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Can anyone let me know some of the limitations of mainstream economics in addressing the problems of the developing countries?

4 years ago in Journal paper writing By Heena


Limitations of Mainstream Economics

Regarding the question, mainstream is not capable of accounting for the value of ecosystem services, not does mainstream economics consider the values of voluntary services such as caring for older relatives, persons with disabilities or social services.
Crime and sickness can be positive as they allow for the movement of money.

Because, the important resources are not accounted for in national accounts, the governments do not allocate sufficient funds & opportunities for their maintenance. When measuring the progress through GDP, preventing crime or controlling smoking might not sound edible

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By Shraddha Answered 4 years ago

Regarding the question, mainstream is not capable of accounting for the value of ecosystem services,  not does mainstream economics consider the values of voluntary services such as caring for older relatives, persons with disabilities or social services. Crime and sickness can be positive as they allow for the movement of money. Because, the important resources are not accounted for in national accounts, the governments do not allocate sufficient funds  & opportunities for their maintenance. When measuring the progress through GDP, preventing crime or controlling smoking might not sound edible.


By Nirav Answered 4 years ago

Mainstream economics, the main principle is the rationality. That means to maximize utility (from consumption of individuals) & profits of firms.  And apart from that, externalities are addressed only in specific studies like public finance. Above, one of the patrons was right about the environment, but there is environmental science, although different from the mainstream.  Indeed the value of natural resources is important, & not all of them have market value cause of low accessibility. To summarize, mainstream economics has limited applicability, while the moral issues and interaction with nature are not addressed.  But the real practice maybe sometimes even not rational from the viewpoint of mainstream economics, I reckon


By Sumitra R Answered 4 years ago

So far, I would say the mainstream economics places still too emphasis on an ideal world, that working smoothly, characterized by representative agents, where they see through multiple irreversibilities does not exist. Also in the political economy aspects of reforms in developing countries have not really been studied.  I would like to add, besides what occurs in the academic world, which is slowly incorporating all these aspects.  I would say, mainstream economists, have to spend a good amount of time in developing countries to see more clearly how realistic are the models,  proposed to solve the problems of countries.


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