business

Chapter 3

Folitical and Economic Development

A clear link exists between the political and the economic world. Economic status and power, on a national level, are often perceived as being associated with political statrrs and poler.I Nations with resources have the ability to influence nations with- out resources, and this is true whether the resources are oil, wheat, or chromium. Thus is it irnportant for us in this chapter to examine briefly the relationship be- tuleen economic variables and political variables and to appreciate the very large differences in political and economic resources befi,r,een the "developed" and the "developing" nations.

ne Concept of Political Development

Indir.idual nation-states do not spring fully blossomed and mature into the contem- porary political world. Political development and modernization are processes, and sometimes these processes are effectuated speedily, while at other times they take longer. Sometirnes the evolution involved is gradual; other times it is abrupt, vio- Ient, and painful.2

Often the terms modernization and deuelopment are used interchangeably t<; refer to the mor,ement of a nation-state from one evolutionary stage to another. Some scholars, however, distinguish between the two terms:

[Development is] an evolutionary process in u,hich indisenous institutions adapt and control change and are not simply. caught up in imitating and reacting to outside forces. Modernization is often contemporalr, imported,

4l

-{

42 Politiml and, Economic Deulopmert t

and creates a dependency on the technologicall,v advanced urban-indr-rstrial centers without helping local political and social institr-rtions to grol, and adapt. DeveloPment means that a system has some abilin'to be selectiye in the $.pe and pace of changes, often imported. that occrLr in a counrn,.,l

In 1963 a long-term study of political modernization ancl political detelop- ment was initiated by the Committee on Comparative Politics of the Social Science Research Center at the Center for Advanced Study in the Behauoral Stridies at Palo AIto, California. This series of research projects 1,ieIded several srud.ies thar were published by the Princeton University Press in a series called Stuclies on Political De- velopment.a Although a number of different subjects are cor erecl in these studies, they are all based on the premise that political development-nation brillclmg.-inr oh.es a number of "crises," and all nations, modern or not, go through these cr-ises. ' Each of these fir e "crises" will be briefly described here.

The Crisis of ldentity

How do individuals in a political regime describe themse.lr-es pd)ttcailt,? Tlris crisi,c was faced in the l-lnited States in the iate eighteenth cenrlrr\'. iihen individr,rals hacl to learn to identify themselves first as Americans, rather rllan as \lrginians or Nert Yorkers, for example. Again in 1860, large numbers of Americans srarred to think of their primary political identities as something other than Arlerican (for example. "Southerner").

In the contemporary political world, one of the ma3or hurdles faced by neu' and developing nations is the need to help citizens develop a narional identiry. Fail- ure to do so can result in national stress and possibll' cir-il rr'ar: The sitgation in Lebanon in which citizens identified themselves not so n'rr-rch Lebar-iese as Chris- tians, Moslems, or Palestinians lecl to a civil war there; Ibo tribesmen in Nigeria did not want to think of themselves as Nigerians and attempted. .,r-r.1,...r.f.,16,, to break away from Nigeria and form a new narion (Biafra). TLe problem, ho.wever, is not restricted to new or "underdeveloped" nations: the recent ciril rrar and geno- cide in what was Yugoslar.'ia is a further illustration of the qr-rest bv ethnic grorip, to develop their own national identities;c many French Canadians toclar.ideniifi them- selves as Q-ltiblcois, not Canadians, and this continues to place srress on the Canacli- an political system. The same can be said for the Sikh popnlation in India's punjab region among olhers.

The Crisis of Legitimacy

The concept of legitimacy suggests a sense on the part of the public that the go\rern- ment in power has a right to exist or is acting "appropriatelli" people may dlsagree with specific governmental decisions or actions without necessarill, denying thi le- gitimacy of the regime. In instances in which governments lose their appeaiance of legitimacy to a major proportion of the populace, they have sreat diffrculgv in sta,v- ing in power and may usually do so only with the coercive rrppo.t of the militarv. Recent regimes that were dissolved as a result of a crucial lois of perceived legiti- macywere Iran (u,ith the downfall of the government of the shah in tgig),1he

Philippi Nicarag

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Political and Economic Deuelopmmt 4Z

Philippines (with the downfall of the Marcos regime from 19g4 to 19g6), and Nicaragua (with the downfall of rhe Somoza regimi in 1979).

In other cases, regimes were not toppled but significant instances of social disruption occurred_ when groups in sociery ceased to iecognize the regitimacy of government. The role of the parti eu6b6cois in canada, in advocating qren".,r r.- cession from the Canadian federation, is a good case in point. Similaily,-tne behav- ior of the Sikhs in India's Punjab state resulted in many deaths and much social disruption. Perhaps most notably in recent years, many governments in Eastern Europe-including those of East Germany, Poland, and bzechoslovakia-fell when substantial segments of their populations concluded that the governments of these states no longer were legitimate.

To a large degree this failure of legitimacy refers to the same general phe- nomenon that was called "institutionalization" by Samuel Huntington in his clissic wotk Political order in Changing Societies.There he defined institutionalization as the "process by which organizations and procedures acquire value and stability. The level of institutionalization of any political system .un b. defined by the aaaptaUilty, complexiry autonomy, and coherence of its organizations and proced.r..r.i,

It is often difficult to define precisely the point at which a loss of legitimacy may become critical. clearly, there will always be some peopie in any regim&ho do nglfgel that the regime is consrructed in, or is actingin, a legitimate manner. Es- tablished regimes can tolerate some of this thoughtl newer iegimes can tolerate less, since they have less of a "bank" of past legitimicy upon whici to draw. Ar some point-a point that de.pends upon the regime and the political system invorved-a loss of legitimacy may become critical, and the system may suffer'irreparable harm.

The Crisis of Penetration

Are laws enforced? Do the policy decisions of the government .trickle d.own,, to all levels of society, or are there areas of the nation in which the laws and policy deci- sions of the regime simply do not apply? To the exrenr that a geographic drstrict may exist in which the laws of the regime are simply ignored, oito the exrent that certain specific laws or administrative guidelines fiomlne government are ignored throughout the nation (for example, legislation prohibitin! rhe consumption of al- cohol), we can speak about problems of penetration. E-xamples might include American national civil rights policies in thi early 1960s *h.r, f.d..ul guidelines were not respected in Southern states and, for example, the Mississippi National Guard had to be nationalized to enforce federal civil rights laws, or government en- couragement of birth control in some Latin American or African nations.

The crisis of penetration, then, refers to the government,s ability to follow through on, and to enforce, its decisions. Governments that are not able to do this, that are not taken seriously by their publics, are less stable than others.

The Crisis of Participation

A system may suffer stress in both quantitative and qualitative dimensions of partic- ipation. Quantitatively, too little participation may result in a lack of legitimaiy (for example, an election in which only 1b percent of the population participatedi, and

44 Political anrl Economic Deaeloltmen,t

;X?ff.j"r.i.ticipation (perhaps roo many demanrls made) may pur too great ,

mandsa,"h;;l:'i;,'1:;:*,,fi .T-iHjHiffi ,...::-,x.?r,"._:..Ti":ih:*:put stress on the system' what should the role or the ' mass,, public be in relation r,the "elite,, of the regime? Examples of this gpe of question, which may creare a cl:-mension of crisis in a politicar iegime, wourd be: 1i) " r;J;;'"'.#;:ffi:i,,,.political opportunity in a regime tiat hu, been racially air..imirratory, such as exis-_ed for manv vears in Rhodlsia 1"oru zi,rruJil;;ffi.;;;rr;'JJ;lJ'r:1it} Africa; (2) a mass demonstrati"" nri,,g--f ;;;;"a" oi ,i"rrr"os or protesrers rc-gether to criticize a regime, such as me runas or a.-orr.t.ltior* thut rr,ere c*rcial ir-the downfall of Ferdinand Marcos in the philipprrr., ir-roa6 or the Shah of rran i:,1979; or (3) individuals refusing . ou, rheir incom. ,o"""."r:tl;::lr"llii:^_protest. -:.--^b -" vuil LrrLrr urLurrle taxes as an act of politic:.-

The Crisis of Distribution

one of the most visible problems of developing nations todar- is a tnoteriaL ontFood, medicar supplies, hlusing, ,ut.., .l..tri.iryi nra so forth are eirher not bei,,.equitabry disrributed in a socierylor, atrr""gh ;l;;;',r.#;Llred, are not sufficieni(\t'e should nore, of course, that ,rr".. pro-ur-#;;;;;#;reristic not onryof de'er_oping nations; rhere are areas of the united stut., tt oi u.. ;i.;'.'h"g "JJi;i""J:.these same problems') New nations have an i,creclible set 01'ciemands made upo'them' and among the most visible of these demands are rhose r elatecl to distributi'rgoods' Long food lines-in Ethiopia, rvhich resuhed ir', rooa .iotr. led to the evenr.a,overrhrow of Emperor Haile seiassie in 1974. A ]ack or .or.r*"r. goocls in the sori-et Union ru. .r:_11,"9 u,ith morivating former Sortet p..;.;, ;;;il;,ilixlifor greater reforms in the e.or-romiE sector there, reforms thar e'entually con_tributed to a dissolutio, ofthe political regime. e.o.r"n'ir.-,rnt.r, u groLrp feels thatit is not receiving its .fairut u.", of tn. ready for revolution.

material benefits of golernmer'rt l. u socieh' These five dimensions of crises in relation to pr.oblems o1 political develop-ment start to tell the story of the concerns confronting man' ol the cleveloping na-tions today' not to mention the older and more.r,uurirr.Jindustriai democracies.These crises are exacerbated in the cleveioping *,orld. tholrgh. br.more readily ao-parent problerns, s,ch as row levels of literacy, poo. g.rr..or n.},r, ;;, dr, ##mortaliq/, and an inability to contror rapidly rising pop.lariors. Ib the extent rharthese and other probrems persist urrJ .orr,rrrr. ,J b..orr" rrorse, neu, nations w,lcontinue to experienc. g..n, instabiliry and turmoil.

Developed and Developing Nations

In chapter 1 we briefly discussed the concepr of'political der-eropme,t and the dis_rinction berween developmen, ^"; ;;;.'.nization. the iatteJ having been cre_scribed as "the process byu,hich u.o.i.n.b.comes ,modern.,,,s One critic of theconcept of modernization has suggested ihat moder.izatio, is not \,ery helpfur asan analytic tool because by definitlon the term ntode,tization,,is the eq,ivalent of

rding

:ntual

i that

Political and Economic De.aelopm,ent 45

\\resternization."e In a similar manner, one problem u,ith the concept of "develop- ment" is, at least partially, that development implies a normatiae perspective.

The starting-point is that we cannot avoid lvhat the positilists disparagingly iefer to as "value judgements." "Development" is ine\.itably a norrnative concept, almost a synon)rm for improvement. To pretend otherwise is just to hide one's value judgements.l"

As a process, development is not only economic but is also "a multidirnensional process involving the reorganization and reorientation of entire economic and so- cial systems."l1

Why is it that some countries are developed and others are not? That ques- tion was the focus of much of the research in this field in the 1960s and 1970s. One of the classic works in the study of political development was by *o1, Bo516n, T/za ,stages of Econontic Growth: A l{on-Communist Manifeslo ( 1962 ) .1

? Its emphasis was "on the psycho-cultural prerequisites of development,"l3 and it suggested that there rrere five stages of growth in the development process:

1. Tradition,al socie$. Prescientific, lvith a limit on how much economic development is possible.

2. Preconditions for takeofJ This involves the development of some science and expanded agricultural and industrial output, similar to that achieved in Western Europe by the eighteenth century.

3. Take off This includes a rapid rise in the gross domestic product and expansion of economic and business institutions.

4. T'he dritte to technological maturi$. Here r,-e include expansion of the in- vestment base of the economy, and increased export markets with new products for the nation.

5. High mass-consuntption. This economy is based upon consumer goods and senices tlpical of those of the industrialized \\restern democra- cies today.la

Many criticized Rostow's framework because it assumed that all countries lollowed the same (predetermined) pathway to development, and because it was cr-rlturally (Western) biased. Althoush it is clearlv the case that this framework should not be taken as an iron law that is universally applicable to all societies- because all societies may not develop in the same stages, at the same time, and at the same speed-it. is worth obserring that there are some common patterns shared bv many systems, as noted by Rostou'. His nork influenced many scholars but has not survived to the present day as a major influence in the discipline.

Another influence in thinking about der,elopment and modernization was the work of Samuel Huntington, who in 1965 suggested that urbanization, literacy, rnodern communication, and mass participation could be seen as instruments of political decay rather than as instruments of progress.l'i Later Huntington expand- ed upon this idea:

Nlodernization in practice altvays involves change in and usuallv the disintegration of a traditional political s),stem, but it does not necessarily

Politi cal and Econornic Daalspysnl

in'o-l'e significant mo\rement tolvard a modern politicat s\ stc. , . \er t1-retendency is to think that because social rl.clJrnirr,iior,'i.-,"kirLg ,lace.poiitical modernization also musr be taking pl;;" ;,-'.'-'-' ' '

Between the 1970s and the present time. the colrceirr c:l' it,:,il;, rrl rlneloltme,t as a discrete, identifiable process has been used 1e-ss ancl le- i-cqLrcrtlr, :rs the basisfor the analysis of rhird world politics. Basicallr'. ir rras cc.rncl,.rclcct rh:.r rhe conceptof developmcnt itserf nas erhnocentric: ir ,,.,, l,n..,i ,,,

' .,, 1,..t. .rrrrr;rtecll as_sumption that the western democracies r'r,ere clevelopec. :rlci .i,t. c,runtries of theThirdWorld shoulcl aspire to become much the,u,.,,,i n. \i,rijr.\:rrer.ic:r and 1,Vest_ern Europe.

The distinction betlveen the developed ancl the rlr,.rr. :rirrs \\.orrds some_times is not as crear as we might like, artho.gr'i rhere is ., 1r,,.,,.... .,],',;r;;; il;;which nations belong to the tr,vo groups. Ob-jectire ir-rdica-,,1.i i..!i 11 .r! a\erage grossnational income (formerly.eferrld. to as the gross ,atr,,ra_ rr:, :.-r,_, ,,r.il; ;;;;,domestic product (GNI and gDp*) u." of,.r,'-....a,r, ,..: ,.. ,..,- ,..,.r.en devel_oped and developing nations.lT _,. _-__Fl.quently, the, term. rl,caelo(ting naticttts is Lr:tcl :-,r r.-rr-!L,ablr irith f/zr Thir:ly?rld; strictlyspeaking, these uru r-,t, rhe sanrc rhirr, :. T,,, ,.i',i1.0.."0.'"ithe 1960s. rlrc rerm Thirrt l\nrl,trel^erred,", r,i" .;; . , .,, ,;.;i: ffi:ern' capitalistic, industrial, and (generall;,) derlocLaiic :r...:-. ., - r.iirrq.d-re UnitedStates, Britain, France,Japan, ur-ri ro on,lr.hich r,_ere k:r.,: r. .,. ,i :'l;;;'i;.il:;and al.so.no-r among what used to be calleci ;" i:., i . . . lrl.,rrist-Leniniststates including the former Soviet Union ancl ir_, :a:r.^--_. _. ,with the dissolition of the Soviet u"i;;, i,;.:",rr. ..1,.,:-,. ,,'.,.ilit"lT3,11r1;to use a First-Seconcl-Third Wortd classificatio.. a.ci :\r ..r- ;: . ..;;;, ffi;; :+i*T;irworld" were reclassified to eirher. joirr ::.t F:,.r, :.1,i or join the , Itis usuallynotagood ideato define u r-r.1r .:, _. .,- -. r: ri11 bs6211.q.there may be tremendous variation left in ,r,. ..,._ I .. 1,,.-.,,,,,,i,.g. Tiris isccrtainlytrtteoftheconceptoftheThirri\tc,r]rl,..

tremendous financiar probrems, such as Brazir rijir: ., - :-.- : r:r. - . ,.. clebt of $g5billion in 1993, r'vhich rose to over $159 bilriou ,, - ,... .- . .a=_ r :-rion by 1g9g,fully 48 percent of its gross national income. rlrt l,_-l.r: :,, r-.:--r,,1 rapked bvthe \\orld Barrl. and a per capira gro.5 1121ia,,. .' . -

. ) - ,.,rr. OrhcrThird World nations are extremely:rich; Sir.rqap,,,:. r.-:.: r. rr..::.r: ,- iri,,i ar-rrl one ofthe highesr per capita g, ors narionel irrcr,,,,_. ,, . . :_._ _ _. r. l!rug.r,,Toput Singapore and Brazil in the same categ.lr-r r_,--r- .-:.f \_r-\ , . .... ha'e to beaware of what \,re are doing, and whr..

xThe gross national income (GNI) of a countrv is dcfineci br tj:_idcnr pri.,rlucer\ plr\ rn\ prodrrcr ,r*". if"lr.;'r,.1,i,".',',, ,,,pflnlar\ rncotne (curnp,.trsation ol employeer nn,l p,,,p,,lp .,,:: ":ll1b,1rk nrg dara Liarat,\ropic ,"pn,,, ..t1,,,,i f , _ i"]1,:'li

goods.and scrvices pr.d,ce,l u.irhin a rr:,riur. , .i,r, I r : :r)rlr In.tllfllng ttrcome that lorcigrrctr irr tlre courrtrr ., rlrr , \. ..

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Political and Econ.ornic Detelrltment 47

There is a substantial literature devoted to the methodological question of ,rr we should measure der.elopment. Often deveiopment is confused with eco-

.. )mic growth; this can be a major problem in theor,v-building. If we beiieve that de- :lopment is linked to poverty, unemployment, and inequaiiq', for example, it is ,tar that a country's GNI can grow rapidly lr,ithout orrr necessarily seeing anv im-

. : ovement in these three indicators of its "development." Orre author has suggested that the term ThirdWoild implies a number of

laracteristics, including a colonial history; a relatively underdeveloped ecortomy .,:,d level of technological development, especially lr.hen compared to the United >,ates or Europe; a lack of interest and/or success in developing "modern" (that is,

-'-Lropean) social, cultural, and economic institutions; and a commitment to ttork - rr greater worlcl equality in the realm of economic and social policl'.2o Elsewhere, . \ common characteristics have been suggested as being 6,pical of developing na- -,.-,ns: (1) low levels of living standards; (2) low levels of productivitv in rvork; (3) ,gh rates of population growth; (a) high and rising levels of unemployment and

::rderemplol.menq (5) dependence on agricultural production and "priman prod- rct exports"; and (6) depenclence ancl r,'ulnerability in international relations.2i

The "third rvorld" is one result of the process b,v wirich, since the late fifteenth centun, the previously scattered peoples of the globe har.e been brought together into what is in manv respects a single society, economy! and political system . . . \&lhat distinguishes the third rvorld is its peripheraliq,. Economic peripherality has meant separation from, and subordination to, the dominant industrial economies rvhich l-rave developed especially in Europe and North Arnerica . . .22

Developing nations include the lorv- and middle-income nation-states. The -,\

or-ld Bank defines as "lorv income" those nations with a per capita GNI of $755 or -r.s; their average per capita GNI was $420. "Middle income" nations are in turn di- rded into fi\,'o groups: lower-middle-income nations were defined by the World

3ank as those having $756 to $2,995 GNI per capita, and their average nas $1,140; .ipper-middle-income nations were defined b1, the World Bank as those having >1.996 to $9,265 GNI per capita, with an a\rerage of $4,620. The "high income" car- :gory includes all countries n'ith a per capita GNI of or,er $9,266, with an average rer capita GNI of $27,510.23

It is no coincidence, of course, that most members of r.vhat we call the .fhird

World had been the subjects of European colonialism, and most of the devel- .rped nations had been the colonial powers themselves. Generally speaking, the sig- nihcance of the system of coionialism can be found in "its iingering effects on the roliticatr and economic structures of Third \tbrld colrntries and on the psyche of iolonized peoples, effects that have lingered because of the length and intensigv of :he experience."2a European colonialism, among other things, created the "elobal roiitical and economic order" that we know today.25

Nthough most of Latin America was independent by the middle of the nineteenth century, virtually the entire ,A.frican continent ulas not independent '.rntil after \{orld \Var II. We can find three interrelated sets of explanations for

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48 Politicat o,nd Economic Dmtelopment

colonialism: socioeconomic, political, and romantic.26 patterns of colonialism tharexisted around the world, r,ere often primar\ economic in nature; the coronialpowers developed and exploited markets for their goJ., u. well as developing anclexploiting sources of primary materials for their orin industries. Thus tne aerlt,rpine' nations were sources of materials for industries in the colonial nations ancloften did not develop any industries themselves. Folror'r'ing the end of worrd war II, most coronial empires began to be dis_mantled, and by the mid-1960s only a few coloniut t.r.lto.i., ,.-;;;j. ei ,rr.1980s there remained only a very few "microcolonies," as ther-rr-ere called, ,,r,irtu.l-ly all of them islandr."" y. can point to Bermnda, Martinique. the Falkland ls_lands' and so on, as examples of re'mnants of coloniai empires. These fer,v examplesare dwarfed by the long lists of new nations that ha'e ernersed from colonialdomination.

The Distribution of Economic Resources

A tremendous differentiation exists in how economic resorlrces are distributedaround the r'r'orld. As <lescribed by one authorjust over a decade "g".r;

;,;;;;g"nuclear family" householcl in North America ulould consist of a familr, of four u.ithan annual income of about $25,000 to $50,000, ",fr"

fiu. ir;;;;;;;;f;;;;*, urban house, with separate bedrooms for each of the children and rhe parents, withmany consumer goods, adequate food, and with the members of the family ....i."ing adequate health care. The children would be abie to attend college, if the1, sodesired, and would. live. to an average age of 72 to 7by.;.

on the other hand, a "qpicallxtended family,; household in Asia wourdconsist of ten or more people, inciuding parents, nv. to se'en chilciren, grandpar_ents' and some aunts and uncles. The combined annual income of the household, P:j! i" money and "in kind" (inclucling the r"oa tn.f s."rr),

'-o,1c1 be berw.een$150 and $200 per year, on the averase. ihey wourd p.on?tq, ji'e i, a single room,and the parents and the older children would be agricultural rr-orkers. Typically,there wo,ld not be enough food to eat, the childrerirvo,ld not attend school be-

[i.]rf few years of elemenrary school, and there wolrld be ir-radeqnate hearth As many obsen'ers have noted, the process of de'elopmenr ,r recent ),earshas given reasons for both optr-ir- urrd pessimism. on one har.rd. a number of de_veloping nations appear to have made real and substantial ethe last two decacles o,. ro. A.lorai.rg," the worrd Burrk, th:oiX:::::i;T.t:L:::ldomestic income of the lon'income"economies between 1gg0 and 1gg5 averageciabout 6.8 percenr.s0 It increased 2.9 percent in 1gg9-2000 arone.,r comparabreprogress included an increase in life expectancy (from an a\/erage o1 42 vears in1960 to 5g years in 19g9), and a declin. i, irrforrt morrariq, lfrom 9g deaths per1,000 live births in 19g0 to 56 deaths pe. t,oo0 tive rrir,"r*ir'igszr.., These fi

,|":qh,o_.*.ffi :ffi ffiTf;';*%.,T:,;*ft :.:.i"H.;l$:l:._,1;:il their lot in life, others have not. It is clear that most of the iiems that are measured

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bi' these figures-such as wealth, income, job opportunities, education, medicalcare' housing, and agricuitural procluctioir-are'not evenly distributed amongnarions' *r_:ul ,1k: u: an exampieof this <lisparilv a comparison of the per capitaGNI of the united Arab Emiratei of g18,060 irank: 32f annuallv i. zoodiorl.r-based upon oil prod.ction-with the per.upitu cxr "isi..rJ.;; "i"5iro i*"a,jl*,} l:f'ly in 2000 dollars-bas.d .,po,' not much ol a developed econom' arail'- 511nrlarl1', the infant mortaligv rates per 1,000 live births that r". ,,,.r-r,iorr.aabove 'ary

dramaticaily: r 33 for Nlalawi, 3i for Er sar'ador, 4 for-|apan.:r4 According to one observer, the "average per capita real incomes in thelarge majoritv of developing countries, especialfi, in Af.i.an and Asian low income

lli"l:Tiriihigher than rhey were in thelate 1g60s, and many seerr ro ha'e rerro-grcssed"''' There is a tremendous range of progress, er.en within the broad cate-s'ories of nations. For example, among ih. ,,to*.ii.ome economy,, nations, Ugancra sa\'v an 11'0 p-ercent aYerage annual growth rate in industry benveen 1g90 ancl 1995;the (former Soviet) Rep,blic of Geoigia saw a 34.1 percent decline. The agricult,ralsector of vietnam's econorn)'grer,v at an average rate of 5.2 percent; Rr,r,an4a,s cie-clirred at an average annual iate,of 10.8 perlent. The service sector of Nepal,seconomy grew at,an average annual rate of 7 .2 percent; that of Armenia fell at a rareof 19'7 percent'36 Nthough some Third \{brld^ ,rutiorx have s,bstantial oil or min-eral resources' such as members of oPEC (organization of petroleum Exportingcountries), or chile, peru, Zaire, and Zambial*rri.rr.""trol the rvorid,s coppersuppl,v, or Guinea, Guyana,Jamaica, and Sierra Leone, which control much of trreplanet's bauxite trade, "the vast majority of rhird wo.ta countries are nor so r,t.ellendowed. being dependent on agricultural production.,,37' The "basic needs" approach to the study of development fbcuses r.rpon rhequestion of the distribution of income and the distribution of "certain sta'clards,,ofnutrition, health, and education services. It advocates "making the rneeting of cer-tain fundamenhl human needs a development prioriry,;; und is a widery sharedproach to rhe study of the process of political a.u.top*"rL; fr;; ";ir:;i:',ili;dramatic differences .mongnations i, terms

"f -""i;i;e basic needs of life, br-rtit is often the case that witiinnations in which there has been a net increase in thestandard of living, this increase is not evenly shared. In fact, rvhen there is a national increase, it is usr-rally a prodtrct of a signifi-canr rise for a smar minority of the population, while the majiriq

"i ,r."-p.i,rr"tion continue to exist with traditional standards of living. 'fhis phenomenon isillustrated in Thble 3.1. In rhe case of Kenya, fo..*u*pi.;;t.;;;[l;;;;.;r;., the population receives less than 1.8 percent of the iationallr.o*. .r.'."rr.rrr,1r_tion' while the richest 10 percent of the population receives nearly 35 percentl,,rl

lnternational Financial Relations and Debt

The inequality behveen ancl among nations in their wealth ancl economic viabilityhas led to a gro$'ing system of irttelnailonal depenlence,in which the ,,ha'e-not,, na-tions have come to rery more and more upon the aid programs oI, the ,,ha'e,, na-tions in order to survive. In many respects ,,the history of the Thircl \Vorld is to zr

ears

, de- rYer

aross -.ged

.ible \In per

al- .in .:'ed

fl

fl

50 Political and Econotnic Deztelopment

TABLE 3.'1 Distribution of lncome in Seven Nations

GNlRmking per Capita

Percentage of National Income srCssssp\isrRece\re6. by Top l0% of population

Percentage of National Income or tonsumption Received

byBottom l0% of population United States Sweden

Poland Brazil

Griatemala Indonesia

Kenya

5

12

81

108

152

30.5%

20.r qnl

46.7

46.0

26.7

31.9

1.8%

3.1

J.:

1.0

i.6 4.tj

1.8 Soartr fu11P11*. o, the top b., ItomMbrldBanL\4ehpae,,nuu.nor ldbanL.urg dara ar,.fr,,op,. t;NppC.prll).

large extent the history of its incorporation into a grobar economv crominated brthe 'core' industrialized countries oiwestern Europe and the United States.,,+(,Theprograms of these core nations inclucle grants, loins, and in_ki1d assistance (suchas wheat or tractors). The economic dependence of the deveroping nations upon the deveropeclnations has srown into a major internationar proltei, irr....r.rt'.,"ars as the inter_national debts of some of the have-not nations have skyrocketed. and the likelihoodthat they will ever be able to repay their loans has decreased. It is easy to see tharMozambique, a countryy,]l u" annuar gross national income .rsi ; ii,-r;il1iexternal debt of

"*:.,q9 9

l,]1,_." iy

_S"t"S,1g have serious pl.obt",r, repaying isdebts'.|amaica ($6.4 billion GNI and $-"s.s iitLo., debt, with u a"u, of 61 percent ofits GNI) has similar probrems. Even co,ntries with a slightlv b",r.. debt_to_GNlratio (for exampre, N{orocco, with a debt of onry 51 percenl ofits GNI) have impos_sibly high b,rdens, since they cannot afford to pay 2'5 or 30 p..."rr, of their GNI ininterest on loans every year, a point to which we shall return belorr,.ri . Tlr foreign-debt nl3brem is especialry troubling ,o .o,,," because it oftencarries with it the specter of foreign intervention.r, or.i..."rl

"o. rras suggestedthat over the next few years "taiin America will have to appropriate as much as

:H|,.,.,?o percent of its exporr earnings for payrnent of ini".est on irs external

. Indeed, inJuly 1989, Braz, missed making a pa)rynent of sg12 milrion owedto foreign sovernments, primarily because itr. t.ia.'r,r.orrr-. -r.i,r-, foreign coun_tries had decreased in recent years, and Brazil's government rvas concerned that apayment of that size could' adversely affect the nitional ..orro-r. Brazil's iriabilityto keep up pa)rmenrs on its present debrs in rurn ,ff.;;. irr.'."r" ,rr,h rrhich it willreceive future roans. At the time of that missed payment, action had jr-rst been take,

,"lL: *'ot surplus is the amount of the excess of value of sales of Brazilian gootls over the r,aiue of imported

Political and Econ.orLic Do-el,o1tnrcn.L 51

to freeze several loans, inclucling $900 rnillion in fund loans, $600 million in com- mercial bank loans, and about $1.5 billion inJapanese assistance.+4

One scholar has argued that

it is high time for the foreisn aid communi6,to take a hard look at costs and benefits of its rvork in general svstems terms. Hor,r, mr"rch has been spent and horv much has been sained in overall results? Hor,r, much have taxpayers in advanced countries contributed. and to rvhat benefit, to those u'ho live in poverq'? . . . Development orgauizations nould be well advise<l to undertake self-evaluations to deternrine (1) to r,r-hat extent the1, [2y. helped the developing world; (2) to what extent they ha,n,e caused or contributed to Third-\{torld problems; and (3) lr,ho in the f,rnal anahsis has benefitted the most from the total arnounr of aid-the poor or the privileged of the Third \[orld, Western cornmercial firms. or development bureaucrats, experts, ancl specialists?45

Manv Third \4rorld nations are in the unfortunate position of having .ih.g/a- product economies, or nearly single-product economies. When their single crop (or indttstrial product) loses its value on the world market, the economv of the nation is ser,erelv hurt. Recent examples of this t)?e of problem include the economy of the sniall Caribbean island of St. Vincent when the price of sugar fell sharply; the economY of Nigeria, Tiinidad, or Nlexico nhen the r,r,orld price of oil declined; or the economy of Chile when the price of copper plummeted. A virtually sinele-prod- Lict economy can also lear,e a nation r,ulnerable if it sells most of its product to only one other nation. One of the reasons that Brazil's econom). took a clownward turn had to do with its dependence upon world agricultural markers ancl the failure in the norld market of some of its cash crops.a,i

Part of the probiems faced by Third World countries can be atrributed to a lack of econornic independence that we suggested previously. It has generallv been accepted that the econornic success of Third \{brtd nations is very depenclent upon the economic growth and expansion of the large industrialized nations.aT

In practice, economic development often means indusfuializatlorz,a8 because econornies entireh, dependent upon agriculture do not have high GNIs. The r'r'orld's poorest nations are primarily agricultural and rural, r,r,'hereas the richest na- tions tend to be industrial and urban. Associated with industrialization we can hnd such characteristics as higher literacl,, higher GNIs, lor,r,er infant mortalitv, better health carc, and a generally higher standard of living.

Z:cnomic Nationalism

There appears to be no clear-cut definition of exactly lvhat economic nationalism is, or lfhat set of domestic and international policies are mandated by it. Accorcling to Peter.]. Burneli, holvever, the term "often carries, and is intended to carrr,,, consid- erably normative weight, favourable or pejorative, depending on who is making the claim."r!)The general idea implied by the term usually involves a strong feeling that the interests of the nation, as defined in a certain r,r.ay (for example, social, political,

f I I

52 Political and Economic Dnelopment

economic, cultural), shouldtake priority in economic poliq.rnaking, regardless of past practices, \ong-term goals, or short-run economic hurdles.

Economic nationalism does not necessarily mean opposition to all foreign interests, for what is in the interests of one's own nation rnuy ufr" be in the interests of others. Similarly, the primary targets of economic nationarism may not be a spe- cific country or group of countries, but courd be a tlpe of multinational corpoia- tion (for example, mining companies) or all foreign^multinational corporations, for that matter.

Tlpically, the economic goals of nationalists involve developing industry in one's own country broadening markets in international trade, decreasing economic dependence upon one or a few other countries, and regaining (or gaining for the first time, for that matter) domestic economic control Ir i*p-o.r..rt sectors of the economy- Examples rnight include regaining control of the copper mines from for_ eign multinationals i^n

-chr_re, nationalizins the asbesto, mi.rerln euebec, or dever-oping a domestic soft-drink market in India. The overall soal, then, is ,,a desire for

greater national economic independence."b0 Additionaily] there have been region_ al variations on the theme of economic nationarism, ,r.h u. .,pan-Arabism i, ,,pan_Islam," "pan-Africanism,"'Asian cooperation," and,,purr-,tm.ri.anism,,, to name some of the more visible examples.5l

Foreign investment is often a target of economic nationalism. This type of investment is often

,r"yghl by developin-g nations because it brings to a nation

much-needed capital, thus helping to ir.ut indusrries andjobs. rhis in turn helps to create other industries and jobs. probrems may develop,-ho*"u.r, when specific foreign industries become too large and powerfui, o. wrr..r'u government suddenly perceives that it is not able to control the direction of its own

"".o.ro*y because sub.

stantial economic 26te15-ef1sn the multinational corporations-have their own goals and strategies. According to Burnelr, "Experience has shown . . . that foreign direct investment . . .^will not necessarily bring to an LDC (ress deveroped country) :i:,j:*t"ne

all, of the possible benefirs" sought by rhe promorion Lrroreign in- vestmenf_"'

lnstitutions and Economic Development

Because our emphasis in this text is on political institutions, a word should be said about how the institutions on which we will be focusing our attention affect political development and economic policy. AS one source not;s, "Given the di{ficult task of creating political order in Third World countries, the processes of selecting and im- plementing constitutional processes are important. Ii constitutional proclesses fail to take hold, as,isthe case in-many Third World countries, political d&elopment is greatly retarded."53 specifically, do institutions help shape ihe distribution process of economic values? Do institutions affect ..orro-i. srarlityl Do some structures enhance economic development or detract from it, and whyi

In recent years, more attention has been paid to institutional development in the Third World' The main reason for this is that "national economic ,rurug.- ment capacity is criticaly dependent on the efficient functioning of a few key

'fetgn

-rests

r spe-

?ora, ::lons

To shorten a long a,rc1 complicated stor1,, the failure of de'eloprnentefforts is assumed to be crue tasicalll,to ihe neakrr"r."r-,,,r'rr-r" politicalsysterns of the LDCs fless der.elunejl countriesl . Gi.,;; ,h. pu.urrr.rrr-,,ilnpuflatrce of the political srstem in pr,rrirling leaclcrship and directionfor all other s!.srems_economic, ,o.iui, u,_rJ r,l","i;Lr;;;ir.:_the politicals'stem's inabi]1q' to f.rfir its roie ad'ersery ur..t, tn. f.riormance of allother sectors.55

Economic de'elopment is dependent on the capacitv of a number of insti_tutions to respond to project and policl,initiatives.50 Tlie purpose of econornicporicy in both creveroping a,d de'eloped nationsis the same : to suide or control the economt,in such u iruui. to influence the size,sror'rh, and distribution of its gross natiorral ir.o,rr..t,t Th...'rr, o,rrrousrli an ex_trenrclv rtide r.ange of policies- thar mighr bc arailable ,o ,,-,, g,r,.".#;;;;;;:.',;influe,ce r'e economl', including govJrnment expencliturei, ih" l.r,"r and compo-sitio, of taxes, the rore of local

*gJve.nments

.and other organizations i, makingand adnlinistering policl. n,on.,ui-. policr and insriruriorrr. rrii'. poticu. prort.criorr-ism, and tariffs and exchange .ut.r. itr.r" activities, and others, ma,v be used in fo,rbroad areas-of polic,vintervention, including (1) altering the distribution of inconrethrough policies desisned to change prices; (2) redistriburing ou,nersrrip of assets;(3) redistributing income through"p.ogressiv" income arrd r""?rth taxes; a,d (4) di_rect transfer pa}rnenm and pubric p.oi,i.io, of goods and scrvices (s,ch as publichealth programs, school l.,rih p.oi.ams).58

Ce ntra I izatio n a n d Dece ntra I izati o n rn5 conllpt of the poriticar centralization of economic planninu has been shorr.,to have direct rerevance for the process of econon-ric and poriticar development.:,r)During the years after 19i0, or"r1'gou"rrmen,, in the Thlrd \Arorrd tried nelv ap-proaches to economic and sociai folicl,making that included ,,decentralized au_thorih' for planning and acrministration ro stare, regional, district, and localaeencies, field units of centrar ministries, local go'ernJ.rrtr, and special_purposeorganizations."6"

As used here, the term decentrarization slrggests transfer.ring-pla,nine andadministrative authoriw frorn.the central government in a poritical sysrem to locallrnits, fieicl orsanizations, local gou.r,.*.rts, or special .o.rgou".r-r-entar organiza_,]"":1". Several goocl reasons exist for decenrrafirAfp"fi.lilrr4 oorrrr,rrsrrarion inthe Thircl World. Specifically, decenrralization

Political and Ennomic Derelopntent bg

national institutional processes such as budgeting and personnel management.,,:,4Moreover, as one author has noted:

I . Allou,s planners and managers to be closer to the problerrs thev aretr'1 irrg ro sollr 2 Nlinimizes "red tape," *,rrich resurts from a centrarization of services 3. Helps to increase officials, alvareness of local problerns

-t-y ln omic ,r'the

f the :r for- ler.ei-

:e tor -Eion- 'Pan-

.lante

-:le of -.rtion

relps ,:cific

lenlr. .: sub- -own

:.eigir

.r tr1.)

.-r1 tlt-

: said :rical

-,k of .I irn- , fail :1It tS cess

Llres

rent age-

kev

-

Political anrl Economic Deaelo|ment

4. Encourages penetLation of policies into hir:-.: , far removed from the nation's capital-r,.:-:. - . may be viewed as irrelevant

5. AJlorvs for greater representation i,-,:- , .: : groups in society in the policr-makina :,:' .'.

6. Encourages the development of learirr.:-,-- . rience among people rvho might nerr:' : , . cisions to be made at the center

7. Increases the efficiency of governr:-r:-.i -:i ..: : cials at the center from haring r,r :u.:- : -, . , decisions that could be made br ir:c-'.. ..-,. - , .

8. Increases commr-rnication and cLrLrr-{-l,r-,-r.: .. : the more remote areas of the naiiL,:-

9. Errcourage' more cilizen par tit ip.,-. :. : . - 10. Decreases the domir-ration of rirt :- . -- :, :

trenched I,,cal elites uho are o{r.:: ..1.. upment policie. and irrsensitire 1,, : .. rural communities"

11. Encourages greater flexibiliq and ::-,:, .:.. - 12. Allons leaders to locate facilities ar-rLr. i::--. -' ..

they r,r.ill be more useful than con1m..rr .r:i .r .: , . cen tral ized leadership

13. Increases stabiliq, and national Lln1tr :,'. 1:. - .. . .. 14. Increases the efficiency with u,hich pr-ri ,-- . -- -,

livered to the people of a nation'"

ts. areas .r,r licies

i other

. :-t.ie\pe- . ' :r'i al1 de-

-: rring offi- .-,:-. rnaking

. . ., ,cal ier,el - .,.: ,-c:ltef and

. . :::rrnistration :- : -.:! br' "en-

r -..:,rrLal clevel- :'.i {rouPs in

:--:r- :niries l.here :.:-- :tc selected b,v

. -. :,,.,: ricipation :, 1 .crrices are de-

In Asia manv of the best examples oi r, ,r----:- -: . ,', -: decelltralization can be found in India, where despite a centraiized fe,:1rr':.- :'. ! i:, rsrablished by the British coloniai government, there has been a fair-l,, . ,r:r:-nrr- mrr\emelrt to encolrrage local governrnent and local administratior-r.

It seerns that local government exist.: .. :.. -,,rr-' tr.. c.,.rLcr'alrr. but the constant revival of the concept of local elr. l ,lr :'t-ltc:. eirher a form of collective conscience that reminds le..,rier'. L-,- r.-r D, '.lii\e rnlues in self- government, or a pragmatic approach that rrc,,ri:tize: the rahie of iocal participation for achier.,ing central soals.

Pakistan, Thailand, Malaysia, and the Philippines are also among Asian na- tions that have undertaken experiments in decentralization in the last fivo decades.

Not only can government structures be slightly decentralized through a federal organization, but administration can be decentralized, too. Betneen 1967 and 1981, Thailand's government undertook to decentralize the administrative process to be both more flexible and more responsive to local needs. Actions un- dertaken by the government included decentralizing industriai management, basic economic services, and social senrices, so as to increase the number of people who could benefit from governmental services and increase production opporflrnities for business. This included giving local authoriries power over how sonle development

funds.would be spent, ancl seekins locai input on and planned.Ga

Political a.nrJ Econoltic Darcktfirtettt b5

hor.v villages should be organized

:1] na- rdes. .gh a 1967 '.1ti\ie

\ llII- basic

: rVhO :s for rienf

An African example of this mo\rement towarcl decentralization can befbund in the case of Ken,va, n'here the government began to decentralize planrringand administration responsibilities in Ihe earl,v 1g70s. This rnoye to decentraliza-tion u'as prompted bv dissatisfaction with the results or ptannlr.g undertaken b,v thecentral government and by a clesire on the part of local leaders ancl administrators to pla1.a more active role in the overall planning process.6i,

In Latin America the process o] a...r-rt.otization has met r,l,ith great i,sti-tutional opposition, primarilv because "concentration of decisicin rnaki,g lvithincentral go\ernmenl mirrisrries. often rel^err.a,o nr.r"r..",..l,zarion, i: a funcla_mental characteristic of Latin American governments.,,60 Much of.the p.sh tou,arddecentralization in Latin America has ris.lted in the creation ot ,,autono,ous', government agencies; in a sense, it is a cur-ious forrn of decentraltzationbecause power still resides at the center, but it is placed within a different structlrre at thecenter.

. For example, there are over 500 decentralizerl organizations ancl r,vhat havebeen called "parastatar enrerprises" that have been establlshed b,v rhe Nlexican go*ernment, incl,dins petroleos Mexicanos (the state petroleum corporatioir,PEMEX) and the state coffee marketing board, which are exampies of dece'tral-ized organizations: nllmerous banks, hltels, sugar mills, and focld incl-rst.ies arealso.exa.mples of parastatal enterprises. Additioiaily, over g00 independent com_missions and councils, including the National Counclt on Agricglnrre and the Fed-eral cornmission on Electricitv Rot.r, are significant p,blic-organizations in'oi'eclin the creation and administration of public policy. These parasta.tal

.enterprises operate-legail1,, mu.h as r,r,ouid private corpo-rations, the greatest significant difference beirig that they hav. representatir-es ofthe government on their boards of directors, and their activities are senerall' sr.rb-ject to rhe o'ersisht of the government. The cenrralir"d o.;;;i;;"1;;;;'i;;;

distinct, thel' own their own properry and they ha'e their o-*,r-, gor,..r-ring boarcls.Unlike parastatal enterprises, however, they fali u.der provisions-or "a-iiir,.*"=la'n rather than commercial iaw67

Other attempts at decentralization in Latin America have resLrltecl inresionalization' For example, \'enezuela has sought "to establish a ne*, ler,el cif gor.ernment benveen the center ancl the states and ilunicipalities that can plan and co-ordinate the acti'ities of all go'ernment .nits within each region.,,,rs It is interesting to note that n'hile we can iclentify movements tor,r,ard de-centralization of government in Third \{orlcl countries u.J.,"J,n. lr,orld, the rnoti-vations for decentralizing planning and aclministration are ,ot ahvar.s the same. I,some countries a desire for greater political regitimacy is the dri'ing force; erse_w'ere, the ,rotivation comes from demands from rerional,

"*rri.,-,i,rui ';;;

giorrs groups fcrr- grearer pa.iciparion in rhe p"fl?r:_u*in; p,..;;::i,:'"',;.; insta,ces, however, decentralization is seen as u *uy ,o -;k;;;.:;"menr more re-sponsive, more efficient, ancl more effective.

Polit i cal an d Ec on omic D e1) elo|men t

Legislatures and Development

The link betn'een elected assemblies and political development is a very significa:. one, because legislative institutions help to provide the legitimacy fbr the char.i.. and dynamism that are inherent in the term deaekltment.ig\'er,v often the legislatu:. as an institrttion is especially r''ulnerable to attack in a developing svstem because is one of the few institutions specifically oriented to promote discussion of contr - versial issues, interest group activity, debate over policy options. and therebt, tl . question of the legitimacy of the regime.

The legislature is the political institution most likelr, to del-rne political issues, :rnd policies to resolve those issues, in sectional terms. The legislature is also perceived bv executive decision rnakers as a bodylvhich lacks the expertise necessary to properly consider complex issues, and as a ih1'ear.;u

As an institution, the legislature is especiallv concerned with the develo:- ment of linkages bettr,een the political center and the more peripheral regions , . the nation.7l Legislators are often concerned with issues such as political represe r - tatiou, resource allocation, and public sLrpport for the legislatr.rre and, thereb1,, th. regime.72

Bureaucracy and Development

One of the major problems faced by developing nations, to which we alluded earlie: is that they do not have a sufficient number of individuals tvith an adequate ler,el , . bureaucratic skill to keep their ne\\r goverllments running smoothh,. Some nelv n,.. tions, such as India, were left with a reasonabl,v large pool of trained talent whe: their colonizing por'vers le{t; elsewhere-in Africa, for example-colonial power t pulled ollt of naLions without leaving behind an adequate cadre of trained and er- periencecl administrative talent.73

The implications of this shortfall are immediately ciear. Nthough the terr: hureaucrarl may have negative connotations in manv parts of the world, all nation, need a body of individuals to administer programs, oversee the del,elopmerrt of po,- icl', and participate in the day-to-day operation of the government. Developing n;- tions are, in respect o{' this need, no different from developed nations; t}ie.: problem usuallv lies in not having an adequate supply of bureaucratic talent. As one observer noted, "African administrators rvhose responsibilities until r:ecently werr characterized by routine are catapulted to the top of the hierarchl,, lr,here they arr expected to advise ministers and politicians regarding major prorrarns of econont- ic and social development."Ta

\!'e shall return to a discussion of the role of the bureaucracy in Chapter -: which examines the political executirre.

Political Parties and Development

Otller political institutions, apart from those described in a constirution, may harc an impact on political and economic developrnent. Such development-r-elated is- sues as political participation, political legirimacv, national inteuration, and t1'rc

Political and Economic Deuelopment 57

management of conflict can be affected by political parties as well as by constitu- tional structures such as legislatures, for example.

Political parties clearly have an impact on the types and levels of political participation, especially movements and demands for political participation, which "are a cTtaracteristic feature of political development."T5 Although the existence of politrcal parties "does not in itself guarantee that governing elites . . . will welcome expanded political participation,";6 parties are associated with the kind of d.ebare, discussion, and interest group activity conducive to expanded participation.

Political parties are a vehicle to mobilize the populace, and thus are an al- most absolutely necessary structure for a system involved in political d.evelopment. Even a one-party government can be democratic and mobilizing and thereby help- ful in the developmental process.

Parties also can be significant in the process of the legitimation of political authority, which is important in the development process. Parties assist in the processes of political recruitment and political socialization and help to pass on the political culture of the regime from one generation to another.

Although parties are not absolutely essential to the process of national in- tegration (because we can identify a number of nations that resolved their "crises of national integration" before the advent of political parties), they can be very im- portant in this function for contemporary developing nations. According to one view, "In most new nations of Asia and Africa, governing political parties are con- cerned with two elements of national integration-the issue of control over the na- tion's territory and the issue of subjective loyalties."77

Finally, political parties can be important vehicles for the resolution of con- flict in developing systems. Parties often serve as "brokerage" mechanisms helping to facilitate conflict between and among groups in societies, especially in societies in which democratic elections are the vehicle for the selection of leaders.

Other lnfluences on Development

These three structures-legislatures, bureaucracy, and political parties-by no means make up an exhaustive list of the political structures and institutions that can influence the process of political development. Rather, they are ind.icated. here sim- ply as illustrations of the kinds of linkages that can exist between political institu- tions and the development process. Indeed, substantial research has focused on the impact on political development of communications,Ts of education,Te and of the political culture,So to name only a few of the behavior and institutional subjects of inquiry in this regard.

Palitical Economics and Political Development

The problems suggested by the interaction of political economics and political d.e- velopment are faced everlwhere in the contemporary world. Economic develop- ment requires political leadership and "control, integration, and coordination of financial and personnel management at the national level with conventional devel-

58 Pohtical and Econornic Deaelopment

opment efforts."81 one useful indicator of the importance of political control fcr: economic policy "liesin the prioriry which economic development has as a politic:- goal of government."E? As one observer has noted:

All societies (deveroped and deveroping, rich and poor, high, middie, or rorvincome) are faced with decisions'coicerning pi"a.i.ti8", .orr.,rrptiorr, resource allocation, distribution, ancl grorvtf,.'How these crecisions are made, as well as th^eir outcomes. crepen"ds,on the interplay of a rariety of general and specific factors. The generar factors a.e'thise o'er .rvhicrr countries have ve.r' rittre or no contror, for exarnple, naturar resource endolvments, economic size, and internationar economic forces. Specific factors incrude a given countn-'s unlque history tt-r. so.io..,tt.',.ur en,ironment, and the government's poiitical icleologl as'is normalry reflected in specific p.ogiams and policies it is willing ai p*r**..r;----'*--'

Theories of Development

The problem with much of what has been calied *development theorry,,is that it ha.not. ade_quately explained the phenomenon of the developme.t ancl evolutio. o,political systems. "Depencrenc,v theory" became popular in iiie 1g60s and suggester. solutions to the problem of a lack oi'economic deveropment. The most commor. explanation provided by the theory was that uncierder.,elopment was not simplr, .temporaly condition leading, elentually, to cier,elopment; iathe., it lvas directiy related to-and some s1i$ clused by-the expansion of capitalism and indlstrialis,- elsewhere in the worlcl."r "The tendency to use the fo.muLa of tlepenclencra to explairl everything that seems Yfong in the Third \4rorld has been ut or.. unclerstanclablr and quite damaging...,,8:,

- Dependency theory rnade some important contributiorls to an understand-

ing of the political world, howel,er.Eo It shor,r,ed us that modern developinu nation:differ in significant ways from the industriarizing \{estern nations oi.the past; tharworld economic conrlitions inflict constraints on today,s der.eloping nations, ancithat there is an interacrion befi,\'een political, social, and economic factors in theprocess of development.si

-\.

Generally speaking, to exist, or to have existed,sS used. These are the liberal

r.. ,..pro?Ch, and the neo-Marxist proaches here.

four broad schools of development theory can be saici although, as we noted earlier, they are no longer u.idelr model, the historicist approach, tt

" *urro!"rAi "fapproach.se We shall brie{Iy describe ea.h of1h"s" ap- -fhe

liberal moder of d,everopment suggested, most simply, that the process ofdevelopment is a linear. one, that stages- or developmental phases are passecrthrorigh in the same order, and that ail countries go through the deveropmenr process. The "advanced" nations, the assumption wen"t, started"the process of.devel_opment earlier; the developing co,ntries were simply at an earlier stage of theprocess, and they would folow the evorution of the derreloped nations.

The historici.st approach objected to the assumption of the riberar moder thatall countries would follow the same process. These social scientists suugested that

rol fo1 ,rlitical

Political and Econotnir: Detek$ment b9

rlot all societies started their evolution at the same point, and further suggested that because many \Vestern characteristics were missingin a great number oiJeyeloping societies, "many of the institutional configurations thaicharacterized the transfor- lllation of \A'Iestern societies were uniikelv to be duplicated in subsequent modern- ization of other societies."e0 In other worcls, not ati svstems would follov. the same Pattern of political evolution, but rather would mature as a consequence of particg, lar national characteristics.

The managerial approttch focused, as its name suggests, less on the broader questions of hor'v political structures and behavio. evoh'eJ, and more on quesrions of how problems are solved in society and horv policv is made ancl evaluatecl. One of the most influential voices in this school *ou.d his emphasis from having the goal of development be.democracy, to ha-,,ins the goal of developmenr be st;iliq.;nd institutional order.el

Finally, t-he neo-Marxist approach focused not on the stages of deyelopment, nor on the specific factors that influence clevelopment, nor on ho* problems are solved in the development process, but rather on the "pathology of development, namely underdevelopment. "

The central idea of the neo-Marxist is that far from being independent oc- currences, the development of the industrial countries ut d the ir.nderclevel- opment of poor countries are opposite phases of the same historicar process.. . . The historical process of the expinsion and development of cap- italism throughout the rvorld simultaneoirsly, generated and continues rcr generate both economic development ancr siructurar uncrerde'elopment.e2

Prablems of Development

It has been concluded, generally speaking, that ',the cumulatiye benefits of eco_ nomic growth have not 'trickled down,' or hal,e not otherwise been sufficientlv ,dif- fr-rsed' to the masses of the population in the d.eveloping world.,,es Indeecl, *hut.u.. scholars' differences irr theoretical approaches to problems of deveiopment, there is some general consensus on practicar problems: ,,Those on the Left and on the Risht as rvell as those in the middle tend to agree that the rate of growth achieved by most less-developed countries (LDCs) after four decacles of foreign assistance is less,than satisfactory, if not disappointing."ea There are a vast ,lr-t.. of general problem areas that are significant across these LDCs, a fer,v of r,vhich we shalibrieflv discu.s here.

Population. At the e,d of the 1980s the world's population was esrimared to be nearl,v 5.5 billion people. united Nations projections predicted a rvorld population of over 6 billion by the year 2000, and over 8.3 billion by the y.u. 2025.,,., Mo.. recent_ predictions have su-ggested a population of o'er 7.1 tlttior-, people bv 2015.e6 Population is a signific;rut issue ir-r ih. ,t.,d,u of developmenr for rwo distinct b,t interreiated reasons. First, of course, is the argurnent iuggested by Thomas Malthtrs in 1798 (An Essay ,n the principte of potrtihtionl,r; ttlt the increase in population in a socie$' will outstrip any increases in production or econornic

, it has ron of lested rtmon :iply a tly re-

,-:alism

; iplain dable

-,tand-

rtions : thar

,. and n the

e said ide11,

rl ap- ie ap_

1L

i

, ess of rssed

, ntent level- i the

thar !] -, ilrnat

'l

1

1 I

i I

1

A

60 Politrcal and Econom.ic Deaelopment

growth to be found in the economy, and that the only wa,v for societies to avoid a "condition of chronic low levels of living" was for people to engage in ,,morai restraint" and limit the growth of their families.es Second, it has been argued thar population increases often have favorable or unfavorable effects on th; growtl1 rates of economies.

At the beginning of the eighteenth century the worid population doubling time was 240 years; at the beginning of the rw-enrieth century it wai t tr years; and irl the 1930-1950 period itwas 70 years. As illustrated in Table 3.2, the worldis population has increased the rate at which it is increasing, and toda,v the norld's popuiation dou- bles approximately every 35 to 40 years.ee Furtherrnore, as shoun in raute 3.3, the pro portion of the world's population living in the underder-eloped norld is increasing. In 1950 approximately 67 percent of the world's population lived in underdevelop.J r.u- tions; by the year 2000 it is expectecl that this figure ltll rise to almost 80 percent.

Nthough the size of one's family mav be a matter of personal concern, ir also has national and societal implications. If a nation's popr-rtition grows ar a rare faster than the increase of its economy, to take a simple ijlustrarion, the increase in the amount of available food will not be aciequate forl the increase in the number of mouths seeking that food. Conversely, of course, a population that is too small mar limit the potential expansion of an economy; a nation cannot increase its factories if there are no people to work in those factories.

Not only is the growth of population a problem but so roo is its 4,istribution. Increasingly, populations are moving out of the rural areas of nations into urban centers, often in search of jobs and a better life. Ironicallr,, rvith this rnoyemenr comes an increase in slums and overcrowded and unhealthr-lirins en\..ironments. In 1980, 66 percent of Mexico's population lived in the cities; in tgga that figure had climbed to 74 percent. similarly, in 19g0, 60 percent of the population of:Jor- dan lived in urban areas, and eighteen years latei this had ,i..r, to 73 percen"t.ror, Sometimes this urbanization is focused. on a single citr,, often the national capital.

TABLE 3.2 World Population lncrease

Population (in miJlions )

7750

1800

1 850

1 900

1950

1980

2000

2016

/.) I

890

1,171

1,668 , ;94 4,132

6,121 (predicted) Actual: 6,054 7,100 (predicted)

lource -lltl adapted from J. Faaland and -f.R. Parkinson, The Political Econow) aJ Daetopment (Nerv york: St. N,Iartin,s Pres's, 1986),p 168 Datafor20u0and2015predictionsareinbulletrrmb.i14fr.omihelistpror.idcdbythe\4rorld Bank (wrulvorldbank.ore/data,/datab),topic/bullers.pdfl

.

Political and Economic Deuelopment 6I

TABLE 3,3 The Goncenrrarion of World populations

Population (in millions)

Population Density Population Growth (people per square kilometer) Rate (percent)

Low-income nations Middle-income nations High-income nations Tbtal

2,459

2,693 qn?

6,OU

76

40 2q

47

I Oq^ t.2 0.7

1.470

Sourte World Dnelopment Reput, 2002, p. 233.

\Ahile approximately 3 percent of the population of Canada lives in its capital city of Ottawa, 34 percent of the population of Costa Rica, 24 percent of the population of the central African Republic-, and 39 percent of the population of Uruguay live in their respective capital cities.iol

India was the first developing country in the world to officially ad.opt a family-planning program. In the 1970s it was hoped rhat the governmenr would. be able to reach 90 million couples and convince half of them to limit the size of their families. To do this, the government set up over 5,000 family-welfare planning cen- ters in rural settings across the country. The program was criticized for a number of reasons, among which was that it overestimated the effectiveness of its "motivators," individuals who were charged with advocating smaller families.

\4rhat . . . can you hope to accomplish in preaching family planning to a mass of starving illiterates living in dilapidated huts and .,.r.orritrry conditions, suffering from diseases and disabilities, and for whom life is an unending chain of misery degradation and deprivation?r02

One critical study estimated that in the period of 1968 to 1969 fewer rhan rwenry- one sterilizations and fewer than eight IUD insertions were performed. in Ind.ia for every technical staff person in the program-not a very impressive rate of results.

In 1976 the Indian government started a new program that in effect in- cluded compulsory sterilization; over 7 million individuals were sterilized as part of this effort. This tJpe of public policy raises significant philosophical warning flags for many observers: How far do we want governments to regulate personal beniv- ior? This program may have been more effective than its predecessors in terms of results, but politically "the rer,rrlsion against this contributed to the downfalt of Mrs. Gandhi's governme:nt in 7977 ."103

One study has suggested that there are six general policy options available to governments in their efforts to "control" population:

1. Through media and educational efforts to trv to persuade people to have smaller families

2. To establish family-planning programs to provide contraceptive ser- vices to encourage smaller families

Poli,tical a,nd Etonotttic Deu elopment

3' To provide economic incentives (ancl disincentives) t. encouragesmaller families -'--l -' 4' To move families away from urban areas and toward rurar areas tobalancl.tll distrjbution of the population (although this option doesn()t lirnil grorvrh) 5. To coerce people into har,ing smaller families through Ians andpenalties 6' To raise the sociai and economic status of women, thus encouraging

delayed marriages and smalrer families for tt . p.oi".ri-orrur,"o-er.,r* There are clear.reasons_why a govefnment might want to establish pop.-,.tion-plarrning policies. The problem is"that popul^,i;;"ky or,.r, ..rr-,, square .into questions of religious belief and ir.r.., ufL.iing the rrorap..r.rrral of famil' ct-cisions; consequentry, governmenrs ha'e not beei u..y .rr..tiu#ffiffiJr"_

policies into force. From an individual perspective, it mu;, be a radonal policy fbr ,rural villager in Africa, for example, to ^have

a large family; without a sociar securis)'st-em, this individual.wilr be supported in his orjag. uy i.,'i,, .niiaren. The best rr.r.,to make sure that he has ',urrr-&ild.en to help ..[po., hrm wtren he is o]cr is ihave many more children when he can, since he muiiallow for some le'el of infarrmortalig/. From the,ational perspective, of course, this is not an optimal pollc..since if a single family has, say, ten children, and each of those ten chilriren mar-r-and have ten children, and so on, the popuration growth

",,ir"prary become an ir--tolerable burderr on sociery.

Quality of Life. Many people in Third worrd nations are constantly strugelin.against malnutrition ancr disease. Life expectancy atbirth in 19gg a'erag;fi"b;;;59 years in the low-income ..oro-u ..r,middre-inco-"".o#i"r";"il;i..,"":"0""#';.;:,':J1ffi1J*3t.r.:il;i nations.rns In the mid-19i0s, almost half oithe population of ihe developing worlc(exciuding cirina), over a- billion peopre, ri'edtn inadequate diets, ancr one_thircof them were child.ren under the age ott*-o.,,,n u,r.t ..ro.J ...."rr1, ,,approximaterr 40 percent of all two-year-olds in ieveloping countries are short for their age . .The prevalence of srunti"g_-1l be as higir as 6b percent in India; ir is more than 5(,,percent in Asia other than India and Ch"ina ...,r0'7 Education. In many Third worrd countries, the ,,education industry,,is the rargesrconsumer of public revenues.l08 rliteracy rates. remain quite high in cleveropi,gnations, averaging 39 percent of the population in the row-i,come countries.compared with 15 percent in middre-in.t*. natiorrs and less than I percent in thehigh-income nations.l0!l overail, it has been argued that ,,educationar svstemsla.rqely reflect and reproduce, rather than arter, the economi.

"",1.::;;,,rJl:;i::of the societies in which they exist.,,1r0 Agriculture' It is clear that agriculture-based economies are not associatecl withrapid economic develop-"rt. As industry expands, agriculture,s share of theoverall economv decrines.

{mong th. poo...t countries in the worrd, onrv Beni.has less than half of its populatiori*"rhrg in the agricurtrr.ur ,".toi, ir;Jrff'rt#poorest countries more than g0 percent of iire pop,lation is engaeed in

_I

- rpula- ,: uareh

Political and. Econoxtic Danr4o.|tmen.t 63

agrictllture'tll Although countries differ greatly in their asricuitlrral resollrces(including the qualigv of the soil, irrigation, ancr so on), new varieties of gr.ains andplants and advances in technologl,* ca, make a remarkable clifference in theeconomic productir,,ity of an agricultural economy. The basic objective of international conccrn over agric,rture, of course, isto s.arantee that ail peopre rvilr have acreqr,rare food s.pplils. The pJoai of govern_mental policyrnaking in this area is ,ot or-rr_" to expand ibod suppties thro,gh in_creasing production, especially in lou.income, food-deficir countries, b.t also tomaxirnize the stability of supplies in the face of production flrictnations and to se-

;ff"il:tt to food sr'rpplies on the part of all, especialiy rhe poor people and poor

Industry and Emproyment. one of the most important questions thatgovernments must face concerning development has to do with ihe distinction befi^'een the pubric and private ,..L., of the economr.. often these questions arepreempted by fundamentar icleologicar positions of the poliry For exampre, Leninr't'ould ,ot have considered pri'ate enterprise as a tool of natio,al economicpolicy;^conversely, state-owned ind,stries are not popurar toors in sl,sterns based,p_o, free enterprise. It is often rhe case that,,the-net eff.ect;i;;';;.r"* influences, except where there is a totar commirment to public onnership, is that amixed indr"rstrial sector emeIflgs, partitio,ed (but noi always neatlr) berweenpublic and private operarion."ri3In;ost deveroping countries, in i;;,;;;;;;"; lllSlMl

such as utilities, rransporratior, .o-pir.ies, or major indusrries, are(ornmon.-- Tiade, Debt, and Foreign Economic R.elations. The problem of.internatior.ral debt, and particularly debt owed by deveropins nations ,o a.*mp.a nadons, is onethat is attracting more anr-l more attention today. Debate fo.use. upon who is toblame lbr the developing narions not being abre to pay their obligations, rro.r,r, theproblem should be resolved, anrl what structures shoulcl be 6er,elopecl to preventthese problems from recurring in the fr,rture .

Manl' aroue that the current debt problem reflects gross financiar irrespon-sibility on the parr of the debtor narions, suggesti,re lh^;;h:) .orr,tr.,r.a borroni,gmoney to "prop up" their societies withor_rt ur1, ..gu..l for the future. Others sugsestthat this simply isn't true, that the developed nations actualv .rr.orrug.J ;:i;_

'elopins nations to b<irrow money, contributing to a rrigher gro*tl., rate of theworld's economv. "As rate as 19g1 many of these nationr rn7... ulnera by the inter_national financiar institutions u, th. u.* model of economic *orrug.rr.r-rt, precisely

::."iji:. nhen the), had alreadl. u...,*.,rut";;;-;"b";;:';..o.dins ro ore

(J r )5er\"er.

. The qttestion. of long-term responses also has been disc,ssed at someIength' Even if the quite substantial ctebis of the deveroping ,uiiorr. courd siniplybe erased, the probrem would not be solved. This statemeniapplies equaily welr toprese.nt-dav debt renegotiations, in which the developea nations-and fina'ciai in-stitutions in those nations-rend the creveloping nations more monev to covertheir present payments, or allon them to postpone pa)rments on part of the princi-

. their -. for a rcuriB'

-rIy de-

-si wa\ Iisto :nfant rolicy. marr\

: an 1n-

rgling - about -irs in 110tlt\

. rrorid .-third :iatelr

.lrgest 'rping .rtries, .u the !tems ,'tLlres

r. with I the

3enin rf the

::d in

64 Political and, Economic Deoelopment

TABLE 3.4 Debt Figures for Six Developing Nations

Nation Total External Debt

(in billions of U.S. dollars) Total External Debt as a Percentage of 1999 GNp

Brazil Lao P.D.R. Kazakstan

Tanzania

Nepal Kenya

244.7

2.3

5.8

7.9

2.9

6.6

18%

100

38

5.1

90

49 Source World Dnelopment Report, 2002, pp. 2Zg_29

pal and interest that they owe at the present time. These actions do not solve theproblem' They.simply postpone the problem; the debts will still be there, and thedeveloping nations are hardly likely to be able to make tt H;Ltfi,T'ure

(when in ract their debts win be *;;;;.;i',fl;lffJ:i:1[#..; Even if the debts were done away with, the more fundamental probrernswould remain' one developmental problem is that a substantial proportion of theworld's nations do not have sufficient resources or sufficiently developed resourcesto offer their populations.what they consider the basic requirements of life. The so.lution to rhis probrem.wil require a wide ,""g.;;;;;ns, including increasingtrade with the developing world, increasing iniestments in the developing world..restructurins tariff barriers affecting trade with the developing world, il1E .uri.,gthe resources available to the developing world, urrd ,o or.,,u

Globalization

Globalization is increasingly_":.g today as shorthand-for a huge range of impressiveand important issues. The world Bank has noted that globalization ,,is one of themost charged issues of the day," arthough it notes that ,,iirere does nor appear to beany precise, widely agreed definirion,, oi th. t"r*.,,, U,fril. ifr.lJlr. .t.u. support_ers and opponents of the process, with the former seeing grobuiiru,io, as the key to lf: },tffil.'*'*?'l::1.:lr'l:i',';J 'h' ru,," "'?fi;;;; sure desrrover of no consensus on its ,"^t^t^"L"_T"

oppressor_of citizens of have-not nations, there is S ru d e n ts *,n #::.:l ;ffi :1i:1,"# Ti*:,i"::,ti iiTXi;.. o, o, .. *nomic globalization "suiery refers to the observation that in recent years a quick11.rising share of economic activity i, th. wo.ta ,..-s to be tuHrg.prace betweenpeople who live in different.orrt.i.. 1.uth.. than in the same country;.,,rro Thisincludes such topics as internatio"ur ,ri",loreign direct investment, environmen_tal policy, human rishls, and a variery oioirr". issues. The position of the worldBank in rhis debate ii that:

,ive the :nd the

-,blems of the

Polit,ical antl, Economic Deu elobmcnt

It is necessary to distinguish behveen globalization,s different forms, including trade, investment, market behavior, regulation, and so on It is necessary to recognize that globalization does not affect all na_ tions in the same $ray or to the same extent; participation in global- ization varies widell

Globalization is not new; only the extent ta which it seems to be ex- panding appears to be netv

We must be careful to distinguish befi,veen the times that we Ltse "globalization" in its economic sense and the times that we use it in other ways.ll9

'[he Future for Developing Nations

The more one studies the developing world, the more serious the perceived prob- lems appear. The nations of the developing world face a number of crises, one more serious than the other. often having shortages of food., raw materials, and a lack of industrial development, as well as an excess of popuiation, these nations face almost insurmountable odds in the contemporary world. Even if one or tn o of these crises could be resolved, there would still be other problems, equally difficult to re- solve, that would need to be overcome.

, One necessity for these countries is institutional deveiopmenr. That is, if we define development as "an increased capacity for problem solving,,,r20 then the de- veloping world desperately needs growth in governmental institutions to assist in this increased capacity for problem solving. "Institutional change is primarily an en- trepreneurial activity depending very much on the ability of practitioners to gain and retain the interest and attention of top decision makers.,,1i1

The real challenge for the developing world will be ro see whether the re- solrrce and institutional growth that are so necessary for political and economic sta- bility can take place in time, before the nations involved are absolutely overwhelmed by the crushing burden of, debt, poverty, and population.

Notes

-. \'!1lfred L. David, Conflicting Paradigms in the Eco- :riiics of Deueloping Nations (New york: praeger, 1g86),

' l. -\ very goo<1 work in rhis area is by Harry Eckstein,

--:;gordin,g Politics: Essays on Political Theory, Stability, and,-ialgp {Berkelev. Cal.: Unirersiry of Calit-ornia press,-f,Q9\

3. Herbert Winter and Thomas Bellows. peoble anrl, ,'rlzlics (NervYork: Wiley, 1977), pp. Z|Z-SZ. 1. ,{mong the many volumes published in the series Princeton, NJ.: Princeton University press) were the fo1-

.,rrring: Lucian Pye, ed., Contrnunications ad potttical De- -.rlopment (1963) ; Joseph LaPalombara, ed.., Bureaucracy :nd Polir jral Dneloptncnl ll963t: Roben E. Ward ani

65

Dankwart Rustow eds., P\tztical Modentization in Japan and Tutkq (1964); James S. Coleman, ed., ErJuctrtion and Political Dateloptnent (1965); Lucian pye and Sidnev Verba, eds., Potiticat Culture and Pohtical Dneloftme.nt (1965);Joseph LaPalombara and Myron W'einer, eds., Political Parties and Politicctl Deaeloprnent ( 1966) ; Leonard Rjnder et al., Crises and Sequences in Potitical Dettela?ment (1971); and Charles Tilly,, ed., The Fonnation of Nitional States in, Wertern Europe (7975).

5. See especially Leonard Binderet al., Crises and, Se- quences in Political Deuelopment. 6. \\'hile there is a massive alnount of writing on this

subject, two very good essays are Radmila Nikarada, "The Mystery of Nationalism: The Paramount Case of

,'tb