Nowadays the economic sphere became the dominant sphere in the development discourse, and it is no wonder the reason of its importance for providing a material basis for the process of development. The representatives of varied economical theories affirm that development significantly relies on the economic sphere.
The importance of economics with regards to the process of development has been many times examined by economists in their theories including Adam Smith, Rostow, Lewis, Nurkse, and others. There exist a few main conceptions of economical development: the first one is a classical theory developed by such economists as Smith, Rostow, and Lewis; the second is one is a structuralist theory developed by Nurkse and others; the third one is a neo-liberal policy supported by Walras and others; and finally, the fourth one is dependency theory developed by Sunkel and others.
Speaking about Adam Smith’s vision on this matter, it should be stated that according to him the main factor of growth and development is the stock of capital along with the labor force. Rostow, in his theory, argues that investment is the basic factor for the development and growth of the economy. He explains that by investing in the leading areas of the economy it is possible to finally achieve the result when all the other economical spheres of any particular country will be affected to speed up in development. Lewis’ theory assumes that the economy is to be divided into capitalist and non-capitalist spheres where the characteristics of the process of development are different. The capitalist sector, according to him, can be acclaimed as applying reproducible capital and employing workers to raise profits.
Nurkse who belongs to structuralist economical theory regards economic development as the problem of economical inflexibility. He argues that the development process sufficiently depends on capital and labor investment; however, even a stable situation with the level of capital and labor recourses does not guarantee stable economic development. Structuralists along with Nurkse assert that advancement in the economy has its structural constraints.
Discussing the neo-liberal policy, it should be stated that its main foundation lies in the importance of capital accumulation which is vital to any further development in the economy. They name unconditional competition, constant capital formation, technological growth, labor force expansion, and removal of distortions as the necessary factors for stable economical development.
Finally, dependency theories state that the developed and developing countries have unequal economic development chances with a strong tendency for the developed countries to be always winning as compared to the developing countries. This emphasizes the structural constraints of the process of development. Thus, the representatives of dependency economic schools can be related to structuralists as their strand.
In conclusion, there exists a variety of different theories on economical development; however, there is a common point between all of them which can be described as the idea that development is not possible without a material basis behind it. This material foundation can be applied in the most varied ways offered by numerous economists. All in all, multiple kinds of research conducted by the representatives of varied economical theories prove that development has always been crucially relying on the economic sphere. Economical background of the process of development emerged since people produced material values, and continued in its getting more and more important with the duration of time. Nowadays, the development discourse has the economic sphere as its fundamental and essential factor.