Book review: The Bottom Billion by Paul Collier

With "The Bottom Billion – Why the poorest countries are failing and what can be done about it", Paul Collier, Professor of Economics at Oxford University has written one of the most convincing and exciting books about development I have read so far. In this book Collier provides a long overdue new way of conceptualising development. For many decades the world has been divided by academics in a developed world with roughly 1 billion inhabitants and the third world containing the rest of the planets population. This distinction however, is becoming increasingly unhelpful as many of the once so called third world countries are advancing with great steps and have become important players in the global political and economic arenas. There is however a group of countries with roughly 1 billion people that remain stuck in a vicious cycle of poverty and political instability.
The concept of the bottom billion refers directly to this group of countries and does not imply that there are no poor people outside the bottom billion countries. Countries like India, China, Brazil or the Philippines still host millions of extremely poor people that might live in similar dire conditions as people in the bottom billion countries. The difference is however, that these countries have entered a rapid growth path that is successfully lifting ever larger parts of the populations of these countries out of poverty. In the bottom billion countries no such dynamic exists and they remain therefore stuck. The logical policy advice of this analysis is of course that development actors should focus their energy and attention to the countries of the bottom billion.
Collier does not provide a list of the bottom billion countries but mentions that they are currently made up of fifty-eight countries (For a list of the bottom billion countries turn to Collier's latest book „Wars, Guns and Votes“). Most of these countries are in Africa, but there are also countries in Asia and Latin America that form part of the bottom billion. The characteristics of the typical bottom billion country are a very low per capita income (read extreme poverty), low or negative growth rates (read no hope for change) and persistent political instability (read civil war, corruption and non effective government services).
After conceptualising the group of the bottom billion countries the question is why these countries are falling behing when the rest of the world has rapidly advanced on all major development indicators. Collier's explanation is that these countries are stuck in at least one or more of four traps that lock them into a vicious cycle. The four traps are: (1) the conflict trap, (2) the natural resource trap, (3) landlocked with bad neighbors trap, and (4) bad governance in a small country trap. Fortunately, Collier does not make use to the theory of poverty being a trap in itself. If a poverty trap as such would exist, no country would have ever developed as all were initially poor.
The conflict trap is the first trap that Colliers deal with in his book. He provides the shocking statistic that seventy-three percent of the people in the bottom billion countries have recently experienced civil war or are still in a state of civil war. Civil war as such does not need to be a trap as many of the now developed countries have gone through civil war. The difference is however, that for the bottom billion there is an increased risk of repeated civil war because of low income, slow growth and dependence on primary commodities. Civil war affects these other factors negatively and vice versa.
The second trap is the natural resource trap which is sometimes also referred to as resource curse. This trap is somehow paradoxical as one would assume that the occurrence of natural resources in a country is rather a blessing than a curse. However, the political economy of resource rich developing countries is often characterised by fighting of different political or ethnic groups over the control of the revenues that flow from the resources. The resource curse can therefore hinder the development of democracy in a country as politicians become obsessed with getting an ever larger part of the resource rents for themselves. The export of primary resources can also negatively affect the development of the rest of the economy through what is called the „dutch disease.“ This refers to the phenomenon that the export of resources can lead to an unfavourable exchange rate that stifles the rest of the export economy.
The third trap refers to landlocked countries wit bad neighbors. Africa hosts a number of such countries, like for example Burundi, Rwanda,Uganda, and Tchad. Because of geography these countries have great difficulties in positively participating in globalization. Anybody who would want to set up a factory in a place like for example Burundi would need to produce for export as the local market is just to small. In order to reach international markets goods from Burundi would first have to be brought to Mombasa in Kenya from where they could be shipped to markets across the world. However, the cost of transporting goods from Burundi to Mombassa is so high that goods produced in Burundi could never compete with for example goods produced in Bangladesh which has direct access to the sea. Furthermore, landlocked countries are dependent on their neighbors transport infrastructure to import goods. This explains that many of the landlocked countries are ultimately dependent on their neighboring countries for their economic development. A reasonable conclusion of this is that some of the landlocked African countries should maybe never have become independent states as they do not form economically viable units.
The fourth and last trap is bad governance in a small country. Bad governance refers to bad policies and endemic corruption. According to Collier, countries with small population sizes are more likely to suffer from bad governance as they have a smaller pool of human resources to draw on for designing and implementing effective policies. Many of these countries suffer from a „brain drain“ where the young and talented leave the country because of the lack of opportunities back home. Some of the countries with bad governance even become failed states like for example Somalia or Afghanistan. These countries form the very end of human development and the international community so far has not found an effective way of fixing failed states.
Are countries in the bottom billion doomed to be eternally locked into the four traps? No, according to Collier these traps can be overcome but it is hard for the bottom billion countries to do it by themselves. Overcoming the traps therefore warrants the help of the international community. Collier suggests four instruments that can be used to help the bottom billion countries. The four instruments are: (1) development aid, (2) military intervention, (3) laws and charters, and (4) trade policy for reversing marginalization.
The first instrument is development aid which has been the standard answer by the developed world with regards to the development problems of poor countries. Development aid is however increasingly coming under criticism as the last forty years of aid have brought little progress in the poorest countries. Collier is therefore sceptical about calls for simply injecting more development aid money to poor countries to solve their development problems. An interesting example that Collier gives in this respect is that in many bottom billion countries there is no shortage of money generated by the sale of natural resources. The oil revenues in countries like Angola or Nigeria simply dwarf the amount of aid given to these countries. Nevertheless, the billions of dollars generated for the state through the sale of oil have so far not brought the expected push for development. In such cases it is therefore difficult to argue for more budget support given by international donors as the problem is obviously not a shortage of government revenues.
In some bottom billion countries with no revenues from oil or minerals development aid already constitutes a large part of the annual state budget. Increasing this share further or even doubling it as proposed by some aid advocates might lead to a situation where these states are completely dependent on aid with all the negative effects this can have.
For Collier therefore it is clear that traditional development aid has its limitations to solve the development problems of the bottom billion. Nevertheless, Collier maintains that aid can play an important role when it is better targeted at supporting reformers and reform processes with the right mix of technical assistance and budget support given to countries that are willing to improve on governance.
The second and probably most controversial instrument Collier suggests is the use of military intervention. Collier argues that despite the bad experience of the Iraq and Afghanistan war the international community should consider using military intervention in the bottom billion countries as one instrument of helping them to develop. Collier gives the examples of Rwanda and Somalia where he says that with more decisive and timely military intervention the suffering of millions of people could have been averted. As positive example for a military intervention Colliers mentions the case of Sierra Leone where the British government with a relatively small number of troops managed to bring an end to a bloody civil war. An interesting suggestion put forward by Collier is that the international community should give a sort of military protection against coups. Such a protection against coups should only be extended to democratically elected governments. Collier argues that this might bring more political stability and make it easier for reformist governments to go against entrenched military interests.
As third instrument Collier suggests the use of laws and charters. One way of changing laws to benefit the bottom billion countries that Collier puts forward is to stop the deposit of money stolen by corrupt governments on bank accounts in the developed world. Linked to this Colliers also suggests that companies involved in bribing should face legal prosecution in their home countries. Besides changing laws Collier advocates a number of international charters that would bring benefits to reforming governments in the bottom billion. The most interesting of his suggestions is a charter for natural resource revenues. As part of this charter Collier recommends that contracts for natural resource extraction should be auctioned off in an international process. This would ensure that governments award the contracts to the highest bidder and not to the one paying the largest bribe. This would then also imply that contracts which were not awarded in a transparent process would not be legally binding for reformist governments.
As fourth and last instrument Collier suggests a trade policy for reversing marginalization. Collier starts this section of the book with an attack on NGOs and particularly Christian Aid United Kingdom, claiming that trade policy was the area of economics least well understood by the NGO world. The problem for the bottom billion according to Collier is not that they have been exploited by international trade and processes of globalization but rather that they have been bypassed by globalization. Collier then goes on to advocate for an active trade policy by the developed world that would help the bottom billion countries to build up their export capacities.
In the last section of the book Collier sets out an agenda for action. He suggests that the international community should use all four of the above mentioned instruments to varying degrees depending on the needs of each bottom billion country. In order to make change happen, Colliers calls upon the public in developed countries to be more informed about development issues and to go beyond simply advocating for more aid.
With The Bottom Billion Paul Collier has written a fascinating work of political economy, full of insights and relatively easy to read considering the complexity of issues presented in the book. Most importantly Collier's analysis of the development problems of the bottom billion countries is not rooted in outdated ideology but in good science. He avoids falling on either sides of the extremes (Easterly and Moyo vs. Sachs) when it comes to the current debates about development aid and provides a refreshingly new perspective to many issues. The Bottom Billion is easily the best book about development in the last decade.


Book review: Dead Aid by Dambisa Moyo

There is a new best-seller amongst people working in development. It's Dambisa Moyo's provocative "Dead Aid". The book can be found in all bookshops on major African airports or cities with an expatriate community working in development. "Dead Aid" is a critique of development aid that is poised to become a bestseller amongst frustrated UN, NGO and other people working in development in Africa like it was "Lords of Poverty" by Graham Hancock some years ago.
Dambisa Moyo is certainly not the first one to offer a critique of development aid. In fact, most of what Moyo writes has been said before by people like Peter Bauer, or more recently William Easterly. She is not even the first African to raise a critical voice on development aid. There are others like the Kenyan economist James Shikwati who are also outspoken about their rejection of western aid to Africa. The reason why her book has gained more attention than the books of other critics has probably to do with her personal background. Moyo is a highly successful academic and business women from Zambia with experience working for the World Bank and for Goldman Sachs. This personal background together with her clear-cut and merciless critique makes it easy to catch the attention of readers interested in development.

In essence Moyo's book is about aid effectiveness. This is certainly not a new subject and is being discussed by academics and aid practitioners since years. Especially with the advent of the Millennium Development Goals and the calls by aid advocates like Jeffrey Sachs, Bono and Bob Geldoff to double development aid to Africa the question whether aid actually works has been at the forefront of discussions. Moyo's contribution to the discussion of aid effectiveness is a simple one. She denies outright that the official development aid of about 1 Trillion US Dollars that was given to Africa since the end of the World War II has achieved anything. But that's not all. The twist in Moyo's argument is that development aid is not only not the solution to Africa's development problems, but that development aid is actually the real problem. According to Moyo it is the official development aid that has corrupted African politicians and taken away the self-initiative of Africans. Moyo's policy recommendation is therefore a radical shock-therapy for Africa. She suggests that all official development aid should be stopped within an agreed timeframe of five years.

Now, how good is the empirical basis of Moyo's argument? She claims that the African countries receiving large amounts of development aid have also had the worst growth rates and that conversely those that received little, like say Botswana, had the best growth rates. This observation is well true. Her argument in essence is that development aid causes bad economic performance. However, it is not surprising that Western donors would select countries with low development indicators to receive development aid and not the ones with relatively good ones. There is therefore not necessarily a causal link between receiving development aid and showing bad performance on economic growth as Moyo claims. Rather the link is that donors consciously choose countries with bad economic performance as they are in more need to receive aid.
Another claim that Moyo makes is that despite the 1 Trillion US$ Dollar spent on development aid in Africa poverty levels in many countries have not significantly declined and in some countries poverty is actually increasing. On the whole this observation again is true. However, if from the 1 Trillion US$ Dollar we deduct all the money that was spent to prop up corrupt governments during the cold war times, like Mobutu's Zaire, and all the money that actually stayed in the West through tied aid and interests paid on soft loans the actual figure in US$ that was spent on poverty reduction would be a lot less than the 1 Trillion US$ Dollar. Nevertheless, Moyo is right that the results are not impressive and the aid industry should seriously look into how to combat corruption and increase aid effectiveness in Africa.

One element that Moyo points out that needs serious attention is the so called micro-macro paradox. Moyo brings the example of an African mosquito net producer that goes out of business because western donors donate mosquito nets for free. This is not the best example as western donors could and often do buy Mosquito nets locally. A better example for the micro-macro paradox would be for example a water project in a dry region. On the micro level the water project might improve the living conditions of say pastoralists in a dry area as they have easier access to water. However, this easier access might also lead to an increase in cattle herds that is beyond what the dry environment with scarce grazing opportunities can sustain. So in the end the well intentioned water project might on the macro level lead to a destruction of the environment on which the larger community depends and thus in the long rung increase poverty instead of reducing it. Moyo is right that the micro-marco paradox needs much more attention. However, she is wrong not to mention the undeniable benefits that a myriad of development projects have brought to many individuals in Africa.

Moyo's book adds to long list of uni-causal explanations why Africa is lagging behind with its development indicators. After the blame has been put on the slave trade, colonialism, imperialism, capitalism, globalization, bad governance, geography and unfavourable climate conditions, Dambisa Moyo now lays all the blame on development aid. As some people, like say Jeffrey Sachs, Bono and Bob Geldof, maybe overestimate the power of development aid to do good and to bring sustainable change, Moyo certainly overestimates the power of development aid to do bad.

In her book Moyo doesn't stop with the analysis of what went wrong in Africa, but she dedicates half the book to what she sees as the solution to all the woes and ills of Africa. Her policy recommendations are essentially packed in what she calls the "Capital Solution". This capital solution entails a greater openness of African states to financial markets. In her view the money flows of financial markets should as soon as possible replace the aid flows. Certainly Africa needs better integration into international financial and commodity markets and most of all Africa needs more entrepreneurs. But whether all the good things for Africa will come from open capital markets is at least questionable given the recent financial crisis that originated in the very same institutions that Moyo thinks will save Africa. Moyo's policy recommendations for Africa are clearly influenced by her experience and the world view gained whilst working for Goldman Sachs.
The other policy recommendation of Moyo, namely to stop all development aid to Africa within five years could entail serious humanitarian and political risks. What would happen to the hungry in Africa? Is it really realistic that after decades of neglect governments would suddenly wake up and feed the hungry? And what would be the chances that there will be more failed states in Africa to be added to the list of Somalia, Sudan, Zimbabwe, Chad and D.R. Congo?
To sum up provocative solutions like the ones presented in "Dead Aid" are good to make headlines and sell a book. To serve as real policy recommendations they are however rather to simplistic. Nevertheless, the book is well worth reading and has taken the discussion of aid effectiveness to a larger audience than the usual academics and aid practitioners.


A tentative comparison of mainstream and alternative approaches to poverty

The year 2000 marked a new international consensus to put poverty reduction at the centre of international development efforts. The United Nations General Assembly solemnly adopted the Millennium Development Goals (MDGs). Amongst the eight MDGs the reduction by half of the proportion of people living with less than a dollar a day until 2015 assumes primary importance. In the same year the World Bank dedicated its flagship publication the World Development Report (WDR) to the issue of poverty and titled it Attacking Poverty (World Bank 2000). This international emphasis on poverty and poverty reduction is seen by some commentators as a new poverty agenda in international development, or - with reference to the World Banks 1990 WDR on poverty - as the new “new poverty agenda” (Maxwell 2001). However, although there is broad based international agreement on poverty reduction as the overarching goal for development, there is less agreement on how to achieve this goal and a vivid debate is under way.

Despite the risk of oversimplifying the current debate on poverty and poverty reduction I suggest that the positions in the debate can be divided into two great narratives. The first narrative frames poverty as “lack of”. This approach characterises poor people as agents of change suffering from a lack of certain assets and as lacking sufficient access to markets. This approach, which could be called the current mainstream approach to poverty, is endorsed by organisations like the World Bank and IFAD. In the academic community it is often associated with researchers in the neo-classical economics and new institutionalist tradition. The second narrative frames poverty as a social relation. This approach characterises poor people as suffering from processes of marginalisation and exclusion, emphasising power imbalances. This approach, which could be called the alternative approach, is often endorsed by NGOs and civil society movements. In the academic community it is often associated with researchers in the tradition of political economy.

This essay attempts to give an overview of how the poor are characterised and conceptualised in what I would call the mainstream and the alternative approach to poverty reduction. In order to do this both approaches will be contrasted along three lines of inquiry. First, an outline of how both approaches characterise the poor and where they differ in their assumptions about poverty will be given. This will be followed by a short account of the different methodologies to measure poverty that both approaches usually rely on. Thereafter, the main policy implications of the poverty knowledge as embodied in the two approaches will be delineated. Finally, I will briefly discuss the internal coherence of each approach pointing out their main weakness and draw a conclusion. The focus throughout the essay will be mostly on rural poverty, which according to IFAD (2001) covers three quarters of the global poor.

The characteristics of the poor
To sketch how the mainstream approach to poverty reduction frames and characterises the poor I will use as references the World Development Report (WDR) 2000/2001 published by the World Bank (2000) and the Rural Poverty Report(RPR) 2001 published by the International Fund for Agricultural Development (IFAD 2001). Both documents show a striking similarity in the language and concepts they use to characterise the poor. Identifying a clear cut alternative approach to poverty is, however, a more difficult endeavour. Although many NGOs and civil society movements differ from the mainstream approach as presented in the World Bank and IFAD documents it is hard to identify an ideal-type alternative approach embodied in a specific organisation or document. In reality most non-mainstream development organisations share some assumptions with the mainstream position about the characteristics of the poor and differ in others. To construct an ideal-type alternative approach I will base my inquiry on some academic authors who write on this subject from a political economy perspective and on the Chronic Poverty Report 2004/2005 published by the Chronic Poverty Research Centre (2005).

The mainstream approach as embodied in the WDR 2000/2001 and the RPR 2001 must be seen in the wider context of a significant shift that has happened over the last three decades in the mainstream development discourse. After the 1980s and early 1990s focus on macro-economic stability, structural adjustment and market reforms, a new consensus emerged towards the end of the 1990s. This new consensus was built on the realization that economic growth was a necessary but not sufficient condition for poverty reduction. In order to make progress in reducing poverty pro-poor growth, improved access to health and education for the poor and properly functioning institutions were needed. This new consensus, sometimes called post-Washington consensus (Saad-Filho, 2005), forms today the mainstream approach to poverty reduction and is shared by the major International Financial Institutions and most of the donor community.

The WDR 2000/2001 acknowledges the need for an agenda that goes beyond the purely economic domain to attack poverty. The report puts forward a framework for action in three areas, which are: promoting opportunity, facilitating empowerment and enhancing security. An effective strategy to reduce poverty, according to the report, will require concerted action in all three areas by the government, civil society, the private sector, and poor people themselves. Within this general framework the WDR suggests to think about poverty in terms of the assets the poor posses. These assets are of several kinds:
• Human assets
• Natural assets
• Physical assets
• Financial assets
• Social assets

The returns to these assets that poor people will be able to generate depend on their access to markets. Both the WDR 2000/2001 and the RPR 2001 describe the poor in terms of their lack of the above mentioned assets and emphasise the importance of market access for poor people. In this framework the role of the state is to invest in the assets of the poor, who then in turn use these assets as agents of change and self-development. The following quote from the PRP 2001 exemplifies this belief in the agency of the poor to change their own lot which is underlying the current mainstream approach.
"Poverty reduction is not something that governments, development institutions or NGOs can do for the poor. The poor themselves have to seize responsibility, as agents of change, for their own development." (IFAD 2001, p. 229)

The WDR 2000/2001 however, recognizes that there might also be structurally poor, who not only suffer from a lack of assets and market access but whose poverty is linked to social identity. In general however, it is fair to say that both reports characterise the poor as rational agents of change who react to price incentives in order to maximise the return to their assets. Using a slightly sarcastic quote from John Sender, the current mainstream approach to characterize the poor could be summarized as follows.
"In the currently fashionable theoretical framework, the poor are self-employed ‘agents’, playing maximizing games in imperfect rural markets. They simply need additional ‘assets’, purchased through access to micro-credit provided by more perfectly functioning rural markets, to smooth the process of their transition into membership of the petty bourgeoisie." (Sender 2002, p.40)

An alternative approach to poverty can be associated with a line of thinking that defines poverty less as an individual characteristic and more as a social relation. In this perspective the poor are mainly characterised by suffering from processes of marginalisation, discrimination and exploitation. To portray this position I will draw on two authors in the tradition of political economy namely Kay (2006) and Sender (2002; 2003) and on the Chronic Poverty Report 2004/2005 published by the Chronic Poverty Research Centre (2005) of the University of Manchester.
Cristóbal Kay in a survey article on rural poverty and development strategies in Latin America concludes that “poverty is a social relation embedded in particular multivariate structures” (2006, p.494). From this perspective then poverty can not be understood by certain characteristics of the poor like their lack of assets or insufficient access to markets. Rather poverty is a structural phenomenon which the current socio-economic system reproduces on a daily basis. This perspective which has much in common with neostructuralist ideas put forward by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) sees state intervention as a pivotal condition for changing the plight of the poor.

John Sender (2003) challenges what he calls the hegemonic assumptions concerning the characteristics of the poor in the mainstream literature on rural poverty. According to his own studies (see Sender 2002) the poorest rural households can not be characterized as self-employed agents simply lacking assets and market access. Rather, so Sender (2003), the poorest rural households are usually characterized by relying on the income of non-educated women engaging in manual agricultural wage labour. An account that characterises the poor as self-employed agents of change could thus bee seen as lacking the empirical basis. Furthermore, such an account misses out the crucial employment-poverty nexus. Improving the lot of the poorest households then calls for an improvement in employment conditions rather than an investment in assets to foster self-employment.

The Chronic Poverty Report 2004/2005 published by the Chronic Poverty Research Centre (2005) also highlights the social dimension of poverty. According to this report people who suffer from chronic poverty also often suffer from discrimination and disadvantage resulting from their position within their households, communities or countries. The report identifies several bases of discrimination, among them are: oppressive labour relations, ascribed status (ethnicity, religion and caste), gender, stigmatised ill-health and age. The report thus provides an account and characterisation of the poor that differs quite radically from the mainstream approach.

Measuring poverty
It is not surprising that different assumptions about who the poor are and what their characteristics are will also lead to differences in the methodological approaches to measuring poverty. This section will try to give a short overview about some key issues in the current debate on methodology to measure poverty. Again there is the risk here of oversimplifying, but I will try to distinguish the mainstream poverty research approach from an alternative research approach by the relative importance both approaches give to either quantitative or qualitative research methods.

The mainstream approach to poverty measurement is a money metric approach based on household income and expenditure surveys. This approach which is often associated with the World Bank, calculates poverty with relation to an international poverty line of 1 Dollar a day. Any individual below this international poverty line is automatically considered poor. The money metric approach to poverty measurement is prominently used to measure the success or failure of the international community to reach the Millennium Development Goal of reducing poverty by half in 2015. The advantage of this approach to poverty measurement is that it allows for highly aggregated statements about global and regional trends in poverty reduction. The World Bank (2000) recognizes that the money metric approach has some weaknesses. These weaknesses, so the World Bank, are mainly the sometimes poor quality of data and the fact that household surveys cannot reveal inequalities within households. It must be noted here that the World Bank also uses qualitative methods for its poverty research, the most famous example for this being the Voices of the Poor project. In general, however, it is fair to say that most of the World Bank and thus mainstream poverty research is based on a quantitative money metric approach.

Harris (2006) critiques mainstream poverty research for its failure to address structural and relational factors for explaining poverty. For him most of the mainstream poverty research abstracts from concrete class and power relationships. By doing so it opens up the way to reduce the problem of poverty to the characteristics of individuals. Alternative approaches usually try to incorporate historical and sociological reality into the research design and put more emphasis on qualitative research methods. Such approaches often try to combine qualitative with quantitative methodologies (see for example Sender, Oya and Cramer, 2006). The advantage of a combination of qualitative and quantitative methods for poverty research is that it can lead to an understanding of poverty that is rooted in a social context (White 2002).

Policy implications of poverty knowledge
The differences in poverty knowledge as embodied in the two approaches outlined above naturally manifest themselves in quite different policy prescriptions for poverty reduction. Although it is nearly impossible to provide a short characterisation that does justice to the two approaches, I will, in the following, try to highlight the main policy elements of each approach.

Poverty reduction strategy papers (PRSPs) have become the primary policy device for international development institutions (Craig and Porter 2003) and can thus be regarded as the main vehicle for the implementation of mainstream poverty knowledge. The PRSP framework is based on the assumption that national ownership is needed for successful poverty reduction policies (UNCTAD 2002, p.173). PRSPs thus constitute, at least in theory, a move away from previous one-size fits all policy prescriptions towards process conditionality that allows developing countries to develop their own approach to poverty reduction. However, in reality the macroeconomic policy content of most PRSPs is quite similar and does not constitute a radical break with past World Bank or IMF policies (Craig and Porter 2003; Cling, Razafindrakoto and Roubaud 2002).

In line with the previously outlined characterisation of the poor as agents who need more assets and market access, the mainstream approach expects poverty reduction to be mainly driven by private sector development and household enterprises. With regards to macro-economic policy environment for poverty reduction the WDR 2000/2001 suggests:
Some economic policies – such as openness to international trade, sound monetary and fiscal policies (reflected in moderate budget deficits and the absence of high inflation), a well developed financial system, and a moderately sized government – are also strongly conducive to economic growth. (World Bank 2000, p.49)

Furthermore the report suggests that policies should be put in place to build up the human capital and physical assets of the poor (World Bank 2000, p.57). In general then, the policy prescriptions associated with the mainstream approach to poverty reduction can be summarized by macro-economic stability, economic growth, trade openness and investment in poor people’s assets.

As the previous sections have shown alternative poverty knowledge tends to see structural constraints to poverty reduction where the mainstream approach tends to see individual constraints (lack of assets). Alternative approaches to poverty reduction therefore are generally less optimistic about the virtues of the market and propose some sort of state intervention to ease structural constraints to poverty reduction. Alternative approaches to poverty reduction are also more likely to focus on the status and conditions of labour and to emphasise the poverty-employment nexus (Osmani 2003). With reference to rural poverty Sender (2002; 2003) points out that a theoretical framework that characterizes the poor as self-employed agents misses out the most important route to poverty reduction. For him the most secure way out of poverty is not self-employment but rather access to secure and decent wage labour. Furthermore, Sender (2002) advocates labour friendly legislation and a strengthening of trade unions as means to improve the living standard of the poor. To summarize then, policy prescriptions associated with the alternative approach to poverty reduction would tend to promote wage employment and emphasise the role of the state or collective action in poverty reduction.

Discussion and conclusion
One might argue that the distinction between mainstream and alternative approaches to poverty and poverty reduction is, to some extent, a false dichotomy. The reality of the work of most aid organisations is more complex and not easily couched within either of the above outlined approaches. Nevertheless, presenting the debate about poverty reduction in these two ideal-typical forms has the advantage to show the strong linkages between assumptions about the poor and different choices in methodology and how these in turn inform different policy prescriptions. The following will shortly discuss these linkages and then conclude by highlighting the major weakness associated with each approach.

The tendency in the mainstream narrative to take the individual or household as key analytical unit is coherent with a characterisation of the poor as self-employed agents who need more assets and market access. This characterisation is also consistent with a neoliberal policy framework that discourages state intervention in the economy. In a situation where neither capitalist investment nor state employment is available, the rural poor necessarily have to be characterized as self-employed agents of change.

The alternative narrative is characterized by a tendency to abstract from individual agency and to take class, gender, ethnicity, etc. as analytical unit which is coherent with a characterization of the poor as suffering from unjust social relations. This characterisation is consistent with a qualitative research design that is able to highlights social relations. The policy implication of this narrative is that the poor have to be aided by some sort of collective action (state, trade unions, social movements, etc.) because it is believed that the market will simply reproduce the existing unjust power relations.

From the above discussion it becomes clear that the main distinction between mainstream and alternative approaches to poverty is centred on the question of agency. Poverty reduction in the mainstream narrative is mainly achieved through individual agency, whereas in the alternative approach it is mainly achieved through some form of collective action. Both approaches, in their ideal-typical form, have considerable weaknesses. A mainstream policy approach that mainly advocates individual agency and market based solution risks to simply reproduce poverty and social injustices. An alternative approach favouring stronger state involvement also risks to be ineffective. This is especially so in Sub-Saharan Africa where the poor in general have not been served well by their own state. And it is not clear why and how this could suddenly change.

To conclude, the preceding comparison of the mainstream and alternative narrative of poverty greatly helps the theoretical understanding of the current debate about the new poverty agenda. However, neither narrative, taken in an ideal-typical form, presents an unproblematic basis for concrete development interventions. The poor are probably best served by ideologically unbiased analysis and by poverty reduction strategies that are well rooted in a socio-historic context drawing on the full range of social actors available for the task at hand.

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White, H. (2002) “Combining Quantitative and Qualitative Approaches in Poverty Analysis”, World Development, 30 (3): 511-522.
World Bank, (2000) World Development Report, 2000/2001: Attacking Poverty, New York: Oxford University Press.


Defending biocultural diversity - Development Studies in postmodern times.

These are interesting times in development studies. The demise of the socialist alternative in its real existing form and the rise of postmodern theorizing in the social sciences have opened up the field for new perspectives. The most exciting of these perspectives evolve around what is termed alternative development and post-development. Traditionally development studies in its modernization and dependency versions has been mainly concerned with the question of economic growth. And of course, current mainstream development theory and practice in its neoliberal form still is primarily concerned with economic growth. However, the ground is shifting and alternative and post-development writers now direct the focus towards questions of culture and environmental concerns. Some of these writers put forward powerful critiques of the deeply troublesome consequences of development and economic growth from ecological, anthropological and feminist perspectives. Development in itself, so it seems, has become a deeply problematic enterprise.

To assess the relevance of these new and sometimes radical perspectives on development they must be understand within a larger context of an increasing problematisation of modernity. Many of the beliefs that constitute the core of modernity like for example the belief in universal values, scientific reason or steady socio-economic progress have increasingly become problematical. On a theoretical level this problematisation of modernity is most forcefully formulated by postmodern theories as the demise of grand narratives (Lyotard 1984).

The purpose of this essay is twofold. Firstly, to analyse the impact of the above mentioned problematisation of modernity on its closely related concept of development. Secondly, to assess the usefulness of alternative and post-development theories as a way forward for development studies. The structure of the essay is as follows. To start with a short description of the increasingly problematic nature of modernity will be given. This is necessary, as some of the more radical writers within post-development can not be understood without a reference to the concept of modernity as a whole. Next the shift in development studies from the problem of development to development as the problem will be described. This shift is mainly expressed in the form of post-development theory of which a short presentation and critique will be given. Finally, a conclusion concerning the value and the future challenges for post-development will be drawn.

The problematic nature of modernity
Berman (1983) in his seminal work on modernity locates the origins of this chapter in human history in the sixteenth century. He describes modernity as a contradictory phenomenon in which “all that is solid melts into the air”, a phrase that Berman borrows from the Communist Manifesto written by Marx and Engels. Modernity promises “growth, transformation of ourselves and the world”, but simultaneously “threatens to destroy everything we have, everything we know, everything we are” (ibid, p.15). At the heart of modernity we can thus locate a relentless drive towards construction and destruction. In the following I will suggest that there are strong reasons to believe that it is the destructive elements of modernity that are increasingly taking precedence over the constructive ones. The increasing awareness of the problematic nature of modernity manifests itself in several areas. Subsequently I shall provide a brief sketch of some of the most important critiques that seriously challenge the believe in the progressive nature of modernity.

Max Weber was probably one of the first writers to spell out some of the destructive consequences of modernity. In his first influential publication The Protestant Ethic and the Spirit of Capitalism, written in 1904, he sees the tendency of an increasing rationalization of modern life which ultimately traps the human being in an iron cage. This critical stance towards rationality and modernity is then further developed in his opus magnum Economy and Society, published in 1922, where he describes the development of modernity and industrial society as an increasing process of disenchantment of the world.

In philosophy the disenchantment with modernity and rationality already began in the late 19th century with Nietzsche as one of the first critics of modernity. In 20th century philosophy the critique of modernity reached a first forceful height with the theories developed by the Frankfurt School. Under the effect of Fascism and the Holocaust Horkheimer and Adorno (2002) analysed the negative consequences of modernity as an effect of what they called instrumental rationality. In the 1970s another important critique of modernity was then formulated by Foucault. Through a thorough examination of the disciplinary function of modern institutions and the relationship between power and knowledge Foucault paved the way for postmodern thought in philosophy. One of the key features of this way of thinking is the total criticizability of everything (See Foucault 2003). The immense criticizability of every aspect of modernity is now an established fact in philosophy. The extent, however, to which modernity itself has to be rejected and replaced by postmodernity is still strongly disputed. For Habermas (1981) the project of modernity can still be saved, whereas Lyotard (1984) thinks the project of modernity has reached its end and liquidated itself. What is however not disputed, regardless of whether one favours Lyotard’s or Habermas’ interpretation of modernity, is the demise in the explanatory power of any sort of totalizing theory – with orthodox Marxism being the classical example for such a grand narrative.

Besides the long history of philosophical critique of modernity and the recent post-modern turn which rejects many core concepts of modernity I would like to point out a second field, from which a serious threat to the legitimacy of the modern project arises. This field is constituted by the increasing realization of the destructive impact of modernity on the environment and the increasing rate of loss in biodiversity as well as the world’s cultural diversity. This is a challenge that goes to the heart of the question of human survival. The late 20th century was full of environmental catastrophes that caught the attention of the media and that pinpoint to the extent of the challenge (Chernobyl, Bhopal, Exxon-Valdez, the destruction of the rainforests, climate change, etc.). Although the destructive force of modernity in the cultural realm is less likely to make big newspaper headlines it is nevertheless equally alarming. If we take the amount of languages spoken as an indicator for cultural diversity than the estimated loss in cultural diversity over the next hundred years is of an unprecedented magnitude in human history. In a report published by WWF International and Terralingua Oviedo and Maffi (2000) quote an estimate that of the currently spoken 6000 native languages as much as 90% will be extinct within the next hundred years. And of course with the extinction of these languages their cultural universe as well is doomed to disappear. Taken together the current rapid loss in biocultural diversity would justify classifying our epoch as what I would call the age of loss.

From the problem of development to development as the problem
The postmodern scepticism of grand narratives and the rising concerns with biocultural diversity have not gone by without affecting the study of development. A sort of Entzauberung or disenchantment has occurred within development studies over the last two decades. Albeit one that is different from what Max Weber used to denote with this term. The status of development as a universally desirable goal has become increasingly questionable. For some writers development itself has turned into the problem.

First signs of disillusionment with the explanatory power of existing perspectives on development emerged with the impasse debate in development studies. Booth (1985) argued that development studies had reached an impasse. This impasse in development sociology, so Booth, was mainly resulting form Marxism’s meta-theoretical framework which aims at demonstrating the necessity of socio-economic phenomena. A critique closely linked to the postmodern scepticism towards grand narratives. Although opposed positions can be found (see Brass 1995) the identification and interpretation of the impasse as formulated by Booth seems now widely accepted within development studies (see for example Kiely 1995 or Schuurman 1993). Nearly a decade after his 1985 article on the impasse in development studies, Booth (1994) identifies a new research direction which he sees as a way out of the impasse. This new direction within development research, which Booth calls “post-impasse” research, is one that is mainly focused on diversity. Notwithstanding this focus on diversity there is currently no single coherent research model within development studies. However, what seems clear is that both modernisation theory and dependency theory have not survived “the onslaught of the 1990s post-modernism” (Gardner and Lewis 1996, p.12).

Broadly speaking then the demise of the grand narratives in the form of modernisation and dependency theory has opened up the room for new and interesting research directions. The most exciting ones, so I contend, are alternative development and post-development. What distinguishes them from the grand narratives is their emphasis on diversity and the rejection of totalizing perspectives. The boundaries between what is considered as alternative development and what is considered post-development theories are sometimes fluid. However, alternative development is most often associated with participatory development (see Chambers 1997). Participatory development in turn has to a large extent become integrated into mainstream approaches to development (World Bank 2006), what makes its status as alternative approach somehow dubious. Post-development on the other side hast resisted this integration. In fact its very rejection of development makes it particularly unattractive for becoming part of the mainstream development discourse.

Nevertheless, post-development understood as reflection and radical critique of the problematic nature of modernity can provide important impulses for development studies. Post-development theories come in many different forms and shapes. I shall focus the subsequent discussion of post-development on the texts and theories as put forward by Rahnema and Bawtree (1997) in their Post-development Reader. The underlying theme in most post-development writings is a decisive shift away from the problem of development as mainly concerned with economic growth towards an understanding of the problematic influence of development itself. Although they vary in the degree to which they reject economic growth and technological progress[1] they all show a common preoccupation with preserving biocultural diversity.

It comes as no surprise that within the field of post-development theory the cultural critique of development should have been most forcefully formulated by anthropologists. Many of them (see for example Norberg-Hodge 1997) study and document the process of disenchantment that is brought about by development and the devastating effects it has on vernacular communities in the developing world. This critical anthropological perspective is a distinguishing feature of post-development. Modernization theory for example was concerned with endogenous constraints to development and saw vernacular and indigenous cultural identities as an obstacle to development. Dependency theory on the other hand was mainly concerned with exogenous structural constraints to development and had little concerns for cultural issues.

Escobar (1995) formulates a heavy criticism of development from a Foucauldian perspective. He sees most of development theory and practice as a powerful tool for normalizing the world, with dire consequences for vernacular and indigenous cultures. Development in its mainstream version as practiced by the World Bank, so Escobar, is conceived as a mainly technical intervention where cultural elements are regarded as residual variables. For Escobar then (1995, p. 44) it comes as no surprise that development should have become a destructive force for Third World cultures.

The ecological critique of development is not an exclusive domain of post-development writers, and indeed has a longer history than most of post-development theory. Already in the early 1970s it became clear that the ecological impact of growth oriented development would be devastating. Most noteworthy in this respect is the publication in 1972 of the Limits of Growth by the Club of Rome. The critical insights of this report soon became integrated into mainstream perspectives of development in the form of sustainable development as for example in the Brundtland Report published in 1987. The ecological critique of development can thus hardly be attributed solely to post-development writers. However, what distinguishes many of the post-development writer’s ecological critique from more mainstream versions like sustainable development is their more radical approach and their emphasis on a simple, non-consumerist lifestyle. Whereas advocates of sustainable development often put their emphasis on an efficiency revolution in order to reduce the use of natural resources, post-development writers focus more on a sufficiency revolution.[2] Mahatma Ghandi’s ideas on simplicity (Ghandi 1997) seem to be particularly influential within post-development theory. Sachs (1997), one of the most pronounced post-development writers, calls for an efficiency and sufficiency revolution in order to prevent the looming ecological disaster.

Some critiques of post-development
Post-development has attracted a lot of criticism. And indeed its sometimes provocative posture and wholesale rejection of development makes it an easy and attractive target for criticism. I shall put forward three examples to illustrate this point. Rahnema (1997) for example compares Development with AIDS and calls it a socio-cultural variety of the virus, AIDS II so to say. Escobar (1995) describes poverty in the third world as if it was only a discursive invention by the World Bank aiming at subjugating the third world. Sachs (1992, p.1) in his development dictionary boldly states “(T)he idea of development stands like a ruin in the intellectual landscape.” The use of so dramatic images and language does not benefit the cause of post-development and can rightly be criticized. However, they might be resulting out of a sense of urgency and need to wake up the people, that most of the academic literature on development is missing.

Post-development is sometimes accused of paying too much attention to diversity and neglecting aspects of social inequality. Schuurman (2000) argues that inequality rather then diversity should be the main focus for development studies. Equally Nanda (1999) observes that post-development has supplemented the problem of inequality with that of inauthenticity or diversity. And more gravely, Nanda suggests that this lacking concern for inequality can lead to perverse outcomes. Nanda presents examples from the Indian Farmer’s movement where a post-development rhetoric rather than serving the poor helps to maintain existing power structures. This is a strong critique; however it would be awkward to imply that the theoretical and practical concern for diversity implies any kind of endorsement of social inequality on behalf of post-development.
It is sometimes alleged that post-development theory with all its post-modern emphasis on epistemological and cultural relativism does not provide solutions for current pressing development concerns. Kincaid and Portes (1994, p.8) for example state that “postmodernism as a model for development studies offers a form of intellectual escapism in which the painful realities of contemporary economic and social crisis are concealed behind the analysis of texts and cultural forms.” And indeed this critique may be true for some proponents of post-development. However, as illustrated by the variety of approaches put forward in the Post-Development Reader (Rahnema and Bawtree 1997) post-development is much more than just endless post-modern inspired discourse analyses.

Lastly it can be asked do the people in the third world want post-development. Do they want to be left alone and not disturbed by the “blessings” of western style modernity and technology? Corbridge (1998) for example in a critique of post-development states that he hasn’t yet met a man or a woman in rural India who would not welcome a fan and the electricity that powers this fan. And surely post-development would be wrong if it advocated a lifestyle that negated third world people this sort of comfort provided by modern technology. However, the general emphasis on the grass-roots level and bottom up processes of change should suffice to convince that the aim of post-development is not one of imposing a backward lifestyle on third world people which they themselves would reject.

The postmodern critique of modernity has seriously undermined the legitimacy of the universal development prescriptions of the past. Whereas the focal point for many of the more traditional approaches to development seemed to have been progress and growth, the focal point for new approaches like alternative and post-development is diversity. This focus on diversity also implies a changing role of agency in development. Most of the hitherto development theory has emphasized the role of the state as the agent of development. Post-development, with its praise for civil society and the grassroots level has undoubtedly positioned itself against any sort of developmentalist state model.

Post-development understood as a radical defence of biocultural diversity against the destructive forces of modernity has its place in development study. It provides important new directions for a radical critique of capitalism and neoliberalism. Whereas Marxism focuses its critique mainly on the economically exploitative dimensions of capitalism, post-development writers focus their critique on the environmentally and culturally destructive elements of capitalism. This angle of critique as show above proves to be a most forceful one. And, so it seems to me, it is one that can link the daily experience of third world people and western people in a way that the Marxist critique of exploitation can not.

Post-development at its best is thus a radical defence of biocultural diversity. At its worst it is a post-modern aberration in endless discourse analysis of World Bank texts. The best of post-development literature encourages us to look at development from the perspective of its losers. It does not call on the third world to develop and become like us. Rather, it calls for more simple and more respectful ways of living as well in the North as in the South. The unwillingness, however, of many authors to put forward a concrete political project to radically defend biocultural diversity is a serious limitation to the practical value of post-development. Many post-development writers seem to content themselves with praising resistance at the grassroots level. Local resistance, however, if it is not channelled into some form of international action will not be enough to reverse the prevailing destructive trends. If post-development wants to be relevant in the long term, it will need to engage in theorising collective forms of action on an international level. Doing this, without falling back into old totalizing categories, will be the great challenge for post-development in the future.

Berman, M. (1983), All That Is Solid Melts Into Air. The Experience of Modernity, London: Verso.
Booth, D. (1985), “Marxism and Development Sociology: Interpreting the Impasse”, World Development, Vol. 13, No.7, pp.761-787.
Booth, D. (ed.) (1994), Rethinking Social Development, Harlow: Longman.
Brass, T. (1995), “Old Conservatism in ‘New’ Clothes”, Journal of Peasant Studies, Vol. 22, No.3, pp. 516-540.
Chambers, R. (1997), Whose Reality Counts? Putting the First Last. London: Intermediate Technology Publications.
Corbridge, S. (1998), ‘’Beneath the Pavement Only Soil’: The Poverty of Post-Development’, Journal of Development Studies, Vol. 34, No. 6, pp138-148.
Escobar, A. (1995), Encountering Development. Princeton: University Press.
Foucault, M. (2003), Society must be defended: lectures at the Collège de France, 1975-76, London: Allen Lane.
Gandhi, M. (1997), “The Quest for Simplicity: ‘My Idea of Swaraj’,” in Rahnema, M. and Bawtree, V. (eds.), The Post-Development Reader, London: Zed Books.
Gardner, K. and Lewis, D. (1996), Anthropology, Development and the Post-Modern Challenge, London: Pluto Press.
Habermas, J (1981), The Theory of Communicative Action, London: Beacon Press.
Hawken, P., Lovins, A. B. and Lovins, L. H. (2000), Natural capitalism: the next industrial revolution, London: Earthscan.
Horkheimer, M. and Adorno, T. W. (2002), Dialectic of enlightenment: philosophical fragments, Stanford, Calif.: Stanford University Press.
Illich, I. (1997), “Development as Planned Poverty”, in Rahnema, M. and Bawtree, V. (eds.), The Post-Development Reader, London: Zed Books.
Kiely, R. (1995), Sociology and Development: The Impasse and Beyond. London: UCL Press.
Kincaid, A.D. and Portes, A. (1994), “Sociology and Development in the 1990’s: Critical Challenges and Empirical Trends”, in Kincaid, A.D. and Portes, A. (eds.), Comparative National Development, Chapel Hill: The University of North Carolina Press.
Lyotard, J. F. (1984), The Postmodern Condition, Manchester: Manchester University Press
Marglin, F.A. and Marglin, S.A. (eds.) (1990), Dominating Knowledge: Development, Culture and Resistance, Oxford: Clarendon Press.
Nanda, M. (1999), “Who Needs Post-Development? Discourses of Difference, Green Revolution and Agrarian Populism in India,” Journal of Developing Societies, Vol. 15 No. 1, pp. 5-31.
Norberg-Hodge, H. (1997), “Learning from Ladakh,” in Rahnema, M. and Bawtree, V. (eds.), The Post-Development Reader, London: Zed Books.
Oviedo, G. and Maffi, L. (2000), “Indigenous and Traditional Peoples of the World and Ecoregion Conservation,” [] Accessed 1 December 2006.
Rahnema, M. (1997), “Development and the People’s Immune System: The Story of Another Variety of AIDS,” in Rahnema, M. and Bawtree, V. (eds.), The Post-Development Reader, London: Zed Books.
Rahnema, M. and Bawtree, V. (eds.) (1997), The Post-Development Reader, London: Zed Books.
Sachs, W. (1997), “The Need for the Home Perspective,” in Rahnema, M. and Bawtree, V. (eds.), The Post-Development Reader, London: Zed Books.
Sachs, W. (ed.) (1992), The development dictionary: a guide to knowledge as power, London: Zed Books
Schuurman, F. (2000), “Paradigms lost, paradigms regained? Development studies in the twenty-first century,” Third World Quarterly, Vol. 21, No.1, pp 7-20.
Schuurman, F.J. (ed.) (1993), Beyond the Impasse: New Directions in Development Theory, London: Zed Books.
Von Weizsäcker, E.U., Lovins, A. B. and Lovins, L. H. (1995), Factor four: doubling wealth, halving resource use: the new report to the Club of Rome, London: Earthscan.
World Bank (2006), “Participation and Civic Engagement,” [] Accessed 11 December 2006.
[1] See for example Marglin and Marglin (1990, p.1) who state that their criticism is directed against modernization and development not against growth or progress in health and education. For a position rejecting growth and technological progress see for example Illich (1997).
[2] The efficiency approach towards sustainable development is best exemplified in concepts like Factor 4 (von Weizsäcker, Lovins and Lovins 1995) or Natural capitalism (Hawken, Lovins and Lovins 2000).


The value of Marx for development studies

In the preface to the first German edition of Das Kapital, we can find Karl Marx making the following statement: “The country that is more developed industrially only shows, to the less developed, the image of its own future” (Marx 2000a, p.453). A first uncritical reading of this statement would clearly suggest that Marx is presenting us here a simple, stagist conception of socio-economic evolution. And indeed, as Wood (1984, p.95) pointed out, much of the criticism of Marxism in recent years has focused on his alleged simple and deterministic conception of history. On such grounds Marxist theory could easily be dismissed as a grand narrative not capable of adequately capturing the contingencies of modern socio-economic development.

Besides the alleged deterministic view of socio-economic evolution that does not go down well with the post-modern mindset, Marxism has also been challenged on the grounds of recent historical events. The last decades have seen important politico-economic changes which have had and continue to have significant repercussion on the academic discussion of Marxist theories. The collapse of ‘real existing socialism’ and the subsequent procession of capitalism around the globe have led to a justified scepticism towards the relevance of the Marxist conception of socio-economic evolution. These historical events seem to undermine one of the basic tenets of Marxism which holds that the development of the productive forces in a given society will inevitably lead to changes in the mode of production. Although a historically unprecedented period of productivity growth has occurred in the OECD countries since the turn of the 19th century, no major change in the mode of production has occurred in these countries. And with the downfall of the Eastern Bloc a transition to socialism seems further away then ever. Moreover, if we consider the spread of capitalism around the globe and the increasing economical divergence between the OECD countries and the rest of the world (Prichett 1997) the theory of the progressiveness of capitalism that is sometimes ascribed to the Marxist conception of socio-economic evolution seems to be seriously challenged.

On the basis of the above mentioned historical events Kiely (1995) identifies an impasse in Marxist inspired development studies. The purpose of this essay then is to assess whether Marxist theory is still capable of providing useful insights for the study of development or if it has reached its expiry date. The scope and format of this essay however, do not allow for a discussion of the totality of Marxist theory and thought. Rather, I shall choose one specific aspect of Marxist theory to demonstrate its relevance for development studies. The subject chosen is, however, one that holds a crucial position in the body of Marx’s work; it is the Marxist conception of socio-economic evolution.

The above quote from the preface to the first German edition of Das Kapital provides the focus for the discussion of Marx’s conception of socio-economic evolution and its relevance for development studies. This then suggests the following structure for this essay. First, in order to judge whether it is justified to ascribe a stagist interpretation of socio-economic evolution to Marx, it is necessary to put the above mentioned quote into the wider context of Marxist thought. This will be done by shortly outlining Marx’s conception of socio-economic evolution drawing on his own writings. Secondly, the influence of Marx’s conception of socio-economic evolution on development studies will be discussed. It will be shown that this influence has found its main materialisation in the discussions about the progressiveness of capitalism. This then, so I hope, will allow me to draw a conclusion assessing the value of Marxist theory for development studies.

Marx’s conception of socio-economic evolution
Marx’s conception of socio-economic evolution must be understood as part of his method of historical materialism. This term, also known as the materialist conception of history, plays a crucial role in Marxism and forms, according to Bottomore (1991), the social scientific core of Marxist thought. The main elements of Marx’s conception of historical materialism can be found in the Preface to his 1859 Critique of Political Economy (Marx 2000) and The German Ideology (Marx 2000b). To put it very crudely it can be said that in these two writings Marx presents a view that it is the socio-economic processes that form the basis of human society and that all other aspects – in Marxist terminology called superstructure – are secondary phenomena. However, as McLellan (2000, p.142) rightly points out, Marx’s strong emphasis on the importance of the socio-economic base for the development of society by no means implies that he was a “simple economic determinist”.

A second crucial element for Marx’s historical materialism is the concept of class and its relevance for an understanding of history. In The Communist Manifesto (Marx 2000c, p.246) Marx and Engels clearly spell out the importance of class when they write: “The history of all hitherto existing society is the history of class struggles.” Within historical materialism class rule and conflict play the important role of forcing economic productivity of a given society beyond the level of subsistence (Bottomore 1991). It is in this sense that Marx writes in The Poverty of Philosophy “No antagonism, no progress” Marx (2000f, p.213).

Another important building block for understanding Marx’s conception of socio-economic evolution is the mode of production. In the Preface to A Critique of Political Economy Marx (2000) elegantly outlines what he understands as mode of production and how different modes of production are linked to various stages in the evolution of human society. A mode of production for Marx is a structure of social relations that is basically defined by two antagonistic classes struggling over the means of production, the only exception being the primitive-communal and the communist mode of production (Brewer 1989). In a passage in the Preface well worth citing in length, Marx describes the interrelationship between modes of production and the developing productive forces which will eventually lead to communism.
“In broad outlines Asiatic, ancient, feudal, and modern bourgeois modes of production can be designated as progressive epochs in the economic formation of society. The bourgeois relations of production are the last antagonistic form of the social process of production – antagonistic not in the sense of individual antagonism, but of one arising from the social conditions of life of the individuals; at the same time the productive forces developing in the womb of bourgeois society create the material conditions for the solution of that antagonism.” (Marx 2000, p.426)

The Preface to A Critique of Political Economy quite clearly suggests a stagist conception of human history where different societies pass through successive progressive stages of development. However, various writers point out that this stagist view of history should be ascribed to the early Marx. McLellan (2000, p.143) points out that the later Marx seems to favour a case-by-case study of development over simple universal pronouncements of the course of history. Also Bottomore (1991) contends that Marx’s modes of production and the stages of history are not to be taken as general laws of history. He points out that Marx in his letter to Mikhailovsky denied that his material conception of history was an “historico-philosophical theory of the general path every people is fated to tread, whatever the historical circumstances in which it finds itself” (Marx 2000d, p.618).

For Marx a change in the mode of production necessarily implies a change in property relations. Of particular interest for Marx is the passage from the feudal mode of production to the capitalist mode of production. In Capital Vol. 1 Marx (1981) identifies ‘primitive accumulation’ as the main process through which capitalist property relations emerged in 16th century England. Marx (1981, p.874-875) describes the process as follows: “So-called primitive accumulation, therefore, is nothing else than the historical process of divorcing the producer from the means of production.” Once the process of ‘primitive accumulation’ and the establishment of capitalist property relations are completed the capitalist mode of production leads, according to Marx, to a rapid development of the forces of production. In The Communist Manifesto Marx expresses his view about the progressive historic function of capitalism when he credits the bourgeoisie with the creation of “more massive and more colossal productive forces than have all preceding generations together” ( Marx 2000c, p.249). Furthermore, Marx identifies the bourgeoisie as a class that is driven around the whole globe by its need for an ever expanding market. It thus creates, in the words of Marx (2000c, p.249) “a world after its own image.”

The above sketches of historical materialism, modes of production, stages of history and capitalist development provide the framework for an understanding of Marx’s statement in the preface to the first German edition of Capital. To repeat once again Marx there states: “The country that is more developed industrially only shows, to the less developed, the image of its own future” (Marx 2000a, p.453). As indicated above, taken out of the context of Marx’s work this statement could easily be interpreted as a stagist version of socio-economic development. Furthermore, this interpretation is supported when we take into consideration that Marx in the same passage of the preface talks of socio-eocnomic laws and tendencies that work “with iron necessity towards inevitable results” (Marx 2000a, p.453). However, it should be noted that Marx might have had a political intention whilst writing the preface. Marx addresses in the preface the German audience and specifically links the experience of England, which was more industrially developed in those times, to that of Germany. By stating that the more developed country shows the less developed an image of his own future he implies for his German readership that the conditions of labour in Germany will deteriorate as they did in England. Patnaik (2006) rightly points out that Marx in many of his writings was very much preoccupied with furthering the prospect of a European Revolution. It is therefore necessary to keep in mind the specific historical context and Marx’s revolutionary intentions when interpreting his work.

It is probably this preoccupation with a European Revolution that explains why Marx has written so little about non-European countries and their development prospects. However, Marx recognized the need to include these countries in his theory of socio-economic evolution and therefore introduced the Asiatic mode of production. This mode of production is a rather stagnant one and does not necessarily lead to higher stages of development, unless it is disrupted by outside influences - for example colonialism. Faced with discussions about the application of his analysis of modes of production and stages of history to the Russian peasantry, Marx makes it clear in his letter to Vera Sassoulitch that his analysis “is expressly limited to the countries of western Europe” (Marx 2000e, p.623).

Is capitalism progressive? Marx’s conception of socio-economic evolution and the study of development
Marx has been and continues to be an inspiration for scholars and writers in development studies. Especially his conception of socio-economic development, its implication for the transition between different modes of production and the impact of capitalism on non-capitalist social structures has stimulated a long debate within the academic community. Much of this debate has focused on the question of the progressiveness of capitalism and related to this on a discussion of imperialism. The following will quickly outline the main discussions in both fields and contrast them with some empirical data.

In the Communist Manifesto Marx clearly ascribes an overwhelming progressive tendency to capitalism in the sense that it massively develops the productive forces of a given society and thus prepares the material basis for passing from capitalism to socialism. The debate on the progressiveness of capitalism is thus one that gets to the core of the Marxist conception of socio-economic evolution. Weeks (1985-86) locates the most important disagreement amongst Marxist scholars over the question whether capitalism in its advanced stage is progressive or not. This question is important for development studies as it necessarily relates to the impact that advanced capitalism is having on the developing world. Weeks (1985-86) proposes an interesting periodization of capitalism’s impact on pre-capitalist societies to assess the progressiveness of capitalism. His periodization consists of three stages that are characterized by different forms of capital exports to the developing world. In the first stage, which is characterized by the export of commodity capital, capitalism is not progressive as it tends to strengthen pre-capitalist social relations. The impact of the second stage, which is characterized by the export of money capital, is contradictory. It is only in the third stage, distinguished by the export of productive capital, that capitalism has a progressive impact on developing countries.

The question of capitalism’s capacity to develop the productive forces of a given society – or in other words the progressiveness of capitalism – is also at the heart of the Marxist inspired debate on imperialism. Brewer (1989) distinguishes two lines of Marxist theory concerning capitalism as a world system. One line, so Brewer, highlights the progressiveness of imperialist capitalism whereas the other line focuses on the exploitative dimensions of imperialist capitalism. The first line of thought is usually associated with Bill Warren (1980) and the second with dependency theories as developed by Andre Gunder Frank and Immanuel Wallerstein. Which line of thought is closer to Marx own thinking is difficult to assess. Marx’s writings on the impact of capitalism on developing countries are few and deal mainly with British colonial rule in India. Marx’s view on questions of imperialism can not be regarded as a clear cut. Indeed, both lines of thought – the theory of progressiveness of capitalism and the dependency theory - can claim the authority of Marx. For example in The Communist Manifesto Marx (2000c, p.249) praises the ability of the bourgeoisie to develop the productive forces of society and at the same time accuses the bourgeoisie of making the East dependent on the West.

Which of the above mentioned interpretations on the progressives of advanced capitalism is more relevant for a contemporary analysis of development is probably more a matter of empirical research than one of the right exegesis of Marx. For the purpose of empirical research the question on the progressiveness of capitalism can be framed in terms of the debate on convergence or divergence of the global economy. Prichett (1997) shows that there has been considerable divergence over the last 150 years in terms of growth rates on a world scale. He identifies a general pattern of convergence between developed economies and a pattern of divergence between developed and developing economies. Weeks (1999) provides a nuanced Marxist reading of this phenomenon using the concepts of primary and secondary uneven development. His analysis implies a long term convergence among developed economies and divergence between developed and undeveloped economies just as Prichett’s (1997) empirical study of growth rates seem to prove.

Conclusion - The value of Marx for development studies
Weeks (1999) shows that Marxist theory combined with empirical studies can still provide powerful insights for the study of development. This gives reason to believe that the impasse in development studies as identified by Kiely (1995) might have been a temporal one and that a more nuanced version of Marxism is making a comeback - at least in the field of academia. Kiely (1995) ascribes the impasse in Marxist inspired development theory as mainly a result of what he calls “orthodox Marxism”. The orthodox version of Marxism, according to Kiely, is one that fetishizes Marxist categories and turns Marxism into a dogma. Three features are characteristic of the orthodox version of Marxism. These are: “first, a unilinear account of history; secondly, an optimistic assessment of the “modernizing influence” of capitalism and colonialism; and thirdly, an assertion that the development of the productive forces is the main agency of history” (Kiely 1995, p.13). It is exactly these features that led Marxist theorizing in development studies into an impasse and Kiely suggests a focus on the Marxist method as opposed to Marxist dogma as a way out of the impasse. Following Kiely, a focus on the Marxist method would reject any stagist interpretation of socio-economic evolution and instead stress the contingent nature of the outcome of historically specific class struggles.

From the above discussion it becomes clear that Marxist theory should not be (ab)used to predict the future development of a given country in a deterministic manner. Two important elements must be highlighted for an understanding of Marx’s famous statement in the preface to the first German edition of Das Kapital cited above in the introduction to this essay. First, the historical-political context in which Marx was writing and his preoccupation with furthering the possibility of a European revolution must be kept in mind. Second, the quote should not be understood as predicting a similar development in different countries, but rather as suggesting that similar mechanism – in particular the class struggle over the means of production – are at work in any given society. This means that we can expect societies with similar class structures – like it has been the case for England and Germany in the 19th century – to proceed along similar path of development. It does however not mean that the outcomes of different class struggles are in any way predetermined or predictable by the use of Marx’s conception of socio-economic evolution.

To conclude we can therefore say that the value of Marxist theory for contemporary development studies should not be sought after in specific Marxist statements or predictions. These statements and predictions, for example about the progressiveness of capitalism, were necessarily bound up with the specific historical context in which Marx was writing. As Lukács (1923) pointed out, “it is not the ‘belief’ in this or that thesis, nor the exegesis of a ‘sacred’ book”, but rather an emphasis on the Marxist method that defines the value of Marx. It is therefore the Marxist method and specifically his focus on class struggle as the key site for the movement of socio-economic evolution that assures the continuing importance of Marx for development studies.

Bottomore, T. (ed.) (1991) A Dictionary of Marxist Thought. Oxford: Basil Blackwell.
Brewer, A. (1989) Marxist Theories of Imperialism: A Critical Survey. London: Routledge.
Kiely, R. (1995) Sociology and Development: The Impasse and Beyond. London: UCL Press.
Lukács, G. (1923) History & Class Consciousness. [] Accessed 7 November 2006.
Marx, K. (1981) Capital, Vol. 1. Harmondsworth: Penguin.
Marx, K. (2000) Karl Marx: Selected Writings (ed. by D. McLellan). Oxford: Oxford University Press, pp.424-427 (Preface to A Critique of Political Economy)
Marx, K. (2000a) Karl Marx: Selected Writings (ed. by D. McLellan). Oxford: Oxford University Press, pp.453-455 (Capital 1, preface to the first German edition, 1867)
Marx, K. (2000b) Karl Marx: Selected Writings (ed. by D. McLellan). Oxford: Oxford University Press, pp.175-208 (The German Ideology)
Marx, K. (2000c) Karl Marx: Selected Writings (ed. by D. McLellan). Oxford: Oxford University Press, pp.245-272 (The Communist Manifesto)
Marx, K. (2000d) Karl Marx: Selected Writings (ed. by D. McLellan). Oxford: Oxford University Press, pp.617-618 (Letter to Mikhailovsky)
Marx, K. (2000e) Karl Marx: Selected Writings (ed. by D. McLellan). Oxford: Oxford University Press, pp.617-618 (Letter to Vera Sassoulitch)
Marx, K. (2000f) Karl Marx: Selected Writings (ed. by D. McLellan). Oxford: Oxford University Press, pp.631-632 (The Poverty of Philosophy).
McLellan, D. (ed.) (2000) Karl Marx: Selected Writings. Oxford: Oxford University Press.
Patnaik, P. (2006) ‘Karl Marx as a Development Economist’, in: Jomo K.S. (ed) The Pioneers of Development Economics: Great Economists on Development. London: Zed Books.
Prichett L. (1997) ‘Divergence, Big Time’, Journal of Economic Perspectives 11 (3) pp.3-17.
Warren, B. (1980) Imperialism: Pioneer of Capitalism. London: Verso.
Weeks, J. (1985-86) ‘Epochs of Capitalism and the Progressiveness of Capital’s Expansion’, Science and Society pp.414-435.
Weeks, J. (1999) The Expansion of Capital and Uneven Development on a World Scale. CDPR Discussion Paper 0999, Centre for Development Policy & Research, School of Oriental and African Studies, London.
Wood, E.M. (1984) ‘Marxism and the Course of History’ New Left Review 147, pp.95-107.

Robert Moosbrugger

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