International Development Theories

Theories and approaches in international development

Just like the many definitions and indicators of development, there are several theories and approaches to global development to be discussed.

Broadly speaking, these can be split into two groups. First, some see the way global development has unfolded as positive (Modernisation Theory) and second, some are 'anti' the trajectory global development has taken (Underdevelopment / Dependency Theory).

Below, modernisation theory and neoliberalism will be discussed first, as these pertain to the main ideological thinking of the 20th century that spurred on the direction and focus of global development.

Internal factors of development: Modernisation Theory

First, let's clarify what we mean by modernisation theory.

These stages of development follow a linear path. They are also cumulative and progressive, in that each new stage is built off the last. Lastly, once the process of modernisation has begun, it is seen as inevitable - it cannot be stopped.

In terms of global development, it suggests that poorer, underdeveloped societies develop only when they adopt Western capitalist and cultural values. Specifically, modernisation theory sees global development as a path of increasing industrialisation, urbanisation, education and rationalisation.

One of the most prominent modernisation theorists was Walt Whitman Rostow (1960), who argued that societies pass through five stages of economic growth and development, with each stage defined by particular characteristics.

It was his ideas that kickstarted the way Non-Government Organizations (NGOs) and International Agencies such as the UN, World Bank and the International Monetary Fund (IMF) would provide aid to developing poorer countries.

Rostow's five stages of economic growth

Let us take a closer look at Rostow's five stages of economic growth, through his view of how society

Stage 1: Traditional societies

• High levels of agricultural production (farming).

• No industrial development.

• Traditional values that hold back change.

Stage 2: Preconditions for take-off

• Western values and conditions begin to take hold.

• Politically and socially, an upper and lower-class system starts to develop.

• There is an influx of aid from 'the West'.

Stage 3: Take-off

• Increases in economic growth, as measured by GDP, become sustainable. The wealth starts to 'trickle down' and spread to the whole population.

• Manufacturing rapidly increases in importance for the economy.

• Agriculture is modernised through technology and starts to produce a surplus that can be exported.

Stage 4: Drive to maturity

• The industrialisation of a society is fully implemented.

• Non-manufacturing industries, such as accountancy, start to develop services.

• Investment in education and health raises living standards.

• The consumption of goods and services increases.

Stage 5: Maturity

• An age of high mass consumption emerges.

• The economy and standard of living resemble that of the West.

Fig. 1 - Each stage of growth is characterised by different features.

In short, Rostow's theory of modernisation is built on the ideas that:

1. Western ideas around economic development (capitalism) and Western culture (e.g. an emphasis on education and democratic institutions) are best.

2. That developing countries are 'underdeveloped' due to the result of internal problems that can be fixed.

3. That the West must assist in the form of financial aid.

Evaluation of modernisation theory

• It is ethnocentric: Western culture, values, and ideas around development are taken as the best and only way to develop as a country.

• Ignores the 'crisis of modernism': high levels of economic inequality in developed countries bring about other social problems, such as high crime rates, high suicide rates, drug abuse, etc.

• It ignores the ways that corruption, the destruction of the environment and the role of corporations and MEDCs in exploiting LEDCs hinder development.

Neoliberalism

Like modernisation theory, neoliberalism believes the obstacles to development to be internal to that country. However, the focus is on economic policies and institutions rather than cultural values and practices.

Neoliberalism believes that the state should reduce its role in the economic market. The processes of capitalism should be left alone - there should be a 'free-market' economy. For global development, this means:

1. Allowing 'free trade' - removing export and import costs.

2. Cutting taxes - for individuals and corporations. This would in theory lead to more jobs, higher levels of investment, and higher levels of spending.

3. Cutting state spending - particularly on welfare. The idea is that it incentivises more people to enter into work.

4. Privatisation - sell state-owned companies, such as power, water and transport companies, etc.

5. Structural Adjustment Programs (SAPs) - new development aid in the form of loans. The condition was that the country was required to adopt the above policies (1-4).

Evaluation of neoliberalism theory

• It has not been found to work - countries that adopted neoliberalism have developed more slowly, according to Hong (2000).

• Foreign investment rarely reaches the poorest countries.

• Dependency Theory argues that all neoliberalism has done has increased exploitation by transnational corporations. Government corruption has been replaced by greed for higher levels of profit.

You might be asking what exactly dependency theory is and what it argues. Well, as always, keep reading on.

Dependency theory and international development

Dependency theory was formed in the 1960s by Andre Frank as a response to modernisation theory.

Modernisation theory focuses on the need to change the internal, cultural and economic factors whilst dependency theory emphasises that it is external, political and historical causes that keep nations underdeveloped.

Specifically, dependency theory argues that a 'core' group of high-income, developed nations exploit the cheap labour and natural resources of a large 'periphery' group of poorer, underdeveloped nations to maintain their wealth.

• Core = MEDCs such as the UK, Europe, and the US

• Periphery = LEDCs and LLEDCs such as many sub-Saharan African nations, Indonesia, Afghanistan, Guatemala, etc.

Causes of underdevelopment

Historically, this dynamic of exploitation is a result and continuation of colonialism. Dependency theory argues that the economic policies brought in by modernisation theory, particularly the conditions attached to international aid programs and the presence of TNCs from MEDCs, is a form of 'neo-colonialism'.

The periphery is still exploited for its natural resources and cheap labour: the profits from the production do not feed back into the periphery but end up within the core, limiting the ability of the periphery to develop.

For example, let's look at the case of Shell in Nigeria.

Shell and Nigeria: a case study

In short, Nigeria is locked into a state of dependency with Shell. The company's exploitative and environmentally damaging practices have prevented local development and harmed the local people. Yet, their contribution to the Nigerian economy makes them too valuable to lose, in the eyes of the Nigerian government.

Fig. 2 - Dependency theory looks at the relationship between the core and the periphery.

So, just how can underdeveloped countries develop?

• Dependency theorists argue that they must exit the capitalist system. Global inequalities between developed and underdeveloped nations are inherent.

• Development must be led by the state/government itself; namely, the profits must feed back into the country, not into the pockets of TNCs or private national companies.

Evaluation of Dependency Theory

Let's now look at the advantages and drawbacks of dependency theory.

Positives of Dependency Theory

• Recognises the importance of history, particularly colonialism, in why and how there are undeveloped and developed nations in the first place.

• It highlights the global inequality in power between developed and developing countries. It explains how this is used to create a state of exploitation and dependency via economic policies and conditions imposed by the core onto the periphery.

• 'Neo-colonialism' helps explain the historical and current causes of global inequality, particularly global inequalities in wealth.

Negatives of Dependency Theory

• It does not provide many practical solutions for the periphery / LEDCs to develop. It still advocates for economic growth through industrialisation.

• There have been some former colonies that have succeeded in developing under modernisation. For example, India and South Korea now have the 6th and 10th largest economies in the world.⁵

• It ignores that foreign aid from MEDCs is often mistreated by corrupt elites and by some governments of LEDCs.

In response to these criticisms, World Systems Theory was developed.

World Systems Theory: a Marxist theory of international development

A refined update on dependency theory, World Systems Theory argues:

Developed by Immanuel Wallerstein in the 1970s, this viewpoint was formed in response to criticisms of dependency theory. World Systems Theory:

1. Claims that TNCs, rather than governments, now hold more power and dictate the conditions of dependency and exploitation onto underdeveloped countries. Just have another look at the Shell and Nigeria case study!

2. Acknowledges that some LLEDCs and LEDCs can achieve economic development.

3. Places underdevelopment and development in the context of a global economic and political system, not just as an exploitative relationship between individual countries.

4. Examines transnational corporations (TNCs) and global economic institutions (e.g. the World Bank and the International Monetary Fund) as the main players within the global economic system.

5. Splits the world economic system into three zones:

a. The core

b. The semi-periphery c. The periphery

Let's look at the characteristics of each.

The core

• Made up of MEDCs

• Controls world wages and the production of manufactured goods

The semi-periphery

• Made up of newly industrialised countries (NICs) and LEDCs

• These countries have some advanced urban sectors but still have high levels of rural poverty

The periphery

• LEDCs and LLEDCs (the most underdeveloped countries)

• These are the provider of raw materials (oil, minerals, etc.) and cash crops (coffee, sugar cane, avocados, bananas, cotton and tobacco) for the core and semi-periphery zones

Fig. 3 - the World Systems Theory, visualised.

In short, Wallerstein and World Systems theory show the causes of global inequality as a result of the interdependence between the three zones. The reliance on money from the core and the desire of the periphery nations to industrialise allows the core to dictate the exploitative conditions of global capital.

Evaluation of World Systems Theory

Let's now consider the positives and negatives of the World Systems Theory.

Positives of World Systems Theory

• It recognises that capitalism now acts on a global scale. Consequently, underdevelopment occurs as a result of countries in the semi-periphery and periphery needing to participate in the world economic system. They are dependent on the core and their TNCs to buy their raw materials and services.

• It recognises that underdeveloped countries are not fixed in their underdevelopment and dependency.

Negatives of World Systems Theory

• Both dependency theory and World Systems theory still see development in economic terms and via a process of industrialisation. It does not offer an alternative way of developing.

• It still has the same weaknesses as dependency theory as it still ignores internal barriers to development.

Post-development: a constructivist theory in international development

Whilst it's true that global development theories can broadly be split into two groups, i.e. modernisation theories and underdevelopment/dependency theories, there is a third branch that challenges this framework completely. It is called post-development theory.

Post Development Theory makes the argument that perhaps we should question the very meaning of development in the first place. In other words, to question how development has been constructed throughout the 20th century.

In short, authors like Arturo Escobar (2008) argue that everything we've learnt so far about what indicates whether or not a country is 'developed' is, in essence, a form of 'Western', ethnocentric form of discourse. Put more plainly, we have only seen one model of development that has been imposed on developing countries - a capitalist-industrial model of development.

Instead of just critiquing development trajectories like dependency theory, Escobar (2008) puts forth development positions from the Global South that are tailored for the Global South. He detaches the notion that to achieve 'development' countries must follow a similar industrialisation path to the West.

Post-development has helped push issues around environmentalism and the idea of 'people-centred development' into the spotlight.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.