The Postwar Development Project: Theory and Practice

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The Postwar Development Project Theory and
Practice

• Development Studies,
• Fall 2008

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Time Line
Debt Crisis Structural Adjustment Policies
Indias Independence
UN / Bretton Woods Institutions
9/11
Oil Shock
Cold War
Keynesianism/Statism
Neoliberalism
Golden Age of Capitalism
Millennium Development Goals (MDGs) set for 2015
Number of UN Member Nations
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UN charter

• We the peoples of the United Nations, determined
  to save succeeding generations from the scourge
  of warreaffirm our faith in fundamental human
  rights and for these ends agree to employ
  international machinery for the promotion of the
  economic and social advancement of all peoples.
• UN Charter, 1945

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1945

• End of Second World War
• Formation of Bretton Woods Institutions
• World Bank
• IMF
• General Agreement on Tariffs and Trade (GATT)-
  later known as World Trade Organization (WTO)
• United Nations (51 member states in 1945)
• Marshall Plan (US funds) for European
  reconstruction after the war became model for
  development assistance

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Terms

• Keynesianism/statism
• State intervention in the economy to stimulate
  demand (providing employment, public services)
• Neoliberalism
• Let the market decide unregulated free market
• Associated with free trade, reduction in public
  service expenditure, privatization, deregulation,
  and the disappearance of the idea of the public
  good

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Global Political Economy 1945 - present

• 1945-1970 The Golden Age of Capitalism
• Cold War from 1950s to 1989
• Keynesian/Statist economic policies until late
  1970s
• Neo-liberalism became prevailing orthodoxy from
  late 1970s to the present
• Rise of US hegemony
• Reaction 9/11
• Rise of India, China. Demise of US
• Global recession?

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Modernization a theory and an ideal

• Process whereby less developed countries can
  acquire the characteristics of more developed
  countries, and become enlightened. An
  evolutionary process
• Initial impetus for modernization is endogenous.
  Exogenous assistance can accelerate the process
• Assumption that less developed countries will
  progress on the same path as developed countries,
  but at a faster pace Rostows Stages of
  Economic Growth
• 1. Traditional society, 2. the preconditions for
  take off, 3. the take-off, 4. the drive to
  maturity, 5. the age of high consumption
• Requires specifying what is lacking in less
  developed countries, preventing their
  modernization
• Technical fixes with associated political and
  social changes are introduced to make up for what
  is lacking
• Planning and development(are) a mathematical
  problem that can be worked out scientifically
  (Nehru)

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Modernization theory is challenged on the basis
of its

• Ethnocentricity modernization associated with
  Westernization. Assumption that The West is Best
• Association with capitalist development
• Assumption that progress is conflict free
• Association with postwar neocolonial dominance
• Neglect of the power structure in which new
  nations are forced to operate, tending to limit
  their opportunities and choices for development

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Dependency theory (periphery dependent on the
core)

• Developing countries locked into exporting
  primary produce (little value-added). Price of
  primary produce declines over time relative to
  price of value added industrial products. Unequal
  exchange
• Richer countries protected their own industries
  so that poorer countries could not export to
  them.
• Exogenous forces are a stronger influence on
  development outcomes than endogenous forms
• Global system inherently exploitative of poorer
  countries, perpetuating relations of dependency
  gains of the core come at the expense of the
  periphery

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Critiques of dependency theory

• Too pessimistic The success of the Newly
  Industrialized Countries (NICs) South Korea,
  Taiwan, Singapore, Hong Kong- challenges the
  doom and gloom predictions of dependency theory
• Overemphasizes exogenous forces, underestimates
  development potential and prospects of the
  periphery
• Oversimplification of complexity of economic and
  social development and change.

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Question

• Are the economic and social circumstances of
  poorer countries due to their relationship with
  the richer world, or from the lack of such a
  relationship?