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DVA3701/1/20112014

98647407

3B2

DVA-MOD STYLE
CONTENTS

INTRODUCTION vii
Acknowledgements xi

THEME A
What is development theory? 1

STUDY UNIT 1
What is development theory? 3
1.1 What does ``theory'' mean? 3
1.1.1 Theory: some technical definitions 5
1.2 Different kinds of theory 5
1.3 Levels of theory 6
1.4 Macrotheory and microtheory 7
1.5 Changing levels in development theory 8
1.6 Theory and practice 9
1.7 Development theories and their historical context 10
1.8 The evolving relationship between historical context
and development theory 12
1.9 Problems with theory 16
1.9.1 Theory can be difficult 16
1.9.2 Theory can be irrelevant 17

THEME B
Theories of the past 19

STUDY UNIT 2
Modernisation theory 21
2.1 Introduction 21
2.2 Before modernisation theories 23
2.3 A brief history of modernisation theories 27
2.4 Themes addressed in modernisation theories 29
2.4.1 Political development 29
2.4.2 Development and nationalism 30
2.4.3 Modernisation 30
2.4.3.1 Stage theory and modernisation 31

DVA3701/1/20112014 iii
2.4.3.2 Modernisation and the decay of society 35
2.5 A critical evaluation of modernisation theory 37
2.6 Conclusion: linking modernisation theory to other theories
of development 38

STUDY UNIT 3
Dependency theory 39
3.1 Introduction 39
3.2 Before dependency: Marxist theories of exploitation
and imperialism 40
3.2.1 Karl Marx and Friedrich Engels 40
3.2.2 Marx and Third World development 42
3.2.3 Socialist development debates after Marx 42
3.2.4 The analysis of imperialism 43
3.3 Voices from the periphery 43
3.4 Baran, Frank and dependency 48
3.5 World systems theory 52
3.6 Dependency theory under fire 56
3.7 Conclusion: linking dependency theory to other
theories of development 61

THEME C
Current theories of development 63

STUDY UNIT 4
Globalisation and development 66
4.1 What is globalisation? 67
4.2 Globalisation as transformation: Manuel Castells 68
4.3 Globalisation with diverse causes and dimensions 70
4.4 Neoliberalism as a cause of the current phase of
globalisation 81
4.5 Globalisation and the nation-state 81
4.6 Globalisation and Africa 83
4.7 Globalisation and development 84

STUDY UNIT 5
Debates on the NICs and the developmental state 86
5.1 Introduction 86
5.2 The newly industrialising countries and development 88

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5.2.1 Why have the East Asian NICs had successful
capitalist development? 88
5.2.2 What was the role of the state in these cases of
capitalist development? 88
5.2.3 How did these countries fit into the global capitalist
economy? 90
5.2.4 The case of China 91
5.2.4.1 China: a development state? 93
5.2.5 Were there special internal conditions which allowed
East Asian growth? 96
5.2.6 Problems with the NIC model 96

STUDY UNIT 6
Global managerialism and the project of globalisation 98
6.1 Introduction 98
6.2 Neoliberal globalisation as the aim 101
6.3 Reduction of society to its economic dimension 103
6.4 The leading role of businesses and corporations 104
6.5 Managerialism and the elite network of institutions 106
6.6 Good governance 107
6.7 Knowledge 107
6.8 Official sustainable development 108

STUDY UNIT 7
Popular models of development against neoliberal capitalist
globalisation 111
7.1 Introduction 111
7.2 Globalisation as corporate pillage 113
7.3 A global space for alternative development:
the World Social Forum (WSF) 115
7.4 Further theories of alternative development 119
7.4.1 Sustainable development: some alternative theories 119
7.4.1.1 Populist approaches to sustainable development 119
7.4.1.2 Political ecology 126
7.4.1.3 Deep ecology 127
7.4.1.4 Ecofeminism 128
7.4.2 People-centred development 128
7.4.3 Women and development 132
7.4.4 An alternative model of global strategy 136
BIBLIOGRAPHY 138

DVA3701/1 v
vi
INTRODUCTION

Welcome to this module on development theory! We in the Department of


Development Studies hope that you enjoy this module. We also hope that it gives
you a broader understanding of development. If you manage to understand the
basics of this module, it should give you greater confidence in talking about
development in practice.

It should also help you to understand the debates and discussions in any writing
about development, including the rest of the course in Development Studies.

In this study guide, we try to answer questions such as the following:


^ What is theory?
^ What are the different development theories?
^ How accurate are these theories?
^ How complete are these theories?
^ What gave rise to development theory?
^ What did people think about social change in the 19th century (18011900)?
^ What were the early socialist debates about development?
^ How did people such as Lenin analyse imperialism?
^ What is modernisation theory?
^ What is dependency theory?
^ What are current development theories?
^ What is globalisation?
^ What is the effect of globalisation on development?
^ Why have some countries in East Asia, such as Taiwan and South Korea, had
such good economic growth?
^ What do people say about the role of women in development?
^ What are the various ideas about how to protect the environment while also
dealing with poverty?
^ What is alternative development?
^ What idea of development do the World Bank and IMF have?
^ What is the World Social Forum?

WHAT DOES THE STUDY PACKAGE CONSIST OF?


Your study package for this paper in development theory consists of:
^ This study guide.
^ Tutorial Letter 101 for DVA201T.
^ There may be other tutorial letters during the course of the year.
^ Your Unisa reader. You must buy this reader.
^ We provide an extra resource for you: recommended books in the library.

DVA3701/1 vii
PRESCRIBED AND RECOMMENDED BOOKS
Your prescribed book is your Reader. You must buy this book. If you have this book,
you will have readings that cover all of the study units. It is an essential supplement
to your study guide. This module on development theory also uses a fair number of
recommended books (see the list in Tutorial Letter 101). Some 200 students have
enrolled for this module, and there are between 30 and 50 copies of each of the ten
recommended books in the library. This recommended literature is extra reading,
and you will not be failed simply because you did not consult a particular
recommended book! However, if they are available, we encourage you to borrow
these books from the library. If you order the books in time, and if you use the extra
reading well, you will greatly enrich your understanding of the module.

WHAT IS THIS STUDY GUIDE ABOUT?


This study guide is about different theories of development. More exactly, it is
about different theories on the causes of or features that assist development,
theories on things that prevent development, and theories on how development has
taken place in the past.

The study guide is divided into seven study units. These study units are grouped into
three themes.

Theme A: What is development theory?

Theme B: Theories of the past

Theme C: Current development theories

To master the module, you must understand each study unit. However, the themes
are also important. They help to give you greater understanding of where the study
unit fits in.

Theme A: What is development theory?


Study unit 1: What is development theory? This study unit introduces you to the
idea of theory. It deals with levels of theory, which indicate how
abstract a theory is. It also talks about the difference between
theories of big things, such as world development (macrotheories)
and theories of small things, such as village development
(microtheories). The unit also deals with problems of theory. It
also introduces you to development theories and their historical
context.

Theme B: Theories of the past


Study unit 2: Modernisation theories. Here we consider some theories of more
recent times (19501980). These theories suggested that Third
World development should bring those countries to resemble
Western industrialised countries. The unit discusses different
theories of this kind and concludes with a short evaluation of the
theories.

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Study unit 3: Dependency theories. This study unit deals with more radical
theories, also of the years 1950 to 1980, which challenged the
modernisation theories. Dependency theory argues that the rich
countries take profits from the poor countries and keep them poor
and dependent. The study unit is divided into four internal readings,
which discuss the history of dependency theory and the ideas of
different theorists.

Theme C: Current development theories


Study unit 4: Globalisation and development. Here we consider the nature of
globalisation, debates over the concept, and the effects of
globalisation on development and on countries of the South.

Study unit 5: Debates around the NICs. This study unit discusses a debate of the
1980s and 1990s concerning national development and the
international context. The newly industrialising countries (NICs)
of East Asia, such as South Korea, Taiwan and China, have had very
rapid economic growth since about 1960. How did this happen? The
unit considers how government policies made this possible.

Study unit 6: Global managerialism and the project of globalisation. This study
unit introduces you to the thinking of global institutions such as the
World Bank and the WTO.

Study unit 7: Popular models of development against neoliberal capitalist


globalisation. This study unit deals with some alternative theories
of development which oppose current globalisation. It has a
particular focus on the World Social Forum (WSF).

Will I manage to study this module on development theory successfully?


If you have completed our first-year modules you should be able to manage this
module fairly easily! You will need to study for a few hours each week. You will
need to start work early in the year, because each unit requires time for you to do
the necessary reading. Here is the route to success: buy your prescribed book
immediately. Start working through the study guide. Think and take down notes at
all times. Be adventurous and brave with the prescribed reading. Try to get some of
the recommended books to broaden your reading. If you want to do very well, try
very hard to get the recommended books. When you are familiar with a topic, or
several topics, choose one for writing an essay. Do at least one essay for the first
closing date.

How will I know what to do in the study units?


Each study unit starts with a box defining the ``enabling outcomes'' of the study
unit. This states what you should be able to do after you have completed the study
unit (and completed the associated readings, activities and assignments). If you
read these enabling outcomes, it should help you get into the topic more easily.

DVA3701/1 ix
The thumbnail sketches. Each study unit on particular theories also contains a
``thumbnail sketch'' of the theory or theories. This is a brief summary of some of
the main characteristics of each theory.

You must find your own way to work through a study unit. Some students will read
through the whole unit before doing any reading. Then they will get the relevant
prescribed reading, and possibly some recommended reading, and do the reading.
Others may want to at least look at the reading when it is referred to in the study
unit. Whatever you do, make sure you have done the following by the end of your
study:
^ Make sure you read the whole study unit.
^ Make sure you make your own notes on the study unit.
^ Make sure you read and make notes on the prescibed reading.
^ Do the exercises in the study units. These are for your own use.
^ Try early on to get the recommended books, especially if you are able to do more
reading and if you want to aim high.

Some of the reading in this module is difficult, and some is easy. You must try both!

Main route and extra route. You may follow the reading ``main route'' to complete
this module by reading the study guide and the prescribed book. The main route
involves all the reading that you must do, and together with your intelligence and
hard work this will help you pass the module. You may also follow the extra route
by reading up to 10 more books (if you can get hold of the recommended books).
This will add some extra dimensions to your study.

Activity boxes. The activity boxes in this module are much the same as in your first-
year study manuals. Now there is an icon for extra activities, including reading
recommended books.

x
This icon shows that you need to do some extra reading.

The pencil shows that you will have to write down ideas or information.

This shows that you will have to do some research on your own either interview
people, or obtain information from a source other than your prescribed reading.

This shows that you will need to think about something, such as a statement or
question in other words, you will need to reflect.

Good luck with your studies throughout the year!

ACKNOWLEDGEMENTS
We would like to thank present and past members of the Department of
Development Studies for their work on previous study guides, which comprises
some 20 per cent of this present study guide. In particular we would like to thank
Richard Cornwell, Richard Haines and Kallie Erasmus (all past members of the
department). Stephan Treurnicht contributed parts of study unit 1, 5 and 7.

DVA3701/1 xi
THEME A
WHAT IS DEVELOPMENT THEORY?

Societies evolve in very diverse ways. It is therefore very difficult to formulate a


general theory about a complex topic such as the evolution and development of a
society, since there are so many variables at stake in a particular context that
feature at a given time. The same is true of families and individuals. In addition,
there is no agreement about what development is or should be. Different theories
have been advanced to try to explain what development should be, and how
development happens (or fails to happen) in reality. Because many different people,
at different times, with different opinions, have written books and articles trying to
explain these things,
^ there are disagreements
^ there are arguments
^ there are many schools of thought
^ there are debates among schools of thought (debates are arguments and
discussions between people with different views about an issue)
^ people borrow ideas from each other
^ people check ideas against evidence.

It is not only ``experts'' who talk about development theory and the ``experts''
may be wrong! You yourself can participate in the debates on development theory!
But if you want to do this well, you must become very familiar with the debates.
Furthermore, you must be in touch with what is happening in the real world. If you
are aware of the theoretical debates, and in touch with the real issues, you are
ready to add to the debate on development theory.

This theme has one study unit. Firstly, we consider the meaning of theory. We also
go into the issue of levels of theory, which is about how abstract the theory is. Is the
theory about how to make a water pump, or is it about structural-functionalist
arguments? The second example is definitely more abstract. Also, is the theory
about big things, such as Africa, or small things, such as a village? Then we discuss
how a theory relates to the issues and politics of the time in which it is produced.
This is to remind you that real life and history give rise to ideas. It is intended to
show you that theories usually arose because certain historical problems had to be

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solved. Of course, theories may also arise in response to other theories, and as the
result of debate. As you work through this course up to study unit 7, you will find
that both factors have an effect: theories learn from and challenge earlier theories,
and theories arise in response to their context.

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STUDY UNIT 1

WHAT IS DEVELOPMENT THEORY?

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ENABLING OUTCOMES
This unit aims to provide you with the following outcomes:
^ explain in your own words the meaning of theory
^ distinguish between different levels of theory
^ outline the difference between macrotheory and microtheory
^ name the times in history when various development theories were written
^ give examples of how theories arise in response to the main issues of each period
^ write about the relationship between development theory and its historical
context
^ You will be able to explain in your own words the meaning of theory.
^ You will be able to distinguish between different levels of theory.
^ You will be able to outline the difference between macrotheory and microtheory.
^ You will be able to name the times in history when various development theories
were written.
^ You will be able to give examples of how theories arise in response to the main
issues of each period.
^ You will be able to write about the relationship between development theory and
its historical context.

-------------------------------------------------------------------

1.1 WHAT DOES ``THEORY'' MEAN?


^ Why is Africa poor while the United States is rich?
^ Is there progress as time continues? Do things get better as the years and
centuries advance?
^ Is it possible for poor countries to become rich in today's world economy?
^ Is economic growth no longer advisable, because it damages the natural
environment too much?
^ Is development mainly about material improvement, or is it equally concerned
with emotional, social and spiritual needs?

These are all important questions relevant to development; they are also questions
without neat, final answers. Because of this, there are debates, arguments and
discussions about these questions. When someone discusses one of these issues in a
careful and organised way, and tries to provide an explanation that ties together all
of the relevant information, then that person is putting forward a development
theory.

3
Before we look at the theories themselves and the way they have influenced our
thinking about development, we first want to examine the term ``theory''. What is
theory and why do we use it?
Theory may be many things and can exist at different levels in our lives. Whether
we are aware of it or not, we all use some sort of theory when we think about, and
try to understand, the ``real world''. This ``real world'' consists of all kinds of
complex phenomena, which are sometimes surprising or unexpected. We need to
understand the meaning of these phenomena in order to live fully in this world, and
we cannot discover their meaning unless we have some kind of general framework,
which places the things that we see and experience in an ordered context and in
some sort of relationship to one another. This organising framework is our theory of
the world in which we live.

-------------------------------------------------------------------

ACTIVITY 1.1 (Spend about 20 minutes on this activity.)


(1) What is your development theory?
(2) Write short answers to the following questions. Think carefully before writing.
(a) What are the most important events in the world at the moment?

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

(b) What do you think is the main development problem in the world today?

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

(c) Who is in a position to really address this problem?

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

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..............................................................................................................

..............................................................................................................
(d) How are they going to solve the problem?

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

Now look back at what you have written. This is your own development theory!
Keep this theory in mind as you study other theories.

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1.1.1 Theory: some technical definitions


Brecht (1959:307) defines theory as being ``a proposition or set of propositions
designed to explain something with reference to data or interrelations not directly
observed or not otherwise manifest''. From this it is evident that a theory is, simply
stated, a tool of explanation, a mechanism with which to make sense of the
complex reality which confronts each of us.
According to Runciman (1983:1920), ``theory is used whenever social scientists
set themselves the task of explaining, describing, appraising, elucidating, making
sense of, giving an account of, exploring the nature of, grasping, gaining an insight
into, analysing, weighing up, interpreting, and so on, any chosen event, process or
state of affairs.
Finally, according to Pieterse (2009:3), ``theory is a distillation of reflections on
practice in conceptual language so as to connect with past knowledge''.

1.2 DIFFERENT KINDS OF THEORY


This course does not require you to study the different types of theory in great
detail. What is important, however, is to remember that most of the theories you
will encounter in the field of development are far more hypothetical than their
authors sometimes claim. That is to say, they include a large amount of conjecture
(that is, conclusions reached from incomplete evidence) and are difficult to test
empirically. As Higgot (1983:xii) notes: ``There is no theory of development in the
formal sense of hypotheses which have been verified in systematic manner through
empirical study.'' You should bear this in mind when you study the work of the
grand theorists of development. Perhaps George Santayana's admonition should be
repeated here: ``Theory helps us to bear our ignorance of facts.'' Higgot (1983:42)
brings this point home in the context of our present studies: ``We still generalise

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more about the Third World, on which we have unreliable data, than we do about
industrial societies for which the data are far superior.''

1.3 LEVELS OF THEORY


In all the social sciences, and in development studies in particular, it is imperative
to constantly bear in mind that theory can, and does, function at different levels. In
this regard, the typology developed by Gunnell (1981:459) is extremely useful.
Gunnell, primarily a political scientist, postulates that theory essentially functions
on three levels.

Similarly, Mouton (1996) argues that it is useful to think that we inhabit a number
of ``worlds'' in which we live and act, and each requires its own form of knowledge.
The following three ``worlds'' are relevant to a discussion of theory:
^ World 1: The world of everyday life and lay knowledge
^ World 2: The world of science
^ World 3: The world of metascience

TABLE 1.1
Gunnell and Mouton on levels of theory

Gunnell First-order theory Second-order theory Third-order theory

Mouton everyday life, science, acquiring metascience


practical learning general knowledge

What kind of techniques and theories, studies theory about


literature is in this traditions of and models of development theory;
category? practice development philosophising
about theory.

First-order theories of (Mouton's ``pragmatic interest'' in) development include


indigenous knowledge, practical skills, ``how-to'' manuals, and analysis aimed at
assisting particular tasks and other techniques of practice. They comprise the
knowledge required to perform developmental actions: that is, how to ``do''
development.

Second-order theories (Mouton's ``world of science'') are the main level at which
development and other social sciences operate. This is the level where people
try to create coherent models or explanations of how development works. Second-
order theories attempt to provide alternative theoretical explanations of how
development either occurs, or is prevented from occurring, in practice. Second-
order theories are used to explain or predict development-related occurrences. The
second-order theories encountered most often in development administration are
modernisation and dependency (or radical) theories, which seek to explain the
reasons for the divergent patterns of development among states. Because
development administration adopts a holistic and integrated approach, use is also
made of second-order theories which originated in other disciplines. In second-
order theory, we include both empirical theory and development philosophy when
formulating explanations of development.

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Third-order theory is also referred to as metatheory, or the philosophy of science.
In third-order theory, the logic and scientific validity of substantive second-order
theories are studied. The emphasis is therefore not on the study of development, but
on the study of theories which try to explain development. You should take care at
all times not to become so involved in metatheoretical considerations that you lose
touch with the actual substance of development.

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ACTIVITY 1.2
Don't be alarmed by all this talk of levels of development theory! It is simply saying
the following:
^ Development writing can be very practical (for example, a guide to help
organise a meeting). This is writing to read and then do. This is first-order
theory.
^ Other writing is written for other people to read and debate. This is mostly in
development journals and books. This theoretical writing may be divided into
two groups:
writing which tries to invent or improve a development theory by referring to
the real world of poverty, development problems and national and
international conditions: this is second-order theory
writing which evaluates or criticises development theories by referring to
other theories, including theories from philosophy, social theory or political
ideology: this is third-order theory, or metatheory

Remember, theories may be weak or strong at any of these levels.


-------------------------------------------------------------------

A common misconception is that these different levels, or orders, of theory are


unrelated. In fact, all theory irrespective of level is aimed at gaining
knowledge through description, explanation and prediction. The distinctions
between the categories outlined above are, therefore, more analytical than
absolute, and theorists most often tend to move constantly from one level to
another. Development theorists are no exception in this regard. Within a theory, the
levels should be linked, because the whole body of theory in any discipline or field
of enquiry should be logically coherent. In other words, the assumptions made at
first-order level must be incorporated into successively higher orders of theories.

1.4 MACROTHEORY AND MICROTHEORY


Macrotheories are those theories which attempt to deal with large issues, such as
``apartheid'', or ``20th century history'' or ``development on the African
continent'', or ``the world economic system''. Microtheories start from the level
of human consciousness and individual action. They attempt to deal with issues
such as ``how do people understand their own situation?'' or ``peasants' experience
of agricultural extension''.

When we speak of levels of theory in Gunnell's sense, we are speaking about the
distinctions among practical, theoretical and metatheoretical writing and speech.
These are levels of abstraction. The distinction between local studies and global
studies (or microtheory and macrotheory) is something different. Perhaps we could

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call it the scale of the theory. Since the global capitalist economy and nation-states
are part of the everyday experience and work of some people, and suitable objects
for careful scientific analysis, there is no need for global theories (or
macrotheories) to be metatheoretical (ideological, philosophical or highly
theoretical).

1.5 CHANGING LEVELS IN DEVELOPMENT THEORY


In development theory, the initial assumptions which prompted theorists to suggest
solutions to the poverty of Third World states and communities were optimistic in
the extreme. A commonly held view was that development would occur
automatically as the poorer states were incorporated into the global economy.
As a result, the first generation of development theories focused on the big picture,
or the macropicture.

The manifest failure of the early ``grand'' theories of development either to explain
or to eliminate the poverty of some states evoked a reaction from development
theorists (Higgot 1983). One shift has been from explaining development and
underdevelopment to doing development. Over the past decade or two, by far the
majority of theoretical work done in the field of development has been aimed at the
enablement of development. Even so, the volume of literature in development
journals has increased faster than has the effectiveness of development. It seems
that most of this literature is either impractical or remains at the level of
theoretical debate. One of the most common types of literature which is directly
practical is studies geared at obtaining funding for projects. These studies often
distort information.

First-order theories involve the ``doing'' of development. In the wake of the failure
of previous theories of development, development theorists turned their attention
both to more practical issues (that is, knowledge of the first order or World 1) and
also to the microlevel of communities and local studies. They sought to alleviate the
consequences of mass poverty in the Third World at grass-roots level.

While there has been a decisive and lasting shift from both Marxist and positivist
metaphysics and metatheory since 1980, there has also been a great deal of new
theoretical work on the big issues, such as the world economy and the role of the
state in development. One can say that there has been a general shift away from the
old metatheories; there has been more caution concerning the role of theory in
general; local issues and actors have been rediscovered; and the boundary between
theory and practical knowledge has become softer and more permeable.

Prominent in this shift of emphasis are new theories with metatheoretical


assumptions: for example, sustainable development, with its idea of the absolute
limitations imposed on the sustainability of development by the environment
(Myers 1985; World Commission on Environment and Development 1987), and
people-centred development, with its radical human focus. New metatheories are
emerging to aid the theoretical and practical struggles of this century, such as
theories supporting globalisation and antiglobalisation. It should also be noted that
the strong human-centred focus in development studies is being more and more
questioned. There is currently a shift in emphasis from a strong people-centred
approach to an approach that pays more attention to the health of our planet as a
whole. In this context, sustainable development acts as a new umbrella for

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development thought; in other words, it covers a broad range of issues in the
development debate. There are many contrasting views on these issues and the
debate is constantly being refined.

What is important for our purposes is to recognise that these shifts of focus are not
a ``break with the past''; they are a necessary extension of an ongoing debate and
ongoing history.

It is clear that the horizon of theory is dynamic and that it is constantly changing.
There are therefore various internal and external variables that affect theories and
shape the nature of the debate on a continuous basis. This also has a major impact
on a discipline such as development studies, which is supposed to be
interdisciplinary.

1.6 THEORY AND PRACTICE


Most theories about development are not just abstract thought, but are related to
practices and real processes that impact on development. ``Theory ... is always in
active relation to practice: an interaction between things done, things observed and
(systematic) explanation of these'' (Williams 1983:317). Moreover, especially in
the radical tradition, there is a closer relation between theory and practice,
expressed in the idea of ``praxis'', which is ``practice informed by theory, and also
... theory informed by practice, as distinct from both practice uninformed by or
unconcerned with theory, and from theory which remains theory and is not put to
the test of practice'' (Williams 1983:318).

When considering development theories, it is worthwhile reflecting how each


theory relates to practice. For example, Marxist theories clearly go together with
politics and activism, which attempts to stop the exploitation of the working class.
Modernisation theories informed the actions of pro-Western officials in advising
pro-Western Third World governments. Present ideas of global managerialism also
greatly influence government managers. Theories of sustainable development
inform and give vision to efforts to protect the environment while implementing
development. There is a greater grass-roots environmental awareness that derives
from theory. This also builds on a greater awareness of the value of a culture that
promotes sustainable development in practice.

Pieterse (2009:2) questions the contribution of development theory to development


practice. He regards theory as a critique, revision and summary of previous
knowledge in the format of general propositions or in a general framework of
explanation. Realities are socially constructed. The way in which people interpret
social realities affects the way in which laws are interpreted. Theory can also be
regarded as a fusion of ideology, politics and explanation (Pieterse 2009:2). It is
therefore very value laden and context specific. Authors are thus inclined to
develop theories with their own frame of reference in mind. It is often very difficult
for outsiders to have the same picture and motivation as those who initially
developed the theory.

The above ideas give rise to many questions. Pieterse is perhaps somewhat
idealistic when he claims that for a theory to be significant, social forces should
take it further (2009:3). We should take into account that a theory may merely be

9
an individual's idea; it is not always realistic to believe that social forces will
respond to it.
The sections on theory and context below relate closely to the issue of theory and
practice. Theories are intertwined with the issues and practices of their time.

1.7 DEVELOPMENT THEORIES AND THEIR HISTORICAL CONTEXT


Theories of development have all been written by people living in a particular place
at a particular time. They wrote about general conditions and problems at the time,
and they wrote about processes of change that they noticed. Many theorists tried to
suggest directions in which change could be steered for the greater good of people;
even these proposed solutions often related to particular contexts. The communist
manifesto of Marx and Engels, which advocated revolution as the answer to the
problems of the times, was written in the same year as several attempted European
revolutions 1848.

Theorists also learn from other theorists either people who have written before,
or people who are writing at the same time. In this way, theories of 1920 (such as
some Marxist theories of imperialism) are to some extent built on theories of the
1800s, and theories of 1990 are in some ways improvements on theories of the
1970s. Theories also gain supporters and enemies. Diverse and sometimes
competing schools of thought (such as the Marxist, dependency and alternative
schools of thought) emerge.

Often development theory is treated as a history of ideas that influence one another.
We tell you quite a lot about this in this course. However, this unit focuses on how
the history of the writer's time and place influenced the type of theory that
emerged.

Table 1.2 puts two processes onto one time scale. Important historical events are
listed in the left-hand column. The right-hand column contains the dates when
various development theories were present. The purpose of the table is to allow you
to see connections between theories and historical events. To a large extent, people
write theories which address the problems of their time. It is important that you
have a fairly good knowledge of the times in history when theories were put
forward. This will help you to see which theories were already around to influence
the theory you are concerned about.

10
TABLE 1.2
Time scale of history and development theory

Important historical events Decade(s) Development theories put


forward
2001: September 11 attack 19702000 199698: Manuel Castells:
on USA; first World Social the Information Age
Forum
1989: Manila declaration on
Rise of the Internet people's participation and
development (people-centred
1993: South Korea's per
sustainable development)
capita income US$7 500;
Ghana's per capita income Mid-1980s to the present:
$430 theories of sustainable
development
1992: the Earth summit in
Rio From 1970s to present: ideas
of ``alternative development''
19891991: the fall of state
have evolved
socialism in Eastern Europe
1987: world population 5
billion
In the early 1970s: ozone
depletion discovered
19731990: slow growth in
the world economy
1973: oil crisis: price
increases 400%
19601973: rapid growth in 19501980 Mid-1950s1980:
the world economy dependency (or
underdevelopment) theory
19581966: most African
countries gained 1966: AG Frank: The
independence: numerous development of
independent Third World underdevelopment
countries emerged
19501970s: modernisation
early 19501985: theory Rostow: the stages of
superpower competition economic growth
between USA and USSR
1950: South Korea's per
capita income the same as
Ghana's
1950: world population 2,5
billion
1947: India independent

11
1928 Stalin's first five-year 18401950 1920s: Russian debates
plan about socialist development
policy
1917: the Russian revolution
1917: Lenin's work on
1884: The ``scramble for
imperialism
Africa'': most of tropical
Africa colonised by Europe 1890s: Durkheim's writings
1848: revolutions in Europe 1860s: Marx's Das Kapital
and Spencer's writings
1848: Marx and Engels: the
Communist Manifesto
1789 The French Revolution Before 1840 1830s: Comte's social
theories
1757 British conquest of
India starts 1776 Adam Smith's inquiry
into the Wealth of Nations
1750s Industrial
(the basis of the free market
development starts in
theory)
England

1.8 THE EVOLVING RELATIONSHIP BETWEEN HISTORICAL CONTEXT


AND DEVELOPMENT THEORY
In the last 200 years, the spread of capitalist industrialisation over the world (and
also the speed of vast social and political changes) has made many people aware
that societies can change and develop. In previous eras and in pre-industrial
societies this awareness was not as great, because societies changed much more
slowly. In some societies the aim was order and the continuation of tradition; in
other societies people saw themselves as living at a higher, more civilised level than
others, whom they described by such words as ``barbarian''. Many countries had
successful and growing economies at times prior to the industrial and modern eras;
there were empires on all continents except Australia. Various non-Western
societies such as China and the Islamic Mameluke Sultanate enjoyed periods where
they were scientifically more advanced than Europe at the time.

-------------------------------------------------------------------

ACTIVITY 1.3 (Spend about 15 minutes on this activity.)


Let's see what you have learnt from this large time chart! For your own purposes,
write down answers to the following questions:
(1) What major historical events happened in these years?:

1789

....................................................................................................................

1884

....................................................................................................................

....................................................................................................................

12
19391945

....................................................................................................................

....................................................................................................................

1947

....................................................................................................................

....................................................................................................................

19891991

....................................................................................................................

....................................................................................................................

(2) Between which dates did modernisation theory flourish?

....................................................................................................................

Between which dates was dependency theory strong?

....................................................................................................................

When did the theory of sustainable development start?

....................................................................................................................

When did Marx and Engels write The Communist Manifesto?

....................................................................................................................

(3) Name the theories or books that you think were written partly because of the
following historical events (the rest of the study unit may also help you to
answer these):
....................................................................................................................
The 1848 revolutions in Europe led to
....................................................................................................................
The 1884 scramble for Africa (and other events) led to
....................................................................................................................
The discovery of ozone depletion in the 1970s led to
....................................................................................................................

13
The Cold War between the United States and the USSR led to

....................................................................................................................

....................................................................................................................

....................................................................................................................

(4) Read Pieterse 2009:25 on the status of development theory. Summarise his
views in three paragraphs.

....................................................................................................................

....................................................................................................................

....................................................................................................................

-------------------------------------------------------------------

Theories of change and development over the past 200 years all have a common
root in the dramatic and continuous changes brought about by capitalism, as it has
spread from Western Europe to the rest of the world. ``Constant revolutionizing of
production, uninterrupted disturbance of all social conditions, everlasting
uncertainty and agitation distinguish the bourgeois epoch from all earlier ones'',
said Marx and Engels in The Communist Manifesto of 1848 (Marx & Engels
1985:83). All development theories reflect these radical changes. In addition, the
great majority of these theories accept that, in order to develop, societies must
grow economically. It is only in the 21st century that this idea of growth is being
seriously challenged through the environmental movement and moves towards
``alternative development''. Some are in favour of the zero growth option, while
others point to the importance of changing the type of growth, with an emphasis on
the use of renewable resources as well as resource substitution.

As we go into slightly greater detail in the following paragraphs, bear in mind that
this common perspective of growth being necessary for development links classical
and modern theories, as well as Marxist and capitalist theories.

Development theory is thought and reflection about how change towards a better
society can occur; and this thought and reflection has mostly happened in the
modern era and especially in the 20th century (since 1900) and to date. In the
19th century (the 1800s) in Europe, many people writing about society were
impressed by the rapid rise of industrial society and imperial conquests, and deeply
affected by the French Revolution and other political changes. In this context,
many theorists developed evolutionary views of societies. They thought that
societies moved through a number of stages, where each stage was higher and more
complex than the one before. Thinkers of this kind included Auguste Comte in
France, Herbert Spencer in England, and Karl Marx in Germany and England.
Many of these theorists, and others such as Emile Durkheim (France) saw the
modern industrial era as destructive in many ways. Marx pointed out that
capitalist growth brought social misery for workers; Durkheim thought that
modern society unavoidably resulted in anomie loneliness and lack of meaning.

14
In the early 1900s the major new development approach, which generated much
theoretical writing and discussion, was Marxist-Leninist socialism in what became
the Soviet Union. The Russian communists wrote extensively about political change
and economic growth in Russia, which was not fully modern or industrialised at the
beginning of the century. For many years the development (and crises), first of the
USSR (from 1917) and then of China (after 1949), provided material for theorists
in many parts of the world to develop theories on how to bring about and manage
revolutionary socialist development.

Development theory, in the sense that it is most commonly used today, emerged at
the forefront of social scientific endeavour fairly recently. As the age of colonialism
came to an end and many Third World states achieved independence, the relative
poverty of these states became evident. Theorists turned their attention to
explaining these disparities and to formulating strategies to close the obvious gap
which existed between the industrialised West and the Third World.

After the end of World War II in 1945, a new approach emerged in the West,
which has come to be known as modernisation theory. This theory emerged from
writing and debates which followed Western efforts to draw the Third World into
pro-Western development. It was partly inspired by the example of the Marshall
Plan which revived West Germany, and partly driven by the Cold War competition
between the United States and the USSR for influence in the Third World. There
was widespread decolonisation in Africa and Asia between 1947 and 1965, and
modernisation in a Western style was part of the American and West European
alternative to revolutionary socialist development. People who wrote to explain,
justify or elaborate this process may be called modernisation theorists. To
generalise, these theorists saw development as involving a change from the
traditional to the modern. Tradition was generally seen as too backward for
modern conditions, and modernity was defined in the image of the West.
Development, for these theorists, involved the spread of capitalist industrialisation
in a country, investment from the West, the growth of Western-type political
institutions, and the spread of modern, Western-type family structures and social
positions won through achievement, rather than ascribed by tradition.

The modernisation approach, while relatively successful in Europe itself and also in
some East Asian countries surrounding communist China, was not very successful
in the poorer parts of the world, particularly in Latin America, Africa and South
Asia. A new theory emerged from the middle of the 1950s dependency theory.
This theory was a critique (or critical evaluation) of Western economic and
political intervention in the Third World and of the weak and usually self-serving
pro-Western, capitalist governments in countries of the South. Note that
dependency theory did not emerge because people were writing about a
development practice in which they believed and that they wanted to improve.
Rather, dependency theorists were attempting, through their writing and ideas, to
reveal reasons for the lack of development and the great inequality in their
countries.

The theory first flourished in Latin America. It was broadly Marxist in origin, but
it took a new line, in that it did not believe that the spread of capitalism brought
any benefit to the non-industrialised countries. Andre Gunder Frank, who was
perhaps the most influential dependency theorist, thought that links between the
Centre (the industrial capitalist countries) and the periphery (the poor countries)

15
were purely exploitative. For him, the world economy works through a chain of
dependency: the rural area in the poor country subsidises the city and the urban
rich; the poor country is milked of its surplus wealth by the semi-industrial country;
and the rich industrial country gathers the surplus of all the weaker countries.
Because the theory was mostly a critique, dependency theorists did not say much
about how development should actually occur. They did, however, advocate socialist
revolution and a break from the international economy.

By about 1980, many attempts at revolutionary socialist development in the Third


World had proven to be unsuccessful. As a result, the two main streams of
development theory, modernisation theory and dependency theory, both lost some
of their ability to persuade people. After these two schools of theory, there has been
a move to less ``grand'' and less ``total'' theories. Some of these borrow from both
modernisation and dependency theory; a great deal of writing and debate moved to
more local and sectoral issues. These included issues such as food systems, the
``soft'' state, theories on how to address basic needs, how to improve institutional
capacity, how to get the right balance between state facilitation and market
freedom and many others. These debates have advanced beyond those of
previous decades in that they are more closely related to development work and
practice. Current debates and theorising also cover many more development issues
than was the case up to the 1970s. Furthermore, today's theory on development
usually takes into account local conditions, local culture, and the potential within
communities.

However, a successor to modernisation theory has emerged, in the form of the


development vision of the World Bank, the IMF and related organisations. At the
same time, another new general school of theory integrating the environment has
emerged. The situation of the world at the moment, and the prospects for food
production, resources, the global economy and health are so bad that a new debate
had to emerge. This debate is concerned with attaining human welfare in a
situation where the natural environment is sliding into crisis. Theorising about this
issue takes place in sustainable development theory, and also in the ``alternative
development'' school. The more radical currents of thought and practice have been
brought together in the World Social Forum, which is opposed to current
globalisation.

1.9 PROBLEMS WITH THEORY


Theory or theories may be problematic in two main ways:
^ Theory can be difficult
^ Theory can be irrelevant

1.9.1 Theory can be difficult


Writing about development is often done by academics at a university, or by
university graduates working in the development field. If they enter a debate on
development (perhaps by writing an article in an academic journal), they usually
write at a level where they are trying to convince people who are already familiar
with the debate. This means that students consulting such writings are sometimes
at a disadvantage, because they often have little background knowledge when they
first meet the particular theory.

16
This study guide should be a ``halfway house'' between the student and some of this
development theory. You will also find that some of the readings are rather easy.

When studying theories about development, always remember that these theories
are about the same world you live in. Your experience and knowledge of your own
country is very relevant to theoretical debates. In this way, if you live in southern
Africa, you have an advantage over students in Europe, Japan or the United
States, because you have first-hand experience of conditions in the South.

1.9.2 Theory can be irrelevant


Every year, a huge amount is written on development. Dozens of journals are
devoted to the development issue, and thousands of long articles are written every
year. Various writers point out that while the volume of development literature is
increasing, human and environmental problems are getting worse in many cases. Is
development theory just part of development business which feeds off the issue of
poverty?

Michael Edwards suggests that there are two core principles for development
intellectuals to remember if they (or we?) are to avoid irrelevance (Edwards
1993:90):
^ ``First, that the purpose of intellectual enquiry in this field of study is to promote
the development of people denied access to knowledge, resources and power for
hundreds of years.
^ Second, that the most effective way of doing this is to unite understanding and
action, or theory and practice, into a single process which puts people at the
very centre of both. This is the real task for development theories in the 1990s.''

-------------------------------------------------------------------
ACTIVITY 1.4
(If you choose to do this extra activity, it could take you about 40 minutes to
complete.)
Further reading
Schuurman, ed. 1993. Beyond the impasse: new directions in development theory.
Chapter by Edwards.
[Please note that the library has limited quantities of this recommended book. You
may not be able to get hold of it.]
Michael Edwards is well known for his argument about ``the irrelevance of
development studies''. In the recommended book edited by Schuurman, read
Edwards' chapter entitled ``How relevant is development studies?'' You will see
that he concludes that there may be a role for theory, under certain conditions!

-------------------------------------------------------------------

17
OUTCOMES CHECK LIST

Question Can do Cannot do


I can explain (in my own words) the
meaning of theory.
I can distinguish among different levels
of theory.
I can outline the difference between
macrotheory and microtheory.
I can name the periods in history when
various development theories were
written.
I can give examples of how theories
arise in response to the main issues of
each period.
I can write about the relation between
development theory and its historical
context.

18
THEME B
THEORIES OF THE PAST

The main focus of this course is on recent theories of development. However, in


order to understand these theories, it is necessary to have some background in
European thought of the 19th and early 20th centuries and also on theories of the
mid-20th century. This is our topic in theme B.

We deal mainly with two theories that dominated debate from about 1950 to about
1980. Modernisation theorists (Study Unit 2) suggested that the core of
development was for a country to move from traditional behaviour and social
institutions to modern behaviour and modern social institutions. Because of this,
modernisation theory proposed that contact with the West (Europe and America)
was good and necessary. Dependency theorists (discussed in Study Unit 3) saw
things in a very different way. They believed that rich countries exploited poor
countries, and kept them in a dependent position. Modernisation theory was a
theory from the North (particularly from the United States). Dependency, by
contrast, was one of the first theories to come largely from the South (particularly
Latin America).

Both theories are quite general theories in other words, they are macrotheories.
The people who supported these theories believed that they could be applied to
societies anywhere in the Third World and, in fact, to the Third World as a whole.
Perhaps this indicates that they were rather poor macrotheories!

In Study Unit 2 we also provide background material on the Classical Theories,


which were the forerunners of modernisation and dependency theories. We
encourage you to read this material!

19
-------------------------------------------------------------------

Modernisation theory implies that modernisation is good;


dependency theory states that dependency is bad!

-------------------------------------------------------------------

It is important to note that both groups of theories were at least partly based on
direct observations. In the Third World, many new independent states came into
existence. These states and part of their populations had been influenced
considerably by Westernisation and modernisation. This was especially noticeable
among urban dwellers and in rich and elite groupings. Modernisation theory was
concerned with actual changes in Third World countries.

Dependency theory was also partly based on direct observations. Dependency


theorists were aware of the continuing and, in some cases, increasing poverty of the
majority in the Third World. In addition, economists found evidence that there had
been serious negative effects on the Latin American countries that had had close
economic involvement with the Western capitalist countries. There was also
evidence that during World War II, when Latin America was cut off from trade
with the North, economic growth actually increased!

When studying modernisation and dependency theories, keep in mind that more
recent debates, such as those concerning globalisation and the NICs, relate quite
closely to the earlier debates on modernisation and dependency. In addition, there
has been a comeback of more classical Marxist analysis as more parts of the world
become capitalist.

20
STUDY UNIT 2

MODERNISATION THEORY

-------------------------------------------------------------------

ENABLING OUTCOMES
This unit aims to provide you with the following outcomes:
You will be able to
^ write about the vision or general outlook of modernisation theory
^ give a basic explanation of the history of modernisation theory
^ outline the existence of different variations of theory as put forward by the
modernisation school of thought
^ give a fairly detailed explanation of Rostow's model of economic growth
^ summarise the basic criticisms levelled at modernisation as a development
approach.

-------------------------------------------------------------------

2.1 INTRODUCTION
Modernisation theory refers to a group of theories which emerged after 1945 in
the United States. The writings and speeches of a large number of theorists aimed
to assist and advise the efforts of Western governments and Western-led
international agencies (for example, the World Bank) to develop the poorer
countries of the South (the Third World). The following quotation of Gabriel
Almond (Smith 1985:535) shows the vision of this group of theorists:

What had happened in Europe and North America in the 19th and early 20th
centuries was now, more or less, about to happen in Latin America, Asia, and
Africa. The progress promised by the enlightenment the spread of
knowledge, the development of technology, the attainment of higher
standards of material welfare, the emergence of lawful, humane, and liberal
polities, and the perfection of the human spirit now beckoned the Third
World newly freed from colonialism and straining against its own
parochialisms.
TABLE 2.1
Thumbnail sketch of modernisation theories

Description/name of the theories Modernisation theories (some refer to


early modernisation theory as
``developmentalism'')
Main theorists Many writers, among them: Rostow,
Parsons, Huntington, Apter

21
Where the theories come from Mostly the USA
Period when the theory was put About 19501980
forward
The main new feature of the world, or Poverty and instability in the Third
the main problem, in the view of the World after World War II; the
theory emergence of new nations; the
possiblity of communism spreading;
the problem of pre-industrial
traditions in poor countries
The solution or way forward The Third World should move from
tradition to modernity. It should
modernise to trade with the West and
to achieve capitalist industrialism,
social differentiation and
individualism, and, if possible,
democracy
The main development actors Aid agencies; Western governments;
Third World governments;
modernised elites in Third World
countries

Modernisation theorists believe that modernisation is a process of conscious,


purposeful, nonviolent change. They believe that modernisation involves changing
social structures, changing people's behaviour, and leading people to a new sense of
what should be done. It is an all-encompassing process which, in the general
perception of these theorists, developing states have to undergo for development to
occur (Du Pisani 1980:67).

Modernisation theory, which is sometimes called ``developmentalism'', originated


in a period when it was thought that developing states had only to follow in the
footsteps of the developed states in order to share in the ``good life'' demonstrated
by American affluence. By duplicating the experience of the wealthy states, so it
was idealistically and simplistically thought, a ``brave new world'' would be created
(Higgot 1983:9 & 16). Development or the process of modernisation in this context
``is therefore very simply to be understood as one of `transition' in which backward
polities will grow increasingly to resemble the American model'' (O'Brien
1972:353).

These circumstances produced a development theory, namely modernisation theory,


which presented a dichotomous picture of the world (dichotomous meaning two-
sided). This conception was based on the work of earlier evolutionary theorists,
particularly Weber. Modernisation theory presented tradition and modernity as
polar opposites, and it was assumed that there would be unilinear development
from tradition to modernity (at first modernity was seen as the same as liberal
democracy), which would be achieved mostly through a technical approach which
amounted to exercises in social engineering (Higgot 1983:1517).

22
2.2 BEFORE MODERNISATION THEORIES: CLASSICAL THEORIES OF
SOCIAL EVOLUTION AND PROGRESS
Before discussing modernisation theories in detail, we would like to give you some
historical background to them by discussing some classical theorists of the 19th
and early 20th centuries. You should understand clearly that these theories, written
between 1820 and 1920, can be seen as background to modernisation theories, but
they are not what we call modernisation theories. Modernisation theories were all
developed after about 1950, in response to conditions after World War II.

The classical theorists discussed below were much struck by the conditions in
Europe in the 19th and early 20th centuries conditions of industrialisation, the
rise of capitalism, and political revolution. To help them understand this context,
these theorists developed theories of social evolution and progress which could not
fail. Thus these ideas are in some respects forerunners of theories of modernisation.

The classical evolutionary theorists of the 19th century (18011900) are called
``classical'' because they lived a long time ago and were the first modern theorists
of social change. Their theory is ``evolutionary'' because theorists of that time,
greatly impressed by new technology and rapid capitalist development, thought
that there was a clear pattern of change from simple societies to higher and higher
forms of society, or more and more complicated forms of society.

The first classical theorists of social change were, as has been said, mainly
concerned with that part of history close to them years which had seen the
collapse of the old political order over much of Europe and the advent of modern
industrial society. They knew relatively little of peoples and civilisations beyond
their own continent, and paid only passing attention to them when drawing up the
global evolutionary schemes, by means of which they tried to comprehend the
pattern of human history. Their principal aims were to explain the distinctiveness
of the modern society in which they felt themselves to be living, and to discover how
it had come about (Etzioni-Halevy 1981:910).

In retrospect, these attempts at systematising and explaining development on a


grand scale seem fanciful, naive, overambitious, historically simplistic and even
downright misinformed. Yet they command our attention here because, despite
their now evident shortcomings, they established so many of the themes which are
still echoed, not only in our present development debate but also in popular notions
about social progress.

2.2.1 Auguste Comte


Auguste Comte (17981857), one of the founding fathers of sociological theory,
was convinced that humanity's situation could be improved by applying objective,
scientific knowledge of the workings of society.

Disturbed by the social and political anarchy of his age, Comte developed an
evolutionary perspective of social change which he hoped would indicate the path
to a peaceful reordering of society (Ritzer 1983:13). The process of social
evolution which had reached its peak in the civilised Europe of his day,
according to Comte was, for him, essentially the product of human intellectual
evolution (Etzioni-Halevy 1981:10; Comte 1973:15).

23
Comte saw this evolution of human thought as occurring in three stages. He
considered this three-stage evolution to be a process which occurred not only in the
historical world as a whole but also in groups, societies, the sciences and individual
personalities (Ritzer 1983:12).

Comte called the first stage the theological stage. In terms of European history this
corresponded roughly with the period before 1300. During this stage all natural
and human phenomena were explained by recourse to supernatural causation or
agency. Fantasy, subjectivity and illogicality overshadowed reason and obstructed
the development of knowledge and skills. Social and political life was dominated by
priests and soldiers; and the economy was characterised by slavery and subsistence
production. This was a period of warfare and conquest.

This stage was succeeded by the metaphysical stage. In Europe, this covered the
period of approximately 13001800. Phenomena now were no longer explained by
reference to supernatural powers and interventions, but by using abstract concepts
such as ``nature''. Comte believed that this represented an advance on the
theological stage, but he thought that these metaphysical explanations clarified
very little indeed and failed to provide any foundation for the systematic testing and
verification of explanations. This second stage, Comte argued, was characterised
by the emergence of juridical-legislative structures (ie legal systems and legislative
bodies).This second stage is followed in Comte's theoretical scheme by a third, and
final stage the positivistic stage, the era of science and industry. This may be
said to coincide with post-1800 Europe. In this period of intellectual development,
phenomena were explained by the application of scientific principles established by
empirical observation. For Comte, this stage was significant because the
intellectual approach is the only one that enables humankind to exert control
over nature. Rational, scientific thought forms the basis on which a technologically
advanced industrial society can be constructed. This, in Comte's view, could also
pave the way for the gradual abandonment of war and the adoption of more
peaceful forms of social organisation. All this fitted his theory that intellectual
disorder causes social disorder (Etzioni-Halevy 1981:10; Abraham 1977:8689;
Ritzer 1983:1213).

Comte's theories relate quite closely to the modernisation theories of the 20th
century (Study Unit 2), and also to the current technocratic views of the World
Bank and IMF (Study Unit 6). The relevance of Comte's theories can also be seen
in the huge social influence that science and technology have today.

2.2.2 Herbert Spencer


Herbert Spencer (18201903) shared Comte's evolutionary conception of history
and social change. The main idea in Spencer's work, however, was the similarities
he saw between societies and biological organisms. Thus, while Comte saw
intellectual progress as the motor or driving force behind social development,
Spencer understood evolutionary development and progress in terms of growth,
differentiation and reintegration.

As with an organism, Spencer argued, a society's evolution is shown first by an


increase in its size. This leads to a growing distinctiveness between its constituent
parts differentiation, in other words as happens in an organism. As in biology
again, this structured differentiation is accompanied by specialisation of functions

24
among the various parts. Thus simple structures, each of which previously served
many functions, eventually evolve into differentiated structures, each of which has
one distinct function only. As constituent parts of a society (or organism) become
increasingly dissimilar, they also become increasingly dependent upon one another.

Just as, in the biological world, small simple organisms can easily survive division
(which would kill more complex organisms), so, Spencer argued, small and simple
tribes of hunters with their minimal division of labour could easily split up and
survive as smaller imitations of their previous selves. Complex societies, on the
other hand, with their greater division of labour, rely upon exchange between their
parts and could not survive such fragmentation. The greater the differentiation in a
society, observed Spencer, the greater the need for closer integration (Etzioni-
Halevy 1981:1112; Ritzer 1983:2627; Abraham 1977:194195; Hoogvelt
1978:11).

For Spencer, the process of social evolution was one of increasing complexity, ``a
change from a state of relatively indefinite, incoherent homogeneity to a state of
relatively definite, coherent heterogeneity'' (Roxborough 1979:14).

For much of the late 19th century and indeed into the 20th, Spencerian social
theories, mirroring Darwin's ideas on evolution, were to play an important role.
They were sometimes used to justify imperialist and racist views. In modern times,
the cut-throat activities of many transnational corporations are often defended in
terms of survival of the fittest in the international market.

2.2.3 Emile Durkheim


Emile Durkheim (18581917) tried to explain how people form orderly, stable and
cohesive groups and how they maintain this social cohesion despite society's
increasing complexity. In his work we encounter some ideas similar to those
expressed in the Tonnies Gemeinschaft-Gesellschaft dichotomy. Durkheim argued
that there were two basic types of society: ``traditional'' and ``modern'' each of
which achieved social cohesion in different ways.

The concept of ``division of labour'' is central to an understanding of Durkheim's


theory. In traditional society, Durkheim said, there was almost no division of
labour, and so there was not much differentiation (growth leading to greater
internal differences) either within or between communities. Communities were
relatively self-contained and interpersonal relationships were usually face to face
and involved people who already knew each other. Durkheim called the sort of
cohesion that prevailed in these conditions ``mechanical solidarity'', because
separate groups were similar to one another and conformed to a fairly standard
pattern of traditional norms and beliefs.

Durkheim argued that as the population increased in numbers and density, more
and more people were forced to compete for scarcer resources. Following theories
of evolution and natural selection, Durkheim believed that society had to adapt to
these changed circumstances or perish. The dilemma was resolved, according to
Durkheim, by a gradual increase in the social division of labour, which not only
improved the efficiency of production but which, as we noted when discussing
Spencer, also created a new and increasing interdependence among the members of

25
society. Durkheim referred to this new type of social cohesion, rather aptly, as
``organic solidarity''.

The transition to modern society, Durkheim maintained, also involved increasing


depersonalisation and a breakdown of traditional sources of moral and spiritual
guidance. Social rules had to become less rigid in order to accommodate more
complex and diverse social structures. While this indeed afforded the modern
individual a greater sense of freedom, it also made him or her vulnerable to the
dangers of frustration and unhappiness arising from the loss of a sense of moral
order and meaning. This new soulless individualism Durkheim termed anomie
(Webster 1984:4446; Roxborough 1979:3; Smith 1973:1418; Etzioni-Halevy
1981:1516, 264).

2.2.4 Max Weber


Max Weber (18641920) is the last of the classical social theorists whose writings
on development we consider in this discussion. Weber was interested in explaining
the emergence of the modern capitalist system in Western Europe, a development
which he regarded as unique in human history. Weber saw Europe's transformation
as the result of the rationalisation of an ever-increasing number of aspects of life,
and the replacement of traditional custom by rational principle.

Until the Reformation in Western Europe (which involved the formation of


Protestant churches), the triumph of rationally organised economic activity had
been blocked by traditional rules and a backward-looking church. In Weber's view
it was the rise of Protestantism in general, and Calvinism in particular, that led to
the liberation and triumph of the rational spirit in capitalism. Calvinism's emphasis
on individualism and rational doctrine was supported by a psychological
willingness to believe that success in this world might indicate divine favour in
the next. This gave rise to what has come to be called the Protestant work ethic.
The principles of rational investment, sound decision making, thrift and hard work
were, as Weber saw it, all key factors in the rise of capitalism.

The rationality of capitalism was expressed for Weber in various ways, for example
in the separation of economic enterprise from the home, as this spatial and legal
separation permitted reliable accounting and many other benefits. This separation,
Weber maintained, made it possible to compute profit and loss accurately. Weber
saw profit as resulting (in these new conditions) from free exchange in a free
market, and not from political pressure or favour. The use of free labour, again,
permitted employers to limit their obligations to their workers to the payment of
wages, and to concentrate their attentions on production rather than on welfare.
Finally, capitalism tended to develop into that most rational of institutions the
bureaucratic organisation.

Weber argued that European society had seen rationalisation in other spheres too,
in law, politics, even in art and music. But it was most obvious in the transfer of
power from traditional political leaders to bureaucracies formal organisations
which embodied the principles of rationality to an extent not known before. These
new structures dominating modern states displayed a well-defined division of
labour and were run according to objective, impersonal rules. These characteristics
ensured precision and speed and got rid of ambiguity. Paradoxically, as Weber
realised, the domination of the bureaucracy also meant that what had started as a
movement for the greater freedom of the individual had resulted in the individual

26
being (in some aspects of life, at least) less free than ever (Etzioni-Halevy
1981:1618; Ritzer 1983:142157; Roxborough 1979:13; Weber 1973:4042;
Webster 1984:4649).

In our 21st century, Weber's fears have been realised in some parts of the world
for example, in the thousands of laws and the bureaucratic structures of the EU.
Furthermore, modern global institutions such as the World Bank and World Trade
Organisation have strong bureaucratic features. On the other hand, poorer
countries often suffer from weak bureaucracies.

2.3 A BRIEF HISTORY OF MODERNISATION THEORIES


We have seen how the Classical Theorists developed a new kind of thinking about
social evolution and progress. Then three features of the world after World War II
greatly influenced the kind of development at which Western-based officials and
modernisation theorists aimed.

^ This was the era of the ``Cold War'' between the two new superpowers. This led
to political and military competition in Europe, Asia (Korea, Vietnam and
Afghanistan), Africa (Angola is a good example) and South America
(particularly over Cuba). Some modernisation theorists, such as WW Rostow
and Samuel Huntington, directly aimed to assist in the anti-communist effort.
^ World War II had been a fight against Fascism and Nazism. In the victorious
countries of the West (principally the United States, Britain and France), the
ideal of democracy was felt very strongly. In modernisation theories of the
1960s and 1970s, much discussion was devoted to the Third World's political
development towards democracy.
^ In 1944, the United Nations Monetary and Financial Conference was held at
Bretton Woods in the United States. This conference laid the basis for a new
world economic era, which is sometimes called the Bretton Woods era. The
conference set up the World Bank and the International Monetary Fund, and
laid the foundations for the General Agreement on Tariffs and Trade or GATT
(Korten 1996:21). These institutions were aimed at promoting world growth
and trade. At the same time, according to the Bretton Woods agreements, it
was expected that national governments would be the agents of national
development.

Colin Leys distinguishes two stages within modernisation theory. From World War
II until about 1960, according to Leys, economists (many of them British) were the
most significant development theorists. ``They wrote plans for both newly
independent countries and the not yet independent colonies of Africa, based on
the idea of raising rural productivity and transferring ... labour out of agriculture
into industry'' (Leys 1996:8). When these plans failed, especially in newly-
independent India, modernisation theory emerged in the United States from about
1960. ``It was constructed by sociologists and political scientists involved in the
rapidly expanding research and teaching programmes established by the United
States government to equip the country with the regional expertise it needed to
exercise its new role as a superpower'' (Leys 1996:9).

Berger (2003) outlines how ``decolonisation, the universalisation of the nation-


state and the Cold War provided the crucial backdrop for the rise and elaboration
of modernisation theory and closely related theories of political development and

27
nation building that were centred on direct or indirect US involvement in the
formation and consolidation of stable anti-communist political systems'' (Berger
2003:422). Berger explores this politically-conditioned development of US-based
modernisation theory, through examining how the political dynamics of US
involvement in south-east Asia gave rise to particular themes. In Berger's analysis,
post-1945 modernisation theory is best understood as a theory that supports
democracy, nationhood and an open world economy all as an anti-communist
strategy. This is despite the fact that later modernisation theory of the late 1960s
and 1970s (such as the work of Samuel Huntington (see 2.4.3.2 below) aimed at
an authoritarian political order.

Tony Smith stresses that the academic efforts which produced modernisation
theory came from a number of different disciplines, such as economics, political
science, sociology, history and psychology; one consequence of this is that
modernisation theory has a number of sub-disciplines which do not always work
together. Many of the theorists were influenced by ``structural-functionalism''. This
was a social theory (a metatheory) which puts a major emphasis on values,
consensus and integration, and on the way in which the various elements in the
system fit with each other and contribute or ``fulfil a function'' for the whole
(Etzioni-Halevy 1981:2).

This produced a theory which was rather dry and abstract. Smith says of the
theoretical models: ``The models in many cases were so formal and abstract that
they proved too stifling, too tyrannical, and ultimately too sterile for the empirical
work they sought to organize'' (Smith 1985:536). At the start, the attitude of
modernisation theorists was that their ideas were provisional but did not constitute
a scientific theory. Yet as time went on and more high-level interdisciplinary
research was produced, many thought that ``the outcome would be a unified social
science able not only to criticize but finally to replace Marxism'' (Smith
1985:536).

Yet by the end of the 1970s the modernisation school faded, as most of its
disciplinary branches (such as development economics and political science) fell
into confusion and pessimism as the Third World's problems multiplied.

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ACTIVITY 2.1
(Spend about 70 minutes on this activity.)

Do a first reading of the article in your prescribed Reader by Berger.


Do the following:
^ Read the first section, entitled ``Introduction: ideologies of western dominance
and ideologies of modernization''.
^ Read up to journal page 429 in the next section, entitled ``Decolonisation, the
Cold War and nation-building I: 19451960''.
^ Read the pages on WW Rostow in the section entitled ``Decolonisation, the Cold
War and nation-building II: 196075'', journal pages 437439.
^ Read the pages on Samuel Huntington in the section entitled ``Military
modernisation theory and nation-building: reorientation and revision'', journal
pages 442444.

-------------------------------------------------------------------

28
Some modernisation theories managed to weather this pessimism by taking solidly
conservative, rather than liberal capitalist, positions. This shift occurred in the
political science wing of modernisation theory, and its best example is Samuel
Huntington (Huntington is discussed below at greater length). Initially, in
extremely broad terms, democracy had been seen as the development goal for
developing states. This goal has been increasingly displaced by the ideal of
institutional order (O'Brien 1972:353361). In other words, it was thought at first
that when a state became democratic, it would be developed. Later on, democracy
came to be seen as a product of a society which had developed stable institutions.
While several attempts have been made to categorise the various perspectives
within this approach, in this guide we shall use the classification of modernisation
theorists developed by Chilcote (1981) for the systematic examination of
modernisation theory.

2.4 THEMES ADDRESSED IN MODERNISATION THEORIES


In terms of Chilcote's classification, three major themes may be identified within
modernisation theory: political development, development and nationalism, and
modernisation in general (which also includes social and economic modernisation).
The first two themes stem from the political science tradition. Modernisation in
general was more interdisciplinary in its origins and in its focus.

2.4.1 Political development


Political theorists concerned with political modernisation were largely concerned
with these three issues (Chilcote 1981:272):
(1) The issue of democracy. As has been explained, democracy was held to be the
initial goal of the development process as described by modernisation
theorists. However, in some later theories of political development, the goal of
order displaced democracy as the identified goal of development (O'Brien
1972:363). However, the aspiration to democracy as the path to development
is still to be found in the development discourse, and it reappeared strongly in
the 1990s, where the waves of democratisation in Eastern Europe and Africa
in particular were interpreted by the World Bank and others as a necessary
component of neoliberal modernisation.
(2) The issue of development and change. The second issue described by Chilcote
in this category is the view held by those theorists who reject neutral
explanations of development as static, and focus their attention on change.
Riggs (1968), with his dialectic superimposition of democratic institutions on
different developing states, is an example of this group.
(3) The issue of formulating crises and sequences of development. The United
States Social Science Research Council's Committee on Comparative Politics
(SSRC) dominated the study of political development (and development
generally) in the decade from 1954 to 1964 (Higgot 1983:15). The SSRC
concentrated on the effect of specific and divergent external factors on the
political system, particularly in developing states. On the strength of its
analysis, it formulated a model of development that saw a political system as
having three dimensions:
differentiation
equality
capacity

29
As the system develops, so the SSRC proposed, the increase in one or more of the
dimensions of the system will give rise to crises of development. The sequence of
such crises would determine the development pattern of the state concerned
(Binder 1971:7781). The crises identified by this group of authors were those of
identity, legitimacy, participation, penetration and distribution (Merkl 1967:448).
These authors believed that a state was developed when it had successfully survived
all these crises of development.
The SSRC model was severely criticised on a number of grounds. In fact, it has
even been suggested that the model be rejected in its entirety. However, in a major
improvement of this approach, Rothchild and Curry (1978:95) acknowledge the
SSRC model as constituting ``a guide to our immediate concerns with setting
system goals in most African circumstances''. It is their opinion that the major
shortcomings of the SSRC model can be overcome with the addition of two
additional crises to the crisis model:
(1) the survival of the nation as constituted at independence
(2) securing freedom from external control

The effect of this addition to the model, so it is argued, would be to convert the
crises of development into systems goals. It would also integrate this approach,
which had previously been criticised almost to the point of rejection (see Dennon
1969), within the vanguard of competitive modernisation theory (Higgot
1983:30). Throughout the developing world, there is mounting evidence that the
survival of nations as constituted at independence, and the condition of dependency
dealt with in Study Unit 3 of this guide, are among the major crises facing
developing states. There can be little doubt, therefore, that crises and sequences of
development will receive a great deal of attention in future. However, whether this
model is capable of explaining development in all its integrated complexity remains
to be seen.

2.4.2 Development and nationalism


According to Chilcote (1981:277), the theorists grouped under this heading
emphasise that nationalism, particularly in new states, provides the ideological
impetus for development across the entire social spectrum, through the process of
socialisation.

More often than not, those authors who do venture into this field rest their case
with ambiguous generalisations. An example of this ambiguity is the statement by
Deutsch (1957:4): ``Nation preserving, nation-building, and nationalism ... these
still remain a major and even still growing force in politics ...''. It is not clear from
this statement whether nation preserving, nation-building and nationalism are
considered to be synonymous, or causally related or independent phenomena. While
they appear, from the statement, to be separate phenomena, they also apparently
constitute a single, growing force. No explanation of this relationship is provided,
and this consequently undermines the analytical usefulness of the observation.

2.4.3 MODERNISATION
This is by far the broadest of the three general themes identified by Chilcote. The
following are some of the many interpretations of the term ``modernisation''
encountered in the literature:

30
^ ''[A] historically situated process and a functional socio-cultural phenomenon''
(Bendix as quoted by Du Pisani 1980:75). As part of this process, emergent
contemporary states are said to duplicate the transformation experienced by
Western states, and the master-servant relationship is converted into an
employer-employee relationship.
^ The identification of Western practices and values as the ideal for all political
systems (Pye 1965:35).
^ ''[The] will and the capacity to cope with and generate continuing transforma-
tion toward modernization while maintaining individual freedom'' (Packenham
1966:27).
^ A cumulative process of increasing role differentiation, structural specialisation
and secularisation (Almond & Powell 1966:194196).
^ Increased differentiation of political structures with the diffusion of political
authority and power throughout society (Eisenstadt 1964).
^ The adaptation of existing institutions to changing ``functions'', with the growth
of knowledge as the source of such change (Black 1966:7, 46, 47 & 55).

Coetzee (1996:53, 57) states that, according to modernisation theorists, progress


is inevitable when the society displays most of the following:
^ a value system stressing performance
^ a universalistic attitude
^ participant (democratic) involvement
^ the structural capacity to absorb continuing change
^ a changing appreciation of the individual, as illustrated in lower birth rates and
mortality rates
^ drastic reduction in all forms of inequality
^ increasing social mobility
^ aspiration to a higher level of literacy and the effective spreading of formal
education
^ increase in the number of bureaucratic organisations touching on all aspects of
life
^ economic rationalisation, working towards an effective market economy and
general economic growth
^ decreasing influence of religion, mystical views or supernatural ideas
^ the formation of a universalistic judiciary
^ associations and interest groups
^ citizenship
^ an erosion of the power of ethnic groups
^ effective, widespread mass media
^ free intellectuals

To facilitate an understanding of the great bulk of work produced on the general


theme of modernisation, we explore two themes, with an example of a theorist in
each. The first theme is stage theory and the example of a theorist is Rostow, an
optimist. The second theme is modernisation and the decay of society, and the
example of a theorist is Huntington, who may be called a cynic.

2.4.3.1 Stage theory and modernisation


Higgot (1983:13) succinctly exposes the naive and optimistic assumption by post-
World War II theorists that the problems facing new states were technical and
financial and would be solved by emulating the Western experience. By

31
metaphorically following in the footsteps (stages) of the industrial states, all states
were thought capable of attaining modernity (Chilcote 1981:279).

CE Black addresses the problems of oversimplification and unilinearity in stage


theory by introducing phases of modernisation. He arranged almost all nations into
seven patterns of development according to five criteria in order to ``compare
societies according to the characteristic problems that modernising leaders have
faced'' (Black 1966:95128). He still, however, remains within the fold of those
championing the emulation of Western experience.

Organski was a proponent of this approach and proposes that the following four
stages must be experienced by a state before modernity is achieved (Organski
1965, chapters 15):
(1) primitive national unification
(2) industrialisation
(3) national welfare
(4) abundance

Rostow and the stages of growth


By 1960, economic growth was firmly entrenched as one of the principal concerns
of development theorists, with the concomitant association of material productivity
as an indicator of economic health. Such is the time-lag between theoretical
controversy and practical planning that the primacy of aggregate economic growth
continued to dominate the convictions of development policy makers throughout the
1960s. Indeed these convictions are still encountered today, despite the academic
and ethical doubts loudly voiced in intellectual circles.

That the primacy of economic growth should have enjoyed such prominence and
popularity among politicians, administrators and businessmen was due in no small
way to the persuasive writings of WW Rostow (b 1916), an American scholar and
sometime government advisor, who strove throughout the 1950s to formulate an
explanatory, and (implicitly) evolutionary, scheme of economic development.
Rostow's work culminated in 1960 with the publication of what most
commentators regard as his magnum opus: The Stages of Economic Growth: a
Noncommunist Manifesto. Focused on the records of the British Industrial
Revolution and illuminated by a wealth of comparative macroeconomic statistics,
Rostow's provocatively subtitled book argued that all societies must pass through a
single, logical and well-defined sequence of five stages of economic development
(Rostow 1960; Brookfield 1975:3637; Harrison 1988:26).

The first of Rostow's stages is that of traditional society. At this stage the level of
technological knowledge is prescientific; although at this level technology is not
entirely static, it places a low ceiling on per capita production.

The second stage sees the achievement of the preconditions for takeoff and the
removal of many of the growth-inhibiting features of traditional society. It is now
that a society obtains the scientific insights necessary to expand its agricultural
and manufacturing outputs. This stage parallels the experience of Western Europe
in the late 17th and 18th centuries, and may be triggered by the shock of external
intrusion into what is still a traditional society. Agricultural productivity now
increases rapidly, and a more effective infrastructure is created. Society develops a

32
new progress-oriented mentality, and new ideas spread more rapidly. A new
entrepreneurial class comes to the fore.

The third stage is the crucial one in Rostow's theory. This sees the takeoff to self-
sustained growth, a transformation which converts a society into one in which
steady growth becomes more or less automatic. This stage may last for 20 to 30
years and is identified by the following:
(1) Net investment and saving rise from five to ten per cent and more of national
income resulting in industrialisation.
(2) One or more manufacturing or industrial sectors assumes a leading role in the
economy.
(3) The political and social framework is modified to exploit the impulses issuing
from the modern sector and give growth a continuing character.

Following this comes a fourth stage, the drive to maturity. Modern technology is
now disseminated from the leading industrial sectors. The economic structure
shows continuous changes as older industries stagnate and make way for new
ventures. Investment now rises to around 20 per cent of national income and
output continues to expand.

Finally comes the age of high mass consumption. This constitutes the ultimate
stage of Rostow's evolutionary schema. Members of this society can now satisfy
more than their basic needs, and consumption patterns shift towards services and
durable consumer goods.

At the time when Rostow advanced this model, he saw only the United States as
having reached the fifth and final stage (Rostow 1960; Brookfield 1975:3639;
Blomstrom & Hettne 1984:13; Roxborough 1979:16; Etzioni-Halevy 1981:36
37; Rostow 1973:285300).

-------------------------------------------------------------------

ACTIVITY 2.2
(Spend about 30 minutes on this activity.)
(1) Write down Rostow's five stages of growth:
..................................................................................................................

..................................................................................................................

..................................................................................................................
..................................................................................................................

..................................................................................................................
..................................................................................................................

..................................................................................................................

..................................................................................................................
..................................................................................................................

33
(2) See if you can say which of Rostow's stages the following countries have
reached:

Lesotho .....................................................................................................

Botswana ..................................................................................................

South Africa .............................................................................................

Taiwan ......................................................................................................

Mozambique .............................................................................................

(3) Do you think everyone in a country which has gone through all Rostow's
stages will be happy with the changes? Write down your thoughts on this.

..................................................................................................................

..................................................................................................................

..................................................................................................................

..................................................................................................................

..................................................................................................................

..................................................................................................................

..................................................................................................................

..................................................................................................................

-------------------------------------------------------------------

Five of the important implications inherent in Rostow's five-stage model are the
following:

(1) It assumes that all societies start from a baseline of underdevelopment and
then experience a unilinear process of transformation along a development
continuum consisting of, or including, multifarious economic and social
changes a continuum that sees them through from tradition to modernity.
Note that underdevelopment is seen here as nondevelopment or undevelop-
ment that is as an initial state or condition. For Rostow, development of
Third World countries entails, inescapably, their repeating the experience of
Europe and North America. Whether or not history has shown this to be
feasible does not enter the Rostow picture.
(2) The indicators used to measure economic progress are usually those
associated with material productivity such as per capita gross national
product, gross domestic product and national income as if these were the
only indices of a country's economic, or developmental performance.
(3) Prior to ``takeoff'' an economy is characterised by the existence of small
enclaves of ``medium'' economic activity superimposed upon a generally
traditional society: islands of development in a sea of backwardness. In this
dual economy each of the two parts is largely detached from the other, with
the traditional sector's backwardness explained by its isolation from the small
modern sectors.
(4) It is assumed that eventually there comes a time when developmental impulses

34
are diffused from the modern enclaves or sectors into the traditional economy.
The modern sector then expands to (eventually) eradicate poverty in the whole
economy, as the traditional sector is gradually eliminated and its workers
absorbed into the more productive, high-income modern industrial sector.
(5) Finally, the model envisages development as a cooperative rather than a
conflict-ridden process.

Many historians have queried Rostow's interpretation of the evidence taken from
Britain's Industrial Revolution. They have also questioned it as an appropriate base
for a generalised model of industrialisation. Other academics have also criticised
Rostow's assumptions about the nature and dynamics of the dual economy, the
incremental nature of the development process, and his failure to provide any real
explanation of the transitions from one stage to another.

Nevertheless, Rostow's theoretical model is of sufficient generality to absorb much


of the criticism directed against it: it is difficult to see exactly what historical
evidence would disprove it. Yet though it could not easily be disproved, what exactly
did it prove? Was it merely a highly generalised description of a historical process
masquerading as theory?

Policy makers were less fussy about such things than was the academic community.
As it was apparently based on carefully researched historical and quantitative
data, Rostow's theory was attractive to those responsible for framing and
executing macrodevelopment policy. It used catchy expressions such as ``takeoff''
and ``sustained growth'' which quickly passed into common currency; it appeared
to give all countries an equal chance to prosper; and it offered a clear development
path without spelling out the details. It also debunked Marxian theory and
proclaimed (and ``explained'') the advantages of the West and its developmental
ideologies (Brookfield 1975:3639; Smith 1973:99).

2.4.3.2 Modernisation and the decay of society


Samuel P Huntington is selected by Chilcote as being representative of this
perspective.

Huntington is acknowledged as one of the most articulate and important


modernisation theorists (Du Pisani 1980:83; Higgot 1983:18). According to
Higgot (1983:18), Huntington's importance lies in his ``challenge to the prevailing
idea of the unilinearity of modernization theory and in his stress on those issues
played down by earlier writers, especially the dislocations that arise in the
modernization process''.

Huntington was a major contributor to the movement which sought to substitute


order for democracy as the goal of political development (O'Brien 1972). It is his
view that ``modernization and social mobilisation, in particular, thus tend to
produce political decay unless steps are taken to moderate or to restrict its impact
on political consciousness and political involvement'' (Huntington 1968:86).

Huntington (1965:393) defines political development as ``the institutionalization


of political organisations and procedures''. When seen together with his support for
a complex society in which ``community is produced by political action and
maintained by political institutions'' (Huntington 1968:11), this definition

35
indicates that he proposed that the process of modernisation be controlled by the
creation of institutions which could accommodate the destructive forces
accompanying the pervasive socioeconomic changes brought about by the
modernisation process (Chilcote 1981:280).

Political development, in Huntington's view, takes place when the political


institutions in a state move from the first to the second of each of the following four
dichotomous variables (Huntington 1968:79):
(1) rigidity to flexibility
(2) simplicity to complexity
(3) subordination to autonomy
(4) disunity to coherence

Huntington describes two distinctly different types of states. He suggests that on


the basis of the ratio between institutionalisation and participation, these two
states manifest differing levels of stability. In the civic state sufficient stability
exists because its institutions can cope with the demands of increased participation,
which is inevitable in the process of political development. In the praetorian state
instability, corruption, authoritarianism and violence are present because there is
insufficient institutionalisation (Huntington 1968:7892).

According to Huntington (1968:79), ``as political participation increases, the


complexity, autonomy, adaptability and coherence of the society's political
institutions must also increase if political stability is to be maintained''.

Huntington's theory of political development is evolutionary in that it perceives


three very large and undifferentiated categories of states:

(1) traditional states


(2) transitional or modernising states
(3) modern states

It further assumes the inevitability and desirability of movement from the former to
the latter. In other words, Huntington believes that it is inherently good for
traditional societies to undergo a process of transition to modernity.

By shifting the condition of stability from the exclusive domain of the ideal-typical
developed state and recognising the ability of traditional and/or transitional
polities to maintain stability, Huntington attempts to tackle the problems of
unilinearity that were previously present in modernisation theory. Unilinearity
means ``one way'', and earlier modernisation theorists were often guilty of
believing that the development process was a unilinear process which would lead
simple, traditional societies to modernity. Huntington was one of the first authors
to acknowledge that some predominantly traditional societies also had elements
often associated with modernity. He also showed that some societies undergo
``negative'' development; that chaos and violence could lead to the disintegration of
modern institutions. He suggested that development is a multilinear process. He
cites India and Ethiopia as examples of traditional states with civic polities and
Chile as a traditional state with a high level of institutionalisation (Huntington
1968:7985). Despite expressing certain reservations, Pye (1965:41) supports
this view, as does Pool (1967:26), who states the following:

36
It is clear that order depends on somehow compelling newly mobilized strata
to return to a measure of passivity and defeatism from which they have been
aroused by the process of modernisation. At least temporarily, the
maintenance of order requires a lowering of newly acquired expectations
and levels of political activity.

-------------------------------------------------------------------
ACTIVITY 2.3
(If you choose to do this extra activity, it could take you about 40 to 80 minutes to
complete.)
Further reading
[Please note that the library has limited numbers of these recommended books. You
may not be able to get hold of them.]
Your recommended books have some quite easy and direct discussions of
modernisation theories, and criticisms of those theories. You may consult the
following three books:
^ Etzioni-Halevy, E. 1981. Social change: the advent and maturation of modern
society. The whole of chapter 2 (pp 3357) is on ``mainstream and
modernisation theory''. Among other things, Etzioni-Halevy shows the
continuity between classical theory and modernisation. Pages 4957 are
devoted to criticisms of modernisation theory. [NB: The library has a fair
number of copies of this book!]
^ Blomstrom, M and Hettne, B. 1984 Development theory in transition: the
dependency debate and beyond: Third World responses, pp 1924, entitled ``The
modernisation paradigm''.

Try to get hold of one of these!


-------------------------------------------------------------------

2.5 A CRITICAL EVALUATION OF MODERNISATION THEORY


Modernisation theory, with its origins in the infancy of development studies, has
proved more durable than many observers had initially thought it would (Higgot
1983:7). It is an approach that has survived despite obvious shortcomings and
failures.

There has been much negative criticism levelled at modernisation theory. The many
attacks upon it have led to the approach being typified as being ideologically
tainted, methodologically inadequate and ineffective as regards policy (Higgot
1983:21). This could easily give rise to the notion that it has no place in the study
of development, which is not so.

In fact the progress made by modernisation theorists is more significant than its
critics have claimed. Higgot shows that the empirical data gathered by
modernisation theorists has greatly improved the available descriptions of
development phenomena. The data has also served to show that the self-centred
approach to development by early theorists was not reconcilable with the reality of
the developing world. This has led to a more realistic appraisal of the problems
facing developing states (Higgot 1983:13).

37
From this review, it is evident that there has been ongoing self-examination by
modernisation theorists seeking to come to terms with the criticisms levelled
against modernisation theory. This has brought about a more sophisticated and
empirical line of reasoning which aims for higher levels of accuracy in more limited
areas of application (Higgot 1983:21).

2.6 CONCLUSION: LINKING MODERNISATION THEORY TO OTHER


THEORIES OF DEVELOPMENT
The ideas of modernisation theorists are similar in some respects to the ideas of
some classical theorists (see section 2.2). Like Comte, modernisation theorists have
a trust in science and rationality. Like Tonnies, Spencer and Durkheim,
modernisation theorists believe that change is from the pole of traditional society
to the pole of modern society. In the same way as Durkheim and Weber,
modernisation theorists believe that modern society is characterised by
differentiation into many roles and functions, the rational separation of different
spheres of society, and freedom from tradition. And like these classical theorists,
modernisation theorists believe that Western Europe and the United States provide
the kind of modernity which should be aimed at.

Modernisation theory is also strongly echoed in some recent theories of what to do


about poverty. The theories of neoliberal globalisation, supported by business elites
and global financial institutions such as the World Bank and the IMF (see study
units 5 and 7), support a Westernisation of the world through the capitalist
market, and Western models of democracy and governance. Like the theories of
WW Rostow, these recent neoliberal approaches to development see economic
growth led by the private sector as the main aim.

In this way, modernisation theory is part of a longstanding tradition that it is


natural and best for a developing country to evolve to be like the West. This way of
thinking is still very strong.

OUTCOMES CHECK LIST

Question Can do Cannot do


I can write about the vision or general
outlook of modernisation theory.
I can give a basic explanation of the
history of modernisation theory.
I can outline the existence of different
variations of theory as put forward by
the modernisation school of thought.
I can give a fairly detailed explanation
of Rostow's model of economic growth.
I can summarise the basic criticisms
levelled at modernisation as a
development approach.

38
STUDY UNIT 3

DEPENDENCY THEORY

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ENABLING OUTCOMES
This unit aims to provide you with the following outcomes:
You will be able to
^ give a general account of what dependency theories are about
^ discuss ECLA and Prebisch
^ discuss Baran's argument
^ discuss Frank's view of dependency
^ summarise the Marxist criticism of dependency theory
^ outline the ideas of world systems theory
^ explain Lall's criticism

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3.1 INTRODUCTION
Dependency theory was the response from the South to modernisation theory. It
directly blamed the main capitalist countries for the situation of poverty in Third
World countries. Dependency theorists believed that the more powerful states and
economies (the core or metropoles) took wealth from weaker countries (the
periphery or satellites). They believed that the weaker countries were funding the
growth of the stronger countries. By the 1970s, dependency theorists were giving a
detailed picture of dependency at many levels. They dealt with internal dependency
within countries, where one part of a country exploits another part. The theory
specified several half-way positions that countries could take, in which a country
exploits several weaker countries but is itself exploited by stronger economies
(there is a diagram of this later in the study unit). And from dependency theory
there developed world systems theory, which has a dependency approach to world
history and to the whole of the uneven global economy.

-------------------------------------------------------------------
A note on reading in this study unit
This unit consists of five main sections. Each of these sections may be treated as a
reading. There is a writing exercise after each of these sections.
In addition, there are a number of relevant articles in your prescribed reader. The
most important of these is the one by Andre Gunder Frank himself. You will be
directed to each of these readings at the end of the section that deals with the topic
of each reading.

39
As with modernisation theory, there is also recommended reading which you should
try to get from the library.

-------------------------------------------------------------------

3.2 BEFORE DEPENDENCY THEORY: MARXIST THEORIES OF


EXPLOITATION AND IMPERIALISM
As we did in the previous study unit on modernisation theories, here we present
some background to dependency theories in the form of Marxist theories of
exploitation and imperialism. These ideas (formulated between about 1840 and
1920) and the socialist radicalism that accompanied them, were a major influence
on dependency theories, which came much later, after about 1960. The ideas of
exploitation and imperialism are key to dependency theories though dependency
theories changed and developed these ideas to address the issues of the Third World
(or global South).

NB: Although we deal with Marx, Lenin and Engels and their radical theories of
imperialism, bear in mind that these earlier theorists were not themselves theorists
of underdevelopment or dependency. Such theorists emerged after modernisation
theory and after World War II.

3.2.1 Karl Marx and Friedrich Engels


Karl Marx (18181883) was another of the classical theorists who, with the aid of
his friend and collaborator Friedrich Engels (18201895), produced a revolu-
tionary theory of class conflicts. At the same time, some writers think that his
theory is similar to those of other classical theorists because he also has a global,
evolutionary view of society and a comprehensive theory of social structural change
(Abraham 1977:203; Etzioni-Halevy 1981:1112).

What was Marx's view of socioeconomic development? He saw the initial stage of
society as one in which property was communally owned and social life was an
extension of family life. In the next stage private property emerged, leading
incidentally to the alienation of people from the forces of production. Slavery
became a dominant institution and society was divided into two principal classes, of
citizens and of slaves. This stage may be said to correspond with the societies we
recognise in classical Greek and Roman times the period of Western antiquity.

In the third, the feudal stage, the principal ruling class is the nobility, whose
position is based upon a complicated system of land tenure, while the subjected
class are the serfs unfree labourers legally tied to the land. This feudal mode of
production is characteristic of the European Middle Ages.

The fourth stage results from the rise of capitalism. The new ruling class, the
owners of capital, the bourgeoisie, enjoy their position through their private
ownership of the means of production. The process of production is now based upon
their exploitation of ``free'' labour that is to say, labour which, unlike that of the
unfree feudal serf, has been sundered from the means of production. In Marx's
capitalist mode of production, producers have no rights over the means of
production or over the disposal of their product, but are free only to sell their
labour on the open market.

40
A third distinctive characteristic of capitalism is that capital accumulates in the
hands of the capitalists through their seizure of surplus value from labour. Surplus
value is understood here (in terms of Marx's labour theory of value) to mean the
price of the commodity produced, minus the cost of wages and raw materials; thus
if capitalists paid labourers the full value of their work, there would be no surplus
value and no capital accumulation. The capitalists' reinvestment of surplus value as
capital, however, enables them to appropriate further surplus value from labour
(Etzioni-Halevy 1981:13, 264).

As with virtually all theorists of their time, the views of Marx and Engels on social
change were dominated by their awareness of the novelty of the industrialised
society in which they lived. Yet Marx was not satisfied merely to suggest a set of
developmental stages through which Europe had arrived at its present state; he
created a theory that attempted to account for the dynamics of the historical
process, and, going still further, used this theory to speculate about what might
happen in the future.

Simply put, Marx held that the forces of history are revealed in the struggle which
ensues between successive modes of production that is to say, between emerging
and obsolete relations of production. This struggle arises as a result of economic
growth, and as a result of qualitative changes which occur in the forces of
production until a point is reached at which these forces can no longer be usefully
accommodated in the existing relations of production. The contradictions that
emerge lead to increasing class conflict, which provides the driving force of history.

In the case of capitalism, Marx predicted that the need to accumulate capital
would ultimately lead to a fatal contradiction. In the capitalist system, he said, the
rate of profit had a tendency to fall. In order to counter this, the owners of the
means of production had continually to increase the ratio of capital to wages
that is, to invest in machinery and technology rather than labour. This in turn
would lead to a series of deepening economic crises, particularly overproduction,
since insufficient wages were being paid for the workers to purchase the
commodities being produced. In the long run, capital would tend to concentrate in
fewer and fewer hands, while an increasingly large and impoverished proletariat
would become aware of their situation and, given the necessary class
consciousness, political organisations and leadership, would overthrow the entire
system (Hoogvelt 1982:150162; Etzioni-Halevy 1981:1214; Roxborough
1979:45; Marx 1973:3239).

The end of capitalism could be followed, said Marx, by socialism, in which the
dictatorship of the proletariat would be established and the means of production
nationalised; socialism would be followed by communism, in which social classes
would wither away; people's natural relationship with the forces of production
would be harmoniously re-established and their alienation would therefore be
ended (Etzioni-Halevy 1981:1314).

Many arguments persist about whether Marx intended to set down universal laws
of historical evolution, in which each stage of development was to be seen as a
necessary step before the following more advanced one. Etzioni-Halevy (1981) is
certainly not alone in arguing that Marx believed all societies must eventually pass
through a sequence of similar or equivalent evolutionary stages, even if they do so
at historically different times. If we accept this reading of Marx, then no society
can escape the capitalist stage before advancing to socialism an interpretation

41
of Marxist thought that continues to influence contemporary theoretical argument
about the less developed world.

Marx's ideas have been popular for many generations, and they inspired socialist
movements and the outlook of socialist states. Marxism seemed to lose prestige
with the fall of the Soviet Union and its eastern European satellites around 1990.
However, modern capitalist-led globalisation has led some writers and thinkers to
say that Marx's theories are more relevant than ever before.

3.2.2 Marx and Third World development


The work of Marx and Engels centred on the development of the economic and
class structures of advanced capitalist societies and upon the tendency of the rate
of profit to fall, this being the first phase in this process. In the second phase the
decrease in the rate of profit drives these societies to expand the geographical
boundaries of their economies by imperialist conquest. Since Marx and Engels
apparently believed that the precapitalist structures of these colonised countries
were stagnant, incapable of stimulating such internal development as that which
took place after Europe's feudal period, they regarded imperial expansion as
historically progressive, since it would at least bring capitalism to backward
nations, destroying and replacing their precapitalist structures. Consequently, new
capitalist societies would come into being, whose development (after they had shed
the shackles of colonial domination) would resemble that of industrially advanced
countries. In the third phase, in these new capitalist societies, as in the early
industrialised nations, capitalism would develop the contradictions that would pave
the way for socialism.

It is interesting to note, as we have done previously, how similar much of this


theory is to that of modernisation theorists. More to the point in the context of
radical development theory, however, is that Marx and Engels saw the capitalist
penetration and transformation of the Third World as not only historically
necessary but as feasible (Palma 1978:387389; Palma 1981:2127).

We should, of course, remember that Marx and Engels were writing before the
high period of European expansion, and certainly had little experience of what
happened when advanced industrial nations colonised or annexed other territories,
so bringing them willy-nilly into the world capitalist system.

3.2.3 Socialist development debates after Marx


The Third World therefore provided an area on which the intellectual disciples of
Marx and Engels could work. And their work constitutes a second stage in the
Marxian analysis of the development of capitalism in backward nations. Lenin
(18701924), among others, wrote extensively on the subject concerning
himself initially with the debate on the development of capitalism in Russia, which
was itself still a ``backward'' area in the late 19th century. While Lenin argued, as
Marx would have, that capitalism constituted a historically progressive force in
Russia's development, he observed that it did not necessarily simply destroy and
replace the precapitalist structures of Russian society. What occurred was a far
more complex interaction than that for which Marx and Engels had allowed
between the imported capitalist model and the older internal structures. This Lenin
ascribed to Russia's situation as a late industrialiser, to the ambiguous role of

42
foreign capital in Russia's development, and to the unexpected tenacity of
precapitalist institutions (Palma 1978:387388).

Other socialists, the Narodniks, with whom Lenin was engaged in a determined
polemic, argued not only that there was some doubt about whether a capitalist
transformation of Russian society would be possible, but also that from a socialist
point of view such transformation was unnecessary (pace Marx), for by building on
the communal structures of precapitalist Russia it would be possible to move
directly and immediately to socialism.

It is interesting to see how this debate on the historical necessity and feasibility of a
capitalist transformation in society is mirrored in later arguments about Marxism
and neo-Marxism in the Third World (Palma 1978:387388, 392394; Kitching
1982).

3.2.4 The analysis of imperialism


Lenin and other Marxist intellectuals, Nikolai Bukharin (18581938) and Rosa
Luxemburg (18701919), all subsequently wrote on imperialism and the prospects
of capitalism in the colonies. While they continued to follow Marx's view of
capitalism's historically progressive nature, they identified an apparent ambiguity
in the behaviour of economies in the advanced stages of monopoly capitalism: in
order to resolve some of their internal contradictions, imperialists would tend to
check industrial development in their colonies. Nevertheless, continued these
theorists, once colonial bonds were broken, these backward colonial countries
would be able to develop their economies, and modern industrialisation would be
able to proceed, though not without the difficulties characteristic of latecomers.
The capitalist development of these ex-colonial nations would then (the argument
proceeded) follow lines similar to those adopted by the industrially more advanced
societies (Palma 1978:388, 395398).

By 1920, however, Lenin was beginning to work on a new analysis of the


difficulties of industrialisation in backward countries. The explicit formulation of
his new line of thought only emerged four years after Lenin's death, and it is of
interest because of the attention it paid to the role of the traditional elites in
backward countries. In so far as the imperial powers tried to arrest the
industrialisation of their colonial possessions (it was argued) they sought a natural
alliance with local traditional elites, whose interests also lay in the preservation of
precapitalist structures (Palma 1978:388, 398399; Palma 1981:3940).

3.3 VOICES FROM THE PERIPHERY


Just as structural functionalism and modernisation theory were beginning to
consolidate their position as the orthodox development thought at the ``centre'',
new ideas were beginning to emerge among scholars on the ``periphery''. Though it
seemed unlikely at the time, these ideas would eventually not only challenge the
centre's attempts at intellectual penetration, but would carry the theoretical battle
into Western academia and play no small part in undermining comfortable
assumptions about development.
Latin America was the base from which this new intellectual movement spread,
reflecting the unwillingness of certain scholars on the periphery to accept external
theoretical models whose relevance to the actual and historical experience of their

43
regions they called into question (Brookfield 1975:124; Palma 1981:50;
Roxborough 1979:27; Blomstrom & Hettne 1984:12). One of the seminal roles
in the theoretical dispute was played by the United Nations Economic Commission
for Latin America (ECLA), located in Santiago, Chile, in 1948. In 1950 an
Argentinian economist Raoul Prebisch (b 1901) was appointed to head ECLA, and
it was under his leadership that a challenge was launched against the theoretical
orthodoxy of the time (Blomstrom & Hettne 1984:3940).

TABLE 3.1
Thumbnail sketch of dependency theory

Description/name of the theories Dependency theories


Main theorists Prebisch; Baran; Frank; Wallerstein
Where the theories come from Latin America and USA
Period when the theory was put About 19551980; though Frank &
forward Wallerstein are still writing
The main new feature of the world, or The failure of development and
the main problem, in the view of the modernisation through trade, aid and
theory contact with the West; oppressive
governments and growing poverty
The solution or way forward Breaking involvement with world
capitalism; Frank sees no short-term
solution
The main development actors Workers, peasants and nationalists of
the South

It had long been the accepted wisdom among experts that international contact in
general, and foreign trade in particular, exercised a beneficial influence upon the
development of nations, especially since a large proportion of economic growth was
believed to be generated by exports. Underlying this argument was the economic
theory of comparative advantage that, by specialising in the manufacture and
export of commodities with a relatively low local cost of production, a country
could raise its level of domestic consumption above what it would have been if
isolated from world trade. According to this theory, mutual benefits would accrue
to the world's states because of an international division of labour by which every
country specialised in, and exported, only those commodities which it could
produce cheaply. Thus countries with a surfeit of labour relative to capital could be
expected to exploit the former by exporting labour-intensive commodities and
importing capital-intensive ones, while states relatively well-endowed with capital
would pursue an opposite and complementary economic strategy (Brookfield
1975:139140; Blomstrom & Hettne 1984:1416).

By 1950 Prebisch was arguing that this view of international trade as universally
beneficial was fundamentally wrong, and that the current system of international
free trade, far from promoting development in the Third World, actually
perpetuated and worsened its underdevelopment. Basing his position primarily
upon the economic history of Latin America, Prebisch attacked the neoclassical
line of thought which he saw as perpetuating the existing international division of
labour. Here, as he saw it, countries on the periphery specialised in the production

44
of primary products, while those at the centre manufactured industrial goods.
Prebisch maintained that this argument of mutual benefit was unsound, both
logically and in the light of evidence.

Neoclassical economic theory held that if technical progress was more rapid at the
centre, as was to be expected, increases in productivity would lead to declining
prices for industrial goods relative to raw materials. The countries on the periphery
would then be able to buy more industrial manufactures for the same amount of
primary produce; economic progress would result without the periphery needing to
industrialise; market forces would do all the work (Blomstrom & Hettne 1984:40;
Brookfield 1975:140142).

Prebisch sought to prove that, despite neoclassical assumptions, the terms of


international trade had moved steadily against primary producers since the late
19th century. Market forces did not operate as most economists claimed, he
argued. He said this because markets at the centre increasingly took on monopoly
characteristics, while labour in the central countries organised effectively to
demand increased wages. Profits grew, but wages also rose and reinvestment in
new technology increased. Thus the economic benefits of improved productivity at
the centre were not realised in lower prices at the periphery.

At the periphery, on the other hand, improvements in productivity often led to


declining prices because the local market was relatively open and competitive; and
thus, once again, it was the consumer at the centre who benefited. The centre thus
benefited twice from its own technological advances, and from those of the
periphery.

The tendency of world trade to perpetuate such growing inequality, Prebisch said,
was reinforced on the demand side of the market; for while the demand for primary
products is fairly inelastic, any increase in incomes at the periphery would
stimulate demand for industrial products, thus leading to further deterioration in
the international terms of trade (Blomstrom & Hettne 1984:4041; Brookfield
1975:140142; Palma 1981:5254; Hoogvelt 1978:7476).

Moving from theory to policy, Prebisch and his ECLA colleagues pointed out that
since Latin America's underdevelopment was determined by its reliance on the
export of primary products, any continuation of its current economic policies would
lead to further deterioration and would obstruct the domestic accumulation of
capital necessary for development. The solution, the Prebisch group argued, was
for Latin America to join the ranks of those exporting industrial goods, in order to
reap the benefits of technological progress. For Prebisch, as for the early
modernisers, the key to development lay in industrialisation (Blomstrom & Hettne
1984:41).

Prebisch maintained that the governments of Latin America could accelerate their
industrialisation by adopting a strategy of import-substitution industrialisation.
This would involve the establishment of industries, behind protective tariff barriers
and exchange controls, to produce goods previously imported. Governments would
clearly have to play a central role in such restructuring of national economies
because, fiscal rearrangements apart, primary production would have to be
persuaded to diversify and expand in order to pay for the importation of vitally
necessary capital goods and this would involve a programme of land reform and
an assault on the established landed elites throughout Latin America. The local

45
market would also have to be broadened by the redistribution of income in order to
stimulate consumer demand for the low-priced manufactured articles of infant
industries.

Much of what ECLA proposed proved too radical for most Latin American
governments, but by the mid-1950s a number of them had embarked on a watered-
down version of the Prebisch strategy (Blomstrom & Hettne 1984:4042;
Roxborough 1979:3033).

As it turned out, import-substitution industrialisation ran into unexpected


difficulties, and by the mid-1960s had been abandoned. In fact, instead of
launching their countries into self-sustaining economic growth, most Latin
American governments found themselves facing economic stagnation and
deepening social and political crises. After an illusory initial stage of ``easy
development'', progress simply ground to a halt. The domestic market lacked the
anticipated capacity for expansion, since purchasing power remained restricted to
an elite stratum which demanded imported luxury goods rather than cheap locally
produced manufactures. The drive for industrialisation also increased reliance on
imports of expensive capital goods (Blomstrom & Hettne 1984:45; Roxborough
1979:3035; Brookfield 1975:143144; Palma 1981:5659).

Roxborough (1979:35) sums up the consequences:


The policies designed to achieve rapid industrialisation in Latin America were
not very successful. Most attempts at industrialisation via the substitution of
imports led to increasing balance of payments problems, increased foreign
penetration of the economy, increasing unemployment, widening rather than
narrowing income differentials, greater vulnerability of the economy to
cyclical movements, a continuing dependency on the export of a limited range
of raw materials or agricultural products, and limited and fluctuating
industrial growth. Above all, it was increasingly clear that the mass of the
population was not participating in the benefits of economic growth. If
anything, they were getting poorer and poorer.

There were critics who explained that Prebisch had misinterpreted his statistical
data this can easily be done if one chooses one's base years wrongly. There were
others who concluded that his model, like so many others, had been overtaken by
unforeseen circumstances and interactions.

ECLA continued to worry away at the problems of the structural imbalances


between the centre and the periphery. This work took them much further than
merely the problems of industrialisation strategies and terms of trade. They were
trying to formulate a complete structural theory to demonstrate that under-
development was by no means the same thing as undevelopment (or lack of
development). Underdevelopment, they were convinced, was the result of a specific
process; it led to underdevelopment in some parts of the world, and to
undevelopment not the same thing at all in others.

Despite the sometimes catastrophic failures that had overtaken their policy
recommendations in Latin America, ECLA continued to refine their arguments,
using the United Nations and other international forums to agitate for an end to
structural underdevelopment and trade-generated inequality. Eventually, this
approach to the problem led to the formulation of proposals for a New

46
International Economic Order (NIEO), in which the less developed countries would
be protected from the ravages of a world trading system that operated in favour of
advanced industrial nations only (Hoogvelt 1982:7576).

There were other economists in the ECLA group, however, whose further research
took them deeper into radical theoretical territory as they sought to trace the
systemic workings of the underdevelopment process, both internal and external
(Blomstrom & Hettne 1984:12, 5658). Osvaldo Sunkel, a Chilean economist
with ECLA, was one of those who came to see underdevelopment as a
characteristic of the normal functioning of the economic system (Blomstrom &
Hettne 1984:49):

... low income, a slow rate of growth, regional imbalance, inequality,


unemployment, dependency, monoculture, and cultural, economic, social and
political marginalization, etc. The conventional theory considered these
symptoms to be deviations from the ideal pattern which, like children's
diseases, would disappear with growth and modernization. It did not realize
that behind this lay a system, the normal functioning of which produced these
results, and that this would continue for as long as development policies
attacked the symptoms of underdevelopment rather than the basic structural
elements that had created it.

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ACTIVITY 3.1
(Spend about 15 minutes on this activity.)
Refer back to the above section to answer these questions.
(1) What was ECLA?

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

(2) Why did Prebisch think import substitution would work?

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

(3) Why did the strategy of import substitution not work?

.....................................................................................................................

.....................................................................................................................

47
.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................
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3.4 BARAN, FRANK AND DEPENDENCY


In 1957, Paul Baran published his Political Economy of Growth, which is generally
regarded as the foundation stone of what came to be known as dependency theory.

Baran's analysis, though concerned to a great extent with Latin America, adopted
a global approach to the study of underdevelopment.

Baran tried to show first how capitalism had developed in Western Europe. The
transformation from feudalism to capitalism had resulted, he wrote, from
increasing agricultural production, a more intensive division of labour, and capital
accumulation. Western Europe had been able to achieve this because of its
favourable geographical position and its lack of natural resources. These factors,
Baran argued, stimulated trade, maritime enterprises, and plunder. Not only were
the countries of the Third World unable to emulate this historical pattern but they
had been its victims, and bore permanent development scars as a result
(Blomstrom & Hettne 1984:3435; Hoogvelt 1982:165166).

Plundering the colonies may not have increased the European national income by
much, but it did constitute a significant contribution to its economic surplus, hence
also to its investment and economic growth. The colonies' economic surplus
consequently diminished, their capital accumulation came to a halt, and their
budding industries were killed by competition. In other words, development in the
colonies was forced off its natural course, and was now completely dominated by
imperialist interests. The countries of the Third World (Japan being a spectacular
exception) stagnated somewhere between feudalism and capitalism, and were the
victims of the worst of both systems (Blomstrom & Hettne 1984:35).

Baran took up and developed an established line of Marxist thought when he


analysed the tensions between the needs of imperialism and the industrialisation
and economic development of backward countries (Palma 1978:401). Baran's
interpretation was much more direct than that of the Marxists: ``Economic
development in underdeveloped countries is profoundly inimical to the dominant
interests in the advanced capitalist countries'' (Palma 1978:401).

In order to prevent development in the Third World, Baran argued, the advanced
nations form alliances with precapitalist domestic elites in order to obstruct any
such transformations to capitalism. In this way, advanced nations also secure

48
access to domestic resources and simultaneously maintain the traditional modes of
surplus extraction. All this limits the possibility of local economic growth. What
surplus is created is either siphoned off by foreign capitalists or squandered on
luxuries by traditional elites. This leaves few resources for local investment, with no
expansion of the domestic market, which leads to economic stagnation from which
the only escape, according to Baran, is a political one (Palma 1978:401).

Thus, in Baran's view, imported capitalism would neither create the conditions for
a local transformation, nor destroy local precapitalist structures (Blomstrom &
Hettne 1984:35; Hoogvelt 1982:166).

This interpretation naturally had political implications for Marxist Latin


Americans. If the local bourgeoisie was simply a small parasitic elite which
controlled land and trade, and was unable to fulfil its historical mission of freeing
capitalism's productive forces, then the two-stage revolutionary strategy inspired
by classical Marxism would have to be discarded and replaced by one of immediate
revolutionary activity based on rural guerrilla warfare. Thus in many ways Baran's
analysis appeared to be in accord with observed realities (Blomstrom & Hettne
1984:35).

A number of Latin American scholars worked on analyses similar to that of Baran


(Brookfield 1975:124165); but it is doubtful whether this work would have had
the international impact that it has in fact had, without the publicity afforded it in
the English-speaking world by Andre Gunder Frank (b 1929). Frank joined forces
with the Latin American dependency theorists in the mid-1960s, publishing a
major work entitled Capitalism and Underdevelopment in Latin America in 1967.
Though this book concentrated on the histories of Brazil and Chile, Frank's vision
was much broader, for he wished to demonstrate that Latin America, and other
areas in the periphery, had been incorporated into the industrial, capitalist world's
economy from an early stage of the colonial period. Frank built upon and expanded
Baran's analysis.

Frank parts company with Baran when he rejects the idea of dualism in a society
and its economy: Frank holds that the incorporation of an economy into the world
capitalist system determines its character through the chain-like structures of
exploitation that bind its local economy to the capitalist metropolis (Blomstom &
Hettne 1984:5052, 6668; Hoogvelt 1982:166167; Roxborough 1979:4445;
Palma 1978:401402).

According to Frank (Blomstrom & Hettne 1984:67), there is an


exploitative relation which in chain-like fashion extends the capitalist link
between the capitalist world and national metropolises to the regional centres
(part of whose surplus they appropriate), and from these to local centres, and
so on to large landowners or merchants who expropriate surplus from small
peasants or tenants, and sometimes even from these latter to landless
labourers exploited by them in turn. At each step along the way, the relatively
few capitalists above exercise monopoly power over the many below,
expropriating some or all of their economic surplus and, to the extent that
they are not expropriated in turn by the still fewer above them, appropriating
it for their own use. Thus at each point, the international, national and local
capitalist system generates economic development for the few and under-
development for the many.

49
Frank's analysis of the capitalist world system had certain important implications,
both in theoretical terms and in terms of revolutionary practice. If all countries
were immediately and forcedly transformed into capitalist economies upon their
incorporation in the world system, then no feudal, semifeudal or other precapitalist
mode of production could survive that moment of incorporation. For orthodox
Marxists, this was unthinkable. For Latin American revolutionaries, however, it
meant that the radical left no longer had to waste its time urging the bourgeoisie to
introduce capitalism; they could now assume that this had already been achieved at
the time of the colonial conquest and they could themselves proceed immediately
with attempts at a socialist transformation (Blomstrom & Hettne 1984:68 see
diagram below).

You should not imagine that these brief summaries have done full justice to the
theories of Baran or Frank, let alone the large numbers of variations on the
dependency theme. Refinements and modifications were made in a wide variety of
ways by development theorists, not only in Latin America but in Africa and the
Caribbean too. Strangely, the dependency perspective failed to take root in Asia
(Blomstrom & Hettne 1984:98162).

Andre Gunder Frank's metropolis-satellite model

M = the world metropolis


m = metropolis
s = satellite

S
S m
m

S S

m m

S S S S S S

Source: Blomstrom & Hettne 1984:69

Since we have no space here to provide a comprehensive survey of the field of


dependency theory (just as we did not have the space to provide a detailed analysis
of modernisation theory), we look at the different variations to be identified in the
dependency school as a whole.

50
-------------------------------------------------------------------
ACTIVITY 3.2
(Spend about 3060 minutes on this activity.)
It is important sometimes to read the original works of theorists. So here are the
words of Andre Gunder Frank himself! Turn to the article by Frank in your Reader.

While reading this article, see if you can distinguish five hypotheses which Frank
puts forward about metropole-satellite relations.
-------------------------------------------------------------------

As we have said, the theoretical positions adopted by dependency scholars are by no


means homogeneous. We may classify their ideas in a number of ways.

Some authorities have tried to develop a typology according to the importance that
various dependency theorists attach to external, as opposed to internal, factors.
Whereas Baran and Frank were both fairly extreme in their views on this issue,
stressing the determining nature of external factors, not all dependency thinkers
followed them in this. Some who perhaps wanted some kind of coming together
with more orthodox Marxists, or with people who were politically less radical,
placed far greater emphasis on internal structural factors.

The relative significance accorded external as opposed to internal factors in the


dependency relationship is also thought to influence the policy prescriptions that
follow from theory: thus more conservative dependency theorists may argue that
internal reforms remain meaningful; moderates may argue that external
dependency will severely limit the efficacy of internal economic and political
reform; radicals may argue that external dependency must be broken before any
development can take place.

Others have analysed the various positions taken by the dependency school
according to the assessments made of the possibility of capitalist development. This
approach obviously is close to the views noted above (Blomstrom & Hettne
1984:70).

Blomstrom and Hettne, in their comprehensive survey of dependency theory,


consider such typologies to be too one-dimensional to reflect accurately the great
variation encountered among dependency theorists; indeed, they do not even
attempt anything that could be called a synthesis of dependency thought. ``Since
the various advocates of this school group themselves differently depending on the
issue, it is almost impossible to provide a systematic account of its theoretical
positions'' (Blomstrom & Hettne 1984:70).

Partly as a consequence of this, critics of dependency theory often seize on the most
extreme or unrefined dependency positions and criticise these as if they were
typical of the school as a whole.

51
-------------------------------------------------------------------

ACTIVITY 3.3
(Spend about 20 minutes on this activity.)
After reading the section above (``Baran, Frank and dependency''), answer the
following questions:

(1) According to Baran, how did the advanced nations prevent development in the
Third World?

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

(2) Explain how a country can be a satellite and metropolis at the same time,
according to Frank (also refer to the diagram).

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................
-------------------------------------------------------------------

3.5 WORLD SYSTEMS THEORY


As the debate on dependency and underdevelopment continued, a number of new
and ingenious variations upon the theme emerged. These were highly integrated
theoretical models of increasing complexity, which attempted to explain the
development experience of humankind in terms of the operation of the world
system viewed as a whole (Blomstrom & Hettne 1984:142144, 182193;
Roxborough 1979:4254; Hoogvelt 1982:171207; Etzioni-Halevy 1981:6673).
Harrison (1988) has a particularly thorough analysis of world systems theory.

It would be impossible to do justice to all these theories here. By way of example,


however, we give a summary of the major work by Immanuel Wallerstein (b 1930),
whose account of the world system was probably the most influential of its type.

52
The first volume of Wallerstein's magnum opus, The Modern World-system,
appeared in 1974. It was a work that demanded attention: majestic in conception
and execution and directed at a classical problem of modern social science how
to account for the pre-eminence of the Western world over the last 500 years. A
book of over 400 pages, of which about a third was taken up by more than 1 300
explanatory footnotes and references, and boasting a bibliography of several
hundred sources, it constituted an imposing addition to the literature of
macrosociological theory. Indeed, some welcomed it as a major contribution to
modern historiography, for this first volume, covering approximately the years
14501640, was planned as the first of four which would deal with the
development of the ``modern world-system'' up to the present day.

What is Wallerstein attempting to do in The Modern World-system? He describes


the object of his work as to provide an account of the creation of the modern world.
The book ``purports to analyze the process of social change in the modern world''
(Wallerstein 1974:3).

Wallerstein believes that central to the problem of creating such an analysis is the
writer's choice of scale. In fact he holds that the major theoretical debates about
social change may be reduced essentially to the search for appropriate units of
analysis. Dissatisfied with the narrowness of his predecessors' conceptual
frameworks, Wallerstein (1974:6) described what he refers to as a ``simplifying
thrust'' for his investigations. This was the fact that neither sovereign state nor
national society provided an arena that would allow him to make sense of the
questions he was trying to answer, since ``neither one was a social system and ...
one could only speak of social change in social systems. The only social system in
this scheme was the world-system'' (Wallerstein 1974:7).

Wallerstein defines social systems as largely self-contained entities whose


developmental dynamics are mainly internal. By this he means that if a social
system could be cut off from all external forces it would continue to function in the
same way. Thus, for him, most of the entities usually described as social systems
tribes, communities, nation-states are not total systems. The only real social
systems are, on the one hand, relatively small, highly autonomous and isolated
subsistence economies and, on the other, world systems (Wallerstein 1974:347
348).

As their name would indicate, world systems are relatively large social systems,
though they need not comprise the entire world. They are also defined by the fact
that their economic self-containment is based on an extensive division of labour,
and that they include within their boundaries a multiplicity of cultures. Wallerstein
argues that there have been only two varieties of world system: world empires in
which a single political system claims control over most of the area within its
boundaries; and world economies in which no single political control exists. The
modern world system is just such a world economy, and a highly successful one, for
previous world economies have tended either to be converted into empires or to
disintegrate. That the modern world system has avoided this fate over the past five
centuries is explained for Wallerstein (1974:348) by the political component of the
economic system called capitalism.

53
Capitalism has been able to flourish because of the existence of the multiplicity of
political systems within the world economy. This is not to say that capitalism's
success is due to noninterference by political structures. On the contrary
(Wallerstein 1974:348):
Capitalism is based on the constant absorption of economic loss by political
entities, while economic gain is distributed to ``private'' hands ... capitalism
as an economic mode is based on the fact that the economic factors operate
within an arena larger than that which any political entity can totally control.
This gives capitalists a freedom of maneuver that is structurally based. It has
made possible the constant economic expansion of the world system, albeit a
very skewed distribution of its rewards.

In Wallerstein's view, the only alternative world system which could maintain such
a high level of productivity and achieve an altered system of distribution would be
one where the levels of political and economic decision making were integrated.
This would constitute a third kind of world system, a socialist world government
(Wallerstein 1974:348; Wallerstein 1979:35).

Wallerstein's modern world economy is divided into core states, which are
culturally homogeneous and have strong state machineries, and peripheral areas,
where the state is either weak or nonexistent. There are also semiperipheral areas,
located between the poles of core and periphery in a number of dimensions:
complexity of economic activity, strength of state machinery and cultural integrity.
Some of these semiperipheral areas were previously part of the core, some had
been part of the periphery for the life of this world system is comprised of
``conflicting forces which hold it together by tension, and tear it apart as each
group seeks eternally to remold it to its advantage''. The semiperiphery is a vital
structural component in Wallerstein's world economy, one of its functions being
that of partially deflecting the political pressures which groups located in the
periphery might otherwise direct against core states (Wallerstein 1974:347350).

Each of the three zones of the world economy has an economic structure based
upon the geographically differentiated division of labour, so that the range of
economic tasks is unevenly distributed throughout the world system. This
arrangement is mainly a function of the social organisation of work ``which
magnifies and legitimizes the ability of some groups within the system to exploit
the labor of others, that is, to receive a larger share of the surplus'' (Wallerstein
1974:349). In the world economy there is a hierarchy of occupational tasks, those
requiring higher levels of skill and capital investment being reserved for the higher-
ranking areas.
Since a capitalist world economy essentially rewards accumulated capital,
including human capital, at a higher rate than ``raw'' labour power, the
geographical maldistribution of these occupational skills involves a strong
trend towards self-maintenance (Wallerstein 1974:350).

The political fragmentation of the world economy tends to reinforce rather than
obstruct the operations of the capitalist system. The differential strengths of the
various states are vital to the functioning of the world system, since the strong state
machineries of the core provide their capitalist classes with extra-economic
assistance to reinforce and increase the differential flow of surplus to the core zone.

54
Thus it is that the processes integral to the capitalist world economy tend to widen
the social and economic gaps between its various geographic components. This is
not to say, however, that areas may not change their structural role, either as the
world economy extends its boundaries to include within it areas which were
previously part of the ``external arena'', or as areas move upwards or downwards
into or out of the semiperiphery. Such movements are particularly likely during
periods of systemic crisis (Wallerstein 1974:350).

It is important to note that for Wallerstein ``the modern world economy is, and only
can be, a capitalist world economy''. He has no interest in the intricate debate
about capitalist penetration of the periphery and the articulation of different modes
of production. Not only does he refuse to label capitalist agriculture based on
forced labour as ``feudalism'', but he will not even admit the existence of socialist
national economies within the world economy these are merely ``socialist
movements controlling certain state-machineries within the world economy''
(Wallerstein 1974:351).

His views on class are also likely to disappoint those raised on a more orthodox
Marxist diet. He sees classes as transnational actors, with the upper classes
situated primarily at the core, while the most exploited, and majority, of the
proletariat are contained on the periphery. The upper classes manipulate the core
states in order to maintain their power and defend their control of the periphery. In
this way, social change is conditioned by events in the world system as a whole
not by events in single countries (Wallerstein 1974:351357; Wallerstein 1979:1
36).

In Wallerstein's view, as we have seen, capitalism's wealth depends on the


exploitation of the periphery. As the most exploited part of the system, the
periphery will be the locus of the future world socialist revolution a revolution
which, following a final state of crisis, will affect the entire system.

-------------------------------------------------------------------

ACTIVITY 3.4
(Spend about 15 minutes on this activity.)
(1) According to Wallerstein, why has capitalism been very successful in the
modern world economy?

..................................................................................................................

..................................................................................................................

..................................................................................................................

..................................................................................................................

(2) What does Wallerstein mean by a ``semiperipheral area''?

-------------------------------------------------------------------

55
3.6 DEPENDENCY THEORY UNDER FIRE
By the early 1970s dependency theory had lost much of its freshness and was
exposed to growing criticism. For a long while the modernisation theorists and
neoclassical economists had been doing their best to ignore dependency theory,
seeking on occasion to dismiss it simply on account of the atrocities perpetrated by
its adherents in their interpretations of neoclassical economic theory (Blomstrom &
Hettne 1984:79). Moreover, any number of critics questioned the dependency
theorists' use of historical evidence (Smith 1979).

More philosophical objections came from the Indian scholar Sanjaya Lall. He
argued that the economic characteristics of underdevelopment in dependent
countries were not exclusive to those particular economies but were, in fact,
characteristics of capitalist development in general. Thus, for example, foreign
capital dominates Canada and Belgium to a greater extent than it does India or
Pakistan. But does this make Canada and Belgium ``dependent''? Lall denied that
one can diagnose dependence by using fixed criteria, and rejected the idea that
fixed characteristics cause underdevelopment (Blomstrom & Hettne 1984:7980;
Palma 1978:404). Lall also indicated that the whole logic of dependency theory
might be founded upon a tautology (Palma 1978:404):
``One sometimes gets the impression on reading the literature that
`dependence' is defined in a circular manner: less developed countries are
poor because they are dependent, and any characteristics that they display
signify dependence''.

According to Lall (Palma 1978:404) dependency can only claim to offer a real
explanation of underdevelopment if it satisfies the following two criteria:
(1) It must lay down certain characteristics of dependent economies which are not
found in nondependent ones.
(2) These characteristics must be shown to affect adversely the course and pattern
of development of the dependent countries.

Thomas Weisskopf provided empirical data to back Lall's objections, finding no


hard evidence to support the dependency thesis of stagnation (Palma 1978:404).

The Marxist criticism of dependency took an entirely different approach. While


Marxist scholars could hardly argue about the dependency school's need to adjust
or change Marx's original universal developmental scheme, they could (and did)
argue with some of the methodological deviations that were to be noted. This was a
sensitive issue because dependency theorists had adopted a great deal of Marxist
terminology, and the Marxist purists were eager to distance themselves from
theoretical and ideological heretics generally known as neo-Marxists.

Blomstrom and Hettne (1984:36) maintain that the Marxist reaction was, in fact,
rather extreme:
``An authoritative view claims that Marxism is whole and indivisible, and that
the neo-Marxists have either misunderstood some basic Marxist theses (i.e.
they are ``poor'' Marxists), or that they should not be thought of as Marxists
at all.''

56
Our two authors here are arguing that neo-Marxism is a term which will probably
disappear once it has served the purpose of denoting a specific stage in the history
of Marxism, during which stage attempts were made to fill in the gaps in Marxist
theory that bore on the study of underdevelopment. They add (Blomstrom & Hettne
1984:36):
It might be said that neo-Marxism has accepted the changes through which
Marxism has passed after its transplantation from European to non-
European soil, while the Marxists have been anxious to safeguard the purity
of Marxism ... it is inadequate to speak of two distinct ``schools'' ... . The
theoretical deficiencies in orthodox Marxism with regard to its analysis of the
social conditions in the Third World are now being mended and its gaps filled.

As has been said, this tolerant view was not shared by many orthodox scholars in
the early 1970s.

Much of the Marxist criticism focused on the dependency theorists' emphasis on


relations of exchange rather than on class and relations of production. Frank, in
particular, was criticised for attempting to explain underdevelopment simply in
terms of the centre's exploitation of the periphery's surplus. This, it was argued,
was a superficial analysis; for while the transfer of surplus was important,
attention needed to be paid to the underlying factors that determined how and why
this transfer took place. This meant starting from the structure of class relations in
a society, such relations being determined by various modes of production
(Blomstrom & Hettne 1984:8182; Palma 1978:404406; Hoogvelt 1982:172
174).

-------------------------------------------------------------------

ACTIVITY 3.5
(Spend about 30 minutes on this activity.)
In your prescribed Reader, the article by Hettne has a section on dependency
theory. Read the section 'from dependence to interdependence' and then answer the
questions below:

(1) What conditions led to the dependency approach?

....................................................................................................................

....................................................................................................................

....................................................................................................................

(2) What were the ideas found in most dependency theories?

....................................................................................................................

....................................................................................................................

....................................................................................................................

57
....................................................................................................................

(3) According to Hettne, why had dependency theory lost some support when
Hettne wrote this article (in 1983)?

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

-------------------------------------------------------------------

In 1971 Ernesto Laclau attacked Frank's version of dependency, highlighting the


weakness of Frank's dependency position vis-a-vis class and modes of production.
Laclau disputed a view of history which had Latin America permeated by
capitalism from the days of the Spanish conquest. Such an interpretation, he
argued, was based on a definition of capitalism so broad that it could embrace
every economic system from the Neolithic revolution onwards. For Marxists, what
distinguishes capitalism from other modes of production is that workers are free to
sell their labour; but Laclau claims that, for Frank, capitalism appeared simply as
a system that produces for profit and is oriented to the market. This faulty
definition, Laclau maintained, had led Frank to locate the cause of the periphery's
exploitation in the sphere of exchange rather than in the sphere of production
(Blomstrom & Hettne 1984:8283; Hoogvelt 1982:174175).

Blomstrom and Hettne (1984:84) draw further conclusions from Laclau's dispute
with Frank:
The difference between Frank and the Marxists concerning the causes of
underdevelopment becomes more obvious when Frank claims that the root of
underdevelopment is to be found in the periphery's contacts with the centre
contacts marked by the periphery's role as a producer and exporter of
primary products. Marxists, on the other hand, point out that a number of
now developed countries have also played this role; but since their class
structures were completely different, the end results were also different.

From Laclau's point of view, however, Marx himself had also been too optimistic
about the spread of capitalism into the periphery. Capitalist penetration had not
caused precapitalist formations or structures in the Third World to disintegrate.
Sometimes, as we have seen, such precapitalist formations had been strengthened,
since this suited capitalist interests. Viewed in this light, it was possible for
Marxists to regard underdevelopment not as the consequence of capitalist
penetration of the periphery, but of insufficient penetration (Blomstrom & Hettne
1984:85). This is presumably what the Marxist economist Joan Robinson had in
mind in 1966 when she wrote: ``The misery of being exploited by capitalists is
nothing compared to the misery of not being exploited at all'' (Streeten 1984:338).

58
One of the most interesting Marxist critiques was that provided by Bill Warren.
This line of attack on dependency theory was based on an almost classical Marxist
position which made few concessions even to Lenin's writings on imperialist
development. Warren (1980) argued that, in many underdeveloped countries, the
prospects for successful capitalist development, by which he meant industrialisa-
tion, were quite good; and that in fact considerable progress had been made in this
direction since the end of World War II. Imperialism, he wrote, far from hindering
capitalist development in the Third World, facilitated it: the roots of such obstacles
as existed should be looked for in the internal contradictions present in Third
World states. The periphery's dependency on the developed nations was decreasing,
he claimed, and would continue to do so, since the international arena with its
superpower confrontations provided an environment that the emergent nations
could use to their advantage (Blomstrom & Hettne 1984:86; Hoogvelt 1982:188;
Warren 1979:144168; Warren 1980).

Few Marxists were ready to revert to this line of reasoning, which one author
categorised as Palaeo-Marxist (Foster-Carter 1974).

One of the most influential Marxist critics of dependency theory is Colin Leys,
himself for some years a leading figure in the dependency-dominated University of
Dar es Salaam. In his subsequent view, dependency theorists were not merely in
error in theoretical argument, but exerted a dangerous influence on Tanzania's
development policy. By concentrating on the external determinants of under-
development, he argued, government was able to ignore vital internal obstacles to
development many of them of its own making (Leys 1982:103). He sums up
these broader objections to dependency theory as follows (Leys 1982:104):
The most important shortcoming of dependency theory is that it implies that
there is an alternative, and preferable, kind of development of which the
dependent economies are capable, but which their dependency prevents them
from achieving when this alternative does not in fact exist as an available
historical option. The core meaning of ``dependent development'' or
``underdevelopment'' is that ``the economies of one group of countries are
conditioned by the development and expansion of others'' in such a way that
the development of the former is blocked. But this blockage is not held to be
absolute; after all, there has been some growth in almost all of the Third
World countries, including the African countries. So what is said to be
thwarted is some supposed alternative course of development, which would be
followed if the countries were not dependent. This, however, is never specified
and for a good reason. Either what is implied is a superior (autonomous,
inward-oriented) kind of capitalist development; for this to be helpful it would
then have to be shown how an autonomous capitalist development could be
expected to unfold without the inequalities and unevenness, the instability,
crises, unemployment, and wars that have characterized early capitalism
elsewhere and to do it much faster than has ever been achieved before. Or
the implied suppressed alternative is a socialist path of development: in this
case, it would be necessary to show the social and political forces capable of
carrying through such a strategy, and that it could reasonably be expected to
be superior. In most African countries this would be difficult, to say the least.
There has to be something wrong with a conceptualization, the import of
which is that the world should be other than it can be.

59
-------------------------------------------------------------------

ACTIVITY 3.6
(Spend about 15 minutes on this activity.)
When you answer these questions, refer back to the section above to help you.
(1) Explain how Lall's references to Belgium and Canada are used to criticise
dependency theory.

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

(2) In Laclau's view, how capitalist was the periphery?

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

(3) Colin Leys says that dependency theory offers no real development path for
Africa. What does he think may be more realistic?

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................

.....................................................................................................................
-------------------------------------------------------------------

Wallerstein's thesis proved to have considerable appeal in some circles. In certain


respects it was suggestive of Andre Gunder Frank's classic formulation of
underdevelopment, but managed to short-circuit some of Frank's critics by
employing an all-embracing world system approach, thus avoiding the awkward
distinction between external and internal causes. At the same time his definition of
the entire system as capitalist offered escape from the interminable argument
about the articulation of modes of production within the system, and simplified the
business of class analysis. His ``simplifying thrust'' also allowed him to account for
some of the more glaring predictive failures of classical Marxism, while
reaffirming its original vision of world revolution. At the same time, the concept
of a semiperiphery permitted him to dilute the bleak determinism that
characterised the work of underdevelopment theorists (Ragin & Chirot
1984:278; Blomstrom & Hettne 1984:185186; Roxborough 1979:5052).

The weightiest criticisms levelled at Wallerstein's book, in the light of its historical
focus, concern his failure to explain the transformation from feudalism to
capitalism in Western Europe.

60
Theda Skocpol argues that Wallerstein's theoretical constructs (world empire and
world economy) actually prevent him from providing this essential explanation,
because they leave no place for an analysis of the dynamics of feudalism. Instead,
she says, Wallerstein is forced to summarise the historical debate about the reasons
for the crisis in feudalism and then to present a series of teleological arguments
about how the crisis ``had to be solved'' if Europe or the world system were to
survive (Skocpol 1977:10771078). As she points out, the a posteriori form of
argument (''predicting what will happen after it has already happened'') takes
away the need to modify or reject a theory if there are deviant historical cases that
do not fit the theory. In this respect, Skocpol (1977:1088) argues, Wallerstein
mirrors the ahistorical and methodological failings of modernisation theory.

3.7 CONCLUSION: LINKING DEPENDENCY THEORY TO OTHER


THEORIES OF DEVELOPMENT
This study unit has discussed some aspects of the relation between dependency
theory and Marxist approaches. While Marxists may disagree about the analysis
and strategy of dependency theorists (as illustrated in the sections above), Marxists
and supporters of dependency theory are both on the side of those exploited by
capitalism: both groups are anticapitalist theories. Further, Lenin and other
Marxist theorists of imperialism eventually saw that imperialism could undermine
poor countries (see section 2.4.4 above). This is also the argument of dependency
theory.

There are also close parallels between dependency theory and the radical analysis
of globalisation led by transnational corporations. This analysis, which is
associated with the antiglobalisation camp and with radical views of alternative
development, attempts to show that the influence of northern corporate business
is highly destructive of local economies, social processes and environments (see
Study Unit 7). Like dependency theory, this approach assumes that local elites,
including many governments, are part of the problem. Lastly, radical alternative
development thought values the excluded majority, mainly found in the South; it
values local culture and local analysis. All this overlaps with dependency theory.
In this way, dependency theory can be seen as part of an ongoing radical
tradition which tailors itself to address (or try to address) the problems of
successive eras.

-------------------------------------------------------------------
ACTIVITY 3.7
(If you choose to do this extra activity, it could take you about 30 to 60 minutes to
complete any one of the tasks.)
Further reading
Blomstrom, M and Hettne, B. 1984. Development theory in transition: the
dependency debate and beyond: Third World responses, chapters 2, 3 and 4.
Etzioni-Halevy, E. 1981. Social change: the advent and maturation of modern
society, pp 6378.
Schuurman. FJ. 1993. Introduction: development theory in the 1990s, in Beyond the
impasse: new directions in development theory, edited by FJ Schuurman: pp 29.

61
[Please note that the library has limited numbers of these recommended books. You
may not be able to get hold of them.]
The recommended book by Blomstrom and Hettne deals mostly with dependency
theory. Chapter 2 examines the history of dependency theory; chapter 3 is about
dependency theory at its height; and chapter 4 discusses criticisms and the
disintegration of the dependency school.
The recommended book by Etzioni-Halevy has a readable, fairly easy account of
dependency theory on pages 6373, and criticisms of dependency theory on
pages 7378.

-------------------------------------------------------------------

OUTCOMES CHECK LIST

Question Can do Cannot do


I can give a general account of what
dependency theories are about.
I can discuss ECLA and Prebisch.
I can discuss Baran's argument.
I can discuss Frank's view of
dependency.
I can summarise the Marxist criticism
of dependency theory.
I can outline the ideas of world systems
theory.
I can explain Lall's criticism.

62
THEME C
CURRENT THEORIES OF
DEVELOPMENT

Since about 1980, many new issues, and consequently new theories have emerged.
Though dependency theories and modernisation theories still have relevance, it is
necessary to consider new perspectives. The world has changed, and so have the
theories. However, the past often has more influence on the present than we might
imagine and therefore theories of the past may also have continued relevance.

By 1980, both modernisation theory and dependency theory had lost support. In
the 1980s several things happened:

^ There was new writing which attempted to learn from both modernisation
theory and dependency theory (eg Smith 1985).
^ There was new writing which criticised both theories for being too generalised
and abstract.
^ A number of new theoretical approaches emerged. Many of these were small-
scale and concerned particular issues, such as women, culture, and local
studies.
^ New ways of approaching macro-issues emerged.

In the 1980s, theoretical developments and historical events led to new


perspectives on the major development paradigms. As social science became more
sophisticated and the characterisation of Third World countries more precise,
theorists were able to identify both the factors that cause a state to be
``dependent'', and those very strong internal factors that inhibit its development.
Articles by writers such as Booth (1985) and Mouzelis (1988) discussed the
inadequacy of the traditional Marxist perspective on development and dependency,
though Booth argued from a non-Marxist perspective, while Mouzelis took a
Marxist view. One may also say that there was a general turn toward theory of a
more particular nature, exemplified in renewed interest in the work of Chayanov on
household theory, and in the concern of scholars with a precise characterisation of
the nature of Africa's states (eg Chazan, Mortimer, Ravenhill & Rothchild 1988).
There was also an enormous rise in concern for environmental issues.

63
The turn toward more localised, particular and practical studies continued into the
1990s (Schuurman's book Beyond the impasse: new directions in development
theory (1993a) and, particularly, Booth (1993) document this shift well). The aim
of such theory was to bring many new issues and levels into development theory.
Colin Leys (1996:27) summarises Booth's vision of the new theory as follows:

New theory would be sensitive to the great diversity of situations in the Third
World, would refuse to reduce complex and locally specific gender and other
relations to relations of class, and would allow for the possibility of ``room to
manoeuvre'' at the ``micro'' and ``meso'' levels of action, as well as the
``macro'' level, which had been the focus of previous development theory
without, however, abandoning the inherited agenda of political economy.
Booth hoped it might also succeed, in a way not achieved before, in combining
the study of cultural meanings subjectively attributed to things with the study
of those same things from an external or objective standpoint. He also hoped
it would be relevant for those engaged in practical development work.

These new perspectives on theory have arisen not only because of theoretical
debates, but also because of historical conditions. A major historical influence has
been the collapse of state socialism in Eastern Europe following Gorbachev's
policies of glasnost and perestroika in the Soviet Union. This has led to a
reconsideration of socialist positions all over the world, and has strengthened new
forms of grass-roots activism. New theory has also emerged because of the rise of
new social movements, such as the women's movement and the environmental
movement. The rapid spread of communication and economic links across the
globe, together with the spread of democracy in many countries of the South, have
stimulated approaches that value participation and diversity.

The fall of socialism, and the global neoliberal thrust of capitalism, together with
new technologies which enable global exchange have brought new concerns to the
fore. The rapid growth in inequality in the second half of the 20th century has led
some to abandon development entirely: theorists of postdevelopment believe that
development has failed and has deceived people. Others blame neoliberalism the
free market policies of the Reagan and Thatcher governments and of the IMF and
World Bank in the 1980s and 1990s for the failure of development efforts. The
rapid growth in global exchanges has led to theories of globalisation. The
environment has also become a global issue, with increasing numbers of issues that
span borders and continents. The form of globalisation in recent years has led to
new global forms of resistance, for example protest against elite forums such as
IMF and World Bank conferences and environmental protests. What, then, does
development entail in the first decade of the 21st century?

Some still see development as orthodox national economic development; others see
the need to construct a specifically developmental state; and yet others see
development solely as projects through which resources are channelled toward poor
communities. There is a huge NGO sector, and also several thousand international
NGOs, carrying out a wide variety of activities. In general, this sector has an
extensive theory of participatory, democratic, sustainable and accountable
development practice, which is often tied to more radical, anti-neoliberal politics.
Such ideas relate to ``alternative development'', which is concerned with ways of
addressing human needs that are creative, sustainable and not based on
consumerism. However, even though there is much scope for consideration of

64
theories that focus on particular sectors, particular social movements, and
particular forms of practice, it is clear that there is again a need for some form of
macrotheory to deal with the environment and global informational capitalism, and
what can be done about them. Lastly, sustainable development (development that
protects and enhances the natural environment) has become a part of every level of
official development and of many forms of resistance and dissent, for example in
the World Social Forum.

In this theme, we address some of these issues. We discuss globalisation, the


``developmental state'' in the form of newly industrialising countries (NICs), global
managerialism and the project of globalisation, and popular models of
development against neoliberal capitalist globalisation. This is not an exhaustive
list of current theories of development. However, we believe that they are among
the most central of our time.

65
STUDY UNIT 4

GLOBALISATION AND DEVELOPMENT

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ENABLING OUTCOMES
This unit aims to provide you with the following outcomes:
You will be able to
^ define globalisation
^ discuss different theories of globalisation
^ separate the concepts of globalisation and neoliberalism
^ discuss the relation of the state to globalisation
^ discuss how the South fits into globalisation.

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To understand development in our present century it is advisable to understand some


of the concepts, issues and debates surrounding ``globalisation''. Many government
decisions are justified by referring to ``globalisation'' or ``the global economy''. There
are protests against globalisation. The Internet, transnational television beamed by
satellite and communication technologies such as the cellphone give many ordinary
people the impression that a global society is emerging.
Yet at the same time many poor people live their lives much as before, but with even
less possibility of escaping from poverty than in previous decades.

TABLE 4.1
Thumbnail sketch of theories of globalisation

Description/name of the theories Theories of Globalisation,


informational capitalism
Main theorists Castells and many others
Where the theories come from mostly Europe and the USA
Period when the theory was put 1990 to the present
forward
The main new feature of the world, or new technologies leading to extensive
the main problem, in the view of the political, cultural and economic
theory interconnections across borders,
leading to greater wealth for some
and greater exclusion of the poor
The solution or way forward international governance and
regulation; increasing global
democracy; national protectionism;
antiglobal struggles

66
The main development actors global political elites; the global
network of those hurt by neoliberal
globalism; national states, still; new
social movements.

4.1 WHAT IS GLOBALISATION?


Globalisation is a concept used to describe new features of the international
economy involving the emergence of global production systems, worldwide
communication networks and the relatively free flow of finance over most of the
world. Globalisation is also used to refer to new processes in politics, society and
culture that reflect increased international influence and interdependence. The
form of globalisation we are experiencing exists within a dynamic, unequal and
unpredictable capitalist economy, which since 1980 has been moulded into an
aggressively free-market, neoliberal form by the leading capitalist economies. The
degree of emerging inequality is shown by the fact that ``the ratio of the income of
the top 20% to that of the poorest 20% rose from 30 to 1 in 1960, to 61 to 1 in
1991 and a startling new high of 78 to 1 in 1994'' (UNDP 1997:9).
Globalisation also coincides with enormous environmental problems, new global
forms of crime, and diseases such as AIDS.

There is debate and disagreement over whether the term ``globalisation'' usefully
describes what is happening. Held et al. (1999) argue that there are three
approaches to globalisation: Hyperglobalists, who believe that there is a single,
progressive global market with little scope for nation states to participate;
Sceptics, who believe that this phase of globalisation is not unique, that it is
reversible, and that it is generally bad for welfare and development; and
Transformationalists, who believe that societies, states and economies are being
transformed by globalisation, with highly unpredictable consequences. In this study
unit we ignore the views of the rather unrealistic hyperglobalists. Instead, we
examine two differing transformationalist views, as well as the antineoliberal
position on national autonomy, which is sceptical of globalisation.

What is the cause of globalisation? In an important three-volume study of the


changing world economy, Manuel Castells describes the emerging world
phenomenon as ``informational capitalism'', reflecting his belief that information
technology used by capitalist businesses is the prime cause of new global patterns.
Others see this as an era of flexible, ``post-Fordist'' capitalism, where the chief
means of change is neoliberal politics and economics, rather than information
technology.

There are debates over what is distinctive about current changes. Some authors
point out that many empires in history have been as globalising as their technology
allowed them to be; others point out that the proportion of trade that was
international was actually higher in the period 1890 to 1914.

It should also be noted that ``globalisation'' is a contested word. In particular, this


is because many business-serving economists, and some academics, portray
economic globalisation as an inevitable process that forces governments to accept
trade liberalisation and to give extensive access to foreign companies. People of
socialist and social-democratic politics who support more radical social welfare

67
governments, strongly contest this notion of globalisation. Instead, they try to
prove that there are extensive opportunities for welfare-oriented policies, and they
try to prove that, with political will, despite international pressures, governments
can choose macroeconomic strategies that do not follow the neoliberal version of
global rules. One could say that although this debate talks about globalisation, it is
actually about neoliberalism.

However, convincing accounts argue that globalisation is a concept that can be


used in an academically rigorous way, and that there are good reasons to describe
many modern processes as part of globalisation, and a globalisation that is
different from, and much farther-reaching and more intense than any previous
phase of globalisation. The major work by Held, McGrew, Goldblatt and Perraton,
Global Transformations: Politics, Economics and Culture, is an example of this.

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ACTIVITY 4.1
(If you choose to do this extra activity, it could take you about 80 minutes to
complete.)
Further reading
Hoogvelt AM. 1997 Globalization and the post-colonial world. The new political
economy of development, chapters 6 and 7

These chapters deal with the nature of globalisation and some debates.
(Please note that the library has limited numbers of this recommended book. You
may not be able to get hold of it).
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4.2 GLOBALISATION AS TRANSFORMATION: MANUEL CASTELLS


Our exploration of emergent social structures across domains of human
activity and experience leads to an overarching conclusion: as a historical
trend, dominant functions and processes in the information age are
increasingly organised around networks. Networks constitute the new social
morphology of our societies, and the diffusion of networking logic
substantially modifies the operation and outcomes in processes of production,
experience, power and culture. While the networking form of social
organisation has existed in other times and spaces, the new information
technology paradigm provides the material basis for its pervasive expansion
through the entire social structure. Presence or absence in the network and
the dynamics of each network vis-a -vis others are the critical sources of
domination and change in our society: a society that, therefore, we may
properly call the network society (Castells 1996:469).

In Manuel Castells' view, while we are still in a firmly capitalist economy, we are
moving toward radically new social and economic dynamics, which will provide
prosperity for large numbers of people, but greater exclusion of sections of the
poor, and exclusion of newly desperate groups.

We are moving into an age of ``informational capitalism'' (Castells 1996, 1997,


1998). This shift is based on a set of relatively new and fast-developing
technologies: ``microelectronics, computing (machines and software), telecommu-

68
nications/broadcasting, and optoelectronics ...(and) ... genetic engineering''
(Castells 1996:30). This has combined with other technological breakthroughs
such as in ``advanced materials, in energy sources, in medical applications, in
manufacturing techniques (current or potential, such as nanotechnology) and in
transportation technology, among others'' (Castells 1996:30). According to
Castells and others there are significantly new ways in which the world
works, resulting from new modes of organisation of economic activity resulting
from the information revolution:
Under informationalism, the generation of wealth, the exercise of power, and
the creation of cultural codes have come to depend on the technological
capacity of societies and individuals with information technology as the core
of this capacity. Information technology became the indispensable tool for the
effective implementation of processes of socioeconomic restructuring.
Particularly important was its role in allowing the development of networking
as a dynamic, self-expanding form of organisation of human activity (Castells
1998:337).

Castells' argument is not that the information technology industry is taking over
production, but that most sectors of economies and most industries are revitalised
and reshaped by the information revolution. This revolution has greatly extended
the scope of industrial capitalism, and is thus historically intimately linked to the
restructuring of capitalism, which occurred from the 1970s (discussed in the next
section):
While the informational/global economy is distinct from the industrial
economy, it does not oppose its logic. It subsumes it through technological
deepening, embodying knowledge and information in all processes of material
production and distribution on the basis of a gigantic leap forward in the
reach and scope of the circulation sphere. In other words: the industrial
economy had to become informational and global or collapse (Castells
1996:92).

Castells argues that the collapse of Soviet statist industrialism can be directly
linked to these countries' falling behind in these new forms of technology,
production and organisation. He also argues that differing levels of connection to
the information revolution are further differentiating and ``disaggregating'' what
used to be termed the Third World.

To Castells' mind, there is a very negative pole of informational capitalism:


during the past 10 years the most extraordinary processes of exclusion and
social inequality have occurred within countries and between them. These
processes are specifically related to the application of the new technology.
They arise from the dynamics of networks and the domination of the market
as the leading form of social organization. So what happens is that, through
payoffs in terms of education, information and flexibility, everything that is
valuable is rewarded, and everything that is not valued as determined by the
spontaneous forces of the market and technology, is downgraded and
excluded. Put roughly, 40 per cent of the planet is currently excluded,
existing on less than US$2 a day. About one-fifth are doing better than they
did and the other 40 per cent are in the industrial economy, surviving and
organizing themselves so yes, this is a dynamic, more productive and more
creative system and simultaneously a more exclusionary one.

69
Castells has been criticised for the degree of coherence and power he assigns to the
elites and dominant structures of the ``network society'', which suggests that in
coming decades it will be almost impossible for workers to resist, and that if there
is resistance, it will come from new social movements such as the environment and
gender movements, who can play the oppositional role that labour formerly played.
Waterman (1999) argues that neither of these is necessarily true. There are also
numerous debates over the nature and future of globalisation (see for example the
reviews by Pieterse 1997 and Woodiwiss 1996).

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ACTIVITY 4.2
Spend about an hour on this activity.
Turn to the article by Hoogvelt et al. (``The millennium symposium''), in your
Reader.
Read Manuel Castells' discussion of his own ideas, and compare them with the
ideas of Wallerstein and Cox, later in the article, who also have theories of what is
happening around the globe at present.
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4.3 GLOBALISATION WITH DIVERSE CAUSES AND DIMENSIONS


In Global Transformations: Politics, Economics and Culture, Held, McGrew,
Goldblatt and Perraton argue that modern globalisation is distinct because of the
``unique conjuncture of social, economic and technological forces'' (Held et al.
1999:429). Among these they list the following:
^ the historically unprecedented quantity and extensiveness of global flows
^ much higher levels of international organisation of economic, political and
social affairs: globalisation has brought multilayered governance rather than
disorder
^ diverse modalities: different patterns in different places as regards new forces
such as migration and cultural and ecological globalisation, and persisting
differences as regards older forces of military, political and economic order
deriving from earlier times
^ reflexivity: ``a developing worldwide elite and popular consciousness of global
interconnectedness reinforced by the globalization of communications
infrastructures and the mass media industries'' (Held et al. 1999:430)
^ growing contestation and conflict over aspects of globalisation, and a growth in
global-level politics
^ regionalisation (such as the EU) in order to create powerful bases within the
global political economy
^ a less Eurocentric globalisation than that in the era of the British Empire
^ internal and other nonmilitary threats to national control of territory
^ increased demands on the state
^ a culture of national democracy in most countries of the world, but much less
democracy in transnational political and economic structures (Held et al.
1999:430).

70
In this analysis, global transformation has different dimensions. Held, McGrew,
Goldblatt and Perraton argue that, in addition to the economic dimensions of
trade, finance and production, there has also been political globalisation, military
globalisation, a globalisation of the migration of people, the globalisation of
culture, and a globalisation of environmental issues. While Castells sees
information technology as the prime motor of a great variety of changes, these
authors discern relatively independent causes and dimensions of globalisation. In
contrast to the arguments of those who see ``globalisation'' as a smokescreen to
hide neoliberalism, this many-dimensioned approach cannot anticipate a return to
a preglobal era even if neoliberalism is abandoned, for example if the rich
countries of the North, in the next few decades, turn to protectionist regional blocs,
which strenuously try to block free trade with newly industrial countries and
regions, such as India and China. Rather, globalisation, while possibly retreating
on some fronts, will continue in other dimensions.

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ACTIVITY 4.3
Read the following article by Held, McGrew, Goldblatt and Perraton (note that this
article is a short summary of their much more substantial book cited above).

71
72
73
74
75
76
77
78
79
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This article is taken from ReVision, Vol 22 (2), Fall 1999.

80
4.4 NEOLIBERALISM AS A CAUSE OF THE CURRENT PHASE OF
GLOBALISATION
As mentioned above, one of the strongest protagonists of globalisation is neoliberal
business. The rhetoric of globalisation provides a benign and apolitical rationale
for business to scour every corner of the earth seeking profit. It may also be partly
due to this rhetoric that many people believe that globalisation basically involves
business, and why they believe neoliberalism is inevitable. For this reason it is
important to distinguish what is neoliberalism from what is globalisation.
The neoliberal strategies employed by the Northern powers since the 1980s have
helped to cause something of what we call globalisation: in the sense that
globalisation is associated with increasing freedom of trade, increasingly easy
access of transnational corporations to national economies, and a continuation of
political domination by the elites of the North. Neoliberalism has indeed been
highly influential: one only needs to remember that the structural adjustment
programmes imposed by the IMF and the World Bank were neoliberal recipes in
most respects; the policies of privatisation, followed from London to Pretoria,
Brasilia to Moscow, are essentially neoliberal.
Some argue that, while there are certainly changes, many features of
``globalisation'' are mostly the result of deliberate business and political strategies
of rich countries and large corporations, aided by neoliberal policies and an
ideology that justifies unrestricted market penetration when this suits the
capitalist. Writers with this reading of globalisation tend to believe that there is no
fundamental transformation of society; neoliberalism can and should be overturned
and reversed, in favour of national and international policies that strongly
regulate the market.
Arthur MacEwan, in Neoliberalism or democracy, acknowledges that ``modern
globalisation'' is occurring, though he refers to it as an ``incomplete and contested
process of globalisation'' and, more dismissively, as ``international commerce''
(MacEwan 1999:30). MacEwan's main points are that (1) neoliberalism is a
destructive policy and a false economic doctrine (2) neoliberal international
commerce can be defied by governments, even in low-income countries.
Opponents of neoliberalism often have a sceptical approach to globalisation. In
certain respects this may be a weakness when suggesting strategies to replace
neoliberalism.
It is a matter of debate, and a matter which history hopefully will judge, whether
one can still construct a welfare-oriented national democracy with high taxation,
capital controls, and an emphasis on local production; or whether processes of
globalisation make this too difficult. Perhaps welfare will be supplied (or not
supplied) at levels above and below the state (in the European Union but not in
Portugal, in Gauteng but not the whole of South Africa, for example), and perhaps
many states will no longer have the legitimacy to carry out the tasks MacEwan
envisages. This takes us to the issue of the state in globalisation.

4.5 GLOBALISATION AND THE NATION STATE


One of the main debates about globalisation concerns whether nation-states are
becoming less powerful and less relevant because of processes of globalisation.
Some argue that this is so, and that power is steadily moving away from national
governments to international agencies and to groups below the national level, such
as local ethnic and religious groups, which use modern technology to increase their

81
autonomy. Others argue that the state has roughly the same power as before, but
that neoliberal ideology and politics have led many governments to avoid bold state
strategies on behalf of the poor and exploited. A third group believes that the state
is as powerful, or even more powerful than before, but that its role has changed
dramatically in the new global and technological environment.

This era of globalisation is based on an extensive system of states, the latest


additions being those of Eastern Europe. Clearly these states differ radically in
terms of power, wealth and adaptive ability. But how much has globalisation
changed the situation for nation-states?

Writers such as Cerny (1997), writing firstly about more industrialised states in
the neoliberal phase of modern globalisation, see a strong pressure for states to
become ``competition states'' (Cerny 1997:251):

In seeking to adapt to a range of complex changes in cultural, institutional


and market structures, both state and market actors are attempting to
reinvent the state as a quasi ``enterprise association'' in a wider world
context, a process which involves three central paradoxes. The first paradox
is that this process does not lead to a simple decline of the state but may be
seen to necessitate the actual expansion of de facto state intervention and
regulation in the name of competitiveness and marketization ... .
Furthermore, in a second paradox, closely intertwined with the first, state
actors and institutions are themselves promoting new forms of complex
globalization in the attempt to adapt state action to cope more effectively
with global ``realities'' ... . [A] third and final paradox is that the
development of this new political terrain in turn hinders the capacity of
state institutions to embody the kind of communal solidarity or Gemeinschaft
which gave the modern nation-state its deeper legitimacy, institutional power
and social embeddedness.

Some questions that arise in response to this argument are:

^ How many of these processes will change if neoliberalism declines and is


replaced by forms of regional protectionism, for example?
^ In an environment where some states are successfully becoming ``competition
states'' with the associated benefits and costs, what happens to states with
weaker capacity, which fail to compete?

Linda Weiss, arguing for an approach of ``managed openness'' toward global


markets, believes that there is already the capacity to go beyond neoliberal
globalism, citing the examples of Taiwan and Japan in particular, and the
regulated internal markets they had in past decades (Weiss 1999). For Weiss,
managed openness also involves ``reorientation of political priorities along with a
reconfiguration of institutional arrangements''. Weiss believes that it may be easier
to achieve control over external financial flows affecting a country than it is to
reorient national priorities toward ``growth, productivity and social protection''
(Weiss 1999:140).

Weiss is arguing for a socially-oriented developmental state. But how likely is this
amidst the political and institutional globalisation described by Cerny? And how
relevant is it to poor countries?

82
4.6 GLOBALISATION AND AFRICA
We now briefly consider the situation of Africa amidst globalisation, since it is our
continent. However, what we find out about Africa will also be an introduction to
problems found in other parts of the world.

By many accounts, many parts of Africa are being increasingly excluded by the
current patterns of globalisation. In Africa, real incomes per capita were lower in
1996 than they had been in 1970 (Global coalition for Africa 1996:42). Hoogvelt
(1997) speaks of Africa in terms of ``exclusion and the containment of anarchy''; in
a section on ``The rise of the fourth world''. Castells (1998) writes about the
``dehumanisation of Africa''. Hoogvelt argues that in Africa, ``Globalization,
including the structural adjustments imposed since the 1980s, has overwhelmed
the fragile social and political orders while further peripheralising their economies.
The combined outcome of these external and internal forces manifests itself in a
zone of civil collapse, anarchy and instability on the edge of the global system''
(Hoogvelt 1997:241).

Even for these writers, however, this is not a uniform condition across Africa, since
there are regional differences, and since globalisation in its current form may
enhance particular businesses, particular cities, particular regions within a
country, and particular countries; further, the elites of all countries are part of the
global elite. Castells also portrays South Africa as having a very different though
not entirely promising relation to globalisation.

Writing from within Africa, while in no way minimising the various African crises,
gives a different picture. Firstly, writers such as Mkandawire and Soludo (1999)
believe that African countries have the human resources and natural resources to
have at least the possibility of creating reasonably coherent national economies.
They seem to have a more positive estimation of people's will and ability to act,
regardless of the problems that surround them. Further, African writers, by virtue
of having a more detailed knowledge of processes in Africa, can show the creative
and destructive ferment of social life.

While at one level, much of Africa is powerless to stop Northern and capitalist
intrusion (through structural adjustment programmes and transnational corpora-
tions, for example), at another level, because of informational capitalism's lack of
interest in many areas and institutions in Africa, African countries are less locked
into the aspects of political globalisation to which Cerny refers than are richer
countries. In addition, by being partly excluded from some currents of
globalisation, Africa is being shaped more than most other areas by its internal
dynamics of war, state collapse, competition over oil and diamonds, and in
southern Africa, the emerging domination of South Africa. In addition, South
Africa and the countries of North Africa are deepening existing links with areas
outside Africa. These emerging patterns of mostly destructive initiatives from
within Africa are discussed by Achille Mbembe, among others (Mbembe 1999).
Mbembe argues that it is wrong to see Africa on the margins of globalisation;
rather, Africa is engaging with globalisation, and globalisation is engaging with
Africa, in very specific ways. Mkandawire and Soludo (140142) argue that
Africa should (and can) ``learn to compete in the global arena'', through an
extensive reform of political and economic institutions. ``Only a democratic and
developmental state can acquire the adhesion of a citizenry as diverse as one finds
in African countries.''

83
Kieh (2008), writing from an African perspective, gives an account of the features
of globalisation which, while overlapping significantly with the picture provided by
Held et al., provides more of a Third World and African perspective. While
concurring that there are economic, political, cultural, social and military
dimensions to current globalisation, he highlights different forces within these
dimensions. He also adds another dimension: that of the neoliberal capitalist
ideology that has accompanied current globalisation. In discussing cultural
globalisation, he discusses the globalisation of American brands. Kieh sees debt
and structural adjustment as key components of contemporary economic
globalisation. As regards political globalisation, he includes examples from the
South. Kieh also discusses global responses to HIV and AIDS, and the
globalisation of the provision of tertiary education as components of social
globalisation.

These are useful supplements to the features outlined by Held et al., who provide
perhaps a more Northern gaze. Kieh also shows that there are particular concerns
in Africa as regards the globalisation of recent decades.

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ACTIVITY 4.4
(If you choose to do this extra activity, it could take you about 80 minutes to
complete.)

Further reading
Hoogvelt 1997 Globalization and the post-colonial world. The new political
economy of development, chapter 8
This is Hoogvelt's account of Africa's exclusion from the global economy.
Please note that the library has limited numbers of this recommended book. You
may not be able to get hold of it.
-------------------------------------------------------------------

4.7 GLOBALISATION AND DEVELOPMENT


Globalisation provides new technologies, new economic opportunities and new
forms of social interaction, which have unpredictable effects on welfare. It has also
provided avenues for intense capitalist exploitation in some regards, and total lack
of capitalist interest in others. New industrial and polluting countries are
emerging. In many ways globalisation will make development more difficult, as
long as global structures of governance and regulation intensify inequality.
However, there are also major opportunities for ensuring welfare and development,
due to the huge amount of wealth generated by the current phase of informational
capitalism and, just as business and criminals benefit from the new resources of
networking and information, so too social movements, communities, development
projects and development programmes may also benefit. The nature of such
development efforts and other efforts toward the social good is more diverse
than ever. In the future, an increasing proportion of these efforts will be directed
toward issues raised by globalisation.

84
OUTCOMES CHECK LIST

Question Can do Cannot do


I can define globalisation.
I can discuss different theories of
globalisation.
I can distinguish between the concepts
of globalisation and neoliberalism.
I can discuss the relation of the state to
globalisation.
I can discuss how the South fits into
globalisation.

85
STUDY UNIT 5

DEBATES ON THE NICs AND THE


DEVELOPMENTAL STATE

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ENABLING OUTCOMES
This unit aims to provide you with the following outcomes:
You will be able to
^ identify the conditions in the world economy that led to the emergence of
theoretical debates about the NICs.
^ explain why the Asian NICs did better than those in Latin America.
^ give an account of the role of the state in East Asian NIC development.

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5.1 INTRODUCTION
This study unit deals with some ideas that have emerged in the years since 1980
which deal with countries and international conditions. As such, they are a form of
macrotheory. However, compared with modernisation theory and dependency
theory, these ideas are more grounded in particular cases and local conditions.
The study unit deals with new views and theories on whether nonindustrialised
countries can successfully industrialise. Some modernisation theories suggested
that most countries could achieve modern industrial economies with mass
consumption. Dependency theory, on the other hand, suggested that it was
virtually impossible for poor, dependent countries to become rich and strong within
the world capitalist economy.
Some countries have tried to develop outside the world capitalist economy. In the
1960s and 1970s, many Third World countries tried the route of socialism: they
went through a political revolution; they had Communist Party governments; much
of the economy was nationalised; and they formed strong trading and political links
with the Soviet Bloc which was led by the USSR. How successful was this strategy?
While the Soviet Bloc still existed, there were some successes in the South before
1990. However, almost all Marxist-led countries (which include Vietnam,
Afghanistan, Angola, Ethiopia, Cuba and others) were subjected to American
destabilisation deriving from superpower conflicts. None has had long-term
economic success. More moderate socialist or self-help models (such as Tanzania
with its ujamaa policy) have also not led to long-term success.
What about Third World countries which have tried the capitalist route? Clearly
most have failed badly in their attempt to achieve sustained industrialisation and
growth. However, a small group has succeeded. These have become known as NICs,
or newly industrialising countries.

86
The main examples of these are in East Asia: South Korea, Taiwan, and Singapore.
However, mainland China, which is moving from a socialist, state-controlled
economy to a market economy, is also successfully ``newly industrialising''. Other
countries, such as Brazil and Mexico in Latin America, and the Philippines in East
Asia, were expected to join the NIC category but have faded.

-------------------------------------------------------------------
Go back to table 1.2 in Study Unit 1. Look in the left-hand
column on historical events, and note when South Korea's rapid
growth took place.

-------------------------------------------------------------------

One thing is certain: what used to be called the Third World has become much more
differentiated. The countries of the global South have gone in very different
economic directions. These diverse developments have had different social and
environmental implications in various regions. Some are poorer than they ever
were, many are stagnating and politically unstable, some semi-industrialised
countries are growing fast (these are the NICs), while many others seem to be
overwhelmed by social and economic problems.

In this study unit we examine two approaches to how and whether weaker states
can develop in the global capitalist economy. First of all we deal with some of the
debates concerning NICs. These debates concern a number of issues:
^ The broad question: why have these countries had successful capitalist
development?
^ Were there special conditions which allowed East Asian growth?
^ What was the role of the state in these cases of capitalist development?
^ How did these countries fit into the global capitalist economy?
-------------------------------------------------------------------

You should take note that debates on successful capitalist


development sometimes leave aside many major questions. The
effect of such development on the environment is especially
important. Rapid growth in both China and Taiwan, for example,
has seriously threatened the environment in both countries.

-------------------------------------------------------------------

TABLE 5.1
Thumbnail sketch of debates surrounding newly industrialising countries

Description/name of the theories Debates surrounding newly


industrialising countries
Main theorists various
Where the theories come from mostly America and Europe

87
Period when the theory was put from about 1980 and continuing
forward
The main new feature of the world, or How did these parts of the Third
the main problem, in the view of the World develop so successfully while
theory most other countries failed?
The solution or way forward finding ways of modifying the NIC
strategy to one's own country
The main development actors The ``developmental state'' is the main
development actor.

5.2 THE NEWLY INDUSTRIALISING COUNTRIES AND DEVELOPMENT


The debate on the NICs has centred on economic growth, rather than development
in a more rounded sense. Bear this in mind as you study this section. The debate on
the NICs is still important, because rapid economic growth provides resources
which may be used for social spending; and furthermore, rapid economic growth
can greatly change a nation's position and options within the global capitalist
economy.

5.2.1 Why have the East Asian NICs had successful capitalist development?
In the early years of the successful growth of East Asian economies, some writers
portrayed South Korea and Taiwan as shining examples of free-market capitalism.
Their growth was seen as ammunition for the capitalist side in the Cold War. You
must remember that East Asia was one of the main sites of conflict between East
and West: there were wars in Korea and Vietnam; China and the USSR were on the
doorstep of all these East Asian countries. Some writers thought that the NICs
represented the triumph of ``pure'' capitalism, free trade and minimal state
involvement. This was the complete opposite of the situation in socialist countries,
which were characterised by socialism, restricted markets and widespread state
control in the economy.

As the debate around the NICs continued, it became clear that the success story of
the NICs was not the success of free market capitalism, but rather the success of
the ``developmental state'' leading a ``guided capitalist market'', in fairly unique
historical conditions.

At the beginning of the 1960s, some countries in Latin America, such as


Argentina, Brazil and Mexico, seemed to have as much chance of successful
capitalist development as Taiwan and South Korea. Jenkins (1991) shows that the
Latin American countries had plenty of foreign investment (largely under the
control of transnational corporations); in addition the Latin American governments
intervened in and regulated their economies, just as the East Asian NICs did. Why
did the East Asian NICs succeed, while Argentina, Brazil and Mexico had much
less successful growth during the 1970s and 1980s? (In a pattern similar to the
Latin American examples, South Africa had very rapid growth in the 1960s in
some sectors of its economy. This occurred mainly because capital was channelled
to various productive sectors of the economy and relatively little attention was paid

88
to issues relating to equity and equality during that time. Yet the 1970s and 1980s
showed little growth, especially in per capita income.)

The difference was largely in the flexibility of the state's response to changing
conditions. There were also political and social differences between the two groups
of countries. The class structures and political traditions of Latin America
generally limited the power of the state. In Latin America (Jenkins 1991:207):
^ Trade unions were strong.
^ Governments, in the tradition of populism, were usually closely tied to the
political interests of organised social groupings, particularly organisations of
the industrial bourgeoisie.
^ Agriculture and rural land ownership ``was dominated by large landlords''.

By contrast, in Taiwan and Korea (Jenkins 1991:207210):


^ Trade unions were comparatively weak and quiet.
^ Business groupings in Taiwan and Korea formed much later and were weaker
than those in Brazil, Mexico and Argentina. Because of this, the state in the
East Asian countries had greater freedom to pursue coherent growth policies.
^ Japanese colonialism and other factors had undermined the traditional landed
aristocracy, allowing the governments to pursue rapid land-reform program-
mes.

5.2.2 What was the role of the state in these cases of capitalist
development?
Most writers now agree that the type of state was the key factor in East Asian
development and that these were `developmental states'. In the words of Jenkins
(1991:224):
The key to the superior industrial performance of the East Asian NICs does
not lie in the general superiority of export-oriented industrialisation strategies
over import substitution, or of market-oriented policies over state interven-
tion, as some writers have suggested. It is rather the ability of the state to
direct the accumulation process in the direction which is required by
capitalist development at particular points in time which is crucial.

This ability of the NIC states (governments) to intervene economically was based
partly on the states' ``real economic power, which was derived from the state
ownership of banks or loanable funds'' (Lee & Lee 1992:123).

In addition to this flexible and leading economic role played by the state, there are
other important features of state intervention in East Asian NICs:

^ The state was involved in a number of different areas: ``In each case the
developmental impact of the state extended far beyond economic policy to
include ideological mobilisation, pervasive political controls and social
engineering'' (White & Wade 1988:24).
^ In Taiwan and South Korea, the state carried out extensive land reforms. This
led to greater social equality, and also to a productive agricultural sector which
provided food security and investment surpluses.
^ The state implemented policies preventing nonproductive investment (Jenkins
1991).

89
The way in which some of the Asian states achieved growth was truly remarkable
from a growth perspective, but this type of growth can be questioned from an
environmental angle, because the impact on the environment was in most cases
disastrous.

Pieterse (2009:132133) indicates that a feature of these East Asian governments


was that they were developmental and cooperative as far as market and society
were concerned. They were also disciplined in terms of labour and capital.
-------------------------------------------------------------------
ACTIVITY 5.1
(Spend about 70 minutes on this activity.)
The article by Lee and Lee (1992) in your prescribed Reader is an extensive
treatment of the role of the state in the NICs and also in China. It has a strong
emphasis on the Confucian religious and bureaucratic heritage in the area.
Read this article with the aim of clarifying the relationship between state and
market in NIC development. It is fairly difficult, but not impossible!
-------------------------------------------------------------------
Pieterse (2009:133) says that what has been overlooked or downplayed is the
coordinated character of government intervention in East Asia, and the indigenous
political and social arrangements which have been devised in order to effect social
policies in a market-friendly fashion; or, vice versa, to effect market support
strategies in a society-friendly fashion.

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ACTIVITY 5.2
(If you choose to do this activity, it could take you up to 30 or 60 minutes to
complete.)
(1) With the above in mind, discuss the views of Pieterse (2009) on the lessons of
East Asia and summarise these in three paragraphs.
[Please note that the library has limited numbers of this recommended book, you
may not be able to get hold of it.]
-------------------------------------------------------------------

5.2.3 How did these countries fit into the global capitalist economy?
While some writers argue that the NICs, and the ``East Asian Tigers'' in particular,
offer an example to developing nations, other writers emphasise that these
countries settled into a niche in the expanding world economy in the 1960s and
1970s, and this ``window of opportunity'' may have passed by. Rapid growth in
these NICs started in a period of rapid growth in the world economy in the late
1950s and through the 1960s. Their role in world trade increased significantly.
Between 1963 and 1976 their share of all the world's manufactured exports
tripled, from 1,3 per cent to 4 per cent (Van der Wee 1987:265). These smaller
East Asian countries ``have industrialized largely by supplying a certain range of
manufactured goods to the world market with the help of foreign capital, and as
hosts to the branch plants of the MNCs (multinational corporations)'' (Kemp
1989:16). The support that East Asian NICs received from especially American
investment was due to particular political and economic conditions at the time. The

90
United States had a strong political interest in buttressing these noncommunist,
authoritarian states. The US economy also had a need for cheap-labour export-
processing zones in foreign countries. By the 1990s, it had become equally
important for the United States to protect its domestic producers.
The cost of establishing export-led industrial development has also risen since the
1950s and 1960s. ``The amount of capital and the level of technology necessary to
establish modern, large-scale industry are increasing all the time. In many cases,
therefore, without foreign assistance, and the economic dependence which that
entails, industrialization may be difficult or impossible'' (Kemp 1989:16).
The NICs are still in a subordinate or inferior position in relation to the main
capitalist countries. From the late 1980s, when the NICs became a threat to its
interests, the United States has forced trade conditions on them which work in the
US interest (Bello 1994:7385). The NICs are also still dependent in other ways.
For example, Barnett and Cavanagh (1994:284) state that ``despite impressive
efforts to train engineers and scientists and to invest in their own research and
development capabilities, all these countries remain technologically dependent on
American, Japanese and European corporations in a number of ways''.
The message for other countries of the South is that there is no easy NIC
development path, and that international economic and political conditions which
permitted East Asian NIC growth will not be found, for example, in Africa in the
1990s.

5.2.4 The case of China


China has become the latest and potentially the biggest growth success in East
Asia. Japan had exceptional growth in the 1950s and 1960s; South Korea,
Taiwan, Singapore and Hong Kong had similar rapid growth in principally the
1960s and 1970s; and since its reforms in 1978 China has had an annual growth
rate in income per person of around 9% (UNDP 2003 191).
China differs from the other NICs in a number of respects. Firstly, it is the world's
most populous country. Secondly, throughout its period of rapid growth it has been
under the rule of the Chinese Communist Party. Thirdly, its growth cannot be
attributed to the political and economic conditions that favoured South Korea and
Taiwan at the beginning of their growth period around 1960. Rather, the rapid
expansion of the Chinese economy has been in the era of the fall of the Soviet
Union and its command economy, and in the era of economic globalisation and
informational capitalism.
China's explosive growth, in both production and consumption, is outlined in Hale
and Hughes Hale (2003). ``The country's real GDP has grown to over $1.3 trillion
from $106 billion in 1970'' (Hale & Hughes Hale 2003:38) a growth in the
economy to twelve times its size in 1970. ``The country has turned into a
formidable exporting machine'', they say: in 2003 its exports were valued at $380
billion; foreigners have invested 450 billion US dollars in China, and ``China now
has the (annual) capacity to produce 2.8 million automobiles''. As regards
consumption, there are 397 million phone lines, and more than 200 million
households have cable television (the equivalent of satellite television).

The question arises whether this positive picture hides the reality. What is the
potential of an economy that is largely coal driven? Pollution is so bad that many
people are suffering from respiratory problems, and this will definitely increase in

91
the future. Furthermore, will private investors stay committed to the Chinese
economy if major environmental problems become impossible to deal with?
China faces a number of problems. Breslin (1996) argues that China has carried
out a ``dysfunctional'' form of decentralisation and notes the emergence of sharp
interregional inequalities (particularly between the coastal exporting regions and
the rest); the declining quality of rural services; and political priority being given to
cities and not the countryside. Hale and Hughes Hale also point to the rural-urban
gap, and also to rising unemployment, an ageing population without secure pension
arrangements, and excess industrial capacity due to overinvestment. Castells
(1998:303306) sees the main problems as, firstly, the roughly 50 million people
from the depressed rural areas who are now floating from city to city ``looking for
work and shelter''; bitter interregional conflicts; the political problem of preserving
employment and safety nets while moving to a market economy; and the
government maintaining a mechanistic view of technology, with the result that ``it
is clearly not catching up in the essential areas of microelectronics, software, and
telecommunications. The bulk of its advanced machinery is imported, and its
ability for ... cutting-edge design in information technology is nil'' (Castells
1998:307).
With huge numbers of people moving to the urban areas, labour is plentiful and
cheap. However, this is changing rapidly. Furthermore, many Chinese factories had
to close during the economic recession.
Although China has an elaborate environmental strategy, increased grain
production and some innovative ecofriendly agricultural techniques (Pretty
2002:99100), it also faces major environmental problems, including acid rain,
groundwater depletion, destruction of cropland, and pressures on the compara-
tively small remaining forest areas. Jahiel (2006) points out that the environ-
mental problems of China are huge, and it is becoming increasingly difficult to
address these in a systematic way. Instead of regarding the Chinese case study as
one of development, one could rather say that it seems to be a classic case of
economic growth without limits which caused environmental decay.

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Activity 5.3
(Spend about 40 minutes on this activity.)

In your prescribed Reader, go to the article by Hale and Hale Hughes. This article
describes China's dramatic growth. Read the article, and then make notes around
the following points:

1. Features of today's China which will help continued growth

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

92
....................................................................................................................

....................................................................................................................

2. Features of modern China which may lead to future problems

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

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5.2.4.1 China: a developmental state?


Is China a developmental state? This question can be examined from two angles.
Firstly, to what extent does the state direct and influence the economy? Secondly, is
this a coherent influence directed to development?

Under Mao, China had a command economy that was state-directed. China's move
from a planned socialist economy to a market economy with some socialist
characteristics was led by Deng Xiaoping, who believed that, following the
destructive effects of the Maoist Cultural Revolution, it was vital to improve the
economy rapidly in order to restore the standing of the Chinese Communist Party.
This was done by allowing an increasing role to private enterprise and to
``collective enterprises'' involving state-private cooperation. Because many key
party members in central party and government structures in Beijing supported
central control, Deng steered his strategy through a decentralisation of economic
powers to the regions. This led to explosive economic growth in some regions, but
also to a number of problems, as discussed above.

How state-directed is China's economy now? According to Castells (1998:298):


In 1993, state enterprises (''wholly people's owned firms'') accounted for
48,4 per cent of the total value of industrial production; private ownership
(including foreign-participated business) for only 13,4 per cent; while
``collective enterprises'' (that is, businesses with participation of specific
government administrations, most of them regional and private investors)
represented 38,2 per cent of the total, and growing.

Ten years later, in 2003, state enterprises still produced 37 per cent of national
output (Hale & Hughes Hale 2003:38), although from 1998 to 2003, 45 million
workers were laid off from state-owned companies (Hale & Hughes Hale 2003:37).

Even though there has been a massive growth of the private sector, Castells still
argues (1998:305) that
the new Chinese economy is developing through the juxtaposition of three

93
sectors: a public sector, insulated from market competition; an internationally
oriented sector, geared towards foreign investment and trade; and a domestic
market-oriented, capitalist sector, mainly built around bureaucratic entre-
preneurs. The connections and passages between the three sectors is assured
by the party's business networks.

The central planning system is ``still in place, but its main role is to subsidise an
unproductive state sector, and ensure enough revenue for the center's priorities.
Among these priorities are technology and military investments, and the
reproduction of state and party apparatuses'' (Castells 1998:300). The state
sector comprises the poorer part of what seems to be a dual economy; the foreign-
connected capitalist sector is often unable to use the goods produced in the state
sector (Breslin 1996:694).

Breslin (1996) believes that China has not been able to follow the route of coherent
state-led economic development: it is not a classic ``developmental state''. This is
firstly because major decisions of economic policy have been the result of political
conflict. Secondly, it is because many independent economic strategies exist in the
different regions. Thirdly, the private sector, which is largely foreign-funded and
export-oriented, is so large and fast growing that it is out of the control of the
state. Breslin therefore sees the Chinese state as too disorganised in its planning to
be termed a ``developmental state''.

In contrast, Hale and Hale Hughes (2003:36) believe that China has ``winning
strategies economic liberalisation, a focus on high technology, and its resolve to
become a regional leader''. Though they see major problems, Hale and Hale
Hughes believe that the likelihood of continued growth in the high-technology,
export-oriented private sector will give China the resources to address its problems
adequately. Their emphasis is thus on the private sector rather than the state taking
the country forward.

It should be noted, however, that the fast-growing Chinese economy is rapidly


running out of resources. China is looking for resources elsewhere, such as in
Africa. While it is too early to talk of the recolonisation of Africa, the increasing
role of China in Africa raises all sorts of questions. China has a very strong
presence in many African countries such as Zimbabwe. It will be interesting to see
whether countries such as the United States and Britain, who themselves have
vested interests in Africa, will accept an increasing role of China in Africa.

Castells to a much greater extent than Breslin sees the continuing evolution of
China fitting into the changing plan of the Chinese Communist Party and the
Chinese state, though in his opinion, political and economic conflicts are forcing
this strategy into a nationalist rather than a democratic or socialist direction.
Castells terms this strategy ``developmental nationalism with socialist character-
istics'' (1998:287). He sees China as ``intertwining regional developmental states
with a nationalist project of China as a great power'' (Castells 1998:293). We
could therefore say that Castells does see China as a form of the ``developmental
state''.

Howell (2006) critically applies the concept of the developmental state to China
against the backdrop of a high degree of economic decentralisation for
development. This author explains that China finds itself between the two
categories of predatory and developmental, because it displays elements of

94
efficiency and inefficiency, control and chaos. The Chinese state can be explained
as a polymorphous one, which displays multiple forms of behaviour in time and
space (Howell 2006:278).
-------------------------------------------------------------------

Activity 5.4
(If you choose to do this extra activity it could take you 80 minutes to complete.)
(1) Critically discuss Howell's idea of China as a polymorphous state in no more
than one page.

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

(2) (Spend about 60 minutes on this activity.)


In your prescribed Reader, go to the article by Breslin. In it he argues that China
displays ``dysfunctional provincial autonomy''. Read through the article, and then:

(2a) List two reasons why Breslin thinks China's provincial autonomy is bad for
development.

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

(2b) Since there has been rapid growth in China since Breslin's 1996 article, say
whether you think provinces are better described as ``regional development
states'' (Castells), or whether China continues to have dysfunctional
government amidst growth.

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

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95
5.2.5 Were there special internal conditions which allowed East Asian
growth?
The recent phenomenal success of China in achieving very high growth rates while
keeping government in Communist Party hands suggests that there are particular
regional factors affecting economic growth which go beyond the capitalism-
socialism debate. White and Wade (1988:24) summarise these regional factors in
this way:
They share: a common Confucian heritage; a historical legacy of strong and
economically active states; traditions of social and political hierarchy; and
strong nationalist sentiments; underpinned by cultural homogeneity; and
reinforced by external threats.

These six factors relate to historical, cultural and institutional conditions which are
very different from conditions in Africa, where there is marked cultural and
religious plurality, where states are weak, and where colonialism and new state
structures have disrupted all traditional authority and thrust Africa first onto the
rocky path to democracy and then to the collapse of democracy in military rule.

5.2.6 Problems with the NIC model


For most of their histories after 1950, South Korea, Taiwan, Singapore and Hong
Kong were not democracies. In fact, they all had distinctly authoritarian forms of
government. Hong Kong was ruled by Britain through a British governor; Taiwan
was ruled by the nationalist regime which had fled mainland China following the
communist victory; and from 1961 until 1979 South Korea was ruled by the highly
authoritarian anticommunist President Park. As a consequence, ``the NIC models
have been accused for years by human rights organizations such as Human Rights
Asia Watch about political repression, child labour and work conditions in
industry'' (Casagrande 1996:125).

There are also severe environmental problems which have grown with rapid
industrialisation. ``In Taiwan, for example, there are three factories per square
kilometre. More than 50% of the river water is badly polluted and only 1% of
human waste receives primary treatment. In the countryside, about 20% of
farmland is polluted by industrial waste water and 30% of the rice grown is
contaminated with heavy metals'' (Casagrande 1996:125).

-------------------------------------------------------------------
ACTIVITY 5.5
(If you choose to do this extra activity, it could take you about 80 minutes to
complete.)

Further reading
Hoogvelt, AM. 1997. Globalization in the post-colonial world: The new political
economy of development, chapter 10.
This chapter is about 20 pages long and deals with ``The developmental states of
East Asia''. If you are able to get hold of the book, you will find this chapter a very
useful supplement.
Please note that the library has limited numbers of this recommended book. You
may not be able to get hold of it.
-------------------------------------------------------------------

96
OUTCOMES CHECK LIST

Question Can do Cannot do


I can identify the conditions in the
world economy that led to the
emergence of theoretical debates about
the NICs.
I can explain why the Asian NICs did
better than those in Latin America.
I can give an account of the role of the
state in East Asian NIC development.

97
STUDY UNIT 6

GLOBAL MANAGERIALISM AND THE


PROJECT OF GLOBALISATION

-------------------------------------------------------------------

Enabling outcomes
This unit aims to provide you with the following outcomes:
You will be able to
^ outline the main ideas of global institutions that support neoliberal globalisation
^ discuss the differences between the vision of UN institutions and the vision of
Bretton Woods institutions
^ explain how the ideas of the World Bank, IMF and World Trade Organisation
support neoliberal globalisation
^ discuss whether these ideas are appropriate to the needs of the South
-------------------------------------------------------------------

6.1 INTRODUCTION
Some of the most influential current ideas concerning what poor countries should
do to improve their situation come from the set of global institutions led by the
World Bank, the IMF, the World Trade Organisation (WTO), the World Economic
Forum (WEF), the United Nations Development Programme (UNDP) and other
UN bodies. This study unit deals mainly with the thinking of the ``Bretton Woods
institutions'' the World Bank, the IMF and the WTO, which succeeded the
General Agreement on Tariffs and Trade (GATT). The World Economic Forum is an
independent organisation whose thinking fits with the perspective of the Bretton
Woods institutions. While the United Nations bodies, particularly the UNDP, differ
substantially from these institutions in their approach to development, there are
similarities in some ideas, and practical cooperation among these institutions.

TABLE 6.1
Thumbnail sketch of global managerialism and the project of globalisation

Description/name of the theories Global managerialism; neoliberal


globalisation
Main theorists Officials of the IMF, World Bank,
WTO, and World Economic Forum

98
Where the theories come from Institutions of global governance and
business elites based in the North
Period when the theories were put Started in the 1980s (structural
forward adjustment) and became stronger in
the 1990s and to date
The main new feature of the world, or The global spread of business in the
the main problem, in the view of the post-Communist information age
theory
The solution or way forward Reduce trade barriers, facilitate the
private sector, and ensure stability
The main development actors Governments, institutions of global
governance, transnational
corporations

This study unit will examine some of the ideas which are widespread in these
organisations of global governance. These ideas include the broad endorsement of
the project of globalisation (even the UNDP thinks it is mostly a good thing!);
giving corporate business a prominent role in both policy-making and in proposed
models of development governance and growth; accepting that global crises and
progress need to be managed from the top; believing that the institutions of global
governance themselves are the key creative actors in the facilitation of development
and growth; good governance; emphasising knowledge management; and
promoting a top-down model of sustainable development. This collection of ideas
has sometimes been called ``the Washington consensus'' (Taylor 1997). More
broadly, it could be called the ideology or ``hegemonic paradigm'' (Cerny 2008) of
neoliberalism (see section 4.4 of this study guide).

These ideas were not usually created by the institutions discussed here. They often
derived from the broader social and political forces of our time, such as the agenda
of the United States as a global power; the agenda of transnational corporations;
and the internationalising force of informational capitalism in its reshaping of
enterprises and the business environment in the direction of networked production
processes (see Study Unit 5). However, it is principally the institutions discussed in
this study unit which have designed how the project of globalisation interfaces with
discussion of what happens to poor countries. Furthermore, these institutions of
global governance develop their own dynamics and role, even though many of them
are heavily influenced in particular by the United States.

The ideas discussed here are influential among these global institutions themselves,
but also in government circles in many countries, in ``development business'' and
more official levels of the development sector. Though these ideas are not bound
together in a single coherent theory, they can still be seen as a widely-supported
general model of how to achieve development. As you will see, all the ideas
discussed below are related to each other: for example, transnational corporations
are the engines of neoliberal globalisation, and they need ``good governance'' at the
national level; they also need governments to lock themselves into the rules of the
global economy and the rules of its network of governing institutions.

99
After the Asian economic crash of 1997, and especially after the financial crisis of
20072010, which featured the crash of the banking sectors of many developed
economies, the global financial institutions and associated bodies have modified
their strategy to include new ideas of governance and how to relate to the South.
New emphases on appropriate institutions, poverty reduction and empowerment
strategies, utilising social capital, and ensuring a more equitable spread of
development aid, would all seem to move some distance away from the
``Washington Consensus'' and pure business-centred neoliberalism (Sheppard &
Leitner 2009). ``The post-Washington consensus entailed a novel package of policy
measures and substituted a discourse of governance and poverty reduction for that
of structural adjustment and privatization associated with its predecessor''
(Sheppard & Leitner 2009:4).
These shifts can be seen as adjusting the tactics of the International Financial
Institutions (IFIs) while the overall strategy remains in important respects the
same. ``The remaking of governance currently underway is certainly not a
wholesale repudiation of neoliberalism. It retains and continues to propagate a
belief in the possibility that globalized capitalist markets can deliver and
confidence that the expertise to deliver on this promise lies in the global North''
(Sheppard & Leitner 2009:7). The 2010 World Economic Forum still placed
leading businessmen on an equal footing with political leaders. The rules and
political control of the international financial institutions are unchanged. For the
time being, then, the development thought in these institutions remains in
important respects as described in the sections below.
When reading this study unit and associated readings, try to get clear in your mind
which parts of existing global management are not negotiable (perhaps climate
accords and UN peacekeeping?) and which parts are global management in
accordance with the agenda of neoliberal globalisation.
The United Nations and its associated bodies had in the past an approach to
development which was more conscious of the social and political dimensions of
society, which attributed prime importance to human welfare, and which was
conscious of the costs of environmental destruction and inequality (Therien
1999:732737). In recent years, however, there has been some convergence
between the ideas of the IFIs and the United Nations family. This is partly as a
result of the IFIs taking on some of the UN's concerns, such as poverty,
strengthening of governments and environmental problems. As argued above, the
IFIs adopted such concerns following financial crises and associated global
protests which undermined the credibility of purely market solutions. At the
same time, from 1999, the United Nations promoted a ``Global Compact'', which
aimed to get private sector businesses to commit themselves to UN values of human
rights, labour standards, environmental commitments and anti-corruption
measures. By 2005, about 2400 corporations had joined the global Compact
(Therien & Pouliot 2006:55). At the same time, the Global Compact created a
network of forums of economic and social actors in the global arena. While these
forums again aimed to promote UN values, they included businesses as actors,
alongside government, labour and NGO actors (Therien & Pouliot 2006:55-57).
This, these authors argue, was a significant change for the UN, in that historically
business had been treated with some hostility by the UN family. Through the Global
Compact, the UN has swung in recent years to treating private businesses as equal
partners, which aligns it with the WEF and the WTO. However, this is all in the
cause of promoting UN values!

100
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Activity 6.1
(Spend about 30 minutes on this activity.)

In your prescribed Reader, go to the article by Therien. Go to the section entitled


``New perspectives on international poverty'', and read the two subsections on the
Bretton Woods paradigm (concerning the IMF, World Bank and WTO) and the UN
paradigm. Make notes on these two subsections.
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6.2 NEOLIBERAL GLOBALISATION AS THE AIM


Philip McMichael (McMichael 2004:152 ff) argues that globalisation is not
inevitable but a political project. What is this project? McMichael quotes Renato
Ruggiero, the first director-general of the WTO, as saying at the time of the
abortive Seattle meeting in 2000 (McMichael 2004:153)
[M]ore than ever before if we want real coherence in global policy-making
and a comprehensive international agenda, then coordination has to come
from the top, and it must be driven by elected leaders .... progress in resolving
the challenge of the new century will hinge on our ability not just to build a
coherent global architecture, but to build a political constituency for
globalization ... . Without the WTO, we will go back to a world of national
barriers, protectionism, economic nationalism and conflict.

(McMichael 2004:153)

Here we see a vision of a strategic global project involving trade liberalisation,


global governance and a push for widespread political acceptance of this new
order. McMichael comments, ``The director of the WTO articulated the vision of
the development project: the implementation of the rule of the market via the
restructuring of policies and standards across the nation-state system. Trade (two
thirds of which is controlled by transnational corporations [TNCs]) was to be
privileged as the motor of development'' (McMichael 2004:134).

As IMF director Anne Kreuger argued, ``20th century growth and globalization
have brought great benefits to the majority of the world's population'' (Kreuger
2002:5). This is the exact opposite of views held by opponents of globalisation.
The route to development, progress and success is through those neoliberal
processes of current globalisation which are so despised in the antiglobalisation
movement.

In UN circles, there are both positive and negative views of globalisation in the
form of global market liberalisation. In 1997 the UN General Assembly endorsed a
document entitled Agenda for Development, which stated that ``the promotion of
sustainable development is entirely compatible with market liberalization''
(Therien 199:738). But the UNDP has consistently noted growing inequality in
the world, and is of the opinion that in developing countries ``some forms of
globalization create economic wealth, but some do not'' (UNDP 2003:70).

101
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Activity 6.2
(Spend about 20 minutes on this activity.)

Read the short article in your prescribed Reader by Anne Krueger, an IMF Deputy
Director. Then answer the questions that follow it.

Now answer the following questions.

1. According to Krueger, what are the advantages of globalisation?

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

2 (a) What must be done to trade to preserve the benefits of globalisation,


according to Krueger?

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

2. (b) According to Krueger, what should governments do?

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

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102
6.3 REDUCTION OF SOCIETY TO ITS ECONOMIC DIMENSION
Nicholas Stern, then a Senior Economist at the World Bank, said that government
can help to transform the lives and prospects of individuals and their families
through (2002:2):
^ education and health care, which increase employability and help people to
become successful entrepreneurs
^ social protection, which allows people to take the risks that participation in a
dynamic economy entails (This is a dynamic perspective on social protection as
a springboard to economic success rather than a static perspective that sees it
as a social safety net.)
^ social organisation and empowerment through the legal system, which improve
the chances that people will be heard, that they can use their assets to improve
their economic position, and that they will not be cheated or excluded

Here the purpose of social protection is seen mainly as a means of creating


competitive economic activity (rather than as a means of achieving different
dimensions of welfare and different kinds of empowerment, which is how a people-
centred approach might see it). This reduction of what public life is about to its
economic dimension is widespread in the institutions of global governance,
particularly the World Bank, the WTO and the WEF. On this count, it should be
noted that the UN and subsidiary bodies such as the UNDP usually have a more
rounded view of social life.

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Activity 6.3
(Spend about 30 minutes on this activity.)

In your prescribed Reader, go to the article by Stern.

Nicholas Stern was Senior Economist of the World Bank. This article discusses
current challenges of development. Read it and then give short answers to the
following:

1. Provide three quotations from the article in which Stern indicates that
economic growth is the main aim.

(a) ..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

(b) ..............................................................................................................

..............................................................................................................

..............................................................................................................

103
..............................................................................................................

..............................................................................................................

(c) ..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

..............................................................................................................

2. Briefly state whether you think Stern's analysis of global challenges is


accurate.

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

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6.4 THE LEADING ROLE OF BUSINESS AND CORPORATIONS


In the World Bank's 2005 World Development Report: a better investment climate
for everyone, the authors state that ``private firms ... are at the heart of the
development process'' (World Bank 2005:5). Furthermore, ``the investment
climate is the first pillar of the World Bank's overall development strategy''
(World Bank 2005:2). While the World Bank agrees that there should be ``well-
designed legislation and taxation'' so that businesses ``benefit society as a whole'',
it argues that, to improve the investment climate, governments and other actors
should reduce the cost of doing business in national economies; they should reduce
the risks faced by firms; and they should eliminate protectionist barriers to
competition (World Bank 2005:xiii).

The yearly meeting of the World Economic Forum, to which many world leaders
and leading businessmen go (on an equal footing), believes in ``entrepreneurship in
the global public interest'' (WEF 2005:1). In the discourse and outlook of the
WEF and other institutions of global governance, the private sector has been
granted a privileged place in the politics of global management. In particular, ``the
WTO is dedicated to privileging corporate rights to compete internationally. This
means ensuring that transnational corporations receive equal treatment to that
received by domestic firms and removing local restrictions (eg labor, health,
environmental laws) on trade and investment that might interfere with corporate
competitiveness in the global marketplace'' (McMichael 2004:172).

104
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Activity 6.4
(If you choose to do this extra activity, it should take you 60 minutes to complete.)

Further reading

World Bank 2005. World development report: a better investment climate for
everyone.

Please note that the library has only limited quantities of this recommended book.
You might not be able to get hold of it.

In the World Bank's 2005 World development report: a better investment climate
for everyone, the World Bank argues for facilitating increased investment in ``less-
developed'' countries. Start by reading the Overview (pages 115). You could then
look at chapter 1 (page 19), which argues that facilitating foreign investment is the
best route to growth and poverty reduction. Then look at chapter 5 (page 95) which
deals with regulating and taxing firms.

Then write answers to the following:

1. In your opinion, does the World Bank accurately shows the benefits and risks
of corporate investment?

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

2. Briefly state whether you think the World Bank's suggestions for the
regulation of corporate investment is appropriate.

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

....................................................................................................................

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105
6.5 MANAGERIALISM AND THE ELITE NETWORK OF INSTITUTIONS
The WEF strives towards ``a world-class corporate governance system'' (WEF
2005). The partly-constructed ``global architecture'' of the UN, the World Bank,
the IMF and the WTO is the only government-recognised system of global
institutions. These organisations, together with other elites such as the
governments of the industrialised countries, the leadership of regional blocs such
as the EU, and business leaders, form an international network of elite institutions
which cooperate extensively and grant to each other areas of authority. They
believe that they themselves are central to global management, and they make
decisions about global management which are often little influenced by democratic
opinion. In contrast, the influence of private business is often very significant.
There is an increasingly large set of standards and rules coming out of these
institutions (for example, IMF conditions for being eligible for loans, the UN's
Millennium Goals, and WTO rules). There is also a deliberate effort by the
institutions of global governance to build processes, rules and institutions at
national level which manage and integrate different actors such as governments,
the private sector (including transnational corporations and finance), civil society
and global institutions.

Swyyngedouw (2005) also outlines how the discourse of governance and good
governance, while perhaps improving the accountability of individual institutions,
tends to promote a culture of ``governance-beyond the-state''. Questions of
democracy and the right of a state to lead policy-making tend to be downplayed,
and in its place, institutions (for example businesses or PRSPs (Poverty Reduction
Strategy Papers)) that display the principles of good governance are taken to have
legitimacy without needing democratic mandate.
Clearly many global processes need to be better managed. At the same time, one
needs to ask in whose interest global management occurs. While the Bretton Wood
institutions seem to act primarily in the interests of corporate business, and the UN
bodies in the interests of popular welfare within the global market economy, both
groups give a clear message that the globalised world needs leadership from an
expert managerial level.

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Activity 6.5
(If you choose to do this extra activity, it should take you 60 minutes to complete.)
Further reading
McMichael, P. 2004. Development and social change: a global perspective. Third
edition.
[Please note that the library has only limited quantities of this recommended book.
You may not be able to get hold of it.]
Chapter 5 of McMichael's book is entitled ``Implementing globalization as a
project''. Read the section on ``The globalization project'' (pages 154165, but
leave out the three case studies if you like), and read the next section on ``Global
governance'', especially pages 165167, pages 172174 on the WTO, and pages
188191 on Regional Free Trade Agreements.
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106
6.6 GOOD GOVERNANCE
Good governance is one of the key elements of the development model
recommended by the institutions of global governance, especially the IMF and
World Bank. In Africa, the background to this was that ``the failure of adjustment
policies was blamed on the `poor governance' of African governments ... neo-liberal
solutions were not wrong, they were simply incorrectly and insufficiently
implemented. Western triumphalism and the need to construct a new legitimacy
for structural adjustment thus coalesced in the good governance agenda''
(Abramsen 2000:43).

The United Nations Climate Change Conference in Copenhagen (the Copenhagen


Summit) which took place in December 2009, showed both the strengths and
weaknesses of managing sustainable development (or other development) from the
top. With the aim of reaching a global agreement on carbon emissions in order to
slow down global warming, almost all of the world's nations and most heads of
state attempted to hammer out a deal. Yet by the end there were no binding
agreements, nor any medium- or long-term targets. The only agreement, the
Copenhagen Accord, was a political rather than legal agreement and was initially
signed by only about 25 countries, which did, however, include the United States
and China. The optimism that preceded the Copenhagen Summit, the belief that the
UN and governments, backed by popular pressure, could manage carbon emissions
effectively, proved to be ill-founded.

In the discourse of good governance, the features of good government procedure


are both self-evident and already set out in mainline institutional discussions. They
include most of the features of the models of IMF and World Bank structural
adjustment imposed on numerous countries of the South, including prescriptions as
regards reducing the public sector, increasing exports, reducing government
spending, lowering tariffs, and dropping the protection of currencies. These ideas
have been added to, with a view to making governments the key actors responsible
for economic and political stability, for establishing the institutions of democracy
(the UNDP pushes much harder for this than do the IMF and World Bank), and for
fighting against corruption. The purpose of all this is to make their countries
shipshape for private-sector growth and for corporate investment, while making
sure that social conditions and political needs are addressed enough to allow this
main purpose. ``The harmonization of business practices is the ultimate aim, but so
too is the defence and enlargement of a project in furtherance of a worldwide
restructuring'' (Taylor 2004:136).

6.7 KNOWLEDGE
For many years, in the documents put out by global institutions, such as the World
Development Reports and the Human Development Reports from the UNDP, great
importance has been given to the information collected (for example, the UNDP's
Human Development Index and the World Bank's figures of growth and per capita
GNP, and World Bank country reports).

The 1998 World Development Report was entitled Knowledge for Development.
The next year, the Global Development Network (GDN) was initiated by the World
Bank and the UN, aiming to ``create, share and apply knowledge'' to improve the
making of development policy (Stone 2003:44).

107
This emphasis on knowledge can be seen from two angles. Firstly, it can be seen as
responding to the opportunity and, increasingly, the necessity of using the resources
for knowledge management which have grown enormously in the informational
economy. Secondly, it is another way in which development is understood to be
dependent on elite leadership. If research, databases and the distribution of expert
development ``knowledge'' are treated as essential for development planning, this
confirms the necessity for involving institutions such as the World Bank and the
GDN.

Furthermore, ``the GDN can be perceived as a vehicle to entrench and resource the
cognitive interests of economic knowledge'' (Stone 2000:249). This is to say that
detailed economic knowledge is assumed to be more important than sociological
and political understanding, for example, or than knowledge at the local level, even
though these other bodies of knowledge are given recognition by the World Bank.

6.8 OFFICIAL SUSTAINABLE DEVELOPMENT


In international forums discussing sustainable development, one view is more
dominant than all the others. It is the view that the environment-development
problem must be managed. This view is committed to an internationalist approach,
and a process which involves rational planning. It relies significantly on scientific
studies. It is also strongly committed to continuing economic growth (Adams &
Thomas 1993:594595). This is the view of the World Commission on
Environment and Development (WCED) (1987), and the final document of the
Earth Summit in Rio also reflects this view. The official intergovernmental
agreements of the World Summit on Sustainable Development (WSSD) in
Johannesburg in 2003 are also in this vein, and this is also the case with the World
Development Report 2003: Sustainable Development in a Dynamic World (World
Bank 2003).

Mainstream sustainable development literature also supports the need for


comprehensive management at national and international levels. Bartelmus
(1986) outlines a scheme for national development planning and project planning
which incorporates ecological concerns at every level. Myers (1985) and the
WCED (Bruntland 1987) both advocate a major effort towards coordinated
international management. Myers (1985:252) shows that the world's cultural and
technological resources are sufficient to meet the requirements of this urgent task.
As well as proposing an end to vast military spending, the WCED also makes fairly
detailed proposals for institutional and legal change at the level of the United
Nations, involving international cooperation, cooperation with industry and so on
(WCED 1987:308). This commission's work gives perhaps the most rounded
account of positive achievements and of technological potential in the field of the
environment and development, and also of the looming crises.

The World Bank's World Development Report 2003 (World Bank 2003) attempts
to provide a global view of sustainable development while taking into account
governance and economic growth. The mood of the report is confident about
sustainable development and does not give a sense of environmental crisis. While it
argues for a strategy of poverty alleviation and targeted environmental protection,
it does so in an economistic language of growth, assets and investment. It also uses
a language of managerial activism, which of its nature is top-down and also
inclined to the networking of elite institutions big business, governments, and
the institutions of global governance such as the World Bank itself.

108
The mainstream position believes that growth is still essential. For example, the
WCED (which was an initiative of the United Nations) made the point that, while
economic growth will continue to create economic problems, ``in recent years
industrial countries have been able to achieve economic growth using less energy
and raw materials per unit of output'' (WCED 1987:32). This seems to indicate
that technological advances may to some extent work against the destructive
effects of previous stages of industrial growth; the new wave of technologies
computers, genetic engineering, fibre optics and so on have cleaner
environmental effects than previous technologies such as nuclear power. ``With
careful management, new and emerging technologies offer enormous opportunities
for raising productivity and living standards, for improving health, and for
conserving the natural resource base. Many will also bring new hazards, requiring
an improved capacity for risk assessment and risk management'' (WCED
1987:217).

Sustainable development thinking, arising from the approach of global manage-


rialism, is close to the model of capitalist modernisation, while attempting to
address the crucial environmental issues. The supporters of this model believe that
increased economic growth, with pro-environment regulation, is the only route
which can address both poverty and environmental destruction. Earlier accounts,
such as the WCED's Bruntland Report and Agenda 21 (produced by the Rio Earth
Summit) believed that it was necessary to reduce the destructive impact on the
environment by introducing measures such as the ``polluter pays'' principle, while
realising that increased economic growth will still have an adverse effect on the
environment. This may be combated by gradually replacing the use of
nonrenewable resources such as fossil fuels by renewable ones where possible.
The World Bank's more recent position (World Bank 2003) puts a lot more trust in
business and in making growth a priority while maintaining detailed prescriptions
concerning the environment. The Kyoto Protocol, signed in 1997 by 141 countries,
came into effect in 2005. It dealt with control of emissions of gases such as carbon
dioxide which cause global warming. While it was an international response to a
major crisis, it tied signatory countries (which did not include the United States or
industrialising countries of the South such as China) to a modest reduction in
carbon dioxide emissions by 5,2 per cent below 1990 levels by 200812. These are
terms which do not endanger growth.

The Copenhagen Accord of 2010, as discussed in section 6.6, had similarly modest
results.

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Activity 6.6
(Spend about 40 minutes on this activity.)

In your prescribed Reader, read the article by Adams and Thomas (1993). This
article gives a good account of mainstream development theory, and also of what
this has meant in practice.

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109
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Activity 6.7
(If you choose to do this extra activity, it should take you about 40 minutes to
complete.)

Further reading
World Commission on Environment and Development 1987: Our commen future
4965.
[Please note that the library has got only limited numbers of this recommended
book. You may not be able to get hold of it.]

In the recommended book: Our common future by the World Commission on


Environment and Development there is a section named ``Strategic imperatives''
on pages 4965. Read this section to get a direct impression of the growth-oriented
approach of mainstream thinking.
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OUTCOMES CHECK LIST

Question Can do Cannot do


I can outline the main ideas of global
institutions which support neoliberal
globalisation.
I can discuss differences between the
vison of UN institutions and the vision
of Bretton Woods institutions.
I can explain how the ideas of the
World Bank, the IMF and the World
Trade Organisation support neoliberal
globalisation.
I can discuss whether these ideas are
appropriate to the needs of the South.

110
STUDY UNIT 7

POPULAR MODELS OF DEVELOPMENT


AGAINST NEOLIBERAL CAPITALIST
GLOBALISATION

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Enabling outcomes
This unit aims to provide you with the following outcomes:
You will be able to
^ write about various ideas of alternative development
^ give some reasons for the emergence of alternative development
^ explain the nature and background of the World Social Forum
^ discuss the strengths and weaknesses of the World Social Forum
^ outline criticisms of neoliberal globalisation from the alternative development
camp
^ write about alternative views of sustainable development

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7.1 INTRODUCTION
This study unit examines ideas of development in opposition to the dominant model
of globalisation. Although there are many different forms of these ideas, here we
look mainly at some ideas of alternative development, including those of the World
Social Forum, which sees itself as a ``space'' for all those struggling ``against
neoliberalism and war'' (Fisher & Ponniah 2003:346) and for a more just and
caring world.
The fall of the socialist bloc in Eastern Europe and the Soviet Union left a new
strategic space in radical and resistance politics in the 1990s. There were also new
social and economic conditions which favoured the development of a movement
supporting an alternative model of development. These conditions included:
^ the emergence of a fully global capitalist economy, with the United States as its
sole superpower
^ the emergence of North-South conflicts rather than East-West conflicts
^ the increasing ease of worldwide communication (which facilitates communica-
tion among NGOs and grassroots movements)
^ the emergence of democracy in Eastern Europe and many countries of Africa
and Latin America, often through the pressure of ``people power'' (Korten
1990a:2629);
^ the increasing importance of a variety of new social movements, such as the
women's movement and the broad environmental movement (the 1995 UN

111
Beijing Conference on Women and the 1992 Rio de Janeiro Conference on
Environment and Development demonstrated and also added to this increasing
importance.)
^ ever-growing numbers of disempowered people in the cities and countryside,
especially in countries of the South
^ increasing local and international evidence of environmental destruction and
crisis

As a consequence of these changes, a variety of forces are ranged against the


North-biased, business-centred status quo. A wide variety of alternative
development initiatives have been drawn into various levels of political activism.
Many socialist-inspired groupings and movements are reasserting themselves and
are attempting to envision new models of postcapitalism. A third grouping consists
of newer movements and organisations which are responding to recent actions of
corporations, governments and institutions of global governance which have
damaged communities and environments.
Alternative development in the 1990s attempted to be militant, activist and
radical, and this culminated in 2001 in the first World Social Forum (WSF).
This is distinguished from the many ``mainstream'' UN, World Bank and
governmental structures which have absorbed some ideas of sustainable
development, participation, and concern for people. Alternative development,
and antiglobalisation in general, militantly reject the mainstream's capitalist
growth paradigm, and aim at creating and expanding a social movement to
oppose and go beyond this paradigm.
This is very different from the comfortable view of participation in most
development projects and programmes. The new and different vision of alternative
development has strong environmental concerns, and it envisions a renewal of
community and local economies.
Alternative development refers to a development vision which is highly critical of
current economic growth, especially industrial growth, as a route to development.
It rejects the aim of economic progress which, in the words of James Robertson
(Ekins, Hillman & Hutchison 1992:5), implies a world in which everyone, in a
human population which is twice as large as it is now, should aspire to the high-
consumption, high-pollution way of the rich minority today.
Instead, the aim of those supporting alternative development is ``to build a
materially more modest, culturally more diverse way of life community based,
convivial, sustainable and on a human scale in which all people can participate
and find fulfilment'' (Ekins et al. 1992:12). To put it another way:
``Alternative development is committed to local solutions, to cultural
pluralism, and to ecological sustainability '' (Hettne 1995:199204).

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Activity 7.1
(Spend about 30 to 60 minutes on this activity.)
For the first activity in this unit, find the short article by Esteva and Prakash
(1994) in your prescribed Reader. It is entitled ``From global to local thinking''.
This article is about the dangers of global thinking which bypasses local issues and
popular energy.
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112
TABLE 7.1
Thumbnail sketch of popular models of development against neoliberal capitalist
globalisation

Description/name of the theories alternative development;


antiglobalisation
Main theorists Korten; World Social Forum;
International Forum on Globalisation
Where the theories come from NGOs in north and south; the
antiglobalisation movement
Period when the theories were put alternative development from the
forward 1970s; antiglobalisation from the
1990s
The main new feature of the world, or The destruction of social and
the main problem, in the view of the environmental conditions by corporate
theory greed
The solution or way forward Popular resistance to neoliberal
globalisation and democratic planning
of the way forward
The main development actors radical social movements; radical
NGOs; the World Social Forum

7.2 GLOBALISATION AS CORPORATE PILLAGE


In the view of those opposed to current processes of globalisation, the biggest
problems of the world today concern the deliberate strategy of corporations, global
institutions and northern governments to control and open up the economies of the
South for corporate exploitation. Compared with previous anticapitalist analysis
and dependency theory, which focused largely on deeply-based structural injustices,
current accounts of global exploitation tend to be more focused on current cases of
abuse and outrage (for example, the Narmada Dam, the abortive Multilateral
Agreement on Investment and the unregulated introduction of genetically modified
organisms (GMOs) into the food industry), on transnational corporations, on global
institutions and particular bodies of antipoor legislation and elite processes of
policy-making, such as those within the WTO and the IMF. These current concerns
reflect the new context of exploitation, and the context of the global media
including the small progressive media needing marketable stories.

According to a report of the International Forum on Globalization (2002:19),


corporate or neoliberal globalisation consists of the following key elements:
^ promotion of hypergrowth, and unrestricted exploitation of environmental
resources to fuel that growth
^ privatisation and commodification of public services and of remaining aspects
of the global and community commons
^ global cultural and economic homogenisation and the intense promotion of
consumerism
^ integration and conversion of national economies, including some that were

113
largely self-reliant, to environmentally and socially harmful export-oriented
production
^ corporate deregulation and unrestricted movement of capital across borders
^ dramatically increased corporate concentration
^ dismantling of public health, social and environmental programmes already in
place
^ replacement of traditional powers of democratic nation-states and local
communities by corporate bureaucracies

In this view, these destructive business practices together create a world of


increasingly sharp inequalities, especially as regards the very poorest. They create
a situation where almost all weaker countries are compelled to give more rights
and more access to, and less regulation of, foreign finance and foreign
corporations. As a result, corporations are more able to shift their costs onto
host countries, in the form of low wages, untaxed negative environmental impacts,
and structurally-adjusted cheap, lean governments shaped to servicing business
interests while cutting down on employment protection, social services and
environmental protection.

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Activity 7.2
(If you choose to do this extra activity, it should take you 40 minutes to complete.)
Further reading
International Forum on Globalization. 2002. Alternatives to economic globaliza-
tion: a better world is possible. Report of the International Forum on
Globalization.
[Please note that the library has got only limited quantities of this recommended
book. You might not be able to get hold of it.]
Chapter 1 of this book is entitled A critique of corporate globalization. Read it to
get a fuller account of an alternative view of globalisation.
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Activity 7.3
(If you choose to do this extra activity, it should take you 30 minutes to complete.)

Further reading
McMichael, P. 2004. Development and social change: a global perspective.
[Please note that the library has only limited quantities of this recommended book.
You might not be able to get hold of it.]
In chapter 3 of McMichael's book, the following sections give an illuminating
picture of corporate power within the new economic systems: ``The global
production system'' (pp 8486); ``Global subcontracting in Saipan'', (pp 9495),
``From the NIDL to a truly global labor force'' (pp 96 98); and ``The
corporatization of world markets'' (pp 100103).
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114
7.3 A GLOBAL SPACE FOR ALTERNATIVE DEVELOPMENT: THE WORLD
SOCIAL FORUM (WSF)
The WSF is perhaps the most significant event where resistance to neoliberal
globalisation is expressed, where alternative paths of change and development are
aired, and where the vast array of organisations and movements from all over the
world striving for change learn to take each other into account.

The World Social Forum has become a vast annual event, recently involving more
than 150 000 participants, and coinciding with the January meetings of the World
Economic Forum in Davos, Switzerland. The WSF is a meeting of ``groups and
movements of civil society that are opposed to neoliberalism and the domination of
the world by capital and any form of imperialism, and (that) are committed to
building a global society of fruitful relationships among human beings, and
between humans and the Earth''
(Fisher & Ponniah 2003:354 [from the WSF Charter of Principles]).

The WSF had its roots in the mass protests against global institutions at the end of
the 1990s for example, the ``battle of Seattle'' in 1999, which halted the
meeting of the World Trade Organisation. In 2000, a small group of intellectuals
organised an ``anti-Davos at Davos'' (Wallerstein 2004a:83). Following this,
Brazilian and French activists convened the first World Social Forum in Porto
Alegre in Brazil in January 2001, also at the same time as the WEF Davos
meeting. Porto Alegre is in the southern state of Rio Grande in Brazil, and both the
city council and the state government had Workers' Party political leadership,
which had implemented a radical ``participatory budget'' process.

With the help of the state and city administrations, Porto Alegre hosted week-long
meetings in 2001, 2002, 2003 and 2005. The 2004 WSF was held in India. The
size of the gathering grew from 10 000 in 2001 to 155 000 in Porto Alegre in
2005. In 2006 the WSF was held in Caracas (Venezuela), Bamako (Mali) and
Karachi, the most dramatic gathering being in Hugo Chavez's Venezuela. 2007
saw a rather weak, commercialised WSF in Nairobi (Bello 2009:2). The 2009
WSF was held in Belem in the poor Amazon region of Brazil. In 2008 and 2010,
The WSF was not organised in a central venue, but rather in globally dispersed
actions and local and thematic forums. The theme in 2008 was ``a call to action''
and in 2010 the theme was ``the global crisis''.

The WSF has become a meeting of thousands of different groupings, with dozens of
parallel sessions, often displaying chaotic logistical arrangements. It has also
insisted on not being an organisation, not issuing a centralised programme of
action or decisions of the body of the WSF, and not having a formal executive.
Instead it has an International Council, made up of representatives of nominated
organisations, which carries out the broad planning of WSF meetings.

While the WSF has brought together many different streams of ideas, it has also
started to create some new perspectives of its own. Through its size and impact
upon the media, it seems to have successfully shown up the destructive impact of
neoliberalism, so that neoliberal ideology can no longer be taken as common sense
in most public debates: ``If during the last two decades of the twentieth century,
neoliberalism, as a cluster of policies, institutions, ruling practices, knowledges,
understanding of state-market relations, and definitions of democracy and
citizenship, appeared as an epochal common sense, today this is no longer the

115
case'' (Perera 2003:89). As regards a model of development, the WSF (Fisher &
Ponniah 2003:15)
asks not only for a post-capitalist democratization of production, but a
democratization of ecological, epistemological, gendered, racialized, ethnic,
sexual, cultural, political, inter-generational and interpersonal relations.
Instead of either unions or identity groups being at the core of the radical
project, it calls for a network of all progressive forces, a universalism of
difference, to converge and build.

Immanuel Wallerstein (2004b) also argues that the significance of the World
Social Forum is in articulating a deeply democratic impulse, in shaping new
alternatives in a way that builds on and improves previous models of change among
left-wing political forces. However, he believes that struggles are necessary to
defend this impulse and to take it into successful action outside the forum: ``The
WSF should be an open space that not merely discusses issues and alternative
forms of action, but encourages the testing of alternative forms'' (Wallerstein
2004b:637).
As the years have passed, more criticism of the WSF has emerged. Bello (2009:3)
supports the view that the WSF is ``unanchored in actual global political struggles,
and this is turning it into an annual festival with limited social impact''. Worth and
Buckley (2009:650) similarly argue that it has become ``a directionless series of
events, whereby the working formula of `open space' has led to the creation of
nothing more than a `talking shop', rather than any valid construction of counter-
hegemony''. Worth and Buckley further argue that there are too many political and
cultural divisions in the WSF, that academic and NGO elites are too dominant, and
that political figures such as presidents Lula da Silva of Brazil and Hugo Chavez of
Venezuela have used it for their own purposes (Worth & Buckley 2009:650658).
However, both Bello and Worth and Buckley support the inclusive, participatory
and democratic aims of the WSF. Bello (2009:4) argues that while there must be
more direct political intervention, this ``need not mean lapsing back into the old
hierarchical and centralized modes of organizing characteristic of the old left''.
The future of the World Social Forum is therefore uncertain. The same global
conditions that gave rise to it are still present. Bello asks (2009:4)
Is the WSF still the most appropriate vehicle for the new stage of the global
justice and peace movement? Or, having fulfilled its historic mission of
aggregating and linking the diverse counter-movements spawned by global
capitalism, is it time for the WSF to fold up its tent and give way to new
modes of global resistance and transformation?

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Activity 7.4
(Spend about 90 minutes on this activity.)

In your prescribed Reader, go to the article by Wallerstein and the article by


Perera.

The articles by Wallerstein and Perera in your prescribed Reader attempts to


evaluate the World Social Forum. Choose one of these articles. Read through it and
then answer the following questions:

116
1 What does the writer think the World Social Forum has achieved?

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2 How does the writer suggest the World Social Forum will help to change the
current world order?

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Activity 7.5
(Spend about 40 minutes on this activity.)

In your prescribed Reader, go to the article by Worth and Buckley, entitled ``The
World Social forum: postmodern prince or court jester?''

Worth and Buckley are questioning whether the WSF is a ``hegemonic'' force in
other words, whether it can mobilise and coordinate those forces opposed to global
capitalism and lead them to victory. They use the idea of the ``prince'' to emphasise
the goal of following a political strategy that really works, as outlined by the
Italian political theorist Machiavelli in 1532 in his book The Prince. The Italian
Marxist Gramsci saw socialism as the ''New Prince'', and some recent writers have
argued that the WSF is the prince, the winning force for today's diverse, globalised
times.

1 Read the first two pages of the article. Then write one sentence on why the
WSF is not a ``postmodern prince'':

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Read the section entitled ``The WSF and strategy''. Then write down

2 Two cases of disagreement between radicals and reformers:

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3 Two examples of contradictory cultural forces:

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Read the section entitled `Elitism'. Then write down

(4) What groupings have formed elites in the WSF?

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Read the section entitled ``The WSF as political initiative''. Then write down

(5) What is the problem that Worth and Buckley see in the political interventions
at the WSF by figures such as presidents Chavez of Venezuela and Lula of
Brazil?

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Activity 7.6
Further reading
Fisher, W. and Ponniah, T (eds). 2003. Another world is possible: popular
alternatives to globalization at the World Social Forum.
[Please note that the library has only limited numbers of this recommended book.
You might not be able to get hold of it.]
Your recommended book edited by Fisher and Ponniah brings together documents
and summaries from the 2002 World Social Forum. Use this volume as a resource
for further reading on the World Social Forum, and for further reading on different
themes in alternative development. Start by reading the editors' introduction,
entitled ``The World Social Forum and the reinvention of democracy''.

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7.4 FURTHER THEORIES OF ALTERNATIVE DEVELOPMENT


We have already discussed the WSF as an alternative development strategy. In the
sections which follow, we discuss some of the strands of thinking in the alternative
development camp. The groupings discussed here are only a few of the positions
which exist in the WSF and in antiglobalisation struggles in general. There are
many issue-based struggles which we cannot cover here; nor do we deal with the
more directly political and governmental struggles (for example, the anti-WTO
protest in Seattle, or the struggle of countries of the South for more equitable trade
rules). Rather, we focus on a number of groups which, together, help to provide a
different vision of development.

Firstly, we examine four alternative approaches to sustainable development. These


are discussions of populist sustainable development, political ecology, deep ecology
and ecofeminism. Then we examine the idea of people-centred development and the
new understanding of the importance of women in development.

7.4.1 Sustainable development: some alternative theories


7.4.1.1 Populist approaches to sustainable development
The alternative, or populist, approach to sustainable development is the approach
closest to the issues of the South, together with some forms of ecofeminism. Its
main support is found in NGO coalitions of the South, and it believes that
grassroots mobilisation rather than management is the primary task.

119
Authors such as Ted Trainer, Ekins and Korten are supporters of this strand of
thinking. They are all very critical of the model of increasing economic growth in
an attempt to promote sustainable development. They believe that this model has
been ineffective in the past in promoting sustainable development. In their view, the
growth-centred model is part of the problem rather than part of the solution.

As far back as 1972 the Club of Rome proposed that population and capital stock
be kept at a constant size with no growth (Meadows et al. 1972:173). Ted Trainer's
recent concept of ``appropriate development for rich and poor countries'' similarly
proposes a low-growth economy whereby the Third World must ``totally abandon
Western affluence as a goal of development'' and ``attend more to social, political,
environmental, cultural and human development'' (Trainer 1989:200). However,
neither Trainer nor the Club of Rome explains how people could be persuaded to
abandon the goals of industrialisation and mass consumption.

It is significant that most of these global trends have been caused by ``progress'';
they are the effects of uncontrolled industrialisation, and of the population growth
in the poorer countries that has resulted from medical advances, and from
nontraditional social needs. An important question is whether economic growth can
be separated from destruction. Trainer (1989:202203) argues that economic
growth is essentially a faulty strategy, and that what is needed is a zero-growth
economy with ``low but adequate material living standards'' and redistribution of
the world's resources.

The supporters of this position believe that people should ``act locally and think
globally''. Local knowledge systems should be mobilised to promote development.
People at grass roots should be seen as the local experts. Sustainable development
actions should leave ample space for grassroots participation. This also implies
sufficient devolution of power to the rural areas to allow people to make their own
decisions. This strand of thinking is not entirely against economic growth; rather,
its followers are opposed to the growth-centred development vision which
mainstream Sustainable Development has not abandoned. They believe that more
attention to microsolutions will increase the capacity of the rural poor to deal with
their situation, and they hope that this will unlock the resources of indigenous
systems to promote sustainable development.

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Activity 7.7
(Spend about 35 minutes on this activity.)
Read the article below by Korten (1992) entitled ``A not so radical agenda for a
sustainable global future''.
Then do the following written exercise.

120
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Now answer the following:
1 List five policies that Korten suggests toward sustainable agriculture.

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2 List four measures that promote economic democracy.

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3 Give five of Korten's suggestions toward regulating international money flow.

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Activity 7.8
(Spend about 40 minutes on this activity.)
In your prescribed Reader you will find an article by Ted Trainer (1990). This
article contains direct criticism of the WCED report, but it also outlines Trainer's
zero-growth option. Read it and then answer the following questions:
1 What is Trainer's criticism of the energy policy outlined in the Bruntland
(WCED) report?

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2 What does Trainer mean by ``appropriate development''? (This is near the end
of his article.)

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3 What does Trainer say about the approach to peace in the Bruntland report?

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7.4.1.2 Political ecology


In the 1980s a number of Green parties in Europe achieved prominence in politics.
While none of them came close to winning an election, they received sizeable
support. Political ecology is that form of environmentalism which aims to influence
and participate in national politics.

Being political parties, the Green parties have had to position themselves in
relation to other parties in their home countries. They have had to build up political
coalitions involving different strands of thought and different social interests.
Being parties within countries of the North, their policy platforms primarily had to
address national and Northern issues, rather than Southern environmental and
development issues.

126
However, in more recent years political ecology has re-emerged in global struggles
against the environmental crises triggered by corporate neoliberal capitalism. This
political ecology ``opposes globalization and eco-modernization'' and they
campaign for justice on particular environmental issues (Byrne & Glover
2002:17).

Some of these current issues include:


^ patenting: corporate efforts, often aided by the WTO, to patent modified genes
and modified biological organisms
^ claims of private intellectual property rights over existing organisms, seeds and
``discovered'' biological processes and extracts, for example the nutrients and
medicines used by indigenous peoples
^ the release of genetically modified organisms into the environment
^ the domination of food production by transnational agribusiness
^ the continued rise of global warming gases, and the failure of the United States
to sign the Kyoto protocol
^ WTO and other legislation which allows transnational corporations to bypass
and ignore national environmental legislation
^ how to make the Bretton Woods institutions (the World Bank, IMF and the
WTO) accountable for policies which have caused damage
^ the increasing ``commodification'' (or the bringing into buying and selling) of
environmental resources which used to be common property, such as water and
natural genetic material, and rules which allow businesses to pay for the right to
pollute or to reduce biodiversity

This antineoliberal political ecology has been strongly represented in the yearly
World Social Forums since 2001.

7.4.1.3 Deep ecology


Deep ecology is an activist and Americanised evolution of older environmentalism.
It consists of activist groupings which attempt to protect individual species or
ecosystems, or which attempt to attack environmentally destructive industrial
projects. Groups such as Earth First!, Wild Earth and The Sea Shepherds are
representative of this approach (Chatterjee & Finger 1994:71). Their approach is a
radicalisation of environmentalism's impulse to protect nature. They have a simple
view of environmental problems, and ``blame the 'humans' ... for today's crisis''
(Chatterjee & Finger 1994:72).
Deep ecology has a very unconventional and philosophical approach to the issue of
sustainability. They criticise the dominant Western development paradigm by
pointing to the failures of techno-industrial civilisation. Deep ecology has been
developed on three principles:
^ All life, human and nonhuman, has a value in itself and humans have no right to
reduce that diversity except to satisfy basic needs.
^ Humans are too numerous and too intrusive towards other forms of life. A
substantial decrease in the human population is necessary to permit the earth to
flourish as a whole.
^ If this is to happen, then according to Salleh (Knill 1992), radical changes have
to take place in human cultures, with the emphasis on sustainability rather than
consumption.

127
7.4.1.4 Ecofeminism
Ecofeminism emerged as a critique of deep ecology. It addresses some concerns
which are not high on the agenda of deep ecology, such as the desperate situation of
the poor, especially women, in many countries. It supports the notion of deep
ecology in criticising dualistic approaches to humanity and nature. Humanity is an
integral part of the environment and not something separate. In this regard,
however, ecofeminism goes a step further than deep ecology. The supporters of this
strand are of the opinion that women are closer to nature than men. Women are the
ones who give birth and ensure that food is available; in many traditional societies
women are the ones who work on the land. In short, ``they have a profound
knowledge of the plants, animals and ecological processes around them''
(Dankelman & Davidson 1988:xi).
Ecofeminism is strongly opposed to the `androcentric' (or male-centred) norms in
our society. The supporters of this model believe that the female role model is an
alternative to the male model, which is often exploitative and technicist. According
to Salleh (Knill 1992), they believe that the female role model can provide an
alternative set of values based on ``nurturant environmentalism''. The most
prominent authors of this school or this strand of thinking are probably Vandana
Shiva and Maria Mies.
There are two contrasting approaches in ecofeminism. One approach is motivated
mostly by the situation of oppression in which women find themselves. For
socioeconomic reasons, they are pushed into a very close relation to the
environment, and therefore
^ the health of the environment is of prime concern to them
^ they have an intimate knowledge of the environment

The other approach believes that women naturally are more connected to a
sustaining attitude and environmental awareness (Antrobus, Bizot & Deshsingkan
1994:42).

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Activity 7.9
(Spend about 10 minutes on this activity.)

The short article by Antrobus, Bizot and Deshsingkan (1994) in your prescribed
Reader mentions the two types of ecofeminism. The article presents the views of
women's organisations on ``an ethical, equitable, and sustainable world''. This
article also fits into the alternative development approach.

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7.4.2 People-centred development


People-centred development and a strong environmental focus are the core of
alternative development. David Korten is perhaps its main publicist. Korten
(1990a:67) defines people-centred development as follows:

128
Development is a process by which the members of a society increase their
personal and institutional capacities to mobilize and manage resources to
produce sustainable and justly distributed improvements in their quality of
life consistent with their own aspirations.

This definition shows a concern for the microlevel, similar in focus to the
``microfoundation'' outlined by Coetzee (1996b:141). However, if you read
Korten's definition carefully, you should be able to see that, while it starts with
the situation of particular people and groups, it refers to larger structures and
situations, such as institutions, management of resources, a system of just
distribution and processes which ensure overall sustainability.

The aim of people-centred development, in Korten's vision, is to address ``three


basic needs of our global society'' (Korten 1990a:4):
^ justice among the world's citizens in their access to a decent livelihood
^ sustainability of our environment for future generations
^ inclusiveness, which allows everybody (particularly previously excluded people)
to contribute to the wellbeing of society

Inclusiveness is firstly to spread awareness of the enemy that must be opposed,


namely the growth-centred vision, which Korten calls ``cowboy economics''.
Against this Korten poses the image of ``spaceship earth'', in which everybody
knows that resources are limited and our future depends on cooperation and
sharing.

This raising of awareness (it could also be called conscientisation) must be


accompanied by mobilisation. Mobilisation for people-centred development is
achieved through people power and voluntary organisations with a new vision
coming together to form a people's movement.

Korten's account of people-centred development has a strong emphasis on global


and political issues, such as reforming GATT, taxing currency transactions and
reforming the United Nations. People-centred development is very different from
pure micro-approaches, such as certain anthropological approaches and older
versions of community development. The emphasis on activism and the creation of
a people's movement also distinguishes current people-centred development from
forms of alternative development found before the late 1980s.

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Activity 7.10
(Spend about 30 minutes on this activity.)
An article by Korten (1990b) in your Reader spells out in four pages what he thinks
people-centred development should be. It is called ``Development as transforma-
tion: voluntary action in the 1990s''. Do the exercise below after you have read the
article.
1 State briefly what you like about Korten's views.

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2 Name those aspects with which you disagree.

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3 What are the ``three painful options'' that Korten outlines?

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4 Korten lists ten features of the people-centred vision which are very different
from the growth-centred vision. Write down four of these.

(a) ..............................................................................................................

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(b) ..............................................................................................................

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An important addition to thinking about people-centred development has been


provided by Manfred Max-Neef, a Chilean ``barefoot economist'' whose main early
writings were brought together in Human Scale Development (1991). In this book
he develops a theory which portrays a wide range of human needs: needs for
subsistence, protection, affection, understanding, participation, idleness, creation,
identity and freedom. Each of these, according to Max-Neef's proposal, needs to be
addressed at the existential levels of being, having, doing and interacting (Max-
Neef 1991:3233).

Max-Neef argues that there are a number of different ``satisfiers'' for each need,
and that these satisfiers may vary from culture to culture. In addition, some things,
``pseudosatisfiers'', may only seem to satisfy a need (prostitution seems to address
the need for affection); other things may satisfy one need but prevent another need

131
from being fulfilled (paternalism may give protection but prevents satisfaction of
the need for freedom and participation).

Max-Neef's concept of needs is important for development, and strengthens the


case for people-centred development. Firstly, it shows that one cannot claim to be
answering people's needs if one ignores or denies one of the basic categories of
need. One cannot leave out material development, freedom, or community without
causing some deprivation.

Secondly, one can start addressing needs with few material resources; and Max-
Neef's scheme also allows us to see how many needs can already be addressed
reasonably for particular groups of people.

Thirdly, it allows for much more subtle planning and policy-making, with many
more choices regarding how to address human need, but it will require people-
centred skill to address the various needs sympathetically and effectively.

How practical is people-centred development? Monty Roodt (1996) has outlined


the problems of putting into practice various forms of participation, including
people-centred development, with particular reference to Africa and South Africa.
He concludes (Roodt 1996:323):
The participation of citizens in local-level decision-making through active
involvement in formal structures, or through organised pressure groups as
part of civil society, is something that is difficult to achieve or sustain, as
examples from the rest of the world, and Africa in particular, illustrate.
The achievement is difficult, because local elites monopolise power and are
often hostile to widespread participation, using a combination of power
positions, such as class, race, gender, age and education, often backed up by
``tradition'', to prevent this from occurring.

Supporters of people-centred development will mostly agree with this. These are
the reasons why participation has generally failed. But this is why people-centred
development aims to support the growth of a social movement. Democracy,
workers' rights and women's rights were achieved through social movements, not
only through individual pressure groups and attempting to participate in formal
structures.

7.4.3 Women and development


''Women comprise about half the world's population, perform about two thirds of
its work, receive only one tenth of its income, and own less than one hundredth of
world assets'' (State of World Women 1979, quoted in Ekins et al. 1992:18).
The quotation above illustrates some of the reasons why women must be given a
central place in a new development vision. Women lack economic power, while
doing most of the world's work in other words, women are being exploited.
Existing economic conditions are solidly against women's empowerment, and so
too are the patriarchal (or male-centred) social relations between men and women.
Yet at the same time women are usually the central figures in families and
grassroots communities, in terms of the time and people-oriented skills that they
put to use.

132
Some argue that women have a particularly close relation with the environment,
and that women are central in moves towards sustainable development, and also in
alternative development. There are two versions of this argument. The first is that
``in many poor countries women gather firewood, fetch water, collect medicinal
herbs and look after the land'' (Antrobus et al. 1994:42). The other version is that
``women are biologically or metaphysically different from men in their attitude
towards conserving nature ... women have a really distinctive perception of what
life is, a sense of what is really vital, which colours their view of what is at stake in
the world'' (Vandana Shiva [an ecofeminist] quoted in Antrobus et al.1994:42).
Korten also believes that women ``bring a fresh and much needed ethical
perspective to bear in solving society's problems'' (Korten 1990a:28).

One may also argue that debates around sustainable development, especially the
more radical views, introduce a new tone to development ethics which is more
feminine, more sensitive and stronger on aesthetic sense than the debates around
economic growth, modernisation and dependency have been able to produce.

Women's presence in development forums and in the renewal of society has


increased in recent years. Since the 1970s, NGO conferences have coincided with
important United Nations conferences on women. In 1985 in Nairobi an NGO
conference of this kind, named Forum 85, ``brought together about 15 000 women
from more than 150 countries all over the world, and was open to all'' (Dankelman
& Davidson 1988:141). The NGO-based conference in Beijing in September 1995,
which was held at the same time as the intergovernment Fourth World Conference
on Women in Beijing, was also very large.

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Activity 7.11
(Spend about 15 minutes on this activity.)
The article by Gita Sen (1995) in your prescribed Reader shows the close links
between different groups in the alternative development movement. The article is
entitled ``Alternative economics from a gender perspective''.
Read this article, partly for the economic ideas, but mostly for what it says about
defining a gender perspective and the section ``Towards Beijing''.
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Since the 1980s, ``the forces unleashed by the feminist movement have been too
powerful to be reversed and the gains will surely continue'', says Korten
(1990a:28). Korten sees the women's movement as an essential part of the
``people power'' that gives political strength to people-centred development.

Janet Townsend (1993) (following Moser 1989) outlines the gradual radicalisation
of debates on women in development ``outside the socialist bloc''. (The varieties of
debate are similar to the stages of the NGO debate as described by Korten.)

In the 1950s and 1960s there was a welfare approach, where women were seen as
passive recipients of aid and as a delivery channel for welfare. Townsend points out
that this appalling approach is still alive in some quarters.

133
From 1970, there was an emphasis on equity, following the perception by many
that development had marginalised and excluded women. However, ``integrating
women into development proved superfluous: often the problem was that they had
been only too well integrated already, often into more work in worse conditions'',
and ``above all, no-one was willing to redistribute power to women'' (Townsend
1993:171).

In antipoverty approaches run by aid agencies, women's immediate needs, such as


water, food and health, were addressed. However, these approaches avoided the
sensitive, threatening issues such as male violence and women's inability to make
autonomous choices.

The women in development approach showed ``how, in the 1980s, in sections of the
World Bank and various United Nations agencies, women became the answer to
everything''. Women were seen as efficient producers, community managers, and
parents; ``assisting women will always pay dividends in straight economic terms''
(Townsend 1993:171).

The more recent empowerment approach ``arises from the writings and grassroots
experience of Third World women''. In this approach, ``women's daily struggles
around issues of primary relevance to their lives become politicised: food prices, the
cost of living, drains, the lack of social services, the disappearance of their children
at the hands of repressive regimes. Women's struggles become the means to
empowerment'' (Townsend 1993:173).

These various approaches, and debates among them, show that there is no single
approach to women's role in development. This means that in different situations
there will be very different opinions and theories about what should be done about
women and what women should do.

Some writings emphasise the new values that women can bring into the centre of
the alternative development movement. Other writings emphasise women's central
role in local communities a key concern of alternative development thinking.
Others focus on women's struggles around current local and global issues. All of
these approaches connect with the emerging movement for people-centred and
sustainable development.

In the annual meetings of the World Social Forum, women's movements and
women's issues have been strongly represented. At the 2004 forum in Mumbai, for
example, ``the organizers prominently recognized patriarchy as a main and
integral form of oppression''; and in the meetings there were ``many calls for the
integration of gender and women's issues into every struggle for justice'' (Albrecht
2004:15). Some of the particular issues and campaigns highlighted were:
^ sexual rights and freedoms, for example of sex workers and those with HIV/
AIDS
^ women's reproductive health and rights
^ women against religious fundamentalism

At previous forums, the issues of violence against women, the sex trade and
trafficking in women and girls (women and girls being bought and sold across
borders, mainly for prostitution) were strongly raised (Fisher & Ponniah 2003).

134
The role that feminism could play in helping to establish the emerging values of the
World Social Forum is also considered (Fisher & Ponniah 2003:338345).

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Activity 7.12
(Spend about 40 minutes on this activity.)

In your prescribed Reader, go to the article by Albrecht.


The article by Albrecht in your reader gives one woman's perspective on the
Mumbai WSF in 2003.
After reading the article, list the women's issues which Albrecht noted at the
Mumbai conference.

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Activity 7.13
(If you choose to do this extra activity, it should take you about 45 minutes to
complete.)
Further reading
Townsend, J. 1993: Gender studies: whose agenda? in Beyond the impasse: new
directions in development theory, edited by FJ Schuurman, pp 168184.
[Please note that the library has only limited numbers of this recommended book.
You might not be able to get hold of it.]
In this recommended book edited by Schuurman (1993a), there is a chapter by
Janet Townsend entitled ``Gender studies: whose agenda?''

Pages 168 to 174 outline the issue of a gender approach to development and give a
summary of different approaches to women and development.

Pages 174 to 184 provide a kind of case study of Townsend's own project
experiences and observations, which gradually led her to a view of the necessity for
the long struggle for empowerment.

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135
7.4.4 An alternative model of global strategy
There have been many models of how to bring alternative values into global
process. While the values of the Bretton Woods institutions quickly get translated
into policy, alternative values and visions about global process often stay at the
level of good ideas. With the growth of the WSF and the growth of various
campaigns, these ideas have begun to be more visible in global media, including
academic books.
In Alternatives to economic globalization, the International Forum on Globalisa-
tion proposes a number of areas of work and change to repair the damage done by
corporate globalisation. These are: a new form of democracy and a new emphasis
on the local; an insistence on ecological sustainability; a protection of ``the
commons'' (this means protecting from privatisation ``the water, land, air and
forests ... the culture and knowledge which are collective creations ... and public
services that governments perform on behalf of all people'' (IFG 2002:6364);
protecting the diversity of culture and forms of life; protecting human rights;
expanding jobs and livelihoods; ensuring much better food security; attaining much
greater global equity between North and South and between men and women; and
using the ``precautionary principle'' (ie restricting or banning a practice or product
when it ``raises potentially significant threats of harm to human health or the
environment ... even if there is scientific uncertainty about whether or how it is
actually causing that harm'' (IFG 2002:76).
Efforts in these areas would need radical reforms of global management. There
would have to be new restrictions on the rights of corporations and on their access
to governments and international bodies. There would have to be a rethinking and
redesigning of the whole way that subsystems of the world economy work for
instance the global energy system (currently based on industrial consumption of
fossil fuels) and the global food system (which is now increasingly based on
transnational agribusiness).
Finally, the International Forum on Globalisation argues that there would have to
be major reforms in the institutions of global governance. The book argues for first
``limiting the powers and mandates of the IMF, the World Bank and the WTO'' and
then dismantling them, and ``strengthening the countervailing powers of the UN
system'' while removing undue US and corporate influence (IFG 2002:221231).
In addition, there will be a need for some new global institutions; the authors
suggest bodies such as a UN International Finance Organisation, regional
monetary funds, and a UN Organisation for Corporate Accountability (IFG
2002:231238).
It can be seen from these proposals that much work needs to done at many levels to
bring to reality the visions of alternative development, and that such work faces
daunting obstacles. At the same time, it is clear that much of this work is both
urgent and unavoidable!

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Activity 8.14
(If you choose to do this extra activity, it should take you 60 minutes to complete.)
Further reading
International Forum on Globalization. 2002. Alternatives to economic globaliza-
tion; a better world is possible.

136
[Please note that the library has only limited quantities of this recommended book.
You may not be able to get hold of it.]
Most of this book is concerned with exploring alternatives. All the chapters from
chapter 3 onwards present some concrete proposals, usually at the end of the
chapter. Look at the contents pages and locate these proposals. Then read a
selection of these proposals, including ``creating new global institutions'' in
chapter 7.
-------------------------------------------------------------------

OUTCOMES CHECK LIST

Question Can do Cannot do


I can write about various ideas of
alternative development.
I can give some reasons for the
emergence of alternative development.
I can explain the nature and
background of the World Social
Forum.
I can discuss the strengths and
weaknesses of the World Social
Forum.
I can outline criticisms of neoliberal
globalisation from the alternative
development camp.
I can write about alternative views of
sustainable development.

137
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