Crisis in development

Samuel Cohn & Rae Lesser Blumberg

Arena Economy

There has been unprecedented human development in the world over the last few decades. But can we be sure that this trend will continue? Is there a chance development will start to reverse?

© Giulio Napolitano /

© Giulio Napolitano /

Development is good for human welfare, but it leaves victims. Economic development has increased the standard of living for the people of the world – greater production of goods and services has increased the number of jobs and increased the wages for those jobs. In a famous study of 62 less-developed nations in 1994, Glenn Firebaugh and Frank Beck of Pennsylvania State University found that GNP was the most important determinant of levels of hunger (measured by average caloric intake) and of health (measured by three different measures of life expectancy).

Even if local elites seize a disproportionate share of the financial returns from economic growth, enough trickles down to the masses to make people better fed and to give them longer, more comfortable lives. Another way to promote economic growth and facilitate greater well-being is to economically empower women. Women who not only earn but also control income and economic resources contribute directly to national income growth, while also tending to spend their income in ways that increase the health and human capital of both their own children and the population as a whole.

However, all economic processes have their dark sides. New productive industries drive out old traditional craftworkers who have no place to go. Efficient businesses keep prices low through production in sweatshops. Women earn income but often toil in dangerous conditions: in sweatshops in many countries of the global South, making minuscule wages that often are cut further for allegedly flawed work, or exposed to strong pesticides cultivating and processing non-traditional agricultural exports, from flowers to broccoli.

Super-farms (and mega-dams) are created by driving smallholding peasants off the land – leaving them to migrate to slums to work in menial employment. The expansion of resource extraction into pristine frontier areas can have devastating ecological impacts. The most efficient governments for achieving development are often dictatorships. The human rights abuses that have been perpetrated by dictatorships set on achieving and retaining power no matter what have been appalling. Even in non-dictatorships, development has led to mass rape, war and genocide, notably in patriarchal nations. The list of the adverse side effects of development could be extended indefinitely.

On balance, though, the effect of development has been positive. It is hard to argue with Firebaugh and Beck’s argument that development has dramatically reduced hunger in the world and given an ever-increasing share of the world’s population access to modern medical care. What matters is that it is important to reduce adverse side effects that have been unpleasant accompaniments to development. If development were to ever produce side effects that were truly catastrophic, this would be a crisis in development.

At the global level, how robust is the economic growth produced by development? If one considers the long-term history of the world economy, it is striking how the world economy has just kept growing and growing. Table 1 (overleaf) shows the GDP per capita of the world from 1820 to 2013. The data for the most part comes from the Maddison Project: an attempt by Angus Maddison, a prominent economic historian, to measure the GDP for every nation in the world going back to AD 0. The estimates for early periods are very speculative and the reader should view the estimate for 1820 with caution. The data for the remaining years is more or less accurate.

The table above shows that GDP per capita increased steadily from 1870 to the present day. There was a mild dip in the 1940s due to the destruction associated with World War II. Maddison’s data is incomplete for the period of the Great Depression, but data for that period would probably show another dip. Essentially, however, the story is one of standards of living increasing by leaps and bounds for most of the last 200 years. The transition from an average real income of US$700 per person to $8,100 per person is an overwhelming shift. The last 25 years have seen particularly dramatic economic improvement – with world personal income growing by more than 50 per cent. Even though this income is unequally distributed, its impact has been enormous.

The good news for the world as a whole does not mean that every region of the world has received the same benefits or that the process of economic growth is necessarily smooth. Table 2 contrasts the evolution of GDP per capita in Sub-Saharan Africa with that of the world as a whole. Global rates look great in part because of the positive experiences of India and China, which have been growing dramatically. Africa has not been as fortunate. We include data only for 1980-2010. The older data for Sub-Saharan Africa is suspect due to the limited data collection capacity of some of those nations; very new data may contain errors that will require revision later.

The statistics tell a strong story. While the global GDP per capita grew substantially from 1980-2000, in Africa, per capita income actually fell. Growth returned in 2000-10, but the rate of improvement in standards of living in Africa was far less than that experienced elsewhere in the world as a whole. It is not hard to find other nations and regions that have had similar adverse experiences.

In the wake of the debt crisis of the 1980s and early 90s, the strict austerity and structural adjustment programmes imposed on debtor nations by the International Monetary Fund and the World Bank resulted in a ‘lost decade of development’ – or more – for most of Latin America and Sub-Saharan Africa.

South-East Asian economies took a hard hit from the financial crisis that began in 1997 with a speculators’ run on the Thai baht, then in September 2008 Wall Street plunged not only the USA but virtually the entire world into the Great Recession, from which many countries – and individuals – still are struggling to emerge.

It means that despite the robust long-term economic development of the world, the development process itself is challenged, with constant obstacles in every historical era and in every nation. It has overcome these obstacles in the past; there is no guarantee it will overcome these obstacles in the future.

The economic health of the world is like the medical health of human beings. Many readers will be in perfect health. Some of you are young and are probably in peak physical condition; if you are currently training you may even become stronger in the future. This does not mean you will live forever or that you will never have health problems. You drive cars and manage to avoid auto accidents. You get infections, which you overcome either naturally or with antibiotics. You enjoy recreational food and drink without having heart attacks or cirrhosis of the liver. At some (hopefully distant) point, you encounter the auto accident, or the infection or the attack on an organ that your body can’t cope with, and you will slide into illness and death.

Development is no different. It has survived the bank failures of the 19th century, low levels of education throughout the world, world wars, the population bomb and any number of international debt crises – and somehow come out on top. Every nation has seen some growth – even in the areas facing the worst exploitation by the wealthy nations or the worst innate ecological or social obstacles. But there is no guarantee that either the challenges of the present day, or the challenges of the future, will produce benignly beneficent outcomes. Just as the prosperity of the Roman Empire was followed by the Dark Ages with 800 years of poverty, the current growth associated with the rise of capitalist development in our modern age may be followed by its own Dark Ages if we encounter an obstacle to development that cannot be overcome.

If development were to ever face such severe obstacles and to produce sustained long-term stagnant or declining economic growth, this would be a crisis in development.

This article is an extract of Development in Crisis: Threats to Human Well-being in the Global South and Global North, published by Routledge.

About the author:

Samuel Cohn is professor of sociology at Texas A&M University. Rae Lesser Blumberg is William R. Kenan, Jr professor of sociology at the University of Virginia.


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