Economic Development Essay

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Encompassing the nexus between political, economic, cultural, and social trends, the study of economic development has been one of the most contentious in sociology. The intellectual course of this field resembles Karl Mannheim’s institutionalization of ideas.

Academics and public intellectuals from both industrial and less-developed societies have quarreled for more than half a century over topics related to nation building. The tumultuous intellectual debates that ensued resulted in one of the first instances of international public sociology.

Early Developments

The field of economic development exploded in earnest after World War II. A particular historical conjunction gave rise to the preoccupation with promoting some measure of prosperity among developing nations. The first obvious political event was the process of decolonization, which resulted in the birth and rebirth of new nations, such as Korea regaining independence in 1945 after 40 years of Japanese rule and the emergence of African nation-states in the 1950s and 1960s. The plight of newly independent developing societies and the disparities of the world economy became the focus of much public and academic debate. One result of the resonance of this intellectual trend was the remarkable growth of institutions dedicated to the study of the challenges associated with economic development. Two such emerging organizations, the UN Economic Commission for Latin America and the Social Science Research Council (SSRC) Exploratory Committee on World Areas Research, and its successor, the Committee on Comparative Politics, would later, irrespective of each other, compete in their economic development theorizing.

In addition, several contextual international developments also facilitated the explosion of development thinking. After the outbreak of the cold war and the Chinese revolution, economic development policies were inserted into the overall peripheral containment strategy. Since then, the juxtaposition of political economic interests and humanitarian intentions has resonated in the minds of pundits and academics.

Meanwhile, the foundations of development studies were grounded in Western philosophy. Liberals argued that the wealth of nations depended, in large part, on their ability to capitalize on free trade policies. Mercantilists became ardent supporters of state-sponsored development. Malthusians correlated living standards with population size. Years earlier, Max Weber, in his Protestant Ethics and the Spirit of Capitalism, had laid out the foundations for a cultural approach to national development, while Marxists argued that developing nations are often enmeshed in financial and diplomatic networks that sustain their own dependency.

Competing Paradigms

Several competing paradigms offered their own prescripts of the causes as well as the policies to overcome the adverse effects of underdevelopment. The first was the modernization perspective. Modernization theory grew out of behaviorist standpoints and the structural-functionalist persuasion that dominated U.S. social sciences for much of the 1940s and early 1950s. Modernization scholars were devout anti-communists, and as such, they conformed to the view that liberalism was absolutely necessary to deflate any stipulations other than a Western approach to development. Modernity, they argued, was essentially the engine to transform backward traditions into Western-style progress. Modernization scholars envisioned this transformation incrementally and linearly. They espoused the conviction that Western development models, particularly the American model, were repli-cable anywhere in the world. For this reason, modernization scholars fervently supported development aid policies and embedded liberalist programs like the Alliance for Progress.

Some proponents encouraged the emergence of an entrepreneurial elite capable of transforming traditional values into concrete economic growth and development. For them, entrepreneurs were the innovators who restructure the production process. Others went to considerable efforts to foster basic tenets of achievement and modernity to jettison “backwardness.”

Needless to say, the ethnocentrism embedded in this line of thinking quickly came under attack for sanitizing the complex and overwhelming reality that developing nations confronted. As a result, a structural version of modernization later gained some currency in the social sciences. Scholars affiliated with the SSRC Committee on Comparative Politics promoted a framework that explored structural obstacles and other conditions affecting economic development without seriously questioning the effects of the world economy. In a widely cited and controversial study, Seymour M. Lipset found a positive correlation between levels of industrialization and democracy. Another provocative study examined how the effectiveness of states facilitates economic development. Another group of scholars scrutinized the modernizing capacity and latent functionality of development.

Modernization was quickly criticized for misunderstanding the distortions of the Western experiment in other parts of the world. Take, for example, Lipset’s argument. Supposedly, industrialization promotes the expansion of the middle class, so pivotal for the functioning of democratic politics. Yet, others quickly pointed out that pressure to lower production costs and the desire of transnational capital to remain competitive depressed middle-class wages, resulting in a more sophisticated brand of authoritarianism. In one of the most pointed critiques of modernization, Guillermo O’Donnell, an Argentine sociologist, illustrates how the new authoritarianism unfolds when— to satisfy demands from multinationals—the military, civilian technocrats, and the entrepreneurial elite forge coalitions and transnational pacts with foreign capital that adversely impact the national interest.

Another equally mesmerizing perspective was dependency. As its name implies, the dependency perspective represented the antithesis of liberal modernization. Early on, many dependentistas rejected the assumptions of modernization and shared the premise that the predicaments of development must be examined within the broader context of regional and global relations that often inflict developing nations. These relations, essentially sustained by hierarchical structures of power, trap less-developed countries in the periphery of the world economy. Conversely, revolutionary change, not incremental evolution, serves as the most viable way out of under-development conditions.

The dependency movement was a radical outgrowth of the basic “terms of trade” argument proposed by Raul Prebisch and his Economic Commission for Latin America associates. The condition of underdevelopment was largely determined, they argued, by the unequal exchange between exporters of raw materials and manufactured goods. The strategy of development they advocated was industrialization through import substitution. Politically, this policy resulted in the rise of mercantilist states, command economies, and populist social mobilizations. However, scholars within the dependency tradition went further to anticipate such conditions as associated-dependent development, development of underdevelopment, marginality, and internal colonialism.

The dependency movement soon fell under criticism from the right for its lax methodology and its historicism and from the radical left for not going far enough in exploring the inner workings of the international division of labor. An outgrowth of this perspective, therefore, pushed for further understandings of the historical legacy of global capitalism.

Immanuel Wallerstein’s world system, even though it did not quarrel with some of the basic premises of dependency, underlines how the economic development problematique lies within the organization, nature, and scope of the global economy, not with the nation-states. Conversely, this position argues that while the location of nations in relation to the world system may change over time from the periphery to the semiperiphery—or in a few cases, as with the United States, to the core—the capitalist raison d’etre and its patterns of exploitation remain. A foregone conclusion, then, was that the only way to promote more equitable forms of development was by changing the capitalist structure, not the bilateral relations among individual units as the dependency movement earlier proposed. This ominous conclusion eventually cast doubts on the capacity of national development theories to promote viable solutions to the question of underdevelopment.

Recent Directions

More recently, the sociology of national development literature no longer attempts to understand micro and macro structures alone or to chart radical policies. With the advent of globalization, the Asian export-led development model, and the modernization under way in China, the possibility of relative national development growth is again in the minds of scholars and policymakers. Globalization has also gravitated to the study of more technical middle-range development issues, such as the volatility of fiscal reforms, production networks, and the magnitude of trade liberalization. Especially welcomed are the recent examinations of neoliberal policy formations. Finally, another popular line of research discerns the impact of transnational population movements and communities.

This new twist in national development theory also contradicts some of the most impious premises advocated by liberal and neo-Marxist scholars. One noteworthy example is the recent work of Peruvian social scientist Hernando de Soto, who dismisses the myths of prevailing lack of entrepreneurial values among marginal classes in developing societies by demonstrating how transaction costs adversely impact economic development. De Soto concludes instead that development bottlenecks lie within the thick bureaucratic layers devised by rent-seeking states to protect their interests and those of their benefactors.

Bibliography:

  1. Cardoso, Fernando H. and Enzo Faletto. 1979. Dependency and Development in Latin America. Berkeley, CA: University of California Press.
  2. Collier, David. 1979. The New Authoritarianism in Latin America. Princeton, NJ: Princeton University Press.
  3. De Soto, Hernando. 2000. The Mystery of Capital. New York: Basic Books.
  4. Huntington, Samuel. 2006. Political Order in Changing Societies. New Haven, CT: Yale University Press.
  5. Portes, Alejandro and A. Douglas Kincaid. 1989. “Sociology and Development in the 1990s: Critical Challenges and Empirical Trends.” Sociological Forum 4:479-503.
  6. Tarrow, Sidney. 2005. The New Transnational Activism. New York: Cambridge University Press.
  7. Wallerstein, Immanuel. 1979. The Capitalist World Economy. Cambridge, England: Cambridge University Press.
  8. Weaver, James and Kenneth Jameson. 1981. Economic Development. Lanham, MD: University Press of America.
  9. Wood, Charles H. and Bryan R. Roberts. 2005. Rethinking Development in Latin America. University Park, PA: Pennsylvania State University Press.

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