Introduction
Prescribed solutions from societies that do not experience lack in its absolute sense will not work for the world of third world counties anguishing in poverty. Historically, such prescriptions have led to increased dependence on hand outs and or a complete breakdown of institutions necessary to fight poverty at an indigenous level (Dos Santos 1970). This essay is a critical assessment to the phrase below, made by Sachs (1992) while referring to the worthlessness of development as a solution to poverty.
The impression of development stands like a decay in the scholarly scene (Sachs 1992, p. 1). The same author proceeds to say, “delusion and disappointment, failures and crimes have been the steady companions of development, and they tell a common story: it did not work” (Sachs 1992, p. 1).
“Moreover, the historical conditions, which catapulted the idea into prominence, have vanished: development has become outdated” (Sachs 1992, p. 1). The author finished by stating that “but above all, the hopes and desires, which made the idea fly, are now exhausted: development has grown obsolete” (Sachs 1992, p. 1).
Development Serves First World Nations Not Third World Nations
The differentiation-integration model of development theory uses various components of societies to define development. However, it falls short comprehensively offering the universal depiction of development as an end means to solve the poverty problem.
Even after bringing forth the question of taking into account social, psychological conditions, and concomitants of productive development, it goes on to narrow the focus to a question of transitioning from backwardness to advancement in the economic status (Bernstein 1971). The problem here is that the advancement refers to first world countries. Thus, the notion of modernization is simply a quest to transform third world into first world without offering a lasting solution to the cause of the poverty (Banuri 1990).
The first-world countries became economically superior by relying on the abundance of raw materials and cheap labour from the world. It has also been having international market access that fosters trade. On the other hand, modernization theorists expect third-world countries to replicate similar situations, and become economically advanced, when the conditions do not allow them. While they may have abundance in raw materials, they lack the freedom and capacity to exercise their capacity of resource exploitation (Peet & Hartwick 2009).
They receive very little actual help at the grassroots level. Much assistance comes in rhetoric form as knowledge transfer under the pretence of capacity building or economic assistance that transforms them into debt servicing nations. Thus, the so-called development throughout the world has led to the creation of additional dependence of the poor nations to the rich nations.
There have been success reports around the world of countries transforming to become rich, such as the newly industrialised counties of Asia (Sachs 2005). Interestingly, these countries could change only because they failed to follow the modernization formula championed by the aid agencies of the western world.
The objections of modernization theory offered by Berstein (1971) rightfully point out its erroneous conceptualization. Thus, any pragmatic development exercise that is based upon the modernization theory suffers the same shortcomings. First, the methodological procedure of assuming everything traditional is recessive and the modern is advanced is wrong.
In recent decades, the theory of modernization as a form of development underwent a transformation. Focus of development shifted from macro analyses to microanalyses and interventions because the study of development demanded scholars to deliver pragmatic research within the period of their study (Bernstein 1971). Developmental studies somehow diluted the theory of modernism, since it is very difficult to conduct an epistemology on a macro scale, and obtain significant results in or less than three years of degree study.
The focus on immediate results to enable the progression of studies to higher levels of scholarly recognition has had catastrophic effects on the overall aim of the teaching in the first place. The study of development is supposed to provide the world with an understanding of poverty and deliver lasting solutions. However, it has become a hot bed for theoretical discourse and strategic plans, which translate into feel-good-pills for the poor throughout the world (Chambers 1997).
When one prescription fails, just like in medicine, the patient becomes resistant and the advice offered is to change into another regime of prescriptions. Thus, the third world has been on the receiving end of half decade or decade-long interventions that are performed as trials. Whatever happens as a long-term intervention covers a very little area to have a national impact (Sachs 2005). Furthermore, most intervention programs suffer because of budget cuts, as donor countries change their priorities and conditions for aid.
Illusions of Poverty Reduction
Over the years, the theory of modernism has led to other concepts like urbanization and industrialization as the solutions to filling the gap between advanced counties and the poor nations. By following the advice from international aid agencies, countries have changed their economic orientation from being mainly agricultural to the manufacture and processing of goods.
In return, they gain considerable returns in form of foreign exchange from their exports. However, most of their industrialization and urbanization came from intellectual and capital aid from western countries (Slater 1993). Thus, when they realize economic gains, it is all eroded by debt and rent repayment even before it trickles down to the poor.
The cyclic occurrence of prescribing solutions and milking of economic gains has only been a return on investment for western countries. There exists little pressure if any, to move away from the system and its ideologies. First, the rise of international development as a career and discipline study together with the establishment of institutions to carryout projects and research blinds many on the problem of poverty.
The cyclic occurrence of prescribing solutions and milking of economic gains has only been a return on investment for western countries (Emmot & Vandana 2000). There exists little pressure if any, to move away from the system and its ideologies. First, the rise of international development as a career and disciplined study, together with the establishment of institutions to carryout projects and research, blinds many on the problem of poverty.
Many of the urban poor live in shanties and cannot afford anything beyond their daily survival. Besides, the industries offering them work are mainly oriented on exports. They rely on the dynamics of international trade. When global recession hits leading to demand cuts from western countries, these industries either downgrade their production or shut down completely.
What follows are massive layoffs in the third-world countries and an increase in the cost of living as their balance of payments shifted in favour of imports. The shift forces people who moved from absolute poverty to relative poverty plunge back to their situation of living on less than one dollar a day.
The social conditions that accompany poverty and a lack of hope for the future leads the suffering masses to desperation. Main consequences of these anxieties include engagement in crime, harmful habits, and labour union unrests. Furthermore, the poor nations remain with little or no defence against health care and food shortage problems as the value of their currencies depreciates. They beg for more aid, which leads to the ballooning of their debt obligation and further erodes their sustainable capacity.
The Development Problem Lies in the Favoured Economic Models
Since development has been, and remains a construct of the advanced world, it relies on their understanding. Thus, the Keynesian and liberalisation models are its main frameworks for practice. However, in the pure form, no version of the two models leads to the banishment of poverty at the end. The best that the world has witnessed is a phased success when conditions are right, followed by failures that prompt for the abandonment of one theory in favour of another.
All this while, practitioners approach development as a novel concept. Past failures of development should serve as a guide. They show that in its current constitution, development is nothing but hogwash, which keeps the poor in poverty in pretence of helping them. The intervention of government in the post-Keynesian model is usually to level the playing field of the capitalist society.
The equalization only favours players and leaves out those who are unable to afford or offer any of the four constituents of production namely, land, labour, entrepreneurship and capital. Therefore, on a development front, the post-Keynesian model fails.
Within this realm of liberalisation are different groups characterised by their tolerance of Keynesian concepts. The neoliberalism movement is most notable for its call on development to focus on equitable distribution of resources by only using the free market. The model calls for the removal of fiscal and monetary policies. It claims that they lead to inflation and distort the proper reward of capital and labour, in the economy.
The neoliberalism model advocates for use of markets to correct the misappropriations in the economy and lead to full employment (Palley 2005). It is a noble ideal. Full employment should end poverty unfortunately the achievement of maximum employment cannot happen without regard for sociological conditions.
Markets cannot guarantee an equitable and ethical exploitation of resources. The driving force under capitalism remains profit, and the provision of social amenities and services does not score well with a capitalist out to maximise their profit. In fact, development prescription in favour of purely Keynesian or neoliberalism models leave many more in poverty as they erode societal conveniences enjoyed in an equitable economy.
In history, the development agenda based on neoliberalism has been responsible for the poverty anguish caused by recession alluded to earlier in this essay. The model’s problem as used in development is that forces of supply and demand exist in different geographical regions. Therefore, they do not synchronize perfectly and leave gaps of over production or underproduction in the global market (Kay 1993).
Moreover, they face changes in trading condition that are beyond the control of markets. The distortions eventually lead to the reward of capital and labour unevenly and unjustly, which goes against the tenets of neoliberalism. Market systems reward capital and the more capital one has, the larger their profits. It is unsurprising for nations pursuing neoliberalism models to have a huge societal gap between the rich and the poor. Evidently, the market system should not be left alone to solve the poverty problem throughout the world.
The conditions that favour either the Keynesian model or the neoliberalism models do not exist where development seeks to lift the masses from poverty. If they existed, then the decades gone by of development programs would have yielded tangible results. The present would only be a replication of the success formulas.
Unfortunately, that is not the case. The micro-level solutions that should solve the development problem erroneously present new strategic plans when conditions change. This happens because they not hooked on the original causes of poverty, or they lack the necessary command to tackle the underlying problems.
At this point, we shall use the example of the United Nations (UN) institutions for development. The institutions carryout various projects that sometimes bring significant benefits to their beneficiaries. However, such programs lack the necessary command to tackle totally the poverty causes. Their benefits exist as long at the projects run. The programs rely on the mandate accorded by the donor countries to the organizations.
None of the donor countries wills to give them the necessary command approval to conduct their programs as they please. While they remain answerable to their financiers, they can only implement their programs to a certain reach, which is subject to budget approvals (Maxwell & Singer 1979). Moreover, the subjection of their programs to budgetary approval from their parent nations creates a competitive environment for aid agencies.
Their main priority becomes the quest to win significant funding commitments for development. However, in accordance with various models of resource allocation in the donor nations, the agencies will end up proposing and implementing projects have huge administration budgets compared to actual grassroots development. Such programs increase the employment of labour from the donor countries and provide an outlet for their industrial produce.
As a result of actually serving the development agenda, the UN organizations fail to support the long-term demand for labour in the poor nations. This would lead to actual reduction of poverty as the income is reinvested into the countries.
Where such programs compel the indigent countries to assume neoliberal models of economic management, they leave the poor with no chance of participation in their economy. As alluded formerly in this essay, the quest for profit sees no value in the penniless and the commercialization of essential goods and services further alienate them (Schuurman 2009).
Conclusion
Both the post-Keynesian and neo-Keynesian view of price and wage have functional applications. It is their prescription, in disregard to underlying conditions, which make development ill equipped to solve the problem of poverty. Here, development exports the economic route, which is dominated by policies of the western countries (Fine 2009).
Proponents of development fail to recognize the relationship between the advanced countries and the underdeveloped countries. Their proposals and programs defy the prescriptions of modernization theory. The failure to engage in a macro-level discussion of development leads them to negate indigenous economic enterprises.
Consequently, the development agenda continues to push the creation of labour forces to work in the aid funded industries at low wages that are supposed to attract more industries within the given country (Schuurman 2009). Thus, it is unsurprising that the under-developed countries remain poor. Sachs (2005) captures the picture by noting that in 2002, out of US$ 30 aid per African, only 6 US cents reached the intended recipient.
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