Transcript POSC 2200 - Introduction

POSC 2200 – International
Political Economy
Russell Alan Williams
Department of Political Science
Unit Seven: International Political
Economy
"Development"
Required Reading:


Mingst, Chapter 9.
Scott, The Great Divide in the Global Village,
Mingst and Snyder, pp. 421-430.
Outline:
1.
2.
3.
The “Development Gap”
Obstacles to Development
Alternatives/Solutions?
1) The “Development Gap”:

Major challenge in IPE?

Most states “developing countries” (“LDC’s”)


However, little development occurring (!)
Key concern because:

Interconnection of globalisation

Power of developing countries in IGO’s

Morality – belief there is a “right to
development”
“Development” associated with:

Increases in:
 Capital accumulation/savings
 Per capita incomes
 Skills and technology
Also:
 Falling birthrates
 Political and institutional reforms
And perhaps also,
 More even distribution of wealth
 Radical perspectives and World Bank
Key measures?
 GDP growth rates
 Inequality
Measures – Growth Rate:

World average = approx + 3% per year
 Less then this is not “development”?

Evidence?
 1970-2000 – Majority of LDC’s less then 3%
 Exceptions?
 East Asian “NIC’s” – “Four Tigers”:
South Korea, Taiwan, Hong Kong and
Singapore
 Since 2000 a significant portion of LDC’s
greater then 3%
 E.g. China = more then 10% a year
However . . . . South still falling further behind
(?)

Measures - Income Inequality:
Dark Blue = 4 X average income
Dark Red = ¼ X average income
Measures – Income Inequality:
“Gap Minder”

Trends?
Average incomes going up . . . ?
 However, gap between richest and poorest
segments of global population have gotten
wider over last 30 years


Implications for “Development”?
 Political instability
 Economic problems cause political
problems?
 “Human security”?
 Struggle to meet basic human needs
 Approx 10 million children die per year
from malnutrition
2) Obstacles to Development:
i) Legacy of colonialism: Sovereignty has not
resolved problems caused by imperialism

Political legacies:
a) Displaced existing state/cultural structures

Post Colonial states very artificial
b) Ethnic divisions

Economic Legacies:
a) Colonies’ economies restructured to meet
imperial needs
E.g. Substance farming to cash crops
 Post-colonial economy:
 Resource-export dependent (“monoexporters”)
 Importers of basic foods
 Urbanization and unemployment
 Need for land reform?
b) Ineffective transportation links when colonies
became independent
Requires statist/mercantilist development policies?
ii) Structures of global capitalism: Radical
perspective – form of neocolonialism has
replaced colonialism

MNC’s dominate global economy:


Systematic exploitation of southern poor
 Cheap labour etc.
Problem of “Technology Transfer”
 Northern MNC’s own technology
necessary to close “development gap”
iii) Legacy of the “debt crisis”:
“Debt Crisis”: Post 1970s balance of payments
crisis for majority of southern states
 Inability to finance trade deficits and pay
back old loans

Result - most southern states have high ongoing
debt servicing costs
 Implication: Economic surplus diverted to
debt rather then local investment
 Net “de investment” since 1970s

Required IMF/World Bank “help”
“Structural Adjustment Programs”: IMF
managed policy requirements for southern
states in debt crisis
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Stipulations:



Economic liberalism – no “mercantilist”
development strategies!
Cutbacks in government spending
 E.g. “subsidies”
Thought to have “failed” in many countries –
reduced standards of living
iv) Failure of Economic Liberalism
“Washington Consensus”: Consensus that economic
liberalism was correct development policy
E.g. Lower tariffs
Privatization
Liberalization
No resource cartels – e.g. “OPEC”


Closely associated with “Structural Adjustment
Policies”
 “One size fits all strategy”
Consensus corresponds with period of poor
performance (1980s to 1990s)
3) Alternatives/Solutions?

Two “post-Washington Consensus”
approaches to development
a) Emphasis on “Sustainable Development”:
Approach which emphasizes need to keep
economic development in line with “ecological
limits”

Belief that this would address some problems of
previous development strategies

E.g. Less emphasis on agricultural
commodities that lead to local shortages of
food
b) Emphasis on institutional development

Need for “strong states” undermined by
economic liberalism

E.g. Bruce Scott
Example: Bruce Scott - “The Great
Divide in the Global Village”


Assumes development failing – gap growing
wider
 Northern states unfair
 Protectionism in agriculture
 Washington consensus hypocritical
Argues development best supported by
“strong states”


Need institutional development
Need international IGO’s that support “state by
state” strategy
Copy success of East Asian “Tigers” in
rest of LDC’s
Problems?

Neither emphasis on ecology or “strong
states” addresses the capital ($$$) problem
of southern states . . . .

E.g. without resolution of the “debt crisis” most
states will fall further behind



“Asian Tigers” never had debt problem!
Progress of debt relief has been very slow . . . .
E.g. Current Financial Crisis . . . .
6) For Next Time . . .
Unit Eight: Transborder Issues and New
Challenges in International Politics
Required Reading:


Mingst, Chapter 10.
Held et al., Globalization, Mingst and
Snyder, pp. 462-471.