Three years after Bangladesh achieved independence in 1971, the 1974 Nobel
Prize for economics was shared by Gunnar Myrdal and Friedrich von Hayek.
Their policy positions were diametrically opposed, however, with Myrdal highly
critical of orthodox economic thought while Hayek endorsed a laissez faire
approach. Four decades later in 2013 the Nobel Prize was shared again - this time
by Eugene Fama and Robert Shiller. Once again, their endorsed policy positions
were poles apart, with Fama endorsing his efficient markets hypothesis (EMH)
and Shiller less willing to believe that markets are inexorably efficient, in
consequence of accepting a more interdisciplinary perspective highlighting
behavioural finance.
With such prominent and enduring divisions in the world of economic theory,
it is evident that there is more than one path forward from which a developing
country might be enticed to choose. In development economics generally the
pendulum has swung from strong commitment to Keynesian intervention in the
1950s and 1960s to a free market counter-revolution in the 1970s under the
influence of such Chicago School economists as P.T. Bauer, to a counter-counterrevolution
in the 1990s in reflection of New Keynesian influence led by Joseph
Stiglitz, Paul Krugman and others.