155
169 targets based on the achievements of the Millennium Development Goals
(MDGs) (UN Sustainable Development website and UN 2015). SDGs are the latest
and the most comprehensive summary of development strategies. Now, because the
SDGs are available as a common action guideline, everyone is encouraged to design
strategies in line with the concepts of the SDGs. Development strategies must be
designed not only to enhance market functions, but also enhance many other dimensions as described above.
In any overview of development strategies prior to the agreement upon the MDGs
in 2000, structuralism or structuralist economics (from the 1940s to 1960s) must
have been mentioned first (e.g., Singer 1950; Prebisch 1959; Nurkse 1952, 1953).
Its fundamental concept was that market functions, including the price mechanism,
had not worked in developing countries. Therefore, they insisted that governments
had to play an active role to make a “Big Push” for economic development
(Rosenstein-Rodan 1943, 1961, 1984). A subsequent approach that relied on neoclassical economics emerged as the mainstream theory of development strategies.
The core concept of the neoclassical approach was that market functions had
worked in both developed countries and developing countries, and that intervention
in markets must be strictly limited to occurrences of market failure (e.g., Schultz
1961; Lal 1983; Balassa 1989).
In the 1980s, development strategies aimed to enhance market functions based
on the neo-classical economics. Structural adjustment loans (SALs) by the
International Monetary Fund and the World Bank (e.g., Hellenier 1987; Williamson
1983; World Bank 1990) are one of the most representative strategies. These development strategies were mainly composed of macro-economic policies. They were
encountered by the Basic Needs approach of reformism which centered around the
International Labour Organization (ILO), and also by the concept of “adjustment
with a human face” by the United Nations International Children’s Emergency Fund
(UNICEF), which insisted on the importance of viewing poverty at the household or
individual level (Oman and Wignaraja 1991, ILO 1976, Hunt 1989; Cornia et al.
1987). In addition, at the beginning of the 1990s, different types of market failures
were recognized: (1) poverty; (2) environmental degradation; (3) unequal distribution of resources such as income, property, and food; (4) problems associated with
women and children; and (5) infectious diseases such as HIV.
Both formal and informal institutions have played essential roles in responding
to these issues. However, development strategies fundamentally remained with the
market function approach via neo-classical economic theory, or to some extent a
new institutional economy in line with neo-classical economic theory. The core
concept of the theory is the way to achieve Pareto Optimum, which is the criterion
for the most efficient resource allocation. Because of the two fundamental theorems
of welfare economics, Pareto Optimum can be attained under competitive equilibrium and all possible Pareto Optima can be equal to competitive equilibrium through
proper wealth redistribution (Arrow 1951; Debreu 1954, 1959; Mas-Colell et al.
1995). In other words, the market mechanism is theoretically guaranteed to play a
critical role in achieving efficient resource use and equal allocation of the resource.
Achieving perfect market is the pre-condition of the fundamental theorems of wel8 Framing Food Security and Poverty Alleviation
169 targets based on the achievements of the Millennium Development Goals
(MDGs) (UN Sustainable Development website and UN 2015). SDGs are the latest
and the most comprehensive summary of development strategies. Now, because the
SDGs are available as a common action guideline, everyone is encouraged to design
strategies in line with the concepts of the SDGs. Development strategies must be
designed not only to enhance market functions, but also enhance many other dimensions as described above.
In any overview of development strategies prior to the agreement upon the MDGs
in 2000, structuralism or structuralist economics (from the 1940s to 1960s) must
have been mentioned first (e.g., Singer 1950; Prebisch 1959; Nurkse 1952, 1953).
Its fundamental concept was that market functions, including the price mechanism,
had not worked in developing countries. Therefore, they insisted that governments
had to play an active role to make a “Big Push” for economic development
(Rosenstein-Rodan 1943, 1961, 1984). A subsequent approach that relied on neoclassical economics emerged as the mainstream theory of development strategies.
The core concept of the neoclassical approach was that market functions had
worked in both developed countries and developing countries, and that intervention
in markets must be strictly limited to occurrences of market failure (e.g., Schultz
1961; Lal 1983; Balassa 1989).
In the 1980s, development strategies aimed to enhance market functions based
on the neo-classical economics. Structural adjustment loans (SALs) by the
International Monetary Fund and the World Bank (e.g., Hellenier 1987; Williamson
1983; World Bank 1990) are one of the most representative strategies. These development strategies were mainly composed of macro-economic policies. They were
encountered by the Basic Needs approach of reformism which centered around the
International Labour Organization (ILO), and also by the concept of “adjustment
with a human face” by the United Nations International Children’s Emergency Fund
(UNICEF), which insisted on the importance of viewing poverty at the household or
individual level (Oman and Wignaraja 1991, ILO 1976, Hunt 1989; Cornia et al.
1987). In addition, at the beginning of the 1990s, different types of market failures
were recognized: (1) poverty; (2) environmental degradation; (3) unequal distribution of resources such as income, property, and food; (4) problems associated with
women and children; and (5) infectious diseases such as HIV.
Both formal and informal institutions have played essential roles in responding
to these issues. However, development strategies fundamentally remained with the
market function approach via neo-classical economic theory, or to some extent a
new institutional economy in line with neo-classical economic theory. The core
concept of the theory is the way to achieve Pareto Optimum, which is the criterion
for the most efficient resource allocation. Because of the two fundamental theorems
of welfare economics, Pareto Optimum can be attained under competitive equilibrium and all possible Pareto Optima can be equal to competitive equilibrium through
proper wealth redistribution (Arrow 1951; Debreu 1954, 1959; Mas-Colell et al.
1995). In other words, the market mechanism is theoretically guaranteed to play a
critical role in achieving efficient resource use and equal allocation of the resource.
Achieving perfect market is the pre-condition of the fundamental theorems of wel8 Framing Food Security and Poverty Alleviation