Structuralist economics

Details

Dutt and Ros argue that structuralist economists try to identify specific rigidities, lags as well as other characteristics of the structure of developing countries in order to assess the way economies adjust and their responsiveness to development policies. A normal assumption within this approach is that the price mechanism fails

• as an equilibrating mechanism,
• to deliver steady growth,
• to produce a "desired" income distribution.

Nixson reports Bitar's argument that there had become a broad consensus on what amounted to the neostructuralist approach. This included the recognition of:

• the importance of political and institutional factors in the analysis of economic problems.
• of the need to raise the level of domestic saving in order to raise the rate of investment given that external sources of finance are likely to be hard to come by
• inflation as a "social phenomenon" requiring for its elimination social, psychological and political-institutional changes, as well as orthodox monetary and fiscal policies.
• the false nature of dilemmas between for example ISI and EOI — planning and the market — agriculture and industry.
• the need to strengthen the productive and technological base.
• the importance of trying to improve the terms on which countries are integrated into the global economy and to improve international competitiveness.
• structural adjustment as only one component of structural change.

More recent contributions to structuralist economics have highlighted the importance of institutions and distribution across both productive sectors and social groups. These institutions and sectors may be incorporated macroeconomic or multisectoral models. At the macroeconomic level modern structuralists would trace the origins of their approach to Kalecki's Problems of Financing Economic Development in a Mixed Economy. Fitz Gerald’s version of this model of an industrializing economy has three commodity markets (food, manufactures and capital goods), foreign trade and income distribution which underpin the specification of a financial-sector with savings, investment, fiscal and monetary balances. For multisectoral models Social Accounting Matrices (SAMs) (an extension to input-output tables) are often used. Lance Taylor has provided both a technical introduction to a form of structuralist economics and critique of more mainstream approaches.