GEOG 451: Regional Development Theories - PDF

CONCEPT OF DEVELOPMENT AND ECONOMIC BASED THEORIES OF REGIONAL DEVELOPMENT Dr. J Teye  Course Outline Definition and meaning of development The case for regional planning: the geography of development Economic oriented theories of regional developmen...

CONCEPT OF DEVELOPMENT AND ECONOMIC BASED THEORIES OF REGIONAL DEVELOPMENT Dr. J Teye  Course Outline Definition and meaning of development The case for regional planning: the geography of development Economic oriented theories of regional development Interregional trade theory and related theories Export base theory Regional domination theory Domination theory and its application to Ghana Strategies of Regional Planning The growth pole theory and strategy Radical critiques and Neo-populist regional development strategies Globalisation, Structural Adjustment and regional inequality in Ghana  Course outline Globalisation and Regional Development Structural adjustment policies in the developing world with focus on Ghana Impacts of Globalisation and Structural adjustment on regional inequalities of development in Ghana Regional Development planning and Planning theory Development planning: Aims, characteristics, benefits and problems of planning Ghana’s decentralised planning system  Development and Regional development Development is generally the progress of society towards a better quality humane life. In the 1950s and 1960s, development was equated to economic growth (GNP and Per capita income). Emphasis on modernization (Rostow model). Beliefs that the country should also adopt industrialisation. Trickle-down notions where economic growth benefits masses through jobs and other economic opportunities Criticisms  Development conceptualized In 1970s, development as distributive justice. In the 1970s economic development was redefined in terms of the reduction of poverty, inequality and unemployment within a growing economy. Dudley Seers (1973) ‘what has been happening to poverty, unemployment, and inequality? If all have declined then there is development and vice versa. 1980s, Development as Freedom: Amartya Sen  The concept of human development Supported by UNDP: Development with a human face Human development involves education in its broad sense, good health, and an adequate livelihood. The HDI is a composite index of achievements in basic human capabilities in three fundamental dimensions - long and healthy life, knowledge and a decent standard of living  Anti-Development Concept Since 1980’s, it reject the western model of development. Development should be indigenous based on each individual and his thought. The concept of development as it is seen now is too Eurocentric. It has even made some countries worse (Mohanty, 1991; Escobar, 1995).  Regional Development Regional development focuses on how regions grow, and what this growth means to different people and groups in terms of levels of income and enhanced human well-being. The need to reduce inequality and polarization and ensure greater national progress through collective use of the resources of all areas in the country provides the basis for regional development. Regional development has to be engineered through careful regional planning in resource allocation and  What is regional planning Regional planning is concerned with the where of development. It entails making decisions about where resources should be allocated and where projects are located, where urban growth should occur and where particular types of agric land use be encouraged. To achieve regional development requires taking measures that will ensure efficient allocation of national resources in such a way as to achieve relative equity among all regions and social groupings.  The need for regional Planning Three common policy problems which regional planning seeks to solve: – regional disparities in development, – the excessive size of the capital city/national metropolis and – rural urban inequality Objectives of regional policy: – to reduce interregional and rural urban inequalities/disparities – and to curb the growth of the national metropolis. Question: Using examples from Ghana, explain the policy problems which regional planning seeks to solve  Interregional Trade theory by Bertil Ohlin Explains regional development in terms of interregional/international trade Interregional trade accounts for economic growth in space Assumptions and tenets: Transport and communication networks between developed and underdeveloped regions are weak. Trade between them is dictated by the principle of comparative advantage. Between regions factors are immobile and intra-regionally freely mobile. No transfer Costs are incurred in trade Production function, which relates level of output to levels of input used, is assumed to be identical in every region  International trade theory International trade is the main factor responsible for regional growth and development. Economic benefits are maximized in a region if it can specialize in production of those commodities and trade. Trading will result in specialization in the under-developed regions, to be accompanied by economies of scale, and higher productivity. Increasing per capita income will imply higher savings and investments and the process of development set in motion.  CRITIQUE OF OHLIN’S THEORY How can regions which lack resource complementarities with the more developed area be expected to grow? Political factors have been ignored Wrong assumption about transportation cost Wrong assumption about immobility of factors of production Increasing polarisation of productive factors and consumers in one region tends to lessen the need for interregional trade in the face of price equalisation. Unequal exchange: unfair pricing mechanisms prevents benefits of trade. Question: Write a critique of the inter-regional trade theory  Export base theory The idea of the export-base was first used by city planners who wanted to predict the short-run dynamics of local urban economies. The economy was divided it into two sectors, ---Export base or basic activities sector (e.g. Agriculture, mining, manufacturing etc) ---The residentiary sector or non-basic activities (e.g. Retail, Commercial, Banking, Necessities).  EXPORT BASE THEORY This theory posits that a region’s ‘export base’ plays the critical role in economic growth (North, Perloff and Wingo). Using the US as example, the theorists argued that a region’s growth depends on its ability to produce goods and services demanded by the national economy and to export them at a competitive advantage with respect to other regions. Expansion of export base will also bring about increase in percapita income, changes in standard of living, and lifestyles. Once the export base is developed, the whole region will enjoy the multiplier effects.  Export base theory The residentiary sector has no autonomous capacity for growth but can only expand when extra income is brought into the local economy through increases in export. The success of export base determines the rate of growth of regions. Expansion of the export base will lead to increased investment, savings and new market activities.  Critique of export-based model There is no logical reason to assume that exports are the sole or most important autonomous variable determining regional income. Others, such as government expenditure, residential constructions. and Remittances may equally be important in determining levels of income. The case of metropolitan areas shows that highly developed business and consumer services account for growth, while export sector is variable and subject to conditional change. The size of a national economy could constrain regional growth based on export. Small countries can benefit more from exports. Political factors not considered. Distribution of power in society may affect development in some regions (e.g. Resources are used to develop other regions)  Assignment Examine the relevance of the export base theory for explaining the patterns of regional development in Ghana. THEORIES OF UNBALANCED (POLARISED) DEVELOPMENT Joseph K. Teye, PhD  Introduction In many countries, development is “unbalanced” or polarised. While the core regions are always developed, the peripheries are less developed. A number of theories have been propounded to explain this polarisation and we shall look at the main arguments of some of these theories.  Albert Hirschman (1958): The Strategy of Economic Development For an economy to develop, it must first develop within itself one or several regional centres of economic strength. This means that international and interregional inequality of growth is an inevitable condition for growth itself (Hirschman, 1968). Interaction between growing centres (e.g. Accra) and lagging regions (eg. Northern Ghana) can take two forms: trickle down effects and polarisation effects.  Hirschman Trickle down : Wealth trickles down to poor regions, through ----demand for raw materials, ----employment, ----access to cheap products produced at core region, ----remittances etc (consider Greater Accra and Northern region)  Hirschman Polarisation: As the centre grows the periphery declines. At the initial stages of development, polarization effects may develop. At the later stages of development, trickling-down effects will dominate over polarisation effects, leading ultimately to regional balance. Conclusion: Inequalities between regions is good because growth in a limited area has advantages of economies of scale whose proceeds will benefit the poorer regions. Though the rich regions benefit more, over time, political action will be invoked to redistribute wealth through redirecting investments to poorer regions.  Gunnar Myrdal (1957): The Circular and Cumulative Causative Theory He identified two important effects of growth in a core region, namely cumulative effects and circular effects. The cumulative effect is the situation when the expansion of a business or industry creates a multiplier effect, leading to more jobs and business as money flows through the economy. Circular effects results from when this growth increases the likelihood of a new invention or innovation, creating another round of expansion.  Myrdal Applying the concept of circular and cumulative causation, Myrdal concludes that the market forces tend to increase rather than decrease regional inequalities. Once a development starts in a particular centre, that region develops due to cumulative causation and circular causation. In theory, peripheral regions may develop based on spread effects from developed regions. Yet, in practice the lagging regions rather become poorer due to backwash effects (flow of labour, capital, etc to developed regions.  Myrdal In conclusion, while Hirschman views regional imbalance as a stimulus to national growth, Gunnar Myrdal showed how the emerging centre-periphery structures leads to cumulatively greater disparity through the operations of unrestrained market forces. The negative effects which leading regions exert on lagging regions (backwash effects) will tend to outweigh the beneficial effects (spread effects).  John Friedmann (1967, 1972): General Theory of Polarized Development (Friedmann’s Centre-Periphery Model) His initial argument was that in the early stages of development, simple centre-periphery structure will be characterized by a primitive city system. At the stage of industrial and post industrial development, the system will develop gradually to a more rank sized distribution of interdependent centres. Outlying areas become transformed as a result of successful incorporation within the modernized economy of the centre.  Friedman Development will tend to have its origins in a relatively small number of centres of change located at the points of highest potential interaction within a communication field. Development will tend to move outward from these centres (core regions) to other areas. However decisions vitally affecting local people will be made by core region authorities.  Feedback Effects of Core Region Growth Dominance effect: Net transfer of natural, human and capital resources to the core. Information effect: An increase in potential interaction within the core region which tends to induce a higher rate of innovation. Psychological effect: The creation of conditions more favourable to innovation at the core.  Friedman Modernization effect: The transformation of existing social values, behavior and institutions. Leakages effect relate to the tendency of innovations to breed other innovations. Production effects: The appearance of linked systems of innovations and growing specialization.  Theory of Regional Domination The concept of domination presupposes the existence of centre-periphery relations, which are reflected in the phenomenon of polarization. Concentration of power at the centre. Domination at global level, National level, district level  Domination theory By definition, the domination of a sub-system or region B by region A occurs when: A may be bigger than B A may have a superior structure A may have greater bargaining power (high population, economic power etc)  The Domination Process Domination operates where there is a centre-periphery structure. Formation of institutions and organisations at the periphery. Relying on dominated dominators to control the periphery. Creation of transportation structures and communication networks which enhance movement between the centre and periphery.  Domination process Core regions organize their peripheries into sets of supplying areas for the supply of raw materials, foodstuffs and commodities needed by people in the core areas. Peripheries also serve as markets for industrial products. Administrative areas in the periphery are for the purpose of supervision and central bureaucratic domination.  The Components of Domination The two main components of domination are extractive and distributive. Extractive domination: Enables the centre to gain a net profit from its relations with the dominated regions. Distributive Domination: Occurs at latter stages of domination. Promotes development at the periphery.  Distributive domination Transport networks built for domination increases welfare at the periphery Technology spreads to periphery. Second generation agents soon become sympathetic to the course of the periphery, and begin to protest against the exploitation of the dominated region. As dominating centres grow beyond some size thresholds, diseconomies of scale set in which makes the periphery attractive locations for new economic activity.  The Outcomes of Interaction between Counter Elites and the Core Centre Repression: Centre institutes measures to suppress the counter elites. Neutralization effects: A group of counter elites modify policies from the centre and institute new structures meant to reduce their extractive effects on the periphery. Co-operation: Working together Replacement: Counter elite rise up to a point where they become powerful enough to demand their total liberation from the core region’s activities.  Limitations of theory The processes by which the core region phenomenon persists even at later stages of development do not seem to have been adequately explained. They ignore economic factors (export base etc)  Dependency Theories They build on domination theory. There are several versions of dependency theory but that propagated by Gunder Frank is very popular. Poor countries are under-developed because of their integration into world capitalist system. Economic development and underdevelopment are therefore opposite faces of the same coin. Poor regions can only develop when they cut their link with rich regions.  Limitations of dependency theory They put all the blame of poverty on developed countries. Failed to discuss role of corruption in under-development. Failed to consider how men dominate women. Tend to be against liberalization and free-  Theory of Regional Domination The concept of domination presupposes the existence of centre-periphery relations, which are reflected in the phenomenon of polarization. Concentration of power at the centre. Eg the district capital always dominates other settlements around it by virtue of the political authority vested in it.  Domination theory By definition, the domination of a sub-system or region B by region A occurs when the reactions of B are not sufficient to offset the actions of A with regard to B. This is explained by a number of factors including the fact that: A may be bigger than B A may have a superior structure A may have greater bargaining power ( high population, economic power etc) A combination of legitimate centralised power, superior economic structures, access to information and technology, increase the bargaining power of core regions which make them dominate their hinterlands.  The Role of Power in Domination Relations The theory emphasised the distribution of power as key to the development of a periphery. A region’s development is to a large extent dependent upon the behaviour of its major city. When decision making only takes place at the centre, it is called centralization and may not help develop the peripheries. Decentralisation may give powers to the local elite too.  The Domination Process Domination operates where there is a centre-periphery structure. Formation of institutions and organisations at the periphery Relying on dominated dominators to control the periphery. Creation of transportation structures and communication networks which enhance movement between the centre and periphery.  Domination process Core regions organize their peripheries into sets of supplying areas for the supply of raw materials, foodstuffs and commodities needed by them. Peripheries also serve as markets for industrial products. Administrative areas in the periphery are for the purpose of supervision and central bureaucratic domination.  The Components of Domination The two main components of domination are extractive and distributive. Extractive domination: Enables the centre to gain a net profit from its relations with the dominated regions. Distributive Domination: Occurs at latter stages of domination. Promotes development at the periphery. --- The distributive process would normally supersede extractive forces at a later stage with the emergence of the counter elite in the periphery who will strive for a more equal share of power and resources. --- It is this notion of counter elite which was ignored by the simple centre- periphery models ----Transport networks built for domination increases welfare at the periphery  Distributive domination Technology spreads to periphery though cadres Second generation agents and cadres soon become sympathetic to the course of the periphery, and begin to protest against the exploitation of the dominated region. As dominating centres grow beyond some size thresholds, diseconomies of scale set in which makes the periphery attractive locations for new economic activity.  The Outcomes of Interaction between Counter Elites and the Core Centre Repression: occurs when the centre, for purposes of maintaining its hold on the dominated region, institutes measures to suppress the counter elites. Neutralization effects: occurs where a group of counter elites modify policies from the centre and institute new structures meant to reduce their extractive effects on the periphery.  Relationship between centre and periphery Co-operation: Can be positive (help to reverse process, eg. Colonialism) or negative (i.e. the centre co-opts the counter elite through bribery to reduce their desire to champion the course of the periphery. Replacement: Counter elite rise up to a point where they become powerful enough to demand their total liberation from the core region’s activities.  Limitations The processes by which the core region phenomenon persists even at later stages of development do not seem to have been adequately explained. It also de-emphasizes the importance of the ideological background of national decision-makers. They ignore economic factors (export base etc)  Dependency Theories They build on domination theory. There are several versions of dependency theory but that propagated by Gunder Frank is very popular. Poor countries are under-developed because of their integration into world capitalist system. Where a country is integrated into the world’s capitalist system, its economic growth will be less because of the transfer of surplus for use elsewhere. Economic development and underdevelopment are therefore opposite faces of the same coin. Poor regions can only develop when they cut their link with rich regions.  Limitations of dependency theory They put all the blame of poverty on developed countries. Failed to discuss role of corruption in under development Failed to consider how men dominate women. Tend to be against liberalization and free- market GROWTH POLE THEORY Origin of the Growth Pole Concept The growth pole concept originated from British Economist William Petty, who was fascinated by the high growth in London during the 17th century and conjectured that strong urban economies are the backbone of the wealth of nations. His ideas were later developed by the French Economist, Perroux, who popularised the concept (see also Perroux 1950; 1955). Since then, the concept has been subject to various definitions and interpretations (see Myrdal 1957; Hirschman 1958), and it has been used widely in the field of regional development (Monsted, 1974; Parr, 1999). The Growth Pole Thesis The theory is based on the assumption that growth does not appear everywhere at the same time, it manifests itself at “points” or poles” of growth (Perroux, 1950; 1955). With varying intensities, the growth spreads by different channels and eventually affects the economy as a whole (see also Vanneste, 1971). Perroux defined Growth Poles as propulsive units in a given environment. As an economist, his early work focused on economic growth, as measured by the growth of industries. It was his thesis that for growth to take place effectively there should be a propulsive unit. This is a large firm or industry that has a high degree of interaction with others and is dominant in that interaction. In other words, the propulsive unit is a type of dominant economic unit which, when it grows or innovates, induces growth in other economic units. It may be a firm or collection of firms in the same sector. Growth in a propulsive unit could induce growth in other parts of an economy. The newly induced activities can be ‘upstream’ suppliers of inputs to the propulsive industry or ‘downstream’ consumers/users of its products. e.g. a cement factory would induce establishment of a plant for bags for packaging and establishment of a block factory. These linkages are likely to be supplemented by the general improvement in regional labour supply and social overhead capital, which follows the industrial expansion, can make the region more attractive for investment. In short, growth pole theory, as defined by Perroux, refers to the grouping of industries around a central core of other industries whose actions act as a catalyst to growth in the area. Regional theorists understand growth pole basically as spatial agglomeration of related industries (see Nicolas 1969; Parr 1973). In relation to development, the core idea of the growth poles theory is that economic development, or growth, is not uniform over an entire region, but instead takes place around a specific pole. This pole is often characterized by a key industry around which linked industries develop, mainly through direct and indirect effects. The expansion of this key industry implies the expansion of output, employment, related investments, as well as new technologies and new industrial sectors. For planners, therefore, the idea of growth pole implies that instead of trying to promote development in the entire national space, planners must ensure that resources are first mobilised to develop certain growth points. Once these poles develop, the benefits of development will trickle down to the surrounding areas. In subsequent years, new poles will emerge (see figures bellow). Once these ‘pure strategy of polarised development is adopted, the problem of achieving the development of a region can be sub-divided into two; (a) How 1 to ensure the delocalisation of a propulsive activity in a region, and (b) How to prevent it from becoming an enclave. Figure 1: growth pole and the region 2 Figure 2: Secondary growth point 3 Figure 3 growth pole Inter-Sectoral Linkages It should be clear to you by now that scholars on growth poles try to base the concept on the notions of external economies, agglomeration and linkages. An external economy exists if a change in the output of one firm or one industry affects costs in other firms. External economies of scale may be negative, as in the case of pollutions costs and traffic congestions, or they may be positive, as in the case of the development of integrated circuit technology in the electronics industry or joint researches. Linkages look at the relationship between the various firms. One firm may supply raw materials for another firm/ or it may buy the products of the bigger firm. Agglomeration effects may include development of infrastructure, and pool of labour. Uneven Impacts of Regional Growth (Growth poles) 4 Based on the discussion so far, it is clear that the impact of growth poles may be both negative and positive. These are: (a) Polarization of development: Concentrating investment in one area usually leads to polarization of development. As growth accelerates in the urban area, the hinterland experiences a parallel decline. Also called “backwash”, this involves the out- migration of rural residents from the hinterlands to take advantage of urban job opportunities. The end result is that the hinterland can become more impacted and less able to meet local needs. (b) The Trickle-Down Process or the Spread Effect: A trickle-down process (Albert Hirschman’s term) or spread effect (Gunnar Myrdal’s term) counteracts the initial depletion of human and financial resources in the hinterland caused by polarization (or backwash). Growing markets, new technology and friction of distance combine with congestion, pollution and diseconomies of scale in the heartland (urban center) and the amenities of the hinterland, making outlying areas more attractive to development over time (Gore, 1984). Proponents of the growth pole believe that the trickle-down effects will outweigh the polarization effects. Application of the Growth Pole theory in Development Planning Regional development based on growth pole strategy became popular in developing countries in the 1960s, mostly in Latin American Countries, with national governments filled with optimism about its benefits for economic growth and social progress (Angotti, 1998). In Ghana, Nkrumah’s development plan in the 1960s has some elements of the growth pole concept. Industries were set up at certain strategic locations to help promote development. Ironically by the 1970s, the interest in the growth pole concept in developing countries had dwindled, after its application failed to yield the anticipated outcome (Gilbert, 1974; Conroy, 1973; Moseley, 1973). This fact notwithstanding, there is still some belief in the growth pole concept today, as could be revealed in the literature and various programs aimed at expanding development via viable cities. The current debate is whether the growth pole is still a viable strategy for jumpstarting the economies of the African region. It must be stated that in some parts of the developing world, the strategy was not adopted at all due to the following concerns. Some policy makers believed that the strategy is associated with a high risk due to the inevitable selectivity and discrimination involved, along with the numerous accompanying uncertainties. It was also feared that the strategy would bring about a radical redistribution of the population and this could affect the quality of service delivery in a specific country. There were also fears that the strategy could cause political instability as certain localities that would not be selected may create problems for the ruling governments. 5 Failure of Growth Pole Strategy Despite the high expectation people had about the growth pole strategy as a potential tool for the elimination or reduction of inequality and the promotion of balanced development, it has poor record over the past 30 years of experimentation which has raised a lot of criticisms about its appropriateness. It must, however, be noted that evaluation of the growth pole strategy is difficult to make because they are often part of a regional programme of development with many elements at play. The main areas of neglect responsible for failure of the growth pole strategy According to Parr (1999: 1247), the main areas of neglect responsible for failure of the growth pole strategy are: The Neglect of the Spatial Configuration of the Poles The Neglect of the Nature of Economic Activity at the Poles The Neglect of the External Effects of the Poles. NEGLECTED ASPECTS OF SPATIAL CONFIGURATION OF THE POLES As you learnt already, the growth-pole strategy seeks to promote development through the activation of a system of planned poles, conforming to a particular spatial configuration in terms of size, hierarchical level, frequency and location. But in reality, there are a number of practical questions related to these spatial objectives. The failure of policy makers to carefully address these questions has contributed to the poor record of the impact of growth pole strategy (Parr, 1999). Lets now discuss each of these spatial objectives and the related challenges as explained by Parr 1999 (you may read the original text) Size and Hierarchical level of poles: According to Parr (1999), the size of a planned pole assumes an importance, primarily because the average costs and the average benefits are unlikely to be constant with the size of the individual pole. The challenge faced by the planner, therefore, is determining the exact size of the pole. Should all planned poles be of the same size? There is now a consensus that since all poles cannot be of the same size, it is important to examine the idea of target size of the growth pole with reference to the existing urban system. There is a need to pay attention to the variations in the average costs and average benefit with pole size for each of the various hierarchical levels of existing urban centres at which the poles may be located. Variations in the sizes of the existing centres in which the planned poles will be established will reflect varied capacities in terms of infrastructure and other conditions necessary for the poles effectiveness. Centres already endowed with infrastructure will have positive cost- benefit ratios than centres that need huge expenditure outlays on infrastructure. The size of demand determined by the population is also important in justifying such expenditures as faster economic growth can be expected from both exports and residential activity. 6 Frequency of Poles: Deciding on the frequency of poles is another important challenging decision, which is sometimes neglected. The difficult decision is whether to increase the number of poles so that more locations will benefit or to have a fewer poles with higher levels of investments. Ideally, a cost benefit analysis should guide this decision. However, possibilities exist whereby the configuration which maximises the level of benefit is rejected in favour of one that provides a more equitable intraregional distribution of benefits so that poles are smaller in size but a greater frequency. This relates to arguments about level of investment in poles, as higher frequency will mean smaller investments but at least all areas are covered, while lower frequency means more investments in say only regional capitals leaving wider hinterlands in-between the poles as we have in Ghana now. Location of poles: Decision on where to locate the poles is also a difficult one, especially in regions of highly differentiated structure. Questions arise as to whether the growth pole should be located at places with some level of infrastructure or in less developed areas. Ideally, this decision should be guided by both cost-benefit analysis and desire to ensure equity of resources. However, in most cases more favoured parts of a region are selected as planned poles with less favoured areas neglected. These poles could be far away from the intended area of influence, and this coupled with the reluctance to migrate to the favoured parts by inhabitants could affect success of the strategy. In fact, planned growth poles in the favoured parts of the region would merely result in the underlying problem being by-passed. Political factors have also sometimes influenced the location of poles at places with very few multiplier effects. THE NEGLECT OF THE NATURE OF ECONOMIC ACTIVITY AT THE POLES It has been argued that the failure of growth poles was due to insufficient attention being paid to the nature of economic activity at the planned poles. Adequate employment opportunities had to exist at such poles for the strategy to achieve success. However, in many cases, there was only a limited concern with the nature of economic activity. Very often, there was an assumption that the existence of adequate infrastructure facilities, coupled with financial inducements, would generate the required level of employment. In reality, however, the mere specification of economic activity at the planned poles, even if backed up by investment is inadequate, unless supported by analysis of the prospects of the specified activity within the problem region. The assumptions regarding levels of industrial linkage at the planned poles are also not realistic. These assumptions that the propulsive unit will have strong linkages with other firms are often wrongly based on the belief that linkages in economic space would automatically be accompanied by linkages in geographical space. In reality, the introduction of a propulsive industry at a planned pole frequently did not always produce the expected linkages. THE NEGLECT OF THE EXTERNAL EFFECTS OF THE POLES 7 As hinted already, the main assumption of the growth pole is that the effects of the planned pole on its hinterland would be favourable. In reality however, the overall effects of a planned pole could also be neutral or unfavourable. Favourable effects: ‘spread effects’ of Myrdal; ‘trickling-down effects’ of Hirschman; multiplier effects Neutral effects: The new economic activity is geared to markets in other regions, from which the capital requirements and skilled labour supply were obtained. Unfavourable effects: ‘backwash effects’ by Myrdal; ‘polarisation effects’ by Hirschman. In some cases, growth poles did not produce favourable effects. GENERAL REASONS FOR THE FAILURE OF GROWTH POLES On the basis of Parr’s work as well as the works of other scholars, the following are the general reasons for the failure of growth poles: 1. Planning horizons of too short a duration was a major factor for the failure of growth poles. Growth pole needed more time in terms of planning to fit the physical, economic and political circumstances. However, in most cases the programme was rushed. 2. The lack of sustained commitment on the part of decision-makers also affected the success of the strategy. Ideally, politicians need to support initiated projects with the necessary resources and policies. This is however not always the case. 3. The period during which growth poles were implemented was highly unstable economically and politically which needed dynamic models rather than the inflexible systems put in place. In Ghana for instance, changes in the prices of major commodities as well as political instability in the 1970s affected the implementation of Nkrumah’s development plan, which has elements of growth pole. 4. Some scholars also believed that the growth pole strategy failed in many instances simply because it was an inappropriate development strategy. It is argued that the very basis of the growth-pole strategy was at odds with the nature of the regional problem. E.g building industries in rural areas instead of boosting agric production. Strategy not in keeping with the locational characteristics and preferences of the types of economic activity. 5. In many cases, the strategy was not feasible. Various enabling factors were absent. For instance, the required capital outlay for its successful implementation was usually above the level of the anticipated budget. The lack of administrative capacity in relation to co-ordinating the decisions of various agencies of government concerned with the implementation of the strategy was another factor that affected the success of this strategy. 6. Location of poles in wrong places doe to political reasons. 8  7. The sizes of some poles were too small to generate adequate multiplier effects. 8. The strategy was unrealistic. There were unjustified assumptions about the operation of the strategy, reflecting insufficient analysis at the planning stage. In most cases, the concentration of infrastructure failed to precipitate any private investment. The implantation of particular industries did not lead to the anticipated development of linked industries. The strategy was required to satisfy too many objectives, hence became internally inconsistent. There were instances of deliberate dilution of the growth pole strategy , motivated by the need for spreading risk, assisting most parts of a region, and accommodating political opposition (Hansen, 1967). This process of dilution led to neglect of concentration which is a key element of the strategy, the result of which is the failure to realise anticipated results of the strategy. Limitations/challenges of growth pole strategy 1. It involves an economic risk as poles may not be successful at engineering development in a particular area. 2. It may lead to further polarisation since only a few poles are developed 3. It may create political conflicts, as some regions may feel that they have been left out in the sharing of the national cake 4. It is very difficult to determine the sizes and frequency of poles 5. It can bring about development only after several years. Practical Question Assuming that you have been hired by the government of Ghana to use a growth pole strategy to design a development plan for northern Ghana. Outline the steps that you would follow and discuss some of the challenges that you would face. Steps Obtaining background information on economic activities and existing infrastructure in entire area (from literature and interviews) Delineating area into various spatial units (regions) Deciding on the size and frequency of poles Selecting locations for growth poles and planning for economic activities to be undertaken in selected sites. Deciding on appropriate investments. 9  Devising policies and measures to ensure that spread effects are maximized. Challenges: refer to notes above 10  Radical Critiques Dependency theories  Introduction: Radical theories Building on domination theory, radical theories questioned the conventional wisdom about the nature of economic and social change in poor countries by examining the position of those countries within the international economic system These shifts in thinking resulted from radical critiques of the process of development emanating from growth pole theorising. These new theories argue that the basis and assumptions of economic oriented theories upon which growth pole strategies were based are wrong and faulty. Radical critiques led to a Shift in policies to: – Develop small market towns as rural growth centres and – promoted administrative decentralisation and the devolution of power to regional and local levels as a means of achieving regional and rural development.  The development of underdevelopment Andre Gunder Frank’s spatial image of the ‘worlds capitalist system’ Frank rejects the analyses of development which assumed that developing countries could be described in dualist terms and which conceptualised economic and social change as occurring through universally applicable series of stages or through a diffusion process. Underdevelopment he argued is not an original condition characterised by backwardness and traditionalism. Underdeveloped countries have a history and the key fact in that history is that since the beginning of the mercantile age all countries have been integrated into a worldwide system of exchange, the world capitalist system.  Andre Gunder Frank’s spatial image of the ‘worlds capitalist system’ Underdevelopment is not due to isolation from modern centres of growth but due to incorporation into the capitalist system. Conditions of poverty are not a consequence of the failure of western technology, capital, and values to diffuse into such areas. Rather, they stem from the nature of relationships within the world capitalist system.  Gunder Frank’s Dependency Theory The world is composed of a whole series of constellations of metropolises and satellites Within each metropolitan-satellite relationships each metropolis holds monopoly power over its satellites. First, the whole system has a monopolistic structure which leads to the misuse and misdirection of available resources Second, there is expropriation and appropriation of a large part of the economic surplus value of the satellite by its local, regional, national and international metropolis  Gunder Frank’s Dependency Theory Cont’ Frank argues that ‘the size and use of the economic surplus value’ determines underdevelopment or development. A country integrated into the worlds capitalist system has less chance of developing because its surplus would be used elsewhere. Poor countries and rural localities have been underdeveloped through their close ties with the world capitalist system, while benefits of urban-industrial growth pole do not trickle down to hinterlands.  Hypotheses of dependency theory Main tenet: International system has its own class structure: metropolis (exploiters) and satellite (exploited) Hypotheses: 1. Metropoles develop; satellites under-develop. 2. Satellites develop when ties with metropoles are weakest. 3. Most underdeveloped regions today had closest ties to metropole in past. Spatial image of the worlds capitalist system It holds monopoly power over World Metropolis the whole world. Trump is World The USA (governing class) President At country level, ruling classes National and international hold power over national satellites Satellites (Leaders) Addo and Ministers At provincial or regional levels Provincial or regional ruling classes hold power metropolises M/DCEs At provincial satellites districts Provincial satellites and villages act according to villages Demands from above. Negative relations  Surplus value Baran (1957) defines the actual surplus as the difference between current net output and current consumption Potential surplus as the difference between what could be produced and what is the minimum essential consumption If a country is isolated, its economic growth may be high if surplus value is not diverted into luxury consumption and wasteful expenditures If a country is integrated into the worlds capitalist system, economic growth will be less than that which is possible, through the transfer of surplus for use elsewhere Transfer of surplus stymies growth in the satellite and fuels growth in the metropole with‘polarising tendencies’ manifested in increasing disparities in income at all levels  Colonialism and the spatial structure of underdevelopment. By David Slater Slater describes the spatial structure of underdevelopment which has evolved within African countries under colonialism by providing a spatial translation of dependency ideas. Defines colonialism as the formal device by which large parts of Latin America, Africa and Asia became incorporated into the international capitalist economy. Premises: – Each colony trades largely with its respective metropolitan country. – Key positions within metropolitan economies are controlled by foreign capital, and – Mining and commercial companies usually have monopolistic power.  Colonialism and the spatial structure of underdevelopment CC The colonial monetary system allows siphoning of funds from the colony The drain of surplus is promoted by ‘unequal exchange’ of agric commodities exchanged for industrial goods. This restricts Local capital accumulation. Integration of colonies into world economy caused underdevelopment  Slater’s theory of underdevelopment The spatial structure consists of a historical schema portraying evolving spatial patterns: – Pre-colonial spatial structure (before 1880) – Colonial penetration, initial concentration, and beginning of internal expansion (1880-1914) – Colonial organisation and continued extension (1919-1950/60) – Neo-colonial concentration and limited attempts at restructuring (1950/60- and onwards)  Precolonial The drawing of political boundaries ‘atomisation of space’ which bore little relation to indigenous social organisation and trading networks  Two phases of the process can be distinguished: The Initial phase Capitalist mode of production in the form of plantations, settler estates and mining concerns Railways were constructed to serve these limited capitalist enclaves. – They were intermediary points in distribution and marketing of agric produce: – Towns where minerals were mined, ports receiving and exporting centres for colonial empires. Such places grew while previous indigenous centres declined.  The Second Phase This phase saw the development of capitalism in-depth in the areas of initial concentration and the development of capitalism in breadth to new areas More areas brought under export crop cultivation and new mines opened The expansion of the transport system was an integral part of the consolidation and extension of colonial control. – Rail in the initial phase and road in the second phase Each economic region corresponds to a ‘one-line economy’ based on a port where imports and exports were brought.  In the final phase of the historical schema, colonies gain independence, but they remain as neo-colonies Attempts at restructuring such as growth poles failed with the spatial structure bequeathed from the colonial period remaining noticeably rigid.  Critique of Dependency Theory 1. Ernesto Laclau condemned Andre Gunder Frank for focusing on the market rather than class relations, despite his call for a class-based socialist revolution 2. No direct relationship between states’ reliance on extractive industries and poverty/ underdevelopment. 3. Bill Warren questioned the assumption that Third World nations are inevitably caught in a cycle of underdevelopment. Why do some satellite states escape (NICs)? 4. Paid little attention to gender in general, preferring the broad sweep of global forces. Failed to pay attention to cultural dimensions of domination.  Sources Charles Gore 1984. Regions in Question. Pages 118-121: 127-134: 146-152 Consult google.com  Trial questions Expatiate Andre Gunder Frank’s theory of dependency and underdevelopment. The dependency theory does not take into account the internal conditions of countries in explaining underdevelopment. Discuss Discuss how colonialism conditioned the spatial structure of underdevelopment in Africa. Discuss the main weakness of dependency theories! Discussion groups  Globalisation Characteristics, Pros and Cons  Objectives At the end of this lecture you should be able to: – Explain the term globalization and detail its core facilitating mechanisms – Discuss the pro-globalists and anti-globalists positions – Discover the benefits of trade and the inherent dangers the current global trade order poses to developing countries  Globalisation Globalisation is primarily an economic phenomenon, involving the increasing interaction or integration of national economic systems through the growth in: international trade, investment and capital flows.  Globalisation – the leftist Left critics of globalisation define it as ‘worldwide drive toward a globalised economic system dominated by supranational corporate trade and banking institutions that are not accountable to democratic processes or national governments’.  Globalisation as integration of economies The movement towards the expansion of economic and social ties between countries through the spread of corporate institutions and the capitalist philosophy that leads to the shrinking of the world in economic terms The increasing reliance of economies on each other The opportunities to be able to buy and sell in any country in the world The opportunities for labour and capital to locate anywhere in the world The growth of global markets in finance  Globalisation as a historic process Globalisation as a historic process is a new stage in the evolution of world capitalism Globalisation involves a restructuring of the world productive apparatus: – the world division of labour – the worldwide circuits of distribution and exchange – the flow of values and consumption Globalisation has not been a natural and spontaneous process, but emerged from conscious decisions by a powerful set of national and international forces in the advanced industrial world It is associated with a rapid rise in world trade dominated by multi-national and transnational corporations  PROPAGATING GLOBALISATION Globalisation is propagated through the World Bank and IMF prescribed Economic Structural Adjustment Programmes (ESAPs) They argue the keys to economic growth and development in global economies include: – Open markets – The operations of multi- and transnational corporations and – The adoption of new technologies – Mass media and telecommunication The global product  Globalisation facilitated by these factors Technology Communication networks Internet access Growth of economic cooperation – trading blocs (EU, NAFTA, etc.) Collapse of ‘communism’ Movement to free trade Containerisation  Characteristics of Globalisation A phenomenal growth in cross-border capital flows, movement of people, goods and services Market-driven economies in which market forces rather than state control are advocated Calls for increased openness and integration into the world economy Calls for the establishment of democratic systems of government, more transparency and respect of human rights Associated with a technological revolution in which information flow has shrunk the world into a global village through developments in information and communications technology (ICT). Increasingly a “global village,” but a Western one watching the same TV, music videos, news, etc.  Pro-globalist argument Offers developing countries the opportunities to create wealth through export-led growth, to expand international trade in goods and services, and to gain access to new ideas, technologies and institutional designs 2000/2001 World Development Report: globalisation has helped reduce poverty and improve living standards WTO: trade liberalisation helps poor countries to catch up with rich ones and that this faster economic growth helps alleviate poverty. Lowered tariff barriers lead to increases in employment and national income because labour and capital shifts from import-competing industries to expanding, newly competitive export industries New companies moving to developing countries often export higher wages and working conditions compared with domestic companies operating in the country.  Benefits of trade Increased choice Greater potential for growth Increase international economies of scale Greater employment opportunities Trade has led to massive increases in wealth for many countries.  The argument for inequality The former British Prime Minister, Margaret Thatcher, once said: "It is our job to glory in inequality and see that talents and abilities are given vent and expression for the benefit of us all.”  Anti-globalist UNDP 1999 Human Development Report states that: – Over the past 10 years, the number of people earning $1 a day or less has remained static at 1.2 billion. – Those earning less than $2 a day has increased from 2.55 billion to 2.8 billion people. The gap in incomes between the 20% of the richest and the poorest countries has grown from 30 to 1 in 1960 to 82 to 1 in 1995. Globalisation has meant decreasing national control in favour of outside players whose main interest is to generate profits and not the welfare of the people  Anti-globalist Deregulation has led to flexible labour regimes and consequent casualization of labour with attendant insecurity and exploitative wages Markets don’t pity people, they make money for capital owners Local cultures are being eroded in favour of global values Transnational corporations (TNCs) are footloose, pay lesser taxes, are capital intensive, occupy export processing zones, and control states  Downsides of globalisation The rich countries remain rich, and a declining proportion of world population The poor countries remain poor, and a rapidly expanding part of the worlds population (95% of the growth) Hence the pressure to move to the rich countries, legally or illegally What information is becoming global? But whose news is becoming global? What is this doing to cultures and communities? Globalization = Westernization =Americanization? Does it matter? Global environmental problems (Ozone, global warming, sea-levels) Global plunder of common pool resources—ocean, forests…..  Trial questions ‘Globalistion is the best thing that ever happened to the world’. Discuss Provide a characterisation of the process of globalisation Discuss the pros and cons of the creation of a‘liberal world order’in achieving regional development. "It is our job to glory in inequality and see that talents and abilities are given vent and expression for the benefit of us all.” (Margaret Thatcher). Discuss how the neoliberal ideology enables development.  Source William I Robinson 2002. Remapping development in light of globalisation: from a territorial to a social cartography. Third World Quarterly, Vol 23, No 6, pp 1047–1071. Held D. and McGrew. A (eds) 2007: The Global transformations reader: An introduction to the globalisation debate (second edition). Polity press, Cambridge. Dixon C., Simon D., and Nárman A., 1995. Introdution: The nature of structural adjustment. Pages 1-6 Neoliberal Structural adjustment policies in the developing world with a focus on Ghana  Objective of lecture To detail the neoliberal turn in development studies To establish the link between globalisation and structural adjustment programs To examine in detail the structural adjustment program in Ghana To assess the outcome of structural adjustment in Ghana  Neoliberalism, globalisation and development I Neoliberalism is both a set of policy prescriptions and a paradigm of development. Neoliberalism is a doctrine of laissez faire capitalism with the assumptions of monetarism, modernisation theory, and comparative advantage, legitimated by the globalist rhetoric of free trade, growth, efficiency and prosperity. The World Bank in 1980 redefined development no longer as national economic growth, but as successful ‘participation in the world market’.  Neoliberalism, globalisation and development Shift from production for domestic markets to production for the global market: subordination of local circuits of accumulation to global ones. Each country must rearticulate to global markets through the introduction of new economic activities linked to global accumulation There should be the contraction of domestic markets, the cheapening of labour through casualization and social austerity to make countries ‘competitive’ The opening up of each country’s public sectors, protected industries and natural resources to commercial exploitation  Dimensions of neoliberal globalisation Global neoliberalism has involved twin dimensions, – One is worldwide market liberalisation and the construction of a new legal and regulatory superstructure for the global economy. – The other is the internal restructuring and global integration of each national economy. The combination of the two is intended to create a ‘liberal world order’, an open global economy and a global policy regime that breaks down all national barriers to the free movement of transnational capital between borders and the free operation of capital within borders. What is structural adjustment? The process of structural adjustment refers to changes in the organisation, composition, and orientation of an economy which are necessary if an economy is to remain or become competitive in the world economy (Koppel 1990) SAPs contain three basic components: – getting the prices right, – letting markets work, and – reforming public institutions The economic crisis in the Third World can be overcome only if they restructure their economies to become active players in a common strategy for world prosperity based on competition in the international export market. 6  Main tenets of SAPs Structural adjustment principles identify with the ideological belief in the superiority of the market over economic planning SAP has a mystical faith that ‘the private sector operating under freer domestic and external market conditions will provide the motive power for a resumption of growth and development’ (Cleary 1989) There is a disillusionment with the efficiency of state intervention: there is a call for economic liberalism with key elements such as minimal role for the state, free trade, financial discipline, comparative advantage and prosperity through economic growth  The origins of structural adjustment The international economy entered a phase of crisis in the 1970s characterised by general instability, global economic shocks, dramatic oil price increases in 1973 and 1979, the transition from fixed to flexible exchange rates and a sharp rise in international interest rates affected non-oil producing countries and poor nations The aftershocks manifested themselves in a global recession and unemployment, balance of payments deficits, and increasing protectionism The Third World reacted to these external shocks by implementing a variety of short-term ad hoc domestic stabilisation measures with assistance from the IMF, World Bank and regional agencies Eventually the severity of the situation led the World Bank to design long-term programmes of economic adjustment and in 1980 the Bank approved ‘structural adjustment lending’ 8  The Objective of structural adjustment is globalization! Stabilisation and structural adjustment programmes became the major mechanisms of adjusting local economies to the global economy. Economic reactivation is achieved through the introduction or expansion of activities linked to the global economy and the integration of ‘national’ accumulation circuits into globalised circuits Globalisation is synonymous to development which is seen as ‘participation in the world market’.  Why Ghana adopted the ERP/SAP The PNDC government inherited an economy that was in an advanced state of collapse with soaring prices and terrible scarcities Economic growth was non-existent : Between 1970 and 1981 per capita GDP fell by about 3.2% per year, the mineral production index fell by 32 percent, cocoa production fell from an average of 380,000 metric tons to 225,000 metric tons in 1981-82 and real wages fell by 80% between 1970 and 1982 (Kraus 1991) Public infrastructure was in a state of decay Public and civil service deprived of conditions needed for effective work. 10  Why Ghana adopted the ERP/SAP Drought and bush fires devastated the agricultural export sector between 1978 and 1979, and between 1982 and 1983. Repatriation of an estimated two million Ghanaians from Nigeria in 1983 The inability of government to mobilize funds from the Eastern Communist Block to deal with the economic crisis forced it into the arms of the World Bank/IMF Ghana joins the global economic community The PNDC government accepted SAP and its conditionalities from the IMF/World Bank as the new development imperative in Ghana in the early 1980s. Ghana first implemented the Economic Recovery Programme (ERP), followed by the substantive Structural Adjustment Programme (SAP)  Objectives of ERP in Ghana The objectives of ERP were to: – stabilize finances – remove price distortions – restore producer incentives, and – attract external aid. It sought to create incentives to stimulate the productive sectors of the economy, by realigning relative prices in favour of domestic production of import-substitutes and exports, and by providing needed supplies through an import liberalisation programme (World Bank 1984) 13  Objectives of SAP in Ghana The structural adjustment programme, which succeeded the ERP, was supposed to remove structural impediments in the economy and put it on a growth path (Cobby 1991, Rothchild 1991) In sum, it is to reverse the trend of declining per capita incomes through better overall economic management, leading Ghana’s economy to a stage from where it can sustain more rapid economic growth.  Phases of SAP in Ghana Stabilisation phase: the removal of price controls on goods and foreign exchange, reduction in government expenditure, increase in wages, removal of subsidies on government services and privatisation of most state enterprises. – Increased cocoa prices by 65% in 1983 as incentive; – Increased tariffs on water, power, railways and telecommunications; – increased the minimum wage 60% by 1984. The main outcome of this phase would be to stimulate aggregate domestic supply and reduce imbalances in external and fiscal accounts. 15  Rehabilitation phase Comprehensive economic rehabilitation program aimed at rehabilitating the road, port, railway and transport infrastructure of the country. Providing the essential raw materials and imported inputs to the productive sectors, with particular emphasis on exports. Outcome is to maintain the incentive structure for eliciting higher production and The enhancement of human capacities in the social sphere. 16  Liberalisation phase Ghana is fully integrated into global market Liberalisation ushers Ghana fully into the world capitalist system Liberalization policies consist of: – removing controls and regulations in factor, commodity and foreign exchange markets; – de-regulating domestic commodity markets; – reducing tariff and non-tariff barriers – eliminating price controls, non-price allocation of credit, interest rate ceilings; and – reducing restrictions on financial intermediation Outcome: Achieve competitive development through exports just as the NICs 17  Has SAP been successful? Positive Performance: 5% growth of GDP achieved between 1984-92, 4.5% between 1991 and 1995, and by 4.1% between 1996 and 2001 Infrastructure improvements through foreign loans Improved access to modern technologies Improved performance of privatised companies in mines and cocoa purchasing Non-traditional crops improve rural incomes Better management of government finances 18  Flip side of SAP in Ghana New patterns of poverty, vulnerability and food insecurity Paralysis of the public services: Cash and carry in health: education for the rich only Subsidy removals- poor agricultural production- poor rural incomes- peasantisation of poverty: rural-urban migration Loss of employment in state sector and slow growth of private sector Privatised companies did not meet their intended objectives Ghana’s outward dependency for (1) finance, (2) technology, (3) policy, (4) security, and (5) food. 19  Trial questions Provide historical account of the reasons that led to PNDC government accepting the ERP/SAP program. Discuss the assertion that ‘the Structural Adjustment Program in Ghana in the 1980s was overwhelmingly negative to the social and economic spheres of the economy’. ‘The objective of the Economic restructuring programmes is to ensure globalisation of economic and social values worldwide’. Discuss. Discuss the three major phases in the implementation of Economic Reforms in Ghana from the 1980s. ‘The Structural Adjustment Programme was a timely and an appropriate intervention in the history of Ghana’. Discuss. 20  Source Songsore J. 2003: Regional Development in Ghana: The theory and the reality. Woeli Publishers. Accra Hutchful, E. 1996. "Ghana:1983-94''. Engberg-Pedersen, P., Peter Gibbon, Raikes, P. & Udsholt, L. (eds) Limits to Adjustment in Africa:The Effects of Economic Liberalization, 1986-94, Centre for Development Research in Association with James Currey, Oxford, Heinemann, Portsmouth. Copenhagen. 141-214. 21  Impacts of Globalisation and Structural adjustment on regional inequalities in development in Ghana  Objectives of lecture To show the state of inequalities regionally in Ghana – Before structural adjustment – After structural adjustment To discuss the structural causes of inequality To enable students assess the present situation in the light of the classical theories of regional development  The Colonial economy – Structure of economy – Export based Neglect for staples Import of manufactured goods Reliance on metropolitan economy – Social transformation – minimal social investments – Policies of domination and spatial effects  Post colonial before SAP – Entrenched structure of colonial economy Exports of primary commodities National companies – Import substitution industrialisation – Socialists strategies – all inclusive – State policies of basic needs and integrated rural development policies  Regional inequalities before structural adjustment Differential resource patterns defined the pattern of regional inequalities in Ghana Concern for resource extraction: growth areas and depressed areas Growth areas: the coastal towns and forest areas Concentration of activities in golden triangle: agriculture, minerals, industry, and administration  Inequalities among Social classes Nationally: – Military-bureaucratic bourgeoisie – Lower petite-bourgeoisie (teachers, nurses, clerks etc) – Workers and lumpenproletariat (unemployed and petty commodity traders) In rural areas: – Proto-feudal or chiefly classes – Kulak class (big farmers/financiers) – Poor peasants and landless labourers  Globalised Ghana: The emerging production structure of Ghana – SAP resulted in a relapse to export-oriented activities and massive importation of cheaper products from a globalised world – More economic and social development in the old core; – Less concern for areas with smaller export potential 9  The growth of export crop zones Rehabilitation of cocoa farms+ producer price increases Expansion into production frontiers of Brong Ahafo and Western regions Non-Traditional crops of pineaples, mangoes, papaya etc – Central and eastern regions Valorization of land and rental systems In-Migration of labour Infrastructure support Foreign and state investments  The growth of urban distribution centres of global imports Liberalised markets led to import boom Informal urban activities mainly profitable in big centres Increased rural – urban disparities Regional centres with more people and higher incomes experience multiplier effects Domination effects operate between larger centers and smaller towns  The decline of productive competitiveness in food crop zones Food crop areas - farmers marginalized by subsidy removals Decline in production affect incomes and wellbeing Land degradation result from unsustainable land management Out-migration to export crop zones reduces human capacities for sustainable land management Affected regions : dry Brong Ahafo, All three northern regions and Volta region (except cocoa growing volta) Affected social group – food crop farmers countrywide  Redefining the centre-periphery structure The rich advanced Highest tier Accra and Kumasi nations and Formal and informal dynamic expanding urban activities South Export zones Southern Ghana Commercial farms Mines Timber Food crop zones of northern BA, the North and Volta Local livestock, tubers and cereals Lowest tier Districts and their villages in Food crop areas 13  Reinforcing old structures – New wine in old skins The result is a thriving export-zone comprised of the old core and expanding new production zone versus declining periphery which feeds the opportunity zones with labour Opportunities for food crop with profitability has opened up in previously poor areas, but only the rich can invest adequately to benefit Social differentiation – emerging/entrenching inequality between export crop producers, import group, bureaucrats and then the food crop peasants and urban unemployed/lumpenproletariat  The social sphere in globalised Ghana – Emergence of new forms of economic hardships due to the ineffectiveness of subsistence farming – Poor provision of social infrastructure in non-export areas creates many deprived areas – Increased labour migration to export producing areas at which creates ‘open spaces’ in the countryside – Industry is out-competed, and replaced by the informal sector which is characterised by coping strategies – Polarization of Ghana between people in different sectors, between the elite and politically weak and entrenched patriarchal values – Casualization of labour – ridiculous wages – precarious employment- living at the ‘edge’ 16 The social sphere in globalised Ghana New life styles demand more resources, and it destroys the sense of humility, sobriety and tradition Patterns of production alter cultures as land tenure mutates to allow for large farms. Landlessness on the rise while urban land is sold depriving hitherto farmers of their livelihoods. The need for resources to meet changing trends leads to prostitution, armed robberies, corruption, fraud and abundant petty theft, and eventually outmigration from Ghana Proportion of adults in each region who have been to school, by sex and locality (%) Region Urban Rural Male Female All Western 84.8 72.0 88.3 63.6 75.2 Central 72.6 64.9 80.6 57.5 67.1 Greater Accra 86.6 72.5 92.6 79.1 85.6 Volta 80.1 67.0 82.7 58.5 70.2 Eastern 80.2 73.5 86.6 65.1 74.9 Ghana statistical Ashanti 86.7 75.5 90.2 72.1 80.0 services: Brong Ahafo 75.9 70.8 84.4 61.9 72.3 GLSS 4.Year Northern 41.4 32.8 46.0 22.5 34.5 2000 Upper West 56.2 38.7 53.6 34.8 44.5 Upper East 66.7 21.0 35.7 16.9 26.3 All 80.2 62.4 79.2 59.6 68.8 18  The new spatial configuration of poverty ◦ The export zone is less poor while food crop areas are poorer ◦ The north and Volta are poorer than the forested south ◦ Industry is outcompeted by global imports leading to a rise in numbers of the urban poor since the repackaging factories follow flexible labour procedures and employ fewer workers ◦ By sector: the food crop producers cannot compete with subsidized food imports and constitute the poorest in Ghana. ◦ Declining agric means increased poverty and unemployment for many in rural areas ◦ The few lucky ones placed at the nodes of the global economic transmission in the banking, services and distribution sectors are getting richer ◦ Polarization of Ghana between regions, between people in different sectors, between the elite and the politically weak ◦ Entrenchment of patriarchal tendencies 19 20 Environmental fallouts of SAP in Ghana Agriculture: profit seeking motives leads to over-mining of the soils and vegetation with large scale cultivation techniques Small farmers deprived of their lands also over-mine marginal lands Labour migration leads to open spaces where land management is a problem Labour migration into the south of Ghana = more deforestation Migration into towns has led to a sanitation nightmare The boom in mining is at the expense of forest and soils as surface mining takes over from deep shaft mining Mining and agriculture combine to pollute water bodies through chemical and sediment discharge 21  Trial questions Examine critically the environmental and social fallouts of Ghana’s structural Adjustment Program. ‘The entrenchment of Ghana’s links with the world capitalist system by globalisation, enabled by neoliberal economic restructuring, accounts for contemporary disparities in its regional development’. Discuss. 22  Source Songsore J. 2003: Regional Development in Ghana: The theory and the reality. Woeli Publishers. Accra Songsore J. 2011. Regional Development in Ghana: The theory and the reality. Woeli Publishers. Accra Hutchful, E. 1996. "Ghana:1983-94''. Engberg-Pedersen, P., Peter Gibbon, Raikes, P. & Udsholt, L. (eds) Limits to Adjustment in Africa:The Effects of Economic Liberalization, 1986-94, 141-214. Centre for Development Research in Association with James Currey, Oxford, Heinemann, Portsmouth. Copenhagen Yaro. J. A. and Hesselberg J. 2010. The contours of rural poverty in Northern Ghana: Implications for food and nutritional security. Research Review Vol. 26 No.1. pp. 81-111. 23 REGIONAL DEVELOPMENT PLANNING The Planning Process  Lecture objectives To explain the meaning and importance of regional planning in the development process To discuss the origins of regional planning To discuss the basic features of the planning process To critically assess the flipsides of planning To enable students relate planning as a generic activity to everyday life  What is Planning? Preparing today to meet future needs – this is because the future belongs to those who prepare today. Friedmann (1964): planning is primarily a way of thinking about social and economic problems, planning is oriented predominantly towards the future, is deeply concerned with the relation of goals to collective decisions and strives for comprehensiveness in policy and programme.  Some Definitions of Planning Planning is the process of articulating and putting into practice identified sets of measures with the basic aim of improving the existing socio-economic condition of an area or region. A process of preparing a set of decisions for action in the future directed at achieving specific goals by desirable means. The process of decision-making that aims at bringing about an optimum combination of activities in a specific area and by which the use of instruments of policy is co-ordinated, given the objectives of the system and the constraints imposed by available resources (Hilhorst, 1971) What is Regional Planning? – Regional planning is planning concerned with the where of development. The technical basis for making decisions about where resources should be allocated and where projects are located, where urban growth should occur and where particular types of agricultural land use be encouraged. – The locational programming of investments within a sector, for example plans to promote industrial development away from the capital, or plans to co-ordinate the location of roads, market centres and credit facilities – Development is the ultimate goal of planning  The emergence of regional planning High levels of regional unemployment following the world depression in the 1930s led to British and American government to establish regional development and dispersal policies – Britain: Barlow Commission instituted measures to disperse industry, industrial estates, tax incentives and discourage industry in London in 1940 – USA: Area Development Administration to deal with unemployment in low income areas in 1961  Reasons for regional planning Slow growth and unemployment Metropolitan cities absorbing scarce agricultural land- environmental, social and economic problems The rapidly changing complexities of societies The problems arising from regional differences in the distribution of development factors Mal-distribution - Differences in resource endowments The need to reduce inequalities and create societal welfare  The scope of regional planning Its content ranges from the physical, economic, social, political, institutional, and psychological considerations. – Physical planning refers to the planning and regulation of an area's physical structure such as land use, environmental quality, communications, utilities and so on. Land use planning is concerned with optimal or orderly use of land – Economic planning, on the other hand, has to do with the economic structure of an area and its overall level of prosperity. Economic planning works more, through the marketing mechanism by seeking to enhance profitable location of factors of production to ensure the multiplier effects of appropriate spatial locations  Basic features of regional planning Regional planning is future and goal oriented Planning is continuous and not static - a dynamic process Regional planning requires determination of facts Regional planning is comprehensive: Any region is seen as a system - exhibiting a complex web of interrelationship. Regional planning provides opportunities for coordination: all actors learn, facilitate, and coordinate activities and efforts. Regional planning should maximize opportunities for everyone within the spatial system to share in the good life, happiness and enrichment, generated in the planning process.  The planning process Planning is a social process concerned with social relations and societal well-being, that eventually results in physical outcomes The planning process involves understanding the past and present; imagining the future; and designing ways of achieving the future These are translated into three phases – research, design and implementation The stages of the planning process include: review and understanding; goal formulation; problem formulation; possible actions; evaluation; selection and implementation  PLANNING AS A CYCLIC PROCESS Review and understanding Implementation and Control Goal formulation Problem formulation Learning Possible course of Actions Evaluation Selection Review and Understanding Stage Gather information about the regional spatial system in terms of the systems framework. Provide information about the physical features, the population and the socio-economic condition of the area in order to understand what is necessary to make life comfortable and meaningful to the inhabitants of the area.  Formulation of Goals and Objectives Goals are the means by which the deficiencies of the regional systems are addressed: the ends The objectives involves a determination of the nature of what is desired at the end of a given situation in the near future.  Problem Identification Comparing the actual state of the regional system and the proposed state as expressed by the goals and objectives. What is and what ought to be in the planning region? Justifications  Selection of the Possible Course of Action Evaluation of the various alternative solutions to the problem Selection of the instruments at the disposal of the actors responsible for the realisation of the desired objectives. Ensure that the selected instrument is efficient and effective enough and has the capacity to see to the realisation of the objectives.  Evaluation Use various types of models or techniques including cost benefit analysis or planning balance sheet method, to explore, predict, evaluate and determine the most viable course of action. Evaluation in the planning process could be before, during and after implementation.  The Implementation Stage This is the stage where action is taken to implement the chosen plan, bearing in mind that the regional system is a dynamic one, requiring a control mechanism which is continuous. Action in terms of investments which may be in the form of capital, money, land or labour. The Cyclical Process Feedback is generated between each of the three broad stages mentioned. There is the possibility for the instruments, objectives and targets to be modified based on the feedback effects Benefits of Development Planning Establishes an overall framework for carrying out development objectives and policies Allows efficient utilization of natural and cultural resources Provides a rational basis for decision-making by both public and private sectors Optimizes and balances the economic, environmental and social benefits of development, with equitable distribution of these benefits to society. A mechanism to manage the effects of economic development, investment and growth on the environment and communities. Provides a framework for coordinating various sectors of development project. Offers a basis for monitoring and evaluation of development.  Criticisms of Planning Humankind only recognizes that careful and far-sighted planning is required only when advance processes have already occurred. It is therefore described as doing little too late, or basically ‘window dressing’. Domination – produces societies where people are forced or disciplined to behaviour according to the wishes and desires of the planner. Planning redefines social and economic life in accordance with the criteria of rationality, efficiency and morality of the planner. What happens if these perspectives of the planner are wrong? Planning requires the normalization and standardization of reality, which entails injustice and the erasure of difference and diversity. References Conyers, D. and Hill, P. J. 1984: An Introduction to Development Planning in the Third World, New York: Wiley. Escobar, A. 1995: ‘Development Planning’, in Corbridge, S. (ed.): Development Studies – A Reader, London: Arnold. pp. 64-77. Allan Gilbert (ed) 1976. Introduction. Development planning and spatial structure. Pp 1-20 G. H. Hilhorst: 1971: Regional planning. Rotherdam A Faludi, 1973: A reader in planning theory. Perspective Press