SHELAGH JOSEPH POLB90 LECTURE NOTES Page 1 of 17
Tuesday, October 22, 2013
Pre-colonial Societies and the Impact of Colonization
Post-colonial thinkers alert us that the expansion of Europe had profound impact on the attitudes of the
Modernization perspective operated from the premise that simple derivatives making transition.
o What happened? Why very developed cities were ‘behind’?
Trading Empires with Complex Administrative Structures
o From 1083 AD, trade between Africa and China
Silver and gold through Mozambique
African trade with India and Arabia
o In order to become a trading empire, you have to have a complex administrative structure. Keep
order of exports, organize merchants, and regulate trade.
India [dynamic and textile industry]
China [had gun powder and printing press]
Societies with Significant Technological Advances
The Meroes Empire
o 8 Century BC
Engaged in iron work
23 character alphabet
Nok Empire (northern Nigeria, 4 and 5 centuries
Mali Empire, Africa, 12 and 13 centuries
o Theory that the Mali Empire was able to sell to America.
o Found images of black people in Central America.
Maya, Central America, 11 century
o Had calendar more advanced than the American calendar.
o Had written language
India (exporter of textiles)
Sophisticated agricultural systems: India, China, Peru (Inca)
o Can’t move on until able to produce agricultural surplus
Features of Some Pre-Colonial Societies
Complex administrative structures
o Maintenance required extensive administrative work
Skill and competence counted
o It was where you were born and what social group you were born into.
o Particularly in pre-colonial societies, competence and skill were taken into account.
Provision of basic needs
o Some of them were very good at providing basic needs to people
o Stem from concept that disappeared with colonial rules – sharing obligation
o No concept of private property (can often interfere with distribution of basic needs and living
standards of lower part of the system) SHELAGH JOSEPH POLB90 LECTURE NOTES Page 2 of 17
o Cannot sell or throw lower cast off the land. Moral obligation to ensure the lower cast.
o Peru (Inca): land was given to family in accordance to their needs and their ability to
o Political control and acquisition of resources of conquered societies
1400: European Expansion begins
Rise of trade, decline of feudal Europe.
Emergence of artisanal industries (particularly in textiles)
Began to expand
o Food (soil began to deplete)
o Trade routes
o Bullion (gold, silver)
Expansion of Europe
1400-1500 – Portugal – North and Northeast Africa
o 1480s Portugal took over Indian Motion Trade.
o Establish direct trading relations with India
o Cohesion required, civilization East of Africa began to decline
o Portugal increased taxes.
o Trade declines in region due to all the fighting and warfare.
o Involved in the Americas (Brazil). Competed with Spain to control America
1500-1600 – Spain – the Americas
o Facilitate by
diseases (Americans were not resistant to European diseases)
weapons (steel and horses)
Motivations wealth, religious conversion
Consequences of the Conquest of the Americas
Destruction of pre-colonial civilizations
Drastic drop in population
o Encounter of Spanish and Portuguese.
Emergences of mixed-blood population (mestizo)
o Consequence of intermingling of Spanish conquest and indigenous population
o Majority of the country are mestizo.
Complete economic re-organization
o Mass amount of gold and silver for the European market.
o Organize labour to extract all of this.
o Emergence of enormous land holdings
o Concentration of wealth
Conquest assumed that the conquerors had the right to extract enormous amount of
Ultimately not Spain, most were shipped to Spain created inflation, manufactured goods
pricing went up and couldn’t compete with British manufactures goods. Profits flowed
to Britain instead.
1650-1800: British Hegemony and the Slave Trade
Sugar became king. North Brazil became center of sugar production.
Every island in the Caribbean had large plantation and sugar production
Manufactures goods to Africa
Slaves to the Americas SHELAGH JOSEPH POLB90 LECTURE NOTES Page 3 of 17
Impact of Sugar Production and the Slave Trade
Sugar regions in the Americas ceased to produce food for domestic consumption
o Alters the production in these countries. Soil became depleted.
o NE Brazil, dynamic center for sugar production. Now poorest place in the world.
New plantation/slave societies emerged in the Caribbean
o Indigenous people who eventually died off.
o Emergence of societies controlled by white elites and black slaves at the bottom.
o Skin colour and degree of pigmentation associated with political power and association.
o Consequence of expansion
Slave trade devastated Africa
o Had profound implication. Meant people became commodities.
o Consequence of crime and debt.
o Slave trade produced war and destroyed economies
British and Europe supplied arms and in return, slaves were given.
o Removed large numbers of productive people.
o Rise to predominance of Africans who would collaborate with Europeans
African slaves benefitted from the slave trade.
Distancing between rulers and ruled.
1757 – 1858: British Conquest and Colonization of India
British had an extensive agricultural system produced surplus.
1757: All Indian commerce in the hands of the East India Trading Company
Marked British economic control over India
1813: Its monopoly of trade between India and Europe is abolished
But continues to rule India until 1858.
Set of advanced policies, successfully destroyed the Indian textile industry.
Economic Impact (Laws, 1768-1784)
The British government
o Required the East India Company to bring British goods (mostly textiles) to India
o Required the Company to pay a large annual sum to the British government
East India Company had to tax heavily on locals.
o Put heavy tariffs on Indian good (textiles) entering Britain
Indian textile were cheaper and better, would threaten the British textile industry
o Then banned them altogether. (banned tariffs on British goods entering India)
Building of railways, 19 century.
British textiles flooded the Indian market.
Indian market was not the only one destroyed by the British (Mexico, Argentina, etc.)
The creation of a strata of Indian Collaborators
o Tax collectors
o Allowed to take away land for not paying tax.
Agricultural production began to decline
The Social Consequences
Last quarter of 19 century: 18 famines, 16 million deaths
o 1943: Bengal famines – 3.5 million deaths
Average life expectancy dropped from 20 years in 1881 to 23 years y the 1920s
o Average life expectancy in Britain in 1920s was 55 years. SHELAGH JOSEPH POLB90 LECTURE NOTES Page 4 of 17
1880-1905: The Conquest of Africa
What drove the conquest?
o From Britain’s point of view, began to think slavery was not a good idea. Began to support
abolition of slavery, wanted markets where it could sell its manufactures goods.
o Europe wanted raw materials, wanted a secure source and markets.
Economic production reorganized Africa to meet European needs.
o Various form of direct cohesion.
o Tax heavily and forced to work in mines.
Conquest in Africa
o Involved actions and military activities of Africans.
o Slave trade: Europeans able to build strata of Africans and marshal them into cooperation to
conquer parts of Africa for various European powers.
Types of European Rule
Indirect Rule: Rule through local institutions, leaders and customary laws.
MOST effective rule.
Utilizes local leader and institutions and customary laws. Utilizes local/indigenous leaders to collect taxes,
adjudicate cases and impose punishments.
Least disturbance to the status quo.
Legitimized colonial rule. (People believed in the institution.)
o Allowed for extraction (esp. collection of taxes)
o Contributed enormously that separated leaders from the population.
Direct Rule: The imposition of European laws and institutions down to the village level.
Less apparent of who is extracting from you.
Produced much more violence
Latin America: first quarter of the 19 century
Asia and Africa: 1946-1965
o By high level of education and thinking.
o Many adopted western way of thinking. Thought of developing.
Franz Fanon (1925-1961)
Tuesday, October 29, 2013
Economic Globalization, Debt and Neoliberal reform in the Global
Franz Fanon(1925 – 1996)
Black psychiatrist from Martinique
Involved in the Algerian struggle for independence from France
o Became aware psychological and cultural impact of colonialism
What it did was inculcated the notion that everything “European” was superior
Literature had an enormous impact on European views on the Global south
Fanon argued that colonized were not only weighted down by economic notions, but the idea of cultural inferiority
of the colonized
Most of these colonies retained their ties with former colonial powers
o “Hybrid elites” – a result of western educated people and indigenous values
o Violent revolutionary struggle was necessary in removing the deep psychological impact of
colonialism would be shaken SHELAGH JOSEPH POLB90 LECTURE NOTES Page 5 of 17
The international financial system
Would have a profound impact on what Global South countries could not do in terms of development
o Mechanism of control
Private commercial banks
Various regional development banks
The World Trade Organization:
Important influence on development
o All of these are linked
The Role of the IMF and World Bank
1948 – Bretton woods
IMF: short term balance payments
Bank: Project lending
o Based in Washington
Makes it easily accessible
Developed country dominance
o The countries that are the wealthiest have more votes meaning that they have more say
o Gives the opportunity for these countries to influence policy making
1960’s supported tariffs
How and why did these institutions become such heavy advocates of neoliberal reform?
Change in the “conventional wisdom” about what constitutes good economic policy
John Maynard Keynes – advocate of state intervention in good capitalism
1970’s: the new orthodoxy
o Central role to the market
Human beings operate on in their own economic self interest
Prices should not be interfered with
o State intervention creates a miscalculation of resources
Rise in petroleum prices
Decline in US competitiveness
The international debt crises
o GS countries borrowed heavily
Decline in commodity prices
o Poverty and inequality shot up
o 1980’s – “the lost decade”
Had permanent implications
How did the new thinking become translated to policy?
o Stabilization agreements (IMF)
Reduction in global spending
To repay debt, stimulate exports.
If they didn’t agree, they could not get loans from the World Bank. Results? SHELAGH JOSEPH POLB90 LECTURE NOTES Page 6 of 17
o Rising unemployment
o No public spending
Then they notices that this policy was not working
The Washington consensus
o Sell off your companies
Deregulation of foreign investment
removal of subsidies
removal of restrictions on capital flow
o instrumental in GS
Negative social consequences
Repeated economic crisis
The Mexican peso crisis of 1995
The Asian crisis 1997
The Argentine crisis of 2001
The Role of Private Commercial Banks
1970’s: Banks pressure GS to borrow
o Due to a rise in petroleum, they had money
Needed a place to invest
They had all this capital to lend out
Country A lends out money in peso’s, the Canadian banking regulations do
not apply, no insurance , no credit checks
o Totally unregulated
Lent huge amounts of money
o Very much a part of this surge in debt
1982: refuse further lending
1982 on: private banking sector is busy lobbying US government and IFI’s
Lobbied these countries
o Had to repay their loans
o No regard for the social implications of this
o While recognition of insolvency – debt reduction
o Banks had enormous power, how did they pressure countries to repay?
Struck a committee of the most important private commercial banks
Review the policy of the GS countries and renegotiate their loans
Pushed countries to shape policy in GS that would please loaners.
The debt was not just held in the GS government
o Huge loan was on private domestic companies
o Commercial banks wanted states of developing countries to take over and pay it off
Net capital outflow
Very difficult to get a country to pursue structure (had to say they would do so, otherwise they would get
no loans) SHELAGH JOSEPH POLB90 LECTURE NOTES Page 7 of 17
Attempts at a debtor’s Cartel
Did not work- Mexico opted out and backed out
IFI`s provide incentives
Sectoral adjustment loans
But debt load was too heavy
o Finally debt relief – 1989
o Very much tied to SAP`s
Only when private banks would not suffer losses
Even though many had recognized the need much earlier
The role of policy dialogue
More important than anything else to get GS countries to reform
o Transmission of new policy culture of market reform
o Years of discussions between WB and country officials.
Wasn’t going to happen unless countries actually owned the policies
Especially country officials in finance ministries
Rise of technocrats
Facilitated by the debt crisis
The undemocratic nature of the process
Discussions were secretive
Only a small group of country officials
o Finance ministry officials
Onside with the idea of balancing the budget.
SAP’s are unpopular: use of strong arm tactics
Argentina – Presidential decrees and manipulation of trade unions
Mexico – repression of labour
When you have poor political policy in economic crisis it is the common folk or poor who suffer greatly.
Role of MNC’s
o Example: pharmaceutical companies, trade related property rights (TRIPS)
Industrialised versus GS countries
o Financial services
Decision making in the WTO
Theoretically democratic, but not in practice
o Green room meetings: draft Doha declaration
o Divide and rule tactics
o Lack of resources of LDC
Tuesday, November 5, 2013
Dealing with Social Deficit
Ways in which WTO Restricts Development Policy Choices
o Export promotion subsidies
Copying and adaptation of technology
o Too much tariff protection for too long is probably not a good thing SHELAGH JOSEPH POLB90 LECTURE NOTES Page 8 of 17
o Impossible for global south to reduce poverty and inequality through 1900s
The Concern for Poverty Reduction
Civil society organizations(CSOs)
All organizations and citizens activity that operates between the individual and the state.
o Non profit
o Service and humanitarian functions
o Provide services with the withdrawal of the state
o Many are international
o They needed to deal with poverty
Social investment funds
By 1995 these funds functioned in 32 countries / operate in over 90 countries today
o Infrastructure , social services microfinance
Started as emergency measures
o -1985 started in Bolivia, rapid trade and privatization HUGE unemployment/ increase of poverty.
First case where the WB had intercepted and made an investment.
Criticisms of Social Funds
Do not help the extremely poor
Benefits may be captured by local elites
Substitute for government services
Used for political purposes
Who determines who gets what? And when
The World Bank and Social Capital
Definition: Set of associations between people consisting of social networks and associated norms
Enters into the discussion of SIFs
Incorporates and tames the notion of societal participation in policy
o NGOs deliver services
o Supports the idea of “good governance”
Criticism of the Bank’s Notion of Social Capital
Social inequalities are largely ignored by the social capital
Ideal community in which everybody will produce equal outcomes.
Gender inequality social investment funds and social capital depended in women that engage in
deliverance of service( volunteer) women in global south countries are already overburden they don’t
have time to volunteer
Responsibility for development rests with the poor
Ignores power and politics
Conditional Cash Transfer Programs (CCTS)
30 countries with them
WB funds 13 countries
o Cash to (Female) heads of households in exchange for certain conditions
o Market will reduce moderate poverty
o Sole us of income for inclusion
o Can divide families and communities
o Ignores the quality of services SHELAGH JOSEPH POLB90 LECTURE NOTES Page 9 of 17
What is it?
Banking services that are provided to unemployed or low income individuals or groups who would
otherwise have no other means of gaining financial services
Grameen Bank, 1983 Muhammed Yunus
Who provides funding?
Regional development banks
The Struggle over Meaning
Grameen Bank Philosophy
Credit as a human right
Other supportive services
CCTS quality of schools
Social goals not just repayment rates financial independence not a goal
World Bank Philosophy and Practice in Microfinance
Establishes norms, metrics ranking…. Practices for microfinance
Consultative group to assist the poor (CGAP)
o Aim: to integrate microfinance into global financial markets
Criteria for “success”
o Repayment of loans
Tuesday, November 12, 2013
Multinational Corporations as Political Actors
Criticism of the HIPC initiative
Inappropriateness of macroeconomic criteria for eligibility
o Keep exports up
o Maintain particular public spenditure
The actual debt reduction is quite small
Only modest increases in social spending
Participation might not be substantial
o They do not get to criticize macroeconomic policy
Excludes many needy countries
Fails to address root causes
Tanzania, PRSP, 2011
Watch over the fiscal deficit
o Advocates of export drive
Create and enabling business environment
o Promote domestic and foreign investment
o Improve infrastructure
o Promote domestic and international investment in mining
o Promote export processing zones SHELAGH JOSEPH POLB90 LECTURE NOTES Page 10 of 17
Definition: enterprise which is based in one country but operates and has assets in more than one country
MNC’s have a home base
Ensure their own protection