Development theory

Development theory is a collection of theories about how desirable change in society is best achieved. Such theories draw on a variety of social science disciplines and approaches. In this article, multiple theories are discussed, as are recent developments with regard to these theories. Depending on which theory that is being looked at, there are different explanations to the process of development and their inequalities

Modernization theory

Modernization theory is used to analyze the processes in which modernization in societies take place. The theory looks at which aspects of countries are beneficial and which constitute obstacles for economic development. The idea is that development assistance targeted at those particular aspects can lead to modernization of 'traditional' or 'backward' societies. Scientists from various research disciplines have contributed to modernization theory.

Sociological and anthropological modernization theory

The earliest principles of modernization theory can be derived from the idea of progress, which stated that people can develop and change their society themselves. Marquis de Condorcet was involved in the origins of this theory. This theory also states that technological advancements and economic changes can lead to changes in moral and cultural values. The French sociologist Émile Durkheim stressed the interdependence of institutions in a society and the way in which they interact with cultural and social unity. His work ‘The Division of Labor in Society’ was very influential. It described how social order is maintained in society and ways in which primitive societies can make the transition to more advanced societies.[1]

Other scientists who have contributed to the development of modernization theory are: David Apter, who did research on the political system and history of democracy; Seymour Martin Lipset, who argued that economic development leads to social changes which tend to lead to democracy; David McClelland, who approached modernization from the psychological side with his motivations theory; and Talcott Parsons who used his pattern variables to compare backwardness to modernity.

Linear stages of growth model

The linear stages of growth model is an economic model which is heavily inspired by the Marshall Plan which was used to revitalize Europe’s economy after World War II. It assumes that economic growth can only be achieved by industrialization. Growth can be restricted by local institutions and social attitudes, especially if these aspects influence the savings rate and investments. The constraints impeding economic growth are thus considered by this model to be internal to society.[2]

According to the linear stages of growth model, a correctly designed massive injection of capital coupled with intervention by the public sector would ultimately lead to industrialization and economic development of a developing nation.[3]

The Rostow's stages of growth model is the most well-known example of the linear stages of growth model.[3] Walt W. Rostow identified five stages through which developing countries had to pass to reach an advanced economy status: (1) Traditional society, (2) Preconditions for take-off, (3) Take-off, (4) Drive to maturity, (5) Age of high mass consumption. He argued that economic development could be led by certain strong sectors; this is in contrast to for instance Marxism which states that sectors should develop equally. According to Rostow’s model, a country needed to follow some rules of development to reach the take-off: (1) The investment rate of a country needs to be increased to at least 10% of its GDP, (2) One or two manufacturing sectors with a high rate of growth need to be established, (3) An institutional, political and social framework has to exist or be created in order to promote the expansion of those sectors.[4]

The Rostow model has serious flaws, of which the most serious are: (1) The model assumes that development can be achieved through a basic sequence of stages which are the same for all countries, a doubtful assumption; (2) The model measures development solely by means of the increase of GDP per capita; (3) The model focuses on characteristics of development, but does not identify the causal factors which lead development to occur. As such, it neglects the social structures that have to be present to foster development.[4]

Economic modernization theories such as Rostow's stages model have been heavily inspired by the Harrod-Domar model which explains in a mathematical way the growth rate of a country in terms of the savings rate and the productivity of capital.[5] Heavy state involvement has often been considered necessary for successful development in economic modernization theory; Paul Rosenstein-Rodan, Ragnar Nurkse and Kurt Mandelbaum argued that a big push model in infrastructure investment and planning was necessary for the stimulation of industrialization, and that the private sector would not be able to provide the resources for this on its own.[6] Another influential theory of modernization is the dual-sector model by Arthur Lewis. In this model Lewis explained how the traditional stagnant rural sector is gradually replaced by a growing modern and dynamic manufacturing and service economy.[7]

Because of the focus on the need for investments in capital, the Linear Stages of Growth Models are sometimes referred to as suffering from ‘capital fundamentalism’.[8]

Critics of modernization theory

Modernization theory observes traditions and pre-existing institutions of so-called "primitive" societies as obstacles to modern economic growth. Modernization which is forced from outside upon a society might induce violent and radical change, but according to modernization theorists it is generally worth this side effect. Critics point to traditional societies as being destroyed and slipping away to a modern form of poverty without ever gaining the promised advantages of modernization.