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development
T. Forsyth, E. Green, J. Lunn
DV1171
2011
Undergraduate study in
Economics, Management,
Finance and the Social Sciences
This subject guide is for a 100 course offered as part of the University of London
International Programmes in Economics, Management, Finance and the Social Sciences.
This is equivalent to Level 4 within the Framework for Higher Education Qualifications in
England, Wales and Northern Ireland (FHEQ).
For more information about the University of London International Programmes
undergraduate study in Economics, Management, Finance and the Social Sciences, see:
www.londoninternational.ac.uk
This guide was prepared for the University of London International Programmes by:
Dr T. Forsyth, Mr E. Green and J. Lunn, Development Studies Institute, The London School of
Economics and Political Science.
This is one of a series of subject guides published by the University. We regret that due to
pressure of work the authors are unable to enter into any correspondence relating to, or aris-
ing from, the guide. If you have any comments on this subject guide, favourable or unfavour-
able, please use the form at the back of this guide.
Contents
i
171 Introduction to international development
iii
171 Introduction to international development
Notes
iv
Part I: A framework for the course
Part I provides essential background for this course. Chapter 1 sets out
the aims and objectives of the course and the learning outcomes that we
hope students will achieve. We also outline the structure of the course as a
whole and offer study and examination advice.
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171 Introduction to international development
Notes
2
Introduction
Chapter 1: Introduction
3
171 Introduction to international development
Learning outcomes
By the end of the course and Essential readings, you should be able to:
• show why development should be understood as a global phenomenon
• discuss and critically evaluate the main intellectual traditions shaping
international development today
• use a range of historical, political, economic and social concepts and
facts in your analysis of development issues
• demonstrate a good understanding of how policy debates and practical
interventions have evolved over time in the context of a number of key
themes.
Chapter 1 Introduction
Aims, objectives and learning outcomes; structure of the guide; how to use
the guide; core readings; the learning process; examination advice; list of
acronyms; useful websites.
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171 Introduction to international development
Reading
Essential reading
The following books are Essential readings for the course as a whole:
Desai, V. and R. Potter, (eds) The Companion to Development Studies. (London:
Hodder, 2008 second edition – or the latest edition) [ISBN 9780340889145]
This is a useful overview of different themes of development in convenient
short chapters by specialists in each field. Please note that all of this book
is useful. In later chapters of the subject guide we recommend certain
sections of this book, but students will benefit from reading all of it, and
dipping into it for general background.
Todaro, M. and S. Smith Economic Development. (Harlow: Pearson
Education, 2014) twelfth edition [ISBN 9781292002972].
This is the latest edition of a classic textbook on development, and is
useful for the more economic themes of development. Please use newer
editions if they are published. (Older versions were entitled Economic
Development in the Third World and were written solely by Michael Todaro.
Use the most recent one you can find.) The book is full of useful statistics
and figures on development issues since 1945.
You are expected to have read these books by the end of the course. If you
are able to purchase them, we recommend that you do so.
You might also find this reference work useful:
Forsyth, T. (ed.) Encyclopedia of International Development. (London and New
York: Routledge, 2005) [ISBN 9780415253420]
This is a comprehensive reference work on Development Studies, including
entries by more than 200 authors.
Detailed reading references in this subject guide refer to the editions of the
set textbooks listed above. New editions of one or more of these textbooks
may have been published by the time you study this course. You can use
a more recent edition of any of the books; use the detailed chapter and
section headings and the index to identify relevant readings. Also check
the virtual learning environment (VLE) regularly for updated guidance on
readings.
6
Introduction
Further reading
As described above, each chapter also has its own list of further readings.
For ease of reference we provide a full list of these readings at the back of
the subject guide in Appendix 3.
Please note that as long as you read the Essential reading you are then free
to read around the subject area in any text, paper or online resource. You
will need to support your learning by reading as widely as possible and by
thinking about how these principles apply in the real world. To help you
read extensively, you have free access to the VLE and University of London
Online Library (see below).
Challenging reading
Certain chapters in the guide also have a category called Challenging
reading. This reading is not material that you are expected to read for this
course; it is simply there if you want to read about any of the topics in
more depth. For ease of reference we provide a full list of these readings at
the back of the subject guide in Appendix 4.
The VLE
The VLE, which complements this subject guide, has been designed to
enhance your learning experience, providing additional support and a
sense of community. It forms an important part of your study experience
with the University of London and you should access it regularly.
The VLE provides a range of resources for EMFSS courses:
• Self-testing activities: Doing these allows you to test your own
understanding of subject material.
• Electronic study materials: The printed materials that you receive from
the University of London are available to download, including updated
reading lists and references.
• Past examination papers and Examiners’ commentaries: These provide
advice on how each examination question might best be answered.
• A student discussion forum: This is an open space for you to discuss
interests and experiences, seek support from your peers, work
collaboratively to solve problems and discuss subject material.
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171 Introduction to international development
8
Introduction
Examination advice
Important: the information and advice given here are based on the
examination structure used at the time this guide was written. Please
note that subject guides may be used for several years. Because of this
we strongly advise you to always check both the current Regulations for
relevant information about the examination, and the VLE where you
should be advised of any forthcoming changes. You should also carefully
check the rubric/instructions on the paper you actually sit and follow
those instructions.
This course is assessed by an unseen three-hour examination, in which
you are expected to answer three questions, including at least one each
from Sections A and B. Section A of the paper corresponds to Part II of the
course; Section B of the paper corresponds to Part III.
There is no single formula for passing examinations, but one crucial
precondition is to read the instructions on the exam paper
very carefully. Make sure you answer the question. Please do not
write about other topics, because this will earn no marks. Each year, we
have students who write long essays on a subject such as ‘the state’ or
‘industrialisation’. But these long, prepared, answers do not get many
marks because they do not answer the question set because they describe
the subject in the question, rather than address the specific problem
set in the question. For example, one year students were asked to write
about the challenges of industrialisation in the twenty-first century, but
many students simply wrote about industrialisation in general, without
mentioning challenges of the twenty-first century. The best answers gave a
lot of background on industrialisation, but also discussed the problems of
industrialisation in the twenty-first century.
The style of answers is also important. Please write concise answers.
Avoid waffly (i.e. long-winded) introductions. Make sure your answer
is in the form of a well-structured argument. Do not fall into the trap of
doing a literature survey. Clear abbreviations are fine, especially when a
term is used often in your answer. Clear diagrams, properly labelled, are
also acceptable, where appropriate. There is no need to give elaborate
references to articles or books. Author (and brief title, where appropriate)
will be sufficient. Beware of repeating yourself within a question or saying
the same thing in two answers on the same paper. It is acceptable to refer
back to what you said in answering another question on the paper.
Do remember that the point of the exam is to test your knowledge and
arguments about international development. This is not the same as
simply summarising each chapter in the subject guide! We want you to be
able to show your own arguments, and back them up with a wide range of
reading, and with information and examples that are not always reported
in this guide.
Also, please do not get into the mindset of thinking that each question in
the exam corresponds to a different chapter of this guide. As you will see
when you read the guide, all the chapters have information and themes
that relate to each other. The best answers in an exam will show a broader
understanding of how the themes in each chapter relate to each other –
rather than being based on one chapter alone.
Revision for an examination involves looking back over what you have
learned and trying to relate this to the kinds of questions you will be asked
in the examination. Don’t try to revise everything. Don’t just learn lots
of material. Take time to clarify your position on what you are revising.
9
171 Introduction to international development
Make sure you know what you think. Then decide what evidence you
need to use to support your argument. You will need to have knowledge of
enough topics to enable you to answer four out of nine questions. To be on
the safe side, you should aim to revise around two-thirds of the material
and to know at least half of it well.
Many of you will have strong beliefs and arguments about subjects in
international development. Some of these subjects, such as colonialism,
poverty, or the international world order are controversial! Please do
argue strongly if you wish. But please avoid being one-sided. You can
avoid being one sided by following some basic common-sense techniques
when you write essays. State your opinion. State the alternative
opinion(s). Give evidence for both sides. Review this evidence. Then make
a conclusion based on your evidence and discussion. Do not just give one
side of the story.
You are advised to look at the Sample examination questions provided
at the end of each chapter and the Sample examination paper at the
end of this guide to give you an idea about what to expect. The Sample
examination paper provides some ideas about how you could tackle
specific questions. These ideas are not ‘model answers’. They are intended
to give you tips on how to approach the types of questions you will be
asked. There is, of course, always room for you to answer the question in
a different way. As long as your answer is well argued and relevant to the
question asked, you will get good marks.
The Sample examination paper indicates the format and structure of
the examination paper from 2011 onwards. Please note that an earlier
version of this course (entitled 135 World development) was offered
from 2006 with a slightly different examination format. You will be told
about any further changes to future examination papers if they occur
on the VLE. The Examiners’ commentaries, which you should use as part
of your preparation for exams, are usually made available online from
mid-September onwards. They contain valuable information about how
to approach the examination and you are strongly advised to read them
carefully.
You should also look at the advice provided in your Student handbook on
examinations.
It is a very good idea to practise writing examination essays to a one-hour
timeframe.
When you sit down to take the examination, make sure you have carefully
read through the whole examination paper and understood what each
question requires before you select the questions you wish to answer and
beginning writing. Make sure that you allocate your time evenly over the
three questions you are required to answer.
Remember, it is important to check the VLE for:
• up-to-date information on examination and assessment arrangements
for this course
• where available, past examination papers and Examiners’ commentaries
for the course which give advice on how each question might best be
answered.
10
Introduction
List of acronyms
AIDS Acquired immunodeficiency syndrome
BJP Bharatiya Janata Party
CGIAR Consultative Group for International Agricultural Research
CIMMYT International Wheat and Maize Improvement Centre
CPI (M) Communist Party of India (Marxist)
ECOSOC Economic and Social Council
EOI Export oriented industrialisation
ERP Economic Recovery Programme
FAO Food and Agricultural Organization
FDI Foreign Direct Investment
FRELIMO Front for the Liberation of Mozambique
GATT General Agreement on Tariffs and Trade
GDP Gross Domestic Product
GNP Gross National Product
HDI Human Development Index
HDR Human Development Report
HIPC Highly Indebted Poor Countries programme
HIV Human immunodeficiency virus
HYV High-yielding varieties
IBRD International Bank for Reconstruction and Development
ICJ International Court of Justice
IDS Institute of Development Studies
IFAD International Fund for Agricultural Development
IMF International Monetary Fund
IRRI International Rice Research Institute
ISI Import-substituting industrialisation
JEM Justice and Equality Movement
LDC Least Developed Countries
MAI Multilateral Agreement on Investment
NIC Newly Industrialised Countries
NIE New Institutional Economics
PRSPs Poverty Reduction Strategy Papers
PPP Purchasing power parity
SAPs Structural Adjustment Programmes
SLA Sudanese Liberation Army
TNC Transnational Corporation
UN United Nations
UNDP United Nations Development Programme
UNHCR UN High Commission for Refugees
UNICEF UN International Children’s Emergency Fund (now UN Children’s Fund)
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171 Introduction to international development
Useful websites
You may find some of the following websites useful as you work your way
through the course. If you have access to the Internet, visit these websites
and explore what they have to offer.
Unless otherwise stated, all websites in this subject guide were accessed in
April 2011. We cannot guarantee, however, that they will stay current and
you may need to perform an internet search to find the relevant pages.
Non-governmental websites
www.actionaid.org
Website of Action Aid
www.brettonwoodsproject.org
Website of the Bretton Woods Project
www.cafod.org.uk
Website of the Catholic Agency for Overseas Development
www.odi.org.uk
Website of the UK Overseas Development Institute
www.oneworld.org
Website of One World, which links to a wide range of other useful sites
www.oxfam.org
Website of Oxfam
www.pambazuka.co.uk
Website of the Pambazuka Newsletter
12
Introduction
www.reliefweb.org
Website of Reliefweb
Academic websites
www.lse.ac.uk/internationaldevelopment/home
Website of the Department of International Development, London
School of Economics
www.ids.ac.uk
Website of the Institute of Development Studies, University of Sussex
www.sed.manchester.ac.uk/idpm/
Website of the Institute for Development Policy and Management,
University of Manchester
www.unrisd.org
Website of the United Nations Research Institute for Social
Development
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171 Introduction to international development
Notes
14
Part II: Theories and history of development
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171 Introduction to international development
Notes
16
Chapter 2: Ideas of development
Essential reading
Desai and Potter (2008) Section 1 (especially Chapters 1.1 to 1.4), Section 2
(especially Chapters 2.1 to 2.2).
Further reading
Amsden, A. The Rise of ‘the Rest’. Challenges to the West from Late-Industrializing
Economies. (Oxford and New York: Oxford University Press, 2001)
[ISBN 0195139690].
Chambers, R. Whose Reality Counts? Putting the First Last. (London:
Intermediate Technology Productions, 1997) [ISBN 185339386X].
Cowen, M.P. and R.W. Shenton Doctrines of Development. (London: Routledge,
1996) [ISBN 0415125154].
Escobar, P. ‘Planning’ in Sachs, W. (ed.) The Development Dictionary. (London:
Zed Press, 1992) [ISBN 1856490440].
Ferguson, J. The Anti-Politics Machine. ‘Development’, Depoliticization and
Bureaucratic Power in Lesotho. (Minneapolis: University of Minnesota Press,
1994) [ISBN 0816624372].
Harriss, J. ‘The case for cross-disciplinary approaches in international
development’, World Development XX, 2002.
Johnson, C. MITI and the Japanese Miracle: The Growth of Industrial Policy,
1925–75. (Stanford: Stanford University Press, 1982) [ISBN 0804712069].
Johnson, C. Arresting Development: The Power of Knowledge for Social Change
(London: Routledge, 2008) [ISBN 0415381533]
Kabeer, N. Reversed Realities: Gender Hierarchies in Development Thought.
(London: Verso Press, 1994) [ISBN 0860915840].
Khan, M.H. ‘Corruption and Governance in Early Capitalism: World Bank
Strategies and their Limitation’ in Pincus, J. and J. Winters (eds)
Reinventing the World Bank. (Ithaca, N.Y.: Cornell University Press, 2002)
[ISBN 0801487927].
Leys, C. The Rise and Fall of Development Theory. (Oxford: James Currey, 1996)
[ISBN 0852553501] Chapter 1.
Nussbaum, M. and J. Glover (eds) Women, Culture and Development: A Study of
Human Capabilities. (Oxford: Clarendon Press, 1995) [ISBN 0198289642].
Parpart, J. ‘Post-Modernism, Gender and Development’ in Crush, J. (ed.) Power
of Development. (London: Routledge, 1995) [ISBN 0415111773].
Power, M. ‘The dissemination of development’, Environment and Planning D 16,
1998, 57798
Ravallion, M. ‘Good and Bad Growth: The Human Development Reports’, World
Development 25, 1997, pp.631–38.
Sachs, W. (ed.) The Development Dictionary. (London: Zed Press, 1992)
[ISBN 1856490440].
Schuurman, F.J. (ed.) Beyond the Impasse. New Directions in Development
Theory. (London: Zed Press, 1993) [ISBN 1856492109] especially Chapter
3 by David Booth.
Sen, A. Development as Freedom. (Oxford: Oxford University Press, 2001)
[ISBN 0198297580 (hbk); 0192893300 (pbk)] Chapters 1 and 2.
Worsley, P. The Three Worlds: Culture and World Development. (London:
Weidenfeld and Nicholson, 1986) [ISBN 0297783564].
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171 Introduction to international development
Challenging reading
Corbridge, S, 2001 ‘Development as freedom: the spaces of Amartya Sen’
Progress in Development Studies 2(3) 2002, pp.183–217.
Cowen, M.P. and R.W. Shenton ‘The Invention of Development’ in
Crush, J. (ed.) Power of Development. (London: Routledge, 1995)
[ISBN 0415111773].
Devereaux, S. ‘Sen’s entitlement approach: critiques and counter-critiques’,
Oxford Development Studies 29, 2001, pp.245–63.
Fine, B. ‘Economics and ethics: Amartya Sen as point of departure’, The New
School Economic Review 1, 2001, pp.151–61.
Gasper, D. The Ethics of Development (Edinburgh: Edinburgh University Press,
2004) [ISBN 0748610588].
Gordon, C. (ed.) Power/Knowledge: Selected Interviews and Other Writings,
1972–77, by M. Foucault. (New York: Random House USA Inc., 1988)
[ISBN 039473954X].
Prendergast, R. ‘The concept of freedom and its relation to economic
development – A critical appreciation of the work of Amartya Sen’,
Cambridge Journal of Economics, 29, 2005, 11451170.
Wade, R.H. Governing the Market: Economic Theory and the Role of Government
in East Asian Industrialization. (Princeton: Princeton University Press, 1992)
[ISBN 0691003971] Out of print.
Classic texts
Foucault, M. Discipline and Punish. The Birth of the Prison. (Harmondsworth:
Penguin, 1991) [ISBN 014013722X].
Frank, A.G. Capitalism and Underdevelopment in Latin America.
(Harmondsworth: Penguin, 1971) [ISBN 0140213341].
List, F. The National System of Political Economy. (Philadelphia: J.B. Lippincott
and Co., 1856).
Marx, K. The Communist Manifesto. (London, 1848).
Polanyi, K. The Great Transformation: The Political and Economic Origins of our
Time. (Boston, Mass.: Beacon Press, 2001) [ISBN 080705643X].
Rawls, J. A Theory of Justice. (Oxford: Oxford University Press, 1999 – first
edition 1971) [ISBN 019825055X].
Smith, A. An Inquiry into the Nature and Cause of the Wealth of Nations.
(New York: Modern Library, 1776).
Introduction
This chapter explores ideas of development. For many people, the word
may seem unproblematic – a common-sense term to describe what needs
to happen if the poor are to be raised out of poverty.
In fact, what the objectives of development should be and how they are to
be achieved has always been passionately contested and continues to be to
this day.
Box 1
Alan Thomas distinguishes three main ways in which the term ‘development’ is used:
Enlightenment origins
Liberalism, progress and modernity
While the term ‘development’ has really only become commonly used
over the past 60 years – that is, since the end of the Second World War
in 1945 – its origins are to be found in eighteenth- and nineteenth-
century Western Europe. A generation of enlightened philosophers such
as Montesqieu, Diderot and Voltaire argued in the eighteenth century
that humanity was undertaking an evolutionary journey away from its
primitive and uncivilised past towards a better – and by definition, more
civilised – future based on the rule of reason and individual freedom.
Founding exponents of a philosophy of liberalism, they described this
journey as ‘progress’. Modernity was the final destination. It was no
coincidence, of course, that the emergence of such views occurred just as
parts of Europe were embarking on periods of revolutionary change. In
France, the monarchy was overthrown following the revolution of 1789
and a Republic was established. In Great Britain the industrial revolution
was gathering pace. To sum up, it was believed that parts of Europe were
beginning natural and predominantly spontaneous processes of social,
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171 Introduction to international development
economic and political change at the end of which its peoples would be
both wealthier and freer. The means to these ends would be capitalism and
democracy.
Critics of liberalism
This optimistic conception of humanity’s trajectory was undoubtedly
shared by significant sections of Europe’s economic and political elites
throughout the nineteenth century. For them, the Scottish philosopher
Adam Smith (1723–90) was one of the key thinkers and his economic and
political liberalism the only viable way forward. But there were always
many dissenters. There were conservatives who viewed capitalism and
democracy as destroyers of the traditional economic, social and political
ties that had bound communities together, offering chaos and anarchy
in their place. There were also dissenting radicals. For Karl Marx (1818–
83), capitalism was a violent and brutal but nonetheless progressive
revolutionary force. However, it would inevitably have to be superseded
by another (communist) revolution if the wealth and freedom it offered
the rising middle class (or bourgeoisie) was to be enjoyed by the masses
as a whole. Advocates of change could not deny that the journey towards
modernity was indeed creating many economic casualties and social
tensions. More conscious and explicit ideas of development began to
emerge in response, reflecting the need to find non-revolutionary ways
of mitigating these crises and preserving order. Important actors in the
emergence of this idea of development as conscious intervention were the
Saint-Simonians and the positivist philosopher August Comte in France 1
On Comte and
(Cowen and Shenton in Crush (ed.), 1995).1 Saint-Simon, see also
course 21 Principles of
There was another group of radical dissenters from the mid-nineteenth Sociology.
century onwards that has come to be strongly represented within present-
day development debates and practice. These were populists such as
the Narodniki in pre-revolutionary Russia. In line with the meaning of
the word in Russian, the Narodniki advocated ‘going to the people’. Like
conservatives, they mourned the destructive impact on communities of
capitalism; unlike them, they did not wish to preserve traditional economic
or social relations but instead replace them with a world in which modern
systems of production and exchange were locally controlled. These
populists dreamt of a gentler, more co-operative process of development
than did Marx. Whereas Marx anticipated a process of modernisation
that would inevitably involve the expropriation of much of the land
controlled by the peasantry and the transformation of many peasants into
proletarians, populists envisioned a world where rural people remained on
the land and constructed viable livelihoods.
During the nineteenth century there were other commentators, often
relatively neglected at the time that they were writing, who began to see
the journey towards modernity as arising out of the combined impact
of nationalism and state power. As Comte and others had suggested,
industrial capitalism required conscious assistance from somewhere if
it was to come into being. Among these commentators was the German
Frederick List (1789–1846). He was one of the first to articulate a ‘statist’
view of development (Cowen and Shenton in Crush (ed.), 1995). It
combined subsequently in different ways with conservative and radical
philosophies. For example, Stalin espoused a highly statist model of
socialist modernisation in post-revolutionary Russia after 1917.
List directly addressed the crucial question of what has come to be called
‘late development’. In the mid-nineteenth century, he asked: will the
apparently spontaneous and free market-based policies and processes that
20
Chapter 2: Ideas of development
propelled the first country to industrialise (i.e. Great Britain) work for
countries coming afterwards? His answer was – no, at least not initially.
There would have to be a phase where the state led the way and new
industries were protected by it. This question has shaped development
theory and policy profoundly since then, although it is important to note
that for List, ‘state-led development’ was not an appropriate strategy for
the non-European world. There, free trade under the auspices of European
Empires would be the only way forward.
Box 2
Smith, Marx and List in their own words:
‘…man has almost constant occasion for the help of his brethren, and it is in
vain for him to expect it from their benevolence only. He will be more likely
to prevail if he can interest their self-love in his favour, and show them that it
is for their own advantage to do for them what he requires of them. Whoever
offers to another a bargain of any kind, proposes to do this. Give me that which
I want, and you shall have this which you want, is the meaning of every such
offer; and it is in this manner that we obtain from one another the far greater
part of those good offices which we stand in need of.’ (Smith, 1776)
‘I found that the theorists kept always in view mankind and man, never
separate nations. It became then obvious to me that between two advanced
nations, a free competition must necessarily be advantageous to both if they
were upon the same level of industrial progress; and that a nation unhappily
far behind as to industry, commerce and navigation must above everything
put forth all its strength to sustain a struggle with nations already in advance.’
(List, 1856)
Activity 1
Write a short answer (no more than 200 words) to the following question: Based on the
above quotations, which of Smith, Marx and List do you think is most relevant to the
challenges of development today and why? If you don’t feel able to answer this question yet,
instead go and find out more about what these commentators thought about development.
Box 3
The value of the term ‘Third World’ has been heavily debated over the years.
Others have preferred to use frameworks of reference such as ‘North and
South’, or ‘developing countries’. Peter Worsley (1986, p.307) describes
how ‘Third World’ was first used in 1952 by Alfred Sauvy, a demographer.
He was a supporter of the non-communist Left in France, which ‘saw
parallels between their own search for a “third way” between capitalism
and Stalinist communism and the struggles of the new wave of militant
anti-colonial movements which opposed imperialism but were by no means
pro-communist’. The political embodiment of Third Worldism was the Non-
Aligned Movement, established in 1961.
22
Chapter 2: Ideas of development
Activity 2
With the end of the cold war and the collapse of communism, has the idea of the Third
World ceased to have any value today? Produce a table giving the reasons for and
against retaining the term.
After 1945, debates about how the Third World could most successfully
pursue economic development were framed by a shared assumption that this
was essentially a matter of promoting ‘modernisation’. But beyond that, there
were many different views about what came to be known as ‘modernisation
theory’. The threat of communism moved the centre of gravity of the debate
somewhat to the left. For intellectuals like Karl Polanyi and John Maynard
Keynes, the state needed to step in to counteract capitalism’s tendency to
destroy the social fabric and generate political crises if left to itself. Polanyi
(2001), writing as the Second World War was coming to an end, saw the
rise of fascism in Europe after 1918 as a desperate response to the effects
of rampant capitalism. These views were extended in modified form to
the Third World. So while a minority continued to argue that all that was
required was to clear the ground and allow the market to do its work, the
majority countered that, whether its ideology was capitalist or socialist, the
state in the Third World needed to intervene actively – for example, through
raising the rate of saving, public works, improvement of productivity,
increased exports, better education, etc. – during the initial phases of late
development. Only in this way could Third World countries make the
essential transition from economies based on primary commodity export to
economies with a strong industrial sector. The new nationalist elites in the
Third World largely adopted this view on coming to power. Statist ideas of
development found a welcoming home in post-war ‘development economics’,
which was soon extremely influential within universities, governments
and the new multilateral institutions dedicated to development such as the
International Monetary Fund (IMF) and World Bank.
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171 Introduction to international development
group echoed the populist perspective, arguing that the best response to
the failure of the world economy since 1945 to bring development was
to focus on building systems of sustainable local production, distribution
and exchange. Ideas about culture and environmental sustainability
provided strong impetus for revived populist perspectives, which were
enthusiastically embraced by many within the emerging non-governmental
(NGO) sector. Unfortunately for radicals of all stripes, it was the neo-liberals
who were initially triumphant.
Box 4
One of the most important Postmodernists, although he might well repudiate the
label (or, indeed, any label), was the French philosopher Michel Foucault (1926–
84). For Foucault, a discourse comprised the words, institutions, and practices
that express a particular understanding (or knowledge) of the world and which
contribute to the enforcement of a corresponding set of power relations.
Activity 3
Do you think that development policy-makers and practitioners often ignore the
experiences and opinions of women? Have things improved in this regard over the past
20 years? If you want to take this further, read Jane Parpart’s article in Crush (ed.), 1995.
What insights does she believe a postmodern feminist perspective offers into what she
calls the ‘women in development enterprise’?
Box 5
The Human Development Index (HDI) is a composite index that measures
the average achievements in a country in three basic dimensions of human
development:
Activity 4
Take a look at the latest version of the HDI on the website of the UNDP. Find its
definitions of GDP and PPP. What do you think some of the problems might be in
successfully measuring poverty?
Sen’s emphasis upon inequality within countries and at the global level
draws upon the thinking of liberal philosopher John Rawls on ‘justice as
fairness’. For Rawls, fairness is rooted in equality of opportunity. He does
not insist on equality of outcomes on the grounds that this is likely to
involve unacceptable infringements upon liberty (Rawls, 1971).
Sen’s explicitly value-based (or, to put it another way, normative) approach
has been criticised on a number of grounds. For some critics, it glosses
over the fact that most countries historically have developed successfully
under authoritarian governments. His approach has also been described
as misconceived because it exaggerates the degree to which growth can
be ‘bad’ (Ravallion, 1997); another critique claims that he overgeneralises
about humanity from a Western-derived cultural model. Martha Nussbaum
(1995) has challenged Sen from within a normative perspective on the
grounds that Sen’s definition of freedom is too minimalist. For example,
she argues that a ‘good human life’ cannot be achieved unless an adult has
opportunities for experiencing sexual satisfaction.
27
171 Introduction to international development
Conclusion
Before moving on to the next chapter, briefly go back to the introduction
and remind yourself of Alan Thomas’s description of the three main
senses in which the term ‘development’ has tended to be understood:
as a vision; as a historical process of social change; as deliberate efforts
aimed at improvement. If you think that development is more an outcome
of historical processes of social change, you may opt to become directly
involved in politics; if you think that development arises mainly out of
deliberate efforts aimed at improvement, you may prefer to become a
policy professional. But whichever course you choose, you still have to
decide which of the ideas of development we have surveyed in this chapter
will shape your actions. That brings us back to the importance of the
vision. So, what is your vision?
Activity 5
Write a short definition – a maximum of five sentences – of what you think the objectives of
development should be and how they can be achieved. Don’t take more than 20 minutes to do
it. Retain it so that you can review and, if you wish, revise it at the end of this course.
28
Chapter 3: Theories of the state and market
Essential reading
Desai and Potter (2008) Chapters 1.8, 2.5.
Todaro and Smith (2014) Chapters 3 and 11.
Further reading
Amsden, A. ‘Bringing Production Back In – Understanding Government’s
Economic Role in Late Industrialization’, World Development XXV(4) 1997,
pp.469–80.
Collier, P. The Bottom Billion: Why the Poorest Countries are Failing and What
Can be Done About It (Oxford: Oxford University Press, 2007) [ISBN
0195374630]
Crouch, C. ‘Markets and States’ in Nash, K. and A. Scott (eds) The Blackwell
Companion to Political Sociology. (Oxford: Blackwell Publishers Ltd, 2000)
[ISBN 0631210504].
Dunleavy, P. ‘Democratic Politics and the State’, University of London External
Programme subject guide (London: University of London Press, 2004) p.12.
Evans, P. ‘The State as Problem and Solution: Predation, Embedded Autonomy
and Structural Change’ in Haggard, S. and R. Kaufman (eds) The Politics of
Economic Adjustment. (Princeton: Princeton University Press, 1992)
[ISBN 0691003947].
Heywood, A. Politics. (Basingstoke: Palgrave Macmillan, 2002) [ISBN
0333971310] Chapter 5 on ‘The State’.
Keen, D. The Benefits of Famine: A Political Economy of Famine and Relief in
South-Western Sudan, 1983–89. (Princeton: Princeton University Press,
1994) [ISBN 0691034230].
Khan, M. ‘State Failure in Weak States: A Critique of New Institutionalist
Explanations’ in Harriss J., J. Hunter and C. Lewis (eds) The New
Institutional Economics and Third World Development. (London and New
York: Routledge, 1997) [ISBN 0415157919].
Kohli, A. State-Directed Development: Political Power and Industrialization in the
Global Periphery. (Cambridge: Cambridge University Press, 2004)
[ISBN 0521545250].
Little, D. Paradox of Wealth and Poverty: Mapping the Dilemmas of Global
Development. (Boulder, Colo.: Westview, 2003) [ISBN 0813316421]
Chapter 8.
Lockwood, M. The State They’re In. An Agenda for International Action on
Poverty in Africa. (Bourton: ITDG Publishing, 2005) [ISBN 1853396176].
Van de Walle, N. African Economies and the Politics of Permanent Crisis, 1979–
1999. (Cambridge: Cambridge University Press, 2001) [ISBN 0521008360].
Wade, R.H. Governing the Market: Economic Theory and the Role of Government
in East Asian Industrialization. (Princeton: Princeton University Press, 1992)
[ISBN 0691003971] Out of print.
Woo-Cumings, M. ‘Chalmers Johnson and the Politics of Nationalism and
Development’ in Woo-Cumings, M. (ed.) The Developmental State. (Ithaca,
N.Y.; London: Cornell University Press, 1999) [ISBN 0801485665].
29
171 Introduction to international development
Challenging reading
Bates, R. Prosperity and Violence: The Political Economy of Development. (London
and New York: W.W. Norton, 2001) [ISBN 0393050386].
Beetham, D. Max Weber and the Theory of Modern Politics. (Oxford: Blackwell
Publishers Ltd, 1985) [ISBN 0745601189].
Burki, S. Dismantling the Populist State: The Unfinished Revolution in Latin
America and the Caribbean. (Washington DC: World Bank, 1996)
[ISBN 0821336894].
Gordon, C. (ed.) Power/Knowledge: Selected Interviews and Other Writings,
1972–77, by M. Foucault. (New York: Random House USA Inc., 1988)
[ISBN 039473954X].
Harriss, J. ‘Institutions, Politics and Culture: A Polanyian Perspective on
Economic Change’, International Review of Sociology 13(2) 2003, pp.343–56.
Kozul-Wright, R. and R. Rowthorn ‘Spoilt for Choice? Multinational
Corporations and the Geography of International Production’, Oxford Review
of Economic Policy 14(2) 1998, pp.74–92.
Mackintosh, M. ‘Abstract Markets and Real Needs’ in Bernstein, H. et al. (eds)
The Food Question. Profits versus People? (London: Earthscan Publications,
1990) [ISBN 1853830631].
Mackintosh, M. et al. (eds) Economics and Changing Economies. (London: The
Open University Press and International Thomson Business Press, 1996)
[ISBN 0412628406].
Mamdani, M. Citizen and Subject. Contemporary Africa and the Legacy of
Late Colonialism. (Princeton: Princeton University Press, 1996) [ISBN
0691027935].
Reno, W. Corruption and State Politics in Sierra Leone. (Cambridge: Cambridge
University Press, 1995) [ISBN 0521471796].
Stern, N., J-J. Dethier and F.H. Rogers Growth and Empowerment. (Cambridge,
Mass.: 2005) [ISBN 0262693461].
Stiglitz, J. ‘Markets, Market Failures and Development’, American Economic
Review Papers and Proceedings 79(2) 1989, pp.197–202.
Sugden, C. ‘Spontaneous Order’, Journal of Economic Perspectives 3, 1989,
pp.85–97.
Tilly, C. ‘Reflections on the Nature of State-Making’ in Tilly, C. (ed.) The
Formation of National States in Western Europe. (Princeton: Princeton
University Press, 1975) [ISBN 0691007721].
Wade, R.H. ‘Wheels within Wheels: Rethinking the Asian Crisis and the Asian
Model’, Annual Review of Political Science 3, 2000, pp.85–115.
Classic texts
Baran, P. and P. Sweezy Monopoly capital: An essay on the American Economic
and Social Order. (New York: Monthly Review Press, 1968)
[ISBN 0853450730].
Harvey, D. The Condition of Postmodernity. (Oxford: Blackwell Publishers Ltd,
1990) [ISBN 0631162941].
Hayek, F. ‘The Use of Knowledge in Society’ in American Economic Review 35(4)
1945, pp.519–30.
Marx, K. The Communist Manifesto. (London, 1848).
Myrdal, G. Asian Drama: An Inquiry into the Poverty of Nations. (New York:
Pantheon Books, 1972) [ISBN 0394470869].
Olson, M. ‘Dictatorship, Democracy and Development’, The American Political
Science Review 87(3) 1993, pp.567–76.
Polanyi, K. The Great Transformation: The Political and Economic Origins of our
Time. (Boston Mass.: Beacon Press, 2001) [ISBN 080705643X].
Ricardo, D. The Principles of Political Economy and Taxation. (1817).
Runciman, W. (ed.) Max Weber: Selections in Translation. (Cambridge:
Cambridge University Press, 1978) [ISBN 0521292689].
30
Chapter 3: Theories of the state and market
Smith, A. An Inquiry into the Nature and Cause of the Wealth of Nations.
(New York: Modern Library, 1776).
Introduction
Let us turn now to two key concepts in theories of development: state and
market. The ways in which people have thought about the state and the
market have profoundly shaped our understanding of what development
is and should be – and our subsequent actions. In earlier chapters, you
had some glimpses of how the state and the market have featured in ideas
of development over the last 250 years. The time has come to explore
theories of the state and the market in a more structured manner.
Box 1
Sample definitions of state and market:
•• The state
‘The state is a distinctively modern and western way of organising
political authority and the conduct of government. The idea of “the state”
essentially is that there should be a single, unified source of authority
in each area, drawing upon the undivided loyalties of a population,
operating in a well-organised and permanently continuing way, and
directed towards the interests of a whole society. Furthermore, a modern
assumption is that government should be organised exclusively by states
which can meet all these criteria. Indeed, very recently, the assumption
has been that the whole surface of the world (which can be occupied
by humanity) should be partitioned exclusively between one state or
another.’
(Dunleavy, 2004, p.12)
•• The market
‘A market is a system of commercial exchange that brings buyers wishing
to acquire a good or service into contact with sellers offering the same
for purchase. In all but the most simple markets, money is used as a
convenient means of exchange, rather than barter. Markets are impersonal
mechanisms in that they are regulated by price fluctuations that reflect the
balance of supply and demand, so-called market forces.’
(Heywood, 2002, p.179)
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171 Introduction to international development
Activity 1
Either:
Spend 10 minutes reflecting upon the above definitions, making notes if you wish.
•• Do you agree with these definitions?
•• Does the state of which you are a citizen meet all of Dunleavy’s criteria? If not, does
that mean that it is not really a state?
•• How useful is Heywood’s definition of the market? Is there anything missing?
Or:
Read Chapter 22, ‘Markets and States’, by Colin Crouch in Nash and Scott (eds) (2000)
and then write a 50-word answer to each of the following questions:
•• If you are an advocate of a strong and effective state, does this mean that you must
be hostile to the market?
•• To what extent might each create and sustain the other?
32
Chapter 3: Theories of the state and market
Box 2
Weber in his own words:
‘In its fullest development…bureaucracy specifically conforms to the
principle of “neither fear nor favour”. Its distinctive characteristics, which
make it so acceptable to capitalism, are developed all the more completely
the more it “dehumanises” itself: that is to say, the more perfectly it
succeeds in realising the distinctive characteristic which is regarded as
its chief virtue, the exclusion from the conduct of official business of all
love, all hatred, all elements of purely personal sentiment – in general,
everything which is irrational and resists calculation. In place of the
lord of older societies, who was capable of being moved by personal
sympathy, kindness, favour or gratitude, modern culture requires the
external apparatus which supports it to be manned by the expert, who is
all the more indifferent in human terms, and so all the more completely
“objective”, the more complex and specialised the culture becomes.’
33
171 Introduction to international development
Box 3
‘Chalmers Johnson laid out the characteristics of the “East Asian developmental
state”, which included:
•• the state is committed to private property and the market, but guides the
market with instruments formulated by an elite economic bureaucracy
•• the state consults with and coordinates the private sector through numerous
institutions, and this is an essential part of the policymaking process
•• state bureaucrats rule, politicians reign, so that the latter create the political
space for the former to act, but also require bureaucrats to respond to
groups on which the stability of the system rests
Activity 2
De Walle writes of Sierra Leone: ‘the descent to state collapse is mostly the unintentional
result of increasingly desperate leaders who have progressively sawn off the state branch
on which they based their neo-patrimonial rule’ (2001, p.185).
To what extent do you agree with de Walle’s analysis? Read pp.114–37 of de Walle and
write a 300-word assessment of the strengths and weaknesses of this interpretation.
Draw on your own country/regional experience where appropriate. If you want to take
this further, also read pp.4–23 of Mamdani.
Other variations
Some analysts have used the term ‘predatory state’ in relation to Africa
to describe situations where processes of elite accumulation and theft
have reached a particularly uncontrolled level. Reno (1995) talks of the
‘shadow state’ to describe the informal realm within which real power
is exercised in Africa. Others, including writers on Latin America, have
talked about the ‘rentier state’, referring to states where elites live off the
profits generated by their control over power and resources. Since the
1960s feminist theory has generated a range of theories about the state.
This has led some to argue that male power – or patriarchy – is no less
important than class power and that it is possible to talk in terms of the
‘patriarchal state’. Analysts have also used terms such as ‘soft’ or ‘weak
state’. For example, India has been characterised as a ‘soft state’, by which
is meant the inability of the state to insulate itself successfully from vested
interests within society (Myrdal, 1972). In the context of Latin America,
this ‘softness’ has also been expressed in the term ‘populist state’, referring
to one of the dominant political traditions in the region, in which elites
form alliances with the urban working class and are unable to insulate the
state from its welfarist demands sufficiently to achieve a developmental
trajectory (Burki, 1996). In the context of globalisation, the reduced
capacity of states to control their economies has led to descriptions of the
state as ‘hollow’ and even as irrelevant. This debate has tended to take
place in relation to developed world states rather than their counterparts
in the developing world, where effective states have sometimes never
existed (Heywood, 2002, pp.98–100).
36
Chapter 3: Theories of the state and market
Box 4
At the level of countries, David Ricardo (1772–1823) developed a theory of
‘comparative advantage’ that would be the basis for economic growth through
free trade. A country has a comparative advantage in the production of a good
if the opportunity cost of producing one of that good, in terms of other goods
foregone, is lower in that country than abroad.
His most famous example involved England and Portugal. In Portugal it was
possible to produce both wine and cloth with less work than it takes in England.
However, the relative costs of producing those two goods are different in the
37
171 Introduction to international development
two countries. In England it is very hard to produce wine, and only moderately
difficult to produce cloth. In Portugal both are easy to produce. Therefore, while
it is cheaper to produce cloth in Portugal than England, it is cheaper still for
Portugal to produce excess wine, and trade that for English cloth. And conversely
England benefits from this trade because its cost for producing cloth has not
changed but it can now get wine at closer to the cost of cloth.2 2
See Ricardo’s The
Principles of Political
Economy and Taxation
Smith argues that if people fail to supply goods that other people want, (1817).
they will not find buyers for those goods in the marketplace. In this way,
efficiency and innovation are encouraged by the market. The animating
principle behind market exchange for Smith is individual self-interest. The
social benefits of a market system do not require any planning of these
outcomes. All that is required is that people should be free to act selfishly
on their own behalf. In the economic sphere, that means that the right of
private property should be sacrosanct. One of the roles of the state is to
guarantee that right.
Of course, the market, as a vital means of organising economic activity,
predated capitalism and also operated in some form or other in most of
the communist states of the twentieth century. However, for Smith and
others from the Liberal tradition, it is in modern capitalist society that
the virtues of the market are given their fullest expression. Indeed, the
two become virtually synonymous. Market relations penetrate all spheres
of economy and society to the point where land and labour become
commodities to be traded like any other. The relentless search for profit
drives on competition for market share, which in turn spurs further
innovation. Those who cannot compete in the market go bust.
Neither Smith nor those who followed him were unaware that the market
could sometimes fail to work as it should and that it produced losers as
well as winners. Neo-classical economists within the Liberal tradition have
expended much energy over the past 100 years or so trying to understand
the circumstances in which markets, however freely operating, do not
function well and when external intervention – for example, by the state
– might be justified. Diagnoses of the origins and extent of ‘market failure’
have differed. For some, there have been relatively few circumstances in
which external intervention is likely to improve matters. Indeed, it may be
these interventions that create the problem in the first place. For others –
such as John Maynard Keynes – the scale of the internal malfunction could
be so socially destructive that regular state intervention may be justified.
For Keynes, shaped by the experience of the 1928–33 Great Depression,
the social phenomenon that above all justified such intervention was
unemployment.
Karl Polanyi (1886–1964) was also strongly affected by the events of the
interwar years. First published in 1944, The Great Transformation (2001)
explores the dangers inherent in the utopian idea of the ‘self-regulating
market’ – that is, markets in which prices are purely based on the
unrestricted operation of the forces of supply and demand. He argues that
modern industrial society is the first human society in which markets have
been freed from social regulation and control. Under these conditions,
‘[I]nstead of economy being embedded in social relations, social relations
are embedded in the economic system’ (Polanyi, 2001, p.57). The idea of
the economy becoming ‘disembedded’ so that the market can no longer
be subject to wider social relationships that would interfere with its free
operation is central to Polanyi’s analysis. For him, the social costs of this
process can be so high that it produces a political backlash. It falls to the
modern state to mitigate these social costs.
38
Chapter 3: Theories of the state and market
Activity 3
What value does Polanyi’s analysis have in terms of thinking about development today?
If you want to take this further, read pp.72–76 of Polanyi’s The Great Transformation and
make notes on his reasons why the key elements in economic activity – labour, land and
natural resources, and money – ensure that ideas of the ‘self-regulating market’ can only
ever be utopian.
39
171 Introduction to international development
Box 5
For Marx, the development of a single world market would have come as
little surprise. His late-twentieth-century followers, as they came to question
dependency theory, linked this process to the crisis of Fordism in the 1960s and
1970s – a system of large-scale mass production, automated assembly lines and
hierarchically organised firms on a predominantly national basis, in which labour
is tightly disciplined, together with mass consumption, secured by welfare states
– and its gradual replacement by regimes of flexible accumulation.
Under these regimes of flexible accumulation, new ways of organising the control
of labour have emerged, for example, through self-disciplining teams, that offer
much less security to workers. Founded on the application of new information
technology, production today is now often to be found in multiple locations
around the world. Immensely powerful transnational corporations have come to
dominate the world economy. A commitment to welfarism has been replaced by
an acceptance of the inevitability of greater inequality both within and between
nations. This restructuring of capitalism is bringing about great social changes
such as the weakening of traditional class politics and the emergence of new
forms of identity politics.
Activity 4
Do you think that the revival of free market theory under globalisation has led to greater
economic inequality and insecurity? Write a short answer to this question. If you want
to take this further, read ‘From Fordism to Flexible Accumulation’, Chapter 9 of David
Harvey’s The Condition of Postmodernity, and make some notes.
While many Liberal and Marxist theorists now agree that market-based
globalisation is proceeding apace, they still tend to differ dramatically,
of course, in terms of how they interpret it. Liberal theorists are usually
positive about its overall impact for economic growth and poverty-
reduction across the world economy. Marxists tend to view it as deepening
the unevenness of economic and social development. But there are also
sceptics who do not believe that market-based globalisation is as far
advanced as has been claimed. For example, some claim that most trade
is within and between a triad of regional economic blocs – Europe, North
America and East Asia (Kozul-Wright and Rowthorn, 1998). They also
point to the fact that foreign direct investment goes mainly to advanced
capitalist countries and to a select but small number of countries in the
developing world. Finally, other observers argue that behind apparently
abstract market processes are very specific national capitalist interests.
For example, behind the growth of world financial markets is the ‘US Wall
Street-Treasury Complex’ (Wade, 2000).
40
Chapter 3: Theories of the state and market
‘Real markets’
An important debate has been taking place in recent decades about
whether the often polarised debate between the Liberal and Marxist
traditions has led us to ask the wrong questions about markets. Maureen
Mackintosh has argued that the two traditions, for all their differences,
both depend upon abstract and static models of the market. For Liberals,
the market is a benevolent arena of exchange; for Marxists, it is a
fetishised arena of exploitation. Mackintosh suggests that it might be
more useful to analyse markets as ‘different ways of buying and selling…
as they operate in the world’. She continues: ‘Markets in this sense of the
term have widely varying institutions and economic contexts, they operate
on limited information, they involve and help to create a variety of social
classes, power relations, and complex patterns of needs and responses.
All of this generates real effects in terms of people’s survival: in short, real
markets’ (1990, p.47).
She is not arguing that you do not need abstract models of the market –
simply that it is vital to test them against concrete evidence. Mackintosh
initially raised these problems in connection with food and agricultural
markets but they apply more widely. In fact, important work on ‘real
markets’ was already under way at the time she was writing, as she
acknowledged. Amartya Sen, investigating the 1974 famine in Bangladesh,
had argued that the normal working of markets can be an important factor
in the creation of hunger and famine. Increased market participation by
individuals and communities can leave them more vulnerable to drought
and pests, as they sell more of their product for cash than before. In
addition, price rises on volatile markets can price them out of the market
when they are dependent upon it to secure their food needs. He directs us
towards the ‘non-market determinants of the ability to command goods on
the market: ownership of resources and the terms on which people come
to market and which influence their ability to trade’ (Mackintosh, 1990,
pp.43–44).
Sen demonstrates that the Liberal tradition is capable of making important
contributions to our understanding of how markets ‘really work’. He is a
strong advocate of appropriate state intervention to address the insecurity
that markets will inevitably generate. Radical thinkers and Marxists
are today also undertaking valuable studies into how real markets are
structured by class and power and arguing how it may be possible to
improve the terms upon which people ‘come to the market’.
It is important not to lose sight of the fact that real markets do not always
operate ‘normally’. Indeed, analysts of civil wars and other internal
conflicts in many parts of the world have shown how powerful groups,
often armed, are able to compel the less powerful to trade in markets on
terms that directly strip the less powerful – for example, refugees and
internally displaced people – of assets and wealth. As Keen has argued in
relation to Sudan in the mid-1980s, in such situations ‘market forces’ are
replaced by ‘forced markets’ (Keen, 1994).
Activity 5
Try to identify some of the ‘real markets’ in your country or region and assess their effects
in terms of people’s livelihoods. If you want to take this further, read and make notes
on Maureen Mackintosh’s ‘Abstract Markets and Real Needs’, which is Chapter 4 of
Bernstein et al. The Food Question (1990).
41
171 Introduction to international development
Conclusion
Theoretical and political arguments about the relationship between the
state and the market often seem to imply that if you are an advocate
of one you must be hostile to the other. As we have seen, there are
major elements of the Liberal and Marxist traditions that have helped to
frame the argument in such terms. The conflict between capitalism and
communism during the twentieth century also certainly encouraged such
a polarisation. Now that the cold war is over, has the time come to move
beyond this ‘either-or’ approach? Our answer to this question would be –
Yes. But this does not mean that we should swing to the other extreme and
assume that the two will always co-exist harmoniously.
Equally, we would argue that there is no single ‘right relationship’ between
state and market for countries seeking to develop. The right relationship
between the state and the market will vary between countries and
regions. To complicate things further, getting the right relationship is not
something that can be entirely engineered through implementing the ‘right
policies’. Much will depend on the balance of forces within society. We
would endorse Mackintosh’s assertion that we need to think in terms of
‘real markets’ – and, for that matter, ‘real states’.
Some of you may be wondering what the point of all this grand theory has
been if ultimately we cannot draw many concrete conclusions from it. The
point of high-order thinking of this kind is that it represents an attempt to
uncover the purest and deepest characteristics of a particular economic,
political or social phenomenon. How these phenomena operate in practice
will invariably be different – and will require what Harriss (2003) has
called ‘middle-range theorising’ – but efforts to understand the ‘real world’
will be fatally compromised if we do not take these grand theoretical
models as a key point of departure.
Let us try again to reach a concrete conclusion by asking another question
that is also important for policymakers and practitioners: which of the
state and the market is more central today to processes of getting
development started? Getting started is the most difficult part of
development. Countries and regions that have not really begun to develop
yet are struggling to ‘catch up’. They lack both resources and power.
Markets are weak and local firms often few in number. Both theory and
practice strongly suggest that the state is particularly crucial in overcoming
such initial impediments. Indeed, states are often instrumental in
creating markets and the economic actors which operate in them. To do
this, states must have the will and capacity not just to support beneficiaries
of such processes, but also to enforce unwelcome outcomes upon ‘losers’.
Foreign aid will never be sufficient by itself to promote ‘developmental’
economic and social change. This leads us to conclude that, even where
the circumstances do not particularly appear to encourage it and allowing
for the limits of what can be achieved through policy interventions, there
is no alternative but to try to build a developmental state.
42
Chapter 3: Theories of the state and market
43
171 Introduction to international development
Notes
44
Chapter 4: Theories of institutions and civil society
Essential reading
Desai and Potter (2008), Chapters 1.5, 2.15, 10.5 to 10.8, 10.11.
Todaro and Smith (2014), Chapters 1 and 11.
Further reading
Chandhoke, N. The Conceits of Civil Society. (New Delhi: Oxford University
Press, 2003) [ISBN 01956661958].
Chatterjee, P. The Nation and its Fragments: Colonial and Postcolonial Histories.
(Princeton: Princeton University Press, 1993) [ISBN 0691019436].
Edwards, M. Civil Society. (Cambridge: Polity Press, 2004) [ISBN 0745631339]
Chapters 1 and 5.
Goodin, R.E. ‘Institutions and their Design’ in Goodin, R.E. (ed.) The Theory of
Institutional Design. (Cambridge: Cambridge University Press, 1998) [ISBN
0521636434].
Hall, J.A. and F. Trentmann (eds) Civil Society: A Reader in History, Theory
and Global Politics. (Basingstoke: Palgrave Macmillan, 2005) [ISBN
1403915431].
Hardoy J.E. and D. Satterthwaite Squatter Citizen: Life in the Urban Third
World. (London: Earthscan, 1989) [ISBN 1853830208].
Harriss, J. Depoliticizing Development: The World Bank and Social Capital.
(London: Anthem Press, 2002) [ISBN 184331049X].
Harriss, J. ‘Institutions, Politics and Culture: A Polanyian Perspective on
Economic Change’, International Review of Sociology 13(2) 2003, pp.343–
56.
Howell, J. and J. Pearce Civil Society and Development: A Critical Exploration.
(Boulder and London: Lynne Rienner Publishers, 2001) [ISBN
1555876196].
Khan, M. ‘State Failure in Weak States: A Critique of New Institutionalist
Explanations’ in Harriss, J., J. Hunter and C. Lewis (eds) The New
Institutional Economics and Third World Development. (London and New
York: Routledge, 1997) [ISBN 0415157919].
North, D. ‘The New Institutional Economics and Third World Development’
in Harriss, J., J. Hunter and C. Lewis The New Institutional Economics and
Third World Development. (London: Routledge, 1997) [ISBN 0415157919].
Przeworski, A., M. Alvarez, J. Cheibub and F. Limongi Democracy and
Development: Political Institutions and Well-Being in the World, 1950–1980
(Cambridge: Cambridge University Press, 2000) [ISBN 0521793793].
Rodrik, D. (ed.) In Search of Prosperity. Analytic Narratives on Economic Growth.
(Princeton: Princeton University Press, 2003) [ISBN 0691092699] Read the
Introduction.
Rodrik, D., A. Subramanian, and F. Trebbi ‘Institutions rule: the primacy of
institutions over integration and geography in economic development’
Journal of Economic Growth 9(2) 2004, pp.131–65.
Rueschemeyer, D., E. Stephens and J. Stephens Capitalist Development and
Democracy. (Cambridge: Polity Press, 1992) [ISBN 0745609457].
45
171 Introduction to international development
Challenging reading
Berman, B. ‘Ethnicity, Patronage and the African State: The Politics of Uncivil
Nationalism’, African Affairs 97(388) 1998, pp.305–41.
Hanlon, J. Mozambique: Who Calls the Shots? (London: James Currey, 1991)
[ISBN 0852553463].
Putnam, R. Making Democracy Work: Civic Traditions in Modern Italy.
(Princeton: Princeton University Press, 1993) [ISBN 0691037388].
Schaffer, B.B. ‘Towards Responsibility: Public Policy in Concept and Practice’
in Clay E.J. and B.B. Schaffer (eds) Room for Manoeuvre: An Exploration of
Public Policy in Agricultural and Rural Development. (London: Heinemann
Educational Books, 1984) [ISBN 0435837605].
Wade, R.H. Governing the Market: Economic Theory and the Role of Government
in East Asian Industrialization. (Princeton: Princeton University Press, 1992)
[ISBN 0691003971]
Classic texts
Marx, K. The 18th Brumaire of Louis Bonaparte. (New York, 1852).
Nowell-Smith, G. (ed.) Antonio Gramsci. Selections from The Prison Notebooks
of Antonio Gramsci. (London: Lawrence and Wishart, 1973) [ISBN
0853152802].
Introduction
In Chapter 3 we looked at two key concepts in theories of development:
state and market. We now turn to the two other concepts that we have
identified as warranting serious attention – namely, institutions and civil
society.
In Chapter 2 we saw that these concepts returned to the top of the
development agenda in the 1980s, as policymakers and practitioners
began to focus on governance issues. However, as with state and market,
how they should be defined, their relationship to the other key forms we
are studying here and their potential role in promoting development have
all been heavily contested.
46
Chapter 4: Theories of institutions and civil society
Activity 1
Here are sample definitions of institutions and civil society:
1. ‘Institutions are the rules of the game of a society, or, more formally, are the humanly
devised constraints that structure human interaction. They are composed of formal
rules (statute law, common law, regulations), informal constraints (conventions, norms
of behaviour and self-imposed codes of conduct), and the enforcement characteristics
of both.’
(North in Harriss et al., 1997, p.23)
Do you agree with this definition? For example, where does it leave organisations
such as the state or the firm?
2. ‘Civil society…is the totality of social institutions and associations, both formal
and informal, that are not strictly production-related nor governmental nor familial
in character. The concept includes, then, everything from the informal card-playing
groups to the parent–teacher association, from the local pub to the trade union, from
church groups to political parties.’
(Rueschemeyer et al., 1992, p.50)
Do you agree with this definition? For example, should political parties be included?
Now make some brief notes about how the two definitions overlap; where they differ.
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171 Introduction to international development
Box 1
Thorsten Veblen (1857–1929), like Weber, identified tensions in contemporary
society between acquisition, display and a technocratic management. His
writings encompassed social mores, phenomenology, business structures, the
interaction of commerce and universities, and US and German imperialism. He is
best known for his 1899 Theory of the Leisure Class (responsible for introducing
‘conspicuous consumption’ into the sociological and economic literature). In his
work on technocracy, Veblen made a distinction between the owners of ‘business’
(who are focused upon profit maximisation through market manipulation,
restriction of production and other similar practices) and ‘engineers’ or other
managers in ‘industry’ (who are concerned with efficiency per se and with
production for the satisfaction of human needs).1
1
www.caslon.com.au/
biographies/veblen.htm
John Commons (1862–1945) developed an analysis of collective action by
the State, and a wide range of other institutions, which he saw as essential to
understanding economic life. John Commons was an opponent of mainstream
neo-classical economics, with its universal laws based on rational individualism.
His best known work is Institutional Economics (1934). He was also a prominent
historian of American labour.2 2
www.cooperative
individualism.org/
commonsbio.html
Writing in the present, John Harriss (2003) has defended the ‘old
institutionalism’ of Veblen and Commons against attempts over the past
two decades to resolve the tensions between institutional theory and
mainstream neo-classical economics by creating a New Institutional
Economics (NIE) that can then be used successfully to promote
development.
Activity 2
Make a list of the 10 most important political, economic, social and cultural institutions
in your own country or region that development policymakers and practitioners should
attempt to understand before they begin to implement their policies. For each of the 10
institutions, add a sentence explaining why you chose it. If you want to take this further,
read Harriss’s article.
Recent theorisations
Each of the disciplines we looked at above have created their own ‘new
institutionalisms’ in recent decades, according to Goodin (1998: pp.2–20).
How far they differ from the older versions has been much debated. Here
we focus on the ‘new’ version that has had perhaps the most direct impact
upon development theory and practice over the past 25 years – New
Institutional Economics. We then go on briefly to discuss the advances that
have been made over recent decades in theories of ‘institutional design’.
One of NIE’s leading lights is the Nobel prize-winning economist Douglas
North. He is certainly its most ambitious practitioner. For North, ‘the new
institutional economics (NIE) builds on, modifies and extends neo-classical
theory to permit it to come to grips and deal with an entire range of issues
heretofore beyond its ken’.
A central concern for North is the relationship between state and market.
He accepts that those neo-classical theorists who posit a rule-free world
based purely on voluntary individual contracts fail to recognise that
reality rarely conforms to this model. The distance between their abstract
utopia and harsh reality is particularly great in countries that are still in
48
Chapter 4: Theories of institutions and civil society
49
171 Introduction to international development
example, they often equate ‘efficient property rights’ with those in which
private ownership is wholly secure. Yet scholars have identified many
contexts where ‘efficient property rights’ have fallen short of this assumed
institutional optimum. In China today, the state has created ‘hybrid’
regimes of property rights that fall short of this standard and yet they
appear for the moment to be working well. Other assumed institutional
optima whose value in promoting development have been strongly
questioned are democracy and decentralisation (the devolution of
power by the central state to the provincial, district or community levels).
Rodrik instead proposes a bottom line on ‘institutional quality’ that is
much less prescriptive: ‘institutions that provide dependable property
rights, manage conflict, maintain law and order and align economic
incentives with social costs and benefits are the foundations of long-term
growth’ (2003, p.10).
Box 2
Mushtaq Khan has looked at NIE theories of state failure. He is highly critical of
its emphasis on ‘political transaction costs’ – for example, concessions to losers
to facilitate a process of change – and the assumption it makes that, the higher
they are, the less likely it is that institutional change that promotes development
will take place. He argues instead that it is much more useful to think in terms of
‘transition costs’ as the key variable. He writes:
‘The great danger with the NIE approach is that by ignoring transition costs it
presents what are essentially transitions as processes which can be managed
judiciously by states which have the right models or the right ‘vision’…States,
when they are involved in processes of transition, are attempting some
transitions rather than others. The justification for this must be based on a
politics that should be made explicit. Moreover, transitions which had low
transition costs in one context may not in another. The difference between
South Korea and Pakistan had little to do with the quality of their leaders or
their conflict management skills. The real difference was in the balance of
power in these societies in the 1960s.
(Khan in Harriss et al., 1997, p.85).
Activity 3
Do you agree with Khan that what matters most when trying to explain development
success or failure is ‘the balance of power’ in societies? Write a 100-word answer,
supplying evidence from at least one specific country to back up your argument. If
you want to take this further, read the Khan article. His arguments are complex and
challenging, so do not worry if you feel by the end if you have not understood everything.
Try to make as much sense of it as you can and then move on!
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171 Introduction to international development
Box 3
The French theorist and politician Alexis de Tocqueville (1805–59) became a
convinced admirer of associational life following his travels around the United
States. In Democracy in America (1835) he explains why:
‘The most natural privilege of man, next to the right of acting for himself, is that
of combining his exertions with those of his fellow-creatures, and of acting in
common with them. I am therefore led to conclude that the right of association
is almost as inalienable as the right of personal liberty…The greater part of
Europeans look upon an association as a weapon which is to be hastily fashioned,
and immediately tried in the conflict…Such, however, is not the manner in
which the right of association is understood in the United States. In America the
citizens who form the minority associate, in order, in the first place, to show their
numerical strength, and so diminish the moral authority of the majority; and,
in the second place, to stimulate competition, and to discover those arguments
which are most fitted to act upon the majority; for they always entertain hopes
of drawing over their opponents to their own side, and of afterwards disposing
of the supreme power in their name. Political associations in the United States
are therefore peaceable in their intentions, and strictly legal in the means which
they employ; and they assent with perfect truth that they only aim at success by
lawful expedients.’
(Hall and Trentmann (eds) 2005, pp.106–07).
From the start, the idea of civil society as wholly benign and desirable
had its critics. Rousseau noted that out of the associations of men had
come extreme inequality. For him, civil society was the means by which
the wealthy sought to deal with disorder and therefore protect their
privileges. He wrote memorably: ‘The true founder of civil society was the
first man who, having enclosed a piece of land, thought of saying, “This
is mine” and came across people simple enough to believe him’ (Hall and
Trentmann (eds), 2005, p.77).
Marx followed in Rousseau’s footsteps but took his critique much further.
Instead of reconciling selfish individualism with the universal community
of the state, Marx saw civil society as the main site of class power. Civil
society was nothing more than an expression of the social relations of
production within it and, as such, could not be a means through which
individual self-interest and the public good could be reconciled.
As we shall see, Marx’s entirely negative view of civil society has been
modified by later Marxists. But it is important to recognise that he raised
a vital question for those development theorists and practitioners who
are advocates of civil society today. How do you reconcile the inequalities
that arise in market economies with the idea of equality of political
participation inherent in ideas of democracy? Poverty and inequality
inevitably affects the terms upon which an individual is able to engage in
public or political life, potentially reducing ‘citizenship’ to a hollow shell
(Howell and Pearce, 2001, pp.31–33).
Of course, democracy was in short supply around the world between the
early-nineteenth and mid-twentieth century. Civil society gradually became
more inclusive as campaigns for the franchise brought the white working
class and women the vote in advanced capitalist countries and British
dominions such as Canada, Australia and New Zealand. The non-white
subject peoples of the European colonies had to wait until after 1945. But
for many, the main motor for achieving greater inclusion was political
society (parties and the state) rather than civil society. For a long time, the
concept fell into relative disuse.
52
Chapter 4: Theories of institutions and civil society
It did not revive again until the 1970s. However, many of the arguments
that would be deployed to revive it had been articulated long before
by Antonio Gramsci (1891–1937) in the 1920s. Although a Marxist
revolutionary, Gramsci viewed Marx’s interpretation of civil society as
too reductionist. Just as he restored the state to a position of ‘relative
autonomy’ from economy and society, so he restored civil society to a
position of relative autonomy from economy and state. He was above all
concerned to understand why communist revolution had failed to take
place in advanced capitalist countries like Britain and France. For Gramsci,
the capitalist state sustained its hegemony not just through coercion but
also through consent, which it established through the institutions and
associations of civil society. But while civil society was therefore the site
of a particular, more subtle, form of domination, it was also potentially a
terrain where capitalist hegemony could be contested and overthrown.
Activity 4
Antonio Gramsci wrote his Prison Notebooks while jailed by fascist dictator Mussolini.
They were only published after his death.3 Here is a taster: 3
For an excellent edited
collection of Gramsci’s
‘In Russia the state was everything, civil society was primordial and gelatinous; in the Prison Notebooks, see
West, there was a proper relationship between state and civil society, and when the state Nowell-Smith (1973).
trembled a sturdy structure of civil society was at once revealed. The state was only an
outer ditch, behind which there stood a powerful system of fortresses and earthworks…’
(Hall and Trentmann, 2005, p.187).
What do you think Gramsci means by his description of Russian civil society as ‘primordial
and gelatinous’? Do you agree with his suggestion that a state cannot be strong unless
it is backed up by a strong civil society? Are there any implications you can see that arise
out of Gramsci’s ideas for development strategies today? Write short answers to these
three questions.
Box 4
John Keane defines global civil society as ‘the contemporary thickening and
stretching of networks of socio-economic institutions across borders to all
four corners of the earth, such that the peaceful or ‘civil’ effects of these non-
governmental networks are felt everywhere, here and there, far and wide, to and
from local levels, through wider regions to the planetary level itself’.
Keane does not see the victory of global civil society as inevitable. He writes: ‘It
is not only that the plural freedoms of global civil society are severely threatened
by a political underworld of secretive, unelected, publicly unaccountable
institutions, symbolised by bodies like the IMF and the WTO. The problem
of hubris is internal to global civil society as well: just like the domestic civil
societies that form its habitats, global civil society produces concentrations of
arrogant power that threatens its own openness and pluralism’ (all quotes from
Hall and Trentmann, 2005, pp.287–92).
Activity 5
Partha Chatterjee has written: ‘The institutions of civil society, in the forms in which they
had arisen in Europe…made their appearance in the colonies precisely to create a public
domain for the legitimation of colonial rule. This process was, however, fundamentally
limited by the fact that the colonial state could confer only subjecthood on the colonised;
it could not grant them citizenship…The crucial break in the history of anticolonial
nationalism comes when the colonised refuse to accept membership of this civil society
of subjects. They construct their national identities within a different narrative, that of the
community’ (Chatterjee, 1993, pp.237–39).
Do you agree with Chatterjee when he advocates the scrapping of the idea of civil society
in former European colonies and its replacement with the idea of community?
If so, why? Write a 200-word answer, drawing on the experience of your own country
or region where appropriate.
Conclusion
Perhaps the great unresolved question in theorising about institutions
and civil society is over where each should begin and end. Think back to
North’s definition of institutions. It appears to include virtually everything.
Certainly, it covers the ‘holy trinity’ of state, market and society. As
for civil society, recent debates have largely reproduced older debates
about it. It is as contested as ever. Edwards claims that we continue to
confuse three ways of understanding civil society: analytically, as forms of
associational life; normatively, as a model of the kind of society we wish to
see; and as the ‘public sphere’ (Edwards, 2004, p.vii). Confusion between
the analytical and normative also applies sometimes to the concept
of institution. It is remarkable how often behind apparently objective
phrases such as ‘efficient institutions’ or ‘a healthy civil society’ lie implicit
assumptions about what ‘good institutions’ or ‘the good society’ should be.
The most common example of this is the assumption that development
and democracy, that most normative of concepts, go together when the
evidence for this is weak.
Dispute or confusion over the meaning and significance of institutions
and civil society may not be ideal. But it is infinitely preferable to a
false consensus that may do more harm than good. Neera Chandhoke
has written persuasively about how concepts such as civil society
become ‘flattened out’ once they are taken into the policy domain. She
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171 Introduction to international development
57
171 Introduction to international development
Notes
58
Chapter 5: The origins of capitalism and the rise of the West
Essential reading
Desai and Potter (2008) Chapters 2.3 to 2.8.
Further reading
Davis, M. Late Victorian Holocausts. El Niño Famines and the Making of the Third
World. (London: Verso Books, 2001) [ISBN 1859847390] Chapters 1 and 9.
Fukuyama, F. (ed.) (2008) Falling Behind: Explaining the Development Gap
Between Latin America and the United States (Oxford: Oxford University
Press) [ISBN 0195368827]
Harris, N. National Liberation. (London: Penguin Books, 1992) [ISBN
0140125604] Chapter 11.
Landes, D. The Wealth and Poverty of Nations: why Some are so Rich and Some
are so Poor. (London: Abacus, 1999) [ISBN 0349111669] Chapters 3, 4,
12–15 and 29.
Lange, M. and J. Mahoney et al. ‘Colonialism and development: a comparative
analysis of Spanish and British colonies’, American Journal of Sociology
111(5) pp.1412–62.
Moore, B. Social Origins of Dictatorship and Democracy. (London: Penguin
Books, 1979) [ISBN 0140550860] See especially Chapter 3.
Morgan, K. Slavery, Atlantic Trade and the British Economy, 1660–1800.
(New York: Cambridge University Press, 2001) [ISBN 0521588146].
Phillips, A. The Enigma of Colonialism: British Policy in West Africa. (London:
James Currey, 1988) [ISBN 085255026X] Chapters 1 and 8.
Porter, A. European Imperialism, 1860–1914. (Basingstoke: Macmillan, 1994)
[ISBN 0333481046].
Tomlinson, B.R. ‘Economics and Empire: The Periphery and the Imperial
Economy’ in Porter, A. (ed.) The Oxford History of the British Empire.
(Oxford: Oxford University Press, 1999) Vol. 3 [ISBN 0199246785].
Challenging reading
Austin, G. The ‘reversal of fortune’ thesis and the compression of history:
perspectives from African and comparative economic history. Journal of
international development, 20(8) 2008, pp.996–1027.
Brenner, R. ‘The Origins of Capitalist Development: A Critique of Neo-Smithian
Marxism’, New Left Review 104, 1977, pp.25–92.
Burnside, M. and R. Robotham Spirits of the Passage: The Transatlantic Slave
Trade in the 17th Century. (New York: Simon and Schuster, 1997)
[ISBN 0684818191]
Hobsbawm, E. and T.O. Ranger (eds) The Invention of Tradition. (Cambridge:
Cambridge University Press, 1992) [ISBN 051437733].
Jenkins, R. ‘Where development meets history’, Commonwealth and
Comparative Politics 44 (1) 2006, pp.2–15.
Nunn, N. ‘The Importance of History for Economic Development’, Annual
Review of Economics, Vol. 1, 2009, pp.65-92.
Vail, L. ‘Mozambique’s Chartered Companies: The Rule of the Feeble’, Journal of
African History XVII, 1976.
59
171 Introduction to international development
Classic texts
Bloch, M. Feudal Society. (London: Routledge and Kegan Paul, 1965) two
volumes [ISBN 0710046464 and 0710046472].
Gerschenkron, A. Economic Backwardness in Historical Perspective. A Book
of Essays. (Cambridge, Mass.: Harvard University Press, 1962) [ISBN
0674226003] Chapter 1.
Hobsbawm, E. Industry and Empire. (London: Pelican Books, 1980) [ISBN
0140203384].
Keynes, J.M. The Economic Consequences of the Peace. (London: Penguin Books,
1988) [ISBN 0140113800].
Introduction
This chapter explores the origins of capitalism and the rise of ‘the West’
between 1600 and 1945. We examine why Great Britain led the way in
terms of capitalist development and how other European countries then
followed. As capitalism became a global force, we look at why and how
Europeans moved beyond their own borders, creating a world economic
system largely based on the suppression of pre-existing economic and
political arrangements in the non-European world and ultimately giving
birth to a new age of imperialism. In doing so, we look at the impact of
European imperialism on its colonies in Africa and Asia between the late-
nineteenth century and the Second World War.
60
Chapter 5: The origins of capitalism and the rise of the West
Box 1
What, or who, is ‘the West’?
In a way, this is jumping ahead to the end of our story. But it is such a commonly
used shorthand term that we think it worthwhile to try to clarify its meaning for
our purposes from the start…
David Landes, in his hugely influential The Wealth and Poverty of Nations (1999,
pp.xx–xxi), simply defines ‘the West’ as Europe. During the cold war (1947–90),
he acknowledges that it was a case of ‘East versus West’. Of course, Eastern
Europe was then part of the Communist bloc, which does not seem consistent
with Landes’ equation of the West and Europe as one and the same. He also
describes the world today as being structured on the lines of ‘the West and the
Rest’, preferring the latter term to ‘Third World’ and the entire phrase to another
popular term today, ‘North and South’. He also claims that ‘the West’ has been the
‘prime mover of development and modernity’ over the past 1,000 years.
‘The West’ lumps together countries with vastly different historical backgrounds.
Until relatively recently, some of them – for example, England and France – were
mortal enemies. However, despite these misgivings, we have retained the term. Our
preferred use of ‘the West’ is as comprising the bloc of advanced capitalist countries
that operated in alliance in the context of the cold war against the Communist bloc
between 1947 and 1990. This chapter is about the historical processes and events
that led to its emergence as a self-conscious political grouping.
Activity 1
Do you agree with Landes’ claim that the West has been the ‘prime mover’ of development
and modernity over the past 1,000 years? Write a paragraph responding to Landes.
Why Europe?
The origins of capitalism
Between the sixteenth and early-twentieth centuries, with Britain leading
the way, Europe underwent a seismic transition from feudalism to
capitalism. However, why it happened remains hotly contested.
Box 2
Working definitions of feudalism and capitalism:
•• Feudalism
Finding a simple working definition of feudalism is not easy. The word is
derived from the Latin feodalis, meaning ‘fief’, which means land held by a
subject from a lord in exchange for military service (Bloch, 1965, p.xviii).
Others have used the term much more loosely to refer to all the social,
political and economic arrangements (including absolute monarchy) that
dominated ‘pre-capitalist’ or ‘pre-modern’ European societies.
•• Capitalism
This is another much debated term. For our immediate purposes, hopefully
the following definition will suffice: Capitalism is an economic and social
system in which power is predominantly held by those persons or groups
who are able to generate profits from capital (a fund of money) through their
ownership of the means of production (land, factories and technology). For
Marxists, the main source of profit is the exploitation of the wage-labour of
the working class, or proletariat, by the class of traders, entrepreneurs and
employers that constitute the bourgeoisie (Williams, 1976, pp.42–44).
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171 Introduction to international development
62
Chapter 5: The origins of capitalism and the rise of the West
Brenner continues:
‘At the same time, agricultural demand made possible the
emergence of a growing home market, not only for industrial
goods and products for general consumption, but also for
agricultural means of production. The latter, in turn, tended
to further increase agricultural productivity…so while much
of European export industry declined during the seventeenth
century as a result of its dependence upon pre-capitalist
agricultural “hinterlands”…English industry continued to grow
because of its construction on increasingly capitalist agricultural
foundations. It was the developing home market which
provided, by the end of the eighteenth century, an indispensable
foundation for the industrial revolution’ (p.77).
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171 Introduction to international development
Activity 2
What are the strengths and weaknesses of these contrasting approaches to the origins
of capitalism? Write a 300-word answer. Your answer will be strengthened if you have
read the Brenner article and Chapters 3–4 and 13–15 of Landes. The Brenner article is a
difficult read but we think that it is worth the effort. We have already described his main
arguments in considerable detail to help you make sense of them. Landes is an altogether
easier read.
64
Chapter 5: The origins of capitalism and the rise of the West
Activity 3
Read either Gershenkron (1962) or Chapter 3 of Barrington Moore (1979) and make
some notes.
The experiences of both the USA and Russia remind us of the fact that
the changes unleashed by capitalism were revolutionary in their scope
and impact. Its emergence was accompanied by dramatic processes of
state formation and collapse, many of them ushered in through war.
For example, German unification was completed in 1871, following
Prussia’s victory in a war with France in the previous year and a decade
of extraordinary industrial growth. France’s defeat in that war brought it
close to another revolution until the defeat of the Paris Commune.
By the early-twentieth century, a second wave of followers was trying
to ‘catch-up’ with Britain and the first followers. They included the
Scandinavian countries and Japan – the first non-European country on the
scene. Most adopted strategies similar to those that had been employed
in the first wave of followers while adapting them to their own political,
economic and cultural contexts. It is important to note that being a
follower was not entirely without its advantages. Britain, as the pioneering
country, inevitably began to be hamstrung by vested interests and policy
myopia. This was despite the fact that many new inventions continued 2
Scientific management
was a theory elaborated
to be British in origin. Germany and the US were able to close the gap
by F.W. Taylor in his
significantly during the ‘second industrial revolution’, which was based on 1911 The Principles of
iron, steel, chemicals and electric power, and by 1914 had either drawn Scientific Management.
level with Britain or surpassed it in terms of economic production. For He argued that it was
example, by 1913, Britain’s share of world output in the chemical industry possible to increase
stood at 11 per cent, compared with 34 per cent on the part of the US and labour productivity
by breaking down
24 per cent on the part of Germany (Hobsbawm, 1980: p.180). Britain
production processes
was being increasingly sustained by its dominance of international trade in into their component
what was at the time an unparalleled epoch of economic globalisation. The parts and organising
First World War (1914–18) sounded the death-knell not just for millions of fragmented work tasks
lives but also for British global economic pre-eminence. according to rigorous
time and motion studies.
During the period 1918–39, the US became the dominant economic power Such methods would
in the world. Its domination was based on its wholesale adoption of mass also reduce the power
production techniques (as exemplified by the Ford Motor Company) of skilled workers or
and ‘scientific management’, combined with its massive home market.2 artisans, and lower wage
costs.
However, it was also a time of great economic and political turbulence.
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171 Introduction to international development
67
171 Introduction to international development
For example, David Washbrook (1988) argues that South Asia (which
includes India, Pakistan, Bangladesh and Sri Lanka, as they are known
today) was developing its own indigenous capitalism by the eighteenth
century. By this time, it possessed upwards of 25 per cent of the world’s
total manufacturing capacity.
‘Marketing systems, which once were deemed disorganised
and peddler-based, have now been shown to have been highly
organised and price responsive…Discrete and alienable property
rights, once assumed barely to have existed in South Asia,
have been traced back…to the early middle ages and a brisk
market in such rights would seem to have existed in the late-
seventeenth and early-eighteenth centuries.’ (pp.60–62)
Washbrook goes on to challenge stereotypes of an agrarian economy in
South Asia that was stuck within a static subsistence framework and shows
that there was considerable internal trade within the region. Revenue
extraction by central authorities was not extreme and some of it was used
productively in public works.
Whether you agree with Washbrook or not depends, of course, on what
you consider the minimum conditions to be for considering a social and
economic system as ‘capitalist’. However, he goes on to argue that, by
the early nineteenth century, South Asia’s potential for a non-dependent
capitalism had been quashed. It was not until the early-twentieth century
that the first relatively independent capitalist economy in the non-
European world was to emerge – Japan.
Box 3
Contrasting Europe and the Tropics:
Percentage share of world manufacturing output, 1750–1900
Activity 4
Do you agree that there existed the potential for autonomous capitalist development in
the non-European world? If so, why do you think that it never materialised? Write a 100-
word answer to these questions. If you want to take this further, read Washbrook’s article.
68
Chapter 5: The origins of capitalism and the rise of the West
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171 Introduction to international development
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Chapter 5: The origins of capitalism and the rise of the West
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171 Introduction to international development
two-fifths of the UK’s finished cotton goods and three-fifths of its exports of
electrical products, railway equipment, books and pharmaceuticals…But how,
in an age of famine, could the subcontinent afford to subsidise its conqueror’s
suddenly precarious commercial supremacy? In a word, it couldn’t, and
India was forced-marched into the world market…by revenue and irrigation
policies that compelled farmers to produce for foreign consumption at the
price of their own food security.’ (pp.298–99)
During the interwar years (1918–39), the limitations of the ‘peasant road
to development’ became clear in many colonies. Let us return to Phillips:
‘The independence which peasants retained may have been
partly illusory since what they produced, and when, was
determined by the market. But they continued to control their
own labour process and resisted proposals for “improved”
techniques. Colonial officials (and after them African
politicians) were convinced that the peasants were wrong;
they set up commissions on “quality control” to grapple with
the task of introducing improved methods of production. But
to enforce such improvements, they had at their disposal only
market prices and administrative decrees. They could not enter
directly into production and dictate the changes they desired…
African farmers accumulated land, employed wage labour, got
themselves into debt and generally refused to remain model
peasants. The colonial states were attempting to freeze the
development of commodity production at that utopian point
which allowed them to maintain control’ (1998, pp.12–13).
At the same time, local modernising elites were losing faith in the colonial
project and imagining a better future for their people free of colonial
chains. The conditions for a sustained challenge to European imperialism
were falling into place by the outbreak of the Second World War. The rise
of the anti-colonial movement in India during the 1920s and 30s was
indeed a harbinger of the future.
Activity 5
Write a 200-word evaluation of what you think are the strengths and
weaknesses of the arguments made by Phillips and Davis. If you want to take
this further, read Chapters 1 and 8 of Phillips (1988), or Chapters 1 and 9 of
Davis (2001) and make some notes.
Conclusion
We have covered vast expanses of time and space at breakneck speed in
this account of the origins of capitalism and the rise of the West. Inevitably,
this means that many important historical events and processes during the
period 1600–1945 have been addressed exceedingly briefly – or not at all.
Our hope is that, along the way, you have acquired some sense of why it
is important to embed your thinking about the prospects for international
development today in a broad historical context.
But our historical account is not yet complete. We have at last reached
the moment where development finally emerges as a fully conscious and
explicit ‘project’ – as a rationale for (and mode of) political action. In the
next chapter, we look at the historical processes and events which gave rise
to the ‘era of national development’ between 1945 and the mid-1970s, and
the reasons behind its subsequent eclipse.
72
Chapter 5: The origins of capitalism and the rise of the West
73
171 Introduction to international development
Notes
74
Chapter 6: The rise and fall of the era of national development
Essential reading
Desai and Potter (2008) Chapters 2.6 to 2.8.
Further reading
Amsden, A. Escape from Empire: The Developing World’s Journey Through
Heaven and Hell (MIT Press, 2008) [ISBN 0262513153]
Armstrong, P., A. Glyn and J. Harrison Capitalism since World War Two. The
Making and Break-up of the Long Boom. (London: Fontana Books, 1984)
[ISBN 0006357946].
Arrighi, G. ‘The African Crisis: World Systemic and Regional Aspects’, New Left
Review 15, 2002, pp.5–36 [ISSN 00286060].
Brett, E.A. The World Economy Since the War. The Politics of Uneven Development.
(Basingstoke: Macmillan, 1985) [ISBN 033337200X] Chapters 3 and 5.
Chatterjee, P. Nationalist Thought and the Colonial World: A Derivative Discourse.
(London: Zed Books, 1986) [ISBN 0862325528, 0862325536] especially
Chapter 5.
De Waal, A. Famine Crimes. Politics and the Disaster Relief Industry. (Oxford:
James Currey, 1997) [ISBN 0852558104].
Fukayama, F. ‘The End of History?’, The National Interest Summer 1989,
pp.3–18 [ISSN 08849382].
Glyn, A. ‘Imbalances of the Global Economy’, New Left Review 34, 2005,
pp.5–37 [ISSN 0028-6060].
Hanlon, J. Mozambique: Who Calls the Shots? (Oxford: James Currey, 1991)
[ISBN 0852553463].
Kay, C. ‘Why East Asia overtook Latin America: Agrarian Reform,
Industrialization and Development’, Third World Quarterly 23(6) 2002,
pp.1073–1102 [ISSN 0143-6597].
LaFeber, W. America, Russia and the Cold War, 1945–1992. (New York: McGraw
Hill, 1993) [ISBN 0070358532].
Lockwood, M. The State They’re In. An Agenda for International Action on
Poverty in Africa. (Bourton: ITDG Publishing, 2005) [ISBN 1853396176].
Mosley, P., J. Harrigan and J. Toye Aid and Power: the World Bank and Policy-
Based Lending. (London: Routledge, 1991) [ISBN 0415015480].
Ngugi, Wa Thiongo Decolonizing the Mind. The Politics of Language in African
Literature. (London: James Currey, 1986) [ISBN 0852555016].
Shadlen, K. ‘Debt, Finance and the IMF: Two Decades of Debt Crises in Latin
America’, The 2004 Europa Survey of South America, Central America and
the Caribbean. (London: Taylor and Francis, 2003) [ISBN 1857431847].
Van de Walle, N. African Economies and Politics of Permanent Crisis, 1979–1999.
(Cambridge: Cambridge University Press, 2001) [ISBN 0521008360].
Westad, A.O. The Global Cold War: Third World Interventions and the Making
of Our Times (Cambridge: Cambridge University Press, 2007) [ISBN
052170314X].
75
171 Introduction to international development
Challenging reading
Ansprenger, F. The Dissolution of the Colonial Empires. (London: Routledge,
1989) [ISBN 0415031435].
Chang, H-J (ed.) Rethinking Development Economics (London: Anthem, 2003)
[ISBN 1843311100].
Chang, H-J. Bad Samaritans: Rich Nations, Poor Policies and the Threat to the
Developing World, (London: Business Books, 2007) [ISBN 1905211376].
Harris, N. National Liberation. (London: Penguin Books, 1992) [ISBN
0140125604] Chapter 11.
Harvey, D. The New Imperialism. (Oxford: Oxford University Press, 2003) [ISBN
0199264317].
Pogge, T.W. and S.G. Reddy ‘Unknown: The Extent, Distribution and Trend of
Global Income Poverty’, 2003 [Paper available at www.socialanalysis.org]
Stiglitz, J. ‘The World Bank at the Millennium’ in The Economic Journal 109,
1999, pp.F577–97.
Toye, J. Dilemmas of Development. Reflections on the Counter-Revolution in
Development Theory and Policy. (Oxford: Blackwell Publishers, 1987) [ISBN
0631145710].
Wade, R. ‘The Development of a “Well Functioning Market Economy”: Where
Do the Institutional Models Come From?’, World Bank and Development
Policy Forum/DSE Workshop, Berlin, 2000, pp.1–13.
Williamson, J. ‘What Should the World Bank Think about the Washington
Consensus?’, The World Bank Research Observer 15(2) 2000, pp.251–64
[ISSN 02573032].
Classic texts
Gerschenkron, A. Economic Backwardness in Historical Perspective. A Book
of Essays. (Cambridge, Mass.: Harvard University Press, 1962) [ISBN
0674226003] Chapter 1.
76
Chapter 6: The rise and fall of the era of national development
Introduction
This chapter explores the rise and fall of the era of ‘national development’.
We begin by looking at the nature of the anti-colonial independence
movements which inherited political power following the end of
European imperialism and seek to understand why a state-led approach
to development tended to come naturally to those movements. We go on
to explore how and why during the long economic boom of the 1950s
and 1960s, largely in response to the threat of communism and with
the blessing of the US as the dominant global power of the post-war
era, capitalism in the developed world took on an increasingly welfarist
character. We also look at how and why during this period Third World
governments enjoyed considerable policy autonomy from the West and the
international financial institutions that they dominated. We then examine
how, again driven by the interests of the US, this period came to an end
from the 1970s as the global economy slowed and neo-liberal political
forces came to power in the developed world. Debt crises provided a
crucial point of leverage for the West in imposing neo-liberal prescriptions
on much of the Third World through regimes of policy conditionality. Our
account ends with a brief assessment of developments since the end of the
Cold War in 1989 – which have ushered in what some have described as
a new era of economic globalisation, in which it is alleged that the scope
for autonomous national development has largely disappeared.
Activity 1
Before working your way through the chapter, spend 30 minutes reflecting on the
experience of your country or region since 1945: how much policy autonomy do you
think it has enjoyed? If the extent of that autonomy has changed over time, why has it
changed? Make some notes and then review them at the end of the chapter.
77
171 Introduction to international development
war. The dominant motif of US foreign policy became combating the threat
of communism. In 1950, it went to war in Korea to that end. Elsewhere, it
used economic support to counter internal threats – for example, in France
and Italy, both of which had powerful Communist parties.2 2
For an excellent history
of the cold war, see
There is no doubt that Marshall Aid had a clear anti-communist purpose, LaFeber, 1993.
whatever economic benefits also flowed from it. But this was not the only
motivation. Extremely high levels of economic support to the non-communist
world by the US were also prompted by the fact that it had entered the post-
1945 period having built up vast surpluses of capital that were searching for
sources of profitable investment. In addition, the US needed trading partners
– countries that were able to buy American goods – if the threat of recession
was to be avoided (Armstrong et al., 1984, pp.106–15).
Levels of US aid under the Marshall Plan reached four per cent of Gross
National Product (GNP) at their peak.3 While most US economic support 3
Compare that with the
went to Western Europe, large quantities of aid also went to frontline level of US aid globally
in 2004 at 0.16 per cent
allies like Japan, South Korea and Israel. Latin American governments also
of GNP.
benefited as the US sought to keep its ‘backyard’ free of communist infection.
Africa and large parts of Asia were at this time essentially sideshows.
Box 1
How the Marshall Plan worked:
‘As soon as the Marshall Plan – or Economic Recovery Programme (ERP)
was announced, the IMF eased its tough lending conditions. Together
with the World Bank, it lent more than $1 billion to Europe in the next
12 months…Congress finally sanctioned $13 billion Marshall Aid to be
spread over four years…Marshall Aid brought a clear shift in the form of
US aid. From 1947 loans repayable with interest dropped sharply. Non-
military grants rose accordingly. In line with this commitment to greater
support for European governments, the Americans also relaxed pressure
on them to open up their economies to US capital. Free trade hawks had
wanted to use Marshall Aid as a lever to break open the Sterling Area…
But the US government rejected this approach, recognising a prior need
to support the British and other European economies…
…They succeeded in getting unprecedented agreements with each
country “to stabilise its currency, establish or maintain a valid rate of
exchange, balance its governmental budget…create or maintain internal
financial stability”. Congress also inserted a “counterpart” provision,
requiring aid recipients to set aside a sum of domestic currency equivalent
to the aid, to be spent in ways agreed with the United States. Moreover,
although easing the pressure to liberalise trade, the Americans insisted
on a number of provisions advantageous to US business: 50 per cent of
goods financed by aid were to be shipped in American boats and covered
by American insurers; aid-financed food imports must come from
78
Chapter 6: The rise and fall of the era of national development
the United States, even if they could be bought more cheaply elsewhere; US
oil interests were also to receive preferential treatment…While Marshall Aid
aimed primarily at making Europe safe for US businesses in the long run,
there was no reason to forego short-term advantages.’
As for the Communist bloc, the Soviet Union and Eastern Europe were
themselves engaged in frenzied efforts to industrialise, in part so that they
could compete militarily against the West in the cold war arms race but
also to demonstrate the superiority of the socialist model to their own
captive citizens and to the world. The early part of the cold war was the
zenith of state planning and the ‘command economy’ in the Communist
bloc. Communist China followed its own turbulent and inconsistent path
during the 1950s and 1960s.4 4
We do not have space
here to address socialist
models of development
Political independence and ‘Third Worldism’ in the depth we would
like. If you want to
The Second World War gravely weakened the European imperial powers know more about this
and Japan. Two of the lesser colonial powers – Italy and the Netherlands important topic, read
– simply collapsed, the latter in South East Asia at the hands of non- Kilmister in Allen and
European Japan. By the end of the war, Indian independence seemed Thomas (2000).
almost inevitable, so debilitated was Britain by its exertions. It came
with the bloody partition of India in 1947. French authority in Indochina
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171 Introduction to international development
Box 2
Jawaharwal Nehru, first Prime Minister of independent India said:
‘India was in my blood and there was much in her that instinctively thrilled
me. And yet, I approached her almost as an alien critic, full of dislike for the
present as well as for many of the relics of the past that I saw. To some extent
I came to her via the West and looked at her as a friendly Westerner might
have done. I was eager and anxious to change her outlook and appearance
and give her the garb of modernity. And yet doubts rose within me. Did I
know India, I who presumed to scrap much of her past heritage?’
(Quoted in Chatterjee, 1986, p.147)
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171 Introduction to international development
82
Chapter 6: The rise and fall of the era of national development
83
171 Introduction to international development
Box 3
Mozambique: The threat of a good example?
In 1975 the Front for the Liberation of Mozambique (FRELIMO) took power in
Mozambique following the collapse of Portuguese colonial rule. FRELIMO had
adopted a Marxist ideology in the course of the anti-colonial struggle and had
received support from both the Soviet Union and (to a lesser extent) China.
But by the early-1980s, Mozambique’s new order was under pressure. While
FRELIMO’s own mistakes certainly played their full part, the hostility of the West
and – nearer to home – apartheid South Africa, as the cold war again intensified,
fuelled an economic and military campaign of ‘destabilisation’. By 1984
Mozambique’s socialist experiment had come to an end.
The US’s largely unilateral tearing up of the post-war settlement did help
it to end its competitive decline, although it did not immediately reverse
it. In the process, the world economy became more Darwinian – an arena
where the fittest would survive. The genie of uneven development was
once again let out of the bottle. What had been a stately progress towards
a more open and liberal world economic system since 1945 became more
of a dash during the 1980s.
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Chapter 6: The rise and fall of the era of national development
Box 4
The Washington Consensus
Activity 3
In his article, Williamson complains that it is unfair to describe the Washington Consensus
as ‘neo-liberal’ or ‘market-fundamentalist’. Do you agree with him? Write a 100-word
answer to this question. Try to read Williamson’s article – it will improve the quality of
your answer!
86
Chapter 6: The rise and fall of the era of national development
87
171 Introduction to international development
Box 5
Robert Wade offers one interpretation of the Asian crisis:
‘The Asian crisis 1997–1998 provided an opportunity for the US/IMF to
apply the strategy of “coercive liberalism” to greatly weakened states…As
one Asian country after another collapsed and appealed to the US and the
IMF for rescue funds, the US Treasury drew a line in the sand. It made aid
contingent upon sweeping movement towards “sound” market institutions,
which is code for market institutions of the Anglo-American type. Above
all, it sought to institutionalise open markets for money, foreign exchange,
and securities. In place of state-encouraged large firms borrowing money
from government-influenced banking systems at concessionary rates they
wanted transparent markets for stocks and bonds. The Treasury and the
IMF also insisted on accounting reforms in the direction of best practice
(US) accounting standards, far-reaching financial deregulation, balanced
budgets, higher interest rates, and freely convertible foreign exchange
markets overseen by independent central banks…
…The US and the Fund justified the conditions by saying that sustainable
economic growth would not occur without fundamental structural reforms.
The contrast with Mexico in 1994–1995 is telling. Within 10 days of
the beginning of the Mexican crisis a massive and credible international
rescue package of $50 billion had been assembled, with almost no
conditionality and certainly no requirement for large-scale structural
reforms. The panic and contagion subsided soon after. In Asia, in contrast,
the governments had to agree to a long list of conditions as a condition of
the initial agreement to provide funds; the pledged funds were relatively
smaller; and they came in phased tranches which were smaller than the
pledges. The panic and contagion lasted far longer. Why the difference in
policy response? One plausible hypothesis is that the US national interest
was overridingly to secure quick recovery on its southern border, while
its overriding interest in Asia was to open markets, especially financial
markets. The IMF was the “honest broker” that delivered these US demands
for institutional and other policy changes.’
The ‘Asian crisis’ threw into sharp relief just how important within the world
economy international finance had become. Specifically, it demonstrated
that the growth of ‘hot money’ – that is, funds invested by Western banks
and speculators with an extremely short time-horizon, which can be moved
in and out of economies with great speed in search of profits – contained
a potential for immense economic volatility. The movement of ‘hot money’
was not necessarily linked to national or regional economic performance
and could be prompted by perception as much by evidence. It was the rapid
outflow of ‘hot money’ that triggered the Asian crisis. The crisis prompted
8
One longstanding
official debates about creating international mechanisms to regulate the
proposal, sponsored by US
flow of ‘hot money’ but these faded once the crisis passed.8 economist James Tobin, is
By the end of the 1980s, the US appeared to have regained the economic that cross-border currency
and political initiative. Spurred on by military expenditure, its dominance transactions should be
taxed to cool down ‘hot
of new information technologies and the power of its banks within rapidly
money’ and raise funds for
globalising financial markets, its economy seemed to have recovered.9 development.
The West had ‘won’ the cold war. Eastern Europe abandoned communism 9
Harvey (2003: 134) and
in 1989 as the failings of state planning and the ‘command economy’ others have written about
became impossible to ignore and the desire for greater political freedom the emergence of a ‘Wall
overwhelming. Within two years, the Soviet Union had itself broken up Street/ Treasury complex’
into its component parts. Everywhere, economic systems based on central within the US.
88
Chapter 6: The rise and fall of the era of national development
89
171 Introduction to international development
Activity 4
Get out your crystal ball. What do you see? How likely is the scenario for the future that
we have outlined? Is it even to be desired? Spend some time thinking about how you
would answer these questions before moving on to the next part of the course.
90
Chapter 6: The rise and fall of the era of national development
• on the basis of the account provided in this chapter, place our earlier
discussions of ideas of development and theories of development in a
firmer historical context.
91
171 Introduction to international development
Notes
92
Part III: Key themes in development policy and practice
In Part III we focus in more depth on key themes which illustrate some of
the most important current dilemmas of development faced by developing
countries today. Four themes are discussed:
• Late development and industrial policy (Chapter 7)
• Agrarian change and rural development (Chapter 8)
• Governance and public policy (Chapter 9)
• The international order (Chapter 10).
‘Late development’ – or the ability for developing countries to become
‘developed’ is a fundamental element of development policy today
(Chapter 7). Agricultural and rural development includes, for example, the
‘Green Revolution’ that has sought to relieve rural poverty and enhance
agricultural productivity since the 1950s (see Chapter 8). Politics and
international political regimes also highly influence development within
any one country (Chapters 9 and 10).
These themes have featured in earlier chapters, but they require more
attention. Part III allows you to reflect on and apply the wider historical
and theoretical insights you acquired in Part II. Of course, international
development involves many more themes than these alone, such as
environment, gender and humanitarianism. This initial course, 171
Introduction to international development does not address these
other themes in detail, but provides a platform for further courses.
93
171 Introduction to international development
Notes
94
Chapter 7: Late development and industrial policy
Essential reading
Desai and Potter (2008) Chapters 4.3 to 4.5.
Todaro and Smith (2014) Chapters 3, 4, 14 (sections 14.1–14.3) and 15.
Further reading
Amsden, A. The Rise of ‘The Rest’. Challenges to the West from Late-Industrializing
Economies. (Oxford and New York: Oxford University Press, 2001) [ISBN
0195139690].
Chang, H-J. Kicking Away the Ladder: Development Strategies in Historical
Perspective. (London: Anthem, 2002) [ISBN 1843310279 (pbk)].
Chang, H-J. (ed.) Rethinking Development Economics (London: Anthem, 2003)
[ISBN 1843311100]
Lall, S. Learning from the Asian Tigers: Studies in Technology and Industrial
Policy. (Basingstoke: Macmillan, 1996) [ISBN 0333674111].
Mathews, J. Dragon Multinational: A New Model for Global Growth. (Oxford:
Oxford University Press, 2002) [ISBN 0195121465].
Wade, R. Governing the Market: Economic Theory and the Role of the Government
in East Asian Industrialization. (Princeton: Princeton University Press, 1992)
[ISBN 0691117292].
Woo-Cumings, M. The Developmental State. (Ithaca: Cornell University Press,
1999) [ISBN 0195170598].
Challenging reading
Cline, W. ‘Can the East-Asian Model of Development be Generalized?’, World
Development 10(2) 1982, pp.81–90.
Polidano, C. ‘Don’t Discard State Autonomy: Revisiting the East Asian
Experience of Development’, Political Studies 4(9) 2001, pp.513–27.
Poteete, A. ‘Is development path-dependent or political? A reinterpretation
of mineral-dependent development in Botswana’, Journal of Development
Studies 45, 2009, pp.544–71.
Sachs, J. and A. Warner, ‘The Big Push, Natural Resource Booms and Growth’,
Journal of Development Economics 59, 1999, pp.43–76.
Classic texts
Hirschman, A. The Strategy of Economic Development. (New Haven: Yale
University Press, 1958) [ISBN 0300005598].
Myrdal, G. Asian Drama: An Inquiry into the Poverty of Nations. (New York:
Pantheon Books, 1972) [ISBN 0394470869].
Rostow, W. The Stages of Economic Growth: A Non-Communist Manifesto.
(Cambridge: Cambridge University Press, 1960) [ISBN 0521409284].
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171 Introduction to international development
Introduction
‘Late development’ refers to deliberate attempts to achieve economic
growth and development within countries that are relatively less
developed than others. Usually, late development involves creating
industrialisation, or the growing specialisation in producing manufactured
goods. The means of achieving late development are a key concern for
many less developed countries today, particularly concerning the selection
of industrial policy. Indeed, ‘late development’ – and the changes this
brings to all sectors of society and the economy of a country – can be a
fundamental change affecting various aspects of development.
Industrialisation, and late development, however, are highly controversial
topics. In the past, economists used to believe that both would follow
from increasing exposure to capitalist growth. During the nineteenth
century, however, many industrialised countries began to argue that
industrialisation required protecting new industries from international
trade and competition, and this idea was adopted by more and more
independent countries after the Second World War. Since the 1980s,
however, protectionism has been criticised, and developing countries
have been encouraged to open their economies to trade and international
investment. These topics remain some of the most important policy issues
for international development.
This chapter summarises the key debates concerning routes to late
development through industrialisation, with implications for industrial
policy and trade.
Industrialisation
Meaning and early approaches
Industrialisation is often used interchangeably with ‘economic growth’ or
‘development’. The term industrialisation, however, specifically refers to
a shift towards industrial production by enterprises using labour, capital
96
Chapter 7: Late development and industrial policy
and raw materials to add value. These units usually employ a number of
people and are based on mechanisation. Industrialisation means shifting
from the most basic level of industry – primary industry, (or the extraction
of raw materials such as minerals and logs) – towards secondary industry
(manufacturing) and tertiary industry (services). These higher levels of
industry can add more value than primary industries because they deal
in finished goods, than simply producing raw materials. Together, these
changes may result in a higher level of wealth created in a country. As
discussed in earlier chapters, many economists have defined economic
growth as lying in the gradual accumulation in the national stock of
capital – or goods that are used to make other goods, such as machinery,
factories, or infrastructure. Investment in capital goods will eventually lead
to a relative increase in the ratio of capital to labour within a country’s
productive capacity.
In the early days of development thinking in the nineteenth and early-
twentieth centuries, many policymakers believed that the best route to
economic growth and industrialisation lay in capitalist investment and
free trade. Many pro-market governments and organisations believe this
today. Indeed, there is much evidence that industrialisation and trade can
increase the dynamism of an economy. Some assumptions were made
about how industrialisation can assist in economic growth.
First, classical economists like Adam Smith and David Ricardo showed
how increased specialisation or division of labour can enhance
returns made by manufacturing. Economic returns can be increased even
further when there is technological upgrading (or the improvement of
the levels of technology and infrastructure within a country). Furthermore,
the increased level of economic activity created the multiplier effect –
the generation of financial activity as money circulates around an economy
every time it is used to purchase products or services.
In time, these assumptions led to endogenous growth theory. (The
word ‘endogenous’ refers to something that occurs from within its own
forces, rather than ‘exogenously’ through the assistance of outside forces.)
Endogenous growth theory optimistically argued that economic growth
would result simply from the actions of entrepreneurs and businesses
acting rationally within a single economy or without government
assistance. As each company invested, then economic growth and
industrialisation would occur as each investor sought the most profitable
opportunity, and the greatest chance to gain competitive advantage over
each other. It was believed this kind of investment would also generate
more income to spend on quality goods, which, in turn, would provide
more incentives for other investors to become involved in industrialisation.
A further belief was that industrialisation would, in turn, increase
agricultural productivity by absorbing excess agricultural labour, and by
providing capital goods for agriculture.
During the twentieth century, this underlying belief in industrialisation
lay beneath mainstream approaches to development or modernisation
theory (see earlier chapters). As discussed earlier, modernisation
sought to improve social and economic development through means
such as increasing economic growth, industrialisation and urbanisation.
Usually, these objectives implied that the government had to invest
widely in industry, as a way to overcome significant structural problems
in developing countries such as the so-called ‘dual economy’. This
idea, used mainly by the economist W. Arthur Lewis, was adopted widely
during the 1950s–60s, and assumed that most developing countries were
characterised by two large sectors: a modern, high-productivity sector,
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171 Introduction to international development
Box 1
The ‘Big Push’ and early approaches to industrialisation
Sumatra and Kalimantan from the 1960s to the 1980s. This scheme was
primarily to address population imbalances in this large country, but the
new settlements in the outer islands were also designed to encourage
economic growth and limited forms of industrialisation.
Yet, perhaps the most typical model of the Modernisation period was the
so-called Stages of economic growth approach, which was pioneered
by the American, Walt Rostow (1960). This approach refers to the belief
that development is an evolutionary process, which undergoes successive
levels of economic productivity, efficiency and consumption. Rostow
argued that all economies could be classified within one of five categories:
the traditional society, the preconditions for take-off, the take-off, the drive
to maturity, and the age of high mass-consumption.
Rostow defined each stage of growth as follows. A traditional society
had limited production functions, based on pre-Newtonian science and
technology. The preconditions for take-off were initially developed during
Western Europe in the late seventeenth and early eighteenth centuries
as the insights of modern science were adopted in both agriculture and
industry, and by the expansion of world markets. Take-off is the watershed
that defines when industrial development as a cumulative process begins,
and when growth becomes a normal condition. In Britain, the first country
to undergo the Industrial Revolution, one important trigger for take-off
in the late eighteenth century was technological innovation following
the development of new machinery. But social and political factors also
were important, and take-off has also been linked to the emergence of a
political group of entrepreneurs prepared to take industrial modernisation
seriously, and who could influence government policy. During take-off,
the rate of effective investment and savings may rise from five per cent
of GNP to 10 per cent or more, especially where preconditions for take-
off required much initial investment in capital goods (such as claimed in
Russia and Canada). The drive to maturity is when investment rises to
some 20 per cent of GNP, and where industry makes a transition to high
levels of technological advancement, also allowing growth in production
to exceed population growth. Industry may also shift in emphasis from
coal, iron and heavy engineering industries of the railway phase, to
machine tools, chemicals and electrical equipment. Finally, the stage
of high mass-consumption was characterised by a shift in industry to
services and consumer durables, a high level of urban population, and per
capita income that easily covered basic requirements of shelter, food and
clothing.
The lesson of the stages of growth model was that countries seeking
industrialisation should see each stage as a necessary process before
reaching the final goal of ‘high mass-consumption’. Like the ‘Big Push’
approach, it required coordination from an overseeing state, and the
helping hand of much investment in key industrial sectors. These early
models, however, have been challenged by newer approaches to industrial
policy. These are discussed later in this chapter. But before this, it is
important to note various other implications of industrialisation for
overall development.
Activity 1
Make a list of the key factors underlying industrialisation in some industrialised countries
such as the United Kingdom or Germany, the USA, Russia and Eastern Europe. When did
they industrialise? How far did the national government shape industrial policy?
99
171 Introduction to international development
100
Chapter 7: Late development and industrial policy
Box 2
Defining the developmental state
101
171 Introduction to international development
The strength of a developmental state comes largely from the ability of the
state to regulate both industry and competitors to political power, such as those
coming from landed agricultural classes. In turn these also encourage a high
level of technological innovation, and the ownership of these innovations by
domestic companies, rather than international investors. Ultimately a successful
developmental state may become seamlessly involved in various aspects
of social and economic change in a country as it transforms from historic
dependence on agriculture to industry. For example, in Japan, the Ministry
of Economy, Trade and Industry has been a key player in building long-term
economic competitiveness through alliances between industry and government.
In South Korea, the chaebols are large, conglomerate family-controlled firms of
South Korea characterised by strong ties with government agencies, which have
influenced rapid economic growth.
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Chapter 7: Late development and industrial policy
of the greatest proponents of ISI were the Soviet Union, and later China,
which were socialist countries content to be protectionist against foreign
imports and to maintain many state-owned enterprises. Brazil and India
were examples of non-socialist (yet centrally planned) countries that
adopted ISI.
ISI was considered to be a successful policy until the 1970s, when
some disadvantages became clear. The emphasis on import substitution
meant that export industries were not developed. In turn, this meant
that countries were not able to generate foreign exchange in sufficient
quantities to pay for capital goods. Moreover, import-substitution polices
were soon shown to discourage export growth as producers were given
little incentive to expand capacity more rapidly than domestic demand
growth, as international prices were much lower than the prices of the
sheltered domestic market. Supporting infant industries also placed great
financial and administrative strains on the state. A further problem was
that ISI tended to slow down processes of technological innovation, and
many countries dependent on ISI – such as India or the Soviet Union –
became characterised by goods that were considered old-fashioned, or
uncompetitive with others produced in exporting economies.
By the 1980s and early 1990s, most developing countries began to tone
down their attachment to ISI, and to introduce trade liberalisation and
incentives for both import-substituting and export-producing sectors.
Activity 2
Make a list of the different characteristics and principles of EOI and ISI and record the
advantages and disadvantages of each. Try to identify examples of where there is overlap
between ISI and EOI in some countries.
against their own goods in foreign countries. A further factor is how far
industrialisation for exports needs to involve indigenous industries, or
whether industrialisation can be achieved by allowing foreign-owned
companies to invest in your own country.
Managing trade and industrialisation has depended on various factors.
First, trade is dominated by historic patterns in the terms of trade.
The terms of trade are the extent to which each country benefits from a
trade. As discussed above, most benefit accrues to the country that adds
most value to a product by manufacturing. Countries with histories of
colonialism have usually found it hard to develop the manufacturing
industry necessary to add value to their products. Moreover, some
powerful trading nations have resisted imports from developing countries.
For example, the USA and EU continue to subsidise their own agricultural
products such as cotton and sugar, and hence it is difficult to trade in
agricultural produce with these countries. Similarly, the USA imposes
quotas and other protectionist measures on steel or high technologies.
Second, the encouragement of industrialisation and trade at the same
time may also depend on the development of competitive companies and
industries from developing countries themselves. These are increasingly
called ‘transnational corporations (TNCs) from developing economies’.
This is also controversial. Until the 1980s, many governments – including
those in Europe and North America – supported large indigenous
companies (or so-called ‘national champions’) as a crucial part of achieving
national economic success. Increasingly, however, governments see the
success of indigenous companies as less important than the attraction of
Foreign Direct Investment (FDI – i.e. investment by foreign countries
and companies in manufacturing factories and infrastructure in developing
countries). Consequently, many governments now believe that – for
particularly competitive and complicated goods – it is no longer necessary
to develop their own indigenous companies, but instead should attract
investment from foreign companies within its own national territory.
One reason for this change is that many governments realise that they
cannot compete in certain industries where other countries have achieved
competitive advantage. A further reason is that many transnational
corporations are now so internationally based that they can no longer be
seen as national.
Many TNCs from developing economies remain specialised in natural
resource industries (such as Malaysia’s Sime Darby). Some are involved
in manufacturing (such as Hyundai and Daewoo from Korea, or Proton
from Malaysia). Often they conduct business within their own regions
because of similar cultural and historical conditions and levels of economic
development – for example some TNCs from Taiwan and Korea are now
investing in China and Vietnam. Consequently, Latin American TNCs
often tend to operate mostly within Latin America, and East Asian firms
within Asia, although they are gradually becoming more prevalent in
European and North American markets. Some high-tech firms from such
NICs as Taiwan and South Korea (such as Samsung) have invested heavily
in the USA and some European countries. Many firms from developing
economies internationalise to become TNCs primarily because they serve
as subcontractors and/or suppliers in the global production networks
orchestrated by large global corporations. As these global corporations
are penetrating into emerging markets, they demand their suppliers and
subcontractors to follow them to the host economies. However, these
companies also experience pressures of rising costs, and consequently may
relocate their production facilities to nearby developing economies. For
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171 Introduction to international development
example, many Asian TNCs have relocated from the NICs into China since
the 1980s.
Activity 3
Make a list of 10 transnational corporations from developing economies and their key
specialisations. What does this tell us about who these countries trade with, and which
countries have been most successful in producing them?
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Chapter 7: Late development and industrial policy
From the 1980s, the removal of trade restrictions (i.e. trade liberalisation)
became a usual expectation in economic policy, either by indigenous
governments or because of conditionalities imposed by the World Bank and
International Monetary Fund as a basis for structural adjustment. The World
Trade Organization (WTO) – the successor to the General Agreement on
Tariffs and Trade (GATT) – has also supported this. Trade liberalisation has
been encouraged because it is assumed that taxes and quota restrictions
increase the cost of manufacture; taxes on exports discourage export
earnings; and protecting manufacturing reduces opportunities for export
diversification. Many pro-market, or neo-liberal economists have urged
these principles strongly. However, other theorists have proposed that
some developing countries should continue to protect certain industries,
especially where they affect poor people.
In the late 1990s, some developed countries also proposed a Multilateral
Agreement on Investment (MAI), which was designed to generate universal
rules for investment overseas. Neo-liberal proponents of the MAI suggested
that it would accelerate global investment, and assist many developing
countries in achieving rapid growth where investment took place. Critics,
however, argued that the MAI would reduce the possibility for developing
countries to impose their own industrial policies, and hence shape the
development of their own industries against foreign domination. The MAI
was rejected at the Seattle WTO meeting in 1998, although the idea is still
being discussed.
Box 3
The World Trade Organization
The World Trade Organization (WTO) was established in 1995 as the successor
to the General Agreement on Tariffs and Trade (GATT). GATT was signed by 23
governments in 1947 and was for some decades the most important organisation
that regulated international trade in goods and services using a system of
objectives and rules laid out in agreements among member governments.
The WTO was established as a more efficient and international organisation,
encompassing a wider range of topics, and in 2005 had 148 member states.
The WTO has immense significance for late development because countries have
to agree to certain principles of free trade before they can gain accession to the
WTO. Once accepted they can benefit from higher levels of international trade,
as well as call upon the resources of the WTO to protect themselves in trade
disputes with other countries. The most important agreement is the principle
known as most-favoured-nation (MFN) treatment. This requires member
countries to show no discrimination between trading partners. Grant someone a
special favour (such as a lower customs duty rate for one of their products) and
you have to do the same for all other WTO members.
Activity 4
Write a few sentences on how trade liberalisation can help or hinder late development.
List two or three basic reasons how late development has been easier to achieve in East
Asia than in most countries of Africa.
Conclusion
Late development is – for many developing countries – the main option
for increasing economic growth and reducing poverty. Usually this
has implied industrialisation. But during the twentieth century, it was
clear that industrialisation must also involve making decisions about
trade and international investment, often from private, rather than
public, companies. Late development is therefore intricately entwined
with important questions of which countries are allowed to enter
specific markets; how far each country can attract international private
investment; and which sectors of society are most likely to benefit first
from late development policies.
Some economic theorists like to suggest that industrialisation and late
development can result simply from opening borders to trade (so-called free
trade), and the lack of government regulation or intervention of industry.
Evidence, however, suggests that the best examples of late development, the
East Asian NICs, have used clever strategies of international trade combined
with domestic policies of building human and physical capital to encourage
long-term investment in globally competitive industries. There is no one
specific model of late development, but the combination of international/
domestic policies is the source of debate in most developing countries.
Activity 5
Write a short definition – a maximum of five sentences – of what you think are the most
important principles of late development, and how the circumstances of each country
might influence these.
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171 Introduction to international development
Notes
110
Chapter 8: Agrarian change and rural development
Essential reading
Desai and Potter (2008) Section 3 (Chapters 3.1 to 3.8).
Todaro and Smith (2014) Chapter 9.
Further reading
Ashley, C. and S. Maxwell ‘Rethinking Rural Development’, Development Policy
Review 19(4) 2001, pp.395–425, and other papers in this special issue.
Ellis, F. Rural Livelihoods and Diversity in Developing Countries. (Oxford: Oxford
University Press, 2000) [ISBN 0198296967].
Land reform
Bryceson, D., C. Kay, and J. Mooij Disappearing Peasantries? Rural Labour
in Africa, Asia and Latin America. (London: ITDG Publishing, 2000)
[ISBN 1853394777].
Deininger, K. ‘Negotiated Land Reform as One Way of Land Access: Initial
Experiences from Columbia, Brazil and South Africa’ in De Janvry, A. et al.
(eds) Access to Land, Rural Poverty and Public Action. (UNU/WIDER and
Oxford University Press, 2001) [ISBN 0199242178] Chapter 13, pp.315–48.
Ghimire, K. (ed.) Land Reform and Peasant Livelihoods: the Social Dynamics of
Rural Poverty and Agrarian Reforms in Developing Countries. (London: ITDG
Publishing, 2001) [ISBN 1853395277].
Challenging reading
Bebbington, A. ‘Capitals and capabilities: a framework for analyzing peasant
viability, rural livelihoods and poverty’, World Development 27(12) 1999,
pp.2021–2044.
Chenery, H., M. Ahluwalia, C. Bell, J. Duloy, and R. Jolly Redistribution with
Growth: Policies to Improve Income Distribution in Developing Countries in
the Context of Economic Growth (London: Oxford University Press and the
World Bank, 1974) [ISBN 019920070X].
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171 Introduction to international development
Introduction
Agrarian change and rural development are important concerns for
international development. Many countries depend on agriculture for
economic activity. Famine – one of the most serious crises affecting
developing countries – is inherently linked to agrarian problems. Many of
the world’s poorest people live in rural areas.
Agrarian change may occur for various reasons. Major transitions,
occurring over a period of years, have been called agrarian
transformations, and refer to historical shifts in production systems,
economic exchange and social relations within agriculture, often as
the result of climatic and demographic changes, or sudden political or
economic events. For example, many areas of Asia and Africa are gradually
transforming from systems of smallholder, and shifting cultivation towards
permanently cultivated industrial forms of agriculture such as oil-palm
plantations or irrigated rice fields. Agrarian change may also be induced
by the actions of governments or development agencies, through activities
such as land reform and agrarian reform. Some of these interventions
may include technological operations to change the nature of agriculture
used for food production, or socio-economic practices to allow poor
people greater ability to access rural resources and livelihoods. Changes
are occurring in farming systems (comprising transitions from small to
large farms or peasant to capitalist structures), and in the provision of
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Chapter 8: Agrarian change and rural development
Box 1
Intermediate classes
Intermediate classes are a grouping of people who occupy social and economic
niches between poor peasants and profit-taking capitalists. They are usually small
farmers or self-employed traders, and they occupy important (and frequently
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171 Introduction to international development
Activity 1
Think of some typical developing countries and identify five ways in which levels of
rural economic development have changed during the last 100 years. Have these
changes demonstrated a transition from a ‘backward’ and remote economy to a more
industrialised and integrated economy? If so, how have these changes occurred?
Land reform
For many years, land reform was considered the most fundamental way to
address problems of entrenched poverty and lack of economic productivity
in rural areas in developing countries. Land reform implies a change in
how land ownership is distributed, recorded and administered, usually in
rural areas. Achieving land reform, however, is difficult because it usually
reduces the power and wealth of large landowners, who commonly have
close ties with local or national authorities. In Latin America, until the
mid-twentieth century, some 20 per cent of landowners possessed 80 per
cent of the land.
There is no universal definition of land reform, but it is usually assumed
that land reform redistributes property rights over land from large
landowners to peasants and/or landless rural labourers. Frequently this
involves the intervention of the state. The purpose of this redistribution
is to provide more resources to the greater proportion of the rural
population, and to reduce the control over land and agricultural
production by one small sector of society.
The causes of land reforms can differ (see Bryceson et al., 2000; Ghimire,
2001). In some countries, land reforms have been implemented because
of peasant revolts and/or major social revolutions. For example, peasants
played a key role in the Mexican revolution of 1910–17 that led to a major
land reform particularly during the populist government of President
Cárdenas in the 1930s. In several African countries like Algeria, Kenya
and Tanzania land reforms resulted from struggles for independence and
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Chapter 8: Agrarian change and rural development
decolonisation after the Second World War. Peasants were actively involved
in socialist revolutions in developing countries such as Angola, China,
Cuba, Ethiopia and Vietnam. Yet, sometimes, major land reforms were
implemented by the state without major peasant involvement. This occurred
in South Korea and Taiwan after the Second World War, where (under USA
encouragement) both governments undertook reforms in order to avoid the
kind of communist-style revolution that had occurred in China.
Two types of land reform are often discussed: distributivist or reformist,
and collectivist or radical. A distributivist land reform redistributes property
rights to families, usually within a capitalist system. Here, landlords usually
receive compensation for their expropriated assets. The beneficiaries tend to
be the tenants who already were working on the farm or sometimes other
smallholders or agricultural wageworkers. Commonly, the state subsidises
this redistribution, and beneficiaries are rarely asked to pay the full value
of the land. Examples of this type of land reform are those undertaken in
Bolivia, Ecuador and Colombia in Latin America; Egypt, Kenya and South
Africa in Africa; and South Korea, Taiwan, the Philippines, India and
Pakistan in Asia.
Collectivist land reform is more radical, and involves establishing producer
cooperatives (also known as collectives or communes), and/or state farms.
Historically, this strategy was used by socialist regimes. Usually, all land is
expropriated and landlords receive no compensation. This reform can also
target smaller, capitalist landlords, who do not own large areas of land,
but who may employ wage-labour, or engage in entrepreneurial activity.
The beneficiaries may be former tenants and rural wage-labourers and
smallholders. But under this reform, all land is collective property. Examples
of this type of land reform include those of Russia, Cuba, Chile (during the
Allende government of 1970–73) and Nicaragua (during the Sandinista
government from 1979–90) in Latin America; Algeria, Angola, Ethiopia and
Mozambique in Africa, and China, North Korea and Vietnam in Asia. Of
course, variations of these two models exist. For example, in Peru between
1969 and 1980, the military governments undertook collectivist reform,
although under a market-based economy. In Tanzania, the ‘villagisation’
program of the late 1960s may be considered another example of a mixture
of collectivisation and redistribution. Socialist countries have also recently
largely decollectivised, or reversed, their land reforms because of the general
decline in this kind of state socialism.
Property rights can differ widely between men and women, indicating
the differential access of women and men to owning, using, or gaining
from property. In largely agrarian contexts, arable land is usually the
most valued property, and can determine livelihood options, social status
and political voice. Rights in property can be defined as claims that are
legally and socially recognised and enforceable by an external legitimised
authority, such as a village-level institution or the state. Yet, differences
may exist in terms of how rights are formally expressed, and how they are
actually carried out. For example, among the Tamils of Jaffna in Sri Lanka,
a married woman needs her husband’s consent to sell land she legally
owns. Different societies may have different rules for transferring property
rights. In much of South Asia, inheritance is generally patrilineal (ancestral
property passed through the male line), whereas in southern and eastern
South Asia matriliny (ancestral property passed through the female line)
exists in Meghalaya and Kerala in India, and bilateral inheritance (property
passing through and to both sons and daughters) in Sri Lanka. Gender
relations may therefore have a strong influence on how local systems of
land ownership and access affect poverty and development opportunities.
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171 Introduction to international development
Since the 1980s, however, large-scale land reform has become less
important as a way to induce rural development. Rather than relying on
the state and large, top-down programs of redistribution, international
institutions such as the World Bank have preferred to focus on
macroeconomic structural adjustment and economic liberalisation as a
way to increase financial incentives and agricultural productivity. One
recent trend has been the ‘market-led’ form of land reform, in which
land may be redistributed via trading between buyers and sellers (see
Deininger, 2001). This has occurred in Brazil, Colombia and South Africa,
although critics have suggested that these new reforms have had little
impact on long-standing inequalities between large and small landholders.
In general, rural development now increasingly focuses on other means of
addressing poverty and productivity than land reform alone.
Agrarian reform
Agrarian reform is another key part of government initiatives to address
poverty and agricultural productivity in rural areas. Agrarian reform refers
to the supportive measures governments may introduce to make land
reform more effective, such as the supply of adequate credit, technical
assistance, marketing facilities and other supportive measures to the
reform sector farm enterprises. These measures were proposed when it
was clear that land reform alone was unable to have the redistributive, or
long-term development impacts hoped of it.
One classic example of agrarian reform is the Grameen Bank of
Bangladesh. This bank was set up in 1976 by a Bangladeshi economics
professor to assist the rural poor in Bangladesh, which had just achieved
independence from Pakistan in 1971. The bank aimed to reduce the
historic dependence of rural farmers on traditional moneylenders, by
offering them money in order to generate productive self-employment. In
this way, the bank was one of many means of overcoming the traditional
problems of the rural sector in South Asia.
The bank adopted an innovative system of lending to small groups of
five people, without the need for collateral. Each person had mutual
responsibility for the repayment of loans. Peer group pressure ensures low
transaction costs on small loans and high rates of repayment. The bank
was successful, and it was formally established as a ‘specialised financial
institution’ in 1983, with support from the government, public banks and
the International Fund for Agricultural Development (IFAD). In particular,
the bank specialised in lending to landless women to finance primarily
non-farm activities such as small-scale trading or animal rearing.
The Grameen Bank has been held up as an example of micro-credit and
finance initiatives that can make a large impact on the opportunities
for rural poor people. (The term, ‘micro-credit’, refers to the lending of
relatively small amounts of money to poor people.) But critics have also
suggested that this kind of micro-credit has displaced attention away
from the structural causes of poverty, and that it remains unavailable to
the poorest people (those with chronic poverty). Moreover, men can still
control loans made to women. It may also trap poor people into activities
that have low productivity. Despite these concerns, the Grameen Bank
is still a visible and popular example of local agrarian reform, which has
been copied elsewhere.
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Chapter 8: Agrarian change and rural development
Annual average per capita food production (index based on 1989–91 = 100)
1961/5 1966/70 1971/5 1976/80 1981/5 1986/90 1991/5 1996/00
Africa 109.0 108.7 106.8 99.7 94.6 97.6 100.4 103.8
Developing
countries
Asia 70.4 72.2 73.4 77.7 87.5 96.4 108.9 124.5
Developing
countries
Latin America 83.0 86.4 86.3 93.6 97.0 99.0 103.6 112.9
and Caribbean
Developing 76.8 78.8 79.5 83.3 90.3 97.1 106.8 119.4
countries total
Table 1: Per capita food production trends 1960–2000
Source of all statistics: FAO (2001). FAOSTATS [online]. Available from: http://
apps.fao.org
There is little doubt that the Green Revolution greatly increased the
capacity of the world’s farming systems to produce food. Table 1 shows
that most areas of the world have become more self-reliant in food
production since the 1960s, with the exception of Africa. Asia has
benefited the most, and some countries, such as Bangladesh, China, India,
Indonesia, Malaysia, Pakistan and the Philippines, have now become
net food exporters, rather than dependent on food aid and imports.
In particular, the increased production of food staples, such as rice,
maize (corn) and wheat increased supply of food to urban areas, and
reduced local prices of these. The Green Revolution was also associated
with the establishment of various international agricultural research
centres supported by the World Bank-based Consultative Group for
International Agricultural Research (CGIAR), such as the Wheat and
Maize Improvement Centre (CIMMYT) in Mexico, and the International
Rice Research Institute (IRRI) in the Philippines. These organisations
performed research on new seeds and farming techniques, and continue
research today.
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171 Introduction to international development
Yet, the Green Revolution has also been criticised. First, the revolution
benefited consumers of food by increasing supply and reducing prices. It
did not help food producers, who found that farm-gate prices for corn,
wheat and rice declined in real terms in every decade since 1950, reducing
income for many farmers. Secondly, the Green Revolution has not been
applied everywhere. It has been most applied in irrigated, cereal cropping
areas, but not in rain-fed agriculture or marginal, mountainous zones.
Thirdly, some have claimed the Revolution forced smallholders off the land
empowering larger and richer landowners. This fear was countered by the
fact that, as discussed, many large farmers experienced declining cereal
prices. Plus, many social changes in rural areas are not simply explained
by the Revolution alone, but instead refer to wider transitions such as
changes in land tenure following urbanisation, or political campaigns
to control land occupied by smallholders. Fourthly, the Revolution has
been blamed for being environmentally unsustainable by depending
on irrigation and inorganic agrochemicals. HYVs have narrowed the
gene pool that is cultivated, making HYV farming more vulnerable to
pests and pathogens, often encouraging farmers to increase the use of
agrochemicals. Fifthly, some – especially the Indian activist Vandana Shiva
– have claimed the Revolution has encouraged farmers to reject traditional
cultivation practices, and become more dependent on imported techniques
from developed countries.
New agricultural technologies are still sought, and remain controversial.
Undoubtedly, the new methods of the Green Revolution have increased
overall food production, with significant impacts on reducing poverty and
famine. But such interventions are not politically or socially neutral. More
recent approaches to rural development have given attention to social and
political factors rather than food production alone. These are now discussed.
Activity 2
In one developing country of your choice, make a list of recent land reforms, agrarian
reforms and new technological improvements in agricultural production. It is important
to have at last one example of a developing country’s experience of land and agrarian
reform, and to see how the specific circumstances and history of that country affect rural
development.
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Chapter 8: Agrarian change and rural development
Another important insight was the concept of ‘urban bias’, after the
work of Michael Lipton. Urban bias is a tendency to prioritise urban areas
and people in development plans, either through allocating resources
to urban zones, or through an implicit focus on urban areas (whether
knowingly or not) by policymakers. Linked to this, Robert Chambers
identified other forms of ‘bias’ in rural development, such as the focus
upon easily accessible villages; research undertaken only in the dry
season; local political influences on projects; and the tendency to speak
only to village headmen, rather than poorer villagers, including women.
Chambers (1983) argued that development interventions should ‘put the
last first’, by deliberately seeking ways to represent poor people in the
planning process, and constantly questioning how development work
might not acknowledge vulnerable or ‘voiceless’ people. Chamber’s work
helped reorient rural development from ‘top-down planning’ towards
understanding how poor people make livelihoods.
Marxist critics, meanwhile, criticised the use of market forces in rural
areas. Commercialisation of rural economies may lock vulnerable rural
producers into poverty, especially when land ownership was concentrated
into a few hands. In the 1970s, the Indian economist Krishna Bharadwaj
pointed out that small producers are often ‘compulsively involved’ in
markets, if they have to market their produce at harvest time, in order
to repay debts and to raise further loans, when they do not have a true
surplus (above their own consumption needs) to sell. Consequently,
agrarian reform or technological interventions, which increased farmers’
involvement in trade, may reinforce traditional inequalities between social
groups. Rural development should therefore seek to isolate poor farmers
from these trade flows.
Despite these arguments, however, during the 1980s and 1990s, economic
stabilisation and structural adjustment placed new pressure on rural
economies to produce tradable, exportable goods. For neo-liberal theorists,
the introduction of market forces and the need to compete internationally
was a positive developmental impact, because it, at last, introduced
market efficiency to rural zones. (For example, in Africa, the elimination of
marketing and processing monopolies was seen to be positive because the
monopolies had been used to reduce prices to growers and provide large
rents to officials and politicians.) However, critics argued that structural
adjustment all too often led to greater impoverishment of the most
vulnerable rural people. As a consequence, the World Bank increasingly
introduced ‘safety nets’ for the rural poor, which would seek employment-
intensive growth, while also providing basic social services for poor people
and minimum social security.
Rural development has therefore transformed from a focus on state-led
land reform in the early twentieth century, to more diverse approaches.
Most rural areas are now integrated to some degree with national and
international trade and markets. But there is now greater emphasis on
agricultural extension services for new technologies and agrarian support.
At the same time, in some areas, there has been a gradual encouragement
of involving poorer rural people in the development process itself, through
so-called participatory development. As discussed in earlier chapters,
participatory development seeks to allow poor people to collaborate in the
purposes and manner of interventions. In turn, this has meant a greater
focus on rural livelihoods.
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171 Introduction to international development
Rural livelihoods
The concept of ‘livelihoods’ refers to the social means necessary to make
a living. The approach was first proposed by Robert Chambers in the
1980s, and later developed by development agencies, including the UK’s
Department for International Development. A ‘livelihoods’ approach
focuses on the social relations of economic production, as it affects poor
people. Rural livelihoods are the means by which different individuals can
gain access to livelihoods, or can diversify their livelihood strategies.
Unlike earlier approaches to agriculture and poverty in rural areas,
the livelihood approach does not focus on technology or overall food
production, but instead on the social means by which employment,
incomes, and resources are shared, allocated and accessed. In practice,
it recognises that individuals attempt to shape their livelihoods within
wider social units, including households, lineages, clans, castes, classes
and ethnic groups. In poorer countries, the assumption is that individuals
operate within a context of vulnerability. People put together multiple
livelihood strategies in order to diffuse risk and achieve a range of
different goals. These strategies are dynamic (i.e. they change over time)
and they are unlikely to be achieved in full. Moreover, some goals and
strategies will clash with one another. But a lack of livelihoods, or the
means to achieve livelihoods, effectively describes the poorest, or the
most vulnerable members of societies. It also highlights where social or
economic practices are most exclusionary, and therefore might need to be
addressed.
For example, a diverse livelihood strategy adopted by one household might
include intensive farming of land near the family home, combined with
a variety of non-agricultural activities such as local trading in goods, or
the occasional provision of services such as sewing, taxi driving or wage-
labour. Some of these activities may include short-term migration by some
members of the household to urban areas, especially during dry seasons
when agricultural work is less common. Migration of male family members
may mean that women become household heads, or become more
involved in specialised economic or agricultural activities. In Thailand,
for example, many taxi drivers in Bangkok come from the rural northeast,
where they have permanent homes and farms. They come to Bangkok to
drive taxis for a few weeks or months at a time before returning to their
farms to plant or harvest crops.
A livelihoods approach to development may often mean adopting some
of the concepts developed by Amartya Sen in describing poverty and
vulnerability. For example, people may avoid vulnerability (and hence
attain livelihoods) if they can access and enhance six sets of assets or
‘capital’ (see Bebbington, 1999). Human capital is generally considered
to include educational and practical skills, good health and the ability
to work. Natural assets consist of those resources and resource flows
– including land, water, forests and biodiversity – that help to secure
livelihoods. Physical capital refers to the basic means of production
and infrastructure, including transport, shelter and communications.
This might be poorly developed in remote rural locations. Financial
capital comprises the savings, supplies of credit, remittances, pensions,
entitlements, and so on, available to different persons. Social capital refers
to the networks and relationships of trust that are built up by membership
of groups. Cultural capital refers to those assets that provide people with
a sense of identity or self-worth, including feelings of protection, affection
and being free.
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Chapter 8: Agrarian change and rural development
Activity 3
Make a list of the various income sources available to a rural zone in a developing country
of your choice. How have these income opportunities grown in recent years? Which
farmers adopt these alternatives, and which do not? Are there differences in gender?
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Chapter 8: Agrarian change and rural development
Which Did food Occupation of Did they lose Any Any direct Any trade
famine? availability most victims endowments? entitlement entitlement entitlement
collapse? shifts? failure? failure?
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171 Introduction to international development
Box 3
Famine and war
The Sudanese region of Darfur is an example of one region that has undergone
famine in 2003–05, and where the reasons for this famine are still unclear.
Darfur is a large region of south-west Sudan in the Sahel of Africa – or the
region of land immediately south of the Sahara desert where rain is scare, and
land is dry. Frequently, the region of Darfur is more influenced by events in
neighbouring Chad and Libya than by the government of Sudan. In 2003, a
rebellion was organised by the Sudanese Liberation Army (SLA) and the Justice
and Equality Movement (JEM) against the central Sudanese government, in
order to claim more autonomy. There are also strong ethnic differences between
many inhabitants of Darfur compared to the citizens of the rest of Sudan.
According to some observers, famine and political unrest in the region is the
result of crop failure and the action of local warlords. But some other critics
allege that a local militia, known as the Janjaweed, is operating with the backing
of the Sudanese government in trying to ‘cleanse’ some areas of Darfur of black
Africans. These suggestions are yet unproven. But it is clear that the origins of
famine in this region have been influenced by the complex political history of
the Sahel and Sudan, where orthodox political representation – in the form of
democratic elections and a transparent state – are not as well developed as in
other countries. In addition, this region is hampered by many diverse legacies of
African development and physical problems of a lack of infrastructure. For many
analysts, there is a need to highlight the political causes of famine and unrest in
this region, and to place pressure on different governments and actors to stop
certain actions, rather than simply suggest that famine is inevitable in this place.
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Chapter 8: Agrarian change and rural development
Activity 4
Look at the newspapers or other news media during the last year and find at least one
example of a famine in a developing country. Consider what may be the political factors
underlying this, and how these have been shown on a long- and short-term basis.
Consider what may be the best response, nationally and internationally.
Conclusion
Agrarian change and rural development are fundamental aspects of
international development, and two of its most debated policy questions.
Historically, rural areas were seen to be backward, with entrenched
problems of a lack of investment, lack of education, and inability for
economic reforms to operate. Initially, land reform – or redistribution from
larger to smaller landowners – was seen to be the key means to initiate
rural development. Over time, however, analysts have begun to focus
on the social and political factors that underlie the vulnerability of poor
people in rural areas. Rather than relying on large-scale changes such
as land reform alone, policymakers are now proposing ways to enhance
rural livelihoods, and to allow individuals greater access to markets and
resources, as the key way to achieve ‘development’ in rural areas.
Nowhere has this been witnessed more than in relation to the serious
problem of famine. Historically, these were seen as largely uncontrollable
results of weather or entrenched lack of development. Now, these are seen
to reflect general levels of social and political opportunities for individuals
in rural areas, and hence can be controlled by building rural livelihoods.
Yet, increasingly, the politics of famines are now being discussed. Rather
than these being seen to be questions of local rights and access to
resources, these are – in the worst cases – now being considered a result of
the tolerance of unethical political behaviour by conflicting parties. Famine
policy is therefore no longer potentially restricted to humanitarian relief or
long-term livelihoods, but to an ethical foreign policy. Such international
positions on famines and war, however, should not detract from the
long-term and careful work on sustainable livelihoods, and assisting poor
farmers with shrewd agrarian reforms.
Activity 5
Write a short definition – a maximum of five sentences – of what you think are the most
important principles of rural development, and how the circumstances of each country
might influence these.
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171 Introduction to international development
126
Chapter 9: Governance and public policy
Essential reading
Desai and Potter (2008) Section 10 (especially Chapters 10.4 to 10.10).
Todaro and Smith (2014) Chapters 11, 13 and 15.
Further reading
Dahl, R. On Democracy. (London and New Haven: Yale University Press, 1998)
[ISBN 0300084552].
Dick, G.W. ‘Authoritarian versus Nonauthoritarian Approaches to Economic
Development’, The Journal of Political Economy 82(4) 1974.
Gray, C.W. and D. Kaufmann ‘Corruption and Development’, Finance and
Development, March 1998.
Harrison, G. ‘The World Bank, Governance and Theories of Political Action in
Africa’, British Journal of Politics and International Relations 7(2) 2005.
Haynes, J. ‘The State, Governance and Democracy in Africa’, The Journal of
Modern African Studies 31(3) 1993.
Khan, M.H. ‘Corruption and Governance in Early Capitalism: World Bank
Strategies and Their Limitations’ in Pincus, J. and J. Winters (eds)
Reinventing the World Bank. (Ithaca, N.Y.: Cornell University Press, 2002)
[ISBN 0801440378].
Little, D. Paradox of Wealth and Poverty: Mapping the Dilemmas of Global
Development. (Boulder, Co: Westview, 2003) [ISBN 0813316421] Chapter 8.
Minier, J. ‘Democracy and Growth: Alternative Approaches’, Journal of
Economic Growth 3(3) 1998.
Ottemoeller, D. ‘Popular Perceptions of Democracy: Elections and Attitudes in
Uganda’, Comparative Political Studies 31(1) 1998.
Przeworski, A. and F. Limongi ‘Political Regimes and Economic Growth’, Journal
of Economic Perspectives 7(3) 1993.
Sachs, J. The End of Poverty: How We Can Make It Happen in Our Lifetime.
(London: Penguin, 2005) [ISBN 1594200459; 0141018666] Chapter 16.
Scully, G.W. ‘The Institutional Framework and Economic Development’, The
Journal of Political Economy 96(3) 1988.
Sen, A. Poverty and Famines: An Essay on Entitlement and Deprivation. (Oxford:
Clarendon Press, 1981) [ISBN 0198284268(hbk); 0198284632(pbk)]
Chapters 1–3.
Sen, A. Development as Freedom. (Oxford: Oxford University Press, 1999)
[ISBN 0198297580(hbk); 0192893300(pbk)] Chapters 4, 6 and 7.
Shleifer, A. and R. Vishny ‘Corruption’, Quarterly Journal of Economics 108(3)
1993.
Srinivasan, T. N. ‘Human Development: A New Paradigm or Reinvention of the
Wheel?’, American Economic Review 84(2) 1994 [ISSN 0002-8282].
Sugden, C. ‘Spontaneous order’, Journal of Economic Perspectives 3, 1989,
pp.85–97.
Tilly, C. Democracy (Cambridge: Cambridge University Press, 2007)
[ISBN 0521701538].
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171 Introduction to international development
Challenging reading
Baum, M.A. and D.A. Lake ‘The Political Economy of Growth: Democracy and
Human Capital’, American Journal of Political Science 47(2) 2003.
Brown, D.S. and W. Hunter ‘Democracy and Social Spending in Latin America,
1980–1992’, American Political Science Review 93(4) 1999.
Chabal, P. ‘The Quest for Good Governance and Democracy in Africa: Is NEPAD
the Answer?’, International Affairs 78(3) 2002.
Corbridge, S., G. Williams, M. Srivastava, and R. Véron Seeing the State:
Governance and Governmentality in India, (Cambridge: Cambridge
University Press, 2005) [ISBN 0521542553].
Schumpeter, J. Capitalism, Socialism and Democracy (New York: Harper
Perennial, 2008 [1942]) [ISBN 0415567890].
Stasavage, D. ‘Democracy and Education Spending in Africa’, American Journal
of Political Science 49(2) 2005.
Sugden, R. ‘Welfare, resources and capabilities; a review of inequality re-
examined by Amartya Sen’, Journal of Economic Literature, December, 31(4)
1993, pp.1947–962.
Varshney, A. ‘Why Have Poor Democracies Not Eliminated Poverty? A
Suggestion’, Asian Survey 40(5) 2000.
Introduction
This chapter will examine governance in the developing world, with a
focus on democratisation and poverty reduction. It will seek to understand
governance and democracy, before attempting to explain how and when
democracy and good governance can help to reduce poverty. It will also
attempt to clarify the meaning of poverty and the various ways it can be
measured and studied.
Governance
Governance is a term that has recently become so popular in development
studies that it appears to have lost whatever meaning it originally held.
Indeed, some scholars like Patrick Chabal (2002, p.447) have rebelled
against this trend and refused to use the phrase ‘good governance’, partly
because he claims it ‘is for ever associated with Bretton Woods institutions’
political conditionalities and partly because I am not sure what it means’.
Indeed, ‘governance’ and ‘good governance’ are used quite often in regards
to the World Bank and IMF’s prescriptions for developing countries.
From the early 1990s onwards at the World Bank ‘governance referred
to reforms in the public sector which enhance the prospect for economic
growth…In essence, for the Bank, governance referred to reforms within
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Chapter 9: Governance and public policy
the public sector which enhanced the prospect for economic growth;
it did not make any judgment concerning the democratic credentials
of a state’ (Harrison, 2005, p.241). This approach to governance led,
Harrison (2005) argues, to less of an emphasis on the role of politics
in development and more on reforming public administration from a
technocratic point of view. In this sense governance is very different from
democracy.
What about other conceptions of governance? Haynes (1993, p.537),
for instance, claims that governance should be distinguished from good
government, which:
‘refers to effective, ‘user-friendly’ rule which may be less than
fully democratic…It is purposive and development-oriented,
seeking to improve the mass of people’s quality of life…By way
of contrast, governance nearly always alludes to the necessity
for liberal democracy as a prerequisite for development…
Governance is synonymous with democracy.’
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171 Introduction to international development
Box 1
Tolls and development in medieval Europe
In 1400 there were 60 independently run tolls along the Rhine. Along the
Seine there were so many tolls that for a ship to sail a good 20 miles cost as
much as its price. In contrast, rivers in England were free of such tolls, which
in part explains the ability of England to develop specialised, commercial
agriculture feeding London, the world’s centre of commerce. These examples
suggest how costly free entry into bribe collection might be to development
(Shleifer and Vishny, 1993, p.608).
Shleifer and Vishny (1993) argue that one part of the problem with
corruption is that multiple officials in government can collect them for the
same reason, as with the above example with tolls, while another problem
involves the costs involved in keeping corrupt activities secret. All of these
costs make corruption very damaging to development (see Box 2).
Box 2
The costs of corruption (Gray and Kaufmann, 1998, p.8)
Gray and Kaufman (1998, pp.9–10) and others have argued that to
combat corruption countries need to set up anti-corruption watchdog
agencies, embrace deregulation and civil service reform, strengthen legal
and judicial systems, improve financial management, and promote a free
press, among others.
Activity 1
Recall a prominent corruption scandal in your own country or region. Come up with three
ways this scandal and similar types of corruption could have been avoided.
Yet some economists have attacked this recent focus on corruption. For
one, Sachs (2005, p.312) has shown that African countries grow slower
than other developing countries of the same level of corruption. This
takes place despite the fact that ‘Africa shows absolutely no tendency to
be more or less corrupt than other countries at the same income level’.
What is clear in Sach’s statistics, however, is that poor countries are poorly
governed (i.e. the poorer the country, the greater its corruption).
Does this mean that poor countries are poor because they are corrupt, or
that corruption takes place because they are poor? Khan (2002), claims
that, contrary to popular belief, it is more the latter than the former,
or more specifically that ‘the process of capitalist development itself
generates powerful incentives and motives for corruption’. Khan notes that
countries in East Asia that have sustained high growth rates for decades,
including China, Indonesia, South Korea and others, did not have lower
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corruption rates when growing than other countries, and that they only
saw lower corruption once they became rich. In other words, economic
growth leads to lower corruption, rather than vice versa. If Khan (2002) is
correct, then we can say that good governance, understood in terms of low
corruption, is not, in the end, a precursor to development.
Understanding democracy
Democracy, as Robert Dahl has noted, is ‘used in a staggering number of
ways’ (Dahl, 1998, p.37). It is undoubtedly one of the more difficult terms
in the social sciences to pin down, especially as people with very different
viewpoints all claim to support democracy without agreeing upon what
they mean by the term.
From Chapter 6, we can already agree that democracy is different from
civil society. But how do we define democracy? Dahl defines democracy
on the basis of equality of participation. He claims that for any
organisation to achieve this equality it must satisfy five criteria:
1. Effective participation (where each member has the opportunity to
make their views known to the other members).
2. Equality in voting (with each vote having the same weight as the others).
3. Enlightened understanding (where each member has the opportunity
to learn about a variety of policies and their consequences).
4. Control of the agenda (where policies are always open to change).
5. Inclusion of adults (where all adults have full rights to participate).
Dahl claims that if ‘any of the requirements is violated, the members will
not be politically equal (Dahl, 1998, pp.37–38).
Box 3
Differing conceptions of democracy in Uganda
In 1994 the American researcher Dan Ottemoeller did a survey among several
hundred Ugandans, asking them to define democracy. They gave three types
of answers, only the first of which would normally be considered ‘correct’ in a
political science classroom:
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171 Introduction to international development
other from the outside. For instance, democracy can be conducted directly
by citizens, called direct democracy, or through elected representatives,
called representative democracy. The former worked to a degree in ancient
Greece when the number of citizens was small but is generally considered
to be unwieldy in countries with large populations. Nonetheless, we still
see direct democracy when countries hold referendums, as is common in
Australia, Switzerland and other countries.
Beyond having representatives, democracies also share something else in
common, namely the establishment of a constitution, whereby ‘an explicit
set of principles defines the scope of collective decision-making, including
especially the definition of a fundamental set of citizens’ rights that cannot
be overturned by democratic action’ (Little, 2003, p.221).
You will notice already that this concept seems to contradict Dahl’s fourth
criterion listed above. Indeed, this is merely the first of many controversies
about how the perfect democracy should function. We will encounter
others later in this chapter.
Activity 2
Write a short answer (no more than 300 words) to the following question: are there some
laws that citizens in developing countries should never have the right to change? If so,
what are they and why?
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Chapter 9: Governance and public policy
the more urgent need of economic growth. This theory has been
recently associated with Lee Kuan Yew, the prime minister of Singapore
from 1959 to 1990, and Mahathir bin Mohammed, the prime minister
of Malaysia from 1981 to 2003. Both rulers have advocated what they
call ‘Asian-values’, where economic development is more important
than individual liberties, which are often seen as a Western imposition.
Yet there is little evidence to suggest that the first argument is correct. The
problem is that it relies upon a benevolent dictator or oligarchy who will
push through serious reforms and policies in the long-term interest of the
people. While this might have happened in a few rare cases – especially in
East and South-East Asia in the late twentieth century – most authoritarian
regimes tend to be disasters both economically and politically. In other
words, as Dick (1974, p.819) notes, ‘LDCs with authoritarian forms
of government perform either very well or very poorly’ – with more
performing poorly than well.
The second argument assumes that people generally care more about
economic growth than democracy. Sen correctly argues that this is a
fallacy, as high electoral participation and large political protests are
commonplace across the developing world, even in East Asia where,
according to Lee and Mohammed, ‘Asian values’ predominate. (Other
East Asian politicians like Lee Teng-hui, president of Taiwan from 1988
to 2000, and Kim Daejung, president of South Korea from 1998 to 2003,
have been very critical of the concept of ‘Asian values’.) It is obvious that
many people want both democracy and economic growth.
Yet, surprisingly, even after defeating these arguments that democracy
is bad for economic growth, researchers have still been stymied by the
lack of any verifiable link between democracy and growth (Przeworski
and Limongi, 1993). Why this is so is controversial – some claim that it
is because economists know very little about what political or economic
factors lead to economic growth in general, while others suggest that the
key factor is state autonomy rather than democracy.
However, even if we were to find some positive statistical relationship
between democracy and economic growth, it would still be unclear to
which degree one caused the other. This classic ‘chicken or egg’ problem –
i.e. which came first, the chicken or the egg – has to do with the difference
in statistics between correlation and causality, where the former indicates
that two variables are related while the second shows that one causes
the other. In other words, even if poor countries are not democratic and
rich ones are, it does not follow that democratising will lead to economic
growth or vice versa. As one might expect, this debate has been very
important for donors, among others, in choosing whether to allocate aid
towards increasing democracy or increasing economic growth.
Yet if there is no relationship between democracy and economic growth,
should democracy still be considered important for development? There
is a case to be made that democracy is important as it is a human right
and is thus essential for development regardless of its effects on economic
growth. Furthermore, as we shall see in a moment, there is a case to be
made that democracy is essential in combating famines and poverty, two
of the key impediments to development.
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171 Introduction to international development
Box 4
Democracy and freedom
Democracy is today considered a crucial aspect of human rights, and the two
concepts are often grouped together: for instance, the Bureau of Democracy,
Human Rights and Labour within the U.S. Department of State. Article 29,
section 2 of the Universal Declaration of Human Rights notes that:
‘In the exercise of his rights and freedoms, everyone shall be subject only to
such limitations as are determined by law solely for the purpose of securing
due recognition and respect for the rights and freedoms of others and of
meeting the just requirements of morality, public order and the general
welfare in a democratic society.’
But what does this have to do with democracy or politics more generally?
Indeed, one need merely recall the famous statement, repeated by former
US President Ronald Reagan and former executive director of the United
Nations World Food Programme, Catherine Bertini, among others, that ‘a
hungry child knows no politics’. Yet, Sen and others argue, this is far from
true – indeed, it would be more correct, in some ways, to claim that ‘a
hungry child knows only politics’. In other words, famines are not acts of
nature – in fact, ‘famines are so easy to prevent that it is amazing that they
are allowed to occur at all’ (Sen, 1999, p.175).
The reason why non-democratic countries allow famines to take place,
then, is twofold: first, their leaders enjoy political immunity, and do not
face any criticism when famines occur, and second, their leaders often fail
to comprehend the nature of the famine itself. In the first case, one need
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merely contrast China, where a massive famine between 1958 and 1961
killed up to 30 million people but failed to dislodge Mao Tse-Tung from
power, with more democratic countries like Botswana or India, where
famines fail to occur because their governments fear what would happen
if they were to fail to provide for their citizens. Thus they take active
measures to create income for their most vulnerable citizens, who then
might vote for the ruling party in the next election.
The second reason why democracies are better at alleviating or preventing
famine is that there is greater access to information in democratic
countries. In authoritarian regimes lower level bureaucrats often lie to
their superiors about what is happening in their jurisdiction merely in
order to please them and thereby keep their jobs. However, in democracies
these bureaucrats are prevented from lying to their superiors, as a free
press provides alternative sources of information and can highlight the
government’s successes and failures. Again, one need merely examine the
details of the great Chinese famine, where officials in Beijing, who relied
upon local Communist party officials for their information, ‘mistakenly
believed that they had 100 million more metric tons of grain than they
actually did’ (Sen, 1999, p.181).
Thus it is clear that democracies are far superior to authoritarian countries
when it comes to alleviating or preventing famines. But what about their
ability to help the poor more generally? This is a crucial question, but
before we answer it we must first have some conception of what poverty
actually is and how it can be defined.
Understanding poverty
Poverty is, like democracy, a concept that seems easy to grasp until you
examine it a bit closer. Most often poverty is defined through the creation
of an income-based ‘poverty line’, whereby those who live below this
line are counted and poverty is then expressed as the percentage of poor
people out of the total population. The international standard of $1 a day
is a well-known example of this approach. Yet, as Sen (1981, p.11) has
noted, this ‘head count’ measure has two serious problems: first, it does
not measure how far away the poor are from the poverty line, and second,
it cannot take into account changes in income among the poor. This is most
striking when someone below the poverty line ends up transferring money
to someone above the line – as happens under a regressive tax system – as
both people remain in the same position as they were before the transfer.
An alternative way to measure poverty is through a ‘biological approach’
(i.e. where poverty is defined by a person’s ability to satisfy his/her
nutritional requirements). This would seem to be superior to the income-
based method, since it measures people’s nutritional needs directly. Yet,
as Sen (1981, p.12) argues, these requirements are actually ‘difficult to
define precisely’, while the price involved in meeting them can differ
enormously depending on local prices and food habits, among other
factors.
Finally, a third way to measure poverty is ‘relative deprivation’, where
the poor ‘possess less of a desired attribute, be it income, favourable
employment conditions or power, than do others’ (Sen, 1981, p.16). This
is an especially important concept of poverty when comparing people
considered poor in rich countries to those in poor countries, where the
former may appear richer on paper but have lower human development
indicators than the latter. Yet this approach also has its problems, in that it
fails in instances where a whole society becomes poorer or richer and thus
the inequality between citizens does not change.
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171 Introduction to international development
Activity 3
Which of the three ways of measuring poverty, discussed above, do you think best applies
to poor people in your own country or area? Write 300 words on which definition you
chose and why.
All three of these measures, then, have both positive and negative
attributes. Sen rather argues that we should adopt a ‘capability approach’,
which he borrows somewhat from Adam Smith, who wrote about certain
necessities that are ‘what ever the customs of the country renders it
indecent for creditable people, even the lowest order to be without’
(Smith, 1776, quoted in Sen, 1999, pp.73–74). These necessities generate
what Sen calls capabilities, or ‘the freedom to achieve various lifestyles’
(Sen, 1999, p.75). This is why Sen titled his book Development as Freedom,
since he sees the ultimate goal of development as achieving a set of basic
freedoms for everyone: in other words, these capabilities and not merely
income are the ultimate goal of development. Thus, as Sen puts it in the
title of one of the chapters of his book, poverty is ‘capability deprivation’,
rather than income or nutritional deprivation. Capabilities are reduced
when the state fails to provide certain basic services, especially in the
realm of health and education, for its citizens, thereby reducing their
capabilities and increasing poverty (see Chapter 2).
Despite its now wide popularity and use in the annual United Nations
Development Programme Human Development Report (HDR), Sen’s
approach has come in for criticism. Robert Sugden (1993, p.1953), for
instance, claims that Sen’s ‘capability approach’ is great in theory but poor
in practice, as it is at best difficult and at worst impossible to measure
poverty in this way. While the income-based approach to poverty is
definitely flawed, it is also one of the easiest – albeit still difficult – ways to
measure poverty, thereby allowing the researcher to move on to addressing
poverty rather than spending all of his/her time merely measuring it.
Indeed, T.N. Srinivasan (1994, pp.240–41) notes that measuring life
expectancy and literacy, which are two measures of capabilities as regards
health and education, respectively, is notoriously difficult. Thus the jury is
still out on whether Sen’s approach is the best one.
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Chapter 9: Governance and public policy
Conclusion
In this chapter we have examined conceptions of governance, corruption,
democracy and poverty. In all four cases we saw how controversial and
varied these concepts are, and how using a different definition changes the
way we view that concept’s relationship to development. In particular, we
saw how good governance and democracy do not have a straightforward
relationship with economic growth, but that democracies tend to perform
better than authoritarian countries in combating famines and poverty. This
suggests that democracy is good for economic growth, albeit indirectly,
and that, in any case, democracy is one facet of human rights that must be
at the heart of any developmental strategy.
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171 Introduction to international development
138
Chapter 10: The international order
Essential reading
Desai and Potter (2008) Section 10 (especially Chapters 10.11 to 10.16).
Todaro and Smith (2014) Chapters 12, 13 and 14.
Further reading
Cha, V.D. ‘Globalization and the Study of International Security’, Journal of
Peace Research 37(3) 2000.
Ehrlich, P. and J. Liu ‘Some Roots of Terrorism’, Population and Environment
24(2) 2002.
Friedman, T. ‘It’s a Flat World, After All’, New York Times, 3 April 2005.
Goesling, B. ‘Changing Income Inequalities within and between Nations: New
Evidence’, American Sociological Review 66(5) 2001.
Hardt, M. and J. Negri Empire (Cambridge, Mass.: Harvard University Press,
2001) [ISBN 0674006712].
Hardt, M. and J. Negri Multitude: War and Democracy in the age of empire.
(London: Penguin, 2006) [ISBN 014014873].
Held, D. and A. McGrew Globalization/Anti-Globalization. (Cambridge: Polity
Press, 2002) [ISBN 0745629881] Chapter 1.
Pieterse, J.N. ‘Global Inequality: Bringing Politics Back In’, Third World
Quarterly 23(6) 2002.
Pincus, J. and J. Winters (eds) Reinventing the World Bank. (Ithaca, N.Y.:
Cornell University Press, 2002) [ISBN 0801487927].
Stiglitz, J. Globalization and its Discontents. (London: Allen Lane, 2002) [ISBN
0713996641] Chapters 1–2.
Wade, R.H. ‘Is Globalization Reducing Poverty and Inequality?’, World
Development 32(4) 2004.
Wallerstein, I. ‘After Developmentalism and Globalization, What?’, Social Forces
83(3) 2005.
Walters, M. Globalization (London: Routledge, 1995) [ISBN 0415105765].
Wolf, M. (2004) Why Globalization Works, New Haven: Yale UP [ISBN
0300107773]
Challenging reading
Corbridge, S. ‘Bearing witness: the global spigot, American empire and the
colonial present’, Geopolitics 11, 2006, pp.159–80.
Kellner, D. ‘Theorizing globalization’, Sociological Theory 20(3) 2002.
Krueger, A.O. ‘Whither the World Bank and the IMF?’, Journal of Economic
Literature 36(4) 1998.
Reus-Smit, C. ‘The constitutional structure of international society and the
nature of fundamental institutions’, International Organization 51(4) 1997.
Rodrik, D. ‘Goodbye Washington consensus, hello Washington confusion: a
review of the World Bank’s Economic growth in the 1990s: Learning from a
decade of reform’, Journal of Economic Literature XLIV, 2006, pp.973–87.
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Introduction
This chapter will cover the interrelated topics of globalisation and the
international system. In the first instance we will examine the varying
definitions of globalisation and attempt to assess how globalisation has
affected development in the past and is likely to do so in the future.
Thereafter we will give an overview of the international system, with a
focus on three key institutions, which have a major role in promoting
development today: the UN, the World Bank and the IMF.
Understanding globalisation
Globalisation is a tricky concept as it is often used in a variety of ways to
mean a variety of things. Indeed, globalisation ‘is often used as a code
word that stands for a tremendous diversity of issues and problems and
serves as a front for a variety of theoretical and political positions’
(Kellner, 2002, p.300).
Yet we can identify some key concepts that are wrapped up with
globalisation, whether they are explicitly stated or not. One such concept
is the increase in interactions – whether economic, political, social or
otherwise – between parts of the globe that had previously little to do
with one another. More specifically, globalisation in this sense can be seen
as inevitably wrapped up with breaking down trade barriers between
countries and thereby increasing free trade.
In this sense globalisation can be defined by the shrinking or ‘flattening’ of
the globe (Friedman, 2005). Yet those who believe in globalisation differ
on which phenomena are most responsible. We can divide globalisation
theorists into two groups, the first of which credits technology while the
second rather credits capitalism itself.
The first group tends to credit technological advances that have allowed
these ‘distant communities’ to be linked, whether through telephones,
computers, the internet, television, radio or other means. In other words,
globalisation is merely the expansion of new technologies across the globe
and the resultant interconnectedness they bring, and is thus akin to what
in a previous era would have been called ‘modernisation’.
The second group of globalisation theorists credit the expansion of
capitalism across the globe. Coming from both the Left and Right,
these theorists argue that globalisation is merely the continued logic of
capital accumulation in regions and spheres of the economy where it
had heretofore not been present (Kellner, 2002, pp.288–89). Those on
the Right tend to view this expansion of capitalism as a natural process,
while those on the Left – starting with Karl Polanyi in the early twentieth
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Chapter 10: The international order
Box 1
Defining globalisation
Globalisation:
6. Is ‘the closer integration of the countries and peoples of the world which has
been brought about by the enormous reduction of costs of transportation
and communication, and the breaking down of artificial barriers to the flow
of goods, services, capital, knowledge and (to a lesser extent), people across
borders’ (Stiglitz, 2002, p.9).
colonialism and later imperialism linked various parts of the globe for the
first time, both economically and politically, in what could be called the
first phase of globalisation. Indeed, Thomas Friedman (2005) has written
about what he calls the three eras of globalisation (see Box 2).
Box 2
Thomas Friedman’s three eras of globalisation
And while the dynamic force in Globalisation 1.0 was countries globalising
and the dynamic force in Globalisation 2.0 was companies globalising,
the dynamic force in Globalisation 3.0 – the thing that gives it its unique
character – is individuals and small groups globalising. Individuals must, and
can, now ask: where do I fit into the global competition and opportunities
of the day, and how can I, on my own, collaborate with others globally? But
Globalisation 3.0 not only differs from the previous eras in how it is shrinking
and flattening the world and in how it is empowering individuals. It is also
different in that Globalisation 1.0 and 2.0 were driven primarily by European
and American companies and countries. But going forward, this will be
less and less true. Globalisation 3.0 is not only going to be driven more by
individuals but also by a much more diverse – non-Western, non-white –
group of individuals. In Globalisation 3.0, you are going to see every colour
of the human rainbow take part (Friedman, 2005).
Other authors have noted that, in terms of trade, the world today is
less globalised than it was during the ‘belle époque of international
interdependence, namely the period from 1890 to 1914’ (Held and McGrew,
2002, p.3). The use of gold as an international currency standard, a global
period of relative peace up to 1914, a general belief – if not always a
practice – in low tariffs and, perhaps most importantly, the expansion of
European imperialism to all parts of the globe were all instrumental in this
first period of globalisation. In fact, as some authors have noted, the ratio of
foreign trade to GNP is about the same today as it was a century ago.
However, Cha (2000, p.392) notes that comparison between the
late-nineteenth century and the present day is:
‘not accurate because the process of change at the turn of the
twentieth century was driven by, and had as its final outcome,
nationalism and the consolidation of statehood. A century later,
statehood and notions of sovereignty are not so much under
attack by so-called “globalisation forces” as empires were,
but are being modified and re-oriented by them. In short, the
nation-state does not end; it is just less in control.’
Thus globalisation today has had the exact opposite effect as it did a
century ago, namely breaking down the power of all nation-states to
control their own destinies, while previously globalisation strengthened
some states at the expense of others.
142
Chapter 10: The international order
Activity 1
Go back to the different definitions of globalisation offered above. For each one write
50–100 words about when in time you think this particular definition of globalisation
began.
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171 Introduction to international development
example could be the series of protests against the then planned war
against Iraq that took place across the globe on 15 February 2003, still
the largest coordinated global protest in world history. Some writers have
termed this ‘globalisation from below’ where the goal is to ‘protect the
environment, labour rights, national cultures, democratisation and other
goods from the ravages of uncontrolled capitalist globalisation’.
These globalists have ‘been promoting globalisation from below,
developing networks of solidarity and propagating oppositional ideas and
movements throughout the planet’ (Kellner, 2002, p.297).
Other scholars from the left, however, claim that globalisation has led to the
expanded dominance of the First World, especially the US, over the Third
World. Specifically, globalisation has undermined rather than strengthened
democracy, as the increased flow of global capital has meant that people in
a given country have less choice over their country’s economic policies as
in the past, as politicians are prevented from angering global capitalists for
fear of a sudden withdrawal of money from their economy as happened in
many countries in East and South-East Asia in the late 1990s.
Box 3
Globalisation and the 2004 Indian election
One recent example of the effect of global capital on national politics was
the formation of a new government in the aftermath of the Indian general
election in 2004. The Congress Party unexpectedly won the election over
the then governing Bharatiya Janata Party (BJP), and Congress leader Sonia
Gandhi was widely expected to subsequently become the country’s new prime
minister. However, another winner of the election was the Communist Party
of India (Marxist) (CPI(M)), which, in coming in third after Congress and the
BJP, picked up its largest ever share of the vote. However, when word leaked
out that Congress, CPI(M) and the Communist Party of India (which had more
than doubled its number of representatives in Parliament from the previous
election in 1999) were discussing forming a coalition government, shares on the
Bombay stock market dropped by 11 per cent in one day, its largest ever drop
since being established in 1875. The Congress Party was forced to respond by
not only refusing to join in a coalition with the two Communist parties but also
by installing Manmohan Singh, the architect of India’s economic liberalisation
reforms in the early 1990s, as prime minister. In response the Bombay stock
market rose by 8 per cent in value, its second-largest ever one-day rise.
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146
Chapter 10: The international order
147
171 Introduction to international development
148
Chapter 10: The international order
The IMF
The IMF came into existence in 1945, and, as an informal quid pro quo
for always electing American presidents of the Bank, the IMF’s managing
director has always been a European. (Three directors have been French
and two Swedish; the current Director, Rodrigo Rato, is from Spain.)
The IMF claims in its statute that it is ‘an organisation of 184 countries,
working to foster global monetary cooperation, secure financial stability,
facilitate international trade, promote high employment and sustainable
economic growth, and reduce poverty’. However, like the Bank voting
powers at the IMF are decided by monetary contributions, thereby
advantaging richer countries.
As mentioned in Chapters 6 and 8, along with the Bank the IMF promoted
‘structural adjustment programmes’ (SAPs) in the 1980s and 1990s,
whereby developing countries would receive loans if they agreed to certain
conditionalities such as liberalising trade, removing and reducing price
controls and subsidies, and privatising state-owned companies. These SAPs
were unpopular to the point where they were largely replaced by Poverty
Reduction Strategy Papers (PRSPs) by the end of the 1990s, which, as
critics noted, have not been all that different from the SAPs they replaced.
Indeed, the IMF has come under very similar criticisms to the Bank, for
reasons outlined above. The most famous criticism launched at the IMF
came from the aforementioned former chief economist of the World Bank,
Joseph Stiglitz, after he won the Nobel Prize for Economics in 2001.
He claimed that the IMF had grossly overstepped its original mandate,
namely to ‘support global economic stability’, rather than its current goal
of ‘reducing poverty in developing countries’ (Stiglitz, 2002, p.34). Stiglitz
traced the beginnings of the IMF’s problems back to the era of the SAPs
in the 1980s and the then popular idea that government was the problem
rather than the solution, along with the growing ‘imperialistic view’ of
the IMF over the World Bank. These two shifts in attitude, Stiglitz claims,
led to a situation where the IMF dismantled public poverty reduction
programmes across the developing world in favour of a neo-liberal reliance
upon markets.
Stiglitz’s criticisms have been widely read and have encouraged many
anti-World Bank and IMF protestors. Some like Anne Krueger, who was
Vice-President at the World Bank from 1982 to 1986 and has been Deputy
Managing Director at the IMF since 2001, agree with some of Stiglitz’s
points, for instance his claim that the World Bank and the IMF have
changed their mandates and now cover much of the same territory. She
claims that, however, the IMF ‘and its staff have generally been viewed
as doing a satisfactory and competent job of dealing with individual
countries’ difficulties’ (Krueger, 1998, p.2011), and that the IMF therefore
‘makes a useful contribution to developing countries in supporting their
policy changes’ (Krueger, 1998, p.2016). Yet there is no doubt that, in
recent years, Stiglitz rather than Krueger has been the more influential
author, and that the pressure for reform of the two Bretton Woods
Institutions is just as strong as it is for the reform of the UN.
Along with its move away from SAPs, the IMF has responded to some of its
critics by initiating the Highly Indebted Poor Countries (HIPC) programme
in 1996, where 38 countries (32 of which were in Sub-Saharan Africa)
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171 Introduction to international development
Activity 3
Write 500 words about whether you think the World Bank and IMF give proper amounts
of voting powers to developing countries. If you disagree, indicate how you would
restructure each organisation.
Conclusion
In this chapter we have examined different conceptions of globalisation
and three of the most important international institutions for developing
countries. We saw how scholars continue to debate when globalisation
began and how it affects both development and global inequality.
Similarly, we examined debates about the usefulness today of the UN, the
World Bank and the IMF. As with globalisation there is much controversy
about whether these institutions are good or bad for development, both in
the way they are currently structured and, more broadly, whether there is
a need for them to exist in the first place.
150
Appendix 1: Sample examination paper
Instructions to candidates
Time allowed: three hours.
Candidates should answer THREE of the following NINE questions:
including AT LEAST ONE EACH from section A and Section B. All
questions carry equal marks.
Section A
1. How and why have our ideas of development changed over the past
two centuries?
2. ‘Theories of the state and market have often set the two up in false
opposition.’ To what extent do you agree?
3. How useful are theories of institutions and civil society for
development policy and practice?
4. Why did European imperialism so often fail to bring development to
its subject territories?
5. How important was the threat of communism in shaping the ‘era of
national development’ between 1945 and 1973?
Section B
6. How have approaches to industrial policy changed during the
twentieth century, and why?
7. How is land reform linked to rural development?
8. What is the relationship between democratisation and economic
growth?
9. How has globalisation increased over the past 30 years?
END OF PAPER
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171 Introduction to international development
Notes
152
Appendix 2: Advice on answering the questions in the Sample examination paper
Section A
1. How and why have our ideas of development changed over the
past two centuries?
This question provides you with an opportunity to consider material from
Chapter 2 of the course. However, it is highly desirable (as in all your
answers) that you also draw upon material from the rest of the course. It is
vital that you ensure that you spend enough time analysing why they have
changed. Your answer will be weaker if it is largely descriptive. One way
of making sure that your answer is sufficiently analytical is to briefly link
your arguments to world historical and political events. A strong answer
will also draw upon Thomas’s description of the three ways in which the
term ‘development’ is used today.
2. ‘Theories of the state and market have often set the two up in
false opposition.’ To what extent do you agree?
You should begin your answer with a brief description of the main theories
of the state and market, as discussed in Chapter 3 of the course. Having
done this, you should then set out why state and market have often been
placed in opposition. A good answer will bring in country or regional
‘case studies’ to illustrate the arguments you wish to make, drawing
upon material from across the course. It is crucial that, in doing so, you
adequately consider the specific challenges of late development. A strong
answer will offer some interesting observations on the implications of the
arguments you have made for future development policy and practice.
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171 Introduction to international development
arguments! A strong answer will also consider what insights (if any) can
be drawn from wider debates about the origins of capitalism in Europe.
Section B
6. How have approaches to industrial policy changed during the
twentieth century, and why?
This question requires you to demonstrate your knowledge of different
approaches or models of industrialisation, and to illustrate these with
examples. This will refer to Chapter 7 of this course. You will need to
list different approaches such as state-led initiatives including the ‘Big
Push’ concept; import-substituting industrialisation, export-oriented
industrialisation, and later versions that incorporate elements of both
domestic industry development and foreign investment. You will also have
to explain the reasons why different approaches were adopted, such as the
rise of global markets, the decline in the economic investment by the state
alone, and the strategies of different countries for achieving economic
growth with international competitiveness.
154
Appendix 2: Advice on answering the questions in the Sample examination paper
155
171 Introduction to international development
Notes
156
Appendix 3: Full list of Further reading
157
171 Introduction to international development
Crouch, C. ‘Markets and States’ in Nash, K. and A. Scott (eds) The Blackwell
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World. (London: Verso Books, 2001) [ISBN 1859847390] Chapters 1 and 9.
De Waal, A. Famine Crimes. Politics and the Disaster Relief Industry. (Oxford:
James Currey, 1997) [ISBN 0852558104].
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Experiences from Columbia, Brazil and South Africa’ in De Janvry, A. et al.
(eds) Access to Land, Rural Poverty and Public Action. (UNU/WIDER and
Oxford University Press, 2001) [ISBN 0199242178] Chapter 13, pp.315–48.
Dick, G.W. ‘Authoritarian versus Nonauthoritarian Approaches to Economic
Development’, The Journal of Political Economy 82(4) 1974.
Drèze, J. and A. Sen Hunger and Public Action. (Oxford: Clarendon Press, 1989)
[ISBN 0198283652].
Dunleavy, P. ‘Democratic Politics and the State’, University of London External
Programme subject guide. (London: London University Press, 2004).
EcKut, Carter J. Offspring of empire: the Koch’ang Kims and the colonial origins
of Korean capitalism, 1876–1945. (Seattle: University of Washington Press,
1991) [ISBN 0295975334].
Edwards, M. Civil Society. (Cambridge: Polity Press, 2004) [ISBN 0745631339]
Chapters 1 and 5.
Ehrlich, P. and J. Liu ‘Some Roots of Terrorism’, Population and Environment
24(2) 2002.
Ellis, F. Rural Livelihoods and Diversity in Developing Countries. (Oxford: Oxford
University Press, 2000) [ISBN 0198296967].
Escobar, P. ‘Planning’ in Sachs, W. (ed.) The Development Dictionary. (London:
Zed Press, 1992) [ISBN 1856490440].
Evans, P. ‘The State as Problem and Solution: Predation, Embedded Autonomy
and Structural Change’ in Haggard, S. and R. Kaufman (eds) The Politics of
Economic Adjustment: ‘international constraints, distributive conflicts and the
state’. (Princeton: Princeton University Press, 1992) [ISBN 0691003947;
0691043000].
Ferguson, J. The Anti-Politics Machine. ‘Development’, Depoliticization and
Bureaucratic Power in Lesotho. (Minneapolis: University of Minnesota Press,
1994) [ISBN 0816624372].
Forsyth, T. (ed.) Encyclopedia of International Development. (London and New
York: Routledge, 2005). [ISBN: 9780415253420]
Foucault, M. Discipline and Punish. The Birth of the Prison. (Harmondsworth:
Penguin, 1991) [ISBN 014013722X].
Francis, E. Making a Living: Changing Livelihoods in Rural Africa. (London:
Routledge, 2000) [ISBN 0415144965].
Friedman, T. ‘It’s a Flat World, After All’, New York Times, 3 April 2005.
Fukayama, F. ‘The End of History?’, The National Interest Summer 1989,
pp.3–18.
Fukuyama, F. (ed.) Falling Behind: Explaining the Development Gap Between
Latin America and the United States (Oxford: Oxford University Press, 2008)
[ISBN 0195368827]
Gasper, D. The Ethics of Development (Edinburgh: Edinburgh University Press,
2004) [ISBN 0748610588]
Ghimire, K. (ed.) Land Reform and Peasant Livelihoods: the Social Dynamics of
Rural Poverty and Agrarian Reforms in Developing Countries. (London: ITDG
Publishing, 2001) [ISBN 1853395277].
158
Appendix 3: Full list of Further reading
Glyn, A. ‘Imbalances of the Global Economy’, New Left Review 34, 2005,
pp.5–37.
Goesling, B. ‘Changing Income Inequalities within and between Nations: New
Evidence’, American Sociological Review 66(5) 2001.
Goodin, R.E. ‘Institutions and their Design’ in Goodin, R.E. (ed.) The Theory of
Institutional Design. (Cambridge: Cambridge University Press, 1998) [ISBN
0521636434].
Gray, C.W. and D. Kaufmann ‘Corruption and Development’, Finance and
Development March 1998.
Hall, J.A. and F. Trentmann (eds) Civil Society: A Reader in History, Theory
and Global Politics. (Basingstoke: Palgrave Macmillan, 2005) [ISBN
1403915431].
Hardoy J.E. and D. Satterthwaite Squatter Citizen: Life in the Urban Third
World. (London: Earthscan, 1989) [ISBN 1853830208].
Hardt, M. and J. Negri Empire. (Cambridge, Mass.: Harvard University Press,
2001) [ISBN 0674006712].
Hardt, M. and J. Negri Multitude; War and Democracy in the age of empire.
(London: Penguin, 2006) [ISBN 014014873].
Harrison, G. ‘The World Bank, Governance and Theories of Political Action in
Africa’, British Journal of Politics and International Relations 7(2) 2005.
Harriss, J. Depoliticizing Development: The World Bank and Social Capital.
(London: Anthem Press, 2002) [ISBN 184331049X].
Harriss, J. ‘The case for cross-disciplinary approaches in international
development’, World Development XX, 2002.
Haynes, J. ‘The State, Governance and Democracy in Africa’, The Journal of
Modern African Studies 31(3) 1993.
Held, D. and A. McGrew Globalization/Anti-Globalization. (Cambridge: Polity
Press, 2002) [ISBN 0745629881] Chapter 1.
Heywood, A. Politics. (Basingstoke: Palgrave Macmillan, 2002) [ISBN
0333971310] Chapter 5 on ‘The State’.
Hirschman, A. The Strategy of Economic Development. (New Haven: Yale
University Press, 1958) [ISBN 0300005598].
Hoekman, B., A. Mattoo and P. English (eds) Development, Trade, and the WTO:
A Handbook. (Washington: World Bank, 2002) [ISBN 082134997X].
Howell, J. and J. Pearce Civil Society and Development: A Critical Exploration.
(Boulder, Colo. and London: Lynne Rienner Publishers, 2001) [ISBN
1555876196].
Johnson, C. MITI and the Japanese Miracle: The Growth of Industrial Policy,
1925–75. (Stanford: Stanford University Press, 1982) [ISBN 0804712069].
Johnson, C. Arresting Development: The Power of Knowledge for Social Change
(London: Routledge, 2008) [ISBN 0415381533]
Kabeer, N. Reversed Realities: Gender Hierarchies in Development Thought.
(London: Verso Press, 1994) [ISBN 0860915840].
Kay, C. ‘Why East Asia overtook Latin America: Agrarian Reform,
Industrialization and Development’, Third World Quarterly 23(6) 2002
pp.1073–102.
Keen, D. Benefits of Famine: A Political Economy of Famine and Relief in South-
Western Sudan, 1983–89. (Princeton: Princeton University Press, 1994)
[ISBN 0691034230].
Khan, M. ‘State Failure in Weak States: A Critique of New Institutionalist
Explanations’ in Harriss, J., J. Hunter and C. Lewis (eds) The New
Institutional Economics and Third World Development. (London and New
York: Routledge, 1997) [ISBN 0415157919].
Khan, M.H. ‘Corruption and Governance in Early Capitalism: World Bank
Strategies and their Limitation’ in Pincus, J. and J. Winters (eds)
Reinventing the World Bank. (Ithaca, N.Y.: Cornell University Press, 2002)
[ISBN 0801487927].
159
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160
Appendix 3: Full list of Further reading
161
171 Introduction to international development
162
Appendix 4: Full list of Challenging reading
163
171 Introduction to international development
Fine, B. ‘Economics and ethics: Amartya Sen as point of departure’, The New
School Economic Review 1, 2004, pp.151–61.
Frank, A.G. Capitalism and Underdevelopment in Latin America: historical studies
of Chile and Brazil. (Harmondsworth: Penguin, 1971) [ISBN 0140213341].
Gerschenkron, A. Economic Backwardness in Historical Perspective. A Book
of Essays. (Cambridge, Mass.: Harvard University Press, 1962) [ISBN
0674226003] Chapter 1.
Goetz, A.M. and R. Sen Gupta, ‘Who takes the credit?: Gender, power and
control over loan use in rural credit programmes in Bangladesh’, World
Development 24(1) 1996, pp.45–63.
Gordon, C. (ed.) Power/Knowledge: Selected Interviews and Other Writings,
1972–77, by M. Foucault. (New York: Random House USA Inc., 1988) [ISBN
039473954X].
Hanlon, J. Mozambique: Who Calls the Shots? (London: James Currey, 1991)
[ISBN 0852553463].
Harris, N. National Liberation. (London: Penguin Books, 1992) [ISBN
0140125604] Chapter 11.
Harriss, J. ‘Institutions, Politics and Culture: A Polanyian Perspective on
Economic Change’, International Review of Sociology 13(2) 2003,
pp.343–56.
Harvey, D. The Condition of Postmodernity. (Oxford: Blackwell Publishers Ltd,
1990) [ISBN 0631162941].
Harvey, D. The New Imperialism. (Oxford: Oxford University Press, 2003)
[ISBN 0199264317].
Hayek, F. ‘The Use of Knowledge in Society’, American Economic Review 35(4)
1945, pp.519–30.
Hobsbawm, E. Industry and Empire. (London: Pelican Books, 1980)
[ISBN 0140203384].
Hobsbawm, E. and T.O. Ranger The Invention of Tradition. (Cambridge:
Cambridge University Press, 1992) [ISBN 051437733].
Jenkins, R. Where development meets history, Commonwealth and Comparative
Politics 44(1) 2006, pp.2–15.
Keen, D. The Benefits of Famine: A Political Economy of Famine and Relief in
South-Western Sudan, 1983–89. (Princeton: Princeton University Press,
1994) [ISBN 0691034230].
Kellner, D. ‘Theorizing Globalization’, Sociological Theory 20(3) 2002.
Keynes, J.M. The Economic Consequences of Peace. (London: Penguin Books,
1988) [ISBN 0140113800].
Krueger, A. O. ‘Whither the World Bank and the IMF?’, Journal of Economic
Literature 36(4) 1998.
Mackintosh, M. ‘Abstract Markets and Real Needs’ in H. Bernstein et al. (eds)
The Food Question. Profits versus People? (London: Earthscan Publications,
1990) [ISBN 1853830631].
Mackintosh, M. et al. (eds) Economics and Changing Economies. (London: The
Open University Press and International Thomson Business Press, 1996)
[ISBN 0412628406].
Mamdani, M. Citizen and Subject. Contemporary Africa and the Legacy of
Late Colonialism. (Princeton: Princeton University Press, 1996) [ISBN
0691027935].
Marx, K. The Communist Manifesto. (London, 1848).
Marx, K. The 18th Brumaire of Louis Bonaparte. (New York, 1852).
Nunn, N. The Importance of History for Economic Development, Annual Review
of Economics, Vol. 1: 2009, pp.65–92.
Pogge, T.W. and S.G. Reddy ‘Unknown: The Extent, Distribution and Trend of
Global Income Poverty’ 2003 [Paper available at www.socialanalysis.org]
Polanyi, K. The Great Transformation: The Political and Economic Origins of our
Time. (Boston, Mass.: Beacon Press, 2001) [ISBN 080705643X].
164
Appendix 4: Full list of Challenging reading
165
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166
Notes
Notes
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171 Introduction to international development
Notes
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