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TECHNOLOGY GOVERNANCE Working Papers in Technology Governance and Economic Dynamics no. 1 the other canon foundation, Norway Tallinn University of Technology, Tallinn CONTACT: Rainer Kattel, kattel@staff.ttu.ee; Wolfgand Drechsler, drechsler@staff.ttu.ee; Erik S. Reinert, reinert@staff.ttu.ee EEvvoolluuttiioonnaarryy EEccoonnoommiiccss,, CCllaassssiiccaall DDeevveellooppmmeenntt EEccoonnoommiiccss,, aanndd tthhee HHiissttoorryy ooff EEccoonnoommiicc PPoolliiccyy:: AA PPlleeaa ffoorr TThheeoorriizziinngg bbyy IInncclluussiioonn.. Erik S. Reinert, Tallinn University of Technology, Estonia and 1 Norwegian Institute of Strategic Studies (NORISS), Oslo, Norway . January 2006 1 The author is grateful to Carlota Perez and Christopher Freeman for extensive comments and dis- cussion of this paper. The usual disclaimer applies. This paper argues that bringing evolutionary and Schumpeterian economics to the Third World would benefit greatly from including insights and ele- ments from pre-Smithian economics, from the history of economic policy, and from classical development economics (post World War II). This is par- ticularly important when evolutionary theory is introduced into new con- texts where institutions and circumstances that can be taken for granted in the First World are not necessarily present. The paper argues that a truly evolutionary theory of economic change requires that all neo-classical assumptions be relaxed at the same time, while re-introducing the many factors that used to be recognised long ago as contributing to the uneven- ness of economic development. ‘New institutional economics’ became neoclassical economics with institu