Development Microeconomics

In recent times interest in economics of development has once again gained in importance. The present set of literature is different when compared to the earlier set of literature on development economics. Much of the earlier literature was oriented towards policy with an emphasis on industrialization of countries. The agricultural sector was expected to respond to the signals of industry by supplying labour, raw material and wage goods needed for industrialization. Further, agricultural sector was supposed to absorb the output of industry either in the form of consumption or as input in agriCUlture. The industry-agriculture linkages are expected to pull the economy on a growth path with industry playing the role of engine of growth. The industrial sector was viewed as the engine of growth in the economy. However, the stimulus provided by industry did not always translate into growth in the aggregate economy, raising some important questions in development economics in general and development and growth of agricultural sector in particular. In this context, it is worth noting the contributions emerging from the sludy of contracls in the agricultural seclor, most notably the tenancy contracts , the labour contracts etc., within the discipline of what is being called 'Institutional Economics'. The present day models in development economics, which evolved in this context, have shifted the emphasis from policy prescription involving industrialization to understanding the role of agricultural sector and the forms of organization of production in agriculture.