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About this book

The book provides a systematic assessment of the evolution of development theory, its relationship to orthodox social science analysis and the liberal pluralistic orthodoxy that now dominates the mainstream approach to international development, showing how we can transcend its failure to address some key problems of late and uneven development

Table of Contents

Introduction

Introduction: Reconstructing Development Theory for the 21st Century

Abstract
The crisis in development theory is a multiple one that is understood very differently by people with different ideological and theoretical perspectives. Most accept that the idea of development is directly linked to the changes ‘towards those types of social, economic and political systems’ created in Europe and the USA from the 17th century (Eisenstadt, 1966: but they often disagree over the objectives of these changes, their normative implications, and the way they should be managed. Modernization theorists like Eisenstadt saw this transition as a desirable, even inevitable process, but their views have always been challenged by a variety of radical voices, especially from the third world, that have rejected his equation of progress with western achievements, especially given the west’s formal commitment to ‘the principle of equality’, and its continuing tendency ‘to violate it in an extraordinarily systematic way’ (Besis, 2003: 5). And even those who have accepted this view have disagreed about how it should be done, and especially about the relationship between conscious social intervention and free markets in managing these transitions. This has produced competing liberal and structuralist traditions that have sustained what Polanyi (1944/2001: 152) has called a ‘double movement’ in policy theory — an oscillation between an extension of markets across the world and subsequent counter-tendencies invoking state intervention to protect societies ‘from the weaknesses and perils inherent in a self-regulating market system’.
E. A. Brett

The Nature of Development Theory

Frontmatter

Chapter 1. The Crisis in Development Theory

Abstract
The fundamental assumptions and analytical models used in development studies are now heavily contested by theorists who adopt ‘a variety of rival and contending conceptions of rationality’, which cannot be reconciled because they cannot agree on the standards to be used ‘by appeal to which defeat and victory can justly be claimed’ (Maclntyre, 1998: 199). As a result, many theorists believe that development studies has ceased to make progress because:
Its hitherto trusted methods of enquiry have become sterile. Conflicts over rival answers to key questions can no longer be settled rationally. Moreover … the use of the methods of enquiry and the forms of argument, by means of which rational progress has been achieved so far, begins to have the effect of increasingly disclosing new inadequacies, hitherto unrecognised incoherences, and new problems for the solution of which there seem to be insufficient or no resources within the established fabric of belief … This kind of dissolution of historically founded certainties is the mark of an epistemological crisis. (Maclntyre, 1998: 165)
E. A. Brett

Chapter 2. The Basic Assumptions of Development Theory

Abstract
This chapter will respond to the disagreements identified in Chapter 1 by arguing that many of them can be transcended by using a comparative institutional theory, which assumes that social outcomes depend on the nature of the authority, incentive and accountability mechanisms that characterize different kinds of institutions and organizations, and that these are likely to operate very differently in DCs than in LDCs. We will show that the primary goal of the liberal market-based institutions in the former are designed to turn technological and organizational innovation into an automatic, even compulsory process; that those in pre-modern societies were generally designed to maintain existing arrangements and therefore discouraged change; and finally that the classical traditions in development theory emerged to deal with a distinct array of market failures which confront LDCs and not DCs because LDCs are still attempting to build modern institutions. These failures make it difficult for them to adopt orthodox policy solutions in the short run, and call for a variety of second-best alternatives that take account of local understandings, value systems and endowments.
E. A. Brett

Chapter 3. Evolutionary Institutional Change and Developmental Transitions

Abstract
A theory of development has to address several interdependent issues:
  • the implications of structural change in LDCs rather than incremental change in DCs
  • the demand for progressive change based on open systems and equal rights, and not just for change itself
  • the relationship between conscious management and the spontaneous operation of market forces
  • the need for processes and incentives that might persuade major social groups committed to different systems to recognize the need to change their institutions and in so doing solve the problems involved in emancipatory social transformations.
We also saw in Chapter 1 that:
  • methodological positivists and individualists deny the possibility of value-driven theory and managed social change
  • cultural relativists reject its implicit or explicit demand for a shift to western institutions
  • corporatists and Communists are committed to systems based on centralized controls rather than free political and economic markets.
We can only reconstruct the development project by addressing these conflicting claims, since they seem to involve
systematic and apparently ineliminable disagreements between the protagonists of rival moral points of view, each of whom claims rational justification for their own standpoint and none of whom seems able — except by their own standards — to rebut the claims of their rivals. (Maclntyre, 1998: 2002)
E. A. Brett

The Institutional Arrangements of Liberal Democratic Capitalism

Frontmatter

Chapter 4. Market Societies, Open Systems and Institutional Pluralism

Abstract
We showed in Part I that the challenges of late development impose a dual task on the theorists whose primary concern is the fate of the poorest rather than the richest societies in the world. On the one hand, LDCs need to access the models of best practice that already exist in DCs in order to redesign their own futures, on the other, they need to find their own ways of overcoming the tensions they generate when they attempt to transfer these models to their own societies. Thus a comprehensive review of development theory needs to start by outlining the assumptions and prescriptions that not only dominate policy and practice in DCs, but also guide the liberal reform programmes now being institutionalized in most LDCs.
E. A. Brett

Chapter 5. State Regulation, Democratic Politics and Accountable Governance

Abstract
If he lives amongst others of his own species, man is an animal who needs a master. For he certainly abuses his freedom in relation to others of his own kind. (Kant, 1784/1991a: 46)
E. A. Brett

Chapter 6. Politics, Bureaucracy and Hierarchy in Public Management Systems

Abstract
The problematic nature of the relationship between representativeness and governability identified in Chapter 5 manifests itself in its starkest form in the uneasy relationship between citizens, their representatives, and rulers on the one hand and permanent officials on the other. Rulers are expected to implement the policy package chosen by the electorate, and use paid and mostly permanent officials to do so. These relationships, however, should not be dominated by either politicians or bureaucrats, but be based on reciprocity and relative autonomy. As Weber (1922/1968: 1404) said, ‘independent decision-making and imaginative organizational capabilities … are usually also demanded of the bureaucrat’, but politicians play the dominant role because they have to generate the authority and support needed to justify and enforce policies and take ‘personal responsibility’ for doing so.
E. A. Brett

Chapter 7. Hierarchy, Quasi-markets and Solidarity in Capitalist Firms

Abstract
Past disagreements over the consequences of capitalist development have focused on two key issues: the role of markets in allocating resources and restructuring social and organizational systems; and the nature of the relationships between owners or managers and workers in capitalist firms. We dealt with markets in Chapter 4, and now ask why capitalist firms set up authority systems that use different degrees of coercion or consent to coordinate the activities of their workers. This issue has, of course, always been central to the debate between capitalists and socialists in both DCs and LDCs. The former treat hierarchy as inescapable and argue that market competition makes it impossible for capitalists to exploit their workers or customers; the latter argue that their market power not only enables large firms to exploit their workers, but also to collude with western states in subordinating or even under-developing the third world. The collapse of statist socialism has now marginalized the radical Marxist critique of capitalism, and changes in technologies and management systems are altering the authority systems within modern firms. We will examine the general implications of these changes for theories of the firm in this chapter, and the role of capitalist firms in development in Chapter 14.
E. A. Brett

Chapter 8. Incentives and Accountability in Solidaristic Organizations

Abstract
The role and influence of voluntary or solidaristic organizations (SOs) is growing in DCs and LDCs. Their role and structures differ dramatically in different institutional systems since SOs include:
  • nuclear families and global religions
  • radical and conservative political and social movements
  • democratic modern associations and ascriptive or theocratic traditional ones
  • small local community-based organizations (CBOs) and international NGOs (INGOs)
  • large and small cooperatives competing in the market economy.
E. A. Brett

Explaining Blocked Development

Frontmatter

Chapter 9. Competing Models and Developmental Transitions

Abstract
Classical theorists saw development as a process through which traditional societies shifted from pre-modern institutions of various kinds to capitalism or socialism; their successors now treat it as a shift to the pluralistic institutions described in Part II. This new consensus represents no more (and no less) than a summation of the ‘third way’ programmes that have emerged to address the crisis in both structuralist and neoliberal programmes in the west, turning the old conflicts between Left and Right into a far less adversarial debate over the use of different kinds of state, for-profit or non-profit agencies to maximize autonomy, growth and solidarity in new and creative ways. These models are promoting new forms of state regulations and relationships with private agencies in the north whose outcomes are still a matter for debate. What concerns us, however, is that the most successful East Asian NICs have not used the liberal versions of this model to manage their developmental transitions, and these liberal programmes have often failed in the weakest LDCs. This is because the values, understandings and endowments needed to sustain liberal institutions still coexist and conflict with others associated with their recent past that distort and/or block liberal transitions in LDCs.
E. A. Brett

Chapter 10. Learning from History

Abstract
The crisis of structuralism in the late 1970s was used to justify the liberal claim that free trade would ‘maximise world income’ (Johnson, 1968: 88), that ‘superior economic performance’ depended on ‘competitive markets, secure property and contract rights, stable macroeconomic conditions, and efficient government provision of public goods’, and that ‘democratic political institutions are the ones most conducive to human welfare’ (Clague, 1997b: 368). Liberal pluralist theory is still dominated by these assumptions because it recognizes the need for strong state and civic institutions, but only to improve or supplement ‘the functioning of the price mechanism’ and not to ‘supplant’ it, as structuralist theorists did (Lal, 1996: 30).
E. A. Brett

Chapter 11. Explaining Blocked Development

Abstract
Different versions of liberal pluralism are being used in DCs to manage the crises generated by structuralism and neoliberalism over the past 25 years. These reforms recognize the need for institutional change, but assume that its primary concern should be the need to maximize individual freedoms and defend rights, and they attribute poverty in LLDCs to the fact that the rules needed to do this are generally ‘absent in developing countries’ (Stiglitz, 2002: 73).1 However, the assumption that these rules could be applied in the same way in weak states as in strong ones fails to recognize that their effective operation depends on the existence of demanding preconditions that are only now being developed in many LLDCs. Instead, it sees institutions as no more than ‘the rules of the game in a society or, more formally … the humanly devised constraints that shape human interaction’ (North, 1990: 3), and assumes that social transformations require little more than a transition from policy regimes that undermine to those that safeguard individual property rights. If this were so, development could indeed take the form of the technical programmes promoted by the policy community that is now pressurizing LDCs to adopt these ‘“good institutions” … with some minimal transition provisions (5–10 years) for the poorer countries’ (Chang, 2003a: 503).
E. A. Brett

Chapter 12. A Theory of Developmental Transformations

Abstract
The ethnologist … [must] describe and analyze one of the most significant phases in human history, that is, the present westernization of the world. Observations on culture change … reveal to us also the general laws of diffusion: they provide the materials for the understanding of certain aspects of human culture: the tenacity of beliefs and traditional modes of life; the reasons why certain aspects of culture diffuse more rapidly than others — in short the dynamic character of the process.
E. A. Brett

Chapter 13. Building Strong States

Abstract
Social progress depends on the ability of states to defend borders, protect property rights, regulate markets, provide infrastructure and deliver social services. This, in turn, depends on the resources and motivation of the politicians and officials who provide them, and on their ability to support and tax the producers who generate the incomes to finance them. Effective states facilitate progressive change by encouraging economic investment, promoting social cohesion and providing efficient services, whereas weak ones block it by producing ‘growth-retarding regimes, policies, and institutions’ that ‘prevent economic development’ (Olson, 1982: 175). Liberal political theorists treat democracy as a defining feature of a developed society, so rapid democratization became a compulsory part of all liberal pluralist policy programmes in aid-dependent states. However, the last four chapters have suggested that democratic transitions are difficult to consolidate in societies confronted by the tensions generated by late-late development.
E. A. Brett

Chapter 14. Building Capitalist Economies

Abstract
Liberal economists attribute developmental failures to the politically generated price distortions, perverse incentives and unproductive rents, which are created by structuralist programmes and which stop market forces from maximizing efficiency and equity. They believe that subjecting local producers to local and international competition will not only generate economic growth, but also good governance by eliminating the political rents that make corruption possible. We set out the liberal case for market systems in Chapter 4, and in Part III have shown why structuralists believe that free markets will benefit poor countries as well as rich ones only when they have all attained ‘nearly the same degree as possible of industry and civilisation, political cultivation and power’. They believe that ‘under the existing conditions of the world, the result of general free trade would not be a universal republic, but … a universal subjection of the less advanced nations to the supremacy of the predominant manufacturing, commercial, and naval power’ (List, 1841/1904): 103).1
E. A. Brett

Conclusions Theory, Agency and Developmental Transitions

Abstract
This book seeks to produce a credible theory of development that takes the needs, capacities and limitations of the poorest rather than richest people and societies as its starting point. The idea of development still exercises a powerful influence on theory and practice in both DCs and LDCs, where it operates as a set of normative goals, policy programmes and teleological expectations. These have generated processes of institutional and policy reform designed to maximize freedom, prosperity, equity and cooperative interdependence by creating open science-based institutional systems since the start of the modern era.
E. A. Brett
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