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Development Theory I:

Modernisation and
Structure of the Lecture

Section One: Brief Historical


Section Two: Modernisation Theory

Section Three: Dependency Theory

Section our: !apitalist Structuralism

Historical Introduction

or ideas of development economics or

development theory to ma"e sense it
necessary to reco#nise difference
$etween developin# and developed

In many respects $oth Mar%ists and

li$erals did not reco#ni&e differences in
!'(th and early !)*th

or Mar% Imperialism was a$out the

e%port of capital

The e%pansion of capitalism led to


+ot that different from li$eral political


,ven critics of Imperialism -Ho$son.

saw it as /developmental0

Modern Development ,conomics was

$orn in Latin 1merica in the '(2*s in
response to world depression

The main early contri$utions of

Development economics come under
headin# of the /structuralist0 school

The wor" of these early scholars was

3uic"ly dwarfed $y contri$utions of 4S
$ased li$eral scholars in the early post5
war period who sou#ht to frame a
comprehensive theory of development
-Modernisation theory.

,%plicit ant5communist political a#enda

'(6*s -in wa"e of the !u$an revolution.

formation of a radical e%planation of
Modernisation Theory

Has cultural7 political and economic


Different authors stress different

aspects of the ar#ument

,volutionary Theory of Human History:

Third 8orld Societies are less /evolved0
than first world societies

9olicy framewor" to fi#ht communism

9arsons overtly uses $iolo#ical


1 num$er of levels of the analyse

irst and third world /man0 are seen as

different physiolo#ically -Oscar Lewis and
David Mc!lelland .:

irst world /man0 is individualist7 rational and

#oal orientated:

Third world /man0 is collective7 irrational and


Second7 first and third world social

systems are fundamentally different in
terms of levels of evolution:

9arsons Ideas of evolutionary

/universals that all societies need to
evolve $eyond a particular level0:
Basic: Social stratification7 !ultural
1dvanced: Bureaucratic Or#anisation7
Money and the Mar"et !omple%7
;eneralised 4niversalistic +orms7 and
finally Democracy

9olitically modernisation theorists did

not simply promote li$eral democracy

!oncerned with pro$lems of transition

-the confluence of the modern and the

+eed mechanism of inte#ration7

depersonalisation7 mediation and
moderation to ma"e democracy wor"

Order -anti5communism. most important

1rmy appeared as a rational modern

institution: 1 medium term political

9ye7 <1rmies in the 9rocess of 9olitical


Democracy ideal in lon#5term

,conomic Theory of Modernisation

>ostow and Sta#es -Traditional Society7

9reconditions for ta"e5off7 Ta"e off7
Drive to Maturity7 Mass !onsumption.

?alues and ideas of traditional society

are a pro$lem

1fter this rates of investment: : Invest

'*5)* per cent of national income:

Lewis: Dual ,conomy and ,%pandin#

!apitalist nucleus

Two economies in underdeveloped

state -capitalist and traditional.

The "ey to achievin# #rowth is e%pand

capitalist sector

It is necessary to channel additional

resources to the sector:

S3uee&e the peasantry

Importantly there is no serious

consideration of e%ternal constraints

!riticisms of Modernisation:

Tradition simply $ecomes a residual

characteristic -not seriously analysed.

Theory of evolution is crude

@ou cannot simply i#nore the structures

of the #lo$al economy

@ou cannot simply i#nore the structures of the

#lo$al economy

The economic solutions it proposes will

e%asperate poverty in the medium term

9olitical solutions 3uestiona$leA

Does not properly delineate $etween different


1ll cultural e%planations of #rowth pose

pro$lem of hittin# the tar#et -!atholicism7
!onfucianism etc .
Dependency Theory

Mar% turned on his head

ocus on e%chan#e than production

4nderdevelopment and development two

sides of the same coin

The idea of a traditional sector is nonsense

The pro$lem is how third world is inte#rated

into the #lo$al economy


4ne3ual ,%chan#e: 1ll trade is monopolist an

controlled $y the centre for its over $enefit
-source of control chan#es.: Same systems
wor" internally -MaBor cities e%ploit the


1ll development is simply the development of


The entire economy is thorou#hly

penetrated $y #lo$al capital

1lthou#h capital may lose interest in

re#ions and periods of passive and
active involution -Su$ Saharan 1frica
e%ample of passive involution.

or ran" active involution has limits

The 1min variation

Different e%planation of 4ne3ual

,%chan#e: 8a#es and Dynamic

,%cepts that there is pre5capitalist

elements in the third world

However7 these elements are penetrated $y

and their development is shaped $y

Some development is possi$le $ut only

e%traverted development auto centric
development is impossi$le

Thus for 1min -'(C2: )(). there no direct

correlation $etween underdevelopment and

!riticisms of Dependency:

Hopelessly rid#ed -particularly ran".

Insensitive to variations within the Third 8orld

-corrected $y !ardoso.

De#rees of dependency: It is not Blac" and 8hite

Belittles the real achievements of the third world

-development of underdevelopment or
e%traverted development.

8hat is e3ual e%chan#eA

,conomic Theory of Modernisation

Lewis: Dual ,conomy and ,%pandin#

!apitalist nucleus

Two economies in underdeveloped

state -capitalist and traditional.

The "ey to achievin# #rowth is e%pand

capitalist sector

It is necessary to channel additional

resources to the sector:

S3uee&e the peasantry

Importantly there is no serious

consideration of e%ternal constraints
!apitalist Structuralism

8e deal with this last $ecause it

represents a /middle #round0
understandin# of third world states
interactions with the world economy

It primarily theory devised $y

economists and is not necessarily a
comprehensive theory of development

Some parallels with Lewis $ut differences

More sensitivity to e%ternal -fact you are

developin# in relation to the developed.

Terms of Trade

,mphasis on the domestic mar"et and third

world common mar"ets

9rimary focus on $alance of payments rather

than savin#s constraint

9olicy Instruments:

!apitalist plannin#

Trade $arriers

Moderate 8a#e Increases -e%pand

mar"ets and drive productivity.

Ta% the >ich not the peasants -the rich

have a $ad pattern of consumption.
Duestions for @ou:
8hat do these two approaches a#ree
8hat can $e salva#edA
!lass ,%ercise:

,lection ever

There is a election in a middle income state

-say Bra&il.:

Divided into 2 #roups -one representin#

modernisation7 one dependency7 one
capitalist structuralism.: 9ut forward a
manifesto with main policies -and rational for
these policies.: +ominate a candidate who
#ave a $rief election address: