THEORIES OF DEVELOPMENT STUDIES
A theory is a set of interrelated statement that provide an explanation for chain of invents, it is a way to binding together a multitude of fact so that may comprehend them all at once (Kelly, 1955). A theory serve as a guide to certain action by formulating a theory, one attempt to make sense of experiences.
A theory as interconnected logical system of concepts that provide a framework for organizing, understanding and observation of social facts. Theories allows us to understand and predict the behaviour of some aspects of the world.
In discussing development theories, there are various theories that try to explain the ways society develop from one stage to another. These theories provides for the strategies to be used to improve economic situation of a given countries.
- There is major three (3) theories of development namely:
i. Modernization Theory
ii. Dependency Theor
iii. Marxist Theory
MODERNIZATION THEORY
It is a transformational process which enables traditional societies to become modern societies. This theory can be related to the theory of evolution that humanity is moving from the primitive to more advanced state.
- The theory aimed to articulate the problem of development in term of the need to transform the backward “traditional” of the 3rd World countries economy into modern economy. i.e. encourage import substitution, foreign aids, technology and others.
- The theory state that, given the relatively low level of new capital formation in most of the 3rd world countries, they requires massive capital investment through foreign aid for them to develop.
- The theory advocate that the source of underdevelopment in poor countries is internally oriented than external ones. These include corruptions, good governance and political instability.
- Modernization is associated with the development aid from developed countries. This idea borrowed from the Marshal Plan of the post World War II. The Programs such as Structure Adjustment Program (SAPs), Millennium Development Goal (MDGs), PSRP, LGRP are the product of modernization theory.
- Modernization theory is an irreversible process, once started modernization cannot be stopped.
- It is evolutionary change and not revolutionary change as dependency theory. It will take years and generation to complete.
NURKE’S VICIOUS CIRCLE OF POVERTY
The vicious circle of poverty introduced by Prof. Ragnar Nurkes, wrote a book in 1952 analyze the cycle of poverty and possible way to break the deadlock. According to poor “the country is poor because is poor”.
Vicious Circle it is a situation in which one problem causes another problems that then cause the first again, so that the whole process continue to be repeated.
According to Ragnar poor countries will never developed without the assistance of the developed countries. They have to get resource from outside.
A country/society in developing countries characterized with low income, and therefore, due to low income have both low level of saving and level of consumption.
The low level of savings mean that the country possess low level of investment due to lack of capital
Low investment in turn means little ability of that country to expand to its productive capacity.
HOW TO BREAK VICIOUS POVERTY CYCLE
1. Proper use of Natural Resource: Proper use of natural resource increase the production and per capital income
2. Establish for Self Reliance Policy to reduce dependency from developed nations
3. Encourage private sector development: private sector will increase the rate of investment
4. Application of capital must be made to a wide range of different industries
5. Increase saving: the government of less developing countries should provide incentives to encourage the rate of saving.
6. Reduction of Import: The country should produce substitute in order the country to save foreign exchange.
7. Invest in Technology
8. Control Population in order to balance the population and available natural resources.
WEAKNESS OF RAGNER THEORY OF DEVELOPMENT
1. The theory ignore the root causes of underdevelopment of the poor nations such as colonialism.
2. The theory create the dependency economy to the developing world. The theory create an environment for massive investment and balance of growth.
3. The theory ignore current and ongoing exploitative relation between developed and developing countries
ROSTOWIAN STAGES OF DEVELOPMENT
The theory introduced by Walt Rostow in 1960s who postulate various stage of development with his famous book “The Stage of Economic Growth”. Rostow argued that for any country to achieve economic growth must pass through five (5) stages.
This model assume that country is able to develop economically by focusing on resources that are short supply in order to expand beyond local industries to reach global market (Todaro, 2005). It is evolutionary theory of development
Traditional Society Stage:
The first stage is known as traditional society which is associated with the country that has yet developed. The investment level is less that 5 per cent of national income
- Majority of the population under this stage engaged in substance agriculture
- The society is characterized by using barter system as the system of monetary are not developed
- The manufacturing sectors and industries in traditional society grow by limited by inadequate scientific knowledge (low productivity)
- The society characterized massive concentration of political power in the hand of land owners
- The social structure is feudalistic in nature
Pre-condition for Take Off Stage:
This is second stage of development as proposed by Rostow, under this stage the country undergo a process of change for building up of condition for growth and take off. Under this stage society characterized by specialization, production of surplus good. The investment level is above 5 per cent of national income
- The change in this stage, the society and the economy are fundamental in nature in the political structure and production technique.
- Trade and other commercial activities are broadened to reach not only local market but also international market.
- It is characterized by massive development of mining industries
- Increase in capital use in agriculture and become commercialized
- Invest in transport infrastructure is developed to support trade
- The stage encourage saving and investment and entrepreneur emerge.
- The economy shift from agrarian to industrial or manufacturing industry
Take Off Stage:
Sometime is commonly known as economic take off Stage. It characterized by dynamic economic growth which is due sharp stimulate of economic, political and technological in nature.
- It is characterized by self-sustained economic growth
- Industrialization increase and increase and economy switches from agriculture to manufacturing. Decline in the number of employees in agriculture sector
- New political and social institution are involving to support industries
- Dramatic technological development in both industry and agriculture
- Significant increase in investment
- Increase urban population due to industrialization
Note: Once the country take off will take as long as fifty (50) years to hundred (100) years to rich to maturity as it was the case of industrial revolution.
Drive to Maturity Stage
This stage of development concerned with the extension of modern technology over other sectors in the economy/society.
- This stage refer to the period when a country has effectively applied the range of modern technology to bulk of its resources.
- At this stage economy diversifies into new areas and become self-sustain
- Economy find its place in the international economy (imported good began to be produce locally. i.e. cars
- Less reliance on import much emphasis in export
- The leading sector in the society shift toward durable consumer goods and services. According Preston (1988) it is characterized by high output levels. At this stage the economy gears not mass production and service sector becomes increasingly dominating.
- Under this stage characterize by high mass consumption of consumer durables
- Increase in employment in the service sectors
- Highly increased in per capital income
- At this stage the society is able to choose between concentrating on military and security issue. A good example is United State of America
- Equality in welfare issues or developing luxuries for its upper class
CRITIQUE TO ROSTOW STAGES THEORY
1. The theory failed to emphasize that developing countries are politically and economically diverse (Haynes, 2008). They can’t follow similar stage in development.
2. Critique by dependency theorist that, wealthy nation exploit the poor countries and remain them underdevelopment.
3. The theory focus only on internal causes of underdevelopment and reject external factors
4. The theory is criticized for failing to consider the poor as center peace in poverty reduction initiatives. Ignoring the involvement of poor countries. Example to introduction of SAPs
- Eliminate traditional values in development process.
5. Theory failed to recognize the creativity and initiative of the African (Western Oriented). Ideas of modernization impoverished African by create economy dependency.
DEPENDENCY THEORY
Dependency theory of body of social science theories, it contends that resources flow from a periphery of poor and underdeveloped countries to a core of wealthy states. It enriches the latter at the expenses of the former.
Note: This theory evolved around 1950s as reaction to some earliest theories of development such as modernization theory. But to large extent, this theory was popular in 1960s and 1970s as
reaction to the earliest theories such as modernization. The modernization held that all societies progress through similar stages of development. Development countries were in situation that is similar to that faced today’s underdeveloped countries.
They argue that for poor nations to develop, poor countries needs investment, transfer of technology, integrate into world market.
Therefore, dependency rejects these ideas. Dependency argued that underdevelopment countries are not merely primitive version of developed countries; rather they have unique features and structure of their own. They are just weaker members in a World Market Economy.
TYPES OF DEPENDENCY
There is major two (2) main stream of dependency theory.
i. The Structuralism Stream:These stream include Prebisch, Hans Singer, Furtin and Smir, they argued that peripheral – central relation is a major causes of underdevelopment in poor countries.
- They argued that this relationship affect negatively self – sustain in poor countries and makes them to depend on rich countries.
- Hans Singer & Prebisch observed that the terms of trade for poor countries, relative to the developed countries had deteriorated over time. Example, developing countries are able to purchase fewer and fewer manufactured goods from the developed countries in exchange for a given quantity of the raw material export. (Unequal trade between developed and poor countries – western countries to control prices for the products produced.
- In world system, poor countries become only raw material producer of cotton, sisal, coffee, therefore, provide inputs for advanced nation.
Singer – Prebisch an Argentinian economist at the UN Commission for Latin America (UNCLA) Suggest that underdeveloped nation must employ some degree of
protectionism in trade if they were to inter a self sustaining development path. They advocated for regional integrations and unity among poor countries.
They argued, in opposition to free market and suggest that underdeveloped countries need to reduce their connection with the world market & pursue their own path.
They encourage for Import Substitution Industrialization (ISI) and not a trade and export orientation.
- The theory focuses on the “Centre – Periphery”/North – South relationships. It state that poor states are impoverished and rich states are enriched by the way poor states are integrated in the world system.
- They argued that the major cause of underdevelopment in external oriented. It ignores institutional structure such as corruption, unproductive land holding, concentration of wealth, poor political system as the cause of underdevelopment.
ii. The Marxian Theory: This stream includes Gunda Frank, Baran, Swezy and others. Paul Baran in 1957 wrote a book “The Political Economy of Growth”.
- They argued that development and underdevelopment are two aspects of economic structure.
- They show the link between the economy and power, the way international economy influence or constrained the development process of National economy.
- It argued that it is difficult for wealth nations/states to develop poor nations, therefore underdeveloped nations would have to create their own economic path (Regional Integrations)
- Monopoly capitalism had vested interest in maintaining backwardness and dependence in the periphery.
The Basic Premises of Dependency Theory
Poor national provide natural resources & cheap labour to strong states. Poor nation are in disadvantage in their market interact with wealth nations.
ncial aids, technological assistances, scholarships, foreign capital flow and others.
Wealthy nations actively counter all attempts made by dependent nations to resist their influence by means of Force/war (USA invade Iraq), Economic sanction (Libya)
THE CENTRAL PROPOSITION OF DEPENDENCY THEORY
i) Underdevelopment is a condition fundamentally different from undevelopment. Undevelopment refers to the condition in which resources are not being used. i.e minerals and land not actively cultivate
Underdevelopment refers to the situation in which resources are being actively used but in a way benefit the dominant states and not the poor.
ii) The theory argued that poor countries they are not poor because they lagged behind the scientific transformation but they are poor because were coercively integrated into the capitalist economic system.
iii) Dependency theorist rely upon a belief that there exists a clear “National Economic Interest” which articulated by rich countries. The rich interact with the poor to gain the national interest as advocated by realism theory of international relations.
iv) The power elites in dependant sates maintain dependant relationship because of their own self interest of dominant states.
v) Underdevelopment is completely different phenomena from non-development. At some time, the current developed states were undeveloped. The major problem poor countries fail to exploit their economical potential.
vi) Dependency relationship maintained through a complex network of political, cultural and economic means and sometimes military measures. Example the overthrow of Saddam Regime by USA and United Kingdom
COMMON FEATURES SHARED BY ALL DEPENDANCE THEORIES
i) Dependency theory characterized by the international system which comprise of two sets of states. Example dominant/dependency, center/periphery, metropolitan/satellites
ii) Both definitions have in common the assumption those external forces of singular importance to the economic activities within the dependent states.
External forces include Multi National Corporations (MNSs), international market, foreign assistance manifest the interest of rich countries.
iii) All indicate that the relation between dominant and dependent states statics are dynamics. The relationship is always is an going process such pre-colonial period, colonial period, imperialism and globalization.
CRITICISM OF DEPENDENCY THEORY
The theory ignore internal factors for underdevelopment such as corruption, political instability and others
To improve domestic market by substuting imported manufactured goods with domestic one.
The countries on the periphery of development are not destined to stagnation. So dependency theory is an incomplete & inaccurate description of the social-economic condition of LDCs.
There are many dependent countries on the periphery which adopted modernization change their economic structure and achieve rapid economic development. Example, India, North Korea, Taiwan
This theory has no relevance to many nations which are neither in the periphery nor in the centre such as China, South Africa. They are called Semi-periphery Countries