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2014/05/28

Modernisation and Dependency theories: Which provides the most useful explanation for poverty in the developing world?


How we understand the causes of poverty in the world?

Centuries of technological development improved the standard of living of the poorest community and absolute poverty was finally being eradicated from human society. The end of World War in 1945 brought peace to humanity, but even after several decades of the post-war period, impoverishment of developing economies and significant financial inequalities among nations still exist worldwide. Besides, when it comes to economic disparities between prosperous and disadvantaged countries, they are still considerable. The rapid process of the decolonisation and dissolution of the Soviet Union created an immediate need to investigate the relationship between poverty and development in penurious countries, where majority of population was suffering from destitution for ages. In order to elucidate the primary cause of impecuniosity and structure of maldistribution of resources, sociologists advocated the two classic theories of poverty, which were the Modernisation and the Dependency theories. This article will concisely describe these two major theories and will analyse which theory provides utterly reliable interpretation of poverty in the developing world.

The Modernisation theory is “a model of economic and social development that explains global inequality in terms of differing levels of technological development among societies”, which emerged in the 1950s (Macionis, 2008, p.281). Macionis delineated the Modernisation theory that, “it was a popular economic theory in the Western countries”, particularly in the post-war period, when countries were eager to reconstruct the war-devastated economy (Macionis, 2008, p.281). However, Macionis also noted that the Socialist economy, especially the Soviet-type economic planning was considered to be more reliable principal than Western capitalism, since the Soviet-type economic model was expanding the influence among low-income countries that had trouble with fragile domestic infrastructure and limited financial capability, by highlighting the drawbacks of capitalistic economy (Macionis, 2008, p.281). Given the strong desire of the United States to unify an allied power among rising economies, according to Macionis, U.S. policy makers established “a broad defence of rich nations’ free-market economies” in order to compete with the influential Socialist economies (Macionis, 2008, p.281). To fill the void, Walt Rostow, the author of “The Stages of Economic Growth”, who was a fierce anti-communist, articulated the Modernisation theory in the early 1960s (Potter et al., 1999, p.89). The Modernisation theory recognises the local practices and rituals as obstacles to economic and technological aspects of social progress that traditional ways provide convincing explanations of the solution to pauperism (Macionis, 2008, p.282). Modernisation theorists claimed that, “some forward-looking societies have eagerly embraced technological innovation while other, more traditional peoples have sternly opposed it” (p.282). It is suggested that technological maturity has direct relevance to the standard of living and economic progress.

According to Rostow’s ‘stages of modernisation’, as cited in Macionis, “the process of modernisation follows four overarching stages,” namely traditional stage, take-off stage, drives to technological maturity and high mass consumption (Macionis, 2008, p.282). In other words, Rostow concluded that all nations exist at various standpoints along almost identical developmental path. Macionis claimed that, countries like Bangladesh and Niger are in the ‘traditional stage’, which was defined by heavy reliance on kinship-based power structures and relied little on science or technology. Instead of scientific knowledge or perspective, spiritual beliefs centering on mythology or superstition have the most irresistible supremacy in traditional society. Other countries, like Mexico and Korea are in the ‘drive to technological maturity’ that economic diversification in emerging economies obliterate absolute poverty from society and impel a population to maximise technological and financial advantages. Finally, countries like the United Kingdom and Japan are in ‘high mass consumption’, which already have reached the pinnacle of development procedure more than a century ago. The challenge of the post-war development project then, was to scrutinise how to accelerate countries effectively along economic progress. Modernisation theorists, in response, expect opulent countries to play a pivotal role in the global economy (Macionis, 2008, p.283). Aiding developing countries, such as assisting in population control and increasing food production meant facilitation of the transition from one stage to the next and as stated by Potter, “it is quite natural that the original recipe for development given by the developed countries should emanate from their own experiences and prejudices” (Potter et al., 1999, p.92). Furthermore, Lewis emphasised the correlation between foreign investments and economic growth that foreign capital provides the society with ‘an unlimited supply of labour’ for development (Potter et al., 1999, p.91) and in contrast, developed nations also benefit from ‘import-substitution development’ by increasing foreign direct investment (Ritzer, 2010, p.72).

The Modernisation theory represented the primary school of developmental thought in the Western academia, but not surprisingly, the school was not without critics. The Dependency theory, which is dramatically different from the Modernisation theory, is “a model of economic and social development that explains global inequality in terms of historical exploitation of poor societies by rich ones” (Macionis, 2008, p.284). Development theorists excoriate Modernisation theorists’ perspective that the Modernisation theory is underestimating the most important event in history, which is colonialism (Macionis, 2008, p.285). Andre Gunder Frank, a Dependency theorist and the author of “The development of Underdevelopment”, argued that although even the developed nations were the less developed nations in the past, the economic circumstances were completely different compared to present society (Ritzer, 2010, p.73). He explained that, “the developed countries were ‘undeveloped’ in the past whilst the current less developed countries are ‘underdeveloped’” and the result is that “the path followed by the former is not necessarily the best one for the latter” (Ritzer, 2010, p.73). Even after majority of the nations achieved their independence several decades ago, Western countries’ Multi-national corporations successfully inherited the tradition and primary function of colonisation, which “rich nations effectively prevent poor ones from developing industries of their own” (Macionis, 2008, p.287). Dependency theorists claim that the basic composition of structural exploitation of international trade between developed and developing nations has not changed since the beginning of the colonisation.

Both the Modernisation and the Dependency theories explain, “why so many of the world’s people are poor and why members of rich societies enjoy such relative advantages” (Macionis, 2008, p.281). However, these two theories present intrinsically different frameworks for understanding and conceptualising destitution in disadvantaged countries. For Modernisation theorists, the solutions to eradicate poverty are primarily originated in domestic affairs of underprivileged community, such as unstable social structures and gender inequalities. So, close ties to the international economy, highly developed countries in particular, could bolster economic growth in developing economies. On the other hand, Dependency theorists insist that the difficulties of development are resulting from the exploitation structure between ‘underdeveloped’ and ‘overdeveloped’ countries (Ritzer, 1999, p.72-73). Moreover, Dependency theorists identify “rich nations more as the cause of global poverty than its solution” (Macionis, 2008, p.284). However, China’s recent economic success, for instance, the beginning of rapid economic growth was the Chinese economic reform, which enabled the country to invite numerous foreign investments and factories in order to accelerate the economy. Recent economic growth in Asia and Latin American countries is also accompanied by an increase in foreign capital (Macionis, 2008, p.281). Even Western European countries and Japan, which are currently one of the most influential economic giants in the world, have been consumed by enormous amount of U.S. investments and financial aids for the post-war reconstruction during the late 1940s and 1950s. These historical processes identify the validity of the Modernisation theory, which emphasizes the significance of international relationships among countries, foreign aids and investments. Additionally, it is believed that several critics against the Modernisation theory involve significant ignoratio elenchi, or irrelevant conclusions. For example, although critics argued that modernisation simply has not occurred in many countries (Macionis, 2008, p.284), some least-developing countries, such as Bangladesh and Somalia remain in the ‘traditional stage’ that these countries are simply still resisting technological development. As stated above, Rostow’s implications in the Modernisation theory were the suggestion that all countries, including least-developed nations, will ultimately proceed along the same developmental progression. For other critics, the Modernisation theory espouses affluent economies as the standard evaluation criteria of economic development and they are judging rest of the developing counties by their own values and obstinacies (Macionis, 2008, p.284). However, the newly industrialised economies, such as Korea, Hong Kong and Taiwan, which are actually one of the poorest economies in the past, are now recognised as the leading industrial economies worldwide for their sophisticated smartphone and computer industries after they start introducing foreign capital (Macionis, 2008, p.282). These arguments will sharpen one of the biggest faults of the Dependency theory, which is “it offering only vague prescriptions for remedying global poverty” (Macionis, 2008, p.290). Possibly, the Dependency theory is underestimating the beneficial effects of rich nations’ aids and investments. Eventually, it is assumed that the Modernisation theory provides the most useful explanation for poverty in developing countries. Despite significant differences between the Modernisation and the Dependency theories, both theories have a basic understanding of the key factors of poverty that are almost the same. Both theories identify fragile domestic economic and industrial structure, serious gender inequality, immature technology, cultural differences and other internal and external factors as the main causes of global inequality. However, again, a careful analysis of recent emerging economies shows rather positive effects for rich nations.

In conclusion, both the Modernisation and the Dependency theories attempt to unravel the primary causes of poverty in developing countries and pay close attention to the role of rich nations. The Dependency theory insists that high-income countries are actually the causes of global inequality and the basic concept of exploitation structure between rich and poor nations are unchanged since the colonial period. Modernisation theorists, by contrast, credit the high-income countries with a substantial role that they are the key to eradicating global inequality. It is suggested that the Modernisation theory, especially Rostow’s “stages of modernisation” theory, is the most useful explanation for poverty in the developing world, which is provable throughout the recent developmental process and technological advancements in developing countries.


References
Giddens, A., 2009: Sociology: Sixth Edition, Cambridge: Polity Press, pp548-556
Macionis, J. and Plummer, K. 2008: Sociology: A Global Introduction: 4th edition, Harlow: Pearson Education Limited, pp280-291
Ritzer, J., 2010: Globalization: A Basic Text, Malden: Wiley-Blackwell, pp71-73, p98-100
Potter et al. 1999: Geographies of Development. Harlow: Pearson, pp89-96