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von Lea L.

How did the Global South organise itself during the 1950s? (Erik Thorbecke)

  • GNP as policy objective in the newly independent less developed countries

    • economic growth and modernisation will reduce income inequalities reflected in social inequalities would be eliminated

  • Economist tool kit contained theories as/e.g.

    • big push: economies of scale (costs decrease with the output) in basic industries and others but building up on

    • emphasise large-scale investments, strongly influenced by the relatively successful development and performance of the Soviet Union between 1928-1940

    • grwoth = development

  • Selected Policies and Strategies were:

    • Industrialisation-first strategy: industrialisation = growth = development food prices at low levels, agriculture as feeding industrialisation and its workers

      • industrial sector as the productive sector

        • influenced by dual economy aaproach a la Lewis, agricultural sector marginal productivity close to 0 (vgl. Adam Smith) subsistence production, low living conditions, unemployment vs. industrial sector productive thus wage above ws, + capital input while wIND<MPIND= capital allocation in industrial sector, labour migration, increasing demand, increasinf profits, increasing motivation to reinvest)

    • Import-substitution to increase foreign trade balance: protect the development and “foster” domestic market mainly products that are in high-demand; foreign import goods replaced by own production (tariff barriers, exchange rate, higher inflation rate= higher interest rate) BUT also increased prices of daily consumer goods = increase in demand while less supply+less efficent and higher production costs in production, higher inflation rate= higher interest rate= less investment

  • Beginning of south-south cooperation

    • 1955: First institutionalisation of South-South cooperation

    • colonies from Asia and Africa

    • common action of underprivileged countries, as well as economic participation

    • common interest holding te Global north accountable


In how far did development theory and practice in the 1970s differ from the 1950s and 1960s?

Major Development Problems

  • Recognised that economic growth is not equal to “development” and in the mid 70s GNP as a dominant objective had been widely (but not universally) dethroned

  • Un- and underdeployment, unequal income distribution within countries, Poverty, Rural-urban migration, Foreign Debt

    • failure of a GNP-oriented developement led to an overthinking and readjustment of the objectives

Selected Objectives and strategies

  • GNP as necessary but not sufficient with the preferance to increase the incomes in the buttom deciles to reduce inequality

  • Income distribution

    • “Redistribution with growth” distribution of the existing assets and factory and requiring increaing investment transfers in projects (mostly public perhaps even private) and TA

    • ILO “basic needs strategy” fulfilling basic needs

  • Employment

    • promoted by ILO

    • to raise the living standards of the poor

    • especially with regarding to the informal sector

  • Poverty alleviation

    • theory of integrated rural and agricultural development to facilitate a structural transformation “bottom-up”(no dual-economy as in th 50s- mid 60s)

      • lending and technical activities benefiting directly the traditional sector

    • Interdependencies between population growth and economic growth “the malthusian tragedy”(jäger-sammler-beziehung)

      • educational and birth control policies

  • Neo-Marxist: call for massive redistribution of assets to the state and the elimination of most forms of private property

  • Socio-economics criterias (employment, income distribution) were included in investment decisions

Theories

  • Appearance of neo-marxist theory

    • a periphery is intrinsic in a world trading and power system

    • periphery are raw-material producers and centre modern-industrialy producers = periphery supplier and demand at the same time

    • based on VGR the income of the one is always the expenses of the other EX=LB-IM




Why and in how far did institutionalist approaches (New Institutional Economics) gain influence in development theory and practice of the 1990s?

  • with the worldpolitical change 89/90 instituions climed on the agenda of development politic

  • Several crisis and steps back in socio-economic development: Asian financial crisis, deteriorated socio-economic conditions in Soviet Republics, Japanese Credit bubble, saving and loans crisis, Maxican tequila crisis

  • Recognition that fostering a more marketfriendly politic is not enough to reach the targets (employment, poverty allevation)

  • + human capital and productivity couldn’t explain differencies in the economic growth rates as a whole

  • Stressed the meaning of Good Governance and refering institutions and it became clear that a fundamental deep-rooted institutional change is needed to transform social economies into market economies

  • Beginning of 90s East Asian miracle

    • their institutions and policies as role models for the other devloping countries which can be transfered to other 3rd world countries and would enrole to the same extent

      • particular stable institutions and selective government interventions

  • Lending institutions still set stabilisation as a dominant objective and understood Good Governance as a set of instituions that promotes economic development as well as socio-economic development

    • Promoting development-supportive instituions and those who combat corruption

    • World Bank credit-lending based on conditions that included improvement of governance

      • Druing their financial crisis it got under criticism, some other even spoke about a “Myth”

      • BUT requires a string state what was missing in majority of 3rd world countries especially in sub-Saharan Africa




Are you in favour of replacing ‘development’ by other concepts like social change?

As a classical student nowdays the classical concept of development doesn’t fit to my values; eurocentric thus emphasising economic grow through industrialisation, states winners and lossers but also reproduces them, capitalistic, not aware for other way of livings, organisation etc.

  • There are so many attempts to redefine development and attributes added but still many of the core-assumptions remain the same and they are controversial and misleading

    • Normative assumption= development is good + Global North is developed countries = their development path was the besst + their staus quo should be achieved

    • 3rd world is not Africa, Latin America, Asia it is a heterogenous group of country and not for every unit does economc growth, birth controle, digitalisation etc. work or is even wanted

      • What is good for us is good for them is not working!

  • Also from my point of view the word “devlopment” creates same assumptions eventhough it should and is way mor than this; human rights teckeling wellbeing as well as securing of environment

  • So maybe it is more the wording same with EZ und EH or change in focus because normally EZ shouldn’t be at economic growth per se it should be about crreating a world that ensure good living for everybody, so the focus is more on the social dimension

  • Social change is for me personally not the best discription as it is misguiding from the wording. If one has no knowledge about the concept, it is easily misinterpreted as the need for changing the society or more precisely that the society is wrong.


Author

Lea L.

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