Economic Growth, Sustainable Development, and the Role of Markets

Abstract

This chapter tracks the long path that Development Theory has traversed over the last century. Its origin traces back to the notions of economic growth and development and eventually reached a stage where governments and academics are more concerned with more holistic notions of development than merely growth. Sustainable development has become the most important notion of the day and provides a more comprehensive definition of development, linking ecological services and quality of life with economic growth. Such a paradigm shift in less than a century is no less than a revolution. Expectedly, this shift has been marked by cognitive dissonance, bitter debates, and scholastic antagonism. This chapter traces the story of how the road has been traversed and the shift achieved. It highlights the various theories of economic growth and development and focuses on the debates among economists that have helped the discipline traverse this long way. Finally, this chapter talks of markets. While it has often been understood that markets can promote economic growth, this chapter further emphasizes how markets, under enabling conditions, might be the right catalysts to promote sustainable development.