Development Theories and Strategies

Unit 2: Development Theories

Endalew Addis

March 2019

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Outline
1.Introduction

2. Modernization Theory

3. Dependency Theory

4. Neo-Liberal Development Doctrine

5. The Developmental State

6. Alternative Development

7. Anti-development Doctrine
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 1. Introduction
 There are disagreements on the factors/causes of underdevelopment, and
the most desirable pathways of development or change.

 Internal factors (people appreciating authoritarian cultural values, weakness

of political parties),

 External factors (a series of foreign domination that started at the age of

multinational corporations/MNCs, World Bank, slave trade, globalization,
etc),

 Government interventions,

 Lack of strong state intervention,

 Inequality and injustices, and

 Lack of challenge and resistance of the violence of the development project.

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 Introduction Cont…
 As a result there are different theories:
 Modernization theory that blame the developing country’s political unrest and
economic backwardness, and these things happen simply because they have local
traditional cultural values that are internal factors.
 Dependency and world systems theories which condemn western exploitation that can
be responsible for political unrest and economic backwardness that are external factors,
 Neo-liberal development doctrine which beliefs that governments should have a
limited economic role
 Developmental state characterized by effective political steering that is strong state
intervention aimed at temporarily dissociating the economy and society from the
international competition,
 Alternative development is a development that is concerned with alternative practices
of development- participatory & people-centered by redefining the goals of
development, and
 Anti-development doctrine/ new social movements emerged to articulate the struggles
for political, cultural, ecological and economic survival that is to challenge and resist
the violence of the development project.
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 2. Modernization Theory
Background
 Modernization theory is based on three interrelated components:

 uncritical vision of the west,

 a perspective of the non-west (traditional societies) as if they have ignored
their own histories, and
 an interpretation of the west-non-west

 Modernization theory argue developing countries could and should follow a path
of political and economic modernization parallel to the one traveled by advanced
and modernized countries.

 To acquire this path developing nations must create modern cultural values,
modern political institutions and modern economic institutions.

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 Modernization Theory Cont…
Dimensions of Modernization

 Modernization is supposed to be a multi dimensional process of

change from traditional to modern societies/nations mainly in
three dimensions:

 Technological economic dimensions,

 Socio-cultural dimensions, and

 Political dimensions

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 Modernization Theory Cont…
A. Technological Economic Modernization: W. W. Rostow
 He argues that all nations should pass through the same five stage of economic
development:
 Traditional society: it uses traditional technology and the economy has limited
potential for production.

 Preconditions for takeoff: the time to transform a traditional society in the ways
necessary to exploit the fruits of modern science, and to fend of diminishing
returns

 Takeoff: The take off is the interval when the old blocks and resistances to steady
growth are finally overcome

 Drive to Maturity: After the take off there follows a long interval of sustained if
fluctuating progress, as the now regularly growing economy drives to extend
modern technology over the whole front of its economic activity.

 Age of high Mass Consumption: it is the time where the leading sectors shift
towards durable consumers’ goods and services.
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 Modernization Theory Cont…
B. Socio-Cultural Modernization
 The most famous approach/model used by modernization theorists to describe socio-
cultural modernization is known as Parsonian Pattern Variables (PPV).
 Parsons develop a number of contrasting pairs of pattern variables which were applied by
the followers of Parsons to the study of social change and development.
1. Articulation of social structure: Functional diffusion versus Specificity
In traditional societies, social structure is unarticulated, loose & comprehensive whereas
in modern societies there is specialization of roles, groups, and social relationships.

2. Bases of status: Ascription versus Achievement

Traditional societies are based on ascriptive criteria/factors such as birth and heredity
where as modern societies are characterized by achievement.
3. Criteria of Recruitment: Particularism versus Universalism
In traditional societies selection and treatment of individuals is based on personal
traits/characteristics whereas in modern societies it is based on general categorical criteria.
4. Roles of emotions in social life: Affectivity versus affective neutrality
In traditional society, social relationships, infusion of emotions in social life is based on
affectivity; whereas in modern societies, it is based on affective neutrality.
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 Modernization Theory Cont…
C. Political Modernization
 Political modernization involves the process of nation and state building.

 It is simply the kneting/binding together of diverse ethnic, linguistic, and religious groups,
and communities into an integrated and homogeneous nation state.

 It appears that this version of the modernization approach is perhaps the most controversial
and the most difficult among all dimensions of modernization.

 The modernization theory assumes that socio-cultural heterogeneity & diversity, ethnic,
religious & linguistic differences as the bases of political community/mobilization will
fade away/disappear under the forces of modernization such as urbanization,
industrialization, modern education, etc.

 However, the modernization approach did not consider the possibility that the process of
modernization/ development like urbanization and industrialization produce, reproduce and
generate heterogeneity, contradiction, conflict but not only homogeneity and integration.

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 Modernization Theory Cont…
Theoretical and Policy Implication of Modernization Theory
1. Underdevelopment is seen as a condition prior to development
2. Modernization theory assumed that the relationships between
developing and developed countries is always beneficial to developing
countries
3. The Modernization Theory viewed development and modernization as
smooth, unilineal, stage based, straight forward and evolutionary
process of adaptation
4. Modernization theory assumed that enough capital investment from the
developed countries, transfer of western technology, and wide spread
diffusion of western values especially achievement, motivation and
entrepreneur sprit are required to stimulate the process of development
in the developing countries
5. Modernization theory views internal orientation and socio-cultural
factors as obstacles of development in developing countries
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 Modernization Theory Cont…
Limitation and Criticisms
1. Many critics have pointed out that the principal term of theory –‘the
traditional’ and the ‘modern’ –are much too vague to be of much use as
classifications, of distinct societies.

2 The displacement and replacement of traditional values and attitudes to

be modernized

3. The weakening of kinship system as a result of industrialization and

urbanization

4. The nation that traditional peasant culture is necessarily contrary to the

development of economic growth is subject to serious question.

5. Modernization theory entirely ignores that impact of colonialism and

imperialism on Third World countries.
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 3. Dependency Theory
Background
 While Modernization theory, theorize and explain “ what made the North rich and what the
South has to do to become rich,”
 Dependency theory come up with one important question “ what made the North rich and
kept the South poor”.
 Dependency theory focused on unequal exchange of economic and political aspects that
takes place between the advanced capitalist countries (core) and south (periphery).
 Accordingly, underdevelopment does not result from some original state of affairs meaning
the whites are not born to become rich and the blacks are not also born to be poor
 But rather some historical processes like colonialism made some to be developed and
others underdeveloped.
 The dependencistas reject the claim that developing countries should follow the same path
of development followed by western countries
 By stating that the particular economic and political conditions that enable the west to be
industrialized are not exist at this time.

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 Dependency Theory Cont…
 Background cont…
 According to Dependency theorists, the development project fosters the economic
dependence of the south on developed countries mainly with the following important
features:
 Most of the technology required for development to take place like information
technology such as satellites, computers and others are developed by western
countries.
 The south relies on foreign investment for the number of reasons such as accelerating
development processes, accessing new technology, and gaining new markets.

 As development in one part of the world went hand in hand with underdevelopment in
another, so underdevelopment in the periphery contributed to further development in
the core countries.

 For development, in most of the time domestic sources are not enough, then foreign
aid (loan) in the form of foreign exchange, human resource development and technical
assistance made the development countries to live in dependency.
 This leads to interest payments and price fluctuations which in turn bring reverse
transfer of resources (from South to North) and debt servicing.
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 Dependency Theory Cont…
Fundamental Tenets of Dependency Theory
1. Development and underdevelopment are two sides of the same coin.
 Development and underdevelopment are two aspects of single historical global processes
though underdevelopment is not a precondition to development
2. External causes as obstacles
 The most important obstacles are not factors such as lack of capital, lack of achievement
motivation or the so called traditional socio-cultural institutions and values but it is related
to the international division of labor.
3. Structural conception of the world capitalist system /WCS/
 Dependency theory argued that the international capitalist system (ICS) and the
international division of labor (IDL) are factors which are historically generated
dependency and underdevelopment.
 For example, the satellite- metropolis chain in which surplus is extracted and pumped out
of the apparently remote and isolated rural agricultural hinterland upwards to the national
and international centers.
4. De- linking from the WCS as a precondition for development and transformation
 Since the periphery is condemned to stagnation, it is necessary for underdeveloped
countries to dissociate /separate themselves from the WCS.
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 Dependency Theory Cont…
Criticisms of Dependency Theory
1. Conceptual and empirical problems
 Critics argue that the concept of dependency does not clarify sufficiently the relationships between
dependency and underdevelopment.
 Empirically, it is directed to the notion of the “development of underdevelopment” meaning
developing countries are doomed to stagnation and underdevelopment as long as they operate within
the WCS which has a tendency to exploitation and peripheralization.
2. External Bias
 Critics have argued that in its eagerness to challenge the internal orientation and socio- cultural
determinism as obstacles of development, the dependency theory has pushed too for in explaining
underdevelopment in terms of external factors.
 In so doing it has overlooked important factors internal to developing countries such as political
factors.
3. Policy Related problems
 The major policy implication of the dependency theory revolves around the issue of de-linking.
 Critics argue that while implying the option of de-linking, many dependency theorists did not
seriously address many central questions in relation to de-linking.
 Dependency theory also fails to provide specific strategies how to initiate development once de-
linking is made.

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 4.Neoliberal Development Doctrine
Background
 In the 1970s and 1980s, there was a general dissatisfaction with the
previously dominant theoretical perspectives in development studies
namely the modernization and dependency theories.
 It was argued that these two rival approaches have failed to adequately
explain the processes and problems of development in the developing
countries.
 This gap was quickly invaded /occupied by neo-liberalism which preaches
a new orthodoxy about the causes of underdevelopment and the solution
for developing countries development.
 This theory believes that governments should have a limited economic
role.
 As a result the state should provide certain fundamental public goods to
the people such as police protection, national defense, judicial system,
educational system and physical infrastructures.
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 Neoliberal Development Doctrine Cont…
Fundamental Tenets of Neo- Liberal Development Doctrine
1. Market Fundamentalism
 Neo-liberalism argues that free-competition and the market system in all countries and under all
circumstances would bring about growth and economic development.
 They believe with the logic of the market forces that should be given full supremacy over all other
forces in that country.
 In other words, they believe that free-market forces should determine two things namely production
decisions and set of prices without government intervention.
 However, these are against government policies in LDCs like protective tariffs, imposition of import
quotas, development of artificial currency exchange rates, provision of subsidies, and control of prices
and interest rates.
2. Anti – statism: The state as a “ night watch man”
 Neo-liberal analysts believe that most developing countries governments injured their economics by
moving far beyond the limited role.
 They argue that the most important cause of economic crises, stagnation and underdevelopment in the
developing countries especially in Africa was excessive state intervention.
 The neo-liberal development doctrine argued that the success of the Asian NICs was the result of the
open door export oriented free market approach, and limited government role.

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 Neoliberal Development Doctrine Cont…
Policy Implications of Neo-liberal Development Doctrine
 The doctrine is expressed by many concepts like structural adjustment,
privatization, de-regulation, free-trade, and market base development.

 However, the most direct policy outcome was the imposition of the so called
structural adjustment programs (SAPs) during the 1980s and 1990s.

 The neo- liberal development doctrine was simply adapted by major

international financial institutions such as IMF and WB.

 Basically this SAPs refers to economic liberalization and reform programs

which required developing countries to implement fairly standard and uniform
policy measures through WB and IMF loan conditionalities.

 Thus the South forced to do a lot of things to get loans such as liberalize their
economies, deregulate the private sector, remove trade barriers, free prices,
reduce and if possible stop subsidies, and privatize state enterprises.

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 Neoliberal Development Doctrine Cont…
Criticisms
1. The Myth of Laissez-faire/ Non-state intervention
 Laissez-faire is a term or an expression used to represent the idea of free enterprise with
perfect market competition and pure market capitalism.
 However, historical experience shows that the pure world of neo-liberal laissez-faire and
non-state intervention did not exist in reality.
 This does not mean that international trade, investment and technology transfer did not
exist.
 These existed but they did not follow the perfect neo-liberal trend of free-market and non-
state intervention.
2. The Use and Abuse of the `Asian Miracle`
 The neo-liberalists depict the Asian NICs as the most recent proof of a neo-liberal
development doctrine pathway to rapid development.
 They have argued that the NICs success is associated primarily with the fact that these
countries followed a free-market, open-door, and export-oriented strategy of development.
 However, critics argue that neo-liberalists have abused the Asian experience and usually
they presented a kind of distorted, partial and sometimes mystifying description and
explanation.
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 Neoliberal Development Doctrine Cont…
 A large number of scholars have undertaken historical research and have shown
almost conclusively that the Asian NICs experience was very different from the
neo-liberal doctrine.
 The intervention of state in this case was so high, pervasive/widespread that
scholars have now developed a theoretical model known as the “developmental
state”.
 This theory argues that the single most important factor in the growth and
industrialization in the Asian NICs is the positive and effective role and
intervention of the state particularly in the
 Industrial policy (provision of cheap credit through state control banks),

 Agrarian reform (land reform- taking land from the Landlords and distributed to
small farmers), and
 Human capital development

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 5.Developmental State
 In the 1980s and 1990s, and until the crisis of 1997, the fast and sustained growth of seven
countries in East Asia, collectively referred to as the Asian Tigers had forced a major
rethinking in development studies.
 The seven countries were Singapore, Hong Kong, South Korea, Taiwan, Malaysia,
Thailand, and Indonesia.
 At first glance, it seemed to conform the thesis of Orthodox neoclassical writers, that the
fast pace of economic development in these countries resulted from liberal, market
conforming regimes and open door policies towards inward investment and foreign trade.
But the neoclassical tradition gradually had to come to terms with the undeniable evidence
of extensive government intervention in the East Asian economies.
 In an effort to salvage the neoclassical tradition, the nature of state intervention was first
argued to be in line with the prevailing orthodoxy, rather than going against it.
 The organization that came to the forefront in defending this was the World Bank.

 It stated that government interventions in East Asian countries were merely of the kind that
aimed at creating macro-economic stability, and a suitable environment for entrepreneurs
to perform their functions by providing certain public goods such as basic education.
 And where interventions in credit and fiscal policies did occur, these were said to be
mainly in order to “get prices right”.
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 Developmental State Cont…
 List had argued that when societies at different levels of development come into
contact with one another, the more highly-developed society and the more
productive economy unleashes a process of “displacement competition” within
the less developed and less-efficient society and economy.
 Based on this, neo-Listian theory explained the success of the East Asian
countries with reference to the strategic role of the state in taming domestic and
international forces and harnessing them to a national economic interest, coining
the term developmental state for this purpose.
 However, to credit the state with developmentally successful intervention in the
economy still left a lot of questions unanswered:
 What are the conditions that gave rise to developmental state?

 Why did it emerge in East Asia and not, say, in Latin America or Africa?

 What is the nature of the government-business relations and of state-civil society

relations?
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 Developmental State Cont…
 According to Ankie Hoogvelt, the answers to these questions drew either on cultural
or area specific factors or on historical-structural and geopolitical factors.
 She classified them into comparative political economy and international political
economy respectively.
 Comparative political economy: One school of thought began to argue that East
Asian capitalism was a model of capitalism quite different from the model of
capitalist development originating in the West.
 According to Berger, East Asian capitalism is different from the West in two aspects
namely: a) it is an industrialization that combines growth with equity, and b) the
public authority and state intervention have led the modernization process rather than
individual enterprise, the free market and representational democracy.
 In Berger’s view, cultural norms and values derived from the Confucian ethic
explained both the public spiritedness of officialdom (the developmentalist
bureaucracy), and the obedience of the populace who were said to prefer social
harmony to conflict.

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 Developmental State Cont…
 International political economy: Analysts standing in the Marxist
tradition have predictably not paid much attention to cultural
explanation of the emergence of the developmental state in East
Asia.
 Rather they have tended to emphasize geopolitical and historical-
structural factors.
 Many analysts argued that the legitimating basis for government in
directing East Asian capitalism has rested not so much on
Confucian values as on the geopolitical reality of US pacific
dominance in the post-war period.
 This pacific dominance was articulated in strategic military and
economic aid to the postwar regimes, the object of which was to
develop Japan, South Korea and Taiwan as bulwarks against
communism.
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 Developmental State Cont…
 American geopolitical interests in the region did more than contribute military
and economic assistance and provide commercial opportunities.

 More important perhaps than the power of the US to shape international security
arrangement was that it understood with remarkable enlightened self-interest that
security arrangements depended on shaping economic arrangements.

 Economic prosperity was thought to be a prophylactic against communism.

 The American basic objective was to increase the level of absolute wellbeing in
the Western Alliance.

 Trade, financial and aid links were self-consciously developed to serve three
mutually supportive roles:
 Economic reconstruction,

 Strengthening the internal political position of pro-American political elites, and

 Cementing strategic relations through economic inter dependence

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5. Alternative Development
 AD is a development concerned with alternative practices of
development- participatory and people-centered.

 Consequently mainstream development has gradually been

moving away from the preoccupation with EG toward a people-
centered definition of development

 AD, therefore, strives for inclusive democracy, appropriate

economic growth, gender equality, and sustainability.

 It views development as not only a lasting improvement in the

condition of life and livelihood, but also a political struggle for
empowerment of households and individuals.

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 5. Alternative Development Cont…

Components of Alternative Development

There are four major components of AD:

 Political integration - inclusive democracy,

 Economic integration - appropriate economic growth,

 Social integration - gender equality, and

 Futures integration - sustainability.

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 5. Alternative Development Cont…
Political Integration: Inclusive Democracy

Political integration gives rise to the claim of an inclusive democracy

that focuses on three inter-related struggles:

 Strengthening the meaning and reality of political community,

 Devolving effective state power to regional and local levels of

governance, and

 Increasing the political community’s autonomy over its life space

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 5. Alternative Development Cont…
Economic Integration: Appropriate Economic Growth
It gives claim in four distinct aspects:
 Household access to the bases of productive wealth,
 the quality of life space
 surplus time

 Rural development, (failed strategies)

 relocating the poor (urban-industrial growth )
 resettling them on new land
 Integrated Rural development (IRD)

 Informally organized work, and

 highly vulnerable activity

 Qualitative growth
 social and environmental costs not considered
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 5. Alternative Development Cont…
Social Integration: Gender Equality
It gives rise to the claims of gender equality, or women’s claims for
equal rights and social participation
 The condition of women
 was restricted by their gendered identity and entitlements

 Women’s claims
 practical and strategic claims

 Gender and culture- (culturally learned attitudes & values account)

 for women’s subordination & social reproduction of patriarchy
from generation to generation

 Women’s collective self-empowerment

 social, psychological and political empowerment
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 5. Alternative Development Cont…
Futures Integration: Sustainability
It gives rise to claims of intergenerational equity
 The globe’s carrying capacity was not infinitely elastic
 The Case for Intergenerational Equity
 SD meets the needs of the present without compromising the
ability of future generations to meet their own needs

 Implementing sustainability
 getting the prices right
 environmental accounting research
 achieving food security
 building resource conserving cities

 Advocacy and environmental action

 politics is at the center of the action
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 6. Anti-development Doctrine
 Despite it claims to bring prosperity and the alleviation of poverty
through economic growth, the development project has caused
enormous environmental destruction, impoverishment,
displacement, and at times, cultural ethnocide of poor and landless
people, urban workers in the formal and informal sector, women,
and tribal peoples.

 In resistance to these processes, social movements have emerged

throughout the world, attempting to protect their homes, lands, and
cultures.

 The responses of state authorities to social movement vary,

according to the type of resistance movement, and the character of
the government challenges, government responses include
repression, cooperation, and accommodation.
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 6. Anti-development Doctrine Cont…
 Social movements articulate resistances at the economic, ecological,
political, and cultural levels of society, all of which can be interrelated.
 At the level of economy, social movement articulate conflict over the
productive resources in society such as forest and water resources, involving
demands for a more equitable distribution of resources, the creation of new
services, and the integrity of local, traditional forms of economic practice.
 At the ecological level, social movement struggle to protect remaining
environment from further destruction, and to ensure the economic and
cultural survival of peasant and tribal populations.
 At the Political Level, social movements challenge the state-centered and
development-based character of the political processes, articulating critiques
of development ideology and of the role of the state.
 At the Cultural Level, social movement frequently affirm and regenerate
local (place-specific) identity, Knowledge, and practices, which at times are
expressed in the langue and character of the struggles. Local resistance may
incorporate local linguistic expression, beliefs, and cultural practices.
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 Thank You for Your Attention!

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