1.

descibe the major events that infuenced the emergence of the concept of
development administration and also identify the basic themes of
development management.\

New public management

From Wikipedia, the free encyclopedia

New Public Management (NPM) is an approach to running public service organizations that is
used in government and public service institutions and agencies, at both sub-national and
national levels. The term was first introduced by academics in the UK and Australia [1] to
describe approaches that were developed during the 1980s as part of an effort to make the public
service more "businesslike" and to improve its efficiency by using private sector management
models. As with the private sector, which focuses on "customer service", NPM reforms often
focused on the "...centrality of citizens who were the recipient of the services or customers to the
public sector." [2] NPM reformers experimented with using decentralized service delivery models,
to give local agencies more freedom in how they delivered programs or services. In some cases,
NPM reforms that used e-government consolidated a program or service to a central location to
reduce costs. Some governments tried using quasi-market structures, so that the public sector
would have to compete against the private sector (notably in the UK, in health care). [3]Key
themes in NPM were "...financial control, value for money, increasing efficiency...,identifying
and setting targets and continuance monitoring of performance, handing over.. power to the
senior management" executives. Performance was assessed with audits, benchmarks and
performance evaluations. Some NPM reforms used private sector companies to deliver what
were formerly public services.[4]

NPM advocates in some countries worked to remove "...collective agreements [in favour
of]...individual rewards packages at senior levels combined with short term contracts" and
introduce private sector-style corporate governance, including using a Board of Directors
approach to strategic guidance for public organizations.[5] While NPM approaches have been
used in many in countries around the world, NPM is particularly associated with the most
industrialized OECD nations such as the United Kingdom, Australia and the United States of
America. NPM advocates focus on using approaches from in the private sectorthe corporate or
business world, which they can be successfully applied in the public sector and in a public
administration context. NPM approaches have been used to reform the public sector, its policies
and its programs. NPM advocates claim that it is a more efficient and effective means of
attaining the same outcome.

In NPM, citizens are viewed as "customers" and public servants are viewed as public managers.
NPM tries to realign the relationship between public service managers and their political
superiors by making a parallel relationship between the two. Under NPM, public managers have
incentive-based motivation such as pay-for-performance, and clear performance targets are often
set, which are assessed by using performance evaluations. As well, managers in an NPM
paradigm may have greater discretion and freedom as to how they go about achieving the goals
set for them. This NPM approach is contrasted with the traditional public administration model,
in which institutional decision-making, policy-making and public service delivery is guided by
regulations, legislation and administrative procedures.

NPM reforms use approaches such as disaggregation, customer satisfaction initiatives, customer
service efforts, applying an entrepreneurial spirit to public service, and introducing innovations.
The NPM system allows "the expert manager to have a greater discretion."[6][7] "Public Managers
under the New Public Management reforms can provide a range of choices from which
customers can choose, including the right to opt out of the service delivery system completely".[8]

Contents
1 History

2 Globalization

3 Aspects

o 3.1 Management

o 3.2 Performance standards

o 3.3 Output controls

o 3.4 Decentralization

o 3.5 Competition

o 3.6 Private-sector management

o 3.7 Cost reduction

4 Differences between public and private sectors

5 Issues

o 5.1 Criticisms

5.1.1 Relevance

o 5.2 Alternatives

o 5.3 Comparisons to New Public Administration

6 Further reading
 7 References

History
The first practices of New Public Management emerged in the United Kingdom under the
leadership of Prime Minister Margaret Thatcher. Thatcher played the functional role of policy
entrepreneur" and the official role of prime minister.[citation needed] Thatcher drove changes in public
management policy in such areas as organizational methods, civil service, labor relations,
expenditure planning, financial management, audit, evaluation, and procurement. Thatcher's
successor, John Major, kept public management policy on the agenda of the Conservative
government, leading to the implementation of the Next Steps Initiative. Major also launched the
programs of the Citizens Charter Initiative, Competing for Quality, Resource Accounting and
Budgeting, and the Private Finance Initiative.

A term was coined in the late 1980s to denote a new (or renewed) focus on the importance of
management and production engineering in public service delivery, which often linked to
doctrines of economic rationalism (Hood 1989, Pollitt 1993). During this timeframe public
management became an active area of policy-making in numerous other countries, notably in
New Zealand, Australia, and Sweden. At the same time, Organization for Economic Cooperation
and Development (OECD) established its Public Management Committee and Secretariat
(PUMA), conferring to public management the status normally accorded more conventional
domains of policy. In the 1990s, public management was a major item on President Clintons
agenda. Early policy actions of the Clinton administration included launching the National
Partnership and signing into law the Government Performance and Results Act. Currently there
are few indications that public management issues will vanish from governmental policy
agendas. A recent study showed that in Italy, municipal directors are aware of a public
administration now being oriented toward new public management where they are assessed
according to the results they produce.[9]

The term New Public Management (NPM) expresses the idea that the cumulative flow of policy
decisions over the past twenty years has amounted to a substantial shift in the governance and
management of the state sector in the United Kingdom, New Zealand, Australia, Scandinavia,
and North America. A benign interpretation is that these decisions have been a defensible, if
imperfect, response to policy problems. Those problems as well as their solutions were
formulated within the policy-making process. The agenda-setting process has been heavily
influenced by electoral commitments to improve macro- economic performance and to contain
growth in the public sector, as well as by a growing perception of public bureaucracies as being
inefficient. The alternative-generation process has been heavily influenced by ideas coming from
economics and from various quarters within the field of management.

Globalization
Although the origins of NPM came from Westernized countries it expanded to a variety of other
countries in the 1990s. Before the 1990s, NPM was largely associated to an idea utilized by
developed countries that are particularly Anglo-Saxon. However the 1990s have seen countries
in Africa, Asia and other countries looking into using this method. In Africa, downsizing and
decrease of user fees have been widely introduced. These autonomous agencies within the public
sectors have been established in these areas. Performance contracting became a common policy
in crisis states worldwide. Contracting out of this magnitude can be used to do things such as
waste management, cleaning, laundry, catering and road maintenance.

Aspects
NPM was accepted as the "gold standard for administrative reform"[10] in the 1990s. The idea for
using this method for government reform was that if the government guided private-sector
principles were used rather than rigid hierarchical bureaucracy, it would work more efficiently.
NPM promotes a shift from bureaucratic administration to business-like professional
management. NPM was cited as the solution for management ills in various organizational
context and policy making in education and health care reform.

The basic principles of NPM is can best be described when split into seven different aspects
elaborated by Christopher Hood in 1991. Hood also invented the term NPM itself. [11] They are
the following:

Management

Because of its belief in the importance and strength of privatizing government, it is critical to
have an emphasis on management by engaging in hands-on methods. This theory allows leaders
the freedom to manage freely and open up discretion.

Performance standards

Its important to maintain explicit standards and measures of performance in a workforce. Using
this method promotes clarification of goals/intent, targets, and indicators for progression.

Output controls

The third point acknowledges the "shift from the use of input controls and bureaucratic
procedures to rules relying on output controls measured by quantitive performance indicators".[12]
This aspect requires using performance based assessments when looking to outsource work to
private companies/groups.

Decentralization

NPM advocates often shifted from a unified management system to a decentralized system in
which managers gain flexibility and are not limited to agency restrictions.

Competition
This characteristic focuses on how NPM can promote competition in the public sector which
could in turn lower cost, eliminate debate and possibly achieve a higher quality of progress/work
through the term contacts.

Private-sector management

This aspect focuses on the necessity to establish short-term labor contracts, develop corporate
plans or business plans, performance agreements and mission statements. It also focuses on
establishing a workplace in which public employees or contractors are aware of the goals and
intention that agencies are trying to reach.

Cost reduction

The most effective one which has led to its ascent into global popularity, focuses on keeping cost
low and efficiency high. "Doing more with less" [13]

Differences between public and private sectors

New Public Management draws practices from the private sector and uses them in the public
sector of management. NPM reforms use market forces to hold the public sector accountable and
the satisfaction of preferences as the measures of accountability. In order for this system to
proceed, certain conditions, such as the existence of competition, must exist and information
about choices must be available.[14] Reforms that promise to reinvent government by way of
focusing on results and customer satisfaction as opposed to administrative and political processes
fail to account for legislative self-interest. Institutions other than federal government, the changes
being trumpeted as reinvention would not even be announced, except perhaps on hallway
bulletin boards.

Issues
Criticisms

There are blurred lines between policymaking and providing services in the New Public
Management system. Questions have been raised about the potential politicization of the public
service, when executives are hired on contract under pay-for-performance systems. There are
concerns that public managers may move away from trying to meet citizens' needs. NPM brings
to question integrity and compliance when dealing with incentives for public managers.
Questions such as managers being more or less faithful arise. The public interest is at risk and
could undermine the trust in government. Accountability can be a big issue.[15]

Relevance

Although NPM had a dramatic impact in the 1990s on managing and policymaking, many
scholars believe that NPM has hit its prime. Scholars like Frank Dunleavy believe New Public
Management is phasing out because of disconnect with customers and their institutions.
Scholars cite the Digital Era and the new importance of technology that kills the necessity of
NPM. In countries that are less industrialized the NPM concept is still growing and spreading.
This trend has much to do with a country's ability or inability to get their public sector in tune
with the Digital Era. New Public Management was created in the Public Sector to create change
based on: disaggregation, competition, and incentives. Using incentives to produce the maximum
services from an organization is largely stalled in many countries and being reversed because of
increased complexity.[16]

Alternatives

Post-NPM, many countries explored digital era governance (DEG). Dunleavy believes this new
way of governance should be heavily centered upon information and technology.[17] Technology
will help re-integrate with digitalization changes. Digital Era Governance provides a unique
opportunity for self- sustainability however, there are various factors that will determine whether
or not DEG can be implemented successfully. When countries have proper technology, NPM
simply can't compete very well with DEG. DEG does an excellent job of making services more
accurate, prompt and remove most barriers and conflicts. DEG also can improve the service
quality and provide local access to outsourcers.

Comparisons to New Public Administration

New Public Management is often mistakingly compared to New Public Administration. The
New Public Administration movement was one established in the USA during the late 1960s
and early 1970s.[18] Though there may be some common features, the central themes of the two
movements are different. The main thrust of the New Public Administration movement was to
bring academic public administration into line with a radical egalitarian agenda that was
influential in US university campuses. By contrast, the emphasis of the New Public Management
movement a decade or so later was firmly managerial in the sense that it stressed the difference
that management could and should make the quality and efficiency of public services. It focuses
on public service production functions and operational issues contrasted with the focus on public
accountability, model employer public service values, due process, and what happens inside
public organizations in conventional public administration. That meant New Public Management
doctrines tended to be opposed to egalitarian ideas of managing without managers, juridical
doctrines of rigidly rule-bound administration and doctrines of self-government by public-service
professionals like teachers and doctors.

The table below gives a side-by-side comparison of the two systems core aspects/characteristics

New Public Management New Public Administration

Hands on approach Hierarchy and rules
Explicit standards Apolitical, non-partisan civil service
Emphasis on output control Internal regulations
Disconnection of units Equality (Equity?)
Importance of the private sector Importance of public sector
Improve timing Stability
Greater usage of money

New Public Administration

From Wikipedia, the free encyclopedia
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New Public Administration is an anti-positivist, anti-technical, and anti-hierarchical reaction

against traditional public administration. A practiced theory in response to the ever changing
needs of the public and how institutions and administrations go about solving them. Focus is on
the role of government and how they can provide these services to citizens in which are a part of
public interest, by means, but not limited to public policy.

Contents
1 History

2 Features of new public administration

3 Themes

4 Criticism

5 Significance

6 References

History
New Public Administration traces its origins to the first Minnowbrook Conference held in 1968
under the patronage of Dwight Waldo. This conference brought together the top scholars in
public administration and management to discuss and reflect on the state of the field and its
future.[1] The 1960s in the USA was a time of unusual social and political turbulence and
upheaval. In this context, Waldo concluded that neither the study nor the practice of public
administration was responding suitably to the escalating turmoil and the complications that arose
from those conditions. Part of the reasoning for this Waldo argued, was the general mistrust that
had become associated with public administration itself. A call to revamap the ethical obligations
of the service sector was necessary in rebuilding the public's trust of government and
bureaucracy in which had been plagued by corruption and the narrow self interests of others.
Moving toward a more ethical public service, then, required attention to the underlying values
that support public service-and public servants-in any sector.[2]

The new public management(npm) did not offer public servants an alternative model to help
them resolve emerging conflicts and tensions. Concepts of citizenship, democracy or public
interest have evolved over time and they are continuing to evolve. Consequently, the role of
government and the role of the public service are being transformed in ways that push beyond
the constraints of the Classic model he lenses of varying perspectives can challenge, clarify, and
create a history that boasts enough depth to serve as not only a history in a traditional sense but
also an interactive timeline that ignites constant improvement. At its core, public service requires
a vision that extends beyond narrow self-interest.[2] Waldo sees public administration and
bureaucracy as integrally bound to civilization and to our culture in two senses: the evolution of
civilization itself was dependent upon public administration and related concepts are constitutive
elements within out specific civilization and culture.[3]

New Public Administration theory deals with the following issues:

Democratic citizenship; Refers directly to the belief in creating a government where the
"common man" have a voice in politics. For such an approach to work, citizens must
become aware, knowledgeable, and active in their communities and nations. True
democratic citizenship requires more than voting for representatives. It requires using
one's own mind, voice, and actions.[4]

Public interest; Refers to the collective common good within society, to which is the
main objective of public interest.

Public policy; The means by which new public policy is enacted, and introduced. Not
limited in participation of the public but encouraged involvement.

Services to citizens; Providing and upholding the moral and ethical standard in regards
to meeting the needs of citizens through institutions and bureaucracies.

First, a new theory should start with the ideal of democratic citizenship. The public service
derives its true meaning from its mandate to serve citizens to advance the public good. This is the
raison dtre of the institution, the source of motivation and pride of all those who choose to
make it their life, whether for a season or for an entire career.

Features of new public administration

These are-

1. Responsiveness: The administration should bring about certain internal as well as

external changes so that public administration could be made more relevant to the social,
economic, political and technological environment. For this to happen the administration
has to be more flexible and adaptable to the various changes.
2. Client Centricity: this means that the effectiveness of the administrator should be judged
not only from the point of view of the government, but from that of the citizens. If the
administrative actions did not improve the quality of life of citizens then they are not
effective notwithstanding whatsoever rationality and efficiency they may have.

3. Structural Changes in Administration: the new public administration approach calls

for small, flexible and less hierarchical structures In administration so that the citizens
administration interface could become more flexible and comfortable. The organizational
structure should be in with the socially relevant conditions.

4. Multi-disciplinary Nature of Public Administration: knowledge from several

disciplines and not just one dominating paradigm build the discipline of public
administration. The political, social, economic, management and human relation
approaches are needed to ensure the growth of discipline.

5. Politics-Administration Dichotomy since administrators today are involved in policy

formulation and policy implementation at all the stages. Dichotomy meaning "a division
or contrast between two things that are or are represented as being opposed or entirely
different".

6. Awareness: Bring attention to the works of a public administration and the task that
public administrators carry out for the community and for the government. Jobs of public
administrators affect communitys and mass amounts of people. The importance of the
job should be highlighted.

7. Case Studies: Case studies help public administrators highlight situations and events
where policies were not carried out as they should be. They set an example for what to do
and what not to do. Case studies are a basic way to break down events in order to learn
from other peoples mistakes and the affects those mistakes have had on the community.
With public administration being a job devoted to the people; it is an obvious way to see
the reality of the work you do in the community. While there are many cases where
policies were not carried out as planned. There are also plenty of examples of executed
policys that have benefited communitys, and those are important to look at as well.

8. Structure Change: Public Administration is moving is many different directions, it is

more often called Public Management now. This is because the job is moving towards a
direction of not only implementing policy to people but also managing policies as it
trickles down through the law process, so that it is realistic for communitys and the
people in them.

9. Jack of All Trades: the best public administrators tend to be someone who has
knowledge in politics and law, but also has a hand in community functions. This allows
for a smooth transition from policy to implementation.
 10. Change: With the changes in the world, the job of public administration has changed.
The job may be the same, but titles like Public Manager and Public Adviser has replaced
the title public administrator.

Themes
1. Relevance: Traditional public administration has too little interest in contemporary
problems and issues. Social realities must be taken into consideration. i.e. people should
see changes as relevant meaning thereby that changes should be specific to the needs of
the area and the need of the people. Earlier approaches to NPA considered that rationality
of the people was neglected. NPA suggests the inclusion of rationality of the people too in
the process of policy formulation.

2. Values: Value-neutrality in public administration is an impossibility. The values being

served through administrative action must be transparent.To practice transparency in
public administration is to ensure citizens the availability of information which is deemed
public. This should be an organizational goal, and is to be taken into account when
conducting all public business regardless of ones job title. If the goal of an organization
is to serve the citizens to the best of their ability, then avoiding or failing to achieve
transparency would cause significant damage to the relationship between them and the
people they are aiming to serve.

3. Social Equity: Realization of social equity should be a chief goal of public

administration.

4. Change: Skepticism toward the deeply rooted powers invested in permanent institutions
and the status quo. Operational flexibility and organisational adaptability to meet the
environmental changes should be in-built in the administrative system.

5. Client Focus: Positive, proactive, and responsive administrators rather than inaccessible
and authoritarian "ivory tower" bureaucrats.

6. Management-Worker relations. There should be equal emphasis both on efficiency and

humane considerations. The new approach has to satisfy both the efficiency and the
human relations criterion in order to achieve success.

NPA provides solutions for achieving these goals, popularly called 4 D's i.e. Decentalisation,
Debureaucratisation, Delegation and Democratisation.

Criticism
Though New Public Administration brought public administration closer to political science, it
was criticized as anti-theoretic and anti-management. Robert T. Golembiewski describes it as
radicalism in words and status quo in skills and technologies. Further, it must be counted as only
a cruel reminder of the gap in the field between aspiration and performance. Golembiewski
considers it as a temporary and transitional phenomena.[5] In other words, we can say that the
solutions for achieving the goals and anti-goals were not provided by the NPA scholars explicitly.
Secondly, how much one should decentralize or delegate or debureaucratize or democratize in
order to achieve the goals? On this front NPA is totally silent.

As said in A New Synthesis of Public Administration, governments have always been called upon
to make difficult decisions, undertake complicated initiatives and face complex problems
characteristics of the period. This is not in dispute. Nonetheless, the current circumstances is to
determine what can be handled in the traditional way and what must be done differently.[6]

Governments have always been called upon to face difficult problems. Setting priorities and
making choices have always been difficult. For example, eliminating a sizable deficit is merely
a difficult problem, although it is hard to believe when one is in the middle of such a heart-
wrenching exercise. This entails making choices among equally deserving public purposes and
making tough decisions about what should be preserved for the future. It requires reconciling
future needs with what could garner a sufficient degree of public support in the short term to
move forward. Academic public administration has lagged considerably behind practicing public
administration. Improved curricula and a refocusing of emphasis upon the policy dynamics of
government administration will be important factors in enticing more students to study of public
administration. It is more important to increase the number and improving the geographic spread
of universities with public affairs programs, integrating public affairs components into the
curricula of other graduate and professional programs, developing many more in-service, mid-
career educational programs for public servants, and utilizing existing resources to strengthen
public affairs programs.[6]

Development theory
From Wikipedia, the free encyclopedia
Sociology

History

Outline

Portal
 Theory

Positivism

Antipositivism

Postpositivism

Functionalism

Conflict theories

Social constructionism

Structuralism

Interactionism

Critical theory

Structure and agency

Actornetwork theory

Methods

Quantitative

Qualitative

Historical

Comparative

Mathematical

Computational

Ethnography
 Ethnomethodology

Network analysis

Subfields

Conflict

Criminology

Culture

Development

Deviance

Demography

Education

Economic

Environmental

Family

Gender

Health

Industrial

Inequality

Knowledge

Law

Literature
 Medical

Military

Organizational

Political

Race and ethnicity

Religion

Rural

Science

Social change

Social movements

Social psychology

Stratification

STS

Technology

Urban

Browse

Bibliography

By country

Index

Journals
 Organizations

People

Timeline

Development theory is a conglomeration or a collective vision 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.

Contents
1 Modernization theory

o 1.1 Sociological and anthropological modernization theory

o 1.2 Linear stages of growth model

o 1.3 Critics of modernization theory

2 Structuralism

3 Dependency theory

4 Basic needs

5 Neoclassical theory

o 5.1 Structural adjustment

6 Recent trends
 o 6.1 Post-development theory

o 6.2 Sustainable development

o 6.3 Human development theory

7 See also

8 References

9 Further reading

Modernization theory
Main article: Modernization theory

Modernization theory is used to analyze in which modernization processes 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
mile 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 Europes 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 Rostows 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.

Structuralism
Main article: Structuralist economics

Structuralism is a development theory which focuses on structural aspects which impede the
economic growth of developing countries. The unit of analysis is the transformation of a
countrys economy from, mainly, a subsistence agriculture to a modern, urbanized manufacturing
and service economy. Policy prescriptions resulting from structuralist thinking include major
government intervention in the economy to fuel the industrial sector, known as import
substitution industrialization (ISI). This structural transformation of the developing country is
pursued in order to create an economy which in the end enjoys self-sustaining growth. This can
only be reached by ending the reliance of the underdeveloped country on exports of primary
goods (agricultural and mining products), and pursuing inward-oriented development by
shielding the domestic economy from that of the developed economies. Trade with advanced
economies is minimized through the erection of all kinds of trade barriers and an overvaluation
of the domestic exchange rate; in this way the production of domestic substitutes of formerly
imported industrial products is encouraged. The logic of the strategy rests on the infant industry
argument, which states that young industries initially do not have the economies of scale and
experience to be able to compete with foreign competitors and thus need to be protected until
they are able to compete in the free market.[9] The PrebischSinger hypothesis states that over
time the terms of trade for commodities deteriorate compared to those for manufactured goods,
because the income elasticity of demand of manufactured goods is greater than that of primary
products. If true, this would also support the ISI strategy.

Structuralists argue that the only way Third World countries can develop is through action by the
state. Third world countries have to push industrialization and have to reduce their dependency
on trade with the First World, and trade among themselves.

The roots of structuralism lie in South America, and particularly Chile. In 1950, Raul Prebisch
went to Chile to become the first director of the Economic Commission for Latin America. In
Chile, he cooperated with Celso Furtado, Anibal Pinto, Osvaldo Sunkel, and Dudley Seers, who
all became influential structuralists.

Dependency theory
Main article: Dependency theory

Dependency theory is essentially a follow up to structuralist thinking, and shares many of its core
ideas. Whereas structuralists did not consider that development would be possible at all unless a
strategy of delinking and rigorous ISI was pursued, dependency thinking could allow
development with external links with the developed parts of the globe. However, this kind of
development is considered to be "dependent development", i.e., it does not have an internal
domestic dynamic in the developing country and thus remains highly vulnerable to the economic
vagaries of the world market. Dependency thinking starts from the notion that resources flow
from the periphery of poor and underdeveloped states to a core of wealthy countries, which
leads to accumulation of wealth in the rich states at the expense of the poor states. Contrary to
modernization theory, dependency theory states that not all societies progress through similar
stages of development. Periphery states have unique features, structures and institutions of their
own and are considered weaker with regards to the world market economy, while the developed
nations have never been in this colonized position in the past. Dependency theorists argue that
underdeveloped countries remain economically vulnerable unless they reduce their connections
to the world market.[10][11]

Dependency theory states that poor nations provide natural resources and cheap labor for
developed nations, without which the developed nations could not have the standard of living
which they enjoy. When underdeveloped countries try to remove the Core's influence, the
developed countries hinder their attempts to keep control. This means that poverty of developing
nations is not the result of the disintegration of these countries in the world system, but because
of the way in which they are integrated into this system.

In addition to its structuralist roots, dependency theory has much overlap with Neo-Marxism and
World Systems Theory, which is also reflected in the work of Immanuel Wallerstein, a famous
dependency theorist. Wallerstein rejects the notion of a Third World, claiming that there is only
one world which is connected by economic relations (World Systems Theory). He argues that
this system inherently leads to a division of the world in core, semi-periphery and periphery. One
of the results of expansion of the world-system is the commodification of things, like natural
resources, labor and human relationships.[12][13]

Basic needs
Main article: Basic needs

The basic needs model was introduced by the International Labour Organization in 1976, mainly
in reaction to prevalent modernization- and structuralism-inspired development approaches,
which were not achieving satisfactory results in terms of poverty alleviation and combating
inequality in developing countries. It tried to define an absolute minimum of resources necessary
for long-term physical well-being. The poverty line which follows from this, is the amount of
income needed to satisfy those basic needs. The approach has been applied in the sphere of
development assistance, to determine what a society needs for subsistence, and for poor
population groups to rise above the poverty line. Basic needs theory does not focus on investing
in economically productive activities. Basic needs can be used as an indicator of the absolute
minimum an individual needs to survive.

Proponents of basic needs have argued that elimination of absolute poverty is a good way to
make people active in society so that they can provide labor more easily and act as consumers
and savers.[14] There have been also many critics of the basic needs approach. It would lack
theoretical rigour, practical precision, be in conflict with growth promotion policies, and run the
risk of leaving developing countries in permanent.
Neoclassical theory
Neoclassical development theory has it origins in its predecessor: classical economics. Classical
economics was developed in the 18th and 19th centuries and dealt with the value of products and
on which production factors it depends. Early contributors to this theory are Adam Smith and
David Ricardo. Classical economists argued as do the neoclassical ones in favor of the free
market, and against government intervention in those markets. The 'invisible hand' of Adam
Smith makes sure that free trade will ultimately benefit all of society. John Maynard Keynes was
a very influential classical economist as well, having written his General Theory of Employment,
Interest, and Money in 1936.

Neoclassical development theory became influential towards the end of the 1970s, fired by the
election of Margaret Thatcher in the UK and Ronald Reagan in the USA. Also, the World Bank
shifted from its Basic Needs approach to a neoclassical approach in 1980. From the beginning of
the 1980s, neoclassical development theory really began to roll out.

Structural adjustment

One of the implications of the neoclassical development theory for developing countries were the
Structural Adjustment Programmes (SAPs) which the World Bank and the International
Monetary Fund wanted them to adapt. Important aspects of those SAPs include:

Fiscal austerity (reduction in government spending)

Privatization (which should both raise money for governments and improve efficiency
and financial performance of the firms involved)

Trade liberalization, currency devaluation and the abolition of marketing boards (to
maximize the static comparative advantage the developing country has on the global
market)

Retrenchment of the government and deregulation (in order to stimulate the free market)

These measures are more or less reflected by the themes which were identified by the Institute of
International Economics which were believed to be necessary for the recovery of Latin America
from the economic and financial crises of the 1980s. These themes are known as the Washington
consensus, a termed coined in 1989 by the economist John Williamson.

Recent trends
Post-development theory

Main article: Postdevelopment theory

Postdevelopment theory is a school of thought which questions the idea of national economic
development altogether. According to postdevelopment scholars, the goal of improving living
standards leans on arbitrary claims as to the desirability and possibility of that goal.
Postdevelopment theory arose in the 1980s and 1990s.

According to postdevelopment theorists, the idea of development is just a 'mental structure'

(Wolfgang Sachs) which has resulted in an hierarchy of developed and underdeveloped nations,
of which the underdeveloped nations desire to be like developed nations.[15] Development
thinking has been dominated by the West and is very ethnocentric, according to Sachs. The
Western lifestyle may neither be a realistic nor a desirable goal for the world's population,
postdevelopment theorists argue. Development is being seen as a loss of a country's own culture,
people's perception of themselves and modes of life. According to Majid Rahnema, another
leading postdevelopment scholar, things like notions of poverty are very culturally embedded
and can differ a lot among cultures. The institutes which voice the concern over
underdevelopment are very Western-oriented, and postdevelopment calls for a broader cultural
involvement in development thinking.

Postdevelopment proposes a vision of society which removes itself from the ideas which
currently dominate it. According to Arturo Escobar, postdevelopment is interested instead in
local culture and knowledge, a critical view against established sciences and the promotion of
local grassroots movements. Also, postdevelopment argues for structural change in order to reach
solidarity, reciprocity, and a larger involvement of traditional knowledge.

Sustainable development

Main article: Sustainable development

Sustainable development is development that meets the needs of the present without
compromising the ability of future generations to meet their own needs. (Brundtland
Commission) There exist more definitions of sustainable development, but they have in common
that they all have to do with the carrying capacity of the earth and its natural systems and the
challenges faced by humanity. Sustainable development can be broken up into environmental
sustainability, economic sustainability and sociopolitical sustainability. The book 'Limits to
Growth', commissioned by the Club of Rome, gave huge momentum to the thinking about
sustainability.[16] Global warming issues are also problems which are emphasized by the
sustainable development movement. This led to the 1997 Kyoto Accord, with the plan to cap
greenhouse-gas emissions.

Opponents of the implications of sustainable development often point to the environmental

Kuznets curve. The idea behind this curve is that, as an economy grows, it shifts towards more
capital and knowledge-intensive production. This means that as an economy grows, its pollution
output increases, but only until it reaches a particular threshold where production becomes less
resource-intensive and more sustainable. This means that a pro-growth, not an anti-growth policy
is needed to solve the environmental problem. But the evidence for the environmental Kuznets
curve is quite weak. Also, empirically spoken, people tend to consume more products when their
income increases. Maybe those products have been produced in a more environmentally friendly
way, but on the whole the higher consumption negates this effect. There are people like Julian
Simon however who argue that future technological developments will resolve future problems.

Human development theory

Main article: Human development theory

Human development theory is a theory which uses ideas from different origins, such as ecology,
sustainable development, feminism and welfare economics. It wants to avoid normative politics
and is focused on how social capital and instructional capital can be deployed to optimize the
overall value of human capital in an economy.

Amartya Sen and Mahbub ul Haq are the most well-known human development theorists. The
work of Sen is focused on capabilities: what people can do and be. It is these capabilities, rather
than the income or goods that they receive (as in the Basic Needs approach), that determine their
well being. This core idea also underlies the construction of the Human Development Index, a
human-focused measure of development pioneered by the UNDP in its Human Development
Reports. The economic side of Sen's work can best be categorized under welfare economics,
which evaluates the effects of economic policies on the well-being of peoples. Sen wrote the
influential book 'Development as freedom' which added an important ethical side to development
economics [17]