Luiz Carlos Bresser-Pereira
Texto para Discussão da Escola de Economia do Estado de S.Paulo 450, marco de 2017.

In this paper, I discuss the historical (not the normative) concept of economic development, distinguish it from human development, reassert its identification with industrialization or structural change or productive sophistication, and argue that the distinction between development and growth is only necessary in cases of Dutch disease and predatory state in which the fruits of growth can be fully captured by the local oligarchy and foreign interests. In developing countries productive sophistication and productivity growth may be better explained by the transfer of workers and technicians to the more sophisticated sectors than by the increasing returns that are more relevant to rich countries. Although economic development does not imply a reduction of inequalities, it implies an increase in real wages to facilitate the equilibrium between supply and aggregate demand; because wages can grow around increasing productivity without making the rate of profit unsatisfactory; and because the remuneration of people ultimately corresponds to their labor value – their cost of reproduction.