Industrial clusters have existed since the early days of industrialization. Clusters exist because of the fact (or perception) that competing firms in the same industry derive some benefit from locating in proximity to each other. These benefits are external to the firm and accrue to similar firms in proximity. Examples include the cotton mills of Lancashire, automobile manufacturing in Detroit, and information technology firms in Silicon Valley. At the firm level, the presence of firms in the same industry, which are located in proximity (in the same region), are expected to increase internal productivity. At the industry level, it is possible to see quantifiable localized benefits of clustering which accrue to all firms in a given industry or in a set of interrelated industries. The sources of this productivity increase in regions where an industry is more spatially concentrated: knowledge spillovers, dense buyer–supplier networks, access to a specialized labor pool, and opportunities for efficient subcontracting. At the metropolitan area level, productivity increases from access to specialized financial and professional services, availability of a large labor pool with multiple specializations, inter-industry information transfers, and the availability of less costly general infrastructure. At the interregional scale, these gains are expected to lead to industry concentration in metropolitan and other leading urban regions. To obtain a complete picture of clustering, one must also consider its absence. If manufacturing and service clusters are associated with regional economic growth, the absence of productive clusters suggests the absence of growth and lagging regions.
This essay focuses on two related “radical theories” of development, dependency and world-systems theory, and shows how they emerged as a critique partly of modernization theory and of the development strategy of import substitution industrialization. The dependency and world-systems perspectives on development were very influential among radical development theorists from the late 1960s onwards, all of whom agreed that capitalism had to be theorized as a world-system. These include Andre Gunder Frank, Fernando Henrique Cardoso, Theotonio Dos Santos, Walter Rodney, Samir Amin, Arghiri Emmanuel, and Immanuel Wallerstein. Some “stronger” versions of dependency, associated with underdevelopment and world-systems theory, have been introduced in recent years. In particular, A. G. Frank proposed the idea that development and underdevelopment are two sides of the same coin. A more nuanced approach to understanding dependency suggested that development and dependence were in some respects compatible. Wallerstein’s world-systems theory has spawned another approach called world-systems analysis. As theories, the ideas associated with both dependency and the world-systems are problematic, failing, for example, to adequately explain the origins of the capitalist world economy. However, both theories remain useful for understanding the current global order. In addition to recognizing that capitalism can in some respects be regarded as a world-system, the two approaches correctly assume that neoliberalism reinforces hierarchies by undermining the capacities of states to shift out of low value production into higher value sectors, as shown by historical patterns of manufacturing.
Shirley V. Scott and Orli Zahava
The most fundamental characteristic of a developing state is that its income, usually calculated as gross national product (GNP) per capita, is relatively low in comparison with that of an industrial country. A second characteristic shared by most developing countries is that they are former colonies. In recognition of the diversity amongst developing countries, they are sometimes divided into subgroups. The term “Least Developed Country” is used to refer to some 50 of the most vulnerable states, whose economies are vastly smaller than those of China, India, Brazil, or Mexico. The BRICS (Brazil, Russia, India, China, and South Africa) is a group of states with emerging economies whose share of world trade, investment, and foreign currency reserve is projected to continue to grow. AOSIS, the Alliance of Small Island States, is a 44-member coalition that functions as a negotiating voice for small island developing states (SIDS) within the United Nations system. The engagement of developing countries with international law typically comes in four aspects: the colonial past and contemporary continuities in international legal approaches and categories, attempts by newly independent Third World states to transform international law through the introduction of specific new legal principles, the effect of the increasing gap between the emerging economies of certain developing countries and the most vulnerable developing states, and whether structural impediments remain to the equitable participation of developing countries in international law.
Robert M. Bosco
The study of religion and development focuses on how the moral and ethical resources of the world’s major faith traditions such as Christianity, Judaism, Islam, Hinduism, and Buddhism might tame the worst excesses of market civilization. Whereas states, corporations, and international development institutions often define “development” as economic growth and all of the adjustments required to achieve it, religious approaches consider the consequences of this conception of development and recommend that the achievement of material gain be tempered by compassion, conscience, a greater concern for social equity, and a responsible application of science and technology to both the social and natural worlds. The origins of the field of religion and development can be traced back to Max Weber's seminal investigations into the elective affinities between Protestantism and the spirit of capitalism. In the 1980s, the majority of scholarly literature grappled with the meaning and significance of Weber’s basic ideas in various contexts and locales as scholars examined whether, when, and how religious traditions enhance or inhibit development at the international, regional, national, or community levels of analysis. After a period of hibernation, the study of religion and development was reenergized in the late 1990s as religious leaders and faith-based organizations played a central role in challenging the policies and practices of international development institutions, especially the World Bank.
The definition of development has changed over the years since the inception of development economics as a sub-discipline of economics in the 1950s. Initially, development economics was understood as a study of how the economies of nation-states have grown and expanded, placing the discipline in line with the classical and neoclassical traditions of economics. Later, however, some scholars focused on how to improve the welfare of the population and the planet informing the critical tradition. The post-war economic development models were fundamentally classical, but they did allow for some state intervention to achieve development, demonstrating the influence of economist John Maynard Keynes. Postwar leftist development economics coalesced around structuralism and dependency theory, or world systems theory, the latter two having their roots in Marxist political economy. This influenced state-led development approaches most associated with the Asian Tigers. In the 1980s, neoliberal ideas came to dominate development economics, however the high social costs of this approach led to a greater focus on poverty, while more progressive scholars emphasized capabilities and redistribution with growth. Since the Global Financial Crisis, questioning of neoclassical economics has grown and, while it is still far from dead, more heterodox approaches are flourishing.
There are three key literatures on the political economy of development that all emphasize the importance of institutions, but in different and somewhat contradictory ways. These literatures focus on developmental states, good governance, and political economic pathways. The developmental states literature is based largely on case studies of East Asian countries that have, since about 1950, largely “caught up” to the already developed nations in Europe, North America, and the Antipodes. The central conclusion of this literature has been that successful late development requires a competent, committed state bureaucracy, independent enough to be capable of imposing its will on domestic businesspeople, but also sufficiently connected to them so as to make good decisions about what will to impose. The literature focusing on good governance, based largely in economics, also sees state actions and characteristics as keys to positive development outcomes. But while the developmental states literature argues that states need to play an interventionist role in “governing” markets (including not infrequently restricting them), the good governance literature usually looks more favorably on free markets. Finally, research in the political economic pathways literature tends to examine much longer periods of time than the other two literatures, and typically emphasizes economic and political developmental outcomes as joint products of differences in the historical trajectories followed by different countries. The key explanatory variables for this literature are a country’s circumstances in the colonial period, and levels and types of social inequality.
Cristian A. Harris
Lands of recent settlement refers to countries settled predominantly by European migration during the nineteenth and twentieth centuries, such as the United States, Canada, Argentina, Uruguay, Australia, and New Zealand. Current scholarship on the lands of recent settlement reveals a very active agenda of comparative studies covering a broad range of areas and issues: culture, institutions, gender, ethnicity, labor, national identity, geography, ecology, environment, noneconomic factors of growth, and transnationalization and globalization. In explaining the different levels of development between lands of recent settlement and the rest of the world, traditional explanations pointed to propitious external factors and factor endowments. These explanations include the analysis of the history of the United States based on the notion of “frontier development” and the staple theory of growth. Meanwhile, recent works debate whether institutions, culture, or geography plays a crucial role. These works focus on the social, domestic, geographic, and biological elements of development, the cultural and institutional legacy of colonialism, as well as questions on gender, ethnic, and national identity. Although they do not reject the importance of foreign demand, capital, and labor in explaining the development of the lands of recent settlement, they question the adequacy of interpretations based solely on economic factors. Ultimately, the most important contribution of the study of development of lands of recent settlement is in the area of an analysis of transnational networks and globalization.
James H. Mittelman
Development cannot be separated from global political economy, but it is an inherent component of the latter. The concept of development was popularized through expansion of colonization, and underwent various transformations as the socio-political structure of the world changed over time. Thus, the central task of development theory is to determine and explain why some countries are underdeveloped and how these countries can develop. Such theories draw on a variety of social science disciplines and approaches. Accordingly, different development paradigms have emerged upon which different scholars have shown profound interests and to which they gave extensive criticisms—modernization, dependency, Marxism, postcolonialism, and globalization. With the recent emergence of the post-modern critique of development, power has become an important subject in the discourse of development. Nevertheless, a full theoretical understanding of the relations between power and development is still in its fledgling stage. Though highly apparent in human societies, social power per se is a polylithic discourse with no unified definition and implication, which has led different proponents of development paradigms to understand power differently. Although there is a dialectic contradiction between the different dialogic paradigms, the reality of development theory is that there is a large choice of theories and models from which field practicioners will draw pragmatically the most appropriate elements, or they will create their own model adapted to the situation.
Steven W. Hook and Franklin Barr Lebo
International development has remained a key part of global economic relations since the field emerged more than half a century ago. From its initial focus on colonization and state building, the field has evolved to encompass a wide range of issues, theoretical problems, and disciplinary traditions. The year 1945 is widely considered as a turning point in the study of international development. Three factors account for this: the end of World War II that left the US an economic hegemon, the ideological rivalry that defined the Cold War, and the period of decolonization that peaked around 1960 that forced development issues, including foreign aid, state building, and multilateral engagement, onto the global agenda. Since then, development paradigms have continuously evolved, adapted, and been reinvented to address the persistent and arguably widening gap between the prosperous economies of the “developed North” and the developing and frequently troubled economies of the “global South.” Today, a loosely knit holistic paradigm has emerged that recognizes the deficiencies of its predecessors, yet builds on their strengths. A holistic conception of international development embraces methodological pluralism in the scholarly study of development, while recognizing the multiple ways policy practitioners may productively apply academic theories and research findings in unique settings.
One of the most significant structural transformations in postwar capitalist democracies has been the rise of the welfare state. The theoretical intent of the traditional sociological and economic inquiry into the welfare state has focused less on trying to understand the welfare state itself and more on to what extent and under what conditions welfare provisions influence social and economic outcomes such as equality, employment, and labor market behavior. Over time, however, scholars have turned toward historical and political factors. G. Esping-Andersen identified three types of welfare state that seem incongruent with the real worlds of welfare capitalism: the “liberal,” “conservative/corporatist,” and “social democratic.” In contrast to the period until the mid-1980s that focused on welfare state expansion, the late 1980s saw the emergence of new streams of literature whose emphasis was on welfare state retrenchment. More recently, scholars have advanced the argument that the globalization of capital markets has effectively increased the power of capital over governments that seek to expand or maintain relatively high levels of social protection and taxation. Another notable trend is the increased intellectual interest in the relation between development and social policy and the growing interface between social policy and economic policy. A question that arises is whether distinctive welfare regimes have the ability to survive, particularly if their norms clash with those of the competition, or Schumpeterian workfare state.
Global restructuring across the developing world can have profound, if uneven, political, economic, and social consequences. As such, the relationship between diasporas and development is necessarily complex. The diaspora spans all of the local, national, regional, and global levels, its networks and communities set apart from other migration flows in terms both of geography and time. It is contended that these groupings are constituted by three main elements: dispersion across or within state borders; orientation to a “homeland” as a source of value, identity and loyalty; and boundary maintenance, involving the preservation of a distinctive identity vis-à-vis a host society over an extended time period. Yet each of these core elements has been contested, most especially that of continued loyalty to a homeland and an enduring transnationalism that evokes a regularized range of interactions between the host country and homeland. Moreover, there is no one paradigmatic concept of diaspora. While none of the interpretations in the mainstream scholarship is necessarily wrong, they tend to be grounded in a very basic categorization of diasporic identifications and groupings, thus leading to new questions about how to tackle the issue of diaspora in the development process. And although many of the central traits of diasporas are apparently well understood, new interpretations of the shifting politics of the diaspora in the context of broader liberal processes of globalization are needed.
Priya Kurian and Robert V. Bartlett
The fundamental conflicts and contradictions between environment and development, and various theoretical and practical efforts to reconcile them, have been a prominent part of the history of development thinking since environmentalism emerged as a significant political phenomenon in the 1960s. The idea of development as change for the better resonates perhaps with all civilizations and across time. All civilizations have development myths which reflect a self-awareness that a particular culture had at some time in the past advanced from a more primitive, less developed state. But these cultural myths of development are only incidentally material or economic. More pronounced concerns over the environment and development emerged during the 1960s and the 1970s. These decades were marked by the emergence of widespread public concern about environmental problems of air and water pollution, and the growth of the environmental movement led to national environmental policy developments and international efforts on the environmental front. In addition, development, environment, and sustainability are all normative concepts with implications for ethics and justice. The vast literature on sustainable development has spawned a range of critiques from a variety of theoretical and disciplinary perspectives. The environmental justice literature developed after early sustainable development literature, and raises questions about intragenerational equity.
Michael Humphrey and Shahadat Hossain
Slums have generated renewed interest among scholars in the wake of rapid urbanization in the South and the growing incidence of urban poverty worldwide. This gave rise to the expression “expanding urban slums,” which refers to a phenomenon occurring in the Global South associated with “hyper-urbanization”— rapid urbanization beyond the capacity of the state or city to plan for, to provide services and housing for, to regulate urban environments or regulate the poor. The UN Challenge of Slums report describes two kinds of slums: “slums of hope” and “slums of despair.” Slums of hope are “progressing” settlements, characterized by new, normally self-built structures, usually illegal (e.g. squatters) that are in, or have recently been through, a process of development, consolidation and improvement. Slums of despair refer to “declining” neighborhoods, in which environmental conditions and domestic services are undergoing a process of degeneration. Earlier studies of slums differ from contemporary research in terms of the extent to which megaslums are emerging as a permanent feature of megacities. Contemporary studies of the “expanding slum” can be conceptualized as about different aspects of informalization of urban social, economic, and political processes. The literature on urban informality and informalization indicates that slums are not excluded spaces but integrated on different terms. Scholars must begin to develop more nuanced theories of urbanism in a globalizing world, and they can use the “gray zones” of Latin American cities as a starting point.
Christopher B. Barrett and Erin C. Lentz
Food plays an essential role in performance and well-being. Apart from its physiological necessity, food is also a source of pleasure. Since both biological needs for food and psychic satisfaction from food vary considerably among and within populations, coming up with precise, operationalizable measures of food security have proved problematic. Furthermore, the concept of food security encompasses not only current nutritional status but also vulnerability to future disruptions in one’s access to adequate and appropriate food. The complexity of the concept of food security has given rise to scores, if not hundreds, of different definitions of the term “food security.” As a result, there have also been variations in thinking about the proximate manifestations and direct and indirect causes and consequences of “food insecurity,” the complement to “food security.” Food security is commonly conceptualized as resting on three pillars that are inherently hierarchical: availability, access, and utilization. Some agencies, such as the United Nations Food and Agriculture Organization (FAO), have added a fourth dimension: stability. Food insecurity is often used interchangeably with the terms “hunger,” “undernutrition,” and “malnutrition.” Threats to food insecurity may be classified as either “covariate” or “idiosyncratic.” Based on these threats, various interventions have been implemented to promote food security by means of increasing availability (improving agricultural productivity), promoting access (economic growth and assistance programs such as food stamps or vouchers, food aid delivery, food banks, school lunch programs), or improving utilization (supplementary feeding programs, therapeutic feeding programs).
The history of development studies as a field of academic inquiry can be traced most directly back to the Cold War era when public funding for “development studies” went hand in hand with international development as a state project, particularly in the United States. Economists, sociologists, and planners began to take the development of the “Third World” as an object of analysis, partially in response to new funding opportunities and a discursive context legitimating it as a field of study. By the 1960s, geographers began to take (so-called) “Third World” modernization and development as an object of research. Geographers’ engagement with development as intervention, and eventually the exploration of uneven global development as part of the “ebb and flow of capitalism,” can be divided into three waves. The first wave, visible in the early 1960s, took the quantitative spatial models dominant at the time in geography, such as those concerning urbanization patterns, transportation linkages, regional development, and population movement, and began to apply them to “Third World” contexts. This second wave, linked to the turn toward Marxist theory by a new generation of geographers in the 1960s, explored the uneven geography of wealth and power produced by capitalism and launched a powerful critique of development intervention as imperialism. The third wave of debates emerged in the late 1980s–early 1990s and is associated with poststructural and postcolonial critiques gaining traction at the time in geography and related disciplines.
Wolfram Dressler and Sally Babidge
The changes in anthropological theory and perspectives on identity and difference can be explored in the context of three major periods of development: the colonial, postcolonial, and postdevelopment periods. In the colonial era, anthropologists drew heavily on the idea of social evolution located in the works of Herbert Spencer, Lewis Henry Morgan, and E.B. Tylor. In their work, lower-order “savages” (i.e., indigenous people) were thought to evolve socioculturally into higher-order, “civilized” Europeans. In the postcolonical period, the wave of independence throughout much of the developing world led social anthropologists to interpret how different groups came to self-identify with people and situations in a relational sense in an emerging postcolonial context. Ethnographers considered how people identified with certain social and cultural characteristics as being contingent upon their shared understanding of these features in relation to group membership and how others perceived such characteristics. Since the 1990s, social anthropologists have considered conceptions of indigeneity and other identity work with greater nuance, focusing on the layered processes that constitute identity. Recent scholarly contributions have considered how and why people have socially constructed their identities through reflections of self, sociopolitical positions, and culture relative to individual and group experiences in society. In particular, three intellectual streams have begun to reconceptualize identity formation: social positioning, articulation, and transnational identity building.
The nature of the relationship between economic development and income inequality has long been the subject of considerable debate. Economic growth has very different effects on poverty, depending on a country’s level of income inequality. In high inequality countries, economic growth that raises the overall level of income disproportionately tends to benefit the rich, whereas policies that encourage economic growth while reducing income inequality will greatly accelerate the achievement of poverty reduction goals. Thus, understanding how income inequality and economic development are linked is important for establishing economic growth policies that reduce poverty. The literature on the economic development–income inequality nexus in industrial society places emphasis on the causes of current social inequality. The central and most cited paper in the literature is S. Kuznets’s “Economic Growth and Income Inequality” (1955), which proposed an inverted U-shaped relationship between development and inequality over the course of industrialization. Some scholars have tried to build upon Kuznets’s theory by focusing on his claim that income inequality is a function of the nature of regulations put on the market. Other studies deal with the importance of studying the relationship between democracy and inequality, the effect of the nature of the government on shaping inequality compared to industrialization, and the implications of globalization for income inequality. This overview of the literature shows that there is little true consensus on the relationship between inequality and development and highlights two major areas for improvement: measurement and data quality.
Wendy W. Wolford and Timothy Gorman
Organization by rural landless movements has been the primary factor driving the implementation of land reform projects. At the heart of land reform is a debate over the very nature of both property and rights within and between socialist and capitalist economic systems of the modern era. One common interpretation of the development of property rights was articulated by Karl Marx, who argued that capitalism was made possible through theft of common land by a rising bourgeois class. The issue of private property rights in land emerged as a crucial aspect of national socialist transformation in the early 1900s. Known as the “Agrarian Question,” it was first formulated by Karl Kautsky as both a political and economic question. Land distribution occurs today via three main mechanisms, which differ in their emphasis on market transactions, state appropriations, and grassroots mobilizations: the market, state, and civil society. Grassroots mobilization to demand access to land has been a key factor behind most if not all land distribution programs. There is a growing literature on the transnational peasant movement (TPM), but much of it is laudatory and descriptive, focusing on the formation of various movements and campaigns. Comparative work is needed to elucidate general trends and retain sensitivity to local conditions in the future. Furthermore, the literature on land reform must be interdisciplinary, with attention to economic issues, political factors, social relations (including power), and historical particularities.
Robin Gravesteijn and James Copestake
Microfinance refers to an array of financial services—including loans, savings, and insurance—available to poor entrepreneurs and small business owners who have no collateral and, otherwise, would not qualify for a standard bank loan. Those who promote microfinance generally believe that such access will help poor people out of poverty. For many, microfinance is a way to promote economic development, employment, and growth through the support of micro-entrepreneurs and small businesses; for others, it is a way for the poor to manage their finances more effectively and take advantage of economic opportunities while managing the risks. One of the newer fields that is getting more attention within microfinance is the measure of microfinance institutions’ (MFIs) social performance, which broadly is an indication of how well an MFI meets the social goals outlined in its mission and vision. Social performance is reflected in a wide range of indicators, including an MFI’s policies towards employees, like providing health care or maternity leave; to what degree an MFI targets the poorest of the poor for financial services; an MFI’s policies on environmental conservation; how low an MFI keeps its interest rates; how transparent an MFI is about these interest rates and other loan terms; and how an MFI’s services translate into improved lives for their clients.
There are three factors that persuade a migrant to cross borders: demand-pull in destination areas, supply-push in origin areas, and network factors that connect them. On the basis of this demand-pull, supply-push, and network framework, a distinction can be made between economic migrants who are encouraged to migrate because of a demand for their labor abroad and noneconomic migrants who cross national borders to seek refuge or to join family members living abroad. Many economists argue that trade and migration have similar effects on sending and receiving countries. However, there is no solid evidence showing that more migration accelerates economic development in migrant-sending countries. The effects of international migration on development are often grouped in the 3-R channels of recruitment, remittances, and returns, each of which can operate in ways that speed up or slow down economic development. Recruitment refers to who goes abroad, remittances are the amount of the money earned by migrants abroad that is sent home, and returns focus on what migrants do after a period of employment abroad. Majority of industrial countries have national laws that require all workers to receive minimum wages and migrants to receive the same wages and benefits as local workers. From the point of view of some developing countries, minimum and equal wages are a form of protectionism aimed at limiting the number of migrant service providers. A major challenge of the twenty-first century is how to resolve this trade-off between migrant numbers and migrant rights.