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## About this book

Development and the State in the 21st Century provides a comprehensive analysis of the state's role in contemporary development.

The book examines the challenges that states face in the developing world – from lasting poverty and political instability to disease and natural disasters – and explores the ways in which states can build capacity to surmount these challenges. It takes seriously the role that state institutions can play in development while also looking at what institutional reform entails and why this reform is critical for policy recommendations to work. This analysis is set in the context of the evolution of both development practice and development theory.

Chapters are organized around the key issues in the field and deploy a wide range of examples from different countries. A range of case studies throughout the text demonstrate the variety of problems development practitioners face and the key theoretical debates surrounding the subject. This text will be particularly useful to students of development and politics who wish to understand how governance and state-building can improve countries' economic performance and end cycles of poverty.

## Table of Contents

### Chapter 1. Setting the Stage: What Is Development?

Abstract
Why are some countries richer than others? What explains disparities in the quality of life both across countries and within them? How can countries create conditions conducive to economic growth? These are the enduring questions that scholars and policymakers in the field of international development seek to address and answer. Although the development community has made enormous strides in addressing important issues like poverty and inequality, there are a number of challenges that lie ahead.
Natasha Ezrow, Erica Frantz, Andrea Kendall-Taylor

### Chapter 2. Theories of Development: Why Are Some Countries Underdeveloped?

Abstract
Most states in the world were poor when they gained independence. This applies to countries ranging from the United States in 1776 to Kenya in 1963. Despite this common beginning, the ability of states to grow their economies has varied dramatically from one case to the next. For example, using data from the World Bank’s World Development Indicators (2014), the GDP per capita of Japan and Ghana in 1950 was comparable, at $1,873 and$1,193, respectively. By 2010, however, Japan’s GDP per capita skyrocketed to $34,000, while Ghana’s stayed about the same at$1,576. In those 60 years, Japan experienced major economic gains while Ghana saw little to no economic improvements for its citizens. The different experiences of these two states raise the question, why is Japan rich and Ghana poor? Is it Ghana’s fault that it remains poor? Or is Ghana the victim of an unjust system?
Natasha Ezrow, Erica Frantz, Andrea Kendall-Taylor

### Chapter 3. Debates on the State and Development

Abstract
Early theories of development highlighted the gap between the world’s rich and poor countries. Figuring out how to narrow that gap, however, proved difficult. Modernization theorists anticipated that states would eventually develop just by virtue of the modernization process, particularly if assisted by Western aid and other capital investments. That, of course, did not happen. Dependency theorists thought, by contrast, that development required insulation from the developed world and an inward focus on industrialization. This policy advice did not help matters either. Many developing states found themselves worse off after following the policy prescriptions implied by the dependency theorists than they were previously.
Natasha Ezrow, Erica Frantz, Andrea Kendall-Taylor

### Chapter 4. Institutions and Development

Abstract
This chapter offers insight into how researchers conceptualize institutions, as well as theories about their impact on development. We start by explaining what state institutions are and how state institutions have been theorized and compared. We then try to break down the study of institutions into more easily understandable categories. State institutions are often lumped into one broad category, but this tells us little about what the specific functions are of each institution of the state. This chapter breaks down state institutions into functional domains: administrative, judicial, political and security. It discusses what high-quality institutions in each of these domains look like, weaving numerous examples from the developing world throughout to illustrate these points. The purpose of this chapter is to provide a starting point for thinking in more specific ways about how state institutions can be moulded to produce better development outcomes.
Natasha Ezrow, Erica Frantz, Andrea Kendall-Taylor

### Chapter 5. Poverty Traps

Abstract
As Chapter 1 stated, 1.22 billion people live on less than $1.25 a day and 2.6 billion live on less than$2 a day (World Bank, 2015). This is an improvement from 1.91 billion in 1990 and 1.94 billion in 1981 (World Bank). Nevertheless, these improvements don’t erase the fact that billions of people are still deeply impoverished, most of whom will never ever be lifted out of poverty.
Natasha Ezrow, Erica Frantz, Andrea Kendall-Taylor

### Chapter 6. Intractable Instability

Abstract
Since 1946, Yemen has experienced five coups, a civil war so devastating that from 1968 to 1990 the state was split into two (the Yemen Arab Republic and the People’s Democratic Republic of Yemen, the latter of which also experienced its own civil war in 1986), another civil war in 1994, and a revolution in 2011 following clashes with protestors and security forces that killed over 2,000 people. In other words, Yemen has been plagued by instability and violence.
Natasha Ezrow, Erica Frantz, Andrea Kendall-Taylor

### Chapter 7. Corruption

Abstract
Though corruption has multiple negative consequences for society, it is also a commonly cited obstacle to economic development (here, we focus on state-led corruption, rather than corruption pursued by societal actors). There are a variety of mechanisms through which corruption can drag down an economy. For instance, corruption can increase transactions costs due to the accumulation of bribes, in turn deterring investment. It can also delegitimize the state, making citizens disillusioned with their leadership. It can generate an atmosphere of resentment, as citizens witness the illegitimate acts committed by public officials. In some cases, citizens respond in subtle ways, such as evading their taxes (Pope, 1996). In other cases, they take to the streets to voice their frustrations, resulting in disorder and instability (Rose-Ackerman, 1996). All of these responses are harmful for economic development.
Natasha Ezrow, Erica Frantz, Andrea Kendall-Taylor

### Chapter 8. Colonialism and Geography

Abstract
Early theorists seeking to explain why some states are rich and others are poor debated the primary reasons for the observed divergence in wealth. Was the international system responsible for persistent poverty by creating and perpetuating exploitative relationships (as the dependency theorists argued)? Or were states to blame for their own lack of growth because their citizens were not yet ready for development (as modernization theorists implied)? As we discussed in Chapter 2, the evolution of research and scholarship seeking to address these questions has significantly affected the policy advice given to developing states. When ideas from the Dependency School prevailed, the primary advice given to developing countries was to close their economies to foreign investment and protect their domestic industries from foreign competition, which stifled prospects for growth through foreign investment. In contrast as the Washington Consensus and its neo-liberal foundations moved to the forefront, developing states were urged to privatize state industries, dramatically reduce government spending, float their exchange rates, and open up their economies to trade and foreign investment, which exposed developing states to enormous vulnerabilities at the hands of international markets.
Natasha Ezrow, Erica Frantz, Andrea Kendall-Taylor

### Chapter 9. Debt and Financial Crises

Abstract
This chapter investigates the challenges posed by debt and financial crises. It explores how developing countries have gotten themselves deep into debt, describing both the international and domestic origins of three of the most significant debt and financial crises, affecting Latin America, Africa and Asia. The chapter also details the consequences of indebtedness for states in the developing world, specifically how this debt hampers economic development and state capacity. The chapter explains how debt has led to more external intervention from international institutions such as the International Monetary Fund (IMF) and what the consequences of this have been. The chapter then explains what has been done to respond to the debt and financial crises, including debt forgiveness, foreign aid and debt restructuring. Finally, this chapter will provide several case studies of how a country lifted itself out of a major economic crisis and used debt relief to encourage institutional reform and development.
Natasha Ezrow, Erica Frantz, Andrea Kendall-Taylor

### Chapter 10. Natural Disasters and Natural Resources

Abstract
This chapter looks at environmental curses. Adverse geographical circumstances can be very detrimental for states’ economic performance. Though such conditions can put states on institutional paths that are undesirable for growth, they can also hurt states’ growth prospects directly. In Chapter 8 we discussed this in depth with respect to how institutions may be shaped by geographical factors. Here, we focus on natural disasters and natural resource endowments.
Natasha Ezrow, Erica Frantz, Andrea Kendall-Taylor

### Chapter 11. Disease Vulnerabilities

Abstract
Economists have long argued that investing in human capital is critical to long-term economic prosperity. Simply put, to grow an economy requires an able-bodied citizenry that can productively and meaningfully contribute to it. When citizens face repeated battles with infectious disease, losing potential workdays and in some cases their lives, this hurts the state’s economy as a whole. In fact, in 2001 alone, around nine million people died of infectious diseases (World Health Organization).
Natasha Ezrow, Erica Frantz, Andrea Kendall-Taylor

### Chapter 12. Globalization

Abstract
This chapter examines globalization in the wider context of development, examining the significance of globalization on development and the state. Proponents of globalization claim that the world is becoming smaller and more integrated. Optimists claim that globalization will offer benefits to all who integrate into the global economy and liberalize their economies, with Thomas Friedman (2000) arguing that globalization would simply flatten the world. On the other hand, critics claim that globalization has only increased the gaps between rich and poor. And despite the optimism globalization is not experienced the same way by everyone. Certain parts of the world are more globally connected than others. For example, much of Africa is not well connected to other regions through trade and investment flows. Thus one of the most significant challenges of globalization is that its effects are not evenly distributed. While some states have seen record levels of economic growth, others have seen their economies stagnate. Globalization poses serious challenges to development, even though it also brings great opportunities. This chapter provides an overview of how globalization can be defined, how globalization affects development, and in turn, the state. Additionally, this chapter offers insights to how globalization can be dealt with. Throughout we emphasize that much of this depends on how effective the state is in harnessing the energy of globalization and taking advantage of the possibilities.
Natasha Ezrow, Erica Frantz, Andrea Kendall-Taylor

### Chapter 13. Foreign Aid and NGOs

Abstract
As the previous chapter highlighted, external actors can play an important role in the development process. In much of the developing world, external actors have attempted to foster development through foreign aid, loans and grants and by providing technical expertise. Though well intentioned, there have been unintended consequences of nongovernmental organizations (NGOs — or organizations that are neither part of the government nor a conventional for-profit business) and foreign aid. Critics have argued that NGOs and foreign aid have created challenges for development and state building, even though their intended effect is to do the opposite. This chapter addresses some of the challenges. Because many scholars have been critical of both foreign aid and NGOs, we treat them as a development hurdle. Nevertheless, that by no means signifies that foreign aid and NGOs cannot be useful in fostering development. Thus the purpose of this chapter is to gain insight into how external actors can help assist the developing world to promote economic development in ways that do not supplant and undermine their state institutions.
Natasha Ezrow, Erica Frantz, Andrea Kendall-Taylor

### Chapter 14. Conclusion

Abstract
Over a billion of the world’s people live in poverty (World Bank, 2014). While that statistic alone is certainly daunting, it becomes even more discouraging when we start to consider what it means in practice. Poverty brings with it a host of difficulties, including high infant mortality rates, low literacy levels and low life expectancies. People who are poor are often undernourished, vulnerable to disease, have an increased risk of violence and lack access to basic services like clean water and sanitation. Each of these factors, in turn, presents significant challenges for development, as we have already discussed in this book. For these reasons, poverty has been a major obstacle to development, as underscored by the relatively low levels of progress among the world’s poorest countries like Chad, Haiti and Kenya.
Natasha Ezrow, Erica Frantz, Andrea Kendall-Taylor
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