Development is one of the most controversial issues in recent history. The experience of development research of the past fifty years has proved that development is possible but not inevitable. While few countries have succeeded in rapid growth, squeezing the gap between themselves and the more advanced nations and bringing millions of their people out of poverty, many more economies have seen the development gap grow and poverty increase.

The objective of this chapter is to critically demonstrate the theoretical interpretation of development, reform and growth. This chapter will outline the concepts, elements and theories of economic development, starting with Adam Smith and his classical school and ending with the recent theory on development that focuses on institutions, laws and regulations in the area of “New Institutional Economics”.

In this chapter, we have traced the concepts, elements and theories of economic development, starting with the classical schools and ending with the new institutional theory. We have three schools of thought and they complete each other; the neoclassical theory stressed the accumulation of physical and technological change as the ingredients for economic development. The endogenous theory of development focused on investment in human capital, innovation, and knowledge. Whereas, the institutional theory of development highlighted the institutional arrangements in determining economic performance.

Citation

Abdelbary, I. (2021), "The Theoretical Basis*", Reviving Arab Reform: Development Challenges and Opportunities, Emerald Publishing Limited, pp. 5-13. https://0810bj2yb-1106-y-https-doi-org.mplbci.ekb.eg/10.1108/978-1-83982-318-320211002