Less-Developed and Newly Industrializing Countries

Less-Developed andNewly Industrializing Countries

The Three World’s

• 1st World: advance democracies• 2nd World: Communist and post-

communist countries• Leave out many countries in the world

– Latin America, Asia, Africa

• 3rd World: – Group together a diverse range of people and

political systems according to what they were not, rather than what they were

• Advanced Democracies:– Early capitalist development – Post modern system

• Communist– Rapid modernization – Industrialization directed by the state

• Less developed – Mixture of pre-modern and modern institutions– Hybrid of economic, societal, and political institutions – Foreign and indigenous

The Three World’s

• Distinguish between less-developed and newly industrialized countries

• What challenges and obstacles these countries have faced after gaining independence?

• What policies might help generate greater democracy, political stability, and economic prosperity in these countries?

• Out of these dilemmas can emerge new ideas and innovations with the potential for positive change

The Three World’s

Freedom and Equality in the Newly Industrializing and Less-developed Countries

• Third World divided into two groups:– Newly industrialized (NIC):

• Experienced dramatic rates of economic growth • Democratization

– Political stability – Social stability

• Example: South Korea– Post Korean war– 50 years = world’s largest economies – Slowly develop democratic institutions– Stable and democratizing political institutions– Expanding a web of nongovernmental institutions– Growing Economy

• Third World: divided into two groups– Less-developed countries (LDC’s)

• Economic and political structures remain weak• Marked by economic stagnation or decline• some sliding into

– Poverty– Violence– Civil conflict

• Example Ghana



• Common tread (LDC + NIC)– Weakness of freedom and equality– NIC: democracy and economic development

• Remain shaky and incomplete• Still be undermined• Gaps between the rich and the poor• Politics have become polarized

– LDC• Economic and political power rest in the hands of a few

– Reasons: Imperialism and Colonialism

Imperialism and Colonialism

• Past Millennium Europe, Middle East, and Asia embarked on a series of dramatic social, economic, and political changes that formed the outlines of what are now recognized as the hallmarks of modern society:– Ethnic and national identity– Technological innovation– Political centralization


• Empires: as single political authorities that have under their sovereignty a large number of external regions or territories and different peoples– Idea that lands and peoples that are not seen

as an integral part of the country itself are nonetheless under its direct control

• Imperialism: system whereby a state extends its power in order to directly control territory, resources, and people beyond its borders– Propagated by European powers from the 16th

and 21st centuries – Driven by economic, strategic, and religious

motives– Often led to colonialism


• Colonialism: indicates a greater degree the physical occupation of a foreign territory through military force, businesses, or settlers – Central goal of imperialism – A means to consolidate one’s empire


• Dated from the 1500’s– Technology developed in Europe, the Middle

East, and Asia• Advance seafaring and military technology

– China• Turned away from this past• Consolidated power • Grew conservative and inflexible • Maintain status quo….striking out to acquire new

lands


• Europeans:– Americas– Saw Imperialism as a means of expansion

• Resources, markets, subjects, and territory in order to gain the upper hand

• Chinese– Retreating from overseas voyages

• Middle East– Ottoman Empire

• Asia, North Africa, parts of Europe• Turned inward and lost interest and in expanding power


• Europeans begin expansion– 16th century

• Europe embarks on imperialism – Economic and strategic motives– Spread of Christianity and western culture– Last 5 centuries

– 17th century• British, French = North America

– 18th century• Europeans exert control

– 19th and 20th centuries• Expanded rapidly in Asia• Africa divided by European states

– Possessed • Well-organized political system• Military structures• Technological advances• Economic resources


Institutions of Imperialism:Exporting the State

• Consolidating powers over– Forms of political organization– Eliminating rivals– Clearly delineating their boarders– Establishing sovereignty

• Europeans new territories were incorporated into the state structure– Carved up by rival states for economic

resources and strategic advantages

• Boarders were a reflection of – Own power over geographic, religious, or linguistic realities (i.e.

Africa)– Imposed boundaries would become demarcations for

independent countries• Established state power and authority

– Bureaucratic structures similar to home• police• Taxes• Legal systems• Public goods: roads, schools, and hospitals

– “civilize” the modern world• People under colonial rule were considered to be

subjects, not citizen– Had few political rights

Institutions of Imperialism:Exporting the state

• Increased education • Benefited from infrastructure

– Improved communication and transportation• Life expectancies rose/infant mortality rates decline

– Population explosion (still continues today)• Traditional institutions (religion and custom) were

eroded • Process was incomplete/uneven • Imperial territories

– Economically and politically underdeveloped – Conflict over identity– Flamed anti-imperialism views – Desired freedom and control

Institutions of Imperialism;Exporting the State

• Unknown prior to imperialism– Identified themselves by tribe, religion,

economic position, or vocation – Imperial elites identify themselves by ethnicity

and nation – Took great interest in identifying and

classifying different ethnic groups (examples?)

– Structuring their political and economic control

Institutions of Imperialism: Ethnicity, Nationalism, and Gender

• Basic rights became tied to an ethnic group– Some cases tied to early-modern notions of race– Certain ethnic groups were superior

• Promoted to positions of power• Economic advantages

– Colonizing race was superior to the colonized– Migrants:

• Further shaped ethnic divisions• Awarded special economic and political privileges

– Inequality and ethnicity became interconnected


• National identity:– 19th and 20th century- powerful force in the

industrializing world– Unfamiliar with national identity

• Little notion of a sovereign state

– Viewed people as inferior subjects– Limited ability to improve their standing within

the empire– Imperial idea of nationalism provided people

with the very means to challenge foreign rule


• National Identity– Nationalism meant: right for a people to live

under their own sovereign state, did this nor mean the subjects people had a right to rule themselves

– Empires provided the ideological ammunition that subjects would use to overturn imperialism


• Gender– Roles differed greatly – Brought benefits to women

• Increasing their freedom and equality• Improved access to health care and education• Reverse occurred in some areas• Example Nigeria

– Pre-colonial: Ibo women wielded great power

– Imperialism brought more rigid and hierarchical roles

– Economic status marginalized women

– Progress came at a price


• First important change– Replacement of traditional agriculture – Driven by the needs of the industrializing

capitalist home country– Subsistence farming/barter = cash economies

Institutions of Imperialism: Dependent Development

• Cash based economy – Transformed economic production – Mercantilist political-economic system:

• Extracted revenue from their colonies• Used territories and people as a captive market for

finished goods from the “home country”

– Free trade did not exist for colonies


• Colonial production was organized to provide good to “home country”– Rebuilt around primary products

• Cotton• Cocoa• Coffee• Tea• Wood• Rubber• Other valuable commodities


• Large businesses – Established these extractive-economies– Dominated by a single monopoly – Example: Indonesia, United East India

Company, Dutch firm• Spice exports• Finished goods from Europe • Destroyed indigenous trade groups

– Lead to the creation of large plantations• Rubber, coffee, or tobacco


• Economic organization – Impeded domestic development– Infrastructure developed to facilitate effective

extraction and export• Rather than to improve communication or movement of the

people • Jobs were created • Local entrepreneurialism and industrialization were limited

– Agriculture • Damaged ability of people to feed themselves• Small farmers run out of business


• Economic institutions

– Traditional agricultural economies were transformed to suit the needs of the imperialist power

– Free trade was often suppressed as colonies were forced to supply goods only to the imperial country, creating extractive economies in the colonies

– Economic organization under imperialism impeded domestic development in the colonies


• Modern states– Expanded power around the globe– Established new political, economic, and

social institutions• Reflection of “home country”; consolidation of

imperial rule

– Mixture of indigenous and foreign structure/pre-modern and modern

– Political institutions/new societies • Citizenship and participation were restricted


• Economic development encouraged– Form that would benefit home country

• Generated new identities and conflict– By classifying people – Between ruler and ruled – Between people themselves

• Contradictions – Inequality and limitation on freedom – Assimilated to modern ideas and values– Helped foster public resistance to imperialism – Paved the way for independence


Challenges of Post-Imperialism

• Latin America : “freed” most of the region by 1826

• Africa: decolonization came after WWII• Elimination of Imperialism

– Did not solve the problems NIC and LDC• Continue to Struggle

– Political– Social – Economic challenges to development and stability– Freedom and equality

• Problems are from legacy rule.

• Difficulty and creating new political institutions• State power: distinguishing between state

capacity and state autonomy– Capacity: ability of a state to achieve basic policy

task– Autonomy: ability of a stat to act independently of the

public

• Both are needed to carry out policy– Both have been difficult to achieve

Challenges of Post-Imperialism:Building State Capacity and Autonomy

• Capacity– States are unable to perform many basic task

expected by the public• Creating infrastructure • Providing education • Health

– Traced to the absence of a professional bureaucracy to run the government

– Exacerbated by the politicization of the state • Bureaucracy: source for jobs, resources, and benefits • Doled out by political leaders as a way to solidify control• Provide goods and benefits to public in return for political

support


• Patrimonialism: the state is packed with officials whose only qualification is their support for those in power– Main goal is to siphon resources from the

state for their own enrichment


• Autonomy – Able to function without consulting the population

• Repress and terrorize the population as they see fit • Limited

– See the state as a resource to be exploited rather than a tool for achieving policy

– Results: corruption or “kleptocracy”• Government by theft• IE: Nigeria

– During military rule in the 1990’s officials stole more than $1billion from the state treasury

• Not all LCD and NID are corrupt– Singapore, Chile, Botswana (rank among least corrupt countries in the

world) US is ranked fourth

– Corruption index, 2000 chart (handout)



• Societies were not homogeneous – Diversity became problematic – Migration complicated things further– After independence problems became

apparent

Challenges of Post-Imperialism:Forging Social Identities

• 1st: economic implications– Ethnic groups favored under colonialism continue to monopolize

the wealth – i.e. Malaysia and Indonesia:

• Ethnic Chinese continue to hold a disproportionate share of national wealth

• Generated resentment among non-Chinese – i.e. Kenya, Uganda, and Fiji

• Indian population, brought by British, came to control a large portion of the business sector.

– Results: violence• Appears to be ethnic • Truly economic

– Civil Conflict in LCD’s and NIC’s • Driven by economic concerns• Religious differences


• 2nd: ethnic and religious divisions– Populations are heterogeneous

• Power falls along ethnic and religious lines• Each seeking to gain control

– Competes for share of public goods and other benefits for the state

– Fosters authoritarian rule • A groups that gains control over the state may be unwilling to

relinquish or share it– No one group can be confident that it could dominate politics

through democratic process

• One group “in charge” the others frozen out of the political process


• Angolan state– Dominated by the Ovimbundu people

• From the north country• Make up 37% of the population

– Opposition is Kimbundu people• From the south country• 25% of the population

– Results: civil war • Devastated country since 1975

• Iraq – Maj. Of pop. Is Shia sect of Islam– Ruling party Ba’ath Party dominated by the Sunni

members


• Creation of a single national identity– Divisions create problems– Less inclined to see the postcolonial states as

a true representation of the group– Little beyond the struggle for independence– Goal may become

• Secessionism: disaffected groups seek to create their own autonomous or wholly independent territories


• Gender (social issues)– Reinforced roles imposed by colonial rule with

rapid urbanization and the commercialization of agriculture

• Favors male labor and property rights

– View males as a valuable addition to families • Limits women’s access to important resources

– Education, economic advancement

• Leads to female infanticide – India approx. 10,000 baby girls are killed each year– China, Taiwan, South Korea


• Sexist institutions are a result of imperialism– Also brought many liberal notions of female

autonomy• Reconcile with more traditional cultural values• Rise of Islamic Fundamentalist in many countries

– Supported by females: feminism is another example of foreign values

– Threatens to deny them their basic freedoms » Education, careers, and individual autonomy


• Explain differences between LCD’s and NIC’s – Development = ethnic lines– Uneven development, lack of mobility, and

opportunity across ethnic lines– Unequal relationships between women and

men


• B/C Imperialism – Rapid changes by colonial powers– Geared to suit European needs – Provide specific goods

• Results – Continued state of economic dependency– Language, infrastructure, and production favor continued

relationships – Not good for long tern development

• Production of agriculture and basic goods/return finished goods– Does not require highly skilled workers– Does not promise large profits

• More unstable– Subjected to factors: weather, global market

– I.e.: western US and saturated fats consumption • SEA and imperial rule tropical oils • Neocolonialism: unequal relationship, indirect form of imperialism

Challenges of Post-Imperialism:

Generating Economic Growth

• Breaking cycle of dependent development– Greatest concern

• Industrial democracies dominated domestic and global markets (size, technical sophistication)

• Could poorer countries compete?

– i.e. : Soviet Union and China• Rapid industrialization: find a different path built

on their own conditions

Challenges of Post-Imperialism:Generating Economic Growth

• Two distinct economic policies – Import substitutions: based on idea that

because the poorer countries cannot compete with advance industrialized democracies: state needs to create more positive conditions for the development of local industry

– Export-oriented industrialization: seeks to directly integrate into the global economy by concentrating on economic production that can find a niche in international markets



• Import substitution– LDC’s restrict imports

• Make them more expensive• Demands for local goods go up• New businesses fill the demand (could be built by

state funds)• Once fulfilled local demands; developed

productivity capacity to compete domestically and internationally

• Trade barriers can be lifted



• Import substitution – Tariff or non tariff barriers were est. to raise price of

foreign goods– Reduced restrictions on patents and intellectual-

property rights– Allows local businesses to copy foreign made goods

(i.e. pharmaceutical products)– Industrialization: developed partially or full-state-

owned businesses (steel and chemical)– Not a liberal strategy– States had to play a string role in directing their

economies– Led towards independence from the dominate power



• Import substitution – Success?– Did not produce the benefits – Set back economic developments– “hothouse economy”:

• Domestic producers (subsidized by state) • Initially lead to economic growth : cold blast of outside competition

were kept “at bay” • Dominate local market/lacking competition

– Less innovative and efficient than international competitors– Draw money from state than generate money

– Created large industries dependent on the state• Making losses rather than profits • Became a drain



• Export-oriented industrialization– Not liberal economic policy– Strong role for the state promoting domestic growth– Used tariff barriers to protect industries in their initial stage– Sought technologies and developed industries export capitalizing

• “production life cycle” – Describes the way in which goods and technologies are diffused in international

markets– Innovator of a good produces it for the domestic market and exports it to the rest

of the world– Other countries finds ways to make the good cheaply– Export own version back to the country that originated it – Originator of the product has moved on to something new

– Seek to capitalize on the “production of life cycle”• i.e. South Korea: focused on basic technologies (textiles and shoes)

– Automobiles



• Structural adjustment programs– Privatizing of state-run firms, ending subsidies,

reducing tariff barriers, shrinking the size of the state, and welcoming foreign investment

– Open the economy and shrink the state• Generate faster and more consistent growth

• Although LDC’s have adopted these liberal economic systems – Past decade they have not reaped great benefits in

terms of economic growth– Permutation of neocolonial policies

• Misapplied in countries

Challenges of Post-Imperialism:Generating Economic Growth

Prospect for Democracy and Development

• Is there a period of “great opportunity” on the horizon?

• Will anarchy take over these weak countries?• Is freedom and equality impossible?• Will these actions spread across countries?

Democratic countries?• How do the events of September 11, 2001 affect

the world?

• Shapes both Freedom and Equality

• International organizations/LDC and NIC – Did not pay attention to the state

• Caused: corruption, wastefulness, mismanagement

• Risky environments for entrepreneurialism, fostered kleptocratic policies, political instability, weak states

• Private sector and organizations promoted public good were ignored/squeezed out

Prospect for Democracy and Development:

Building State Capacity

• Rolling back state power?

• New economic systems= increase corruption– Political elite v. poor

• Rule of law (basic function)– Requires a state that can generate and

enforce institutions – How does one make “good government?”



• Solutions:– Clientelism/rent-seeking = meritocracy

• Develop entrance exams for employment• Tenure system: insulates govt. admin from begin

fired for political reasons

– Limited by inefficiency = decentralization of state bureaucracies/devolutionary policies

• Increase democratization within govt. admin. • Increasing oversight/participation of citizens

Prospect for Democracy and

Development: Building State Capacity

• Solutions/reforms:– Each have own difficulties and possible

problems– Help achieve structural change

• 1st step towards economic and political development

– “Politics and economies cannot be played effectively if the rules are not clear and clearly enforced”



• Development of Civil Society/ Role of the Public– Organizations outside the state that help

people define and advance their own interest – Activism/organization

• Against the expansion of state power that might threaten democracy

• Instills democratic politics based on – interaction, negotiation, consensus, and compromise

– LCD’s and NIC’s = weak


Supporting Civil Society

• Civil Society Weak:– Divided by ethnic, religious, economic, or social

boundaries– Public activity viewed as an equally important

component

• 1st step– Civic education

• Learn their democratic rights to shape government policy

– Organizational skills • Public is able to mobilize effectively • Make voices heard

Prospect for Democracy and

Development: Supporting Civil Society

• Nongovernmental Organizations (NGO”S)– National and international groups– Independent of the state– Pursue policy objectives– Foster public participation – I.E. Doctors without Boarders, Amnesty international – Created by advance democracies– Local organizations staffed by poorer countries themselves– Women play a primary role in stating and running groups– Enable underrepresented segments of society to organize and

expand their rights.



• NGO’s – Powerful role in LCD’s and NIC’s– Tackle issues

• Human rights• Environment• Gender • Health• Minority rights• Poverty

– Supported by foreign aid



• NGO’s– Spread is a sign of a global civil society– Functions beyond the limits of any one state– Neocolonialism by western NGO’s

• Bring agendas of social, political, and economic change

– Blurring of domestic and international relations



• Lack of economic development and pressing problems of poverty

• State driven policies– Further debt– Economic stagnation

• Promote liberal economic strategies– Open market– Rolling back state power – Results

• Stimulate trade, entrepreneurialism, and growth

– Fears:• World market would benefit by source of cheap labor,

perpetuate dependent status


Promoting Economic Prosperity

• Need to concentrate on the people– Provide policies that empower individuals

economically– Informal economy

• Not taxed or regulated by state• Self employed• Small enterprises (street vendors)• 60% of country’s GDP (hard to measure)• Women play a large role

– 90% work in the informal economy



• Limitations of Informal economy– Does not generate tax revenues

• Used for infrastructure and social welfare

– Not Subject to labor laws – Not subject to state employment benefits– Small and suffers from financial problems

• Lack of capital needed to expand



• Microcredit:– System that involves not an individual lender and

borrower, but borrowing groups made up of several individuals

• Groups serve as support and collateral• Combination of business and society

– Results:• Alleviate poverty• Decrease economic vulnerability by building personal assets• Assist in increasing women’s public participation and

independence• International aid has been channeled toward microcredit



Documents

Less-Developed and Newly Industrializing Countries