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2. On Models, Applicability Theorems, and Development Theory
When considering the nature of development theory it is important to recall that the economist's empirical task is to construct abstract representations of human processes that offer tentative but plausible explanations of observed behaviors. That process usually starts by making reference to an axiomatic structure of premises (or assumptions) and postulates (or propositions). Indeed, the core model of a particular discipline is what differentiates that discipline from others. Economists usually start with human behavior under conditions of scarcity. We further assume rationality, self interest (which is not the same as greed), and the desire for improvement in one's personal circumstances. There are other aspects which might be appended, but this description is a reasonable statement of the minimal set of assumptions thought pertinent to human behavior.

This core model can, of course, be used to generate testable hypotheses. The pertinence of these derived hypotheses will often be improved if other characteristics are appended to the core model. For instance, self interest can be expanded, that is, elaborated, to encompass the interests of others for whom one feels particularly close. We see that self interest in the expanded version of the model extends to one's children, one's spouse, one's cousins, or the members of one's village.

The core model that speaks only to self interest in the narrowest sense, once it is augmented with other conditions, has an improved chance of fitting a particular empirical situation. While the core model of self interest may be quite applicable to the recluse living on a South Pacific isle, it will not be particularly apposite to an individual enmeshed in a South Pacific village. The core model is not wrong for this more social setting; it is simply incomplete. The very act of annexing several other conditions can then render the basic model both more reasonable, and more plausible. We then know that the elaborated model will be better able to generate tentative and testable hypotheses about behavior.

A full theory of human behavior therefore consists of two parts: a core model that is tautological in nature (axiomatic); and a set of applicability theorems that allow for the mapping of the core model into the particular empirical setting of interest to the researcher. We refer to this augmented model--with its applicability theorems (auxiliary assumptions)--as an economic theory. This theory is then capable of rendering empirically pertinent hypotheses about observable phenomena of interest to the economist. We can think of it as:

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