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What is the legacy of modernization theories for contemporary debates on development?

In the post-Second World War period, the world was locked in an ideological power struggle between

the two superpowers of the day. On the one hand, the United States, supported by her liberal minded

allies in Europe, advocated ideas of democracy, modernity, and economic liberalisation. On the other,

the USSR promoted communist ideals and dictatorship. It was in this geopolitical setting that

modernization theory first emerged supported, generally, by Western states. It was a theory centred on

the liberal values and norms that so repulsed the Soviet Union, emphasising democracy and economic

growth above all else, and exporting these values under the disguise of development. The theory may

well have risen to prominence in the 1960s out of a desire to improve the lives of citizens in Third Wold

countries through opening up their economies to the international trade market, but it is also worth

noting that the most ardent supporters of modernization theory also stood to gain from economic

liberalisation. With more countries ‘open for business’, the colonial powers in Europe and the export

focused US, would have more nations with which to trade, allowing them to return to the greater levels

of economic growth that had been so elusive following on from the depression of the 1930s and a costly

world war. Development theory was, at this time, heavily influenced by the idea that economic growth

and development went hand in hand - marginalising the importance of culture and social tradition and

instead favouring a universal set of values and norms which, if adopted, could provide the levels of

modernity enjoyed by the major Western powers. Development theory was also dominated by notions

of linear development; meaning that if one followed a series of stages, one could improve the national

economy and with it, quality of life – this can be seen in both modernization theory and Karl Marx’s

theory of history.

Modernization theory has a far reaching legacy, with many of its values still promoted in contemporary

debates on development. This essay will argue that ideas first seen in modernization theory have

underpinned many more contemporary concepts and economic policies that are now widely adopted by

numerous Western countries and international financial institutions (IFIs). However, opposition to

modernization has equally created separate strands of development theory that are more focused on

culture and people rather than the economy. The legacies of modernisation theory can be separated into

three distinct categories; the focus on the economy in contemporary development theory, the

prescription of Western values and norms globally, and theories that were produced in opposition to the

ideals espoused by modernization. In order to explain the legacies of modernization theory on

contemporary debates on development, this essay is divided into two parts. The first shall explain what

is meant by modernization theory and provide a basic overview of the policies it promotes and its

objectives. The second will explain the legacies in terms of an economic focus within development, the

promotion of Western values, and opposition theories, followed by the conclusion that modernization

theory has both directly and indirectly shaped the current discourse on development.

What is modernization theory?

Modernization is “the process of transformation into advanced, capitalist and hence pluralist and

democratic societies” (Leys, 1996: 65). The theory was first introduced in 1960 in accompaniment with

Walt Rostow’s ‘Stages of Economic Growth’ in which he classified the economies of all societies into

one of his five stages of growth; traditional society, the preconditions to take-off, take-off, the drive to

maturity, and the age of high mass-consumption (Rostow, 1960: 4). Rostow believed that by following

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a linear development path, each society could reach ‘modernity’, based on the historical development

paths of Europe and the United States. His notion of development was purely economic, believing that

traditional culture was a hindrance to development –modernization theorists argue that processes of

modernization, including industrialisation and universal education, led to a reduction in forms of

parochial attachment (Durkheim, 1893; Parsons, 1960; Gellner, 1964; Apter, 1965) and an increase in

national identification over ethnic identity (Robinson, 2014: 713). Rostow argues that the cause of under

development is not the inequality between states, but gaps within developing countries themselves (Ish-

Shalom, 2006: 295).

‘Traditional’ society corresponds to under-development, characterised by low levels of productivity,

due to a lack of technology, with limited progress across generations (Rist, 2008: 94). These societies

were defined by a reliance of agriculture, low growth rates, local trading networks, poor administrative

competence, and a low division of labour (Leys, 1996: 65). In ‘traditional’ societies, the family one was

born into had a greater impact on the job one acquired than achievement and success (Leys, 1996: 65).

The struggle against scarcity of resources was their greatest threat, and so people were focused on

gaining food and shelter for their families (Meier, 1994: 91). Rostow argued that these societies should

welcome technology in order to increase their levels of productivity but Rostow failed to understand

that, unlike in capitalism, these traditional cultures were not focused on accumulation and so it could

be argued that their ‘limiting’ factor was their own culture (Sahlins, 1972). From this notion, we can

see that Rostow believed that all ‘traditional’ societies were alike and should behave according a

Western concept of rationality (Rist, 2008: 95). He failed to understand the importance of cultural

history in the formation of a society, and by generalising ‘traditional’ society, he embarked upon a

process of cultural destruction believing that the Western values of capitalism were universally aspired

to.

The next stage of Rostow’s model of growth is the ‘preconditions to take-off’. In these societies, Rostow

believed that economic growth would begin to be seen in a positive light and as something beyond a

necessity (Rostow, 1960: 6). People living within these communities would seek growth out of a desire

for private profit, a better standard of living for their children, a higher quality of life, and national

dignity (Rostow, 1960: 6). In this stage we can see further destruction of traditional values, in that

Rostow assumes that all societies will understand the drive for a stronger economy, and prioritise it

above more traditional values. He argued that this stage would speed up the disintegration of traditional

culture until “a modern alternative is constructed out of the old culture” (Rostow, 1960: 6). In this stage

we can begin to understand Rostow’s constructivist thinking behind his concept of society and culture.

Moreover, he argued that societal change was a product of external circumstances – a view point that

would seem to justify colonialism, which he argues was established to “fill a [political] vacuum; that

is, to organise a traditional society incapable of self-organisation … for modern import and export

activity” (Rostow, 1960: 109).

The ‘take-off’ stage sees the further transformation into a ‘modern’ society. It is the stage in which “the

old blocks and resistances to steady economic growth are finally overcome” and economic growth

becomes a norm within the society (Rostow, 1960: 7). Levels of investment begin to rise from 5% of

GDP to 10%, agriculture becomes commercialised, new businesses and industries begin to bloom and

utilise more modern forms of technology (Rist, 2008: 97). This is the first stage in which the capitalist

underpinning of Rostow’s conceptions of modernization begin to appear. He argues that the desire for

growth is motivated by a ruling elite eager to catch up with the Western world and modernise (Rist,

2008: 97). His language of resistance being overcome, perfectly encapsulates his opinion of cultural

history - it is something that needs to be defeated in order to develop.

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The fourth stage of economic growth, the ‘drive to maturity’, marks the transformation into a society

that meets the “requirements of modern efficient production” (Rostow, 1960: 9) and the upheaval of

traditional values and institutions as a result of improved technology, the creation of an entrepreneurial

spirit, and major investment rising from 10% of GDP to 20% (Rist, 2008: 98). In this stage, a capitalist

economy, and Western prescribed values have been largely adopted marking the end of traditional ways

of life and understandings. People are more productive and reliant on technology as a result, meaning

old methods and techniques are largely forgotten.

The final stage marks the creation of a ‘modern’ society. ‘The age of mass consumption’ is one in which

people strive for accumulation of wealth, material goods, and food. It is an age characterised by

consumer choice in the market place. Productivity is greatly increased and ‘gains’ (including work

related bonus payments) are distributed to workers in order to further raise levels of consumption (Rist,

2008: 98). Ideally, a welfare system in established to provide a basic level of security to the most

economically vulnerable in the society (Rist, 2008: 98).

Modernization theory also incorporates ideas of political development, including a desire for co-

operation between elites and the other social categorisations to create social harmony (Ish-Shalom,

2006: 295). The belief was that growth and prosperity would provide the foundations for a modern

democratic society through inclusive education that would improve political and social skills (Ish-

Shalom, 2006: 295). The supposed interlinking of economic and political development was argued to

lead to democracy (Ish-Shalom, 2006: 296). However, according to Therborn, history suggests that

European states democratised in response to war, not modernisation (Therborn, 1997).

For Rostow, and modernization theory, the main objective is to transition from traditional to modern

society (Rist, 2008: 96). However, the constructed notions of traditionality and modernity, creates a

binary system that grants sole legitimacy to the ‘modern’ ideals, “for one society to claim universal

desirability, while turning its back on other from whom it is convinced it has nothing to learn, is not

only cultural elitism, but cultural racism” (Tucker, 1999). Traditional societies are not perceived to be

as ‘developed’ as modern societies and therefore non-Western traditions and norms are seen to be a

hindrance to the creation of a ‘developed’ state. This concept assumes that there is a singular notion of

development, defined by political structure and economic power but this is not universal, for many non-

Western societies, development also encompasses notions of cultural history and diversity – a direct

contrast to modernization theory. Modernization theory does not consider cultural history and social

factors as indicators of development and perpetrates the notion of a universal aspiration based on purely

Western ideals, however “development is not a transcultural concept that can claim universal validity”

(Rist, 1990). The destruction of traditional culture and a desire for economic growth would lead to the

creation of a common language to facilitate the exchange of ideas and information necessary for

democracy, and for an economy to function effectively internationally (Ish-Shalom, 2006: 296). In

modernization theory, modernity is seen as a techno-economic status rather than a period of time, and

the construction of a global hierarchy marginalises local perspectives and ideals, granting authority to

the ‘modernised’ discourse. It could also be argued, that in observing the trajectory of development

within Europe and the US, Rostow is confusing the notions of cause and effect (Rist, 2008: 98). Through

interpreting the economic paths of Western states, Rostow concludes that there is a singular, linear path

to development, and in doing so he fails to understand global variation, for example, Rostow argues

that the USSR had reached the ‘maturity’ stage and instead of entering the ‘age of mass consumption’,

it chose to divert from the development path in order to pursue communism (Rist, 2008: 100) – he does

not entertain the thought that communism could lead to its own form of development. Similarly, Rostow

and modernization theory believes that the future lies along a trajectory defined by the past (Rist, 2008:

99) however, if modernity and therefore development had been reached in the 1960s, there is nowhere

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left to go. This categorical definition of development is a major flaw of modernization theory because

if growth is intended to have no limit – as defined by the theory – then there is by definition no ‘final

stage’ to development (Rist, 2008: 99). Modernization theory rests on the assumption that prosperity

amongst the social elites would spill over to the whole society but this cannot be guaranteed (Ish-

Shalom, 2006: 295). Before becoming the Director of Policy Planning for the Kennedy administration

in 1961, Rostow argued that promoting modernization could serve US national interest and secure the

American way of life (Ish-Shalom, 2006: 296).

The Legacy

This section of the essay will identify three main legacies of modernization theory on contemporary

debates on development; the focus on the economy, the prescription of Western values, and opposing

theories. The 20th Century was a period in which a multitude of research into global development was

conducted, leading to a wide variety of theories which can be directly or indirectly related to

modernization theory.

The most noticeable legacy of modernization is the focus on the economy by a number of subsequent

theories including; the Washington Consensus, Neo-liberalism, and Dependency Theory. The

Washington Consensus rose to prominence in the 1980s and 1990s and was compiled in relation to the

development of Latin America (Williamson, 1993: 1329). It was a theory focusing primarily on

economic growth as the driver for development but it also aimed to promote democracy alongside

‘good’ economic policy (Williamson, 1993: 1331). The Washington Consensus was comprised of ten

headings, each dealing with a separate aspect of an economy; fiscal discipline, public expenditure

priorities, tax reform, financial liberalisation, exchange rates, trade liberalisation, foreign direct

investment, privatisation, deregulation, and property rights (Williamson, 1993: 1332-1333). Fiscal

discipline involves curtailing a budget deficit to be sustainable without the need for tax inflation, which

normally required a primary surplus of several percent of GDP and an operational deficit of no more

than 2% GDP (Williamson, 1993: 1332). The distribution of a government budget was covered in the

public expenditure priorities section, which involved restructuring expenditure from departments that

provided little economic return to departments that had the ability to increase economic return and

income distribution, for example, reductions in defence spending would enable an increase in

infrastructure or the education budget (Williamson, 1993: 1332). Tax reform encompasses broadening

the tax base and slashing marginal tax rates, with the objective of increasing incentives and improving

equity to encourage consumption (Williamson, 1993: 1332). The objective of market driven interest

rates was to be achieved though financial liberalisation (Williamson, 1993: 1332), which reduced

financial regulation and encouraged market self-determination. The Washington Consensus included a

desire for a unified, competitive exchange rate in order to prompt growth in non-traditional export and

management to assure exporters that the competitiveness was sustainable (Williamson, 1993: 1332).

Trade liberalization involved the removal of trade restrictions in favour of the introduction of tariffs

which should be steadily reduced over a period of between 3 – 10 years to around 10% with a maximum

tariff of 20% (Williamson, 1993: 1333). Foreign direct investment was to be encouraged through the

removal of obstacles to foreign corporations, and the notion that domestic and foreign businesses should

be allowed to compete equally (Williamson, 1993: 1333). The privatisation of state enterprise was also

encouraged in order to strengthen domestic markets and increase market control (Williamson, 1993:

1333). Regulations that restricted competition or discouraged the establishment of new businesses was

to be abolished (Williamson 1993: 1333), and legal property rights were to be introduced and made

available, for workers in the informal sector (Williamson, 1993: 1333). The common feature of the ten

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policies promoted by the Washington Consensus is that they all relate to an economy, in much the same

way modernization theory does. The Washington Consensus is a product of modernization, in that both

theories promote economic growth above all else, favouring market led growth, greater international

involvement into an economy, and liberalization.

Neo-liberalism flourished after the fall of the USSR in the late 1980s and 1990s with ideas based upon

economic rationality and development through private power and market competition (Thomas, 2001:

167). Neo-liberalism, similarly to modernization and the Washington Consensus, values the

liberalisation of trade, foreign investment, and the reform of a nation’s economy (Thomas, 2001: 167),

to imitate the capitalist Western economies. Neo-liberal economic policies have been widely adopted

amongst leading IFIs and are seen as a universal solution to the problem of under-development and

poverty (Thomas, 2001: 167). Neo-liberalism strongly opposes state economic intervention, choosing

instead to support market led economies in order to become more in sync with the global economy

(Leys, 1996: 17). Inflated public sectors, economic controls, and emphasis on capital controls are

symptoms of the problem of ‘corrupt’ and ‘parasitic’ forms of government, which neo-liberalists argue

hinder economic growth and thus development (Leys, 1996: 18). The solution to this was to privatise

the public sector, decrease the levels of government spending, and remove government economic

policies that affected prices outside of market driven forces (such as exchange rate controls), and create

a global capitalist economy regulated only by international institutions that reflected the interest of

transnational capital (Leys, 1996: 18). The emphasis on economic development and the idea that people

would universally act with economic rationality, can be seen within modernization theory.

Dependency theory, although born out of opposition to modernization theory, was also focused on ideas

of development through the improvement of an economy. Unlike modernization, the Washington

Consensus and Neo-liberalism, Dependency Theory was dedicated to the idea that Third World

countries were being exploited through Western centric economic development policies (Leys, 1996:

46). Proponents argue that the accumulation of capital and investment into areas that provide the highest

return gave rise to surplus removal from underdeveloped to developed nations, which perpetuated low

levels of productivity and structured their economies to become subordinate to the economies

accumulating capital (i.e. the West), through an externally focused economy (Leys, 1996: 46). Although

Dependency Theory does not offer a set of policies that should be implemented by developing countries,

they focused on the economic nature of domination in development theory. The argument that capital

flows from the ‘periphery’ (the Third World) to the ‘core’ (developed states) is economically focused,

and this reflects the prevailing view in 20th Century development theory, that development is

intrinsically interrelated to economics. The focus on economics within development theory can be

traced back to modernization.

Despite their differences, modernization, neo-liberalism, the Washington Consensus, and dependency

theory are all focused on the economic aspect of development, choosing to ignore other features such

as culture. Modernization theory predates the other theories discussed and its economic focus was

adopted as the major focal point for 20th Century development, thereby influencing many subsequent

theories. Therefore, one of the major legacies of modernization theory on contemporary debates on

development, was the emphasis on the economy.

The second legacy of modernization theory, is the prescription of Western values to the Third World.

This marginalisation of indigenous culture, values and norms has been perpetuated by the Western

desire for an increasingly globalised international economy, and has subsequently given rise to theories

that place the protection of native values at their heart. The most widely known of these theories relates

to civil society and grass-roots movements. The Western desires for democracy, the establishment of

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capitalist norms, and the marginalisation of traditional culture and ways of life are major requirements

for development according to Rostow and modernization theory, and have continued to be promoted in

the Third World by the Washington Consensus and Neo-liberalism. Civil Society includes NGOs, local

community groups, women’s networks, faith-based associations, and clan and kinship circles (Scholte,

2002) and aims to provide alternative forms of development and represent marginalised voices within

a society. The crux of civil society movements is the encouragement of participation into domestic

politics (Scholte, 2002). However, this usually is only available in democratic societies. Nevertheless,

Civil Society seeks to represent under-represented peoples and can provide a strong voice against

Western norms. In India, social movements assume that some sections of the society are exploitative

and only serve the interests of the exploiting classes that frequently promote neo-liberal ideas (Omvedt,

1994: 37). Civil Society movements tend to be locally rooted and adopt more ‘people-centred’

approaches. The encouragement of participation in a democracy can help to preserve local traditions

and practises that had otherwise been destroyed by modernization theory and by ensuring that the voices

of local people are heard, development practise can reflect local concerns. However, many NGOs tend

to be based in the West and so are staffed, primarily, by Western people and so they can, in reality, be

used to continue the domination of culture. The rise of grass-roots movements and civil society directly

relates to the legacy of modernization theory because it seeks to re-empower community voices that

had been drowned out in the pursuit of economic growth.

The final legacy of modernization theory, is the construction of opposing theories; including

dependency theory and human development. As mentioned previously, dependency theory is in direct

opposition to modernization theory arguing that states are dominated by foreign capital interest in

natural resources, cheap labour and cheap government (Brewer, 1980), creating monopolies that divert

surplus to developed nations leading to stagnation (Brewer, 1980). Dependency theory challenges the

very nature of modernization. The human development concept was introduced in 1994 in order to help

achieve UN Development Programme objectives (UNDP, 1994) through “a big push of basic

investments in public administration, human capital, and key infrastructure” (Anna, 2005: 19). The ‘big

push’ involves a large increase in foreign aid and, simultaneous investment into multiple sectors, which

will have the consequence of enabling poor countries to escape the ‘poverty trap’ (Easterly, 2006). The

concept focuses of the well-being of the individual, the freedom of choice and creating opportunities

for future generations, rather than promoting development through economic reform, and thus aims to

be accomplished over a shorter time scale than modernization theory. Jeffrey Sachs argued that

“investments well attuned to local needs and conditions can enable … economies to break out of the

poverty trap” (Sachs, 2005: 208). The focus on ‘human capital’ seeks to oppose the economic centricity

of modernization theory and broaden the development agenda. Alongside dependency theory, human

development can be seen to oppose modernization theory, and as a result is a direct legacy of

modernization.

Conclusion

Modernization theory has provided the basic underpinnings of a number of development theories that

rose to prominence in the 1990s. The focus on the economy is reflected in the Washington Consensus,

Neo-liberalism and dependency theory, whilst its promotion of Western values has encouraged civil

society and grass-roots movements aimed at empowering local people and grounding development

within the local community to better represent local views to counteract the Western development

narrative. Opposition to modernization theory has prompted the rise of dependency theory and the

human development concept through a desire to broaden the development discourse. As one of the

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earliest development theories, it is natural that modernization has had such a large impact on

contemporary development debates, and this essay has argued that its legacy is not only multifaceted

by far reaching in its extent.

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