Development and the State in the 21st Century

Tackling the Challenges facing the Developing World

Erica Frantz, Natasha M. Ezrow, Andrea Kendall-Taylor, Natasha M. Lindstaedt (née Ezrow)

• Publisher: Bloomsbury Academic
• Year: 2015
• Print ISBN: 9781137407115
• eBook ISBN: 9781350311633
• Edition: 1
• Topic: Social Sciences
• Subtopic: Global Development Studies
• Index: Social Sciences

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.

Part I

Understanding Development

Chapter 1

Setting the Stage: What Is Development?

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.

Let’s start with some good news. According to the World Bank (2013b), the percentage of people in the developing world living on less than $1.25 per day has decreased considerably in the past 30 years (from 50% in 1981 to 21% in 2010). Remarkable success stories in states like China, India and Brazil, all of whom have made great strides in growing their economies and reducing the number of their citizens living in poverty in the past few decades, highlight the advances the development community has made. In 1981, the percentage of the population living on less than $1.25 per day was 84% in China, 60% in India and 17% in Brazil. By 2005, these numbers declined to 16% in China, 42% in India and only 8% in Brazil (The Economist, 2009). These are considerable transformations.

Yet, significant challenges for the development community remain. The absolute number of the world’s people who live in poverty is still all too high. According to the World Bank (2013b), there are 1.22 billion people who live on less than $1.25 per day, a third of whom live in Sub-Saharan Africa (unless otherwise noted, from here on we will refer to Sub-Saharan Africa as Africa). And for many of the world’s poor, their quality of life continues to deteriorate. The endless cycles of political instability, outbreaks of disease and episodes of famine that plague this part of the world continue to prevent reforms that would enable growth to take root (Collier, 2008).

Take the Democratic Republic of Congo (DRC). According to the World Bank (2013a), the DRC has the potential to be one of the wealthiest states in the African continent due to the abundance of agricultural and mineral resources there. Yet, it has been plagued by an endless cycle of conflicts since the 1990s. There are now over two million displaced persons and refugees inside the DRC’s borders, and humanitarian emergencies in various parts of the country have become the norm. Its institutions are weak, damaged by the violence and instability, and the standard of living experienced by citizens is among the lowest in Africa, if not the world. In sum, the problems in the DRC are many and there appears to be no end to them in sight.

As the case of the DRC underscores, addressing the world’s development needs is no easy task. In this book we seek to shed light on many of the critical issues in the field today and to draw attention to the key challenges that lie ahead. But in order to fully understand why today’s development landscape looks the way it does and to better prepare the field’s future leaders to confront tomorrow’s challenges, we also seek to take stock of where the development community has been in the past. By analysing the evolution of key development theories, and highlighting the many factors that scholars have found to affect development outcomes, we hope to provide a solid foundation on which future practitioners can build.

What is the developing world?

The central goal of the field of development is to improve the quality of life for more of the world’s population. Though there is consensus on this point, there is disagreement on most other issues in the field. For one, observers disagree about the set of states that should be the subject of inquiry. Few argue that the United States, Canada, Western Europe, Australia, New Zealand and Japan need development assistance, but from there things get quite contentious. Should states like Qatar, where citizens are often wealthy but lack many basic political rights and liberties, be included in the sample? Should states like Cuba be included, whose citizens, though poor, have better access to a variety of public goods, like education and health care? These are not easy questions and the answers often depend on the specific goals one seeks to achieve.

Observers also disagree about the specific terminology that should be used to refer to the sample of states that warrants our attention. During the Cold War, scholars and policy practitioners referred to this group of countries as the ‘Third World’ where countries in the West comprised the First World, the countries associated with the USSR and communism made up the ‘Second World’, and the ‘Third World’ referred to everywhere else. After the end of the Cold War, however, the term ‘Third World’ has become less relevant and has decreased in prominence accordingly.

The terms that have since emerged to fill the void are admittedly imperfect. Some observers, for example, use the term ‘underdeveloped’ to reference the sample of states under inquiry, yet this implies that these states are in some way backward. Others use the term ‘less developed’, which suffers from a similar drawback. Some observers instead use the term ‘Global South’, but this term is misleading. For example, Afghanistan, a state that nearly all observers agree warrants the attention of the development community, lies in the Northern Hemisphere, while Australia lies in the Southern. Other observers use the term ‘developing’, which has also been criticized because it implies that states classified as such are all in the process of achieving, and will eventually achieve, a (development) goal, which is an overly optimistic assumption.

We acknowledge that there are drawbacks to all of these terms. For consistency, we use the term ‘developed’ to refer to the West and Japan and ‘developing’ to refer to everywhere else. By the West, we mean Europe, the United States, Canada and Australia. Japan is also included due to its history as a colonial power and current status as an economic power. Though there are drawbacks to grouping these countries together in our analysis, these countries are the most predominant members of the major international financial institutions and organizations, such as the Organisation for Economic Cooperation and Development (OECD). They are also some of the largest donors of foreign aid.

What is development?

There are also disagreements with respect to what we mean by development. Is it political development (implying a focus on democracy), social development (implying a focus on social conditions) or economic development (implying a focus on poverty reduction)? All three of these types of development are intertwined, making matters even more complex.

Political development consists of building governments that are responsible and representative, with some form of mass participation and universal laws. Definitions from the 1950s and 1960s assumed that political development entailed an ‘increased differentiation and specialization of political structures and the increased secularization of political culture’ (Almond and Powell, 1978, 20). For Samuel Huntington (1968), political development includes the institutionalization of political organizations and procedures, which then improves government performance. Additionally, political development is also associated with creating a national identity (Rustow, 1970).

Social development generally speaking encompasses a process of planned social change that is designed to promote the well-being of the population as a whole (Midgley, 2014, 13). Social development is concerned with projects and progressive policies, which may entail improving education, health care and removing barriers that prevent social inclusion (Midgley, 2014, 14, 17), with the prime focus on the structural changes to society.

Economic development may include many issues that concern social development, but in essence, economic development is concerned with structural changes in the economy. Economic development constitutes not only economic growth, economic growth per capita, savings and investment but also socio-economic improvements such as increases in living standards, improvements in health care and education, and quality of life – which all provide more choices and opportunities. In this way economic development coincides closely with social development. Economic development can also constitute building infrastructure, ensuring environmental sustainability and improving security and chances for employment (Sen, 1983).

Thus, development can mean many different things, but broadly speaking development encompasses change, growth, progress or some sort of evolution of the human condition. Development is supposed to promote the well-being of the population as a whole, improve the quality of life, reduce the spread of disease and mitigate its effects, reduce poverty and increase life expectancy (Stiglitz, 1998, 77). Development may imply that massive societal shifts have taken place such as moving from a rural/ agricultural to an urban society, or changes in class structure. Development may also indicate a large shift away from traditional relations, cultures and social mores (Stiglitz, 1998, 77). Development may also entail a move towards scientific ways of thinking.

After World War II, early meanings of development were focused on rebuilding economies in the developed world as a way of preventing the rise of communism. Early conceptions of development focused entirely on economics and growth. Early on the World Bank focused on promoting foreign private investment, and raising productivity as a means of raising the living standards of countries. By the 1970s, the Bank started to emphasize the importance of social development. When Robert McNamara became World Bank president in 1968, the World Bank became more committed to improving the productivity levels of the developing countries. He also recognized that development had a social objective that was aimed at eliminating poverty and global injustices. He paid particular attention to issues such as overpopulation, urbanization, land reform, income redistribution, health care and the environment. The Bank started to use social indicators to measure development, which went beyond just looking at economic growth. Overall, there was an emphasis on the quality of growth, which incorporated broader criteria of development.

Noted scholar and Nobel Prize-winning economist Amartya Sen (1983) expanded on the definition of development, advocating a human-centred approach to development. Going beyond economic growth, Sen argued that freedom was crucial to development since it enhanced individuals’ well-being. Sen highlighted five basic freedoms, which included political and participative freedoms such as civil rights, freedom of speech and elections; economic opportunities to help people work to pay for what they may need to consume such as food, clothing and housing; social opportunities such as education and health care; transparency guarantees such as an open government and societies with high levels of social trust; and protective security such as law and order and social safety nets for the unemployed and to prevent people from living in abject poverty. Development, as he sees it, is the process of ‘enlarging people’s choices’ (Human Development Report, 1995) and expanding freedoms and capabilities enables people to live the types of lives that they would value (Sen, 1999, xii, 1, 18). For Sen, all of these freedoms are crucial to development. Only states that provide a host of different freedoms will enable individuals to pursue trade and other productive endeavours. Ideas of development started to emphasize that development could be achieved through education, meeting nutritional needs and health-care needs (Schultz, 1962).

Heavily influenced by Sen, in 1990 the United Nations Development Programme (UNDP) began to publish its annual Human Development Report. This reflected another shift towards human development. This shift was also reflected in the World Bank’s definition of economic development, which according to the World Development Report of 1991 was defined as improving living standards, improving education, health care and environmental protection.

Inequality and development

Scholars started to focus on development that took into account how growth and wealth was distributed both between countries and within. Though growth was taking place, not all developing countries were catching up to the growth that had taken place in the developed world. For example, using data from the World Bank’s World Development Indicators (2014) from 1960 to 2010, we see that in the developed world, life expectancy is 79 years, infant mortality rates are seven deaths per 1000 infants and nearly all adults over 15 years of age are literate. Compare this to the developing world, where life expectancy is only 57 years, 135 infants die out of every 1000 and just two-thirds of adults (61%) can read. These are fairly dramatic differences. On a number of fronts, the data indicate that the quality of life of citizens in the developing world is inferior to that of citizens in the developed world. Another difference is that the gap between women and men in terms of earning power, political power and education is much larger in the developing world than in the developed world. Women are more impoverished, less likely to be a member of parliament and have much lower literacy rates. For more on women and development, see Box 1.1.

Additionally, though growth had taken place in developing countries, it was very unevenly distributed. There was little evidence that growth within one country would trickle down. Instead, there was more support that meeting the needs of the poor through social development would create conditions that were positive for economic growth (Newman and Thomson, 1989, 469). Dudley Seers (1969) aimed to redefine how development was defined and measured by focusing on reducing poverty and inequality. He claimed that development that was not accompanied by social improvements to address inequalities was meaningless. Much of development was uneven, and development planning needed to address the problems of unbalanced development. Hollis Burnley Chenery et al. (1975) argued that rapid economic growth would not by itself spread the benefits of development widely to raise living standards for all. For this reason, measures that directly reduce income and wealth inequality are needed.

In 2010, high-income countries, which account for 16% of the world’s population, were estimated to generate 55% of the global income. Low-income countries created only 1% of the world’s income though they constitute 72% of the world’s population. There also continue to be growing gaps between rich and poor within countries. China, Russia and India are seeing their inequality levels rise. Billionaires in Russia and India are responsible for 18.6% of Russia’s GDP and 11% in India. These disparities are obvious in Africa as well. Those living under $2 a day account for 60.8% of the population but hold only 36.5% of the income, while those living on $20 a day account for 4.8% of the population and hold 18.8% of the total income. In some countries these disparities are even greater. In Mozambique the average share of income of the lowest 20% of the population is 5.2% while the richest 20% have a share of 51.5% (African Development Bank Group). In Namibia, the situation is even worse. The poorest 10% of households command just 1% of the country’s total income whereas the wealthiest 10% control more than 50% (UNDP).

Inequality (for more on this, see Box 1.2) has major implications for both social and economic development. Countries with low levels of inequality sustain higher growth rates for longer periods of time (Alesina and Rodrik, 1994; Berg et al., 2012). In contrast, countries with high levels of inequality have less stable and efficient economic systems, which can stifle economic growth (Stiglitz, 2012). One reason for this is that countries with high levels of inequality have lower levels of aggregate demand, which slows down economic growth. Low wages make it difficult for the poorest segments of the population to consume. All of the wealth being concentrated in the hands of the few does not generate enough demand to stimulate the economy (Goldberg and Pavcnik, 2004).

Inequality also perpetuates poverty traps. It slows the pace of poverty reduction because it limits opportunities for social mobility and access to health care and education. Much of the population in countries with high levels of inequality will see their potential go untapped. Inequality usually means that there are fewer people working, and also more people working only part time, resulting in fewer total working hours.

Inequality in health care can affect long-term development. Health outcomes are important to mobility since adults in poor health will find it more difficult to attain and hold a good job, which leads to lower wages (Case and Paxson, 2006). Additionally, children in poor health have greater difficulty learning and leave school earlier than healthy children. Nutrition is an area where inequalities remain very high. In Latin America, survey data shows that there are high disparities in countries such as Bolivia, Honduras and Peru, where child stunting is nine times higher among children from poor households compared to children from rich households (United Nations, 2013, 48). Though life expectancy disparities have decreased across most regions, this has not been the case in Africa. In Africa, life expectancy was 14 years lower than the world average in 1980–1985. From 1995 to 2000, life expectancy was 16 years lower than the world average.

All regions have made ...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of Boxes and Tables
• Acknowledgements
• Part I: Understanding Development
• Part II: Development Traps and Hurdles
• Part III: The Road Ahead for Development
• References
• Author/Scholar Index
• Index