Recent Trends in Economic Theory – Implications for Development Geography Erik S. Reinert and Vemund Riiser

This report on the state of development economics was written more than 25 years ago, but is even more relevant today in the wake of the global economic crisis and the pandemic.

Introduction

Development geography and mainstream economic theory have for many years lived separate lives. Especially so since the downfall of development economics, an academic subject which has repeatedly been pronounced dead by one of today’s leading US economists.² The geographical dimension – the location of production in space – has completely disappeared from neo-classical economic theory. This is, in one sense, curious, because the ‘founding father’ of neo-classical economic theory – the Englishman Alfred Marshall – is still an important figure also in economic geography through his industrial districts. We shall return to ‘the two Marshalls’ later in this paper. Another vintage economist used in modern economic geography, Alfred Weber, with his Location Theory (Standorttheorie) ³, belongs to a school of economics which virtually died out: The Historical School, of German origin.

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