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Mainstream, VOL LV No 19 New Delhi April 29, 2017

Development: An Elusive Conception

Sunday 30 April 2017

by V. Mathew Kurian

I. Introduction

The post-Second World War era is considered the ‘age of development’. During this period, the very meaning of the term ‘development’ has undergone great transition. Experts have also enunciated various measurements of development. Multiple actors are there engaging in ‘development’ and these broadly include government and non-governmental organisations and the United Nations Organisation. Though development has many objectives, the central one seems eradication of poverty and imparting socio-economic justice to the vast masses of the world’s people. But this goal still remains an elusive one.

In this paper, we attempt to explore the historiographic background in which the idea of development was mooted, the evolving conceptualisation and measurement of development, the shifting paradigms of development, the present predicament of the epistemology of development and the need for expounding an alternative vision of development to make it more meaningful to the life of people with justice and sustainability.

II. The Birth of ‘Development’1

Though the two terms ‘growth’ and ‘develop-ment’ are sometimes used as synonyms, the latter is much broader and multidimensional. Economic growth was the main concern of ‘modern economics’ in its very inception in the eighteenth century. The full title of Adam Smith’s work ‘An Inquiry into the Nature and Causes of Wealth of Nations’ (1776) carries this idea. He theorised that a competitively driven market economy with the practice of division of labour and specialisation and internationally linked by free trade would ensure maximum economic growth. So Smith portrayed industrial capitalism, free from the clutches of ‘mercantilism’2 as the most ideal economic system. Karl Marx, in spite of being a vehement opponent of capitaplism, acclaimed the intellectual contribution of Smith by honouring him as the ‘Luther of Capitalism’. Later, classical and neo-classical economists followed Smith and theoretically deepened and broadened the conception of ‘economic growth’. Growth economics still constitutes an integral part of modern economic science.

Gunnar Myrdal (1966) has identified three factors which facilitated the intellectual formation of development economics and development studies. These include (1) the liquidation of the colonial power structure, (2) the revolution of rising expectations among the people of the Third World,3 and (3) the Cold-War spirit. These forces contributed both to the provision of development and the demand for it by the stakeholders.

For centuries, most parts of the world, especially in Asia, Africa and Latin America, happened to be colonial appendages of a few Western imperial powers. For example, India was under the colonial yoke of the British. In fact the ‘fabulous riches of the East’ attracted the Europeans to Asian countries like India. However, their brutal exploitation made these countries extremely poor and underdeveloped. This consciousness of exploitation necessitated nationalist uprisings and people’s movements for ‘decolonisation’. These efforts found success after the Second World War. As a result, political colonisation was liquidated in the post-war era.

However, the Third World peoples, in general, and their leaders, in particular, found the socio-economic situation of their countries under-developed. In the latter period of the colonial era, the Third World peoples could sense the relatively higher living standard of the First World. This created ‘a revolution of rising expectations’ in them. In India, for example, the Drain Theory of Dadabhai Naoroji (1901) stated that once India is made unBritish, poverty alleviation and people’s development would be spontaneous. Mahatma Gandhi perceived economic freedom along with political freedom in the post-independence period.

In his ‘tryst with destiny’ speech (midnight of August 14-15, 1947), Jawaharlal Nehru, the first Prime Minister of India, proclaimed that the imminent task of the new government was to end poverty, illiteracy, ill-health and inequality in social and economic opportunities. One could notice the ideal perception of ‘development’ in Nehru’s words.4

The post-war period also experienced a ‘Cold War spirit’ in the world with the USA leading the capitalist ideology and the USSR the socialist ideology. The US leaders found the idea of ‘development’ as the most viable strategy to include the newly liberated countries into their fold. In 1949, the then US President, Harry S. Truman, made a marvellous speech in the American Congress with Four Points.5 These points set the international political economic agenda of the US in the post-war world. They included US support to the UNO, NATO and Marshall Aid Programme and extending development assistance to the newly-freed countries. The US Government also directed American economists to chart out a new ‘Development Economics’ as an integral part of modern economic science. The outcome was the birth of the ‘modernist paradigm’ in develop-ment economics.

The UNO from its very inception accorded top-most priority to the idea of development.6 It perceived development as a means to sustain global peace. Poverty anywhere in the world is perceived as a threat to prosperity everywhere. So the UNO organised a number of continental level study groups like the Economic Comm-ission for Latin America (ECLA) to explore the problem of underdevelopment and established various international institutions like the International Bank for Reconstruction and Development (IBRD), United Nations Industrial Development Organisation (UNIDO), and United Nations Development Programme (UNDP) to promote development. The UNO also declared the late decades in the 20th century as ‘development decades’ focusing on development. Nevertheless, the goal remained elusive. So in the Millennium General Assembly, it proposed the Millennium Development Goals (MDGs). Though the UNO succeeded in achieving some of the MDGs, poverty still persists in the world. So it restated that the coming 15 years would be the period for Sustainable Development Goals (SDGs).

A number of non-governmental organisations ranging from local to international also adopted ‘development’ as the goal of their ‘social and economic action’.7 In spite of all these efforts ‘development’ still remains an elusive conception.

III. Meaning and Measurement of Development—An Evolutionary Profile

The term ‘development’ is subjected to a wide range of meanings and there are also alternative measurements. The initial approach to develop-ment may be cited as ‘growth oriented develop-ment‘. The process of economic growth was treated at par with development. ‘Per capita Income’ was used as a measurement of develop-ment by this approach. Economists like Gunnar Myrdal and Amartya Sen proposed much more comprehensive approaches in development. Myrdal defined development as the ‘upward movement of the entire social system’. The social system comprises a number of social conditions which include (1) output and incomes, (2) conditions of production, (3) levels of living, (4) attitudes toward life and work, (5) institutions, and (6) policies. The first three are economic and the next two are non-economic conditions. Policies may be either economic or non-economic based on the nature of policies. Upward movement refers to changes in the prevailing conditions in the direction of greater desirability from the development point of view. Changes may have either independent or instrumental values. The latter refers to the impact of changes in a condition to changes in other conditions. So all of them together constitute a ‘social system’.

Myrdal is also critical in using per capita income as a measurement of development. He cautions that such a measurement may even drive planning for development more in the materialistic direction.

Amartya Sen approached the conception of ‘development’ not only from a socio-economic point of view but also philosophically. Sen’s main contribution is in advancing the ‘capability approach in development’. To Sen, development involves building up of human capabilities which result in higher per capita income and better social variables, particularly in education and health. He also ascribes greater importance to ‘social participation’ of vulnerable sections. When people’s capabilities are built, their ‘entitlements’ also would be broadened. A person’s exchange entitlement is the basket of commodities which he or she can command by exchanging what he or she has.

In his book, Development as Freedom (2006), Sen perceives promotion of human freedom as development. He distinguishes five types of freedom: (1) political, (2) economic, (3) social, (4) entitlement and (5) protection. From a philo-sophic point of view, Sen considers advancement of ‘human functionings’ as development which involves ‘being’ and ‘doing’.

Sen, along with his friend Mahabubul Haq, introduced the human development index as a measurement of development through the UNDP’s Human Development Reports. Human Development Index is a composite index with three sub-indices on economic performance measured by real per capita income, educational and health attainments with a maximum value one. The UNDP also introduced a number of other human development indicators like Gender Empowerment Measure, Gender Related Human Development Index and Human Poverty Index. As income inequality is considered a negative dimension of development, one recently adopted Human Development Index is ‘Inequality Adjusted Human Development Index’.

A landmark shift in the conceptual evolution of development is the UN proposal of Sustainable Development. The Brundtland Commission (1987) defines sustainable development which meets the needs of the present without compromising the ability of future generations to meet their own needs. This is more in tune with the Gandhian perception of ‘needs’. According to Mahatma Gandhi, there are sufficient resources available in this world to meet the needs of all but not to cater to the greed of anybody. In spite of all the attempts at sustainable development, ecological destruction persists, making our earth uninhabitable and the life of ordinary people miserable.

IV. Shifts in Development Paradigms: An Overview

Experts on development have so far created a number of theories on development. These theories could be broadly grouped into various approaches which may be called ‘development paradigms’. We may broadly distinguish four such paradigms: (1) modernism, (2) structura-lism, (3) institutionalism and neo-institutiona-lism, and (4) neo-liberalism.

Theories on development in general address two pertinent questions: (1) why is a country underdeveloped? And (2) how can a country achieve development? Protagonists of the modernist paradigm like W.W. Rostow (1966) allege lack of modernisation of underdeveloped countries as the main cause of their underdevelopment. Only by filling this modernist gap development could be attained. The modernists find the salvation of it in foreign aid.

The structuralists broadly comprise neo-Keynesians and neo-Marxists. They assign great responsibility to the state in initiating develop-ment and sustaining it. They discard the modernist analysis of underdevelopment as very opportunistic. The modernists deliberately excluded ‘colonialism’ and ‘neo-colonialism’ as factors behind underdevelopment. The struc-turalists also accord great importance to state planning for development. Structuralists like Prebisch (1950) and Singer (1950) suggested ‘import substitution industrialisation’ (ISI) as the main solution for underdevelopment. But this did not work as anticipated due to the penetration of transnational corporations (TNCs) in underdeveloped countries. So radical structu-ralists, like Andre Gunder Frank and Samir Amin, wanted a revolutionary approach to disarm the transnational corporations in underdeveloped countries.

Institutionalists, like Gunnar Myrdal, John Kenneth Galbraith and Amatya Sen, also theorised for state intervention. They hopefully suggested that through the building up of appropriate social and economic institutions development could be accomplished.

The neo-institutionalists like Douglas C. North argued for social and economic institutions but integrated these with the ‘market mechanism’.

In spite of all these development paradigms, the modern world is predominantly influenced by the neo-liberalist paradigm. The principal advocates of this paradigm are mainly experts belonging to multilateral institutions like the World Bank, IMF and WTO. Towards the close of the 1980s in the last century they succeeded in bringing about a ‘consensus’ for the whole world, known as the ‘Washington Consensus’.8 This consensus placed the ‘market theology’ as the panacea for the entire illness of the world including poverty and environmental destruction. But the present predicament of the world, including underdeveloped countries, falsifies the claims of neo-liberal globalisation.

V. Development Elusion and Post-Developmentalism

As received development theories could not explore the problem of underdevelopment realistically and the so-called development organisations failed to bring about people’s development, activist-oriented experts like Escobar (1995) condemn the present develop-ment economics and development studies. Some of them go to the extent of stating that ‘development’ is dead and what we can now do is just write its obituary. (Sachs 1992) These Doubting Thomases may be broadly called the post-developmentalists.

VI. An Alternative Perspective for Development

For genuine human development ‘de-globali-sation’ and ‘definancialisation’ are absolutely needed. Local and national relative self- sufficiency should be accorded priority rather than corporatisation of market and global free trade. The democratic state has to be politically reoriented to facilitate the basic needs of the common people. Financial engineering by speculative capital should be rooted out. Economies have to be regenerated ensuring maximum labour participation of people and meeting the needs of the ordinary people. Inequality has to be curbed through proper state interventions. People should have the power to kick out anybody who is corrupt and inefficient. Intergenerational and intragene-rational dimensions of justice should be taken as the basic criterion for all political and economic decision-making.

VII. Conclusion

In this paper, we have attempted to give a brief overview of development economics and development studies. Though the idea of development was initiated in the post-Second World War era, it miserably failed in fulfilling the people’s aspirations. The present trend of globalisation is really anti-developmental. In this predicament, we need an alternative perspective which should address the people’s needs with ecological justice.

Notes

1. For a detailed discussion on the birth of Development Economics, refer to Jomo, K.S. and Erik S. Reinert (ed.) (2006): The Origins of Development Economics—How Schools of Thought Have Addressed Development, New Delhi: Tulika Books.

2. ‘Mercantilism’ as a system of political and economic ideas prevailed in Europe for about three hundred years, during roughly the middle of the fifteenth century to the middle of the eighteenth. Mercantilists perceived ‘foreign trade’ as the engine of economic growth and accumulation of bullion as the main goal of trade. They legitimised government intervention in the economy to sustain a favourable balance of trade. Adam Smith was a vehement opponent of ‘mercantalism’ and his theoretical arguments were in favour of ‘free trade’ and free market economy.

3. The expression ‘Third World’ was first used by a French demographer, Alfred Sauvy, in 1952. In the sense in which Sauvy used it, it was an allusion to the ‘third estate’ of French Society prior to the revolution of 1789. ‘Third World’ refers to all those countries which shared a common fate of ‘colonialism’ in their history and in the post-independence era inherited an ‘underdeveloped economy’. See, Third World editors (1990): Third World Guide 89/90, Rio de Janeiro.

4. All the dimensions of ‘human development’ could be foreseen by Nehru in 1947. For a brief discussion of the ‘tryst with destiny’ speech, see Jean Dreze and Amartya Sen (2002): India: Development and Participation, New Delhi: Oxford University Press, pp. 4-6.

5. Truman said, ‘We must embark on a bold new program for making the benefits of our scientific advances and industrial programs available for the improvement and growth of underdeveloped areas.’ Harry S. Truman, Inaugural Address, January 20, 1949, in Documents on American Foreign Relations, Connecticut Princeton University Press, 1967.

6. See Jim Whitman (2011): “The role of the United Nations in developing countries” in Vandana Desai and Robert B.Potten (ed.): The Companion to Development Studies (2nd edition), London: Hodder Education pp.555-559.

7. See Vandana Desai (2011): “The Role of non- governmental organisations” (NGOs) in ibid., pp. 525-529.

8. ‘Washington Consensus’ was first coined by John Williamson in 1989. He codified the approach in ten axiomatic generalisations with a focus on outward- oriented market economies subject to macroeconomic discipline. See Charles Gore (2005): “The Rise and Fall of the Washington Consensus as a paradigm for Developing Countries” in C.Roe Goddard et al. (ed.): International Political Economy, 2nd edition, New Delhi: Viva Books, pp. 317-340.

 References

1. Escobar, Arturo (1995): Encountering Development: The Making and Unmaking of the Third World, Princeton: Princeton University Press.

2. Myrdal, Gunnar (1966): Asian Drama — An Enquiry into the Poverty of Nations, New York: Pantheon.

3. Naoroji, Dadabhai (1901): Poverty and UnBritish Rule in India, London.

4. Prebisch, Raul(1950): The Economic Development of Latin America and Its Principal Problems, New York: United Nations Organisation.

5. Rostow, W.W. (1966): The Stages of Economic Growth- A Non Communist Manifesto, Cambridge: Cambridge University Press.

6. Sachs, Wolfgang (1992) (ed.): The Development Dictionary, London Zed Books.

7. Sen, Amartya (2000): Development As Freedom, New Delhi, Oxford University Press.

8. Singer, H.W. (1950): “The Distribution of Gains Between Investing and Borrowing Countries”, American Economic Review, 40, 2: 473-485.

9. Smith, Adams (1776): The Wealth of Nations, London: J.M.Dent & Sons Ltd.

10. World Commission on Environment and Development (Brundtland Commission) (1987): Our Common Future, Oxford: Oxford University Press.

Dr V. Mathur Kurian is the Joint Director, K.N. Raj Centre, M.G. University, Kottayam.

ISSN : 0542-1462 / RNI No. : 7064/62