PowerPoint Presentation
prepared by
Terri Petkau, Mohawk College
CHAPTER NINE
Development and
Underdevelopment
Anthony Winson
INTRODUCTION
• Will examine:
 Theories of development
 Structural roots of underdevelopment
 Implementation and effects of neoliberalism in
global south countries
Copyright © 2011 by Nelson Education Ltd
 Role of state violence and war in production of
poverty in global south countries
 Forms of resistance to neoliberalism*
9-3
DEVELOPMENT
• Development initially associated with
industrialization and democratization of
society based on equal rights and
freedoms of its citizens
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• After WWII, development came to mean
process that generated economic growth,
industrialization, and modernization in
regions and countries perceived to be poor,
traditional, and undeveloped…*
9-4
DEVELOPMENT
Copyright © 2011 by Nelson Education Ltd
•
Arose out of the following:
i.
Competition between U.S.-led capitalist countries
and Soviet Union-led communist countries
ii.
Business in developed West seeking new
markets outside their traditional spheres of
operation
•
Is claim by some analysts that development and
study of development have served to support
world capitalism (i.e., economic system based on
competitive enterprises seeking to maximize
profits using wage labour)*
9-5
RELEVANCE OF DEVELOPMENT
AND GLOBAL INEQUALITIES
• Can consider development in terms of (i) morality
and social justice; and (ii) self-interest and need for
security
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• Are huge differences in income not only across
countries but within countries as well
• Neighbourhood economy of global capitalism is
maintained by system of power relations backed up
by disproportionate wealth and, ultimately,
willingness to exercise violence when all else fails*
9-6
EARLY THEORIES OF
DEVELOPMENT
1. Development in Stages
• Human societies likened to social organisms that
passed through stages of development and were
susceptible to pathologies or diseases
•
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Rostow’s stages of development theory: Argued
that a society at first was traditional,
undifferentiated, and underdeveloped
 Then entered stage of possible “take-off” with
exposure to developed society
 Ultimately moves along path to development as
more efficiently scientific and technological
diffusion occurs*
9-7
EARLY THEORIES OF
DEVELOPMENT
2. Modernization Theory
•
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Emphasizes importance of values and norms
as drivers of development
 Assumption  Most of responsibility for
economic “backwardness” lies with societies of
the “third world” or “global south” themselves
•
Development occurs then when citizens of poor
countries adopt virtues of the developed North
 If they fail to do so, they remain in pathological,
undeveloped state*
9-8
DEPENDENCY THEORY
•
i.
ii.
Takes a holistic view through the following:
Recognizing each part of the world is shaped by,
and helps to shape, a wider, global reality
Attending to the history and structure of relations
between countries
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•
Established that it was precisely the nature of the
relationship between metropolitan powers and
satellite regions that blocked economic progress in
the global south
•
Recognized critical role of factors such as
conquest of existing civilizations and West African
slave trade*
9-9
STRUCTURAL ROOTS OF
UNDERDEVELOPMENT
• Dependency theory shows how social and
economic structures established by European
colonizing powers since about 1500 resulted in
the following:
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 Distorted local societies for benefit of European
traders and merchants
 Later blocked emergence of industrial capitalism
in the global south while propelling rapid
development of industry in Western Europe (and
later, North America) through extraction of
resources from the global south*
9-10
COUNTRIES VS. CLASSES AS
CAUSES OF
UNDERDEVELOPMENT
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•
Are two explanations in dependency theory for
causes of underdevelopment:
1.
Geographical version, which views exploitation
as arising from unfavourable terms of trade
2.
Marxist approach, which emphasizes class
relationships and suggests nature of class
interests are shaped by (i) underdevelopment,
and (ii) types of class conflict that
underdevelopment engendered*
9-11
CLASS ALLIANCES AND
STATE CONTROL
• The global south is not homogeneous
 Each country has a unique history
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• Different class alliances came to
control the states of the global south,
with widely different consequences for
ensuing pattern of
underdevelopment…*
9-12
CLASS ALLIANCES AND
STATE CONTROL
• In periods when foreign influence weakest (e.g.,
during global recessions), in some countries
internal elites and allies were able to establish local
industrial enterprises and internal markets
 Result: Deepened process of development and
strengthened local economies
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• In other especially small countries where foreign
capital dominated, middle and industrial working
classes failed to develop
 Also, economy was based almost exclusively on
exports of only few commodities*
9-13
AGRARIAN CLASS
STRUCTURE AND
UNDERDEVELOPMENT
• In 1980s and 1990s, to understand better
the processes of development and
underdevelopment, researchers focused
increasingly on role of the following:
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 Class structures
 Class alliances, and
 State policies…*
9-14
AGRARIAN CLASS STRUCTURE
AND UNDERDEVELOPMENT
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• Consequence of estates (large, privately owned
agricultural enterprises employing many agricultural
workers to produce export crops such as coffee,
wheat, and cotton) in countries, such as Chile and
Egypt:
 Restricted purchasing power for workers who were
compensated with small land plots rather than wages
 Minimized need for advanced agricultural machinery
given ready supply of cheap labour
 Restricted demand for goods (including agricultural
machinery) that small manufacturers could have
produced locally
 Gave enormous political power to estate owners*
9-15
GEOGRAPHY AND
BIOLOGICAL RESOURCES
•
Diamond argued people’s environment heavily
implicated in development of different societies
•
Distinguished between proximate (or immediate)
and ultimate (or fundamental) causes of
development:
i.
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Example of proximate cause of European
development:
 Development of firearms and modern metallurgy by
Europeans, along with lack of resistance to deadly
diseases in peoples of the Americas, were
proximate causes of defeat of established, complex
civilizations by marauding Spanish army in Latin
America in 1520…*
9-16
GEOGRAPHY AND
BIOLOGICAL RESOURCES
ii.


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
Example of ultimate cause of European
development:
Europe especially rich in plants and animals that
could be domesticated
East–west axis facilitated intermingling and
dissemination of wide variety of species because
of few geographical barriers and roughly similar
climate across the region
Wealth of species available for domestication (in
Middle East too) allowed for accumulation and
storage of large food surpluses, which in turn
enabled growth of large, complex, hierarchical
societies*
9-17
CRITICISMS OF
DIAMOND’S THESIS
• While theory attractive to wide audience, is criticized
for ignoring the following:
 Existence of mountain ranges and deserts that
surely impeded diffusion of domesticated plants and
animals across Europe
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 Corn, a major staple, was disseminated from Central
to South America
 Crucial political factors, such as Europe developing and then dominating - in marine transportation
technology (arose in response to trade with Asia
being cut by Ottoman Empire in 15th century)*
9-18
THE NEOLIBERAL ERA: DEBT,
STRUCTURAL ADJUSTMENT, AND
UPHEAVAL IN THE SOUTH
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• In recent years, neoliberal theory of economic
development (advocated by Milton Friedman) has
become influential in highest policy circles
 Central tenet: Only in societies where markets are
free of state interference can competitive
entrepreneurs maximize economic growth for benefit
of themselves and the rest of society
 Theory favoured private rather than state solutions
• Contrasted with Keynesian approach (popular until
1970s) that advocated state intervention in the
market*
9-19
THE NEOLIBERAL ERA
AND THE GLOBAL SOUTH
• The global south took advantage of substantial lowrate loans offered by international banks and
lending institutions
• But after 1981, interest rates increased drastically
plunging global south countries (especially South
America) into debt crisis
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• Faced with loan default, global south countries
offered bailout if they instituted neoliberal policy as
set out by structural adjustment programs (SAPs)
of the Washington consensus that called for
austerity, privatization, and market liberalization…*
9-20
THE NEOLIBERAL ERA AND
THE GLOBAL SOUTH
• SAPs required indebted global south countries
undertake the following:
 Privatize state-owned enterprises, such as
telephone and oil companies, and national
banks
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 Let in international corporations and goods
produced in developed countries
 End tariff protection of local industry and
agriculture
 Radically curtail social welfare programs
 Encourage new lines of agricultural exports*
9-21
NEOLIBERALISM AND SAPS
AS SOLUTIONS TO POVERTY
• Is debate over whether neoliberal reforms in
developing countries have alleviated poverty or
produced dramatic increase in global income
inequality, widespread misery, and social
dislocation
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• Winners in neoliberal global economy include:
 Mexico, and the emergence of a new class of
billionaires
 India and China, which enjoyed exponential
rates of economic growth and growth of a middle
class
 Large commercial agricultural producers…*
9-22
LEVEL OF CONSUMPTION VS.
QUALITY OF LIFE AND THE
ENVIRONMENT
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•
But economic benefits in India and China not
necessarily positively correlated with increase in
quality of life
•
New urban life often characterized by the
following:
i.
Increased personal insecurity along with dramatic
increases in crime and violence
ii.
Negative health outcomes associated with polluted
air and water…*
9-23
LEVEL OF CONSUMPTION
VS. QUALITY OF LIFE AND
THE ENVIRONMENT
(New urban life often characterized by the following –
cont’d)
iii. Dangerous work environments
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iv. Deterioration in diet associated with consumption
of fast food and low-quality street foods
v.
Massive environmental destruction and attendant
health consequences (for both urban and rural
residents) because of unregulated development*
9-24
ABSOLUTE POVERTY AND
GLOBAL INCOME
INEQUALITY
• Despite economic gains in some countries, global
income inequality is substantial
• The richest 5% in the world earn in 48 hours about
what the poorest 5% earn in an entire year
Copyright © 2011 by Nelson Education Ltd
• Also, price levels in most Asian countries are much
higher than formerly assumed giving rise to many
more poor people than previously estimated
 Is now argued that global inequality is much
greater than even the most pessimistic analysts
thought*
9-25
IF 100 PEOPLE LIVED ON
EARTH
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9-26
TRENDS IN INEQUALITY
WITHIN AND BETWEEN
COUNTRIES
• From 1930s to 1960s when welfare state being
constructed and Keynesian economic policies
being implemented, following trends were evident:
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 The gap between the rich and the poor decreased
in all developed countries but only for some global
south countries
 Overall, the gap between rich countries and poor
countries remained quite stable*
9-27
TRENDS IN INEQUALITY
WITHIN AND BETWEEN
COUNTRIES
• After the 1970s, when neoliberal policies
implemented, the following trends occurred:
 Substantial increase in inequalities within countries
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 Increase in gap between countries (especially
during 1980s)
• While other mitigating factors, overall neoliberalism
helped widen the gap between the rich and the
poor*
9-28
GROWTH NEEDS STRONG
STATES
• Neoliberal policies have not stimulated growth in
the global south
 Rather, growth rates were higher in decade
before introduction of SAPs than in era when
SAPs imposed by international lending agencies
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• Lack of growth not surprising because rich
countries (apart from Britain) also did not follow
tenets of neoliberalism in own path to
development
 Clearly demonstrates need for substantial state
involvement in development (e.g., “Asian
tigers”)*
9-29
WOMEN UNDER
NEOLIBERALISM
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• In some parts of the global south (e.g., India and
Thailand), neoliberal policies have been especially
hard on women, partly because women form bulk
of agricultural work force
 Trade liberalization, which encourages import of
heavily subsidized agricultural commodities from
the developed countries, undermines rural
incomes
• Elsewhere (e.g., Nicaragua and Nigeria), women
have had to raise families on own as husbands are
forced to migrate to cities or to developed world in
search of cash income…*
9-30
STATE VIOLENCE, WAR, AND THE
PRODUCTION OF POVERTY
• Military aggression and war also have helped to
undermine development in much of post–WWII era
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• From 1950s to late 1970s, under guise of making
world “safe for democracy” and “fighting
communism,” U.S. directly or indirectly was
involved in series of military coups d’état in Latin
America and elsewhere
 Sometimes supported state terrorism resulting in
tens of thousands of deaths and millions fleeing
home countries…*
9-31
STATE VIOLENCE, WAR, AND THE
PRODUCTION OF POVERTY
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• “Domino theory” held if one country fell under
communist influence, its neighbours would follow
suit
 Operating with domino theory in mind, U.S. began
decade-long military intervention in Vietnam in
1960s
 This intervention followed years of French colonial
domination
• Soviet Union also sought to extend its influence and
promote its favoured economic model by using
military force to block efforts to democratize and
liberalize authoritarian communist regimes within its
sphere of influence…*
9-32
STATE VIOLENCE, WAR, AND THE
PRODUCTION OF POVERTY
• Soviet economic and military aid also assisted
struggles of different movements around the
globe to remove colonial and neocolonial
domination
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• In 1970s, U.S. (with help of allies, such as
France) provided military equipment, extensive
training, and expertise to help install military
governments in several global south countries
 Oppressive military regimes typically forged
strong ties with multinational corporations while
brutally suppressing trade unions and popular
organizations as well as groups that opposed
them*
9-33
STATE VIOLENCE, WAR, AND THE
PRODUCTION OF POVERTY
•
i.
ii.
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•
In 1980s, the U.S. government sponsored illegal
arms deals to covert armies in order to…
Fight revolutionary government in Nicaragua,
and
Support South African government in its
campaign to destabilize Mozambique and Angola
In 21st century, war has continued to plague parts
of the global south (particularly sub-Saharan
Africa and the Middle East), and undermined
benefits that might come from development
assistance*
9-34
RESISTANCE TO THE
NEOLIBERAL NEW WORLD ORDER
1. Government resistance:
•
Since 2000, Argentina, Brazil, Bolivia, Ecuador,
and Venezuela have elected governments that
oppose neoliberalism:
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 Governments have sought to aid the landless
and urban poor
 In some cases, have nationalized key resource
industries in order to capture profits that for
decades went largely to transnational
companies with little local benefit*
9-35
RESISTANCE TO THE NEOLIBERAL
NEW WORLD ORDER
2. Popular resistance:
•
In civil society, broad-based organizations have
challenged neoliberal development model
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 Most prominent among these organization are (i)
the World Social Forum and (ii) Via Campesina
(international organization of peasant farmers,
rural women, and landless workers that seeks to
achieve social justice and gender parity in context
of sustainable agricultural production)…*
9-36
RESISTANCE TO THE NEOLIBERAL
NEW WORLD ORDER
• Popular resistance to neoliberalism in both the
global south and the global north often takes form
of sit-ins, demonstrations, and strikes on part of
students, non-governmental organizations, unions,
peasant associations, and trade unions
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• Increasingly, however, resistance to neoliberalism
has entered formal politics (e.g., 2008 American
presidential race that sparked debate over damage
done to both people and the environment by the
North American Free Trade Agreement)**
9-37