Abstract

The London School of Economics (LSE) seems to have occupied a special place in the emergence of development economics as a field of research. Indeed, by its openness, the LSE welcomed some overseas students from India and other countries within the British Empire. The term “economic development” appeared for the first time in the work of LSE historians in the 1920s such as Vera Anstey and Lillian Knowles (Arndt, 1981, p. 458). ² A fair number of economists and practitioners, who would later specialize in the field of development economics, were trained at the LSE: Colin Clark, researcher at the LSE from 1928 to 1929; Arthur Lewis in 1932; Nicholas Kaldor, assistant professor from 1932 to 1947; Albert Hirschman, student from 1935 to 1936; Ursula Webb Hicks and Vera Smith Lutz, doctoral students in the 1930s and Alice Amsden in the late 1960s. Contributions focused mainly on two broad kinds of factors enhancing economic growth: the real factors (productivity, capital and land endowments and the growth of the population) and monetary factors (access to liquidity, aid or external loans, and the existence of a sound financial infrastructure). It seems that a small number of scholars in the 1950s analyzed the importance of banking institutions to enhance economic growth in developing countries.