In writing the second edition of Process of Economic Development we have deliberated over every page of the first edition. We have found that the basic organization and sequencing of the book has been well received. We have not sought to alter the major themes examined in the first edition. Nonetheless, extensive changes too numerous to summarize have been introduced in virtually every chapter. We have attempted to include new research in every area. Yet, we are aware of the vastness of the field of economic development and the likelihood that we may have overlooked more than one important new research finding. Wherever possible data and tables have been brought up to date, or new tables have been created.
We were both pleased and surprised to find that the field of economic development seems, in some respects, to be moving closer to many of the core ideas highlighted in the first edition of the book. Specifically, it is currently stylish to acknowledge that any analysis of developing nations should include a serious examination of "institutions." (What exactly is meant by institutions is often not clearly defined or expressed.) Our thinking and research on issues of economic development has been profoundly influenced by institutionalist analysis. We thus welcome this "new" focus, which has long been a crucial component of our frame of reference when dealing with development issues.
A second change that we also welcome has been the revival of interest in the early "developmentalist" ideas of the core thinkers in the still-young field of development: Paul Rosenstein-Rodan, Albert Hirschman, Ragnar Nurkse, Arthur Lewis, and, more rarely, Gunnar Myrdal.
We are also encouraged by some of the broader indicators of development that suggest forward movement in developing nations, such as the 45 percent decline in infant mortality between 1970 and 1999. The World Bank notes that life expectancy in poor nations has improved by 20 years over the past four decades and illiteracy has been cut in half. These are changes of a magnitude that is hard to imagine. Other encouraging signs are to be found-the percent of the world's population below an inflation-adjusted income of one dollar a day dropped by 4 points between 1987 and 1998-suggesting that some 240 million people were lifted out of the most extreme poverty. The two most populous nations in the world, India and China, have experienced rapid change. The World Bank registers China's economic growth at 10 percent a year, 1990-2001. (There is a debate over the accuracy of these numbers, but none over the fact that China has experienced explosive growth for a respectable period.) In the same period India had extremely strong economic growth of 5.9 percent per year. With these two nations accounting for an astonishing