Generative sectors and the new historical materialism: Economic ascent and the cumulatively sequential restructuring of the world economy

The causes and consequences of inequality between national economies, the ascent to dominance within the world hierarchy of economies, and the dynamics driving the material intensification and spatial expansion of production and trade in the world economy have long been core questions in a wide range of fields concerned with economic change and development and with international relations. In this article, we propose that one of the fundamental mechanisms driving all three of these processes for at least the last 500 years has been a dynamic tension, or contradiction, between the economies of scale that reduce relative costs and drive national economic ascent to dominance in world production and trade, and the diseconomies of space that result from the increased consumption of raw materials that this expanded production entails. The four most rapid cases of economic ascent in the history of the world economy—Holland, Great Britain, the United States, and Japan—resolved this contradiction in similar ways that drove the ascent of these economies to the top of the system of global stratification. Stephen G. Bunker is professor of sociology at the University of Wisconsin-Madison. His research examines how the world economy is driven by raw materials and transport, including the role of the Brazilian Amazon as a raw-materials periphery and the political economy and ecology of Japanese raw-materials access strategies. Paul S. Ciccantell is associate professor of sociology at Western Michigan University. His research examines the socioeconomic and environmental impact of raw-materials extraction in Brazil, Canada, Mexico, and Venezuela; the organizational sociology of raw-materials and transport industries; the impacts of the North American Free Trade Agreement; and the political economy and ecology of Japanese raw-materials access strategies.     

Networks and Public Policies in the Global South: The Chilean Case and the Future of the Developmental Network State

Recently, there has been considerable excitement about the economic potential of the “developmental network state”—decentralized government policies that successfully accelerated growth in several high- and medium-income countries. The question remains whether such a strategy could be successful in less-developed nations whose scientific and technological resources were relatively limited. This paper analyzes the trajectory of Chile, a Southern country which, despite adverse conditions, managed to produce something akin to an economic miracle during the last few decades. Our argument is that Chile’s success was based on the developmental network state strategy. Moreover, we highlight the centrality to understanding the Chilean experience of the concept of “network failures”—a common phenomenon that occurs when domestic production would be best served by network forms of organization but for a variety of reasons, these networks either fail to materialize or fail to take hold (Schrank and Whitford 2011). Over and over again, we see that the logic behind the actions of the Chilean state was to provide resources that reduced the likelihood of network failures. We examine three case studies of successful export sectors: salmon; wine; and fruit and vegetables. The paper outlines some of the challenges faced by the Chilean model and assesses its long-term viability.     

Economic development and population

Conclusion Neo-Malthusian analysis that high and increasing population density hinders economic development and results in poverty has been demonstrated to be false. The two major structural variables negatively associated with rate of population increase are wealth and socialism, and the major determinants of economic growth are level of economic development and economic organization. If our analysis is correct the various campaigns supported by AID, the major U.S. foundations and other groups to discourage population growth in Third World countries in order to increase their rate of economic growth are misguided. Every baby born is not only a new mouth to feed, but also within a few years two more hands to work. There are great potentialities for economic growth in the Third World that await only the proper economic organization to be realized. That is, if the two hands are used efficiently, they will more than feed themselves. Attempts to reduce the birth rate by propaganda and making contraceptives readily available, ignore the structural causes of high fertility and so are not likely to succeed in reducing the birth rate. Our data suggest that only when the structural causes of high fertility—the poverty and economic insecurity associated with capitalism—are removed is the birth rate likely to fall significantly.     

Hardening Budget Constraints: A Cross-National Study of Fiscal Sustainability and Subnational Debt

This study explores the financial sustainability of subnational governments in four different countries. Scholars argue that subnational fiscal capacity helps local governments deliver better public services and provide public goods, which in turn helps to promote economic growth. While administrative control by the central governments contributes to reducing moral hazard from the soft budget constraints, bottom-up strategies to manage fiscal profligacy also need attention. The study first provides understanding about the characteristics of central-local governance and management of subnational government debt of each country. Then, we test our hypotheses regarding local fiscal capacity and administrative control, including political-economic factors that may affect debt spending by local governments. Our findings show that subnational fiscal sustainability improves when the central governments have clear rules to intergovernmental transfers in place and more (market) liberal policies, meanwhile when subnational governments have a more fiscal capacity and less intergovernmental transfers they are able to manage their debt more soundly.     

Democratic BRICS as role models in a shifting global order: inherent dilemmas and the challenges ahead

India, Brazil and South Africa constitute an important subset of Brazil, Russia, India, China and South Africa (BRICS) and emerging powers at large in a shifting global order. The article examines the capacity of these democratic BRICS to serve as a role model to the rest of the developing world, at a time when liberal democracy seems to be experiencing serious challenges and dislocations in the Global North. The article considers the important achievements of democratic BRICS, in terms of their individual performances as well as through active cooperation strategies through organisations such as the India, Brazil and South Africa (IBSA) Dialogue Forum. Attention is drawn to the inherent structural dilemmas confronted by democratic BRICS to serve as genuine role models, given their domestic weaknesses as well as inherent constraints on their collective action strategies. Our central argument is that these countries, individually and collectively, are likely to have a crucial bearing on the future of liberal democracy on a global scale.     

Cacophonies of Aid,Failed State Building and NGOs in Haiti: setting the stage for disaster,envisioning the future

The January 2010 earthquake in Haiti was a catastrophe not only for the loss of life it caused, but also because it destroyed the very thin layer of state administrative capacity that was in place in the country. This article argues that the fragility of the Haitian state institutions was exacerbated by international strategies that promoted NGOs as substitutes for the state. These strategies have generated a vicious circle that, while solving immediate logistical problems, ended up weakening Haiti's institutions. However, the article does not call for an overarching condemnation of NGOs. Instead, it explores two cases of community-based NGOs, Partners In Health and Fonkoze, that have contributed to creating durable social capital, generated employment and provided functioning services to the communities where they operated. The article shows that organisations that are financially independent and internationally connected, embrace a needs-based approach to their activities and share a long-term commitment to the communities within which they operate can contribute to bringing about substantial improvement for people living in situations of extreme poverty. It concludes that in the aftermath of a crisis of the dimension of the January earthquake it is crucial to channel support towards organisations that show this type of commitment.     

Seeds of hope,seeds of despair: Towards a political economy of the seed industry in southern Africa

The seed industry in Southern Africa has been radically transformed by a policy of liberalisation and privatisation started under structural adjustment. Traditionally under the domain of parastatals, seed research, production and distribution has been criticised for failing to provide modern variety seed to smallholder farmers. However, the private companies which have stepped in to replace seed parastatals in southern Africa have proven no more effective in meeting the demands of smallholders. The Trade Related Intellectual Property Rights (TRIPs) Agreement, concluded in 1994 as part of the Uruguay Rounds of GATT negotiations, as well as certain biotechnological innovations such as Terminator or Traitor technologies, threaten to further undermine local seed production and consumption by destroying the informal seed sector so central to agricultural production in the region. What alternatives exist? The success of Zimbabwe's maize seed network offers some insight. Resting on a unique relationship between government and nationally based producer co-operatives, Zimbabwe's maize programme was able to provide nearly every farmer in the country with hybrid maize suited for local growing conditions.     

Namibia and nuclear proliferation

This article offers a discussion of the probable effects of a Worldwide Patent System for developing countries. It draws upon insights from the ongoing processes in the World Intellectual Property Organization and elsewhere relevant for the global patent system and discusses these features from a developing country perspective. For scientifically advanced developing countries the effect in their most advanced and most global enterprises is potentially positive as they will benefit as much as other multinational companies. In areas of research and development where these most advanced developing countries do not possess a high level of technological capacity, a Worldwide Patent System is unlikely to create any benefits for them. For countries with the ability to copy and produce inventions made by others a Worldwide Patent System will have a negative effect as inventors will have little opportunity to utilise the system, whereas they will be bound by a larger number of exclusive rights narrowing down their space for innovation. For the least developed countries an additional problem arises: it might become even more difficult to import essential goods because patents will be in force in these countries even though there is no production of that product in the country.     

The rise of a capitalist subsistence economy in Peru

The Peruvian economy depends for its growth on the export of its mineral resources. This dependency is derived from the country’s role in the international division of labour and is expressed in its export structure, economic structure and business structure. Peru’s dependency on its mineral resources, an economic structure that is principally made up of non-tradable sectors and a business structure dominated by micro businesses, make lasting economic progress very difficult. We argue that although the Peruvian economy is divided into an advanced economy and a capitalist subsistence economy, the country is not a dual economy where two sub-economies are economically and socially separated from each other and have structurally different modes of operation. The capitalist subsistence economy is characterized by low productivity levels and is expressed in remuneration rates at or near the minimum wage level. This structural feature of the Peruvian economy impedes the successful implementation of a process that would make the country less dependent on its natural resources and would set it on a development course of increased value-added production.     

Surviving in Rondônia: The dynamics of colonist farming strategies in Brazil’s Northwest frontier

The modernization of Brazilian agriculture beginning in the mid-1960s led to the massive out-migration of family farmers from Brazil’s traditional “farm-belt” in the subtropical South. The tropical forestlands of the Northwest frontier (Rondônia) were opened through a government program, POLONOROESTE, to absorb this displaced agrarian population. The results of this land settlement program have been disappointing. Agricultural production in Rondônia, emphasizing low-yield annual cropping and casual cattle ranching, has been accompanied by high rates of deforestation. Colonists migrating to Brazil’s Northwest frontier confront numerous obstacles to establishing and maintaining a viable farm. This article explores how colonists adapt to the changing factors of farm production. These factors occur at three levels: environmental, institutional/structural, and household level. Based on colonist household surveys, three principal and overlapping farming strategies were observed and their financial performance evaluated: annual cropping-only, coffee production, and cattle ranching. Three case studies are presented that illustrate how these strategies change over the short-term in ways that tend to favor temporary land uses.     

State-centered vs. Class-centered perspectives on international politics: The case of U.S. and British participation in the 1953 coup against premier Mosaddeq in Iran

Two alternative perspectives—state-centered and class-centered—on state actions 01 are considered. The explanatory power of each of these perspectives is examined by analyzing the behavior of three major political actors in the Iranian oil disputes—the Iranian, the British, and the U.S. governments—using the existing historical evidence. The article supports a class-centered explanation by demonstrating the significance of the International Petroleum Cartel in determining U.S. and British policy towards Iran in this period and the failure of the Iranian bourgeoisie to continue their support of Mosaddeq in the face of economic difficulties resulting from the nationalization of the oil industry. Partial support for a state-centered explanation is also noted. For future research, the utility of considering the state and class as interdependent actors with the specification that the nature of this interdependence is asymmetrical is suggested.     

Coping with U.S. and EU's challenges? Strategic confusion in the Czech foreign and security policy

This article traces developments in the Czech political elite's thinking about structural changes that the region and the country have experienced during the last several years. It is argued that two parallel, external structural constraints have significantly shaped decisions of the Czech political elite as the country has, once again, proven to be an ostensibly “reactive state”. These structural constraints have been the ongoing U.S. recalibration of its grand strategy as well as the financial crisis with a systemic challenge to the European political project in which fiscal and monetary issues have largely replaced previous criticism of the Constitutional Treaty and then the Reform Treaty. It is argued that these developments have posed a notable problem for two predominant ideological convictions present in the Czech political thinking – Atlantism and Europeanism, as neither of them has offered readily answers to deal with such a challenge. As will be shown, this mutually reinforcing dual challenge has further exacerbated previously existing Czech government's lack of political vision, and resorted to a political mentality which has contained elements of denial, rationalization, and political resignation.     

Pitfalls of power to the people: Decentralization,local government performance,and system support in Bolivia

Across the developing world, many governments have implemented political reforms—heavily promoted by international donors—designed to transfer greater power to subnational levels of government and to provide a more substantial policymaking and oversight role to citizens. Although economic analyses have frequently argued that such decentralization programs improve the efficiency of public expenditures, far less is known about their political impact. Based on an analysis of two large national public-opinion surveys from Bolivia, a country that has recently implemented one of the most comprehensive decentralization reforms yet attempted in Latin America, we analyze the role decentralized local institutions are playing in shaping citizen attitudes toward their political system. Our findings support the contention that decentralization can bolster citizen levels of system support at the national level. Equally important, however, we also demonstrate that the renewed emphasis on local government can have the opposite effect of producingmore negative views of the political system when the performance of local institutions falters. Jonathan T. Hiskey is assistant professor of political science at the Univeristy of California, Riverside. His most recent research focuses on subnational processes of political and economic development taking place across Latin America. Mitchell A. Seligson is Daniel H. Wallace Professor of Political Science, research professor of international studies, and professor in the Graduate School of Public and International Affairs at the University of Pittsburgh. His research centers on surveys of democratic values and behaviors in Latin America.     

FDI,AGOA and Manufactured Exports by a Landlocked,Least Developed African Economy: Lesotho

Lesotho, a resource-poor country located inside South Africa, is now Africa's largest exporter of apparel to the US. Its performance, very unusual for Africa, relies heavily on Asian investors and trade privileges. This article traces the origins of FDI in Lesotho and the determinants of its export competitiveness, showing that apparel production suffers from low productivity, poor skills and weak local links. Its prospects after AGOA (the African Growth and Opportunities Act) remain uncertain unless the government addresses these structural problems. Lesotho holds important lessons for industrial development in Africa, going beyond creating a good investment environment.     

Uneven development,inequality and concentration of power: a critique of Thailand 4.0

This article provides a critique of the Thailand 4.0 strategy to push the country out of the middle-income trap through innovation-driven, inclusive and sustainable growth. First, it argues that the policies have insufficiently analysed the persistence of structural hierarchy and uneven development in the global political economy, which will constrain Thailand’s catch-up success in the future. Second, based on writings about progressive mission-led industrial strategies, it is argued that Thailand 4.0 ought to embed a progressive social and environmental agenda more clearly in its industrial strategy. Third, it is argued that Thailand 4.0 neglects to address the high concentration of political and economic power in the country, and also continues to allow unequal access to the policymaking process that has led to socio-environmental problems. Overall, this article argues that Thailand 4.0 will increasingly aggravate the two-tier fragmented nature of the political economic system of Thailand, where few can reap the biggest shares of the surplus and participate in more advanced sectors of the economy. It also calls for a more progressive industrial strategy and an alternative developmental path.     

National development and the globalisation discourse: Confronting 'imperative' and 'convergence' notions

The Bonn Agreement of December 2001 lays the foundations for a political transition in Afghanistan after 23 years of war. The agreement excludes the defeated party, the Taliban, while seeking to commit the remaining groups to a long-term and loosely defined peace process. With Afghan regionally based political-military groups defined largely along ethnic lines, and closely linked to external powers, rebuilding national authority will be a slow and conflictual process. Rebuilding the coercive capacity of the state is essential to overcome strong centrifugal tendencies, yet must be timed so as not to get ahead of the restoration of legitimate political authority. International assistance can support the political recovery by being conscious of the need to neutralise the 'spoilers' of the peace process. Making haste slowly in aiding economic recovery can prevent armed competition for power at the centre. To promote this kind of transition, and promote Afghan influence in the peace-building process, the international aid community must fundamentally reorient the strategies and methods of past involvement in the country.     

Foreign investiment in socialist Cuba: Significance and prospects

In February 1982, Cuba’s Council of State approved legislation that authorized some forms of foreign investment in the island. The legislation was largely ignored by foreign business that for nearly a decade showed scant interest in investing in Cuba. However, in the 1990s, foreign investiment in socialist Cuba has increased rapidly. The first part of the article gauges the economic significance of foreign investment in the context of the financial needs of the country. The second part touches on a number of issues that have a bearing on the further growth of foreign investment in Cuba. The article concludes with some general observations on the impact of foreign investment on the Cuban economy and prospects for the future. Jorge F. Pérez-López is an international economist with the Bureau of International Labor Affairs, U.S. Department of Labor. His writings on international economics issues— especially on the Cuban economy—have appeared in professional journals and several edited volumes. He is the author ofThe Economics of Cuban Sugar (University of Pittsburgh Press, 1991),The Cuban Second Economy: From Behind the Scenes to Center Stage (Transaction Publishers, 1995), and editor and contributor ofCuba at a Crossroads (University Press of Florida, 1994). He received his Ph.D. in Economics from the State University of New York at Albany. The views expressed in this article are those of the author alone.     

Raising wages in the controlled sector: A general equilibrium analysis

The likelihood of the possibility pointed out by Stewart and Weeks, that a rise in wages in the ‘controlled’ sector of an underdeveloped country might raise total employment, is reexamined using an alternative model which facilitates consideration of the impact of such a wage rise on output and potential welfare as well as on employment. It is argued that Stewart and Weeks may have been overly sanguine in their appraisal of the impact of a controlled sector wage rise: the impact of this on real income and employment looks more likely to be adverse than not.     

Competing for Foreign Direct investment: Efforts to Promote Nontraditional FDI in Costa Rica, Brazil, and Chile

This article examines government efforts in Costa Rica, Rio Grande do Sul in Brazil, and Chile to promote nontraditional foreign direct investment (FDI). Rather than attempting to account for the overall level of FDI attracted, this article seeks to explain the ability of governments to develop a well-targeted, responsive, and sustained strategy specifically to attract nontraditional FDI. It concludes that three independent variables play an important role in making some governments more effective than others at developing strategies to promote nontraditional FDI. These are the extent of the government's autonomy from special interest groups, both domestic and foreign; the extent of the government's transnational learning capacity; and the extent to which there is an ideological consensus among political parties in the country or state in favor of working closely with the business community. Roy C. Nelson is an associate professor of International Studies at Thunderbird, the Garvin School of International Management. He is currently completing a book entitledHarnessing Globalization: The Promotion of Nontraditional Foreign Direct Investment in Latin America.     

Urban growth in India: Demographic and sociocultural prospects

This paper explores some of the complexities of India’s urban growth since its first post-Independence census of 1951. Two levels of analysis are pursued as they affect one another: numerical or demographic changes, on one hand, and changes in living conditions, or sociocultural trends, on the other. The general conclusion of the study is that a process of “erosion” of traditional society is occurring, but it is occurring slowly— as a population more than twice the size of the entire United States continues to live in the countryside (and to increase at about twice the U.S. growth rate). Moreover, the sociocultural change is occurring in a non-linear fashion, as much that is traditional endures along side of the modern—rather than being replaced or obliterated by it. Finally, while the growth is occurring in cities of all sizes, the intermediate, regional capitals like Hyderabad and ahmedabad—rather than the largest cities such as Bombay or Calcutta—are experiencing the most rapid growth. Jay Weinstein is a professor of sociology and faculty research fellow at Eastern Michigan University. He has also taught at the University of Iowa (1972–77) and Georgia Institute of Technology (1977–86). He has been involved in comparative development studies for over twenty years, beginning with his Ph.D. fieldwork in India in 1971. His current interests include Canadian Studies and Eastern Europe. He visited Bulgaria in February–March, 1991 as a member of a U.S. Information Agency Citizen Exchange Project.