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Development
• To be able to describe the different
approaches to development.
• To be able to describe and evaluate the
different methods of reducing the
development gap.
• Remember that when we are discussing
development it is important to realise that
all conceptions of development reflect a
particular set of social and political values.
Two key views of development
Orthodox view (Modernist view)
Poverty: Poverty is a situation
where people do not have
money to buy food and
resources.
What is Development: This is the
transformation of a society from
a traditional subsistence stage to
a modern industrial stage where
people sell their labour for
money.
Core Ideas and assumption:
There is a possibility of unlimited
economic growth in a freemarket system. Wealth will
trickle down to those at the
bottom to benefit everyone.
The alternative view
Poverty: a situation where people
are not able to meet their
material and non-material
needs.
What is Development: Creation
of human well-being through
sustainable societies in social,
cultural, political and economic
terms.
Core Ideas and assumption:
Emphasises the value of
nature, cultural diversity and
the community controlled
commons (water, land, air,
forest). Human activity must
be in balance with nature. Self
–reliance. Democratic
inclusion, participation, e.g. for
marginalised groups. Local
control.
Two key views of development
Orthodox view
Associated models and theories:
Western model
Neoliberalism
Rostow’s model of development
Winter (Alex)
Marxism???
The alternative view
Associated models and theories:
Sustainability.
Environmentalism.
Measurement:
GDP, economic growth,
industrialisation
Measurement:
Fulfilment of basic material and nonmaterial human needs of everyone;
condition of the natural environment.
Political empowerment of marginalised.
Process of development:
Top-down, reliance on western
knowledge and expertise, large
capital investments in large
projects, advanced technology,
expansion of the private sphere
Process of development:
Bottom-up; participatory; reliance on
appropriate (often local) knowledge and
technology; small investmets in smallscale projects; protection of the
commons.
So what practical methods are
there to reduce the development
gap?
•
•
•
•
Trade: Investment and Reform
Aid
Debt: Abolition or rescheduling
Fairtrade
Method of reducing inequality
• How can it help (possibly preceded by how
does it enhance inequality at the moment)
• Evaluation of whether it can work to
reduce the development gap.
Methods of development
1. Trade: Essentially Orthodox development
based around Economic Liberalism. (A
neoliberal argument)
Advocated by the World Bank, IMF and
GATT. These were set up following WWII
to embed liberalism and encourage free
trade.
How does it work
Free trade
Examples
• Asian Tigers. South Korea, Taiwan,
Singapore. Look at printed tables from
page 476 and 477.
Evaluation
Argument for:
• Look at Asian Tigers.
• WB and IMF have argued that the countries who have
integrated into the global economy furthest have
seen the highest rates if GDP growth.
• The increasing inequality in these countries can be
seen as a positive thing by neoliberals as it
encourages more competition and an entrepreneurial
spirit.
• Lack of a credible alternative
• History of developed countries.
Argument against:
• Trickle down has not worked. Inequality
has increased markedly in countries where
GDP has increased. Can this be seen as
development.
• Leads to state of dependency, (See
dependency theory)
• It is inaccurate to suggest that global trade
is truly free trade.
• http://fpc.org.uk/fsblob/339.pdf
• Read through and highlight articles on
Blair/CAP and Cotton Subsidies.
• So explain that trade must be reformed for
any development to have a chance of
taking place.
Aid
Glossary
Bilateral Aid
Multilateral Aid
Humanitarian Aid
Development Aid
Project Aid
Voluntary Aid
• How can overseas development aid work?
• Who gives the most? Look at page 160
green book.
• Compare the maps on pages 161 and 135
what do you notice
• Typical Aid
‘Winners’
Typical Aid
Losers/Bad
Evaluation
• So what are the problems with Aid?
– Top down versus bottom up Aid projects.
• Top down e.g. Akosombo Dam
• Bottom UP e.g. ???
Debt - rescheduling or abolition
• After independence many African
countries borrowed large sums of money
to carry out radical improvements to
their infrastructure.
• A combination of bad investment and
interest rate hikes during the oil crises
of the 1970’s left most LEDC’s in a
crippling financial situation.
• In 2007 the debt servicing of the 41
most indebted nations amounts to $11
billion a year.
• Nearly a quarter of Aid received by
African countries each year is
immediately returned to service loans.
• It is estimated that without these
debts 21 million child lives would be
saved and 90 million girls and women
could gain access to a basic education.
SAP’s
• After countries began to default on their
interest payments on multilateral loans, the
IMF and WB introduced a range of ‘structural
adjustment packages’. SAP’s are an
agreement that the indebted country must
sign up to in order for the IMF and WB to reschedule their debt repayment. SAP’s are
rigorous agreements where countries will be
forced to cut public spending and adopt a
‘free-market approach’ to trade.
So what has happened?
• When the UK held the G8 presidency in 2005
it prioritised global inequality and the LEDC
debt burden.
• At the 2005 G8 Gleneagles conference major
decisions were made on cancelling debt.
• http://news.bbc.co.uk/1/hi/business/4238045.stm#
• The UK has now abolished all of the
bilateral debt money it is owed by
26 of the most heavily indebted
LEDC’s. The UK government say
that they are working to reduce
debt owed to multilateral sources.
• Have the promises of Gleneagles followed
through?
Evaluation of debt
rescheduling/Abolition
SAP’s
Abolition
• Pros
• Explain the ‘orthodox’ (economic liberal)
approach to development.
• (Total for Question 4 = 15 marks)
• Explain the alternative approach to
development.
• (Total for Question 4 = 15 marks)
• Evaluate the different methods of reducing
the development gap
• (45 mark)