Globalisation; Interdependence?
An Introduction to Theories of Development.
These papers examine the nature of economic interdependence between nations. In particular the social and economic conditions that govern relations between the advanced Industrial nations and the developing world will be looked at in some detail. Although the primary theoretical basis of the module is drawn from macro-economic models it is the practical outcomes and impact of the implementation of dominant theories on developing societies that is the primary focus of the module. There are four very closely interrelated conceptual areas we will examine :
Industrialisation:
Trade:
Foreign Aid & Investments
International Organisations & Development.
At the outset it also should be recognised that even the terminology of development studies can be a matter of contention the terms "Less Developed nations", "The South", "the Developing World" and the now obsolete "The Third World"will all be used interchangeably and will also appear frequently in your reading. That being said all of the words used to generalise about the relationships between the advanced Industrial societies and the "developing" nations are at least to some degree inaccurate.
The sociology and economics of development has at its core a single deceptively simple question- Why have a relatively small number of largely Northern countries been able to successfully develop socially and economically to the point where there has been and continues to be a huge divergence between them and the rest of the world? The discipline largely arises out of the work of and responses to the work of American post war economists and sociologists broadly known as Modernisation theorists.
The founder of Modernisation Theory is, it has been argued W W Rostow.
In "The Stages of Economic growth-A non-communists manifesto" (1960) Rostow holds that traditional societies worldwide will be transformed by industrialisation to resemble Europe and North America. Convergence will cause all nations to look alike.
The stages he asserts that all nations either have or will go through are evolutionary and analogous to biological evolution:traditional, preconditions for "take-off," take-off, drive to maturity, and high mass consumption.
Models of industrial development according to Rostow
On the grounds of English first industrial revolution, W. W. Rostow, an economist, (New York, 1916) elaborated a five phases model of the industrial development
Phase 1:Start.
It is marked by:
Traditional society
Pre-Newtonian science and techniques.
Prevalently agricultural economy.
Low productivity.
Moderate demographic growth.
Phase 2:Preconditions for ìtake off.î
Changes occur in the following areas:
Cultural (scientific mentality, idea of progress)
Political (forming of national state)
Social (birth of entrepreneurial class, demographic growth)
Economic (increase of the capital into circulation, diffusion of effective credit and banking system)
Infrastructural (construction of good communication lines, goods and labour circulation)
Phase 3:Take off
Breaking off the traditional course is marked by:
Techniques innovations
Increasing manpower occupation
Profits invested in industrial activity
"Growth is the normal condition. Economic and social structure changes in an irreversible way" (Rostow)
Phase 4:Industrial maturity
normally happens 40 - 60 years after the take off
Industrial development extends to every productive field
Phase 5:Mass consumption:
It is marked by:
Increase of personal income
Establishment of driven needs
Diffusion of the consumption society
Modernity, it is asserted, is industrialisation, and this is both universally desired and in the long run inevitable, indeed "the maximum satisfaction of human needs is only possible in an industrial society."
Modernisation, as we will see is by no means unchallenged, however the theory remains important primarily because it appears to underpin the development policies of governments and international organisations around the world.
Throughout the post war period the relative poverty of the South has been a major political issue in the international arena. However it should also be viewed in the context, at least until 1989, of Global Geopolitical and Ideological conflict. The governments of the West, especially the United States saw in the economic and political instability of the impoverished majority a real threat to their own economic and political interests. W W Rostow was himself an advisor to the Kennedy Administration in the early 1960ís.
Throughout the module specific examples will be used to illustrate the problematic nature of the development process and although there is enormous cultural, social and economic variation between individual countries certain characteristics do appear common to all the ìLess Developed Nationsî.
They all tend to exhibit:
Widespread and evident poverty.
A heavy concentration of employment in agriculture.
A very heavy dependence on a few export commodities from the primary sector.
High population growth rates and relatively low life expectancy.
A Low Capital / labour ratio.
Low income.
Low savings.
All of these characteristics will tend to act together to inhibit economic development and lead to what has been called a vicious cycle of underdevelopment. The essentially Cultural features that according to Rostow (and others) characterise ìTraditionalî societies will also slow or even prevent growth and the drive to an industrial society.
There are of course a number of assumptions underlying this conventional economic definition of development. Because development is defined largely by reference to measures of National income per capital a primary area of contention is the adequacy if the most common measure- GNP or gross national product per capita. This measure is not capable of recognising another feature commonplace in the Less Developed nations- very unequal income distribution.
The measure also, because it is based solely on the cash or legitimate economy fails to take account of economic activity that takes place outside that area. Subsistence agriculture is still the major form of labour in the South- since this is excluded, so is the importance of women, who make up the major part of the labour force in that sector, for the development process.
The importance of the illegitimate economy is likewise ignored. For some countries illegal activity is both very substantial and pervasive. Indeed in the example of Columbia the illicit drug trade is probably the biggest single industry.
Perhaps more importantly than any other factor however GNP does not appear to give an adequate measure of the quality of life of the population of any given nation.
Recently the International organisations that are charged with both directing and measuring development (World Bank, IMF, UNDP) have attempted to incorporate measures such as Life expectancy, infant mortality and literacy to provide what has been termed the Human Development Index (UNDP).
There are of course other major issues that arise out of the fundamental basis of Modernisation theory which some of you will be already familiar with:
Modernisation assumes:
1 That all countries wish to industrialise.
2 That all countries are industrialising.
3 That all countries will eventually succeed and industrialise. That is that industrial society is inevitable.
4 That industrialisation is progress - that "maximum satisfaction of potential is only possible in an industrial society" ( Lerner)
5 That modernisation is relatively easy to achieve since we have the historical example of the developed nations to follow, including the late industrialisers and the NICs.
There are in addition a series of assertions and assumptions about the nature of modern (industrial) society and of traditional (pre- or non- industrial ) society. It is also asserted that certain features of western society are directly responsible for its development and that where traditional societies fail to emulate particular social and economic traits commonplace in the industrial world they will fail to develop adequately
The importance of the historical context -primarily the commonality of the colonial experience of the the Less Developed World is not given significance.
There is also the assumption that development is a relatively simple unilinear process, which is not borne out either by post war economic experience or for that matter contemporary events. Recession, famine, drought, war and natural disasters such as the floods in central America of late last year can and do inhibit growth or even send an economy into reverse.
It could and has been argued that over time development becomes progressively more difficult, and in any event will be limited in the long term by the finite nature of natural resources.
Of fundamental importance is the nature of the underlying assertion of Western social superiority. Is the social and economic model provided by Europe and North America the only acceptable definition of modernity? If this is the case must the developing countries import the social problems of the Advanced Industrial World, as an unavoidable cost of economic growth?
Brian Mulrine 2000
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