Let me react to Reg's questions first.
Post-modernity and pragmatism. I remembered the pragmatists recently, because I was reading an article about Obama. My teacher, Randy David read a lot of Rorty before he was absorbed by Luhmann and Rorty could be considered a pragmatist along with John Dewey and William James. Pragmatists are anti-foundationalists (there is no firm ground on which anything stands, even science is not a "mirror of nature" as Rorty would say).
But pragmatism isn't nihilism. The way we understood it is that pragmatism is about looking for what works. There may be no (firm) ground for things but certain ways of looking at things work better than other ways of looking at things. The pragmatists also have a firm commitment to democracy and education (which makes me think that maybe Sen is a pragmatist).
So I take back what I said in class. Most students now are pragmatists, not necessarily post-modernists.
Nation-building and poverty. Reg brought up that interesting point about what nation-building means. I think the danger is to associate nation-building with (narrow views of) poverty. There's nothing wrong with helping people to attain a basic standard of living but we should not neglect other aspects of life such as the development of culture.
Development. As for Arnold's question, the points below are shooting off the hip and probably drawn from stuff I've read before but whose citation I fail to remember now. Cryptomnesia.
First, people like Adam Smith and Thomas Malthus were writing in the context of debates about particular policies (free trade policies and the Poor Laws respectively). So I suppose, by then, there was already concern for questions of economic and social policy.
Second, I remember reading somewhere that the Russians (in the context of a socialist state) were the first to put into place 5-year plans. That would be the equivalent of our present day Medium-Term Development Plan (but on a much more ambitious scale.
Third, "Development Studies" as a field emerged during the period of decolonization after World War II. That's a pretty standard statement from introductory DS books (there are such books). Now that all these areas are newly independent, how do they proceed to develop.
