The Untenable Development in the theory of International trade: Growth as the engine of development: A sceptical assessment* Alexis Saludjian 1 INTRODUCTION Defining the concept of development is not an easy task and it would certainly go far beyond the scope of this text. Nevertheless, it is necessary to recall that originally, the concept of development had a political goal. President Truman presented this concept more than fifty years ago, in 1949. The basic idea was that «developing» Society or an economy was a historical task. Firstly, development from this point of view was mainly a strategy of the Occident to contain communism. Secondly, the process which took a century in the rich countries to occur could happen in the same way in a few decades in other less economically developed countries. The eventuality of «catching up» is closely related to this notion. Third, development is considered to be an endless process that could last forever no matter what happens. Last but not least, development is closely linked with the role of the state and its historical goal to succeed in developing the nation. Despite the historical and political reasons stated above, our paper focuses on the neo- classical approach to the development issue. According to this analysis, growth has been considered to be the ultimate goal of these so-called Under-Developed countries in order that they develop. The lucid analysis of J. Stiglitz is worth quoting: « During the past four decades, development has been considered (at least for the dominant approach) as a mere matter of economics: The point was to look for the increase in Stock exchange capitalisation (through foreign transfers or the increase in domestic Savings rate) and through a better allocation of resources 2 . These changes were supposed to lead to a rise in income and, (automatically) to a sustainable increase in the growth rate.» [Stiglitz, 2000a, p.9] The analysis of growth will therefore represent the core element of the neo-classical international trade theory 3 and its role is determinant for under-developed countries to «develop» and catch *Article prepared for the AISPE Conference (University of Lecce, May 24 th - 26 th 2001) 1 PhD in Economics at the University of Paris 13-Villetaneuse (France) CEPN CNRS-UMR, member of the GREITD (Groupe de Recherche sur l'Etat , l'Internationalisation des Techniques et le Développement) and CEPN-UMR CNRS 7115. Email: alex_saludj@yahoo.fr and saludjian@seg.univ-paris13.fr 2 It is interesting to note that the same author shared this idea when he wrote « The main challenge that the developing countries have to face is the elevation of the standards of living or their income per capita. They have to adopt a two-folds strategy: First, accelerate their GDP growth rate and second, contain their demographic growth» [Stiglitz, 2000b, p.849] 3 We will have the opportunity later on to comment on the slide of discussions and subjects of the debate from development (or what can be approximated as development) to growth theories (exogenous and endogenous) and the importance of technical progress as the main determinant of growth. 1