THEORIES AND PRINCIPLES

OF DEVELOPMENT
Mr. Sanga Chesco Habili
Tel: +255 627 496 434
 Content
• Definition of development concepts
• Theories of development
• Economic development
• Principles and theories for development policy
• Development
Development is a broad term that encompasses
various processes aimed at improving the
quality of life and well-being of people.
It is a process that creates growth, progress,
positive change or addition of physical,
economic, environmental, political, social and
demographic components.
• Economic development
This refers to the process by which a nation or
an individual improves the economic status.
It involves efforts to improve the economic
health of an individual, household, region or
country, focusing on increasing income levels,
reducing poverty, creating jobs etc.
• Sustainable development
Is the development that meets the needs of the
present without compromising the ability of
future generations to meet their own needs
(Brundland Commission)
- This concept emphasizes balancing economic
growth with environmental protection and
social equity.
• Human development
Focuses on improving the capabilities and
opportunities of individuals. It includes life
aspects such as education, health, income etc
• Social development
This involves the improvement of social
structure and institutions to promote social well
being.
It includes efforts to reduce inequality, enhance
social cohesion and ensure that all individuals
have access to basic services and opportunities.
 The Multidimensional nature of
Development
• Development is a multi-dimensional concept.
There are three perspectives which are
considered when we attempt to define dvp.
- Economic dimension/perspective
- Political dimension/perspective
- Social dimension/perspective
a. Economic perspective (economists)
Economists look at indicators of dvp such as:
- Economic growth of a nation (eg GNP, GDP)
- Increase in foreign investment into activities
like mining and industries
- High level of technology
- Increase in income among households etc
b. Political perspective
Looks at dvp in political dimension such as:
- Availability of democracy (eg. free and fair
election)
- Low level of corruption
- Availability of human right (right to work,
marry, education, speech, assembling,
worship etc)
c. Social perspective
Focuses on improving the quality of life of
individuals and communities including:
- Availability of social services eg electricity
- Increase in life expectancy
- Lack of diseases
- Low mortality rate,
 Theories of development
• What do theories do?
Theories are there to provide concepts,
propositions, assumptions and beliefs which
learned people use to understand and interpret
the world around them.
• Development theories provide frameworks for
understanding how societies progress and
transform over time.
• Development theories are categorized into several
schools of thought, each with its own unique focus and
assumptions.
For the purpose of this lecture we shall discuss the
following theories of development:
i. Bourgeoisie / modernization theories
ii. Political economy theory (Karl Marx)
iii. Dependency theories
iv. World systems theory
v. Nationalist theories/socialism and self-reliance
vi. Neo-Liberal theories of social development
 1. BOURGEOISIE / MODERNISATION
THEORIES OF DEVELOPMENT
• The modernization theories emerged after the
Second World War. These theories tried to
answer the following questions:
- Why are Europe & North America more
developed / advanced than the Third World?
- Why is there a wide gap among these
countries today? What contributes to these
differences?
 Theoretical claims of modernisation
theories
• Modernization theories seek to describe and
explain the processes of social transformation
from “traditional societies and systems” to
“modern ones” following the same path that
the Western Europe and North America
followed from the 15th century to the
present.
• (Read: Walt Rostow’s Stages of Economic
Growth: A Non-Communist Manifesto, 1960)
 Underlying assumptions of
modernisation theories
• Modernization is a phased, stage-by-stage linear,
social development process and that all societies
have to go through the same path as was the case
with Western Europe, the USA and Japan.
• Modernization can only take place within a
capitalist framework and not
socialism/communism.
• For modernization to take place traditional
structures and values must give way to modern
ones
Modern structures and values include:
- More achievement oriented
- More receptive to change
- More technologically- oriented
- More participatory decision-making via universal suffrage
- Political parties, parliaments and meritocratic
bureaucracies
- Industrialization
- Urbanization
- Money economy
- Technical upgrading of production and service etc
• In this course we shall concentrate on two
modernisation theories which are:
i. Rostow’s Five stages of Human development
ii. Nurkse’s Vicious Circle of Poverty
 A. ROSTOW’S FIVE STAGES OF
HUMAN DEVELOPMENT
• This theory was introduced by Professor Walt
Rostow in 1960.
• The theory uses the analogy of an airplane
moving along the runway until it reaches the
take-off stage then soaring into the sky.
• Walt Rostow views dvp as a process that follows
linear trajectory starting from low to high by
passing through five stages of dvp.
• Each stage of dvp should be fulfilled in order to
allow the society to undergo the next stage.
• These stages are as follows:
 a. Traditional Stage
At transitional stage, the society is featured by the
following characteristics:
i. Agricultural sector is dominant in the society
ii. Low productivity - because of poor methods of
farming
iii. Low level of technology
iv. High mortality rate - Especially of infants
between ages 0-5 years.
v. High fertility rate
vi. Extended family and clan alliances
vii. Little social mobility- or no movement at all
viii. Poor political organization - characterized by
conflicts and non consensus
ix. Presence of diseases and nefarious local beliefs.
• In summary: traditional society’s stage is pre-
scientific, low productivity, family and clan
alliances, undifferentiated social roles,
investment in security and religion, feudal land
ownerships).
 b. Transitional Stage (Pre-condition
for take-off stage)
i. Expansion of trade - Both at international and national
level
ii. Increase of external influence from outside the
country/society
iii. Introduction of modern methods of production in both
agriculture and industries
iv. National investments being raised to 5% of the national
income to sustain economic growth
v. Willingness of people to change their values e.g.
borrowing/lending money for investments.
vi. High level of entrepreneurship and the society being
innovative and creative
vii. Level of science and technology being raised in
order to bring innovation.
• In summary: pre-condition for the Take-off stage
(emphasizes on the role of the state, education,
technology and capital savings and investment
above pop. growth rates, national-level
organizations and institutions, new elites,
integration in world economy, diffusion of
Western of S&T etc.)
 c. Take-off stage
i. National investments level rises to 10%
ii. Increasing productivity in agriculture, industries, mining
and fishing
iii. Strong political organization – high lev. Of democracy -
there is a consensus and hand shaking whenever one
wins the election and the loser not opting to fighting
iv. Agricultural sector is mechanized
v. Science and technology are higher
• In summary: Here (same as above, investment and savings
are above 5 to 10% of national income, there is substantial
manufacturing, appropriate institutions, more integration
in world economy)
 d. Drive to Maturity Stage
i. Emergence of industrialized society
ii. Transportation and communication are more
complex
iii. Science and technology are at higher stage
iv. The old industries are now replaced by new
ones with new advancement methods of
production
v. High political organization - high level of
democracy, free and fair elections, good
governance and observance of human rights
• In summary: At this stage there is technology
use throughout the economy and society,
investment and savings are 10-20 % of
national income, new sectors of economy,
efficient institutions)
 e. High Mass consumption
i. The society here is too matured in all aspects of
human life: politically, socially, economically and
culturally.
ii. Strong political organization - high level of
democracy, free and fair elections, good governance
and human rights
iii. Transportation and communication are more complex
iv. Science and technology are at higher stage
v. Good allocation of resources to the people; e.g. the
specialist ones are taking authority in organizing
society.
 Weaknesses of the theory
i. The promised modernization failed to occur: aid,
technology and loans increased Africa’s indebtedness
ii. Import substitution industrialization strategy failed to
modernize the economy as manufactures remained
only enclaves with no forward or backward linkages.
iii. Education system remained Western in outlook,
elitist in character, fostering alienation. Few could
attain it
iv. Western social value systems have own historical
specificities and could not be transplanted
everywhere and anywhere.
v. The modernization theory is explicitly about
economic growth not development per se
vi. There are more than one path to
development with different end-points
vii. Development could take place outside the
capitalist system
 B. THE VICIOUS CIRCLE OF POVERTY
THEORY
• The theory was introduced by Professor
Ragnar Nurkse (1965)
• Nurkse’s main argument is that:
“if a society is poor, then that society will
continue to be poor and poor forever”
“We are poor because we are poor, and
therefore; we shall continue to be poor all the
time” (Do you subscribe to Nurkse’s perspective)
• Nurkse presents the circle of poverty showing
the persistence of poverty in the following
schematic diagram.
• Nurkse summarizes that; for poor countries to
achieve dvp, they are supposed to receive
external push (big push) from outside.
• The push should be from e.g. financial
institutions and other social assistances. (We
have had IMF, World Bank and so many
Foreign Direct Investments- grants, loans etc.
Has this helped in our country?).
• Is it true that external push is a solution to African
development?
Or is it true that globalization is a solution to African
poverty?
• Globalization has brought issues like the SAPs with its
associated conditionalities and the grants or
assistances from outside have had price tags e.g.
- Devaluation of local currency,
- Removal of subsides in agricultural sector,
- Cost sharing in education, health etc
- Minimizing government expenditure,
- Privatization, and Free markets
- Multi-party system etc.
• Assistances from outside should be for complementing
our development and should not have a lot of tied
strings e.g. that leads to be dependents on others.
 LIMITATIONS OF NURKES’S THEORY
i. Nurse’s theory fails to tell us the root causes of
underdevelopment of Third World countries;
rather it tells us the outcomes of
underdevelopment which could be a result of
external forces for example the rise of
capitalism in Europe
ii. Nurkse failed to show how European countries
managed to break the circle of poverty, if
formerly, all countries lived in the same circle of
poverty
 2. POLITICAL ECONOMY THEORY
(KARL MARX)
• Karl Marx lived during the time of Industrial Rev. in Europe
where majority of people were too poor to sustain their
daily life. This was the time when there was mass poverty
in the society.
• Two antagonistic classes existed among the society,
namely; the class of have not (proletariats) and the rich
class (bourgeoisie).
• This was observable in England and Germany where people
had to move from rural to urban areas in order to look for
better lives.
• So Marx wanted to study what contributed to such
disparities among the societies and likewise, to propose for
lasting solutions for those changes.
 Marx’s main arguments
• Class struggle:
He argues that, within societies, class struggle is very
necessary in producing positive changes. Marx believed
that, in order for the society to develop, there must be a
class struggle
• Class conflict:
Development in the society normally depends on class
conflict, so he views class conflict in positive manner
rather than negative one.
-Therefore to understand the process of class struggle
and class conflict in the societies, he identified five main
stages of human development
 Marx’s stages of social development
1. Primitive accumulation
• This was initial stage of human development
• Productive forces were very poor e.g. sticks and
stones.
• Ownership of the means of production was
communal.
• Relations of production were collective.
• There was no antagonistic class (exploitation of
man by man).
2. Feudalism
• At this stage there are some improvement of
productive forces.
• There exist two antagonistic classes : the class of
serfs and landlords.
• Serfs were largely exploited by landlords in terms
of rent in kind/money.
• This led to class conflict which led the mode to
fail and usher in another mode.
3. Capitalism
• Two antagonistic classes exist: the class of bourgeoisie
and proletariat.
• The major means of production were primarily
controlled by the bourgeoisies.
• The bourgeoisie paid proletariats a little wage which
did not sustain their lives. (Is this still going on under
multinational capitalism under globalization? Examine
how employees are paid by their employers at their
places of work, are they adequately paid or not??).
• Due to class conflict in the society this led to change
the mode to another one.
4. Socialism
• According to Marx, this was the higher stage
of development - had no antagonistic classes.
• The working class (proletariats) was
controlling the major means of production.
5. Communalism
• This is the highest stage of social
development.
• There was no exploitation of man by man.
• The level of investments and production were
primarily determined by national plans (and
not individual people)
 Criticisms/weaknesses of the theory
Bourgeoisies criticize Marx:
• That his arguments of class struggle and class
conflict are too ideological which cannot be
successfully implemented in the society.
• That the society can never develop without
exploitation that is without classes. (Don’t
exploiters develop?)
• Marx believed on working class as an instrument
leading to real revolution in the society, but this is
not true because real revolution should come in
collaboration between workers and peasants.
• Marx believed on class conflict as important
aspect for development but he contradicted
himself because in socialism and
communalism modes there are no class
conflicts.
- The question comes: how could socialism and
communalism emerge as the highest stage of
human development while there is no any
exploitation of man by man?
 3. DEPENDENCY THEORIES
• Neo-Marxists are people who came to write after Karl
Marx.
• They borrowed some Marx’s arguments to propound their
views.
• This theory was advocated by The Latin America’s school of
thought called “Dependencia School”.
• It was developed during the 1950’s to early 1960’s.
• It was a response to the failure of the Bourgeoisie’s theory
to answer some prevailing questions.
• The school assumes that development in the society can be
understood in connection with the world political economic
system.
• Dependency theories constitute of a number of versions
 Some Versions of Dependency
Theories
A. Classical Dependency Theory
- Introduced by Raul Prebisch and Hans Singer in
1950s and 1960s.
- It emphasized on structural inequalities btn
developed and underdeveloped countries.
B. Neo-Marxist Dependency Theory
- Introduced by Andre Gunder Frank and Immanuel
Wallerstein
- It argues that capitalism inherently creates a
global system of exploitation and dependency.
C. Structuralist Dependency Theory
- Linked to the Economic Commission for Latin
America
- Key figures are: Celso Furtado and Osvaldo
Sunkel
- It focuses on the internal structures of
underdeveloped countries and how these are
shaped by their integration into the global
economy
D. Liberal Reformist Dependency Theory
- Among the figures of this version is Fernando
Henrique Cardoso
- The theory believes that some development is
possible within the capitalist system through
targeted policy interventions and reforms.
Theoretical Claims of the dependency
theories
• According to dependency theories, the cause
of underdevelopment is the dependence on
industrialized countries while internal factors
of developing countries are considered
irrelevant or seen as symptoms and
consequences of dependency.
• Poor countries are poor and underdeveloped
not because they lagged behind the scientific
transformation but rather they were
coercively integrated into the European
system wherein they are economically
exploited, socially oppressed and politically
dominated with rigid economic divisions of
labour.
• There are two sets of states: metropolitan nation-
states and peripheral nation-states
• Interactions between these two sets are unequal,
exploitative and largely beneficial to metropolitan
nation-states
• External forces that negatively impact peripheral
societies and economies include MNCs and
MNBs; international commodity markets,
multilateral and bilateral agencies, and cultural
institutions.
• The cause of underdevelopment is the
dependency on industrialized countries
• Developing countries are dependent countries
• The economic and political interests of
industrialized countries determine the
development of the periphery countries
• Walter Rodney once argued that, “the
intervention of European powers in African social,
economic and political processes throughout the
19th C created a situation of dependency and led
to the impoverishment of African people”.
 Proposed Policy Interventions
• Total disengaging ourselves from dependent relations with
capitalists (as was the case with China)
• Strategic participation in the global capitalist markets (Via
trade, investment and technology transfer)
• Promotion of South-South cooperation
• Development of national economies via developmental
states to regulate trade, investment and technology
transfer and satisfy domestic demands and improve the
social welfare of majority.
• Promote regional cooperation and integration to widen
markets
• Restructure society to struggle for socialism and self-
reliance.
 Theoretical and Policy Shortcomings
• Dependency theories neglect the role of contemporary internal
political and economic conditions.
• The external dependency is not sufficient to explain lack of
development in the South.
• In explaining the process of underdevelopment the role of internal
politics should be looked at, but always with historical approach.
• Dependency theories do not identify the ultimate causes of
underdevelopment apart from saying they spring from the
centre/the core.
• These theories stress much more on external obstacles to
development and neglects the highlighting of how to initiate
development once the obstacles are removed.
• Ultimately, we can say that dependency theorists disregard the
anthropological level of analysis (i.e. the local community).
 4. THE WORLD SYSTEMS THEORY
• The theory was written by Emmanuel
Wallenstein.
• Wallenstein believes that the world is divided
into three parts which are:
- The core,
- Semi-periphery, and
- Periphery.
a. The core countries
These countries have the following features:
- They are highly industrialized
- They have highly integrated economies
- They manifest high level of productivity
- They have skilled labour
- They are democratic
b. The semi Periphery countries
These countries are:
- The intermediary countries that can fall back
to the periphery or can leap to the core
- Dynamic economies with rigid but negotiable
wages
- Countries that use capitalism as their mode
of production
c. The Periphery countries
These countries are:
- Politically undemocratic
- Vertically integrated with the core-countries
- Peasantry economic oriented
 Assumptions of the World Systems
Theory
i. The world system consists of a single market
and its unit of analysis is the world market
ii. There are series of state structures which
exist as subsets of the global market
iii. The world is capitalistic in nature
iv. The world is hierarchically structured with
the core countries at the center, semi-
periphery in the middle and periphery
countries at the bottom
v. The core countries are likely to exploit the
semi-periphery and the periphery at all levels
of economic life
vi. The periphery countries never move to semi-
periphery or the core
vii. The r/ship that exists btn the periphery and
the core/centre is exploitative in nature
through financial institutions
 Solutions to Problems of
Underdevelopment according to the
WST
i. Socialism
The WST provides the socialistic solution to the
underdevelopment of Africa. (TZ adopted
Socialism and Self-reliance “1960s-1980s”. Has
it helped us?)
ii. Zonal economic integration
Eg. ECOWAS, SADC, PTA, COMESA, EAC etc
iii. Cutting-off the existing r/ship with the core
- Is it possible to cut-off r/ship with the core now
that we call them our development partners?
 Critiques to the World Systems
Theory
Capitalists criticize this theory’s tendency to
ignore explaining internal factors as causes of
underdevelopment such as:
i. Corruption
ii. Misallocation of human resources
iii. Poor policies formulated among African
states that aren’t implemented
iv. Tribalism, regionalism, low technology etc
 ECONOMIC DEVELOPMENT
• Economic progress, growth and development
look like interchangeable concepts while in
background they are distinct.
Economic Progress?
• “Progress” has to do with straight and upward
movements
• Economic Progress deals with the current
status of economies in a very short period.
Economic Growth?
• Growth in economics denotes economic growth.
• “Economic growth” is a term which is borrowed
from life sciences.
• An increase in economic variables over a period
of time is economic growth.
• We can measure this by looking at: industrial
production, road lengths, food production, no. of
educated persons, per capita etc
• Growth rates can be calculated annually in percentage
across various sectors.
Economic development?
• It is a process whereby an economy’s real national
income increases over a long period of time.
• Economic development therefore covers three
concepts:
- It is a process
- Real national income increases
- It covers a long period
• Economists identified that “economic growth”
does not result into better quality of life.
• These people therefore defined economic
development differently to include: nutritional
levels, health, sanitation, drinking water,
vaccination, education and other indicators
which make quality of life better.
• Economic development is both quantitative
and qualitative progress/growth.
What differentiates Economic growth
and Economic development?
i. Single dimensional vs multidimensional
natures.
• Economic growth is a single dimensional concept
which is merely quantitative in nature. It is
concerned with rates of increase in national
income.
• Economic development is a multidimensional
concept which is both qualitative and
quantitative in nature covering the welfare of
people along with increase in per capita income.
ii. Distribution of income
Ec. Growth ignores distribution of income in
spite of increase in income levels because no. of
poor people may rise if the distribution of
income is unequal.
Development considers distribution of income
since equal income distribution is on one of the
principal targets of economic development.
iii. Dependency on structural, institutional and
technical changes.
Economic growth occurs independent of any
structural, institutional and technical changes in
the economy. It may have nothing to do with
socio-technological change.
Economic development is invariably associated
with significant structural, institutional and
technical changes in the economy.
iv. Measurement
Economic growth is measured by rate change in
which an economy grows year after year. Think of
pure GNP and GDP.
Economic development is measured by many
parameters since it is associated with increase in
overall living standards and quality of life of people.
Measures of Economic development do indicate of
economic development.
Indicators of Economic Development
There are numerous indicators of economic
development. Some of them include the following:
i. Gross Domestic Product (GDP)
ii. Gross National Product (GNP)
iii. Consumption (i.e How much we do consume?)
iv. Investment
v. International trade
vi. Stability (i.e central gov’t budgets, prices,
money supply and balance of payments)
THE END