Lecture 11: States & Development: Modernisation Keynesianism & Dependency

Lecture Outline

2. Modernity & modernisatyion

   1. Keynesianism

   2. Linear Stage models

   3. Dualistic models

   4. Spatial dimensions of modernisation

3. Structuralist & dependency approaches

   1. Structuralism theories

   2. Dependency theories

   3. World systems theory

4. Conclusions & preparation for next lecture

Modernity & Modernisation

• Multiplier effect that is kickstarted by an investment made by a government or private sector

• The Marshall Plan: US invested $15 billion to restore Europe together = A strong European economy is beneficial for Amercia’s economy

Linear Stage models:

Walt Rostow - modernization theory (1960)

• 5 stages of development/modernisation

  1. Traditional

  2. Pre-conditions for take off

  3. take off

  4. Drive towards maturity

  5. Age of high mass consumption

Dualistic Models:

Sir W. Arthur Lewis: (1915-1991)

• Believed that economies were ‘dualistic’ - transitioning from ‘traditional to modern’.

• External capital - foreign investment - could aid and accelerate this transition

Spatial Dimensions of Modernisation:

Key figures:

Albert O. Hirschman (1915-2012) Argues that inequality is an inherent part of development and the inequality would reduce as a country becomes more developed.

Karl Gunnar Mydral (1898-1987): Argues that you will only get less inequality in terms of development if there is government aid.

Aid: ‘a transfer of resources on concessional terms - on terms that are more generous or ‘softer’ than loans obtainable in the world’s capital markets’ Cassen 1994

Different ‘kinds’ of Aid

Humanitarian aid

• Rapid, short term

• Aims to saves lives and alleviate suffering

• Made available in emergency conditions or the aftermath of a disaster

Development aid

• Long term

• Addresses prolonged, structural issues

• Aims to improve everyday quality of life, strengthen economy and tackle social challenges

3. Structuralist & Dependency approaches:

Structuralist Theories:

Raúl Prebisch (1901-1986)

• United Nations Economic Commission for Latin America (ECLA)

• Challenged ‘modernisation theories’ - argued that developing nations couldn’t emulate the path of developed nations

• Free trade acted as an ‘obstacle’ for Latin American development.

Import-Substitution Industrialisation (ISI):

• Brazil, Argentina and India adopted ISI from 1940s

• Protected domestic industry and promoted production for export

• Tariff Barriers to encourage production for export

Dependency Theories:

‘Dependistas’:

1. The ‘West’s pathway to modernity was not replicable’

2. The ‘Wests’ development was built on the world of exploitation of the ‘developing world’ which is maintained by the global economic system

   

The Global system is too unequal to allow development without exploitation of other countries = Under this theory, exploitation leads to underdevelopment, leaving countries that were exploited to be dependant on more developed countries = countries are unable to develop or at least in the same model of the Global North

HOWEVER:

1. Countries were able to ‘break out’ of the dependancy relationships, in particular East Asian economies

2. Very economic focus, no other factors were being considered ie: political social etc.

3. Exogenous: little consideration of what was going on internally

World Systems Theory:

Summary of similarities & Differences between Modernisation and Structuralist & Dependency theories and Approaches to Development: