IDC Summary PDF

Concepts and Definitions ======================== A. **[Intoduction]** - Interdisciplinary approach involves politics, economics, IR, social work... - Development related with industrialization and capitalism BUT other non-capitalist approaches like Soviet Union and mixed economies l...

Concepts and Definitions ======================== A. **[Intoduction]** - Interdisciplinary approach involves politics, economics, IR, social work... - Development related with industrialization and capitalism BUT other non-capitalist approaches like Soviet Union and mixed economies like China - Origin: Britain late 1700s, spread to Western Europe, US and Japan in early 1800s - Still, many aim for capitalism + industrialization to reach development - *Industrialization* = sustained increase in productivity and competition, creates innovation and an increase in productivity SO, generates growth and wealth, improving the standard of living of societies BUT tendency to periodic crisis and inequality North-South dichotomy (which has a great influence in how development flows/aid work) B. **[What is IDC]** - Definitions of development carry political connotations and need to be understood in their historical, social, philosophical, and political context. - It varies in time ex: development aid now development cooperation (more =) - Definition of concepts - **Development cooperation** = refers to activities aimed at supporting development priorities, prioritizing developing countries, fostering cooperative relationships developing country ownership. Not driven by profit. and is part of international cooperation. - **International development =** traditionally, it focuses on aid and research for poorer countries, but a global development framework broadens this view to address global processes and outcomes, moving away from a sole focus on poverty and aid. - **Aid** = its aim is to reduce disparities and inequalities to make poor countries achieve industrial and technological advancements. - **Foreign aid** = US term, refers to the international transfer of capital, goods, or services from a country or international organization for the benefit of the recipient country, Aid can be economic, military, or emergency humanitarian - **Development aid** = includes monetary assistance in the form of direct grants, programs or training to support a developing country's political, social or economic development (can come from a developed country but also a developing one). A part of foreign aid focused on contributing to human welfare - **Humanitarian vs development aid = the** first is designed to relieve suffering in the short term or during emergencies. The second is designed to alleviate long-term issues, such as poverty. It works over the long term by promoting economic, political, social or environmental development. - **Official development assistance** = government aid that promotes and - specifically targets the economic development and welfare of developing countries. Does not include loans or credits for military purposes - Aid may be provided bilaterally, from donor to recipient, or channeled through a multilateral development agency (UN, the World Bank...) C. **[What is the IDC regime]** - **International regime** = social institutions that govern specific activities, characterized by norms, rules, and decision-making structures that tackle issues in a specific area of international relations BUT not necessarily formally articulated or with explicit arrangements - **Official Development Assistance (ODA) regime** = it stands out for its formal structures and focus on performance standards, balancing donors\' self-interest (e.g., advancing foreign policy) with collective goals like poverty reduction. Donors maintain autonomy in aid decisions but are evaluated on aid quantity and quality, favoring grants, untied aid, and support for least developed countries (LDCs). - Criticism: D. **[Motives for Development Cooperation ]** - They vary and evolve main 4 = moral and humanitarian principles, political and national security considerations, ec and trade considerations, environmental policy considerations - Some: Ideology and the pursuit of commercial advancements play a big part - Others: Geopolitical and commercial interests, not altruism. - Things that influence it = historical ties, international situations, such as conflicts and specific or sudden crisis. - In the end, a sum of factors BUT always part of international politics and part of foreign policies SO, politics are always involved E. **[Principles of IDC ]** - Key principles whose aim to achieve sustainable dev + reduce poverty - *Co-financing* = cooperation between donors and recipient countries is based on joint efforts to ensure accountability. - *Sustainability* = IDC promotes sustainable development that considers economic, social and environmental aspects and focuses on long-term changes (this will enable developing countries to continue to prosper after the end of financial support) - *Partnership* = between donors and recipients + cooperation with stakeholders like civil society, private sector, local communities, etc. - *Consistency with development objectives* = aligned with international development goals like the SDGs F. **[Main Stakeholders of IDC ]** - *Donor countries* = provide the help (financial, technical, political support) - *Recipient countries* = receive the support (funds, technical assistance...) - *Civil society* = promote a participatory approach, transparency, accountability, monitoring (ex: NGOs) - *Private sector* = participate through CSR, investments, PPPs... - *Multilateral organizations* = World Bank, UNI, IMF \> provide financial and technical support G. **[Actors in IDC]** - *Governments* = responsible for formulating and implementing policies and development programmes in their respective countries. They make decisions on resource allocation, alignment of policies with the SDGs Aim: ensure the rule of law and protecting HHRR. - Can also work with other countries and international organizations to achieve common development goals. - *IO* = they aim to promote development and cooperation between countries (UN, World Bank, INF, WTO...). They provide support in ≠ areas and monitor results + hold donor countries accountable - Civil societies and NGOs = local communities, civic initiatives, trade unions, academia, media, etc. they advocate and promote the interests of communities in need. - Cooperation among all of them is key (each has their own areas of expertise) BUT can be hard bc of ≠interests, priorities and approaches KEY: establish mechanisms for dialogue, coordination, transparency and accountability H. **[Approaches to Development Cooperation]** - *Programmatic help* focuses on a particular sector and is all about long-term planning and resource programming. Aligns national development plans with the initiatives through cooperation. - Advantage: long-term planning and capacity building - *Technical assistance* supply of knowledge, abilities, tech... to facilitate development. Allows for tech transfers and involves expert missions, consultations, educational programs, etc. - *Capital assistance* financial aid (money). Can be in the from of grants, loans, or investments. Usually used in infrastructure or major projects. - *Humanitarian aid* deals with the immediate assistance to communities impacted by catastrophes (≠ than IDC because it is short-term but they can overlap, ex: reconstruction phase) - Advantage: best suited in emergency situation I. **[Main sources of financing of IDC ]** - *State aid / development aid* from one nation to another to promote development. Can be multilateral (mediated by IO) or bilateral (direct) - International Financial Institutions provided by them (like the World Bank or the IMF) - *Private sector* especially through PPP and FDI (not only money but also know how and innovation) - *Philanthropy and donations* from individuals, corporations, foundations (includes charity) - National budget state budgets or special budget allocations for development projects. J. **[Controversy]** Overall, IDC = An instrument of foreign policy + A key component of international relations + Implies relations of power, and thus forms of domination + Evolving concepts and practices, in constant transformation so... Very complex (≠ motives) \+ there are no agreed-upon standards to measure whether aid works, Ideological differences and changes in political power exercise a great influence on framing IDC practices and institutions Historical and Institutional Configurations of IDC ================================================== Origins and influences: - 18^th^ century appearance of the Concept of civilization - Enlightenment = spatial dimension that placed Europe in relation to other civilizations they assumed a superiority and racist reality in their relationship - Adam Smith's "invisible hand" + Wealth of Nations = supports the notion that free markets, driven by competition and self-interest, lead to innovation and efficiency + contributed to the rise of industrial capitalism and globalization. - Imperialism and colonialism control onver colonies and idea of imposing Western mentality - The League of Nations first organization on a global scale to promote international cooperation and to achieve peace and security BUT legitimises interventionism and European control (set up Mandates) 5 phases: **[1st Phase: 1945-1969 -- Industrialization and Growth + Modern Aid Era]** - *1944: The Bretton Woods Institutions* = First approach to building a global financial system that will allow in the future to foster economic development, and multilateral cooperation to fight poverty and promote growth in developing countries (created the IMF and the World bank) - *1945: UN Charter* = Creates a major organization for common objectives for all countries, such as peace and security. - one of the first international legal documents acknowledging international cooperation key to ensure and legitimize the need for cooperation between countries and their self-determination - *1947: Marshall Plan* = economic aid given by the US to European states to rebuild their countries and their economies after the Second World War. - Established the US as a major player in the world and in international cooperation - First large-scale economic aid given by a country and a great example on how cooperation can help recuperate stability in a region. - *1948: OEEC/OECD* = created to manage the Marshall Plan funds (alongside the US Economic Cooperation Agency) - Start of multiraletal cooperation focused on economic development - TODAY, The OECD influences global governance through three key mechanisms: - Policy Guidance: reports, offering policy advice, and framing guiding principles. - Providing quatitative and standarized data as a neutral and reliable - Policy Evaluation: Conducting peer reviews to assess and guide policies. - *1955: Bandung Conference (Indonesia)* = first South-South cooperation initiative (alternative to traditional cooperation and paternalistic dynamics with Western countries) - Reflected the dissatisfaction and the need for self-determination of these countries - Delegitimize colonialism and preceded the decolonization wave - Advicated for cultural and ecomic cooperation in the Asian-African region - The UN recognizes de rights of people to self-determination - Cold war, Truman "we must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas" (victimizing them? Hidden motives tho) - Ex: 1961, Alliance for Progress in Latin America ec cooperation to stop the rise of communism in the region Overall, between the 1940s and 1960s, the \"modern aid era\" emerged, driven by international organizations and new actors in global society. Development cooperation was seen not only as a means to improve living standards but also as a strategy to promote peace and security. **[2nd Phase: 1969-1980 -- Poverty Focus and Environmental Protection]** - *1969 The Pearson Commission Report* = created to investigate the effectiveness of the World Bank\'s development assistance +made recommendations for future operation of the organization. - Argued for a more substantial commitment to foreign aid and economic development as a global initiative - Considered as the first evaluation of international development assistance. - "the international development effort is to put the less developed countries as soon as possible in a position where they can realize their aspirations with regard to economic progress without relying on foreign aid" - *1972: Stockholm Declaration* = marked the first major international effort to address environmental issues on a global scale. It established the principles of environmental degradation. - Recognized the need for sustainable development, emphasizing the balance between economic growth and environmental protection - Introduced the concept of the human right to a healthy environment - *70s: The Women in Development Approach* - Liberal feminists called for addressing disparities in employment opportunities, leading to the Women in Development (WID) approach. This focused on women's productive roles and improving access to resources like land, education, labor markets, and family planning. The 1975 UN World Conference on Women raised awareness of these issues, showing that development policies did not automatically benefit women. Overall: start of a reflection on the relation between economic growth, development and the quality of aid. Moreover, it included poverty eradication as one of the main objectives of IDC, as well as women's rights and their crucial role in the economy + growing awareness of the relationship between environmental issues and development **[3rd Phase: 1980-1992 -- Neoliberalism, Structural Adjustment and the Lost age of Development]** - Context: oil crisis Arab states placed an oil embargo on the US and other industrialized states that had supported Israel in the Yom Kippur War. Oil prices went up and crisis erupted - Consequences: recession in industrial world and highly indebted growing ec. (debt crisis) - *1980 and 1983: The Brandt Reports I and II* by the Brandt Commission  - Addressed the differences between the North (more industrialized and stable), and the South, (growing and new economies) - Introduced the need for cooperation in a North-South way (bc of global disparities) + shaped the perspective of international cooperation for years to come ( focused on global interdependence) - *1989: Structural Adjustment Programs (SAP)* *= Washington Consensus* IFI conditioned aid flow to the adoption of these policies - They were focused on ec reform, especially in LATAM and Sub-Saharan Africa supposedly to improve BOP and debt - Ex: liberalization of imports and foreign exchange, devaluation of the official exchange rate, anti-inflation measures (raise interest rates, stop gov spending...) + promote foreign investment - Negotiated under conditions of unequal power - Developed economies were interested bc of commercial benefit - IMPACT: degradation of living conditions (ex: unemployment) growth of inequality, focus of commodity exports... Overall, lost decade of IC BUT by the end of the 80s aid levels started to rise again (end of crisis, increased public awareness of emergencies ex: Live Aid) + NGO numbers rising. **[4th Phase: 1992-2000 --Good Governance. From Global to Local]** - *Creation of the HDI* enhances the importance of placing human beings at the center of development concerns, beyond monetary issues (combines measurements like life expentancy, education levells, GNI per capita...= - *Second-generation conditionality* consisting of systemic and policy reforms, directly linked to the international transformations of the period (especially related to democracy, rule of law, HR...) - *Multilateralism* Summit meetings became a central element of international diplomacy. - *1992: UN Rio Earth Summit* - Celebrated to reconcile economic development with sustainability (interdependence between the two is highlighted) - Objective: create a broad agenda and a new blueprint for international action on environmental and development issues to guide international cooperation and development policy Agenda 21 - *1995: 4th Conference on Women in Beijing* - Conference organized by the UN to address women\'s rights and gender equality - Crucial to spread awareness and responsibility over this topic into global development agendas (ex: created funds and a platform for collaboration) - *1996: Heavily Indebted Poor Countries (HIPC) Initiative* - Focused on debt relief for poor countries - The impact is higher in countries with low access to international capital markets. - The initiative encouraged stronger economic reforms and governance improvements in participating countries debt relief needed to be accompanied by measures to promote long-term financial stability. Overall, decade marked by rising globalization, the exacerbate poverty after the lost decade (poverty rediscovered), big focus on human development (inspired by Amartya Sen and Mahbub ul Haq !: pursuance of predominant Western political norms and interests + prevailing Western economic system becomes the main focus **[5th Phase: 2000-2030 --MDGs and SDGs]** - *Summit diplomacy at its peak* practice of high-level diplomatic meetings between heads of state or government of different countries. - Touched on topics like Protection of Children, HR, Environment - One of the UN system\'s greatest strengths the ability to move from raising awareness to setting agendas to reaching agreements + their roles in supporting countries to meet their commitments = foster global cooperation - *2000: MDGs and Millenium Summit* - Stated 6 fundamental values for IR Freedom, equality of individuals and nations, solidarity, tolerance, respect for nature and shared responsibility. - MDGs = commitments to halve extreme poverty by 2025 by tackling hunger, education, gender equality, child mortality, etc. issues - Criticism goals mostly targeted to the developing world + too much need for financial assistance + neglected challenges/difficulties to implement them + unrealistic + lacked proper monitoring and data-collection processes - Success and challenges most successful anti-poverty movement in history BUT inequalities persist and progress has been uneven. - Ex: 1 billion people lifted out of extreme poverty, yet another billion remain - *Securitization of aid* aid has increasingly been linked to security, with donor countries using it to address national or international security concerns - Involves framing aid as a tool for security, prioritizing assistance to countries and sectors based on security needs and involving security actors like military forces in aid delivery. - Before 9/11, the focus was on human security in violence-affected countries. Post-9/11, aid shifted toward industrialized nations' homeland security, creating tensions between both realities. - 2015: SDGs and Agenda 2030 - 17 goals aiming to end poverty, protect the environment, and achieve gender equality by 2030 (among other objectives) - Improvements: targets every country, indicators to facilitate date collection... - Criticism: still too ambitious, neglect of indigenous people, data limitations still pending, still big need for financing... Overall, summit diplomacy takes up relevance, better effort coordination than ever, South-South cooperation gaining importance (bc of growth of the BRICS + unresolved inequalities in the world), securitization of aid, proliferation of Private actors (big power bc of financial capacity can be foundations, companies or private funds) Main thing unitary policy formation worldwide Modalities and Types of Aid --------------------------- Types of Aid ------------ Aid = assistance provided by governments, businesses, individuals, non-government org. from one country to another to help reduce poverty and achieve sustainable development 1. **ODA (Official Development Assistance)** - = aid that promotes and specifically targets the economic dev of a developing country - From official providers (governments)to low/middle income countries - Can be financial transfers, technical cooperation, commodity transfers, humanitarian aid - "Gold standard" of foreign aid by OECD main source of financing for dev aid - The Development Assistance Committee (DAC) makes a list of eligible countries and territories that is reviewed every three years (57 countries have left the list since 1970) - These consist of all low- and middle-income countries based on GNI per capita - UN target of 0.7% of GNI (national income) set in 1970, today only Norway, Lux, Sweeden, Germany and Denmark have reached it (out of the 33 member countries of the DAC) - Ex: election monitoring, weaponds disposal (if under UN administration), promotion of culture, assistance to refugees, construction of nuclear power plants... - Not included in ODA: military or police equipment, sponsoring athletes, purchase of carbon credits - DAC uses sector classification to track aid flows(ex: production, social infrastrucutres, humanitarian aid,etc.) 2. **Other official Flows (OOF)** - Transactions that don't meet the criteria to be ODA ex: grants to developing countries for representational or commercial purposes - Includes: export credits to aid recipients from an official agency, subsidies to the private sector to soften its credits, and funds in support of private investment. 3. **Private flows** - = flows at market term and financed put of private sector resources - Ex: private grants by nongovernment organizations and private foundations, and remittances sent home by migrants - More volatile but gaining traction lately Aid Channels ------------ 1. **Bilateral** - = Aid flows from official sources directly to the official sources in the recipient country - Can sometimes de channeled through NGOs in the recipient country - Most of ODA is bilateral 2. **Multilateral** - = financial contributions from official (government) sources to multilateral agencies like development banks and financial institutions (WB, IMF) where it is then used to fund the multilateral agencies' own programs. - They are able to effectively mobilize (quicker than states) relevant expertise and technical assistance + many are specialists of specific development priorities - Only 25% of the world's aid 3. **Multibilateral / earmarked multilateral** - = resources channeled through multilateral agencies, but earmarked by the donor country for specific themes, sectors, regions, or countries. Types of contributions ---------------------- - **Non-core aid** The donor country specifies how they want that money to be spend and where (they decide9 - **Core aid** The donor country does not decide where the money is going to be, could be use for anything (it loses its identity) PROS CONS ---------------------------------------------------------------------------- ------------------------------------------------------------------------------------------- Focus on the people (secure them, protect them, guarantee basic needs) Need for lots of logistics and coordination. The recipient country must agree to the help Great help for emergency situations (only possible used actually) Very expensive Quick response UNSC decides when to give HA, not governments Works with peacekeeping forces and the military to be more effective (new) - **Humanitarian Aid** actions to help victims of disasters, inmmediate relief to ease theur suffereing and protect them - Short-term - Responds to a catastrophe/disaster delivered in that place - Focus on saving lives - Key principles: - Humanity, impartiality, neutrality and independence - No discrimination, can't be used for a political/religious agenda, respect cultures and customs, aim to reduce future vulnerabilities, include the beneficiaries, hold yourself accountable, victims seen as dignified human being not hopeless objects - Reported as part of ODA to the DAC - Key entities that deliver HA: UNDP, UNICEF, EFP (world Food Program)... Aid conditionality ------------------ - **Tied aid** when the recipient does not receive the funds in such a way that it can freely dispose of them but is obliged to spend them on the purchase of goods produced in, or services provided by the donor country. - **Economic conditionality** (1^st^ generation of aid conditionality) recipients had to commit to deep and precise economic policy reforms if they wanted to receive aid. Mainly in the 80s - **Political conditionality** (2^nd^ generation of aid conditionality) Required recipients to commit to policy reforms to promote particularly democracy, human rights and good governance. Mainly in the early 90s Aid Modality ------------ = ways in which development support can be delivered - **General budget support** Direct funding to a recipient government's treasury, managed through its own budgetary processes, offering flexible support for macroeconomic reforms and poverty reduction strategies - **Core support to NGOs** Funding given to NGOs or similar entities for use at their discretion to implement self-developed programs and activities. - **Investment Projects** Aid aimed at building physical infrastructure in recipient countries, including technical cooperation and funding for local costs. - **Debt Relief Administrative Costs** Actions to manage or cancel debt, including forgiveness, swaps, rescheduling, and refinancing. - **Other in-donor expenditures** contributions that remain within the donor country, such as development awareness programs and support for refugees. Geographies of Development Cooperation -------------------------------------- 1. **North-South Cooperation** - Traditional way of cooperation - Reflects an asymmetric distribution of wealth and power in the global world vertical, paternalistic and dominant from donor country - More than a geographical division, it is based on countries that share a common socio‐ economic and political characteristic 2. **South-South Cooperation** - Somewhat new - Main goal: collaboration among countries of the South in the political, economic, social, cultural, environmental and technical domains share knowledge, skills, resources, etc. - Based on shared experiences and sympathies, common goals and solidarity respect, no conditionality, strives for self-reliance, autonomy, horizontal - Brand Report promoted it - Ex: ASEAN 3. **Triangular Cooperation** - New model - = When South-South Cooperation is implemented with the support of a Northern partner - Fosters co-responsibility, more inclusive but more complex - Main attractive: the possibility of combining the strengths of DAC donors and providers of South-South co-operation to promote development in beneficiary countries 4. **Decentralized Cooperation** - = cooperation between sub-state administrations (ex: autonomous gov, town halls, universities) - Focus on local development processes connect societies more directly - Makes govs more efficient at all levels + encourages civil society action - Aims to improve the development on mega cities that lack services like healthcare infrastructure, etc. - Local so better insight on people's needs + more efficient + lowers regional disparities - Modalities\_ - *Direct cooperation* = direct partnerships between local/regional govs from ≠ countries (mutual exchange of knowledge and resources) - *Local and regional government networks* = multilateral, collaborative platforms or associations of local govs that address common challenges - *Delegated cooperation* = one local/regional gov acts on behalf of others to manage and implement projects (more efficient) 5. **Regional Cooperation** - = solve cross-border problems and strengthen regional cooperation - Multilateralism but on a smaller scale - Ex: EU, ASEAN... - Allows ec growth, trade enhancements, fosters investments in the region, political stability, collective security, etc. - BUT, sometimes hard due to lack of trust, political tensions get in the way, can lead to migration flows, exclusion of non-member states - Mechanisms: - *Unidimensional organizations* focus on a specific sector, addresses specialized challenges (ex: OPEC) - *Multidimensional organization* comprehensive cooperation across multiple policy areas (ex: EU) 6. **PPP** - = partnership between the public and the private sector combines the public sector's goals and knowledge + private sector's resources, innovation and drive for market expansion - Public sector monitors and private sector finances, implements, designs, etc. - Allow large-scale gov projects to be completed through private funding ex: infrastructure like bridges, roads, hospitals... - An efficient way to provide public services, + helps de public sector to diversify the economy which makes the country more competitive - BUT, a risk for the private partner (less demand than expected, can't make deadlines, etc.) *Comparison between these geographies:* tablassssssss Institutionalization of aid =========================== = process through which international development cooperation was gradually institutionalized in international politics creation of institutions, summits, rules... It involves developed and developing nations Actors ------ - **OECD (Organization for Economic Cooperation and Development)** - Founded in 1961, BUT established from the OEEC that was created before to run the US Marshall Plan - 38 countries - = organizations seeking to shape policies that foster prosperity equality, well-being for all - Composed of a Council (decision-making body), Committees (analyze policies, data and proposes solutions o policy reviews) and a Secretariat (in Paris, carries out the work) - **DAC (Development Assistance Committee)** - Founded in 1960 under the umbrella of the OEEC - = forum for the coordination of development aid efforts - Provides data and resources to expand long-term aid flows guidelines on the management of aid - Adopted the concept of ODA (Official Development Assistance) - **UNPD (United Nations Development Program)** - Founded in 1966 by the UN - = helps countries develop policies, skills, partnerships and institutions to end poverty, build democratic governance, rule of law, and inclusive institutions. - Focuses on sustainable dev, democratic governance, peace building and climate resilience ODA: Planification, measurement and motives ------------------------------------------- - **Planning** - Projects series of orderly activities, mobilizing a given number of resources, in order to achieve defined objectives, over a defined period, in a specific area - Different phases: - Identification or conception - Formulation or design - Implementation and monitoring - Evaluation and audit. - How do we measure aid? - For donations: ODA to GNI ratio goal: 0,7% (Pearson Commission) - Trend by sector: - Education has fallen, developing countries have improved their educational systems a lot (now able to use their own resources) - Health has risen (AIDS crisis and importance of MDGs) - Multisector has risen (donors have recognized the interdependence of aid inputs and have facilitated more choice by recipients in the final allocation of these - **Motives for giving aid** - ODA funds are normally authorized by countries governments on a yearly basis, so it is a [political decision] to address emergencies (humanitarian aid), global engagement for development and poverty reduction (MDG‐SDG), to achieve their geopolitical interests, to help their own economic and commercial interests, because of historical ties and human rights, good governance records, for moral and ethical reasons. Development Theories ==================== Classical Theories ------------------ ### Modernization Theory - Development in the context of the Cold War (50s-60s) - Inspired by the Marshall plan of 1948 - Premise: economic growth can only be achieved by industrialization capital with minimum public sector intervention would lead to industrialization and eceonomic development - viewed the process of development as a series of successive stages of economic growth through which all countries must pass - Main inspo: - Harrod and Domar **\"Harrod‐Domar Model" of economic growth** - Importance of investments and savings for growth each economy should save a % of their national income + need to attrack new investments - This will lead to hiher level on national income which allows people to save and spend more - Critics: labour forced not referenced bc assumed to be abundant in a developing-country context and can be hired as needed in a given proportion to capital investments Not always valid, there is labour avaiblable but lack of ohysical capital (machinery, equipment, buildings) - Rostow **"The Stages of Economic Growth: A Non-Communist Manifesto"** - Promoted as part of the US foreign policy, he worked for J. F. Kennedy - Modeled after western capitalist countries and aimed to assist lower-income countries in their dev + assert the US's influence over that of communist Russia. - The transition from underdevelopment to development can be described in terms of a series of stages (linear) through which all countries must proceed - Five stages: Traditional society Preconditions for take‐off Take‐off Drive to technical maturity Age of high mass consumption Beyond the consumption (post‐industrial era) - Critics: not all countries develop in a linear way, emphasizes a trickle-down modernization effect from urban industry, goal is mass consumption and generalizes that all countris should aim for this + assumes that all countries have an equal cahgne to develop (disregards access to resources, population size, location, etc.) ### Structural-changes theories - Focus on the processes and mechanism employed to transform economic structures during development - Main inspo: - Lewis **"Dual-Sector Model"** - Mid 50s - Argued that the way to spur development in poor countries is to shift labor into manufacturing, where it is more productive (from rural sector to urban indsutrial sector) aim: promote industrialization - Why? Capitalist industries are productive enough to have extra income that they save and reinvest = growth - Critics: assumes that the modern industrial sector's growth over time absorbs the surplus labor from the agricultural sector + that agricultors don't save - Chenery **"Two Gap Model"** - Context: professor, worked for USAID and was the WB's VP for ec. Dev - The transformation of economic structures require a large inflow of external monetary resources in a short period of time SO, foreign aid is key - Two gaps: savings gap and foreign exchange gap - Savings gap: during initial industrialization, insufficient saving limits investments and growth - Exchange gap: later, once a nation has industrialized, the availability of foreign exchange required to finance essention imports for development - Solution: development aid can help bridge with foreign aid + structural changes like increase human skills and adopt a more productive tech (≠ from Rostow) - Countries can develop faster by leveraging opportunities from industrialized nations, such as capital, technology, and export markets ### Under-development theories: Latin America Structural Approach-Dependency Theory - 60s, by Latin American economists like Raúl Prebicsh - Wanted to challenge prevailing ideas about economic development - Wmerged from the UN Economic Commission for Latin America and the Caribbean (ECLAC)  - Key points: - The world economy is divided into industrial \"center\" countries and commodity-producing \"periphery\" countries - Underdevelopment in peripheral countries is a direct result of capital intervention from center countries, not a lack of development - Free trade and comparative advantage theories favor industrial economies, leading to unequal exchange - Developing countries are caught in a dependence and dominance relationship with rich countries - The global economic structure prevents peripheral countries from following the same development path as European countries did historically - Solutions: - Import-substitution industrialization - Regional economic integration - State intervention to prevent inequalities - Criticism: inefficiencies and corruption associated with extensive state involvement in the economy (specially in this region) ### The neoclassical/neoliberal free market theory - 70s and 80s - Pillars: - The market\'s effectiveness in resource allocation and criticism of government intervention must limit state intervention to essential functions and promote economic freedom (free market) - The benefits of full participation in international trade. - Key elements: - Economic inequality as an incentive for innovation - Free markets maximizing efficiency and welfare - International trade as mutually beneficial - Inspo: Milton Friedman, Rostow, - Friedman a company\'s primary responsibility is to its shareholders, not society - Importance: These ideas significantly influenced international financial institutions like the World Bank and IMF this lead to the implementation of Strucutral Adjustment Poliices (Washington Consensus) in developing countries in the 80s (consequences: market opening, dismantling of public ownership, and reduced government regulation in these nations) Alternative Theories -------------------- ### Responsible Development - Dudley Seers (UK) - Principle: dominant economics is based upon phenomena of "developed countries" that are an exception and are generally inapplicable to the "underdeveloped countries" \> bc of different contexts - Impossible to think every country behaves in the same way - Incorporates more socially relevant measures to better address development problems education, population growth, and political independence \> and development is addressing all of these - Critical towards neolibral policies and the idea of growth as a standard of development \> "need to redefined how development was measured" ### The basic needs model - Developed by the World Bank and Institute of Development Studies (University of Sussex) - Identified the most basic needs of all people: - Minimum wage enough for foods, shelter, furniture, etc. - Essential services water, sanitation, public transport - Better quality jobs and higher salaries - Qualitative needs such as healthy and humane environment, participation in decision-making, individual freedoms - WB, ILO: proposed the satisfaction of basic human needs as the main objetive of national and international policy - Important people: Paul Streeten (economist, US) linked basic needs improvement to economic growth (both need to happen together) ### Sustainable development - Intersection of development and environmental agendas economic growth should respect the environment - Sustainable development = development that meets the needs of the present without compromising the ability of future generations to meet their own needs - So, the goals is: socially inclusive and environmentally sustainable economic growth. - Guiding principle of the COPs \> Brundtland report, Rio Summit, Rio+20 - Criticism: tensions between North and South, SGDs will probably not be achieved... ### Human development theory - Refers to the importance of placing human beings at the center of development concerns - Important people: - **Amartya Sen** (Indian economist and philosopher) - Critiques economists for constructing their models away from social reality - He highlights the complexity of human motivations and integrates social and ethical considerations into economic thought - Main ideas / philosophy... - Functionings: states of being and actions that contribute to a person's well-being formed by beings (fundamental states like being safe, healthy, educated) and doings (more complex actions, like being able to participate in community life or pursue ambitions) - Capabilities: The opportunities and abilities people have to achieve valuable functionings include inborn potential (natural talents), trained potential (learned skills) and opportunity capabilities (social or economic) - Two types of freedom freedom "from" = as an intrinsic value (from hunger or oppression) and freedom "to" = as an instrumental value (to participate in democracy) - \+ development is not about economic growth or GDP but about advancing these freedoms real development is about expanding people\'s freedoms to choose and act, not just improving income levels. - 5 Freedoms: political (free speech, voting rights), economic (access to resources and ec opportunities), social (education, healthcare), transparency (to prevent corruption) and protective security (like disaster relief or unemployment help) - Poverty = unfreedom - IMPACT: shift in focus, inspired the HDI - **Mahbub ul Haq** (Pakistani economist and politician) - contributed to the new paradigm of development, putting human priorities on the agenda of development strategies - collaborated with the UNDP and created the HDI and the Human Development Report - Report: argued that the ultimate end of development was to improve human well-being and that economic growth was only a means to achieve this. - Development "as development of, for and by the people" ### Post-Development theory - 80s - Emerged as a critique of development theories oriented towards modernization and industrialization - Argues that the concept and practice of development reflects the hegemony of the Western North over the rest of the world - Development as industrialization is rejected because it means cultural westernization, homogenization and brings environmental destruction focuses solely on economic growth, legitimizes intervention in societies defined as less developed, compares societies according to universal scale + ignore the local, cultural and historical contexts of the people to which they are applied - Linked to ecological critiques, ecofeminism, rights of indigenous communities - Critical stance toward globalization, seeking to defend the local against the global: social movements - Important people - **Arturo Escobar** (Colombian) - **Wolfgang Sachs** (German) ### Degrowth Theory (Décroissance) - Emphasizes changing priorities of society away from economic growth - Wants to reshape society by lowering consumption and prioritizing after the environment, local communities and redistribution of wealth on social services; and maximizing happiness, promoting co-operation and well-being. - Even seek lower economic growth and measure the success of an economy through other factors related to wellbeing - Proposals: - Reduce global consumption and production by switching to a less materialistic approach to life. - Advocate a socially just and ecologically sustainable society by growing own food, consume locally and eat more seasonal and organic food - Promote the transition from an individualist to a convivial and participatory society. - Replace GDP as the indicator of prosperity - Important people: **Serge Latouche** (French economist) - Opposes infinite economic growth - Altruism should replace selfishness, the pleasure of leisure to the obsession with work, the importance of social life to consumption. - GNI per capita (measured in dollars and adjusting each currency to the real purchasing power of each country) - GDP: measures production of a country - Important for the exam: Bandung Conference, Humanitarian aid, Amartya Sen