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Lecture 5

CLASSICS 1M03 Lecture 5: Political Science 1AB3 2017 Lecture 3b overhead development/ Todd Alway

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Claude Eilers

Political Science 1AB3 2017 Lecture 3b Development and Underdevelopment - According to Dependency Theory, underdeveloped states are underdeveloped because of the structure of the world economy - The cause of underdevelopment is the international system, not internal domestic factors - Global capitalism creates the conditions for development and underdevelopment simultaneously - In fact, the economic development of European states only occurred because of the economic underdevelopment of non-European states - Historical example of the Atlantic Triangle in the 16 -19 century - The question is, just how pervasive is the underdevelopment mechanism in history - Does the Atlantic triangle of the 16 century repeat itself in subsequent centuries? - According to Dependency theorists like Andre Gunder Frank, exploitation continues, even while the items being traded may change - So what is the Solution from this standpoint? - Underdeveloped states must break the connection to the world capitalist system if they want to develop - Internal development policy in an era of independence - A variety of approaches were used by newly independent states as they emerged from colonial rule - 1. Import Substitution Industrialization - The premise: A state should manufacture goods domestically, rather than importing them from abroad - To do this, the state must create barriers against imports o In effect, it must isolate itself from international markets - First Stage ISI worked well - Second Stage ISI ran into problems - Imports of expensive capital equipment was required 1 - States suffered Balance of Payments problems and high levels of foreign debt - The lesson drawn from this episode of development policy by the mainstream development community o Was that isolating a state from the international economy does not appear to be a successful long-term strategy for development - 2. Export-Oriented Industrialization - Some states made the decision to emulate the Japanese example and focus on EXPORT industries rather than focusing on replacing imports - The key to economic development was to insert the state into international markets - on favourable terms o To rely upon the co
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