Theories of Development (2)

The development adventures of underdeveloped and developed countries are not the same. Although there are different opinions, the traditional approach is that underdeveloped countries can also achieve their development by going through the stages that developed countries have gone through. The form of development theory in the developed West assumes the dimensions of 'economic growth, industrialization, modernization and capitalism'. In the last century, when we focus on the development problem, we see that the search for solutions with numerous development theories has come to the fore. There are "development prescriptions" that vary from country to country, written by the political will of the countries according to their own specific conditions, with the support of academic circles. In this article, we want to establish the theoretical background of a series of articles that we plan to write in the future by talking about the main development theories. In this context, the development theories we have discussed are briefly summarized in the following paragraphs:

Big Push Theory

The big push model advocated by economic theorists such as Paul Rosenstein-Rodan, Ragnar Nurske and Tibor Scitovsky argues that there are two obstacles to the development of underdeveloped countries.

The first of these is the insufficient demand structure due to the low level of national income.

The second is the inadequacy of production and, accordingly, the low level of capital accumulation.

Walt W. Rostow, who sought economic development within the capitalist system, made an analogy with the acceleration of airplanes on the runway for the development of a country. He says that just as an airplane needs the distance and time it needs to take off, similarly, countries will need a development process and time "to be spent" for this. In any case, in order for the big push model to be successful, political will needs to engage a planning-based public leadership, state intervention (developmental state approach). A major push from the launch of planned investments will stimulate a country's economic life and put the economy in general on a steady path of growth. In particular, a leading sector based on the core resources and capabilities of the country should be selected. The progress that can be achieved in the selected sector by acting within the framework of planning and the strategy to be followed can enable other sectors to be activated and the development to spread throughout the country.

Structural Development Theory

structuralists, including Raul Prebisch, former head of the Central Bank of Argentina, founder of the structuralist school; It envisages import substitution industrialization, state intervention and regional economic integration as the main key to development. Hirschman, one of the famous structuralists, draws attention to the fact that the a priori and backward connections created with the manufacturing industry can create externality and this will be a basic argument for industrialization. For example, the establishment of an automobile factory within the borders of a country will bring along the need for steel for use in the automobile factory in that country. This will naturally play a role in increasing the demand for steel in that country. For the development of the automobile industry, a positive externality is provided by protecting the domestic steel industry from foreign competitors. Thus, automobile production benefits from the steel industry, a priori and backward link is established, and profitability increases. The theme of the constructivist school; transferring financial resources to the manufacturing sector, which creates high added value and increases production, and establishes the necessary environment of trust for investment. In any case, the basic tool is a structure based on planning.

Neoliberal Development Theory

Since the 1980s, it is a theory that has been imposed on the whole world as a "recipe of natural development, the indispensable basis of the economy". In this theory, natural resources, labor and capital; It is envisaged to be used in a way that meets market expectations. Competitive and dynamic structure of the market; It leads the producers to make more innovative and efficient production, to use technological developments and to increase the economic capacity. In this theory, instead of planning and state intervention in development, the free market mechanism is based, and globalization is blessed. neoliberalism, emphasizing Adam Smith's idea of ​​the "invisible hand"; He finds the Keynesian type of interventionist social state understanding wrong and argues that market conditions should automatically direct economic growth. In this theory, the minimal state is recommended. It is predicted that national development will occur spontaneously as a result of the integration of national economic units that act rationally in the global free market into world trade over market prices. Points such as the abolition of state regulations, the breaking of all kinds of spatial and temporal barriers to free trade, the prohibition of direct intervention of the state in the market by means of support purchases, infrastructure services or subsidies, the privatization of public institutions, the liberalization of exchange rates and the implementation of tax reforms that encourage investment are in line with the basic doctrine of Neolibarelism is among them. In this respect, it is aimed to realize the development based on neoliberal hegemony all over the world, in short, globalization. In one way or another, free trade can promote international peace and harmony by creating economic interdependence and strengthening social relations and therefore mutual understanding between states.

Modernization Theory

According to the modernization theory, which is an extension of the Classical Liberal Theory, underdeveloped countries can develop if they follow the same paths as developed countries, focus on the products they have a comparative advantage and comply with the principles of free trade on a global scale.

Such countries can avoid the mistakes made by developed countries in the path of development and learn from their mistakes (advantages of backwardness). Developed countries can facilitate their work with the financial aid they provide to underdeveloped countries, technology transfers realized through foreign investments, capital and know-how flow, and they can rapidly modernize these countries. The basic idea adopted by Western institutions for development is the Modernization Theory. Accordingly, developing countries should follow the same path that developed countries have followed in order to develop in the historical process. The main strategy for development is the realization of technological transformation.

Conclusion

It is within the responsibility and authority of the political will that governs the country, according to the realities of that country and the expectations of its people, to decide which of these four development theories we have tried to express in a nutshell, which one should follow an appropriate development model. However, in the 1960s, it was easier and more practical to act with the understanding of the "developmental state" than it is today. The impositions of Rich Center countries that impose globalization and free market dynamics were not as strong in the past. Global capital, which currently sees the whole world as a market for its own products, finds state-based development moves dangerous for its own interests and market expectations. The "minimal state" or "passive state" type is highlighted, the "developmental state" or "leader state" type is seen as the old world mentality and is not desired. In this case, there is a situation for underdeveloped or developing countries to remain as a Poor Peripheral state at the periphery of the existing Rich Central states, not getting a sufficient share of the world's wealth, and not making efforts to change the status quo.

Note: In our next article, we will focus on the "Concept, Stages and Strategies of Industrialization".

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