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Title: GLOBAL DEVELOPMENT


1
GLOBAL DEVELOPMENT LECTURE NOTES SPRING 2008 BY
ALF GUNVALD NILSEN SCHOOL OF POLITICS AND
INTERNATIONAL RELATIONS, UNIVERSITY OF NOTTINGHAM
2
Global Development (M14054/M14055) Lecture 1
Introductions
3
ORIENTATIONS
4
What is Development?
Development seems to defy definition, although
not for a want of definitions on
offer Cowen/Shenton Doctrines of Development
Development
Immanent
Intentional
Development as that which is deliberately willed
to happen i.e. development policy and action
with such agents as the state, transnational
institutions, and NGOs We argue over the means
and ends of intentional development
Development as that which happens in history
i.e. historical processes of change in the social
organization of human practice Development can
have different directions and meanings and we
argue over which direction and meaning
development should have and why!
5
Everybody is in favour of development
everybody wants to see progress. And everybody
agrees that development implies social change
But academics, development workers, experts and
development consultants working within the
intellectual parameters of different theoretical
perspectives understand the same experience of
social change quite differently, implying
different policy strategies to advance
progress Ken Cole Economy Environment
Development Knowledge
6
The twenty-first century has witnessed an
impoverishment of the concept of development.
From its start as a project of capitalist
industrialization and agrarian change, the
political direction and social transformation
that accompany this process and the deliberate
attempt to order and mitigate its necessary ill
effects on human beings and their habitats
development has been reduced to an assault on
poverty, apparently driven by international aid,
trade and financial agencies and festooned in
targets Barbara Harriss-White Poverty and
Capitalism
There has been an increasing tendency within
contemporary development studies to focus on
intentional rather than immanent processes of
development, in ways that often obscure the
underlying politics of development The
assertion that development can be willfully
managed through the right mixture of
institutional designs has effectively
depoliticized the notion and practice of
development in poor countries rather than
seeing it as negotiated with and contested by its
subjects Hickey/Mohan Relocating
Participation Within a Radical Politics of
Development
7
Three Dimensions of Development
As an object of knowledge Theories about
development as a process and a project
As a process Patterns of change in the global
political economy of capitalism
As a project Policies and strategies that seek
to give shape to and control processes of social
change
8
Why Global Development?
the world of humankind constitutes a manifold,
a totality of interconnected processes, and
inquiries that disassemble this totality into
bits and then fail to reassemble it falsify
reality Eric Wolf Europe and the People
Without History
Between 1880 and 1914 most of the world
outside Europe and the Americas was formally
partitioned into territories under the formal
rule or informal political domination of one or
other of a handful of states Between 1876 and
1915 about one-quarter of the globes land
surface was distributed or redistributed as
colonies among a half-dozen states Eric Hobsbawm
The Age of Empire
Major Global Trade Routes, 1400-1800
9
(No Transcript)
10
Global Development Unequal and Uneven
Persistent inequalities between states and social
groups are expressive of historically constituted
structures of power and how they impact on
development
But Power is a relationship it is two-way. It
is not a zero-sum game something that the
powerful possess and the powerless do not Ken
Cole Economy Environment Development
Knowledge
A core concern of this course How is development
in all three meanings of the term shaped by
relations and processes of power and resistance?
11
COURSE STRUCTURE
12
Development in the Age of Imperialism
(1870s-1940s)
Process
Project
Object of knowledge
Imperial expansion creation of global division
of labour Crisis of liberal capitalism Workers
movement and class compromise Anti-colonial
struggles and national liberation
Conceptions of tradition and modernity in
classical western social theory Orientalism and
western conceptions of the other The social
question and trusteeship in colonial
development Anticolonial ideologies of development
Strategies of economic improvement and social
welfare State intervention and the creation of a
capacity for governance and control Decolonization
and the formation of new sovereign states
13
The Age of Developmentalism (1945-1970)
Process
Project
Object of knowledge
US hegemony and the Cold War, and the Third
World The Great Transformation and the rise of
organized capitalism Changes and continuities
in the global division of labour
Developmentalism, the developmental state and
national development The Bretton Woods system
and the regulation of the global economy
Keynesianism and theories of modernization Modern
ization and its relation to classical social
theory Structuralism as a critique of
modernization theory
14
Developmentalism Unravelling (1970-1980)
Process
Project
Object of knowledge
Dependency theory and the critique of the
modernization agenda Debates and controversies
in radical development theory Basic needs and
another development
Global crisis of organized capitalism US
hegemony unravelling? Divergences in the global
division of labour Developmental differentiation
and the end of the Third World
Stagnation of developmentalism and the onset of
the international debt crisis The collapse of
Bretton Woods The call for a New International
Economic Order
15
Neoliberal Hegemony, Neoliberal Development
(1980-1990s)
Process
Project
Object of knowledge
Structural adjustment, the Washington consensus
and the end of national development The lost
decade of development Good governance and
market discipline
Reversal of the class compromise and the rise of
neoliberal capitalism Collapse of communism and
the end of history Transnational accumulation
strategies
Neoclassical economic theory and the
counter-revolution in development theory The
impasse in radical development theory
16
Globalization and the Crisis of Neoliberal
Development (C21)
Process
Project
Object of knowledge
Global financial crisis and the collapse of the
East Asian NICS Crisis of growth and
development Hegemony and imperialism US
resurgent? The challenge from China Global
resistance
Post-Washington consensus A return to national
development and state intervention? Social
movements and the reinvention of development from
below
Critiques of neoliberalism a return to
Keynesianism? Criticism of the critics
reorientations in radical development theory
17
Global Development and the Twenty-First Century
  • The state, hegemony and the global (1)
  • - What role for the state in development?
  • - Is the US still a hegemonic power?
  • - The national and the global in development
  • Power, resistance and development (2)
  • - How is power exercised through development?
  • - How do social movements resist the power of
    development?
  • Critical development theory at the current
    conjuncture (3)
  • - How do we bring the large structures and big
    processes back in to development theory?
  • - How do we engage with power and resistance in
    development? Is there a future for development?

18
Development in the Age of Imperialism Global
Development Lecture 2
19
PROCESS
IMPERIALISM AND THE GLOBAL DIVISION OF
LABOUR CRISIS, STRUGGLE AND CHANGE
20
IMPERIALISM AND THE GLOBAL DIVISION OF LABOUR
as regards economic development on a global
scale, it is impossible to understate the
significance of the economic breakthrough that
occurred with the rise of capitalism in Western
Europe between the 15th and 19th centuries To
make a long story short, the rest of the world
was subordinated to the economic requirements of
expanding European economic and military
might (John Saul Development After
Globalization)
  1. Origins of capitalist development
  2. European expansion and imperialism
  3. The developmental legacy of imperialism

21
a) Capitalist Development
2 approaches
Capitalist development as quantitative expansion
of markets and trade
Marxist theory Capitalist development as a
qualitative change in the organization of
production
2 key elements
Liberal Free markets and trade The basis for
development
Radical Due to unequal exchange, trade causes
under-development
The capital-labour relation
Expanded reproduction and increased productivity
How does capitalist development relate to
European expansion and the emergence of
imperialism?
22
b) European Expansion and Imperialism
  • Three broad phases
  • Mercantile expansion (C14-C19)
  • Free trade imperialism (C18/19-1870s)
  • The age of imperialism (1870s-1914)

Global division of labour
23
c) The Developmental Legacy of Imperialism
  • 2 key questions
  • What impact did imperialism have on development
    in the core?
  • What impact did imperialism have on development
    in the periphery?
  • Core Impacts
  • Radical critique Imperialism fuelled
    capitalist development by giving access to cheap
    raw materials, investment opportunities, and
    markets
  • Kiely Mercantile expansion and imperialism
    were not sufficient causal factors in the process
    of capitalist development
  • Periphery Impacts
  • Liberal/Orthodox Marxist view Imperialism led
    to progressive diffusion of capitalism
  • Radical critique Unequal exchange caused
    underdevelopment
  • Kiely A legacy of unequal incorporation into
    the world economy caused uneven/unequal
    development (different from underdevelopment)

24
CRISIS, STRUGGLE AND CHANGE
Social history in the nineteenth century was
the result of a double movement .. While on the
one hand markets spread all over the face of the
globe and the amount of goods involved grew to
unbelievable dimensions, on the other hand a
network of measures and policies was integrated
into powerful institutions designed to check the
action of the market relative to labour, land and
money Society protected itself against the
perils inherent in a self-regulating market
system this was the one comprehensive feature
of the age (Karl Polanyi The Great
Transformation)
  • Crisis and change in the global political economy
  • Movements from below
  • - Workers struggles
  • - Anticolonial struggles

25
a) Crisis and Change in the Global Political
Economy
The onset of the age of imperialism coincided
with the onset of the Great Depression of
1873-1896 Capitalism after the structural
crisis of the end of the nineteenth century was
very different from capitalism before the
crisis (Dumenil/Levy Capital Resurgent)
  • A move from small enterprises to corporations,
    and a fusion of industrial and finance capital
  • A move from a liberal state to an
    interventionist state
  • - Economic regulation
  • - Social regulation
  • The decline of British hegemony in the world
    economy
  • Decolonization and the emergence of the Third
    world

Transition from liberal to organized
capitalism Consolidated after 1945
26
b) Movements From Below
Workers struggles
The emergence of new unionism and labour
parties in late C19 laid the foundation for
organized workers struggles These escalated
from the outbreak of crisis towards 1945 and
resulted in the historical compromise between
capital and labour in Western countries
27
Anticolonial Struggles
Two waves of anti-colonial struggle and
decolonization (i) early C19, resulting in
independence for the Americas/European settlers
(ii) early to mid C20, resulting in independence
for Asia/Africa/Non-Western peoples 2nd wave
struggles started as elite-led campaigns, but in
the inter-war years transformed into mass
movements, uniting workers and peasants in an
alliance against colonial rule and around
projects for radical social change
28
PROJECT
THE COLONIAL DEVELOPMENT PROJECT
29
THE COLONIAL DEVELOPMENT PROJECT
It is the fashion nowadays to describe the
Colonial Empire, and the African part of it in
particular, as a vast estate that it is our duty
to develop. This description on the whole is an
improvement on the old view of Africa, as a sort
of mine from which the contents, mineral,
vegetable and in old times human, should be
extracted as quickly and as cheaply as
possible (Bernard Bourdillon)
From Late Victorian Holocausts to Colonial
Development
30
From Late Victorian Holocausts to Colonial
Development
Late Victorian Holocausts A series of
subsistence crises across Asia, Africa and Latin
America, which revealed the impacts of colonial
exploitation upon the livelihoods of social
majorities (See Mike Davis Late Victorian
Holocausts)
During the first half of C20 a concern with
development emerged among the major colonial
powers
Emergence of surplus population
Loss of productive force
Development policies centred on state intervention
  • Colonial development policy had a European
    precedent
  • Colonial development policy foreshadowed
    national development policy

31
OBJECT OF KNOWLEDGE
IDEAS OF DEVELOPMENT IN THE IMPERIAL AGE
32
IDEAS OF DEVELOPMENT IN THE IMPERIAL AGE
the modern idea of development emerged in the
first half of the nineteenth century out of the
disillusionment with the promise of potentially
infinite improvement The burden of development
was to compensate for the negative propensities
of capitalism through the reconstruction of
social order. To develop, then, was to ameliorate
the social misery which arose out of the immanent
process of capitalist growth (Cowen/Shenton
Doctrines of Development)
  1. Progress, Development and Trusteeship
  2. Tradition, Modernity and Orientalism
  3. Development and Nationalism in Anticolonial
    Ideology

33
a) Progress, Development and Trusteeship
The idea of progress ? C17 A break with cyclical
conceptions of change in Western thought and a
move towards an idea of progress as the linear
unfolding of the potential for human improvement
Adam Smith Improvement and spontaneous order
would result from the free operations of the
market The pursuit of individual gain in and
through capitalist economies would advance the
greater common good
Thomas Malthus The benefits of economic growth
would be cancelled out by population growth and
stagnant/declining productivity
Early C19 ? An awareness of the social
dislocations brought about by capitalist
development The Many-Headed Hydra/The Social
Question
The idea of development came to occupy the
perceived gap between progress and order
Development was conceived of as intentional,
constructive intervention to give shape to these
processes of change The agency of development was
conceived of as trusteeship an institution or
set of agents capable of organizing interventions
that would give a beneficial form and direction
to immanent processes of change
34
b) Tradition, Modernity and Orientalism
The preoccupation of classical western social
theory was the transition from traditional to
modern societies In analyzing this transition,
these theories came to rely on dichotomies
between tradition and modernity
  • Marx Precapitalist vs. capitalist modes of
    production
  • Durkheim Organic vs. mechanical solidarity
  • Weber The rationality of western society
  • Tonnies Gemeinschaft vs. Gesellschaft

These dichotomies were projected upon the
relationship between occidental (colonizing)
and oriental (colonized) societies The
outcome was a discourse of orientalism
Orientalism was ultimately a political vision
of reality whose structure promoted the
difference between the familiar (Europe, West,
"us") and the strange (the Orient, the East,
"them") The essence of orientalism is the
ineradicable distinction between Western
superiority and Oriental inferiority Edward
Said - Orientalism
35
c) Development and Nationalism in Anticolonial
Ideology
In reality there are two Indias the one
prosperous, the other poverty-stricken. The
prosperous India is the India of the British and
other foreigners. They exploit India as
officials, non-officials, capitalists, in a
variety of ways, and carry away enormous wealth
to their own country The second India is the
India of the Indians the poverty-stricken
India. This India is bled and exploited in
every way of their wealth, of their services, of
their land, labour and all resources by the
foreigners, helpless and voiceless this India
of Indians becomes the poorest nation in the
world Dadabhai Naoroji
Development was a key element in anti-colonial
ideology, and closely fused with nationalism
  • The lack of development manifest in poverty
    and loss of productive force was attributed to
    a colonial drain of wealth
  • National self-determination and sovereign
    statehood were posited as necessary preconditions
    for development to take place

Anticolonial nationalism was in turn articulated
as a critique of the paradox of colonialism the
fact of colonial subjugation contradicted the
discourse of universal human rights and the right
to national self-determination
36
Some further reading Eric Hobsbawm Age of
Capital Eric Hobsbawm Age of Empire Eric
Hobsbawm Age of Extremes Cowen/Shenton
Doctrines of Development Mike Davis Late
Victorian Holocausts Eric Wolf Europe and the
People Without History Giovanni Arrighi The Long
Twentieth Century Beverly Silver/Eric Slater
The Social Origins of World Hegemonies (in Chaos
and Governance in the World System) Edward Said
Orientalism
37
The Age of Developmentalism (Global Development
Lecture 3)
38
PROCESS
FROM PAX BRITANNICA TO PAX AMERICANA THE COLD
WAR AND THE THIRD WORLD THE GREAT
TRANSFORMATION AND ORGANIZED CAPITALISM
39
FROM PAX BRITANNICA TO PAX AMERICANA
More than half the people of the world are
living in conditions approaching misery Their
poverty is a handicap and a threat both to them
and to more prosperous areas. For the first time
in history humanity possesses the knowledge and
the skill to relieve the suffering of these
people I believe that we should make available
to peace-loving peoples the benefits of our store
of technical knowledge in order to help them
realize their aspirations for a better life The
old imperialism exploitation for foreign profit
has no place in our plans. What we envisage is
a program of development based on the concepts of
democratic fair-dealing (Harry S. Truman)
The rise of US hegemony and the embedded
liberalism of the post-war global order
40
Economic crises
Movements from below
Two world wars
Decline of liberal capitalism and British
hegemony Systemic chaos in the interstate system
Post-WWII Reconstitution of the interstate
system under US hegemony
A global order of embedded liberalism
National self-determination
Welfare and mass consumption
Supranational governance
John Ruggie International Regimes, Transactions
and Change Embedded Liberalism in the Postwar
Economic Order
Giovanni Arrighi The Long Twentieth Century
(chapters 1 and 4)
41
THE COLD WAR AND THE THIRD WORLD
By non-alignment we are saying to the Big Powers
that we also belong to this planet. We are
asserting the right of small, or militarily
weaker, nations to determine their own policies
in their own interests, and to have an influence
on world affairs At every point we find our
real freedom to make economic, social and
political choices is being jeopardized by our
need for economic development (Julius Nyerere)
The politics of containment, development and
non-alignment
42
1917 The Russian Revolution
Anti-imperialism and the right to national
self-determination
Proletarian internationalism and the rights of
livelihood
1945 Two historical developmental alternatives
  • Development as geopolitical strategy resolved
    two related problems
  • The poverty and underdevelopment of former
    colonies
  • The containment of communism in newly
    independent states

Non-alignment as response to Cold War rivalries
The Bandung Conference and the idea of the Third
World
Solidarity between former colonies on the basis
of common interests
Non-alignment with First and Second Worlds
pursuit of a third alternative
Mike Mason Development and Disorder
43
THE GREAT TRANSFORMATION AND ORGANIZED
CAPITALISM
Nineteenth century civilization has collapsed
The fount and matrix of the system was the
self-regulating market. It was this innovation
which gave rise to a specific civilization Such
an institution could not exist for any length of
time without annihilating the human and natural
substance of society Inevitably, society took
measures to protect itself, but whatever measures
it took impaired the self-regulation of the
market, disorganized industrial life, and thus
endangered society in yet another way (Karl
Polanyi The Great Transformation)
From liberal to organized capitalism
44
David Harvey Condition of Postmodernity (Pt. 2)
Armstrong/Glyn/Harrison Capitalism Since 1945
1870s-1945
Economic crises
Movements from below
Two world wars
An epochal shift in the trajectory of capitalist
development From liberal to organized
capitalism
Organized capitalism
Domestic mass production for domestic mass
consumption Fordism
  • State intervention
  • Economic management (production, investment,
    employment)
  • Welfare provision and redistribution of
    market-generated income

Lash/Urry The End of Organized Capitalism
The golden age of capitalism
Sandra Halperin War and Social Change in Modern
Europe
Eric Hobsbawm The Age of Extremes (Pt. 2)
45
PROJECT
THE RISE OF DEVELOPMENTALISM THE BRETTON WOODS
SYSTEM
46
THE RISE OF DEVELOPMENTALISM
Every step in the governments power, both
internally and in its external relations, will be
taken to further the development of the nations
resources for the common good The government
hopes that, as a free, sovereign and independent
state, Ghana can become the centre for the
discussion of African problems as a whole Our
aim is to work with others to achieve an African
personality in African affairs We can stand on
our own feet (Kwame Nkrumah)
The elements of national development
47
The trustee of developmentalism
interventionist state that gave direction to,
mobilized resources for, and coordinated national
development strategies
DEVELOPMENTALISM
A national project of intentional development,
centred on social and economic modernization
The Developmental State
  • Agricultural modernization
  • Land reforms
  • Green revolution
  • Import-Substituting Industrialization
  • Promotion and protection of domestic industry
  • Reduction of import dependence
  • Development Alliance
  • Coalition of interest groups
  • The moral economy of developmentalism

Ray Kiely Clash of Globalizations (Chapter 5)
48
McMichael/Raynolds Capitalism, Agriculture,
and the World Economy
T. J. Byres/Henry Bernstein Various books and
articles
Agricultural Modernization
  • Land reforms
  • An ambition to abolish feudal social and
    economic relations in the countryside, create a
    class of agricultural entrepreneurs, to provide
    labour and raw materials for industry, as well as
    food for the urban population the question of
    urban bias
  • Mixed track record a successful undertaking in
    East Asia (Taiwan/Korea) limited impact in South
    Asia and Latin America due to elite resistance
  • The green revolution
  • An ambition to introduce modern and scientific
    methods of cultivation, and to promote the use of
    modern technology (biological and mechanical)
  • Mixed track record boost in productivity, but
    also elite capture of benefits
  • Displacement of traditional knowledge,
    ecological disruption, and subordination to
    global market interests

Vandana Shiva The Violence of the Green
Revolution Phillip McMichael The Global
Restructuring of Agro-Food Systems
49
Import-Substituting Industrialization
  • A central part of the golden age of
    development from 1950-75, income per person in
    the developing world grew by an average of 3 per
    cent
  • But the benefits of development and thus
    also the track record of ISI were unevenly and
    unequally distributed
  • ISI has become a central target of neoliberal
    critiques of developmentalism but blanket
    condemnation disregards regional
    variations/contexts, and misrepresents East Asian
    success
  • ISI did not mean total insulation of economies
    in the South (a) dependence on import of capital
    goods (b) bypassing of barriers by foreign
    investors through joint investment projects with
    domestic capital

50
The Development Alliance
Decolonization the extension of juridical
sovereignty to all nations was the immediate
global reform won by the colonial world from the
period of war and revolution. For the national
elites who had never embraced social revolution
their central aim of political independence and
sovereignty had been achieved As each colony
achieved independence, the cross-class alliance
of the nationalist movements tended to
dissolve (Beverly Silver Forces of Labour)
If elite groups and their middle-class retainers
reaped the greatest rewards of the new policy, it
was nevertheless a regime of developmental
populism by virtue of the social wage guarantees
that it conceded to urban masses The critical
feature of all these programs was that they
implied a bargain between the state and the poor.
Public assistance was provided in exchange for
political loyalty (Walton/Seddon Free Markets
and Food Riots)
  • But developmentalism was not without its forms
    of class compromise it was upheld by an
    alliance of social forces
  • Rich farmers
  • Public workers
  • Industrialists and merchants
  • Industrial workers and urban poor
  • The alliance was predicated on an exchange of
    political patronage and acquiescence for
    subsidized production and consumption

51
THE BRETTON WOODS SYSTEM
We are to concern ourselves here with essential
steps in the creation of a dynamic world economy
in which the people of every nation will be able
to realize their potentialities in peace will be
able, through their industry, their
inventiveness, their thrift, to raise their own
standards of living and enjoy, increasingly, the
fruits of material progress on an earth
infinitely blessed with natural riches. This is
the indispensable cornerstone of freedom and
security. All else must be built upon this. For
freedom of opportunity is the foundation for all
other freedoms (Henry Morgenthau)
Reembedding Finance, Regulating Trade
52
Eric Helleiner - States and the Re-Emergence of
Global Finance
The central concern of the 1944 Bretton Woods
conference was to create a system of global
governance that would prevent the political and
economic disasters of the period 1930-1945
Outcomes
Reembedding of global finance the dollar/gold
standard world money came to be regulated by
the US Federal Reserve System acting in concert
with selected central banks of other states, in
sharp contrast to the nineteenth century system
of private regulation based on and controlled by
the London-centred cosmopolitan networks of
haute finance
  • Institutional framework of governance
  • IMF
  • World Bank
  • GATT
  • These institutions were characterized by western
    dominance, but
  • the chief instrument of world market formation
    under US hegemony, the GATT, left in the hands
    of governments in general, and of the US
    government in particular, control over the pace
    and direction of trade liberalization

(Giovanni Arrighi The Long C20)
53
OBJECT OF KNOWLEDGE
MODERNIZATION THEORY STRUCTURALISM
54
MODERNIZATION THEORY
It is possible to identify all societies, in
their economic dimensions, as lying within one of
five categories the traditional society, the
pre-conditions for take-off, the take-off, the
drive to maturity, and the age of high mass
consumption When independent modern nationhood
is achieved, how should the national energies be
disposed in external aggression, to right old
wrongs or to exploit newly created or perceived
possibilities for enlarged national power in
completing and refining the political victory of
the new national government over old regional
interests or in modernizing the economy? (Walt
W. Rostow The Stages of Economic Growth
Dualisms in development theory
55
The Keynesian Revolution
The 1930s economic crisis
Soviet industrialization
Challenge to the intellectual hegemony of
classical economics and equilibrium theory
Keynes depression equilibrium ? The factors
of production are not used to achieve optimal
economic configurations So what will ensure
full employment?
Government intervention based on deficit
financing Deficit financing will have a
multiplier effect in the economy Increased growth
will increase tax revenues The state can manage
its deficit The Keynesian recipe attained a
hegemonic position in economics in the post-war
era
56
Modernization Theory
Basic assumption The dual sector model
  • The modern sector
  • Dominated by Industry
  • Expansive dynamic, profits reinvested, expanded
    reproduction
  • The traditional sector
  • Dominated by agriculture
  • Lacks dynamic, yields no investible profit,
    simple reproduction

The modern sector can only expand by drawing in
surplus labour from the traditional sector And
through its absorption of this surplus labour the
modern sector will come to dominate the economy
  • Generating such a structural shift in the economy
    requires authoritative intervention key
    agencies are
  • The state
  • Multilateral agencies
  • International markets

W. A. Lewis, Rosenstein-Rodan, Harrod Domar,
Hirschman, Rostow
57
STRUCTURALISM
Underdevelopment must be initially understood in
terms of the social structure The
characterization of underdevelopment in purely
economic terms, being a much simpler task, is a
perfectly legitimate initial formulation of the
problem Consideration of underdevelopment in
terms of income per capita is, however, one of
the obsessions of our time and creates a serious
handicap for understanding the problem on a
historical plane (Celso Furtado The Political
Consequences of Underdevelopment)
58
The developmental experience of Latin America in
the depression years led to spontaneous
adoption of ISI With the postwar opening of
international trade, Latin American countries
experienced relative economic success
Raul Prebisch A critique of Ricardos theory of
comparative advantage centred on the assertion
that the world market was not a level playing
field
produces and exports goods with high income
elasticity
CORE
Gunnar Myrdal Hans Singer Dudley Seers
Demand gravitates away from periphery
Terms of trade Power of labour
produces and exports goods with low income
elasticity
PERIPHERY
Global accumulation is concentrated and biased
towards the centre
Import Substituting Industrialization as
developmental remedy
J. Larrain - Theories of Development
R. Kiely Sociology and Development
C. Kay Latin American Theories of Development
and Underdevelopment Bjorn Hettne Development
Theory and the Three Worlds
59
Developmentalism Unravelling (Global Development
Lecture 4)
60
PROCESS
THE END OF THE GOLDEN AGE US HEGEMONY IN
DECLINE? THE TRAJECTORY OF THE THIRD WORLD
61
THE END OF THE GOLDEN AGE
  • By the early 1970s, the postwar boom and with
    it, the golden age of capitalism came to an
    end
  • Declining productivity
  • Declining profit rates
  • Reduced investment rates
  • Decline in demand
  • Combined with fiscal crises, currency crises and
    increased competition between core states

A crisis of stagflation
Rising unemployment
Rising inflation
Harvey The Condition of Postmodernity Armstrong,
Glyn and Harrison Capitalism since 1945
62
  • The exhaustion of Fordism as an accumulation
    strategy
  • Following full implementation of mechanized
    production, productivity rates were bound to slow
    down
  • Productivity could only be increased through
    reorganization and intensification of management
    pressure on labour
  • Successful resistance by labour ? Gap between
    wage and productivity growth ? Inflationary
    pressures ? Monetization of conflict ? Further
    inflationary pressures ? Oil price hikes ? Major
    recession in advanced countries 1974/5

NB! The economic crisis was embedded in a global
groundswell of resistance
The world revolution of 1968, which lasted more
or less from 1966 to 1970, was a tumultuous
uprising against authority of every kind by
students and, in many cases, workers as well We
may call them a world revolution because they
occurred virtually everywhere, and cut across the
tripartite division of the world system at the
time the West, the Communist bloc and the Third
World
Immanuel Wallerstein The Curve of American
Power
Arrighi, Wallerstein and Hopkins Anti-Systemic
Movements George Katsiaficas World-Historical
Movements
Michael Watts 1968 and all that Chris Harman
The Fire Next Time
63
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64
Helleiner States and the Re-Emergence of Global
Finance
Arrighi The Long Twentieth Century (ch. 4)
US HEGEMONY DECLINING?
Two indicators of decline
Industry the US lost its competitive edge in
relation to the other regions of the Triad
Western Europe and Japan
The demise of the dollar
Post-WWII International currency value
dependent on competiveness of US economy
Decline meant devaluation
International recovery depended on supply of ?
US B of P deficit ? Long-term effect
Undermining US economy
US trade deficit with J and G ? Excess
stockpiled in European banks Eurocurrency
market Value of steadily undermined
  • Abandonment of gold/ standard
  • Devaluation of the dollar
  • Abandonment of fixed exchange rates

Dollar glut Excess in the world market
increasingly worthless
65
Mark Berger The End of the Third World?
Mark Berger After the Third World
THE TRAJECTORY OF THE THIRD WORLD
2 key developments
Radicalization
Divergence
Late 1960s and early 1970s 2nd generation Third
World states emerged, often in the wake of major
wars of liberation Espoused a more radical,
openly socialist ideology than 1st generation
regimes a rejection of the attempt to carve out
a middle ground This was intertwined with the
emergence of new social movements which revolted
against the institutionalized elite politics of
the 1st generation regimes
1970s the emergence of a New International
Division of Labour (NIDL) Industrial production
was decentralized as parts of the production
process was relocated to states in the
South Simultaneously the emergence of the Newly
Industrializing Countries (NICs) The emergence of
NIDL and NICs were uneven processes
concentrated in East Asia and some Latin American
countries Undermined the material basis of Third
World solidarity
66
PROJECT
THE TRAJECTORY OF DEVELOPMENTALISM THE COLLAPSE
OF BRETTON WOODS AND THE ORIGINS OF THE DEBT
CRISIS
67
THE TRAJECTORY OF DEVELOPMENTALISM
Ray Kiely Industrialization and Development
Rhys Jenkins The Political Economy of
Industrialization
The 1970s present us with a scenario of unevenness
Some countries above all the East Asian NICs
had emerged as major centres of growth and
development
Most countries across Africa and Latin America,
and notably India entered into a phase of
stagnation and developmental failure
  • This scenario was central to the neoliberal
    critique of developmentalism
  • ISI had prevented domestic and internal
    competition and thereby hampered growth and
    development
  • The success of the East Asian NICs could be
    attributed to the adoption of an export-oriented
    development strategy
  • A problematic argument
  • East Asian development strategy was centred on
    ISI and state intervention
  • Differential outcomes of developmentalism is
    related to specific constellations of class power
    and state autonomy in specific contexts

Alice Amsden Asias Next Giant
Robert Wade Governing the Market
Vivek Chibber Locked in Place
68
THE COLLAPSE OF BRETTON WOODS
1973 Following the abandonment of the
dollar/gold standard and the devaluation of the
dollar, the Bretton Woods system of fixed
exchange rates was replaced with a system of
floating exchange rates
A disembedding of global financial capital
Stuart Corbridge Debt and Development
which coincided with the build-up of excess
financial capacity
Eurodollars
Petrodollars
International banks eager to lend
Third World regimes eager to borrow
Radical alteration of the structure of Third
World debt Early 1970s Private sector bank
loans 13 Late 1970s Private sector bank
loans 60 Debt financing inflated the crumbling
foundations of developmentalism in the short-term
but deepened its structural vulnerability
Susan George A Fate Worse than Debt
69
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70
OBJECT OF KNOWLEDGE
DEPENDENCY THEORY NEW INTERNATIONAL ECONOMIC ORDER
71
Ray Kiely Sociology and Development
DEPENDENCY THEORY
Bjorn Hettne - Development Theory and the Three
Worlds
A fundamental critique of the basic assumptions
of modernization theory
Economic development and underdevelopment are
the opposite faces of the same coin. Both are the
necessary result and contemporary manifestations
of internal contradictions in the world
capitalist system Andre Gunder Frank
Capitalism and Underdevelopment in Latin America
  • The four central arguments of dependency theory
  • The most important obstacle to development is
    the international division of labour i.e. an
    external rather than internal obstacle.
  • The international division of labour has a
    core-periphery structure, in which surplus is
    extracted by the former from the latter
  • Development and underdevelopment are therefore
    two aspects of the same process namely global
    capitalist accumulation
  • Since embeddedness in the core-periphery
    structure is the cause of underdevelopment, the
    only viable strategy for development is to delink
    from the global capitalist system

J. Larrain Theories of Development
C. Kay Latin American Theories of Development
and Underdevelopment
72
Andre Gunder Frank Metropolis and Satellite
the historical development of the capitalist
system have generated underdevelopment in the
peripheral satellites whose economic surplus was
expropriated, while generating economic
development in the metropolitan centres which
appropriate that surplus
  • The three internal contradictions of capitalist
    development
  • Expropriation/appropriation of economic surplus
    Structures of monopoly control in the
    capitalist system enables the expropriation/approp
    riation of surplus across spatial scales
  • Polarization of metropolis and satellite The
    tendency towards centralization in capitalism
    finds its spatial manifestation in the
    polarization of the world economy into a
    metropolitan core and peripheral satellites
  • Continuity in change Throughout its historical
    trajectory, the basic core-periphery structure of
    the world capitalist system has remained the
    same, and so has the dynamic of
    development/underdevelopment

73
Critiques of Dependency Theory
  • Standard critiques
  • Limited explanatory value It is more or less
    impossible to distinguish between dependent and
    non-dependent national economies, therefore the
    concept of dependence has limited explanatory
    value.
  • Empirical problems the structural fatalism of
    dependency theory has been proved wrong by the
    rise of the East Asian NICs
  • Marxist critiques
  • The impact and significance of external forces
    and structures is overestimated (Robert Brenner,
    Henry Bernstein)
  • The classification of Latin American social
    formations as capitalist is flawed (Ernesto
    Laclau)
  • The dependency perspective disregards the
    progressive dynamic of capitalist development,
    and therefore also the progressive historical
    role of imperialism (Bill Warren)

Robert Brenner The Origins of Capitalist
Development
Ernesto Laclau Feudalism and Capitalism in
Latin America
Bill Warren Imperialism and Capitalist
Industrialization
74
Immanuel Wallerstein World-Systems Theory
The capitalist world-system the genesis of
this historical system is located in
late-fifteenth-century Europe the system
expanded in space over time to cover the entire
globe by the late nineteenth century, and it
still today covers the entire globe
CENTRE
SEMI-PERIPHERY
PERIPHERY
75
FERNANDO CARDOSO ASSOCIATED-DEPENDENT
DEVELOPMENT
the external is also expressed as a particular
type of relation between social groups and
classes within the underdeveloped nations. For
this reason it is worth focusing the analysis of
dependence on its internal manifestations
  • The basic assumptions and arguments
  • The integration of LA economies in the global
    capitalist system sets the parameters for their
    economic trajectories, but does not determine
    them
  • During early independence, two forms of
    economies emerged local economies under
    national control, and enclave economies under
    foreign control
  • After WWII a new type of dependence emerges,
    based on dynamism of multinationals and
    internationalization of domestic markets
  • Different economies with different internal
    constellations of social forces respond
    differently to the same processes of change the
    internal is not a simple reflection of the
    external
  • Dependency is not antithetical to development
    there is a possibility of associated-dependent
    development given certain internal/external
    constellations

76
New International Economic Order
Inasmuch as the old order is maintained and
consolidated and therefore thrives by virtue of a
process which continually impoverishes the poor
and enriches the rich, this economic order
constitutes the major obstacle standing in the
way of development and progress for all the
countries of the Third World Honari Bourmedienne
A reflection of 2nd generation Third World
radicalism, drawing on structuralism and
dependency theory
  • NIEO the core demands
  • Opening the northern markets to southern
    industrial exports
  • Improving terms of trade for Third World primary
    products
  • Providing better access to international finance
  • Facilitation of increased technology transfers

A call for reform of global capitalism and one
that ultimately came to an impasse
Growing divergence of the Third World
The turn towards market-based accumulation/develop
ment strategies in the North
77
Neoliberal Hegemony, Neoliberal
Development (Global Development Lecture 5)
78
PROCESS
TOWARDS NEOLIBERAL HEGEMONY
79
TOWARDS NEOLIBERAL HEGEMONY
Liberal democracy remains the only coherent
political aspiration that spans different regions
and cultures around the globe. In addition,
liberal principles in economics the free
market have spread, and have succeeded in
producing unprecedented levels of material
prosperity, both in industrially developed
countries and in countries that had been, at the
close of World War II, part of the impoverished
Third World. A liberal revolution in economic
thinking has sometimes preceded, sometimes
followed, the move toward political freedom
around the globe (Francis Fukuyama)
80
1970s
Economic crisis
Political conflict
Dissolution of the post-war class compromise
One condition of the post-war settlement was
that the economic power of the upper classes be
restrained and that labour be accorded a much
larger share of the economic pie While growth
was strong this restraint seemed not to matter.
To have a stable share of an increasing pie is
one thing. But when growth collapsed in the 1970s
then the upper classes everywhere felt
threatened The upper classes had to move
decisively if they were to protect themselves
from political and economic annihilation (David
Harvey A Brief History of Neoliberalism)
Neoliberalism as a hegemonic project
Business groups
The New Right
Conservative think-tanks
David Harvey A Brief History of
Neoliberalism Dumenil and Levy Capital
Resurgent Saad-Filho and Johnston
Neoliberalism A Critical Reader
Susan George A Short History of
Neoliberalism Radhika Desai Second-Hand
Dealers in Ideas
81
The consolidation of neoliberalism as economic
orthodoxy regulating public policy at state level
in the North occurred from the late 1970s
  • NB! Neoliberal dress rehearsals
  • Chile 1973/New York City 1975

Naomi Klein The Shock Doctrine Susan George
A Short History of Neoliberalism
commonly associated with the electoral
victories of Margaret Thatcher and Ronald Reagan
  • Accumulation strategies
  • The rise of flexible accumulation
  • Financialization and the centrality of
    shareholder value
  • The rise of a transnational production process
  • State policies
  • Restrictive monetary and fiscal policies
  • Reduced levels of state intervention
  • Reduced public expenditures
  • Tax cuts
  • Privatization/liberalization

A moving map of the progress of neoliberalism on
the world stage since 1970 would be hard to
construct but
82
  • 1980s the uneven foundations of hegemony
  • Neoliberalism implemented under the New Right
    in the UK and USA
  • Neoliberalism implemented through structural
    adjustment throughout Latin America and Africa
  • But economic growth was concentrated in Japan,
    East Asia and West Germany i.e. states that
    resisted the neoliberal turn

Increasing capital mobility
Expansion of neoliberal restructuring
Enhanced ideological influence
Increasing financialization
  • 1990s the global consolidation of hegemony
  • Neoliberalism implemented through shock
    therapy in Russia and Eastern Europe
  • Neoliberalism implemented through structural
    adjustment in India following fiscal crisis in
    1991
  • Neoliberal restructuring in the East Asian NICs
    following the financial crisis of 1997
  • Continuation of neoliberalism under New Labour
    in Western Europe

83
PROJECT
THE DEBT CRISIS AND STRUCTURAL ADJUSTMENT THE
LOST DECADE AND THE POLICING OF DEVELOPMENT
84
THE DEBT CRISIS AND STRUCTURAL ADJUSTMENT
It could be argued that the international debt
crisis signaled a watershed in relations between
the developed and developing countries western
banks now became less concerned with pouring
capital into developing countries than with
recovering their existing debts Structural
adjustment came to be synonymous with economic
reform during the 1980s and became the only
acceptable strategy for development, according
to the international financial institutions that
were to dominate the economic policy of the
developing world throughout this
decade (Walton/Seddon Free Markets and Food
Riots)
85
1970s ? Increased lending from private sources
helped sustain an increasingly stagnant
developmentalism, but created structural
vulnerabilities
1979 The Volcker Shock ? A steep increase in
interest rates, geared to quell inflation
A serious increase in the burden of debt repayment
Less demand for exports from the South
Decline in the terms of trade for products from
the South
This combination of factors constrained the
ability of states to continue debt servicing as
their dollar reserves steadily lose value 1982
Mexico defaults on its 80 billion debt The
outbreak of the international debt crisis is a
fact 1986 Third World debt 1 trillion
Stuart Corbridge Debt and Development
Susan George A Fate Worse than Debt
86
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87
The policy-response to the debt crisis was shaped
by the emergent neoliberal hegemony in the
development community
IFIs and the Federal Reserve
US Congress and Administration
The Washington Consensus
John Williamson What Washington Means by Policy
Reform
John Williamson Democracy and the Washington
Consensus
Think-tanks
Consensus on what would be regarded in
Washington as a desirable set of economic policy
reforms based on neoliberal economics
  • This generated a particular conception of the
    debt crisis
  • Countries with balance of payments problems had
    been pursuing flawed economic policies
  • The source of the problem was internal the
    inefficiency and cronyism generated by state
    intervention
  • Reforms centred on policy changes and internal
    economic restructuring

88
IMF Short-term economic stabilization
World Banks Long-term economic restructuring
Structural adjustment
Duncan Green - Silent Revolution
K. S. Jomo Tigers in Trouble
Devaluation of currency
Deregulation of prices and trade
Downsizing public expenditure
Privatization
Sale of public utilities to increase efficiency
Imports dearer, exports cheaper improved trade
balance
Reduce the need for external capital supplies
Remove subsidies and enhance competition
From 1978 to 1992, 70 states underwent 556
stabilization and structural adjustment
programmes primarily in Africa and Latin
America The 1990s witnessed a new round of
structural adjustment this time centred on
South and South-East Asia, following fiscal
crisis in India in 1991 and the Asian financial
crisis in 1997
Poul Engberg-Pedersen Limits of Adjustment in
Africa
Mosley, Harrigan and Toye Aid and Power
89
THE LOST DECADE AND THE POLICING OF DEVELOPMENT
The procedures of the debt regime eroded
national economic management and, by extension,
the social contract that development states had
with their citizens. Keynesian policies had
steadily eroded throughout the 1970s in the First
World as the ideology of economic liberalism
spread its message of giving the market a free
rein Under the new monetarist doctrine in the
1980s, this trend was extended south. The debt
regime directly challenged the development state
The restructured global South was apparently
now quite profitable for private
investment (Philip McMichael Development and
Social Change)
90
  • The Case of Mexico
  • 40 of the population is malnourished
  • Minimum wages fell 50 between1983-89
  • Purchasing power fell to two-thirds of the 1970
    level in the same period
  • The number of Mexicans living in poverty rose
    from 32.1 million to 41.3 million, matching the
    absolute increase in population between 1981-87
  • Manufacturing rates plummeted, causing
    increasing unemployment coupled with cuts in
    social services, this led to declining living
    standards
  • A general verdict on structural adjustment
  • The combination of priorities and policies
    aggravated the developing countries economic
    woes and social distress in a number of ways
    (South Commission, 1990)
  • The lost decade
  • Average per capita income fell 15 in Latin
    America and 30 in Africa during the 1980s
  • SA engendered competitive austerity domestic
    demand reduced through lower wages/cuts in public
    spending, increased exports ? Increased export
    volume not linked to increased export value
  • Debtor countries entered 1990s with 61 more
    debt than they had in 1982 1984 outflow of
    capital from Third World as debt repayment
    surpasses inflows (loans/investment) -
    400.000.000.000
  • Rising poverty in Africa 1985-89 from 191
    mill. ? 228 mill and Latin America 1980-1989
    from 91 mill. to 133 mill.

Frances Stewart Adjustment and Poverty
91
so what did structural adjustment really
achieve?
Structural adjustment facilitated the imposition
and implementation of a neoliberal development
project
Structural adjustment entailed reforms which
undermined the structure of the developmental
state and the alliance of social forces it was
based on
  • Curbed public capacity in development spending
  • Reorganized the structures of states and
    priorities of governance
  • Boosting the influence of transnational
    managerial elites
  • Altering the balance of power in state and society
  • Structural adjustment was key to giving direction
    to development in a time of crisis - the
    policing of development had to crucial aspects
  • Internalization of a global market discipline
    in state/society
  • Reintegration of the economies of the south in
    emergent circuits of global production and
    accumulation

92
Neoliberalism ruptured the material basis of the
development alliance
Rich farmers, public workers, industrialists and
merchants, industrial workers and urban poor
The developmental state and postcolonial elites
Acquiescence in exchange for social wage
IMF riots Austerity protests
In the mid-1970s the social pact collapsed. The
debt crisis resulted not only in the elimination
of artificially supported levels of domestic
consumption but also in the abrogation of many
customary guarantees such as housing, public
employment, education and health care. When
austerity protests responded to internationally
prescribed market reforms, no doubt was left
about the moral economy that animated the
perceived betrayal Protestors demanded that the
state meet its responsibilities to the people
who, during the decades of patron-client
politics, had upheld their end of the
bargain Walton/Seddon Free Markets and Food
Riots
93
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94
OBJECT OF KNOWLEDGE
THE NEOLIBERAL COUNTERREVOLUTION THE IMPASSE
IN RADICAL DEVELOPMENT THEORY
95
THE NEOLIBERAL COUNTERREVOLUTION
In 1945 or 1950, if you had seriously proposed
any of the ideas and policies in today's standard
neo-liberal toolkit, you would have been laughed
off the stage or sent off to the insane asylum
The idea t
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