Definition and Conceptual History
In the academic and political debate the term development is generally understood as a concept to describe, compare and manage processes of socio-economic change in societies worldwide.
This basic idea of development is rooted in the epistemological revolution of European Enlightenment, which initiated the formulation of secular teleological concepts of history throughout the 18th and 19th century. Thinkers, such as Adam Smith, Auguste Comte or Karl Marx – just to name the most prominent ones –, conceptualized theories of history based on their observations of the socio-economic realities of their times. These theories conceived and compared past and present human societies regarding their level of scientific and technological rationality and material productivity. Specific societies were described as becoming more rational and productive and were, thus, seen as advanced and on a higher stage of the imagined linear process of human social development (Leys 1996; Cowen and Shenton 1996; Jolly et al. 2004).
Since its beginnings, development thinking was, furthermore, inherently aligned to the concept of the nation state. Thus, the nation state was conceived as the natural unit in which development takes place, postulating the existence of national societies competitively developing in parallel with each other on a linear and universal course of history.
From the early 19th century on, this broad concept of development had been adapted and constantly reformulated regarding to differing historical and regional contexts and political standpoints. Generally, a tension can be observed between universal understandings of development on the one hand and regional adaptions that were formulated in confrontation to the former on the other hand. While universalist ideas generalize and globalize the eurocentric view on history as a struggle for national development, regional approaches discuss in how far this eurocentric model of development can serve to analyze the respective regional social situation. Especially since the second half of the 20th century, this discussion is interrelated with the establishment of an institutionalized worldwide system of development cooperation dominated by the industrialized countries, which can be seen as a central part of the institutionalized relations between the industrialized and non-industrialized world.
Development Thinking in the Americas - from the 19th century to WWII
Looking at the Americas, the eurocentric conception of development was adapted by local elites who led the process of decolonization and the making of postcolonial nation states throughout the major parts of the hemisphere from the late 18th century on. These elites located themselves inside the western tradition of thought, but the given context of the postcolonial multi-ethnical societies of the Americas and the apparent power asymmetries between the United States and Latin America inserted a peculiar Inter-American dimension in the conceptualization of development and its political use.
Throughout the 19th and the early 20th century, American intellectuals argued in how far the ever more obvious unequal development of capitalist structures in the USA, and respectively in Latin America, was primarily based in their differing colonial history (Cowen and Shenton 1996, 63-75). The central argument of Latin American liberals and later socialists alike was that Protestantism and liberalism of Anglo-Saxon settlers had favored future capitalist development in the United States, while on the contrary in Latin America the legacy of Catholicism and feudalism of the Hispanic conquistadores had resulted in being an obstacle to it.
Despite these contemporary reflections of discrepancies in the development of the postcolonial nation states in the Americas, development thinking north and south of the Rio Grande circulated around common topics that distinguished it from its European counterparts. The question of the multicultural and multi-ethnical composition of national populations played an especially central role. Discussed in terms of development and employing different racisms and racist theories, the political and economic elites considered population of European descent as most capable in forging the development of the nation. At the same time, indigenous peoples and peoples of African and Asian descent were merely seen as a hindrance to development, thus negating their considerable share in the construction of American economies. These presumptions helped to legitimize state policies which aimed at a “whitening” of national populations through the stimulation of European immigration and the exclusion of indigenous people from the national communities (e.g. Clark 1998; Sánchez Alonso 2013).
Another common aspect of American development thinking during that time was the idea of the existence of a national frontier, which divided the national territory into a civilized and developed part and an uncivilized part still yet to be developed. Especially in the United States and Argentina, but to a lesser degree also in other American states, this imaginary had a profound influence on national development policies as it proclaimed the demand of European settlers and technology in order to develop the frontier. The canonical text of the U.S. American historian Frederick J. Turner, “The Significance of the Frontier in American History,” written in 1893, similarly argues that “the existence of an area of free land, its continuous recession, and the advance of American settlement westward, explain American development” (199). Having these questions anchored in the center of the various national and regional debates on development in the Americas, economic activities in the United States concentrated on an industrialization process to meet the growing domestic demand. In Latin America, the export economy of primary goods seized a prominent role in many national economies. Both development models seemed to be successful for their exponents until the global economic crisis of the Great Depression initiated a rethinking of the concept of development in the Americas.
Development Thinking in the Americas - from WWII to the 1980s
After the second World War, two theoretical strands of development thinking originated in the Americas which had paramount importance for development policies in the hemisphere and beyond: The Theory of Modernization that underlay U.S. and European foreign development policies worldwide and the Dependency Theory that inspired different political approaches of an alternative development path for the non-industrialized world.
The Modernization Theory was formulated in the aftermath of WWII by U.S. intellectuals and policy makers. Its proponents – after the victory over the fascist aggression – were convinced that the model of market economy and liberal democracy they perused represented universal values that had to be globalized for worldwide peace and prosperity. U.S.-President Harry S. Truman set forth this new orientation of U.S. foreign policy in his famous inaugural address on January 20, 1949. In this context, the 19th century assumption, that national societies were developing and competing in parallel with each other, was adapted to the political situation of decolonization and block formation after WWII. But now, the United States were put on the top of the imagined development ranking giving the example that other societies all over the world would have to try to catch up with them (Gilman 2004).
As defined by modernization theorists, the global strategy aimed at the development of the now so called “third world” countries via high economic growth rates. In this vein, the prospected modernization process would – in the logic of the Cold War – secure global peace and prevent feared socialist revolution. Hence, one of the key texts of Modernization Theory (W. W. Rostow’s The Stages of Economic Growth (1960)) carries the unambiguous subtitle A Non-Communist Manifesto. From this vantage point, United States foreign policy and the newly founded structures of the United Nations Organization (UNO) should assist third world national development efforts. This can be considered as the creation of international development cooperation as we know it today.
At the same time, from a Latin American perspective, economists generated a peculiar development thinking that questioned the possibility of a simple emulation of the development path that Europe and the United States had taken before. This approach was named Dependency Theory as its proponents, e.g. the forum of the UN Economic Commission on Latin America (ECLA), led by the Argentine economist Raúl Prebisch, emphasized the role of structural dependence of Latin American peripheral economies to those of the centers of global capitalism (Reifer 2006; Bracarense 2012). Referring to the particular regional and historical characteristics of Latin American economies, they recurred to the strategy of import substitution industrialization (ISI) to overcome the economic dependence. The analysis and policy proposal of the Dependency Theory had far-reaching influence on scholars and policy makers engaged with development policies in the periphery as well as in the center. It generated various political strands that oscillated between reformism on one side and the claim for social revolution on the other.
During the 1950s and 1960s, economies in the Americas achieved considerable growth rates. In Latin America, state administrations implemented an ISI policy receiving technical help and development loans from the United States and Europe to guarantee the necessary capital and expertise for their development efforts. Nonetheless, this policy failed in integrating the fast growing population into the formal labor market and inequality and poverty were rising. Political tensions were seething and many advocates of the Dependency Theory, e.g. André Gunder Frank, were convinced of the necessity of a clear-cut anti-imperialist policy that would ultimately break the structural dependency of Latin American economies to the capitalist centers (Reifer 2006). The wave of U.S. supported right wing military dictatorships that rolled through Latin America from the late 1960s to the mid-1980s discarded the realization of alternative approaches to development. But, with the emergence of the Latin American Debt Crisis in the 1980s, observers across the political camps came to the conclusion that Latin American development strategies of the post war decades and the U.S. development cooperation had reached a dead end unable to deliver their promises.
Development Thinking in the Americas – from the 1980s to the new millennium
Since the turning point of the debt crisis, three approaches dominate development discourse in the Americas to date. First, the neoliberal vision of development through free market forces and capital flow, second, the so-called Neo-Desarrollismo, which combines ideas of state planning with the strengthening of primary product exports, and third, Post-Development Theory, which deconstructs development thinking as a eurocentric discourse fortifying western hegemony.
From the view point of neo-classical approaches, which achieved a dominant position in U.S. economics from the 1970s on, state planning and spending were generally considered as contra-productive to economic development. International institutions like the World Bank, the International Monetary Fund and the Inter-American Development Bank, that had financed Latin American development efforts after WWII, fundamentally changed their development approach under the influence of U.S. lobbying. Based on the Washington Consensus, neoliberal development thinking was grounded on universal believe in the free market mechanism. In the U.S. economy, the new economic policy was connected to a process of de-industrialization and a concentration on the finance market. In Latin American countries the contributing institutions and state administrations required to implement structural adjustment programs of liberalization, privatization and fiscal austerity in order to receive new credit (Williamson 2004; Cypher 2011). The macro-economic results were modest at best. Hence, the 1980s came to be known as the “lost decade” and the 1990s also only showed small growth rates in most Latin American countries. Though, with the boom of commodity prices on the world market at the end of the 20th century, international investment in the Latin American mining sector and agro-industry increased significantly. The massive exploitation of natural resources for the global market financed by foreign private capital was named Neo-Extractivism. Its advocates and adversaries fiercely debate in how far this economic model can contribute to long term national economic development in the periphery without exceeding ecological limits and violating social rights of the population (Svampa 2009).
At the beginning of the new millennium, Latin American development thinking was revised with the formulation of the Neo-Desarrollismo approach. In the context of the election of various center left and leftist governments, e.g. in Argentina, Bolivia, Brazil, Ecuador and Venezuela, the new administrations tried to re-strengthen their grip on the primary sector of the economy and to implement state development strategies using the revenues of the commodity export for welfare programs and the modernization of national economies. This recalibration is connected to a reconsideration of principles of structuralist approaches to development of the 1950s and 1960s. With the example of East Asian industrialization during the 1980s and 1990s in mind, Latin American economists and politicians formulated a new state driven development strategy from the perspective of the periphery and opposed the laissez-faire of neoliberalism (Farah and Wanderley 2011).
Beside neoliberalism and Neo-Desarrollismo, Latin American thinkers, like Escobar (1995) and Esteva (1992), contributed significantly to the formulation of a fundamental critique of the concept of development as such, later named Post-Development Theory. From the 1980s on and based on the historical experience of several decades of failed development policies in Latin America, Post-Development Theory exposed the idea of development as eurocentric and interpreted national and international development policies as an expression of western epistemological hegemony over the non-industrialized world. Therefore, its followers discard the idea of development as unfit to be at the basis of social and economic policies in the non-industrialized world and demand an alternative societal idea. In the Latin American case, post-development approaches partially draw on the implications of the multi-cultural and pluri-ethnical history of the hemisphere particularly on indigenous cosmovisions. In this context, especially concepts like the Andean “Buen Vivir” or “Sumak kawsay” represent points of contact to formulate an alternative to development thinking as they articulate cyclical understandings of time instead of linear understanding of historical progress, which emphasize the importance of ecological and social equation instead of economic growth rates.
Reflection and Outlook on Development Thinking in the Americas
Since its beginning, development thinking in the Americas has oscillated between the adoption of the universal idea of development on the one hand and the accentuation of regional peculiarities on the other hand. Especially the significance of colonial history for the future development of the hemisphere has been and is still being discussed by generations of contemporaries and historians alike (e.g. Hofmann 2000, Albán Moreno 2008; Engermann and Sokoloff 2012).
While until the early 20th century both the U.S.-American and Latin American development thinking reflected their own circumstances against the backdrop of the European classical example, this changed during the first half of the century. With the upcoming Modernization Theory intellectuals and policy makers of the U.S. declared their own society as the ideal of development, which the rest of the world – including Latin America – should imitate and, hence, set up a worldwide system of development cooperation for implementation. On the contrary, Latin American perspectives on development stressed the importance of the colonial economic heritage that put Latin American economies in dependence to those of the capitalist centers. With the idea to overcome this dependence by import substitution industrialization Latin American development thinking formulated the blueprint for development strategies from the viewpoint of the periphery worldwide.
From the perspective of the advocates of Neo-Desarrollismo, especially East Asian countries like China, South Korea and Vietnam, prove that state led industrialization in formerly peripheral regions can be successful. However, the neoliberal experiment of the late 20th century has evidently failed in Latin America. The future will show if the strategic switch to Neo-Desarrollismo will enable Latin American economies to catch up with the Asian example in a multipolar world. Nonetheless, there are notable ecological limits and social risks inherent in this model. The inner logic of development, to indefinitely increase mass production and consumption, can hardly be globalized without provoking ecological and social crisis in the future. The post-development theory and its critique of the understanding of history as a competition of nation states developing in parallel offer the basis for a necessary re-formulation of development thinking.
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