Microsoft Word bal paper with addendum doc

III.3 New Tendencies in development thinking 

Under all circumstances the approach needs to be adapted to the specific needs of developing 

countries. One way to do this is to look at three recent tendencies in development thinking through 

the focussing devices presented in the first parts of this paper. 

First, there is an increasing focus on capabilities rather than resource endowments as the main 

instruments and values in development. This tendency can be exemplified by work by Amartya Sen. 

Second, you can observe a new focus on knowledge as the perhaps most crucial resource driving 

development. This can be illustrated by several recent reports from the World Bank. Third, there is 

a tendency to underline the primary importance of institutions as the ‘root causes’ of development 

dwarfing the importance of all other factors such as geography and policies. The IMF has recently 

underlined this view. 

The three tendencies are interesting since each of them represents a broadening of the more narrow 

economic views on economic development and they can find a place in the national system of 

innovation and competence building as defined in this paper. At the same time I will argue that they 

underestimate the importance of learning and especially DUI-learning (Lundvall and Johnson, 

1994; Archibugi and Lundvall (eds) , 2000).