Import substitution industrialization (ISI)
A strategy of individual development based on manufacturing goods domestically
that was previously imported.
- Politically popular (job creation, consumer subsidies)
- Improvements in social and economic indicators
- Form of economic independence/self-sufficiency
- Established a manufacturing base
- Sectorial disparities
- Inefficient productions – not able to compete without protection
- Disappointing industrial employment results
- Small domestic markets limited growth
- Heavily dependent on loans
LA and Africa. Longer ISI resulted in more economic crisis
Export Oriented Industrialization (EOI)
An industrialization strategy that is heavily tied to exporting manufactured goods.
- By diversifying their economics into manufacturing for export, as well as for
domestic consumption, many of the East Asian economies managed to avoid
the economic pitfalls faced by LA and Africa.
East Asian Miracle
The economics take off of South Korea, Taiwan, hongkong, and Singapore in 1980s
When much of the Global South went into economic declines.
Unlike LA and Africa debt crisis and struggles East Asia has grown phenomenally
Reasons for success
- Developmental state or strong state intervention or statecraft
- Relative income equality (larger domestic markets)
- High educational level (technically skilled workforce)
- Successful agrarian reform (agricultural surplus used for industrialization
- Switched to EOI (more capital for investment, didn’t have to borrow)
- Semi or soft authoritarian (contained conflict)
- Skilled bureaucracy (worked with big business in their countries)
- Relatively work civil society (unchallenged by labor/peasant groups)
- Confucian culture (Hard work, honesty, cooperation, social harmony)
The Developmental State 1
A state that intervenes actively in the economy in order to guide or promote
particular development goals, such as growth and equity
- East Asian countries have grown through the free market, but also with a
significant state role. Ex) Japan, Singapore, Taiwan. - Similar to neoliberal or free-market of economic competition to secure
growth. Private entrepreneurs are primarily responsible for promoting
economics activities. Unlike free-market capitalism, the developmental state
rejects the idea of the invisible hand as the regulator of the marketplace and
gives the government a central role in economic development
- Government decides national priorities and assists industry (individuals
driven by self interest not trustworthy to do this)
- Economics growth and equity are viewed as essential for development:
investment in education, health, housing, infrastructure and agriculture.
(Industrialization should not mean neglecting age or rural sector)
- For more extensive and direct government economic intervention than in the
West, targeting either whole economic sectors (such as agriculture particular
companies. In all of the East Asian tigers, the state played an important role,
guiding the private sector toward targeted economic activities and
stimulating growth in areas that the government wished to expand.
- Labor-intensive, low skill manufacturing, -> capital intensive, highly skilled
- A capitalist economic system that involves excessive state intervention in
- While much of the economic activity remains in the hands of the private
sector, statist governments tend to nationalize strategically important
enterprises, such as railroads, airlines, petroleum industries power plants
and telephone companies and to invest in or protect industries that fail to
attract sufficient private capital
Nationalization: government takeover of privately owned industries
Protectionism state policies to protect infant industries from international
competition through tax breaks, retraction on import.
- State-owned enterprises are often poorly run and overstaffed. First many
state owned enterprise are frequently overstaffed an poorly run results in
inefficient, expensive operation, as well as political pressure to sell at a low
price = low money.
- Encourage inefficiency in private sector through protectionist policies
protection (e.g., tax breaks, tariffs on imports, import quotes) are commonly
used globally, but need to be scaled back as infant industries grow so that
firms have incentives to become more productive and internationally
competitive. In LA and Africa, protectionism was maintained.
- Combination of money losing state-owned industries and private sector
subsidies bankrupted much Third World government and put them in a
downward economic spiral. Sustainable Development
Development that meets the needs of the present generation, without
compromising the ability of future generation to meet their own needs. World
commission on Environment and Development
- Focuses on how to sustain a broad process of positive change called
- Employs the idea of “meting needs” to emphasize the legitimate claims of the
- Invokes the idea of environmental limits as a potentially serious obstacle to
continued social advancement.
- Dominant discourse in development it suggests that it is not a question of a
choice between environmental protection and social advancement but rather
a problem of selecting patterns of economic and social development that are
compatible with sound environmental practices.
- Anthropocentrism- human welfare focused, should focus more on
sustainability of the natural environment
- Sustainable development as a crude attempt to impose a Northern
environmental agenda on the South
- Mainstream view: Sustainable Development can be promoted by better
resource management and by using market mechanisms.
- Alternative/Human Rights view: Sustainable development can be achieved
through, local participatory process of environmental management (self-
reliance, small scale)
- Radical view – the pressure exerted on the environment already exceeds
global ecological carrying capacity, thus dramatic action is need most.
Poverty and the Environment
Debate: impact of Third World Economic Development and Industrialization
- Industrialization and economic growth main environmental concerns
- Increase in pollution will cause climate change catastrophe.
- Whole world cannot live the way the North does (ecological limits of the
planet) concern in China Development
- Counter – need to speed up development to get countries through the higher
pollution stages of economic development (primary and secondary sector),
as economic development leads to knowledge-intensive industries –
- Debate: Poverty = Survival by any means, including environmental
- Lack of industrialization and poverty main environmental concerns
- Broad- poverty is commonly believed to drive the poor to seek survival
through any means possible, including those that degrade the very resources
they depend on e.g. cutting down every last tree in the forest. Thus, poor people are seen both as victims and as agents of environmental degradation.
However, Broad’s research on the Philippines shows the poor as
environmental protector’s when: a) environmental degradation threatens the
natural resource bass off of which the poor live; b) poor people have ties to
the land and a sense of permanence; c) civil society is organized and
- Socio-economic and political relations reasons (why the poor are poor?)
provide better explanations of the abuse of natural resources (e.g. George-
Debt/ Environment connections: 1) borrowing to finance large –scale
ecologically destructive projects (e.g. hydroelectric dams); 2) repaying loans
by selling off natural assets (e.g. intensifying cash cropping for expert)
- It is not their poverty, per se, that is counting local people in the Global South,
which degrade the environment but, global political and economic forces that
arise behind their actions.
Debate: Over-Population or Over-Consumption as Key environment and
- Over-population: “People vs. Resources” perspective (carrying
capacity of Earth estimated between 7.7 and 12 billion people.
- Malthus – people reproduce geometrically, food grows arithmetically
Population growth key cause of poverty and suffering – disaster.
- Neo-Malthusian – population the cause of problems, but human
intervention can limit population growth
- Social development view: rapid population growth is not the cause
of socio economic and environmental problems but rather a
symptom. Development tends to result in lower fertility rates.
Over- Consumption: inequitable distribution of resources perspective. Its
not poverty, but affluence, that is the real problem, per capita emissions
higher in developed world.
Seeks to include the various stakeholders in the proposing, planning,
implementation and monitoring of development projects.
- NGOs have been key players in alternative or participatory
approaches to development in the south. - Failure of mainstream development models = search for alternatives
- Answer an increasing the capacity of the poor to meet their own
needs (building an own capabilities and experience)
- Failure of conventional development because of lack of real
dialogue between beneficiaries and the program implementers.
- Needs-oriented: in terms of meeting both material and non-material
human needs (e.g., self-esteem, confidence; skills and assets)
- Endogenous: each society defines its own priorities and visions of
development (as opposed to exogenous) No universal path to
- Self reliant, each society depends primarily on its own human as
well as natural resources
- From the Bottom Up: enabling people to articulate and achieve their
goals rather, than simply providing them with aid
- Ecologically sustainable, purses development with a full awareness
of ecosystem carrying capacity and the limits to growth.
NGOs and development
- Potential Roles of NGOs in Development
- Emergency assistance and relief: stopgap measure (service provider)
- Institution-building strengthening the poor’s capacity to make
demands for themselves (facilitator of development)
- NGOs view themselves as enables of the poor, empowering them to
achieve own goals through development but are frequently service
providers without the transition to autonomy, also bad reputation as
arrogantly telling the poor how to do things or doing things for them.
Strength of NGOs
- Political autonomy
- Strong grassroots links
- Participatory methodologies and tools
- Ability to innovate and adopt
- Cost effectiveness
Weakness of NGOs
- Dependence on foreign funding
- Small-scale interventions
- Community dependence
- Problem of accountability - Inadequate evaluation
Debate- NGOs-progressive force for change or tool of neoliberalism?
NGOs fill role of social service previously taken an by state, NGOs
forwarding, market-led options
Additional relevant concepts
- NGOs and the state
- NGOs and the Market
- How to address funding shortness?
- Social enterprise
- In 1982, Mexico announced it would not be able to make the
interest payments on its foreign debt causing international banks
to place a moratorium on new landing to the Global South and to
recall existing loans.
- Situations worsened, by 1983, 27 countries had rescheduled
$239 Billion of debt or were doing so.