The Routledge Handbook of Latin American Development

Julie Cupples, Marcela Palomino-Schalscha, Manuel Prieto, Julie Cupples, Marcela Palomino-Schalscha, Manuel Prieto

• Publisher: Routledge
• Year: 2018
• eBook ISBN: 9781351669689
• Topic: Social Sciences
• Subtopic: Business General
• Index: Social Sciences

The Routledge Handbook of Latin American Development seeks to engage with comprehensive, contemporary, and critical theoretical debates on Latin American development. The volume draws on contributions from across the humanities and social sciences and, unlike earlier volumes of this kind, explicitly highlights the disruptions to the field being brought by a range of anti-capitalist, decolonial, feminist, and ontological intellectual contributions.

The chapters consider in depth the harms and suffering caused by various oppressive forces, as well as the creative and often revolutionary ways in which ordinary Latin Americans resist, fight back, and work to construct development defined broadly as the struggle for a better and more dignified life. The book covers many key themes including development policy and practice; neoliberalism and its aftermath; the role played by social movements in cities and rural areas; the politics of water, oil, and other environmental resources; indigenous and Afro-descendant rights; and the struggles for gender equality.

With contributions from authors working in Latin America, the US and Canada, Europe, and New Zealand at a range of universities and other organizations, the handbook is an invaluable resource for students and teachers in development studies, Latin American studies, cultural studies, human geography, anthropology, sociology, political science, and economics, as well as for activists and development practitioners.

Part I
Debates and provocations

1
Modernization and dependency theory

Cristóbal Kay

In this chapter I discuss the main ideas of the theories of modernization and dependency from the perspective of the Latin American region. Both theories have to be set against the background of the Cold War and the competing ideologies of capitalism and communism. Modernization theory emerged in the North during the 1950s and 1960s and was largely absorbed uncritically at the time by social scientists and policy makers in Latin America. From the late 1960s it was fiercely challenged by the dependentistas, as the dependency theorists and followers were often called. While modernization theorists aimed to develop and strengthen the capitalist system in the Third World, distinct strands within dependency theory aimed either to overthrow it and start a process of transition to socialism (a Marxist strand), or to reform the underdeveloped structures of the region and reforming the international economic system towards a more equitable relation between North and South (a structuralist position). I will first examine modernization theory (MT), proceed to the analysis of dependency theory (DT), and finish with some conclusions.

Modernization theory

After the Second World War the process of decolonization gathered pace. Social scientists were encouraged by governments, international institutions, aid agencies, and policy makers to undertake research into the so-called ‘backward’ countries or ‘non-Western societies’ with a view to designing and implementing development strategies and policies which overcame the various economic and social obstacles to development. For economists these barriers boiled down to finding ways to increase the rate of savings and investment while sociologists focused on changing social norms and cultural values. Development was seen as a process of transition from a traditional to a modern economy and society.

The development goal for traditional societies was seen as involving a process of modernization that followed the footsteps of the West by adopting the experience of the developed countries as a model. In this dualistic typology of traditional and modern, traditional societies were defined as simple and undifferentiated societies with a large rural subsistence economy based on family labour, employing primitive technology which explained their low productivity and poverty. They were also characterized by low levels of literacy, health, and political participation. By contrast modern societies were depicted as complex and differentiated, with an industrial economy geared to the market, based on wage labour and the adoption of scientific technology which explains their high productivity and standard of living. They enjoyed high levels of literacy, health, and political participation. While modern societies are characterized by universalism (actors judge each other according to general principles in their personal relationships), achievement orientation (individuals are judged according to their actions), and self-oriented (when private interest dominated actors’ behaviour), the opposite is the case for traditional societies who display particularism (actors judge each other according to their personal relationships), adscription (individuals are judged according to their given status), and collective orientation (when collective interests are given priority). Countries were accordingly located by modernization theory in a unidirectional continuum between these two extremes. Modernization theorists dangled the promise before the underdeveloped countries that they could catch up with the developed countries by replicating their experience.

One characteristic which modernization theory regarded as blocking development in traditional societies was traditionalism itself, whose fatalistic approach to life (‘things have always been as they are’) discouraged people from taking action. Meanwhile in modern societies there was held to be a willingness to overcome obstacles and embrace change while maintaining certain traditions. They were characterized as having upward social mobility, equal opportunities, rule of law, individual rights, and freedoms. Thus for traditional societies to progress, prevailing attitudes, beliefs, and cultural and social values had to be displaced by modern viewpoints through the diffusion of scientific knowledge, technical capabilities, organizational and institutional capacities, and so on. Development aid from rich to poor countries would facilitate the process of transition.

Different authors within modernization theory emphasized different factors for modernization to take place. Wilbert Moore (1963) underscored value changes towards individual merit, social mobility, science, and political participation. In turn, David Lerner (1958) stressed transformations in personality, David McClelland (1961) highlighted such psychological factors as the desire to achieve, and Everett Hagen (1962) expressed this in terms of developing an entrepreneurial and innovative spirit. Bert Hoselitz (1960) uses the pattern variables of Talcott Parson for his analysis of social change and economic development.

The prominent political scientist, Samuel Huntington (1968), argued that the main objective of modernization should be the promotion of political order. He was concerned that the political institutions in developing countries would be unable to cope with the increasing political participation and social demands unleashed by a process of modernization and that this could result in the eventual breakdown of the political system. Hence his overriding concern was for securing political order and stability above all other objectives. His analysis was interpreted (by some) as justifying strong and even authoritarian governments. Huntington also differed with some of the tenets of MT as, in his view, all societies combined to different degrees both traditional and modern elements. Thus all societies are in transition. He thus critiqued mainstream MT for being too static and unable to explain the actual processes of change.

In sum, modernization theorists emphasized that social, cultural, psychological, and political factors are also important for economic development. In this way, the non-economic social sciences were put ultimately at the service of economic objectives, although economists were seen as having the upper hand in the design of development strategies. This secondary role of sociological and cultural factors has since been challenged, especially with the rise of post-modern, postcolonial, and cultural studies which largely dismissed economics and the whole idea of development.

One of the most popular and probably most influential analyses of economic growth within a modernization perspective is that of the economic historian Walt W. Rostow (1960). He argued that there are five stages in the modernization process which all countries must sooner or later follow; (1) the traditional society, (2) the preconditions for take-off, (3) take-off, (4) the drive to maturity, and (5) the age of mass-consumption. Societies are situated at different points on this continuum. Traditional societies are located within the first two stages and modern societies in the last two stages. The take-off stage was the key turning point towards modernization. The preconditions for take-off is a protracted stage of over a century, involving the formation of a vigorous commercial and entrepreneurial class whose savings finance the industrialization process. By contrast the take-off stage is a much shorter period of two or three decades during which the rate of investment increases substantially enabling the rate of economic growth to exceed the rate of population growth and for income per capita to rise for the first time in history.

One of the main attempts to apply Rostow’s stages of growth theory to Latin America was made by Guido di Tella and Manuel Zymelman (1973). Their depiction of six stages of growth in the case of Argentina were similar to Rostow’s but with some modifications as in their analysis reaching a certain stage did not automatically secure the transition to the next. In the case of Argentina, they inserted an additional stage between Rostow’s (3) and (4) called ‘delay’ as Argentina failed to adjust fast enough to the change from an agricultural export economy to an industrial economy. Although the country had reached in their view the self-sustained stage (1933–1952) they characterized the subsequent period as one of readjustment rather than leading to the age of mass consumption. Meanwhile Gino Germani (1962) distinguished four stages of economic growth in Latin America which are traditional society, weakening of traditional society, dual society, and, finally, mass society. For each stage he analyzed the economic, societal, and political characteristics.

In the late 1960s André Gunder Frank (1972a, orig. 1967) launched a devastating critique of MT. He forcefully rejected its traditional-modern dualism, unilinearity, its adoption of neo-Parsonian social pattern variables and neo-Weberian cultural and psychological categories. Furthermore, he argued that it was empirically faulty, theoretically derisory, and useless as a policy tool for underdeveloped countries (Frank, 1969). But his main point of difference with MT concerned the common assumption that underdevelopment was an original state and that the rich countries had developed in isolation, ignoring the ways in which development and underdevelopment are part of a single process in the formation of the world capitalist system since the 15th century. Indeed, I would contend that MT regarded change as being largely determined internally, ignoring the impact of colonialism and imperialism on underdeveloped countries or assuming these to be benign. Empirical evidence has shown discontinuities and reversals in the development process and that rather than a single evolutionist path of development there is a variety of transitions to modernity.

While some Latin American thinkers merely replicated the ideas of the modernization theorists there was one notable exception. Gino Germani (1981) introduced some ideas of his own by creatively adapting MT to the particular conditions of Latin America. For example, he argued that social forms belonging to different historical periods coexist in any process of transition thereby creating conflicts as some spheres change faster than others. There are lags, backlogs, and various asynchronies, as he calls them, such as between regions, institutions, social groups, and motivations. He is also concerned with the “demonstration effect” of advanced societies which can create aspirations for a level and type of consumption in the transition societies which cannot be met and can therefore lead to mass mobilizations and crisis. But some of the abovementioned shortcomings of MT also apply to him. From a Marxist perspective he fails to discuss class, exploitation, and class conflicts, as well as ethnic conflicts, which can be very acute in underdeveloped countries.

Varieties of dependency theory

Background

DT arose at a particular time and context within Latin America. The theories of imperialism and the ideas of the Latin American structuralist school of development were two key influences. The structuralist school arose out of the Economic Commission for Latin America and the Caribbean (ECLAC), a United Nations body established in Santiago, Chile, in the late 1940s, whose driving force was the Argentinian Raúl Prebisch (Kay, 2006). Although not generally considered to be a dependency theorist, Prebisch was certainly one of its precursors. He wrote the influential Economic Survey of Latin America 1949 (ECLA, 1951) which the famous thinker Albert Hirschman (1961: 13) appropriately dubbed the ‘ECLA Manifesto.’ Prebisch’s centre-periphery paradigm exposed how the international trade system worked to the benefit of centre countries (the developed rich countries of the North) and to the detriment of the periphery (underdeveloped, developing, or poor countries of the South) exacerbating inequality between them. The centre countries retained most of the benefits of their industrial technological progress (through increased profits and/or wages) and profited from the (relatively) lower prices of the primary commodities they imported from the periphery. The periphery, by contrast, transferred part or all of its increased productivity in the form of the primary commodities they exported to the centre while at the same time as being unable to benefit from the increases in productivity of the industrial commodities exported by the centre. This phenomenon, which flatly contradicted Ricardian orthodox international trade theory on comparative advantages, is referred to in the economic literature as the ‘Prebisch-Singer thesis’ on the periphery’s deterioration of the terms of trade, i.e. the price of primary commodities exported by the periphery falls more quickly (or rises more slowly) than the price of the industrial commodities exported by the centre.

Prebisch’s conceptualization of the world economy and his revelation of the systemic unequal relationship between centre and periphery profoundly changed how the problem of development should be addressed. It constituted a very different way of looking at the problem of development from MT and from orthodox economic theory (Kay, 1989). In his last book, published five years before his death, he attempts to develop a theory of ‘peripheral capitalism’ which is written in the best structuralist tradition that he pioneered and where he introduces aspects of DT while also attacking the emergent neoliberal paradigm (Prebisch, 1981).

Differences and commonalities within DT

The early influence of the structuralist school on DT aside, it is my contention that there is not one, but several distinct versions of DT so that strictly speaking one should talk of dependency theories in the plural rather than the singular. This broad array of ideas which emerged in the mid-1960s reached its widest influence in Latin America and worldwide during the 1970s. Its demise started with the economic crisis of the 1980s and the rise of neoliberalism, first through the pursuit of World Bank- and IMF-designed structural adjustment programmes and later with the Washington Consensus in the 1990s. In this transformed context, some dependency thinkers embraced world system theory, others, known as neo-structuralists returned to their structuralist roots with modifications, and yet others argued that aspects of DT acquired new relevance with the spread of neoliberal capitalism globally (see Gwynne and Kay, 2000).

I distinguish mainly two strands within DT, one with origins in structuralism and the other in Marxist theories of imperialism. Both arose as a critique of the process of import-substitution industrialization (ISI) that most Latin American countries (especially the larger ones) had been following since the Second World War or earlier. In the early decades growth rates under ISI rates were high and industry became the most dynamic sector of the economy. Later growth rates declined as ISI became ‘exhausted.’ Expectations of ISI relating to employment, income distribution, technological diffusion, and export orientations never fully materialized. What particularly provoked and irked progressive critics at the time was that ISI led to increasing control by foreign capital over industry rather than greater national control over the economy. Foreign capital not only retained a high degree of control of the traditional primary product export sector, particular mining and plantation agriculture, but began to dominate the new industrial sector as well.

The key difference between the structuralist and Marxist strands in DT is political. While the former sought to surmount dependency and underdevelopment by reforming the capitalist system, the latter argued that the shackles of dependency could only be surmounted by overthrowing capitalism, if necessary by revolutionary means, and replacing it with socialism. Another key difference pertains to the theoretical apparatus deployed. While structuralists used the analytical and conceptual tools of development theory, albeit of a heterodox kind, Marxists relied on historical materialism and the labour theory of value.

While both strands of DT share a comparable definition of dependency, the problematic of dependence cannot be reduced to and encapsulated in a single definition as will become clear later. Sunkel (1973: 136) writing from a structuralist perspective argues:

Development and underdevelopment should therefore be understood as partial but interdependent str...

Table of contents

• Cover
• Title
• Title
• Copyright
• Dedication
• Contents
• List of figures
• List of tables
• List of boxes
• List of editors
• List of contributors
• Acknowledgements
• Latin American development: editors’ introduction
• Part I Debates and provocations
• Part II Globalization, international relations, and development
• Part III Political and cultural struggles and decolonial interventions
• Part IV Gender and sexuality, cultural politics and policy
• Part V Labour and campesino movements
• Part VI Land, resources, and environmental struggles
• Part VII Latin American cities
• Index