ABSTRACT
At the end of the 1980s and throughout the 1990s the field of development economics underwent far-reaching changes. Development theory steered progressively away from the strict model of general equilibrium, which had dominated thought and practice in development throughout the 1980s. The strict Walrassian model depends on the two basic principles of perfect competition and the rationality of economic operators. In a world governed by these two principles, consumers and producers meet in the marketplace and exchange goods and services. Since their emergence, endogenous growth theories have examined the principal factors explaining growth dynamics and their self-sustaining characteristics. In addition to market imperfections, recent work in economic theory has examined the different institutions that play an important role in coordinating the actions of different operators and regulating the decentralised economic system. Recent economic research findings, however, are tending to confirm the intuitions and the recommendations of several pioneering studies on a number of issues.
