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Economics as a Public Science, Part I: The Economist’s Ethos and Modes of Persuasion

Lauchlin Currie and Albert O. Hirschman on Development as a Problem of Decision Making

Le développement comme problème de prise de décision chez Lauchlin Currie et Albert O. Hirschman
Andrés Álvarez, Andrés Guiot-Isaac et Jimena Hurtado
p. 209-235

Résumés

Cet article analyse les contributions de L. Currie et A. O. Hirschman à l’économie du développement dans le contexte de leurs expériences colombiennes en tant qu’expert étranger. Nous montrons que les idées reçues sur les divergences entre ces auteurs ne tiennent pas compte leur vision commune quant au rôle de l’expert comme élément déclencheur dans la stratégie de développement. Tous deux considèrent que les experts devraient faciliter et guider les processus de prise de décision. A l’aide de sources publiées et d’archives, nous montrons que leurs expériences en tant qu’experts en Colombie les ont poussés à redéfinir leurs idées et leur ont fait comprendre l’influence qu’ont les théories des politiques de développement sur les conseils dispensés par les experts.

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1We would like to thank the organizers of the workshop “Economics and Public Reason,” which took place in the University of Lausanne 3-5 May, 2018, for providing financial support to present a previous version of this article, and the participants for their valuable feedback. We would also like to thank the participants at the 6th Latin American Conference in the History of Economic Thought, in particular Roger Sandilands, Mario García and Annie Cot for their useful questions and comments. We would like to thank Carlos Caballero Argáez for his unconditional support and valuable hints. We would also like to thank the financial support of the Vice-chancellery of Research and the Centro de Estudios sobre Desarrollo Económico (CEDE) of the Universidad de los Andes. Finally, we would like to thank the two anonymous referees for their insightful comments and suggestions.

Although our treatments differ significantly, Hirschman and I appear to be close on this most fundamental of diagnoses: ‘If backwardness is due to insufficient number and speed of development decisions and to inadequate performance of developmental tasks, then the fundamental problem of development consists in generating and energizing human action in a certain direction.’ The difficulty lies in securing agreement on the direction. (Currie, 1966, 141, fn 1).

  • 1 “Loosely, high development theory can be described as the view that development is a virtuous circl (...)

2Paul Krugman (1993; 1994) defines the 1940s and 1950s as the period of “High Development Economics.” During these years, according to Krugman, an alternative view on development emerges, trying to overcome the limits perceived in the prevailing theoretical economic models. The main claim of this alternative view was that the problem of underdevelopment escaped from traditional economic analysis, and therefore demanded new tools of analysis. Precisely during these years, Lauchlin Currie and Albert O. Hirschman built their views on development using their experience as foreign experts in Colombia. Even if these views share the main assumption Krugman identifies in high development economics, namely, the central place given to increasing returns to scale1, their distinctive trait is something else. In this paper we try to show that what Currie and Hirschman share, and distinguishes them from high development theorists, is their common understanding of development as a strategic process of decision making; an idea that begins with recognizing the importance of the political economy of development and the role experts play in it.

  • 2 However, Currie’s notion of “balanced growth” differs significantly from the way that Hirschman int (...)

3The scholarship on Currie and Hirschman has traditionally underscored the opposition between them due to theoretical, personal and sociological positions (Sandilands, 2015). Whereas Currie is associated with balanced growth, Hirschman is presented as an advocate of unbalanced growth2, and these contradicting theoretical stands were evidenced during their joint work in Colombia, when their strong personalities and quest for reputation made this opposition particularly salient (Alacevich, 2009; 2016). In this paper, we explore another possibility. Following Deas (2012), instead of starting from their oppositions, we begin with what is common to both thinkers. We then aim at reframing the divide among them from a different point of view. We take seriously Currie’s (Sandilands, 1991) and Hirschman’s (1984; 2001) own avowal about their scarce knowledge of development economics at the time they were appointed advisers in Colombia, and we explore how their ideas changed due to their work in a developing country. In particular, we retrace their views on the role of experts as policy advisers in countries they know little about.

4As the opening quote shows, Currie and Hirschman coincide in that the strategic nature of development should lead to the coordination of economic and political forces and decision makers in a consensual path of development. The key to the divide between both is the way each one of them believes this coordination can be achieved. Currie (1965; 1981) advances a top-down approach, underscoring the importance of economic education in order to have an informed public opinion and professional economists. When public opinion becomes informed about its own interests and how to achieve them and national professional economists can produce reliable information and analysis it will be possible to have a favorable situation for development. Hirschman (1984), on his side, considers it is necessary to take advantage of what already exists because the seed of development is there, and does not require being planted or special education, but rather fostering a common vision or a project of society that an expert might help make visible and publicly debated (Hirschman, 1970).

5Currie (1966; 1967) and Hirschman (1958) share a deep belief that the main thrust of development is strategic thinking or a strategic view, where experts may play an important part. The way towards modernity, they agree, requires the construction of common social goals and coordinated actions of the main actors involved in this transformation. They diverge on the exact part experts should play, and on the way this strategic thinking could be brought about and promoted. This divergence is the consequence of the way each of them thinks economics and politics are related. Whereas Currie (1981) believes politics should accommodate to the economic reality, Hirschman (1984) is convinced that there is a fundamental interdependence between politics and economics, and that economists should learn to deal with this. According to Currie experts should advise, propose and guide decision-makers using the art of advising, trying to have direct influence on their understanding, and therefore on their decisions. For Hirschman, emphasizing the uncertain character of any decision-making process and its context, experts should act as facilitators, catalyzers and promoters of public and political debate that reveal hidden or underused mental, intellectual and physical resources, following the principle of the hiding hand. Therefore, they both recognize the importance of decision makers and stake holders, and of experts in dealing with these fundamental agents of development as a strategic process.

6The paper is divided in three parts besides this introduction. In the first part, we position our interpretation on the divide between Currie and Hirschman considering prevailing interpretations. In the second section, we flesh out our contribution analyzing how Hirschman and Currie reacted to their early experience as foreign advisers in Colombia. We show this experience allowed them to converge on a view of development as a process of change that faces the problem of implementation given the scarcity of decision-making skills. The third section deals with their divergence about the role experts play in this process of promoting the coordination of decisions towards appropriate development paths. Some concluding remarks, pointing at Currie and Hirschman’s influence in Colombia and the influence the Colombian experience had on both, end this paper.

1. Towards an Alternative Interpretation of the Currie-Hirschman Divide

  • 3 See Álvarez, Guiot-Isaac, and Hurtado (2017) for an account on Currie´s and Hirschman’s experiences (...)

7Hirschman and Currie visited Colombia as experts, commissioned by the International Bank for Reconstruction and Development (IBRD), during 1949 and into the 1950s3. Although they share the same goal of contributing to the formulation of economic policies with a developmental purpose, it has been recognized they disagree on their theories, their personalities clashed, and they differ in their views on expertise. These are the three prevailing interpretations about their differences.

8The first interpretation, found in Sandilands (2015) and Caballero (2008), underlines theoretical differences between Currie and Hirschman. The second, developed by Alacevich (2009; 2016), offers a sociological explanation building on Merton’s view of a “battle of egos” that was engaged and heightened with their joint work in Colombia. The third can be found in Adelman (2013) and Escobar (1995), who associate Currie with technocratic development, and Easterly (2014), taking this a step further, associates Hirschman with free development.

9Technocratic and free development are terms Easterly (2014) uses to describe different forms of development policy and design. He associates the former with autocratic approaches to development in specific political contexts with little to no participation of citizens who have practically no economic or political rights, in contrast with the latter. Easterly (2014) places experts as allies with autocratic development. Neither Currie nor Hirschman would agree with the place given to experts in these definitions. As we will show in what follows, Currie and Hirschman do not associate expert advice and involvement in development policies with a specific type of political regime (i.e. dictatorships or authoritarian regimes and democratic regimes). Experts might participate either in authoritarian or democratic regimes and they will always be involved in the decision-making process, which should make them aware of the political economy in the country.

10Following Seers (1962), we argue the success of expertise depends upon the technical and political economy aspects in the underdeveloped countries where expert advice is provided. This is the combination that we intend to explore and that brings to the fore something we believe has been overlooked in all three interpretations. Namely, development is about strategy, which has to do with the particular context under transformation and the decision-making skills needed to define, adapt and implement such transformation.

1.1. A Theoretical Debate on the “Big Push” Mechanisms

11Sandilands (2015), the main comparative study on the theoretical standpoints of Hirschman and Currie, shows that, in spite of their agreement about the advantages of external economies to trigger economic transformation, they disagree on the theoretical mechanisms to attain such a process (Sandilands, 2015).

  • 4 We thank Roger Sandilands for his remarks on Hirschman’s difficulties to understand the distinctive (...)

12This interpretation builds upon the divergence between Currie and Hirschman on the growth model underlying their theories. According to this view, Rosenstein-Rodan’s (1943) model of the Big Push is the main seminal reference and inspiration for Currie’s theory (Sandilands, 1990, 227; 2018), and the target of Hirschman’s criticism. Sandilands’s argument emphasizes that for Currie the Big Push model implies a demand-side argument according to which growth arises from pecuniary externalities that result from the interrelationships between reciprocal real demand. Unlike Currie, Hirschman’s theory of economic growth does not follow the “real demand” approach that stems from this theoretical tradition that runs from Adam Smith (1776) to Allyn Young (1928)4.

13The most striking feature of Hirschman’s theory would be his opposition to the idea that the process of virtuous growth and economic transformation, called development, is the result of the expansion of the market due to pecuniary externalities. Therefore, according to Sandilands (2015, 229), Hirschman privileges the supply side and technological linkages over real demand, and his notion of forward linkages results in a poor representation of market-size conditions. While the extension of Hirschman’s ([1977] 2015) analysis to “final demand linkages” brings him closer to Currie’s notion of real demand effects, nevertheless they may be held to differ on the potential empirical magnitudes—hence strategic significance—of the linkages as opposed to the number of the linkages, making their opposition on this matter less clear.

  • 5 This does not mean that overall plans, conceived and implemented under the responsibility of the ce (...)

14These theoretical differences explain the opposition of these two economists on the role of planning as a mechanism to implement development policies. Currie has been traditionally associated with plans and Hirschman with projects as means of problem-solving (Adelman, 2013, 302). Both plans and projects are policy mechanisms that involve decision-making, but they differ on the scale. Both have to do with allocating investments and searching for means to finance them, but plans have been more associated in Colombia with general policy guidelines headed by the central government, and projects with specific problem solving by economic agents5.

15Even if there are theoretical elements that place Currie and Hirschman on different stands as to the appropriate growth model that should be implemented in developing countries their theoretical distance can be shortened or, at least, put into perspective using the Colombian context. This will bring us closer to the second interpretation of the divide between these two economists; an interpretation which privileges sociological and personal traits.

1.2. A Sociological Divide: “A Clash of Egos”

  • 6 Adelman (2013) and Sandilands (1990), in their authoritative biographies of Hirschman and Currie, r (...)

16Colombia has a long tradition of economic planning (Urrutia, 1988), inaugurated precisely with the IBRD’s Mission Report. When Currie (in 1949) and Hirschman (in 1952) arrived in Colombia they found a central administration interested in promoting technical analyses and recommendations but largely in the hands of non-professional economists, mainly lawyers. The impetus these foreign experts gave to economic planning was halted in 1953 with the military coup of General Gustavo Rojas Pinilla, whose military government lasted until 19576. During the first civil government of the so-called National Front of Alberto Lleras Camargo (1958-1962) a national Law was passed by a future president, Carlos Lleras Restrepo, considered to be one of the main promoters of technocratic economic policy design, creating the National Council of Economic Policy and Planning and, later, the National Planning Agency. Urrutia (1988, 165) argues that the Bank’s Mission Report (1950) had paved the way for the creation of these agencies showing the scope and possibilities of applying economic analysis to specific problems. It succeeded in showing the importance of trained economists to diagnose, inform and provide policy recommendations. The so-called “Currie mission” then appears as the starting point of a long tradition of expert economic policy design in the country.

17The creation of the planning agency during the first National Front government reinforces this perception. The military government was deposed through an alliance between the two traditional political parties, the Conservatives and the Liberals. They agreed to alternate in government leading to 16 years of two liberal and two conservative governments. Both Liberal governments, Alberto Lleras (1958-62) and Carlos Lleras (1966-1970), gave ample room and support to economic planning. Whereas national professional economists were not yet available during Alberto Lleras’ administration, Carlos Lleras created a more significant group of young economists who were in charge of supervising and advising the government on economic affairs.

  • 7 We provide more details on their background in section 2.1.

18This transformation of the sociological features of those in charge of economic policy can be associated with the IBRD’s mission and its results. Currie and Hirschman arrived in a country with little experience in technical economic policy making and came with previous experience in economic recovery plans but not exactly in developing countries. Prior to arriving in Colombia, Currie had worked as assistant to the chairperson of the Board of Governors of the Federal Reserve System and assistant to President Roosevelt, making him a New Deal economist. Hirschman had worked as an economist in the Marshall Plan for the reconstruction of Europe7.

19When they arrived in Colombia the development question was in its beginnings so they were confronted with the challenge of analyzing and talking about economic transformation from the place that needed to be transformed rather than revitalized. No doubt their economic training was crucial, but realizing the political economy of development policies and being directly involved in it also played an important part. We believe this means their disagreements went beyond theoretical positions, and involved life experiences but cannot be reduced to those either.

20Alacevich (2009) proposes an interpretation of the Currie-Hirschman divide that can be classified along these lines, even though it underscores the clash of egos, leaving aside the influence of the place where they were acting as development experts. According to Alacevich (2009), Hirschman and Currie’s divergent theoretical stances regarding development plans and projects, and balanced and unbalanced growth are not fundamental as there is evidence of a certain convergence between their policy recommendations. Therefore, their disagreements would be the expression of a tactical conflict between experts in their handling of relevant information especially that concerning their diagnoses and policy recommendations on fiscal and monetary matters (Alacevich, 2009, 86).

21This tactical clash, as Alacevich (2009) argues, took place within a particular institutional setting. Internal tensions within the IBRD, and the way it wanted to deal with Colombia and local officials, fostered Currie and Hirschman’s confrontation. The way they inserted themselves within the Colombian government, the networks and relationships they established, play a major role (Álvarez et al., 2017). Their experience as experts in Colombia revealed not only their theoretical divergences or their personal strategies to be seen as key figures but also a divergence of attitudes towards the place that each one should occupy as “counselor of the prince.”

22In Colombia, Currie and Hirschman had first-hand experience in dealing with the economic and political actors involved in development planning and policy making. They both enjoyed a certain degree of freedom in their role as foreign experts. Currie as head of the first economic international mission to the country, and Hirschman as an expert hired by the government through the advice of the IBRD appeared as outsiders and, to some extent, impartial agents (Hirschman, 2001, 81). Their advice, even if not always followed à la lettre, was sought and respected. Sometimes, also, their advice was used in power disputes among national actors, which made them realize the waving frontier between technical and political discussions (Álvarez et al., 2017). Almost in spite of themselves, they were involved in the national political dynamics and negotiations, which gave them a privileged and inside view of the political economy of development in a developing country (Álvarez et al., 2017). As we shall see in section 3, this had profound implications for their view on the role of experts.

1.3. Policy Design: Technocratic vs. Free Development

  • 8 “The Bank and its officers shall not interfere in the political affairs of any member; nor shall th (...)
  • 9 In 1948 presidential candidate and leading figure of the Liberal Party, Jorge Eliécer Gaitán had be (...)
  • 10 See Álvarez, Guiot-Isaac, Hurtado (2017).

23According to Easterly (2014) the 1949 IBRD Mission to Colombia marked the ultimate triumph of the alliance between autocrats and economic experts. Committing to a nonpolitical clause in the Bank’s 1944 Articles of Agreement8, the IBRD hired Currie to lead an economic mission in a country that was in state of siege due to growing partisan violence9. The clashes between Hirschman and Currie in the follow-up planning council created after the Mission10 has led some authors, notably Easterly (2014), to associate Currie with a technocratic approach towards development and Hirschman with a commitment to free development.

24Currie, the leader of the Mission, is depicted as the prototypical foreign adviser that privileges expert knowledge, and Hirschman is presented as the dissenter who promotes bottom-up autonomous development. The former would manifest contempt for the visited country and the latter fascination for it. Adelman (2013, 299) associates personal traits to their opposite positions: Currie, with more experience than Hirschman, was a confident expert, convinced he knew what should be done to accomplish development goals, whereas Hirschman, less experienced but also coming from a more troubled personal path that had taken him through trying ordeals, was more skeptical. Adelman (2013) contends that such different personal backgrounds also influenced the way they played their roles as experts. Currie led the mission as if Colombians were incapable of understanding the structural reasons of the country’s situation because they were immersed in it and lacked the perspective and objectivity of foreign experts, a position Hirschman deeply disagreed with (Adelman, 2013, 307). Hirschman had more confidence in local knowledge and experience as a valid source of meaningful inputs to advance development policies.

25Escobar (1995, 26) associates positions such as Currie’s, and the Currie Mission specifically, with the normalizing of the third world, as no other visions or alternatives were seriously considered. Development experts were to act as missionaries showing the way towards the affluence of the West, following in its steps (Escobar, 1995, 56). Hirschman’s differences with the IBRD mission have been interpreted as a general reaction against the centrality of expertise in development and to this view of a “normal” path towards development. Currie has the “missionary trademark,” the “exalted status as the foreign expert,” which makes Hirschman “cringe” (Adelman, 2013, 299, 307). Also, Hirschman reacts against a premise of the Currie mission that “only foreign experts could really understand the problem because they were foreign and because they were experts” (Adelman, 2013, 307). Easterly (2014) and Ellerman (2004) present Hirschman as an early dissenter of the technocratic approach, and a precursor of grassroots development, citing his opposition to the mission but drawing mostly from his writings on foreign aid and north-south relations from the 1960s.

26However, this narrative presents an incomplete picture of the conception that Currie and Hirschman had on the role of expertise in development. Currie was not unconcerned with involving other agents in decision-making, and nor does Hirschman completely deny a place for expert knowledge. Political dynamics and technical advice are fundamental for expertise to play a meaningful role in development processes (Seers, 1962), and the combination of both factors is what Currie and Hirschman realized determines the possibilities of successfully implementing expert policy recommendations. This shared recognition highlights the common ground Currie and Hirschman share (section 2), and allows presenting a nuanced interpretation of their disagreements (section 3).

2. Beyond the Divides: Sharing Ideas against the Mission’s “Comprehensive Approach”

27We propose an alternative interpretation of the Currie-Hirschman divide that allows us to focus on the place from where they started thinking and working on development, following Malcolm Deas’ (2012) suggestion for understanding their differences by starting with what they share:

It has been common to contrast Hirschman and Currie, but …, they both shared certain characteristics. Neither the one, nor the other believed so much in development economics. (Deas, 2012, 148)

28Their disbelief stems from their view of theory and economics as just an instrument, a tool, in understanding and producing policy recommendations that could be translated into development policies. They both believed in the need to mobilize resources and energies in a desired direction, which they identify with development as requiring strategy. Currie and Hirschman agreed on their critique of the IBRD’s comprehensive approach to development because it did not take into account implementation details and local political and economic features.

29Hirschman’s critique is well-known and has been seen as being addressed to Currie because it was he who led the Survey Mission to Colombia that resulted in the 1950 report advocating a comprehensive approach. However, Currie also distances himself from this approach after his return to Colombia in 1950, this time on a Colombian Government contract to advise a newly formed Committee on Economic Development (later the National Planning Council), to help elaborate the precise ways and policies needed to implement the report’s recommendations for Colombia.

30Even if they share their critical view on the comprehensive approach, the substance of their criticism diverges as well as their own alternatives to it. This critical view is, for both, the result of their experience in the country because they both change their opinion about the report afterwards (Álvarez et al., 2017).

  • 11 We expand on what “orthodox” means in section 2.3.

31As mentioned above, both economists agree that development is a problem of mobilizing resources and energies in a desired direction. The solution to development problems is not technical as orthodox development theorists argued11. In practice, Hirschman and Currie share a common understanding of development as a strategic process that implies political economy considerations; in particular, the role of the expert and the place of public involvement in economic matters.

32Hirschman takes issue with overall planning and with balanced growth theory. He advances instead the idea of development as fostering decision-making skills. Currie criticizes the approach advanced in the Survey Mission report and especially the eclectic approach of attacking problems separately. He considers coherence and order is needed to trigger development. Therefore, he asserts general planning is the appropriate approach, prioritizing goals and steps; planning means focusing on the sequence and order of steps that lead to those goals.

2.1. Currie’s and Hirschman’s Prior Development Policy Experience

33Neither Currie, nor Hirschman were experts on development upon their arrival in Colombia. While Currie had worked as a top economic adviser in the Federal Reserve, 1934-39, and then as President Roosevelt’s White House adviser on economic affairs, 1939-45, his only contact with an underdeveloped country had been two visits to China in 1942 and 1943. His involvement there was initially to investigate the causes of China’s wartime inflation, but he was then involved with the civilian lend-lease program for China. He was also the acting head of the Foreign Economic Administration, 1943-44 and in the early 1945 headed a wartime mission to Switzerland as President Roosevelt’s emissary. He left government service after Roosevelt’s death in April 1945 to work as a private consultant with projects that included private business with China, Argentina, and Mexico. Hirschman had even less knowledge in development economics. After receiving an unorthodox formation in statistical economics in Europe, he emigrated to the United States in early 1941 and worked at Berkeley University for three years before enlisting in the US Army in February 1944, serving in North Africa and Italy. After the war he worked as an economist with the US Department of Commerce and the Federal Reserve Board and was the Fed’s representative on the European Recovery Program where his work included dealing with exchange control problems (Adelman, 2013; 2016). Paradoxically, both Currie and Hirschman ended up as foreign advisers in the emerging “third world” (Escobar, 1995) escaping, wittingly or unwittingly, from McCarthyism.

34Therefore, their first stay in Colombia was formative for them. It was determinant in a negative way, as an experience from which they attempt to distance themselves afterwards, specifically, from some aspects of their work as foreign advisers for the IBRD Mission and the follow-up National Planning Council. This process of demarcation is productive because it allows them to present alternative views on development. Both developed a broad understanding of development, free from any economic reductionism, as a process of decision-making. It is in this sense that we propose to interpret Deas’ (2012, 148) statement that “[n]either the one, nor the other believed so much in development economics.”

35But their view of development certainly differed about the place they assigned to politics and stake holders. Currie, for his part, contends that there is no such thing as development economics but rather economics applied to particular conditions prevailing in developing countries. He is aware of the decisive role stake holders play in the implementation of any policy, which explains the amount of time he spends communicating with key politicians, including Ministers and Presidents, in order to influence their decisions by praising their actions when they were supported and in line with technical advice instead of pointing at possible mistakes or misunderstandings. Currie sees economic advice as a type of technology transfer dependent upon the administrative capacity and the local actors’ level of competence. In this sense, advising is an art (Currie, 1981, 188), using rigorous theoretical analysis and mental discipline that must consider the prevailing circumstances in order to attain desired objectives (Currie, 1981, 208). An expert must adjust theory to the situation at hand, and identify transforming forces to promote them (Currie, 1981, 231). In a context of low administrative skills and negligible advanced economic education the expert then acts as a sort of guide. This was not Hirschman’s view. For him, rather than guiding, the expert can act as a catalyst in public debate, someone who does not necessarily have the answers but can help in articulating them.

2.2. Hirschman’s Critique of the Comprehensive Approach of the 1949 Survey Mission and the Critique of Balanced Growth

36The IBRD 1949 Mission was not the “first mission sent out by the Bank, or even its first mission to Colombia,” but it was the first in charge of designing an “overall framework for development and appraising project proposals in the light of that framework” (Mason and Asher, 1973, 299). The final report the Mission submitted was conceived as a “comprehensive and internally consistent program [...] to raise the standard of living of the Colombian people” (IBRD, 1950, ix, x). According to Currie, the Mission chief, “the recommendations will have fully served their purpose if they succeed in stimulating Colombians to think in terms of the whole economy” (IBRD, 1950, xii). Following this advice, the Colombian Government created two years later the National Planning Council and hired Hirschman as foreign adviser.

  • 12 Hirschman, Albert O. May 15 1954. Algunas consideraciones sobre la oficina y el trabajo de planeaci (...)

37After finishing his work at the Council, Hirschman concludes that the general balance of the planning experiment was disappointing12, due to “a misconceived notion of what planning could and should be” (Hirschman, 1954 [unpublished], 3). He elaborates on this in his first scholarly article on the subject, arguing that development plans produce the “optical illusion that economics as a science can yield detailed blueprints for the development of underdeveloped countries” (Hirschman, 1954, 42). Eventually, he warns, this spurious pretension will “invite reactions of the type: But the Emperor has nothing on!” (Hirschman, 1954, 41). He believes this “overemphasis on the confection of ‘overall integrated programs’” led local and international actors to adopt an “absurd conception of the role of the economist” (Hirschman, 1954, 44).

38Assigning this role of planner to the economist is rather a waste of her expertise, “one of the very scarce resources in underdevelopment countries” (Hirschman, 1954, 47), who should rather focus on identifying promising sectors, and conceiving concrete projects in close collaboration with private and public entities (Hirschman, 1954 [unpublished], 4-5). In the debate between projects and plans, Hirschman chooses the former because they allow the economist to make the best use of expert knowledge, not because the latter exceeds the limits of private knowledge. But this does not imply limiting expert knowledge to casuistry, for proper economic theory provides “meaningful generalizations … concretely helpful in the location and elaboration of promising, specific investment projects” (Hirschman, 1954, 44).

  • 13 Hirschman, Albert O. [unpublished] 1958. Economic Development: Current Research and Problem Areas. (...)

39The Strategy of Economic Development is the result of Hirschman’s effort to “elucidate his own immediate experience” as foreign adviser in Colombia (Hirschman, 1958, vii). His criticism of the “balanced growth doctrine” is the translation of his disagreement with comprehensive economic planning in Colombia into the language of the contemporary theoretical literature in development. According to Hirschman, the central idea of the “balanced growth doctrine” is that equilibrated growth reduces the risks associated with complementarities of demand, guaranteeing that society profits from external economies. The policy implication of this theoretical framework is that only a simultaneous attack on all sectors—a Big Push—is effective in overcoming the condition of underemployment that characterizes underdeveloped countries. However, Hirschman considers that this doctrine “fails as a theory of development” (Hirschman, 1958, 51), because it “is an attempt to prove the need for a sudden massive effort”13 (Hirschman, 1958 [unpublished], 6-7), without explaining how to transform “one type of economy into some more advanced type” (Hirschman, 1958, 51-52).

  • 14 Boianovsky (2018, 492) shows how Hirschman’s criticism of Harrod-Domar’s model relates to “investme (...)

40In order to provide an alternative framework, Hirschman resorts to breakthroughs in growth theory; in separate works, Harrod (1939) and Domar (1957) show that some conclusions that are valid in static systems do not apply in dynamic frameworks (Hirschman 1958, 30-31). Borrowing from this idea, Hirschman shows that, from a dynamical perspective, the possibilities disequilibria create outnumber the risks. Besides, he faces the challenge of adapting Harrod and Domar’s framework to the study of developing economies (Boianovsky, 2018, 485). Harrod and Domar’s treatment of investment, as income and capacity generator, supposes an equilibrium between savings and investment that Hirschman considers inapplicable to underdeveloped countries, because there “investment and saving decisions are largely interdependent … [and] savings depend far more on the opening up of investment opportunities and on the removal of various obstacles to investment than on increased income” (Hirschman, 1958, 32). More than the result of autonomous or induced investment, economic growth in underdeveloped countries is fueled by the “perception of investment opportunities and their transformation into actual investments” (Hirschman, 1958, 36)14. This perception can be induced or enforced through Hirschman’s Principle of the Hiding Hand (Hirschman, 2014). Experts could promote investments in certain sectors and projects emphasizing the possible positive results rather than the costs, incentivizing risk averse agents to take risks. Even if uncertainty can never be resolved, the expert should attempt to find an adequate balance between uncertainty and risk taking in order to promote transformative projects that may lead to social change and development.

41Despite the fact that the language of economic growth allows Hirschman to expose the limitations of understanding economic development as a static phenomenon, he is emphatic that development is not synonymous with growth. In the Introduction to Strategy, he argues that “[the tension of development] is not so much between known benefits and costs but between the goal and the ignorance and misconceptions about the road to that goal” (Hirschman, 1958, 10). The divorce of development from benefit-cost analysis leads him to restate his distance from the balanced growth theory in broader terms:

My point of departure is that development is not held back so much by scarcities in resources and abilities as by difficulties in reaching the decisions necessary to bring these resources and abilities into play … What I am presenting therefore as a theory of development is a theory of maximizing induced decision-making (Hirschman, 1958 [unpublished], 7)

  • 15 This interpretation is consistent with Frobert and Ferraton’s (2003), who argue that Hirschman’s no (...)

42Decision making is rather a political process where the Hiding Hand appears as the main tool the expert has to help specific agents to make decisions15. This explains why the policy recommendation of a Big Push—foreign lending and comprehensive planning—to achieve structural transformation is “an escapist solution,” because it requires “huge amounts of precisely those abilities which we have identified as likely to be in very limited supply in underdeveloped countries” (Hirschman, 1958, 52-53). In particular, comprehensive plans demand an outstanding ability to reach consensus, because they expect societies to introduce not only positive externalities but also “some of the social costs into the economic calculus” (Hirschman, 1958, 57). This prescription fails to acknowledge that underdeveloped societies lack precisely the organizational basis to solve such conflicts.

43According to Hirschman, “inducement mechanisms” provide a decentralized alternative to comprehensive planning, without taking for granted the society’s ability for decision-making. During his stay in Colombia, Hirschman perceived that mechanisms such as showpiece projects and social overhead capital shortages generate pressures that induce responses from private enterprises and public authorities, following their desire for profit and political survival (Hirschman, 1958, 64). This explains his interest in “a general study of decision-making processes” (Hirschman, 1958 [unpublished], 15) because he considers that “the evaluation of economic policies in underdeveloped countries” is “one of the most neglected and at the same time interesting and potentially useful research areas” (Hirschman, 1958 [unpublished], 14). Following his own advice, his study of the political economy of the 1961 agrarian reform in this country showed him further that the response of policy-makers is “not necessarily or intrinsically less automatic than the response of entrepreneurs to a rise of the price of their product” (Hirschman, 1963, 20). Citizens and stake holders can use the art of voice to command the attention of decision makers (Hirschman, 1970).

2.3. Currie’s Critique to Programming and the Non-Strategic Features of the Survey Mission

  • 16 Currie, Lauchlin. December 5 1950. Some Economic Problems, Address of Dr. Lauchlin Currie at Palaci (...)

44Hirschman’s critical and skeptical tone towards this comprehensive approach of the Survey Mission is not that far from Currie’s own assessment of it. After arguing that the main contribution of the Survey Report was instilling in policy makers a comprehensive perspective to tackle development problems16, he reflected upon the difficulties this legacy implied. Following the overall framework of the Mission to Colombia, the World Bank replicated this experience in several countries (Mason and Asher, 1973). The comprehensive approach seemed “to justify a broad-scale attack on many fronts, and this actually became the practice among advice-givers” (Currie, 1981, 67). However, the disappointing results of such attempts led Currie to declare a mea culpa, acknowledging that “the first of such comprehensive study missions—the World Bank Report on Colombia in 1949—seems to have been responsible for much misspent or at least disappointing subsequent effort” (Currie, 1981, 53). He consoles himself, however, arguing that policy advisers failed to understand “the very special nature of this experience,” which could only have been successful under a “combination of circumstances [that] is very difficult to replicate” (Currie, 1981, 67).

45This line of criticism continues to appear in Currie’s writings each time he deals with this type of planning characterized for including “many separate items without giving predominance to any of them.” The problem of this eclectic approach is that “many disparate goals are pursued simultaneously, and at first sight, there appears to be no order or scale of priorities” (Currie, 1966, 68). Moreover, it leads to confuse planning with programming, placing the “emphasis on quantitative relationships to the neglect of theory and qualitative considerations” (Currie, 1966, 8).

  • 17 On an address in the commemoration of the thirty years of the Survey Mission, Currie shared with th (...)

46Like Hirschman, Currie considers that in poor countries with unskilled public administrations and “few trained economists, the waste is indefensible” (Currie, 1966, 60). While programming techniques are useful, “over and above it must be planning—the choice of objectives, the diagnosis of the problems, and the strategy of the attack on the problems to achieve the objectives” (Currie, 1966, 8). Sound economic planning involves more than understanding the interdependencies between economic variables, it requires defining a “rational system of priorities” (Currie, 1966, 200) in resource allocation. This reappraisal of planning led Currie to argue that it would be more effective if it followed a strategic17 rather than an eclectic approach: “planning (and advising), whether by foreigners or nationals, offers more chance of being effective if it is selective in emphasis rather than comprehensive” (Currie, 1981, 67).

  • 18 The way Currie reads this approach is similar to what Boianovksy (2018) identifies as a traditional (...)

47Moreover, economic programming concentrates on empirical exhaustiveness at the expense of theoretical coherence, which leads to a fundamental misunderstanding of the nature of development. Currie identifies the emphasis on capital-output ratios of programming techniques with the “capital formation approach,”18 which he considers a misguided orthodoxy in development theory (Currie, 1966, 127). Thinkers as diverse as Myrdal, Prebisch and Nurkse share the belief that the main obstacle for underdeveloped countries was the scarcity of capital. Like Hirschman, Currie sees “no particular merit in treating all development problems in terms of capital formation, capital stock, consumption, and production” and considers that noting the identity of saving and investment is “by no means a theory of employment or a theory of development” (Currie, 1966, 130).

  • 19 “A model based on the propensity to save and the capital-output ratio is bound to be far less usefu (...)

48He even quotes a fragment of the Strategy19, adding that Hirschman is “still another skeptic” of the predictive and operational value of this approach (Currie, 1966, 137). These theorists fail to understand that “the truly difficult problem in accelerating development is not technical, difficult as that is, but rather the lack of will and knowledge” (Currie, 1966, 140). Planning should not be reduced to programming because underdeveloped countries need to economize their decision-making skills—the will to develop and the knowledge of how to develop—by strategically defining priorities and possible roads to mobilize human energies in this direction.

  • 20 The political scenario of Colombia in the 1960s provided Currie a field of experimentation on polic (...)

49Currie’s further experiences as policy adviser in Colombia20 made him reconsider the proper economic theory to think coherently and define priorities. Greatly influenced by his 1920s Harvard mentor Allyn Young (Currie, 1997), he believed that his theory of demand-induced growth (Young, 1928) should be the foundation for the construction of a theory of development.

50Following this, he believed that the role of the adviser in developing countries is to accelerate growth by stimulating latent demand that might then stimulate latent productive capacity in areas where it is most needed and fruitful. The difference between developed and underdeveloped countries is of degree, not of substance. It affects policy but not the validity of economic theory. The question is, thus, how to implement policies derived from sound economic theory in a context where decision-making skills are scarce.

51His experience with Operación Colombia, his first failure as policy adviser because it was not adopted, made him realize that overlooking the political implications of any policy could mean the neglect of economic advice. The need for a close relationship with economic and political decision makers led Currie to cultivate his contacts with several high-ranking officials to promote economic discussion. Praising key actors for their ability to understand and implement sound development policies instead of focusing on possible misunderstandings is an efficient way to influence and guide policy and political decisions, and can be understood as the art of advising.

52Implementation of sound economic ideas and neutralizing politics become a motto of his advice for experts to interact with politicians, private agents and policy makers. Concurring with Hirschman, Currie developed the conviction that decision making is the art of aligning (coordinating) “human action in a certain direction … The difficulty lies in securing agreement on the direction” (Currie, 1966, 141, fn 1). In this sense, direct communication and the art of advising appear central.

  • 21 At least as defined by Hirschman but again see Currie’s (1970 [2018]) critique.

53Even if Hirschman and Currie differ in the content of their criticisms of economic planning and programming, both agree that the theory on which these policy mechanisms are grounded does not work as a strategy of development. In particular, they both disagree with what they considered the orthodoxy in development theory proposed. Neither “balanced growth”21 nor capital formation represented the most appropriate road to development. Any such approach would lead to the misuse of resources, ignoring specific circumstances and attempting to apply general recipes. The problem is not with the recipe but with the capacity to implement any economic policy; the problem has to do with the decision-making skills present in developing countries. This explains their shared vision of development as strategy, and of the misuse of economic expertise in such comprehensive approaches. According to Currie (1967, 13), it is the “task” and “responsibility” of economists to define national objectives and conceive consistent plans to achieve them. Confirming the need for experts, Currie insists that economists are the most suited for this task because they have developed coherent theories explaining the economy as a system of interrelationships.

3. The Expert’s Role as Catalyst of Decision Making

54If development is a matter of defining priorities and energizing resources, this means it is not just a technical, but a political problem. Both Currie and Hirschman drew this insight from their work in Colombia (see Álvarez et al., 2017). However, the Colombian experience and its particular political economy context led them both to propose alternative ways to attain that goal.

3.1. Currie: Breaking the Vicious Circle of Low Growth and Economic Ignorance

55Understanding development as strategy means striving to formulate a coordinated path between local economic, political and social agents. Such coordination requires developing or enforcing decision-making skills, which need some type of common ground of discussion. For Currie, this common ground is economic education whereas for Hirschman (1970, 43) it corresponds to “the art of voice.

56Currie presents the challenge as breaking the difficult interaction between culture and development, which he conceived as a vicious circle between low growth and cultural practices and beliefs:

If a people with a particular culture has, to date, shown itself to possess less than acceptable domination of environment, how can the degree of change that seems necessary to accelerate the process of development and the date of transition from a less to a more developed category be brought about? (Currie, 1981, 237)

57The problem here is to transform this particular culture that seems incapable of important change, and the question is how this should be done.

58Currie believes that a first step to transformation is having sound foundations to propose such changes, which are to be found not in development economics but rather in basic rudiments in economic analysis. The discussion between policy makers and decision makers should be based on this common ground, which would then lead to discussions on the specific goals and steps to achieve them.

  • 22 Currie himself would play an important role in the development of economic education in Colombia. H (...)

59Currie believed there is only one correct type of economic analysis, around which there is a consensus in the profession, that can be applied in different circumstances (Currie, 1981, 6, 118). This difference of circumstances materializes in the degree of control and efficiency in each country and the ability to choose over policies (Currie, 1981, 39), and here is where debate should center. Economics for developed and developing countries is the same, but the policy recommendations need to be adapted as conditions differ. Though these recommendations may differ among economists, if policy makers and decision makers share a common ground it guarantees that all those involved in determining policy goals, policy design and implementation also share a common language and understand each other thanks to it. Therefore, Currie considers economic education is paramount to development processes22.

60In line with the idea of the art of advising, Currie himself plays an important role in the development of economic education in Colombia. In his report on this topic, Currie (1965) recognized the progress made on this front over the previous 15 years. The creation of the Administrative Department for National Statistics and of some 15 Economics Departments around the country attest to this process. However, Currie insisted on a clear distinction between economic science as taught in a textbook such as Samuelson’s Economics and the skills required for national, regional and urban planning:

When the distinction is not recognized and the teaching of ‘planning’ is attempted at an early stage in the preparation of an economist, there is a risk of oversimplifying what is perhaps the most difficult branch in which an economist can work, and of creating mental rigidities. What is needed is to be alert, have originality and mental agility combined with a thorough grounding in economic theory. (Currie, 1965, 13, our translation).

61Along these lines, an investment policy in education was needed if the country was to overcome the limitations on development associated with deficient policy making due to lack of capacity and training. Currie thought such an investment should aim first at training

the upper class, and, to a slightly lesser extent, … the larger middle class. A corollary is that expenditures on training, especially abroad, and on creating attitudes favorable to better domination and control of the environment will prove highly productive over a period of time. (Currie, 1981, 228)

62Moreover, economic education should go beyond Economics Departments, and reach the relevant public: “the upper classes should have enough understanding of how the economic system works as to be able to comprehend and evaluate the probable impact of specific economic programs and proposals” (Currie, 1965, 14, our translation). Only where key stake holders are economically enlightened, can trained economists effectively inform policy making.

63This is even more important in a context where the number of foreign experts and international missions is shrinking, making the impact of expert knowledge less direct and harder to trace. Rather than a direct influence, expert advice would now come through the form of the conditions for loans, articles, books, and the training of national policy makers abroad. These newly trained policy advisers would then have an increased responsibility “to modify and adapt theories and policies to domestic requirements” (Currie, 1981, 227).

64Such an education would ease the work of policy advisers, who could then play their role as guides in the debate, using good economics and the knowledge of specific conditions in order to identify and promote transforming forces (Currie, 1981, 213). Currie compares the policy adviser with “a driver in heavy traffic” who “must be alive to many things going on around him” (Currie, 1981, 206). Therefore, the policy adviser cannot concentrate only on theory, but rather be able to consider the circumstances, the quality and reliability of the information, the coherence of the policies proposed to achieve general goals, and the social and political context (Currie, 1981). In order to be able to participate and illuminate the public debate, the expert should also be able to converse with different audiences, be them other economists or the relevant public. Besides theoretical and technical skills, the expert must also be persuasive.

3.2. Hirschman: From the “Visiting Economist Syndrome” to the “Facilitator”

65Concerning the art of communication as a major requirement for the successful expert, Currie joins Hirschman. Being able to participate in professional and public debate is their skill. There is no sense in formulating goals and policies if they are not appropriated and legitimized in public debate, if public opinion and all stake holders do not understand and share them.

66However, Hirschman gives a less central role to economic education and to the expert in the debate. More in the line of trying “to identify those [powerful] forces [that are tending to bring about great transformations in society] and to shape his advice to further rather than to obstruct them” (Currie, 1981, 231), Hirschman sees the expert as a figure that identifies and empowers voices that have been hidden or neglected. The focus should not be on bringing knowledge or educating people in economics, the motto of the “visiting economist syndrome,” but rather finding “hidden rationalities” (Hirschman, 1984) and bringing them to the light, so that local knowledge could be used, shared and expanded. The role of the expert is precisely to involve other agents in the process of common “self-discovery” and “self-affirmation” (Hirschman, [1961] 1970, 304) that characterizes development as a process of endogenous change. It is not the art of advising behind the expert as an economic educator that advances this role but rather the promotion of voice, and the encouragement through the Hiding Hand.

67Therefore, rather than, as Currie thought, economics informing and even determining public debate, Hirschman favored recognizing the political and social context within which economic policy debate took place, making this debate a political one. The purpose was not to avoid or change this debate as untechnical, uninformed or the expression of vested or unenlightened interests. Economic policy debate was a political one, where all stake holders should be able to exercise their voice.

68In brief, even if Currie and Hirschman disagreed on the precise grounds for an informed public debate on economic policy and the role the expert should play in it, they agreed that with the “growth of a more informed and critical public opinion, what can be hoped for is that there will be a tendency for decision-makers to identify their personal interests more with the longer term interests of the community and to give more weight to the probable judgement of history” (Currie, 1981, 228). Therefore, the strategy of development could be defined, shared and appropriated widely.

4. Concluding Remarks

69Currie’s and Hirschman’s experience in Colombia gives us an idea of how they believe expertise should be understood. Exploring their reflections on their own roles as foreign experts, allows to show the limits of development theory and the influence of the political economy of development, and call our attention to the role of experts. They should develop their capacity to make public interventions (Mata and Medema, 2013) through the art of advising or the Principle of the Hiding-Hand. Successful expertise implies being aware of the reciprocal influence experts and decision-making agents have on each other.

70Neither Currie nor Hirschman seem to acknowledge that the former’s art of advising or the latter’s Hiding Hand Principle lead precisely in this direction. Their appraisals of the role of the expert in development processes point to the risks or the negative sides of these practices: the art of advising would hide the expert’s superiority, and the Hiding Hand Principle would ignore the risks of false or inaccurate advice.

71The divide between Currie and Hirschman can be traced to the apparent independence that the Colombian economic technocrats have from politics. Such independence seems to agree with Currie’s view about the relationship between politics and economics. There is a prevailing view in Colombia as to the ability experts have to get around politics but it could also be argued that the important difficulties of the country’s development are related with what Hirschman identifies as its inability to deal with politics and assume the role of experts in the political economy of development and in economic, social and political debates. Here we might find the roots of what could be called the Colombian paradox of a stable economy within an unstable political and social context.

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Annexe

Archives

Archivo Lauchlin Currie, Biblioteca Luis Angel Arango (BLAA), Bogotá. This archive contains copies of what is also in Duke University’s Special Collections Library.

Albert O. Hirschman Papers, Seeley G. Mudd Manuscript Library, Princeton University, Princeton, NJ. (AOHP).

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Notes

1 “Loosely, high development theory can be described as the view that development is a virtuous circle driven by external economies -that is, that modernization breeds modernization” (Krugman, 1994, 41).

2 However, Currie’s notion of “balanced growth” differs significantly from the way that Hirschman interprets Rosenstein Rodan’s (1943) theory of the “Big Push.” For Currie, “balance” involves a balancing of supply with the actual or potential elasticities of demand that vary considerably as between the various sectors of the economy, and is the basis for Currie’s selective prioritization of ‘leading’ sectors accordingly. See Currie’s (1970 [2018]) critique of Hirschman’s interpretation of Rosenstein Rodan in a paper published only recently, in Sandilands (2018). In sections 1.1 and 1.2 we come back to these views.

3 See Álvarez, Guiot-Isaac, and Hurtado (2017) for an account on Currie´s and Hirschman’s experiences as experts in Colombia and the details of their personal and professional controversies during that period.

4 We thank Roger Sandilands for his remarks on Hirschman’s difficulties to understand the distinctiveness of this tradition.

5 This does not mean that overall plans, conceived and implemented under the responsibility of the central government, do not imply decision-making. As we note here, the main difference has to do with the scale at which decisions are made and who appears as the primary body responsible for such decisions. We come back to this point in section 3.2.

6 Adelman (2013) and Sandilands (1990), in their authoritative biographies of Hirschman and Currie, respectively, show that both economists took their distance from the Rojas Pinilla government. Currie retired to a cattle farm in Albán, in the Colombian central region, and Hirschman opened a private consultant office, travelling through Colombia. These personal decisions show that the political regime in Colombia is not the main feature to understand the role of experts for Currie and Hirschman.

7 We provide more details on their background in section 2.1.

8 “The Bank and its officers shall not interfere in the political affairs of any member; nor shall they be influenced in its decisions by the political character of the government of the member or the members concerned. Only economic considerations shall be relevant to their decisions” (Easterly, 2014, 115). For Easterly, this was the original sin by which the Bank embraced the technocratic approach to development at the expense of ideals of freedom (Easterly, 2014, 105).

9 In 1948 presidential candidate and leading figure of the Liberal Party, Jorge Eliécer Gaitán had been assassinated, giving rise to what is known as the Bogotazo with massive riots and the destruction of an important part of downtown Bogotá on April 9th, the day of the assassination. The Bogotazo is also considered as the key date for the open display of violent confrontations between political parties and factions at the origin of Colombia’s lengthy period known as La Violencia. Currie arrives in Colombia in 1949, and what he finds is a country full of poverty amidst abundant natural resources, with little public administration and respect for the rule of law (Sandilands, 1990, 163).

10 See Álvarez, Guiot-Isaac, Hurtado (2017).

11 We expand on what “orthodox” means in section 2.3.

12 Hirschman, Albert O. May 15 1954. Algunas consideraciones sobre la oficina y el trabajo de planeación. Box 39, folder 4. Albert O. Hirschman Papers, Seeley G. Mudd Manuscript Library, Princeton University, Princeton, NJ (AOHP). Our translation, and henceforth we refer to this as Hirschman (1954 [unpublished]).

13 Hirschman, Albert O. [unpublished] 1958. Economic Development: Current Research and Problem Areas. Box 58, Albert O. Hirschman Papers, Seeley G. Mudd Manuscript Library, Princeton University, Princeton, NJ (AOHP). Henceforth we refer to this as Hirschman (1958 [unpublished]).

14 Boianovsky (2018, 492) shows how Hirschman’s criticism of Harrod-Domar’s model relates to “investment-stimulating projects.” Besides this point we focus on how this criticism leads to the Principle of the Hiding Hand and informs the role of experts.

15 This interpretation is consistent with Frobert and Ferraton’s (2003), who argue that Hirschman’s notion of hidden rationalities, central for his understanding of development, entails the “will and intrinsic ability [of concerned communities] to define ends collectively and find means to achieve them” (2003, 32). We will come again to this notion in the next section.

16 Currie, Lauchlin. December 5 1950. Some Economic Problems, Address of Dr. Lauchlin Currie at Palacio San Carlos. RM0039, rolls 1-2, World Bank Mission, 1948-1953. Archivo Lauchlin Currie, Biblioteca Luis Angel Arango (BLAA), 1-2.

17 On an address in the commemoration of the thirty years of the Survey Mission, Currie shared with the audience an anecdote that revealed the importance of thinking in strategic terms: “A final anecdote. The atmosphere became unpropitious for planning in early 1953 with the Presidency of Rojas Pinilla and I prepared to resign. Before I did so, however, I wanted to assure myself that the partida for a road from Barranquilla to Ciénaga Grande, which Karl Parrish of Barranquilla had urged to me in my studies there, was inserted in the next year’s budget. So I saw the General on this matter. He was not very much impressed by my economic arguments. Suddenly, however, he said ‘You’re right, but not for the reasons you cite. It is necessary for strategic purposes.’ I was suitably impressed and the partida was placed in the budget and the road was subsequently built ‘for strategic purposes’”. Currie, L. August 31 1979. A talk by Lauchlin Currie. RM0029, roll 1, Talks, speeches, prologues, 1979-1988 and distinctions, forum, 1963-1992, BLAA, 12-13. The stress is Currie’s.

18 The way Currie reads this approach is similar to what Boianovksy (2018) identifies as a traditional view of development economists as capital fundamentalists. A simple synthesis of this historiographical approach can be found in Meier and Seers (1984, 16): “The extension of Keynesian short-run employment theory into long-run growth theory in the form of the Harrod-Domar equation (g = s/k, where g is the growth rate, s the savings ratio, and k the capital-output ratio) implied that the growth rate could be maximized by maximizing the marginal saving from output growth and by minimizing the incremental capital-output ratio (ICOR).”

19 “A model based on the propensity to save and the capital-output ratio is bound to be far less useful in underdeveloped than in advanced countries. Its predictive and operational value is low” (Hirschman, 1958, 32).

20 The political scenario of Colombia in the 1960s provided Currie a field of experimentation on policy advice. In 1961, Currie prepared an economic plan for the government called Operación Colombia (OC). The main idea behind this plan was to capitalize on the benefits of the green revolution by creating urban jobs for the rural unemployed. The key was to define a leading sector, which would trigger self-sustained growth through three mechanisms: stimulating demand for production inputs in a broad way to encourage demand in other sectors, absorbing low-skilled labor, and creating a virtuous circle of adoption of new technology. OC was not adopted. Currie realized he overlooked the political implications of a transformation of the agricultural sector, in a country with deep political and economic inequalities in land ownership. However, he successfully put forward a new plan, the Four Strategies Plan, which was implemented in 1972, thanks to energetic persuasion skills from a key advisory position in the National Planning Department and close links with President Misael Pastrana.

21 At least as defined by Hirschman but again see Currie’s (1970 [2018]) critique.

22 Currie himself would play an important role in the development of economic education in Colombia. He was active in the country’s two major Economics Departments, promoting not only their undergraduate and graduate programs, but also contributing to the consolidation of economic research centers associated with these Departments at the Universidad Nacional de Colombia and the Universidad de los Andes. He was made Professor Emeritus of the latter in 1987, where he taught until 1991, two years before his death. He is also known for participating in the direct economic education of key politicians and officials. He not only held regular classes at the National Planning Department to explain the theory behind his policy recommendations, he created the Grupo de los miércoles, an informal group of influential figures, made up of industrialists, bankers, and regional governors, where, using the Socratic method, he would sound out his ideas on reform.

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Andrés Álvarez, Andrés Guiot-Isaac et Jimena Hurtado, « Lauchlin Currie and Albert O. Hirschman on Development as a Problem of Decision Making », Œconomia, 9-2 | 2019, 209-235.

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Andrés Álvarez, Andrés Guiot-Isaac et Jimena Hurtado, « Lauchlin Currie and Albert O. Hirschman on Development as a Problem of Decision Making », Œconomia [En ligne], 9-2 | 2019, mis en ligne le 01 juin 2019, consulté le 14 novembre 2019. URL : http://journals.openedition.org/oeconomia/5496 ; DOI : 10.4000/oeconomia.5496

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Andrés Álvarez

Facultad de Economía - CEDE, Universidad de los Andes, ca.alvarez967@uniandes.edu.co

Andrés Guiot-Isaac

St. Antony’s College, Oxford University, andres.guiotisaac@sant.ox.ac.uk

Jimena Hurtado

CEDE, Universidad de los Andes, jihurtad@uniandes.edu.co

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