The Concept of “Development” and “Underdevelopment”

The Reasons for Underdevelopment The Solution?

◦ Two Classical Types of Development Strategies Export-Oriented Growth Import-Substituting Industrialization New Strategies

◦ Other Alternatives? Globalization and Development

The Causes for Underdevelopment

The Possible Solutions for

Underdevelopment

Underdevelopment

What are the reasons for underdevelopment and solutions to it?

Economic Development◦ Sustained growth over a time span: becoming a

high-income economy

Political Development◦ Stability of institutions that govern, within-state,

state-society relations, within society relations

DISCUSS: Why is the study of the issues of development important?

THE CRUCIAL QUESTION: Why is this so? Why are the reasons for underdevelopment of South Asia and Africa?

Historical Dependency Relations: Colonialism

◦ Economic Dependency Recall Dependency Theories (Raul Prebisch)

◦ Instability of Political Institutions

False Economic Strategies◦ What is a false economic strategy for each IPE

perspective?

Cultural Environment ◦ Does culture really matter for development? In what

ways?

Prime Minister Pandit Nehru with Dr. Kwame Nkrumah of Ghana, President Nasser of Egypt, President Soekarno of indonesia and President Tito, of Yugoslavia at a meeting of Non-Aligned Nations, New York, October, 1960

This strategy combines elements of liberal and mercantilist prescriptions for economic growth and development. ◦ Links production to international markets ◦ Protects infant manufacturing industries from

foreign competition◦ Promotes high-level of savings and investments◦ Active role for the state ◦ Foreign investment and aid sometimes facilitates

export-oriented production http://www.pbs.org/wgbh/commandingheights/shared/video/wmp/mini_p03_09_220.html http://www.pbs.org/wgbh/commandingheights/shared/video/real/mini_p03_09_220.html

DISCUSS: What are the problems of export-oriented growth?

This strategy views international trade as a potential threat to domestic producers and seeks to produce goods locally◦ Supports domestic infant industries and domestic

producers. ◦ Produces NOT for export, but mainly for local markets

http://www.pbs.org/wgbh/commandingheights/shared/video/wmp/mini_p01_10_220.html http://www.pbs.org/wgbh/commandingheights/shared/video/real/mini_p01_10_220.html http://www.pbs.org/wgbh/commandingheights/shared/video/wmp/mini_p02_04_220.html http://www.pbs.org/wgbh/commandingheights/shared/video/real/mini_p02_04_220.html

DISCUSS: What are the problems of import-substituting industrialization?

What are the alternative strategies of development to export-oriented and impost-substitution models?

What is the best development strategy: export-oriented growth, import-substituting industrialization or something else?

Does globalization help development?

◦ Production and trade in developing countries ◦ The Institutions of Washington Consensus (IMF,

World Bank, WTO)◦ The Working Conditions (Sweatshops) ◦ Global Governance of Development

UNDP UNCTAD NGOs Foreign aid from the developed countries