Theories and History of Development Flashcards
What is societal level development?
Societal level development is a multidimensional process involving major changes in social structures, popular attitudes, and national institutions.
What is individual level development?
Individual level development is improving people’s “capabilities” and ability to make choices they value.
According to Sachs, how did the UK develop? Did he believe just any country could do this, or was Britain special? Why?
According to Sachs, the UK developed due mostly to industrialization. He rejected the idea that colonialism is fundamentally a system that created underdevelopment. Instead, he believed technology has been the main driver of consistent growth.
Because of this, he believed every and any country could in theory develop as well as the west because they have access to just as much technological advancements as they rest of the world. (This may not be right but it what Sach’s argued)
According to Sachs, what six feature of English society allowed Britain to industrialize and grow faster than others?
(1) Open society and individual initiatives
(2) Strong institutions protecting property rights
(3) The scientific revolution
(4) Major trade routes available/ being created for Britain
(5) National security
(6) Freedom from energy constrains due to their coal supply
According to Rodney, how did the UK develop? Did he believe just any country could do this, or was Britain special? Why?
According to Rodney, the key behind Britain’s development was their colonial history as the money they used for investments came from previous acts of exploitation from areas like the slave trade.
He did not believe just any country could develop and in facts cites the actions of colonists who would create policy and commit acts of violence deliberately meant to ensure Africa or other southern nations could not develop.
What were the four major justifications for colonialism?
1) Economic: Commercial reasons, the need for new markets, more raw material, new investments, etc.
2) Political: The need to increase the power of the state (nationalism) and the competition between European militaries.
3) Moral: It was justified as moral as they were taming and helping these primal people in African that required civilizing. It is what becomes known as “the white man’s burden”. The burden that white men have a moral obligation to bring civilization to people who they deemed as not being civilized.
4) Cheap labor: The role of companies that wished to have cheap labor. Without labor all you have it capital, all you have is raw material. You need cheap labor to expand them.
Explain Import substitution industrialization and its rise in the 1930s. What did it seek to accomplish and how?
ISI was a push to promote local industry with premises based on high wages, high tariffs (to limit competition) and importation of capital goods. The idea was to protect “infant industry” or these new small industries that needed to be protected and not wiped out by larger western ones.
The Washington consensus followed the collapse of the Soviet Union in 1991 and was seen as the “win” of capitalism. Who coined this consensus and what was the main points? (You DO NOT need to remember these points exactly!!)
Coined by John Williamson, the main points were:
(1) Fiscal discipline (don’t run deficits).
(2) Public expenditure priorities to be reordered (pro-poor).
(3) Tax reform (collect more taxes).
(4) Liberalizing interest rates (no subsidized credit).
(5) Competitive exchange rates.
(6) Trade liberalization (reduce tariffs).
(7) Liberalization of inward FDI (attract MNCs).
(8) Privatization (sell state-owned enterprises).
(9) De-regulation (less government interference in the economy).
(10) Increased protection of property rights.
(This was a massive beginning of neo-liberalism as we know it today)
Who coined the term “invisible hand of the economy” within their 1776 novel The Wealth of Nations?
Adam Smith
What are the characteristics of classical political economy (1776-1930) and who were the two scholars associated with it?
Classical political economy emphasized personal freedom of choice and a non-interventionist state. It paved the way for our current economies based on self interest, free markets, and free trade.
Adam Smith and David Ricardo were both associated with the movement.
With the rise of development economics as a legitimate discipline (1930-1981), what theory were states most supportive of and who were the two scholars associated with its rise during this period?
States were supportive and Keynesianism and wished to see more state lead development in this WWII era of rebuilding.
The two scholars associated with this rise were
1) Alexander Gershenkron who believed the state needed to be involved pushing developmentby facilitating the production of capital goods and providing infrastructure.
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2) Paul Rosentein-Rodan coined the “big push”. He believed we needed to focus on specific industrialization projects that can then jump start the rest of the economy. (Think of big pushes like Japan and technology)
Which scholar was associated with economic modernization theory (1940s-1970s)? What were his 5 stages of development like?
W.W Rostow is associated with economic modernization theory. His 5 stages of development went like such:
(1) Traditional society: Low productivity, no science, and subsistence agriculture.
(2) Preconditions for take off: Expanding trade, import of new goods, interest in increasing production.
(3) Take off: Growth becomes a permanent feature alongside infrastructure connected to foreign aid.
(4) Road to maturity: Economically modernized, ISI, new technology, and diversification.
(5) Age of mass consumption: There is a focus on consumption and services, with welfare and security. They are fully industrialized.
The rise of neoliberalism (1982-2000) sought to address concerns with modernization theory. What were these concerns based on?
Countries did not develop during the period under Keynesianism (state lead development) & by the 1970s state-led development seemed to be highly dysfunctional.
What factors lead do doubt being cast on neo-liberalism in the early 2000s?
Weak economic results such as growth at the cost of poverty
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The successful experience of the East Asian Tigers that neo-liberalism could not at all explain.
