PDW: Slide 1

Joel S Migdal:
About Post-colonial societies in the Post WWII era; independence and economic developing to make
states legitimate in eyes of citizens
Argued for political activity and economic development to follow

Research Puzzle?
That states which can mobilize extensive resources cannot really get their populations to do what
they want them to do.
Research Question:
Looked at the ability of states to perform the 4 key function
- Control the use of force on their territory
- Make decisions autonomously of other societal actors
- Regulate social and economic life
- AND do so in a coordinated manner
Why cant strong states not get their way?
States cannot impose will because someone always resists
Weak states have fragmented social control; many social organizations that are alternatives to the
state. PRIMARILY local strongmen who exercise power locally through informal organizations.

IV: the extent of fragmentation of social control; number of different sources of power that govern
DV: the ability of the state to get compliance with its laws by pop

Why cant a state break the power of local strongmen?
1. Politics of survival: leaders in less developed states weaken state organizations but having a
revolving door in leading positions so no one has power for too long
2. The capture of local branches of the state by the strongmen

Major Questions in Comparative Politics
Causal questions lead to empirical arguments, based on facts involving explanations about the world
is the way it is.
Normative questions: concerned with what is moral or ethical; arguments about how the world
ought to be.

Concepts: ideas comparativists use to think about the processes we study; a construct
Concepts are building blocks in political science. Good concepts are:
i) Clear and Consistent
ii) Consistent
iii) Useful for measuring variables.

Ex of Concept: Democracy and democratization
Clear and coherent
- Democratization: a process by which rights and liberties are extended to all adults in a country.
- Consistent: If democracy is defined as a set of institutions (core values), democratization should
also be about changes in institutions
- Useful for measuring variables: Democracy can be defined so that some places have it while
others dont.

Concepts: involves several steps
Conceptualization: process of creating and selecting social science concepts; identifying or making
concepts we use.
Operationalization: process of making basic concepts measurable; makes concepts usable

Operational definitions of democratization: a case for d occurs when (choose one)
A country holds a free and fair multiparty election
Free and fair elections are held and constitutional law guarantees absolute rights
Ruling party loses an election and peacefully steps down from power.
There is no verifiable suppression of political participation

What is Comparative Methodology:
Two methods: experimental and non-experimental
NE: large number: statistical; intermediate: comparative. N=1 case study

Arend Lijphard: Comparative Politics and the Comparative Method.
A) Experimental method: ideal method of research, use two equivalent groups, one of which is not
exposed to a stimulus while the other is not.
B) Statistical method: entails the mathematical manipulation of empirically observed data in order
to discover controlled relationships among variables.
C) Comparative Method: simply a way to establish a correlation between IVS and DPV

Comparative Method: relies on quantitative research, close to the data, insider perspective, process
oriented, valid: real, rich and deep data and assumes a dynamic reality.

Statistical method: relies on quantitative research, removed from data: outsider perspective, outcome
oriented, reliable hard data and assumes a stable reality.

WE COMPARE TO DEVELOP THEORIES AND TEST THEORIES

Comparative method: establishing correlation between independent and dependent variables.
Correlation: change in one phenomenon and there is a corresponding change in another one.
Dependent variable: variable we wish to explain; value is influence by that of the IV.
Independent variable: variable we propose as the cause of the dependent variable.
Intervening variables: link other two: are influenced by the IV which in turn influences the DV
Reinforcing variable: is the factor that strengthens the effect of the IV, without it, its influence weak.
- Interaction effect: multiple IVS converge to produce the outcome
- Spurious relationship: we see a relationship between two variables and we assume causality,
but there really isnt.

Question of generalizability: quality of being apllicable to a # of cases
Comparative checking: process of testing the conclusions from a set of comparisons against additional
cases or evidence.

Comparative Method: two types of designs.
A) Most Simliar Systems Design
- Research design in which we compare cases that are similar with respect to a number of factors,
but with a distinct outcomes.
- Cases similar on many variables but only a few truly explain outcome
B) Most Different Systems
- Reseach design in which we compare cases that differ respect to multiple factors but in which
the outcome is the same.
- Cases different on many variables but only a few explain outcome.

Theories, Hypotheses, and Evidence: a Cycle
1. Theory: Understand prevailing theory
2. Hypothesis: from hypothesis from theory.
3. Evidence: Test hypothesis using evidence.
4. Thesis: form thesis from evidence. Find implications for theory.

Hypothesis
A specific prediction that can be tested against empirical evidence.
Specific hypotheses are often derived from theory.
In comparative politics, hypotheses are often about a certain case or many.

Distinction between correlation and causation
A) Correlation: relationship between two variables in which they tend to move in predictable
relationship to one another; can be positive or negative.
B) Causation: relationship in which one thing causes another.

Problems:
A) Definitional problems: X & Y will correlate if they are the same thing
B) Reverse Causation: Y causes X vs X causes Y: cancer ex
C) Endogeneity: x causes Y, but y also causes Y, ex: health and education
D) Intervening variable: X leads to Y but only indirectly (say via variable Z) Communism leads to
democracy in EU
E) Omitted variable: X correlates with Y, because both are caused by another variable Z: ice cream
sales and murder.
F) Spurious correlation: x and y correlate, but no good logic explains why.

Principal problems with comparative method
Many variables, small number of cases
The Fallacy of attaching to much significance to negative findings
Findings or hypothesis can only be invalidated if many deviant cases are found.

Help it out
Increase the number of cases as much as possible
Reduce the property space of the analysis. If the sample of cases cannot be increased, it may be
possible to combine two or more variables that express an essentially similar underlying
characteristic into a single variable.

SLIDE #2

Underdevelopment
Harry Truman (1949):
Areas have inadequate food, disease, primitive economic life and poverty
Developed Areas: scientific advancement and industrial progress, skill and technical knowledge

Wealth and Inequality
The above are not predetermined; governments make them that way
Theories explaining uneven economic development: culture, religion, geography, weather, historical
endowment of plant and animal species and advancement of technology.
Sachs and Diamond: people need incentives to invest and prosper; they need to know that if they
work hard, they can make money and actually keep that money

The rich get richer and the poor get children: Nancy Birdsall
80 percent of the worlds pop generate 20 pecent of income
Growing inequality and triumph of democracy and liberal economy go hand in hand.

Defining the Terms
Relative Poverty: exists in every society, some people lack resources others take for granted, exists
in high income countries.
Absolute Poverty: life threatening absence of resources, often measured by median age of death,
life expectancy or infant mortaliy.
Poverty Trap: where those on poverty line may not benefit from getting paid work they might be
better off staying on benefits
Economic inequality: refers to all disparities in the distribution of economic assets, income and
resources (physical strength, political rights, wealth, income even ambition) either among
individuals and groups within a society or among countries.
Why is it that the rich prefer to support poverty alleviation programs while not targeting the root
causes of inequality
Ideological views concerning poverty
1. Conservatives usually want to limit antipoverty programs.
2. Liberals want to expand them
Welfare or entitlement
1. Welfare program means tested, its recepients must demonstrate that thre are poor according
to certain criteria.
2. Entitlement ie. Social security, can one cut it?
CONSERVATIVES: welfare offers incentives for unemployment, illegitimacy and drug use.

What is development?
Liberation of people (during the 1950s and 1960s)
Liberalization of economies: structural transformation
The millennium development goals: reducing poverty
A discourse a set of ideas that shapes and frames reality and power relations: spatial, cultural
intergration.




Amartya Sen: Development as freedom
What is development? Three definitions
1. Historical: development as a process of change
2. Policy related and evaluative: based on value judgements, has short to medium term time
horizons development as the MDGS
3. Post Modernist: ethnocentric and ideologically loaded Western conceptions of development
and raising the possibilities of alternative conceptions.

Definitions of Development
A) Development as a state or condition- static
B) Development as a process or course of change dynamic
Development is not purely an economic phenomenon but rather a mutli-dimensional process
involving reorganization and reorientation of entire economic and social system.

Development is a process of improving the quality of all human lives in three aspects:
1. Raising peoples living conditions (income, consumption, medical services, educationetc.
2. Creating conditions conducive to the growth of peoples self-esteem through the establishment
of social, political and economic systems and institutions which promote human dignity and
respect.
3. Increasing peoples freedom to choose by enlarging the range of their choice variables. EX:
varieties of goods and services.

Development is
Long term, a process of structural societal change, a historical change, from a traditional to modern
society. From a rural or agriculture-based society to an urban or industrial-based society
Development involves changes to socio-economic structures including ownership, the organization
of production, technology, the institutional structure and laws.

Development as a vision or measure of progressive change. (Thomas)
Concerned with development as occurring in terms of a set of short to medium term goals as targets
to mark economic progression (poverty or income levels)

Development as a dominant discourse of Western modernity.
The majority of Western intervention into the third world imposing their notion on development has
made things worse and has had bad outcomes.

Development Indicators
Dissatisfaction with the use of income per capita as a measure of welfare and of development.
Problems:
Incomplete or unreliable data
Mismatch between some of the economic series which are widely available (such as per capita
income) and the concepts for which data is sought (such as development, welfare and poverty)
Non-quantitative in nature so that it has been necessary to find alternative approaches for the
identification of rigorous indicators.
Human Development Index (HDI): three equally weighted factors: a long life, knowledge and standard of
living.

Millenium Development Goals
MDGs add a negative connotation to development by putting it exclusively in the 3
rd
world with an
agenda created by industrialized countries without any adequate consultation.
Social science researches are funded upon by government funded research councils or from
development agencies which are MDG driven.

Underdevelopment: common theories
Absence of development caused by physical environments, cultural traditions and values.
Lack of natural resources certainly impediment to development but not impossible.

Reasons for Japanese Success
Strong cooperation between government and business.
Able to adapt to spatial-physical situation and acquire a maritime prowess.
Early development of transport and banking systems
Highly literate population
Niche development: technology driven.

Other expalantions of Underdevelopment:
Instability and bad internal situations; political factors
Extended turbulence are not conducive to development: central African nations
Poor physical environment: lack of rainfall, poor soil

Other Explanation
Colonialism as Scapgoat: view development in historical perspective:
- Indigenous population exploited
- Traditional way of life and self sufficient mode of production have been destroyed.
- Force to pay taxes and conscripted labor practices.
- Social differentiation increased: disintegrating force.
- Fatal effects on secondary and tertiary sectors: import of cheap goods
- Discouraged modern industrialization
International division of labor and Western trading structure took advantage of colonial authority.

How to Help Poor Countries
Wealthy nations can help poor ones; give resources and trading opportunities.
However: development is largely determined by poor countries; which they continue to emphasize.
Financial aid and the liberalization of markets can only trigger a little growth.
International trade system is unequal; goods from developing countries cannot compete on global stage.
AID is only as good as the ablility of a recipients economy and government to use it prudently and
productively.





Slide #3

Theories of Development

Quick Timeline
1500s: all countries roughly the same GDP
1900: gap is 6-1
1950: some countries became rich, other joined in the late 20
th
century while others fell behind: EU

Western countries in 1500-1900: result of societal change
Guarantee of human rights: Magna Carta
The reformation and the protestant ethic
European Enlightment: led to the Industrial revolution creating raid economic growth.
Enviromental conditions allowed EU to sustain high agricultural productivity to support high dense
population; a necessary pre condition to have tech innovations and rapid economic growth.
Lack of coal and ore deposits close together along with no outward migration for other regions.
Land scarcity is also seen as a factor that stimulates urbanization and industrialization.

THEORIES OF DEVELOPMENT
A) Modernization theory
- Emerged in the US: 1950s
- Offerend liberal pro-capitalist perspective
- Developed in particular ideological context: cold war & decolonization
- Based on experience of the West: provide a valuable guide to what to expect in the dev. World
(Political Development Theory)

Structural functional approach (Gabriel Almond): the relationship between political functions and
particular structures or institutions.
See Box 1.1 pg

Modernization revisionism: PMT would eliminate traditional elements of politics; chaste and ethnicity.
They argue that PM would invigorate these traditional elements; in a changed form.

Politic of Order (Samuel Huntington)
Not Political Modernization, but political decay: rapid economic growth from low initial levels could
destabilize important institutions.
What mattered was not the form of government existed, but the degree of government.

Capitalism: Origins
Max Weber proposed a theory to explain development of capitalism in Western Europe (1904-05)
Stressed the role of Protestantism in the development of capitalism and the growth seen in parts of
Western Europe during the 1500s and beyond
- Roman Catholics are assured of their salvation from their belief in sacraments.
- He believed that the protestant ethic had removed such assurances of salvation.
1. Life is organize around systematic work and material success.
- Belief that working hard due to responsibility and a duty to save and invest; sign of Gods favor.
2. Manner of organizing life led to calling forth the spirit of capitalism
- Emphasis on individual responsibility and striving
- Compulsion to save and not spend.
- The religious basis eventually dropped out as modern capitalism absorbed this spirit.

Adam Smith
The Wealth of Nations: a classic manifesto against Mercantilism
- Mercantilism: an economic policy, which called for national regulation of transactions in foreign
exchange and in metals in order to maintain a favorable balance and ensure economic success.
- Appeared in 1776: the idea of free trade was unpopular: British clung to mercantilism.
- Led to the development of classical economics.

Argument: free market guided by the invisible hand
- While humans are selfish and greedy; competition in the free market will benefit society
- But, you have to prevent the formation of monopolies
- Against all government restrictions: attacked most forms of government interference in the
economic process including tariffs; argued that it leads to inefficiency and high prices.
- This theory (laissez-faire) influenced gov. mostly during the 19
th
century.

Alexander Hamilton
Founding fathers of US, first secretary of the treasury: established national bank, the tariff system
and friendly trade relations with Britain
Report on Manufacturers: (1791)
Recommended economic policies to stimulate the economy after the conclusion of the war (75-83)
The Mercantilist Approach: to secure US independence: had to encourage the growth of
manufacturing and have it as a permanent feature of the US economy.
- Achieved help with bounties or subsidies to industry, regulation of trade with moderate tariffs
and other gov. encouragement
- Provided diversified employment opportunities and promoted immigration

Tariffs: Moderate (not high)
- Raise revenue to fund the nation and encourage domestic manufacturing and growth of the
economy.
- Protect infant American industry for a short term until it could compete
- Raise revenue to pay the expenses of government

Subsidies to industry
- Encourage the spirit of enterprise, innovation, and invention within the nation
- Support the building of infrastructure (roads and canals)
- Grow the infant US into a manufacturing power independent of control by foreign powers
through reliance on their goods for domestic and especially defense supplies.

Friedrich List: 89-1946
German Economist, developed the National System of Innovation, moved to US.
Influenced by Alexander Hamilton
Mercantile Realism
- Opposed free trade, develop the infant industry
- Argued that the economy cannot be allowed to run its natural course, if it tends to contradict
the national interests (power, security, wealth) of the state
- Politics over Economics
- Development of agriculture, manufacture, commerce, infrastructure and high technology

Dependency Theory
Marxist inspired theory
Originated in South America and reflected their experience
Focus on the processes of economic production and or exchange and the social class relationships
embedded in them, including both domestic and international perspectives.
Development of the developed world was premised upon underdevelopment of the developing
world
- The only way in which a satellite economy could end this dependence was to drastically reduce
ties with the metropolis
- Variations: core, periphery, semi-periphery (the Asian tigers)

Vladimir Lenin: Imperialism is the monopoly state of capitalism. It includes the following 5 features:
1. The concentration of production and capital has developed to such a high stage that it has
created monopolies which play a decisive role in economic life.
2. The merging of bank capital with industrial capital, and the creation, on the basis of this finance
capital, or a financial oligarchy
3. The export of capital as distinguished from the export of commodities acquires importance.
4. Formation of international monopolist capitalist associations which share the world together.
5. The territorial division of the whole world among the biggest capitalist powers.

Summary
Lenin argued that the concentration of capital created global inequality, because the finance-capital,
the dominant form of capital, used the state machinery to colonize the periphery.
The capitalists would use the oppressed peripheral labor to produce primary commodities and raw
materials cheaply, sell these goods. This under mimes indigenous industry, making the colonies
dependent on core investment.
The overall effect was that the core pumped wealth out of the periphery.

Dependency and Development
State capacity and the configuration of social forces: under certain circumstances, these states can
become proactive and accelerate their development
The goal of the developing countries is to escape the periphery and catch up with the West.
Alexander Gerschenkron: by having advanced and backward countries, the latter can catch up
quickly by adopting the formers technology.
Key focus is in the institutions who can facilitate that economic growth.
TRADE offs between DEMOCRACY AND DEVELOPMENT

Dependency theory
Flow from a periphery of poor and underdeveloped states to a core of wealthy states, enriching
the latter at the expense of the former.
Rich nations become richer by the way poor states are integrated into the world system.
World System Analysis
- The primary unit of social analysis is world system.
- World-system refers to the inter-regional and transnational division of labor, which divides the
world into core countries, semi-periphery and periphery countries.
- Unequal development is the result of Europes advantages during the process of
industrialization and capital accumulation.

Globalization
Focuses on a process of accelerated communication and economic integration that transcends
national boundaries and creates one global social system.
Economic globalization global trade, FDI
Cultural globalization: cultural awareness and interaction across national boundaries
Draws on both modernization and dependency theory, emphasizes increasing global economic
integration.
Calls into question both the importance of the state and the existence of a distinct developing world

Challenges of economic development in an increasingly globalized world
Must explore historical processes of state formation and see if there was a global economic break
that created national autonomy and state capacity.
EA: a rupture with colonialism after WWII allowed states to alter their foreign relations and build
more autonomous nationalist states.
In Latin America, by contrast, there was no such rupture; LA states remained or became a part of the
US Empire.

Predatory State: when state actors extract large amounts of investable surplus but do really nothing
with it and therefore impeded economic transformation.
Developmental State: when state actors are able to foster long term entrepreneurial perspectives
among private elites by increasing incentives to engage on transformative investments and lowering
the risks involved in such investments.
TO OVERCOME backwardness and economic dependency: THE STATE HAS TO LEAD.

The phenomenon of successful late development should be understood as a process in which states
have played a strategic role in taming domestic and international market forces and harnessing
them to a national economic interest.
Corporate coherence: individual incumbents have to some degree be insulate from the demands of
the surrounding society

EAST ASIA DEVELOPMENTAL STATES
Economic development
Strong government
Reliance on family for welfare provision
Focus on productive investment in social and human capital development
Limited welfare and social rights: welfare stratification
South Korea Model
- Authoritarian state (military) and coherent state elite rule
- Strong bureaucracy supporting and guiding the chaebols (policy loans) strategic industrial
policy
- Little FDI, much technology import
1980-97
Gradual state retreat and the dismantling of the classical DS
Democratisation, a disunited political elite, democratic legitimacy
Stronger, more autonomous and resistant chaebols
After 1999
Economic liberalisation, active and expansive state, state-led recovery
Some Gov. Intervention in certain industries.

Centralized power structure and a strong drive to eliminate or subordinate all potential centers of
countervailing power.
1. Suppression of consumption and mass mobilization
2. Industrialization
3. Technocratic rationality
4. Insulation from pressures by different social interests and policy consistency
5. Developmental ideology.











Colonial power
Arterial- strong near the nodal points of colonial authority, less able to impose its discursive grid
elsewhere
- An attempt to rule on the cheap not to invest in them.
- Coercive and extractive, yet thin, with local collaborators, such as traditional rulers.

Colonizing states pursued distinct modes of colonialism
Level of colonialism: extend of settlement and institutional implantation in colonized territories
Levels of postcolonial economic and social development, which capture national differences in
prosperity and human well-being.

Following independence of states, there was
Struggle to establish national control
Overcome regionalism
Politics dominated by the upper-class landowning elite

Conditions leading to the Latin America context
The actions of peasants: revolts over issues of land.
The type of political regime (the national political context and the presence of cross-class alliance)
The strength of external actors backing the regimes (i.e. the US)
The military and ideational strengths of guerrillas, social and internationalities of guerrillas
Sustained insurgency (Foco theory)

Class In cohesion: weak middle and upper class politics pave way for dictatorship to seize power.
Contribution of US political and military intervention.
Political Institutions: (weak)
Personal, rather than party-based rule
Personal domination of armed forces, became private armies
Massive corruption, enrichment of ruler and personal associates
Violent attacks on political opposition.

Two types of political economies (Imperial nations)
1. Mercantilist
Promotion of economic self-sufficiency; short-run consumption
More restrictions on trade, ownership, and economic participation
Status-group hierarchy; patrimonial state-economic elite
2. Liberal
Promotion of international comparative advantages; long-run investment
Fewer restrictions on trade, ownership, and economic participation
Market-based class stratification; capitalist elite.

Level of Colonialism
Entails settlement and implementation of institutional framework.
Having a Mercantilist or Liberal colonizer effects the extent of colonization that state will do.

TYPES OF PRECOLONIAL SOCIETIES
Mercantilist: Habsburg Spain (before 1700) and Portugal
Liberal: Bourbon Spain (after 1700) and Britain

Lower Complexity Intermediate
Complexity
Higher Complexity
Political Institutions Decentralized and
nonbureaucratic
Centralized but
nonbureaucratic
Centralized and
bureaucratic
Economic Institutions No significant div. of
labor, no slavery, no
intensive agriculture
Some div. of labor;
limited or no slavery;
semi-intensive
agriculture
Significant div. of
labor; large scale
slavery; intensive
agriculture
Sociocultural
Institutions
Single ethnicity and
language; kin-based
relations; religion not a
central basis for rule
Single ethnicity and
language; class-and
Residence-based
relations; religion used
for rule
Multi ethnicities and
languages; class- and
residence-based
relations; religion used
for rule

Causes of levels of Colonialism Colonizer Institutions
Mercantilist Liberal
PRECOLONIAL
INSTITUTIONS

Higher Complexity Higher Level of
Colonialism
Lower Level of
Colonialism
Lower Complexity Lower Level of Higher Level of
Colonialism Colonialism

Mercantilists: pursue higher levels of colonialism in complex pre-colonial regions
Due to their orientation toward consumption and immediate accumulation
- CONDITIONS EXIST FOR RAPID RESOURCES EXTRACTION
Growth of a large settler population; introduction of institutionalized ways of life from metropolis
Mercantilists with less complex indigenous societies = lower levels of colonialism
Hunter-gatherers, semi-sedentary few opportunities for exploiting indigenous labor.
Too much effort implanting new patterns of authority and production

Liberals: pursue higher levels of colonialism in less complex indigenous societies.
Hunter gatherers and small societies can be displaced or destroyed easily to create liberal institution
The pre-existing order can easily be eliminated
Liberals: pursue low levels of colonialism in high complex societies
Entrenched pre-capitalist institutions make it difficult for liberal colonizers to achieve market-based
accumulation; start-up costs are too high
Indigenous population resists the colonial imposition of unfamiliar forms of economic activity.

Consequences of Levels of Colonialism
1. Mercantilist: NEGATIVELY related to POSTCOLONIAL DEVELOPMENT
- Mercantilist powers impose restrictions on economic participation and grant rights to privileged
merchants who leave behind and preserve their monopoly rights and power.
- Construct and uphold coercive labor systems and sociocultural conventions
2. Liberal: POSITIVELY related to POSTCOLONIAL DEVELOPMENT
Higher levels of colonialism are associated with higher levels of postcolonial development
When liberal colonial authorities colonize an area, it creates instituitons that resemble those found
in metropolis.
These institutions empower a local bourgeoisie from the settler population that is capable of
promoting autonomous economic development and also expanding the state institutions.
- Produces homogeneous society, but at the expense of the indigenous population.
DRAW TABLE FOR YOURSELF


Mercantilist Colonizer
Settled and reproduced its institutions in polities with highly differentiated pre-existing institutions
and state-like political formations.
- Central Mexico (Aztec Empire), the Andean Region (Inca Empire) and North East Brazil
- If exploitable resources were found, then interest would increase

Liberal Colonizer
Brought their institutions to the more sparsely populated areas featuring pre-state societies with
less differentiated institutions: Australia, Canada, New Zealand, and the US
Also Southern cone of Spanish American by Spain
Low level of liberal colonialism resulted in some of the poorest countries in Africa


Colonialism and Development in Latin America
Mexico, Peru, Colombia: mercantilism colonialism: economic reforms saved countries
Bolivia, Ecuador, Guatemala: mercantilist colonialism without liberal changes; failing
El Salvador, Honduras, Costa Rica, Chile: developmental outcomes still left open

Post-Colonial Development
African States: lacked the societal cohesion, state tradition, and Cold War geopolitical significance
Botswana & EA: benefited from ethnically homogenous society, dominant class and purposeful leader.

Institutions: are formal or informal procedures, routines, norms and conventions embedded in the
organizational structure of the polity or political economy. How do they affect behaviour?
Calculus approach: Idv. Seek to maximize their goals according to their preferences; behaving
strategically.
Cultural approach: idv. Behaviour is not fully strategic but bounded by an idvs worldview; people
rely on established routines or familier patterns of behaviour to attain their purposes.

Three kinds of Institutionalism: sociological, rational choice and Historical
1. Historical
- Institutions distribute power unevenly across social groups; some having little access to
decision- making, therefore some lose
- Path dependency: structure a nations response to new challenges
Unintended consequences and inefficiencies generated by existing institutions
Periods of continuity punctuated by critical junctures. Ie. Moments when substantial institutional
change takes place thereby creating a branching point from which historical development moves
onto a new path.

Rational Choice Institutionalism: the development of a particular organizational form: the result of an
effort to reduce the transaction costs of undertaking the same activity without such an institution.

Sociological: Institutions can be seen as culturally specific practices: akin to the myths and ceremonies
devised by many societies, and assimilated into organizations

Botswana: explanation for economic growth:
Mineral wealth
- Before 1976: agriculture accounted for 40% of GDP
- Mining rose to 65% of GDP by 2005
Good macro-economic growth
- Avoidance of external debt and stabilization of government expenditure; built large
international reserves by having budget surpluses; used during mineral export drought.
- Management of the exchange rate and promote economic diversification
Good governance and institutions
- A functioning constitutional democracy since 1966.
- Low levels of corruption, consistently the lowest in Africa.
- Parliament enacted the Mines and Minerals Act which vested all sub-soil resources in the state,
pre-empted any future conflict over mineral wealth.
- Effective institutions: parliament, anti-corruption commission, independent judiciary

The Developmental East Asian State during the 60s and 70s.
A) International
The Cold War
- US aid to strong states
- Anti Communism as ideology
- Sense of Urgency
- Social Unity
Favorable economic environment
- Favorable access to export markets

After the Cold War
US push for political liberalisation
Economic globalization; export of neo-liberalist ideas.
Stronger and more internationalized industrial bourgeoisie
Stronger Working class, middle class and civil society
Democratisation

Import-substituting industrialization (ISI): LA attempts to overcome unequal global relationship
Promotion of local manufacturing; failed to promote state objectives
- Resulted in inefficient government-owned industries that were unable to compete globally.
REASONS OF FAILURE
Reluctance to reduce tariff walls that the industries would be forced to compete internationally.
The internal market in LA was not large enough to reap economies of large-scale production
The reliance on imports remained instead of manufactured goods, machine tools, spare parts and
specialized knowledge.

Washington Consensus
The promotion of a more efficient use of labour
The reduction of the states role in the economy
Remove hindrances to trade
Promote the inflow of FDI
Lower tariffs
Allow currencies to float rather than being managed by governments
Criticism: the state is now seen as playing more active role in overseeing the financial system, and
providing the education and institutional infrastructural projects.

South-South Cooperation: exchange of resources, technology, and knowledge between developing
countries. Created by the UN.
Successful on decreasing dependence on the aid programs of developed countries and created a
shift in the international balance of power.
Joint investment in energy and oil, and a common bank.
Brazil has developed an increasingly successful model of overseas aid provision of over 1 billion
annually; focuses on technical expertise and the transfer of knowledge and expertise
Challenges and critique.
Lack of big enough capital to start a South-South bank


Pros and Cons of Africas involvement in Africa
B) National
Weak Society
- Weak Labor Class
- Weak Land oligarchy
- Weak industrial bourgeoisie
Suitable set of ideas: Neo-mercantilism
Initial conditions: Educational level
A) Pros
- Offering new markets for African commodities
- The Presence of Chinese businesses is transforming retail and service sectors entrepreneurial
skills and capital, which is vital for Africa.
- Absence of Chinese environmentalist conditionalities around resource extraction and Chinese
corporate engagement more generally may trigger a race to the bottom.
B) Cons
- Distributional outcomes of Chinese-led growth may be limited
- Anti-Chinese sentiments in southern Sudan, Ethiopia, Zambia and South Africa
- Danger of unaccountable rentier states

Dambisa Moyo : economist; PhD in Economics from Oxford
Foreign aid has harmed African and should be phased out
- Limitless aid to African governments has fostered dependency, encouraged corruption and
ultimately perpetuated poor governance and poverty
- Foreign Aid helps perpetuate the cycle of poverty and hinders economic growth in Africa