Can developing countries ever catch up with developed countries

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 Essay: Can developing countries ever catch up with developed countries?

                                                                                        

The concept of “development” is the crucial concept which defines the boundary between “developed” and “developing” (or more accurately, given their stagnation, “underdeveloped”) countries and implicitly, the idea of “catching up”. There have been many definitions of this concept.  The World Bank, for instance, claims that “[r]educing poverty is the fundamental objective of development”, implying a purely economic definition. In contrast, Worsley argues that “[t]he examination and definition of development should include the interplay between economic and political institutions and the rest of social life”.  For the purposes of this essay I shall adopt a definition which treats development as convergence with western self-definitions, particularly regarding standards of living and economic wellbeing.  Such a definition retains an awareness of the link between underdevelopment and poverty while also incorporating an awareness of the colonising implications of the concept of “development”.  Thus, “developed” or northern countries are those with industrial economies and high standards of living (measured by GDP).  In contrast, “underdeveloped” societies (mainly those located in Latin America, Asia and Africa) have low standards of living and economies focused on agriculture, extractive industries or low-level production within vertically-integrated production structures (for instance, through sweated labour). The grinding poverty and degradation, low life expectancy and problems of hunger, preventable disease and environmental catastrophe often lead to the presentation of such societies as inferior to “developed” ones, and therefore definitions of their problems in terms of their “failure” to “develop”.  “Development”, then, involves “underdeveloped” societies solving their pervasive problems by becoming more like “developed” societies. Wide economic disparities exist between the developed and the developing states.  For example, the per capita GDP of the United States is $37,600 compared to Colombia which has a per capita GDP of $6,500 and East Timor which has a meagre $500.

How, then, should the problem of underdevelopment be contextualised and analysed within the discipline of International Relations?  This essay will juxtapose two competing types of theory associated respectively with the development and dependency problematics.  The mainstream model, associated with liberal- and realist-inspired approaches in I.R. and I.P.E. and with the discourse of mainstream economists and development specialists (not least those employed by the dominant global institutions themselves), suggests that development is a problem of national economic insufficiency.  Nation-states are viewed as distinct entities, related to one another through external relations such as trade.  The problem of underdevelopment is assumed to arise because underdeveloped countries have not marshalled their economic resources as effectively as have developed ones.  Therefore, the solution takes the form of an attempt to make underdeveloped societies more like developed ones, by means such as “structural adjustment”, privatisation, free trade, democratisation and anti-corruption drives.

 

The argument which supports the ‘development problem’ analyses stems from neo-liberal economics. The theoretical basis is the idea that free trade allows more efficient production through economies of scale and through the effects of consumer choice and competition in improving the quantity and quality of the goods supplied.   This approach has been influential in modernisation theory, which asserts that, once states implement neo-liberal restructuring measures and entrepreneurs accumulate sufficient capital, the benefits of growth and efficiency would ‘trickle down’ to the poor.  Neo-liberals argue that underdeveloped societies “should learn from the development experiences of the already developed or pioneer countries”, striving to become more like existing developed societies. This approach can be traced back to the five-stage model of development proposed by W Rostow.  According to Rostow, underdevelopment occurs when a country is unable to escape an earlier stage.  Rostow blamed “ceilings” on wealth accumulation and the application of science and technology for limits on economic growth in the earlier stages.  This simplistic linear model made the “development problem” equally simple: an economy will “take off” and then flourish if it is able to construct a capitalist “free-market” economy.  For Rostow the most important factor in the precondition for take off is “[e]xternal intrusion by more advanced societies coupled with the building of an effective centralized national state”, plus the rise of political democracy and modern science.  Once these pre conditions have been meet take-off will happen, with early massive profits for business people eventually stimulating general wellbeing.

Modernisation theorists would argue that evidence to suggest this theory works can be easily be identified.  The so-called ‘four tigers’, the newly-industrialised economies of Asia (Hong Kong, Singapore, South Korea and Taiwan), are particularly often invoked.  The rapid economic growth and increasing (relative) welfare of these societies since the 1960s, ostensibly on the basis of export-led growth, is sometimes used to attack the idea that the north/south boundary is fixed and unchanging. Despite the Asian financial crisis, these economies have maintained long-term growth.  For example, since 1986 Taiwan’s output per person has risen from £4000 to $13000, and the World Bank’s report on Singapore commented that “[t]he phenomenal development of Singapore has taken place despite the lack of natural resources and the absence of a large domestic market. This remarkable success has been attributed largely to sensible and effective policies and the early attention paid to Singapore’s infrastructure and manpower resources”.  The experience of the tigers has been invoked as a model for other societies and taken as evidence of the possibility of development in Asia and elsewhere.  For instance, Malaysia has been dubbed “the most prominent tiger cub” because its economic growth confirms the same pattern. Institutions committed to neo-liberalism attempt to implement the “tiger” model.  For instance, the World Bank claims that “[c]ountry case studies illustrate the variety of ways in which foreign assistance can help to catalyse change through a combination of policy advice, technical assistance and resource flows”.  

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The adoption of the neo-liberal policy agenda has raised problems with this paradigm, however, because, in spite of huge international efforts to apply the ‘tiger’ model, few countries have come even close to ‘catching up’ with the west.  This is not for lack of effort, since neo-liberal institutions have loaned the underdeveloped world billions of dollars.  In 2000 alone the World Bank lent $16bn to underdeveloped countries to aid them onto a path of stable, sustainable and equitable growth.  Why have no underdeveloped states apart from the Asian tigers achieved economic take-off?  This is a question which modernisation theory ...

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