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CCS 102 Chapter 1 TO 5

Fundamentals of development (University of Nairobi)

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CCS 102: FUNDAMENTALS OF DEVELOPMENT

AND ITS APPLICATIONS

Training Manual for 1st Year Students

Department of Agricultural Economics and

Extension
University Of Embu

DR. ELIZABETH MBOGOH-KIURA

\
In coparation with Njoroge Harrison karanu.

January 2018

1.0. INTRODUCTION TO BASIC CONCEPTS

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1.1. Development
This implies a qualitative change in the way the society carries out its
activities, such as through more progressive attitudes and behavior by the
population, the adoption of more effective social organizations or more
advanced technology which may have been developed elsewhere.
Development generally means the improvement of people's lifestyles
through improved education, incomes, skills development and employment.
Development also means that people should have decent housing and
security within those houses. Development means that people should be
able to read and write. Development should, then, be viewed as a multi-
dimensional process involving major changes in social structures, popular
attitudes and a national condition of life from unsatisfactory to satisfactory.
In this regard, satisfactory means materially well to do and spiritually happy
or content with what one has got. One of the prime ingredients of
development is information.

Furthermore, how that information is disseminated between people is also

crucial. Information is disseminated for various purposes; information about
new fertilizers, agriculture or land development, town planning and
community building, public health (e.g. HIV Aids) and education information
campaigns. In a nutshell, development is seen as a transformation of society,
a movement from traditional relations, traditional ways of thinking,
traditional methods of production, to more modern ways-modernization so to
speak. While the term is usually applied to changes that are beneficial to
society, it may result in negative side-effects or consequences that
undermine or eliminate existing ways of life that are considered positive. For
example, urbanization may lead to crime, prostitution, lack of farm labor in
rural areas, development of slum areas, traffic jams, pollution, etc.

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1.2. Underdevelopment
This refers to a situation in which resources are being actively used, but used
in a way which benefits dominant states or groups and not the poorer states
or areas in which the resources are found. It is the state of an organism or of
an organization (e.g. a country that has not reached its maturity. It is often
used to refer to economic underdevelopment, symptoms of which include
lack of access to job opportunities, health care, clean water, food, education
and housing. Underdevelopment takes place when resources are not used to
their full socio-economic potential, with the result that development is slower
in most cases than it should be. Furthermore, it results from the complex
interplay of internal and external factors that allow less developed countries
only a lop-sided development progression. Underdeveloped nations are
characterized by a wide disparity between their rich and poor populations,
and an unhealthy balance of trade. Underdevelopment is not lack of or
insufficient development, as many people tend to think. It is a product or
sub-product of development. Underdevelopment derives inevitably from the
colonial or neo-colonial forms of economical exploitation which still imposes
itself in many regions of the world.

1.3. Sustainable Development

It is a pattern of resource use that aims to meet present human needs while
preserving the environment to avoid compromising the ability of future
generations to meet their own needs. Sustainable development ties together
concern for the carrying capacity of natural systems with the social
challenges facing humanity. It has been defined as balancing the fulfillment
of human needs with the protection of the natural environment so that these
needs can be met not only in the present, but in the indefinite future. The
field of sustainable development can be conceptually broken into three
constituent parts: environmental, economic and sociopolitical sustainability.
Five key drivers are considered important to achieving a sustainable
community or sustainable development:

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 High quality services

 A good physical environment
 A strong economic base
 Strong and exemplary leadership
 Shared values between community members

1.4. Empowerment
This refers to increasing the spiritual, political or economic strength of
individuals and communities. It often involves the empowered developing
confidence in their own capacities. It addresses members of groups that
social discrimination processes have excluded from decision-making
processes through - for example - discrimination based on disability, race,
ethnicity, religion or gender. It is the process of obtaining these basic
opportunities for marginalized people, either directly by those people, or
through the help of non-marginalized others who share their own access to
these opportunities. It also includes actively blocking attempts to deny those
opportunities. Empowerment also includes encouraging, and developing the
skills for, self-sufficiency, with a focus on eliminating the future need for
charity or welfare in the individuals of the group. Empowerment is a multi-
dimensional social process that helps people gain control over their own lives
and therefore a process that fosters power (the capacity to implement) in
people, for use in their own lives, their communities, and in their society, by
acting on issues that they define as problematically important.

1.5. Social Development

It is a process which results in the transformation of social structure in a
manner which improves the capacity of the society to fulfill its aspirations
and meet its needs at the optimum level including access to and utilization
of social services to improve their quality of life. Society develops by
consciousness and social consciousness develops by organization. The
process that is subconscious in the society emerges as conscious knowledge

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in pioneering individuals. From a material/economic point of view, social

development is the promotion of a sustainable society that is worthy of
human dignity by empowering marginalized groups, women and men, to
undertake their own development, to improve their social and economic
position and to acquire their rightful place in society. The Copenhagen
Social Summit 1995 defined Social Development in terms of three basic
criteria:
 Poverty Eradication
 Employment Generation
 Social Harmony

The summit emphasized Social Development as a global imperative. In the

Report of the World Summit for Social Development, definition of “social
development” can be read from the following passage:
We gather here to commit ourselves, our Governments and our nations
to enhancing social development throughout the world so that all men
and women, especially those living in poverty, may exercise their
rights, utilize the resources and share the responsibilities that enable
them to lead satisfying lives and to contribute to the well-being of their
families, their communities and human kind. To support and promote
these efforts must be the overriding goals of the international
community, especially with respect to people suffering from poverty,
unemployment and social exclusion. (United Nations 1995, p. 3)

1.6. Social Welfare

Social welfare is seen as a broad system intended to maintain the well-being
of individuals above a certain minimum threshold of services within a society.
The responsibility of the government to provide social welfare was not
informed by altruism and concern for the poor, but rather as a process of
standardizing the ways in which the poor were to be managed. Social welfare
can be considered to be the well-being of the community as a whole. Social

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welfare is about how people, communities and institutions in a society take

action to provide certain minimum standards and certain opportunities and
hence seen generally as an attempt to help people facing contingencies such
as unemployment, illness, disease, violence, injury or disability,
homelessness, orphan-hood, advanced age, etc. Examples of social welfare
provision in Kenya include:
 Provision of ARVs to PLWHAs
 Provision/supplementation of school bursaries to needy children
 Provision free ITNs to expectant mothers and those with Under-5
children
 Provision of relief food, shelter, clothing, medical care, etc.
 Buying of livestock during severe drought
 Cash transfer program for the elderly
 Provision of free primary school education
 Rehabilitation of drug addicts at the Coast
 Women enterprise funds and youth enterprise funds

1.7. Social Policy

This primarily refers to guidelines and interventions for the changing,
maintenance or creation of living conditions that are conducive to human
welfare. Thus, social policy is that part of public policy that has to do with
social issues. Hence it is the part of public policy and practice in the areas of
health care, human services, water, criminal justice, inequality, education
and labor. It hence aims to improve human welfare and to meet human
needs for education, health, housing and social security among others. Social
policy is therefore seen as mainly a state intervention in society to secure
the wellbeing of its citizens. It is that part of public policy that has to do with
issues more narrowly construed as social: public welfare, public access to
social programs, social security and generally basic needs, but goes beyond
them.

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1.8. Participation
It is an umbrella term including different means for the public to directly take
an active role in political, economic, management or other social decisions.
Ideally, each actor would have a say in decisions directly proportional to the
degree that particular decision affects him or her. Those not affected by a
decision would have no say and those exclusively affected by a decision
would have full say. Likewise, those most affected would have the most say
while those least affected would have the least say. Participatory decision
making infers a level of proportionate decision making power and can take
place along any realm of human social activity

1.9. Poverty
Poverty is a multidimensional phenomenon and manifests itself in different
forms. It can be defined as inability to attain certain pre-determined
minimum levels of consumption at which basic needs of a society or country
are assumed to be satisfied-the poverty line. Poverty can also be seen as or
in terms of powerlessness, voicelessness, risk and vulnerability, although
these cannot be quantified. Poverty is the lack of what is necessary for
material well-being especially food, but also housing, land and other assets.
It’s meaning differs from place to place and as such what farmers may
perceive as poverty is not necessarily what pastoralists may see as poverty.
It is generally the lack of multiple resources that lead to deprivation. The
poor shall be taken to mean persons, families and groups of persons whose
resources (material, cultural and social) are so limited as to exclude them
from the minimum acceptable way of life in the Member State in which they
live. It is the deprivation of common necessities such as food, clothing,
shelter and safe drinking water, all of which determine our quality of life. It
may also include the lack of access to opportunities such as education and
employment which aid the escape from poverty and/or allow one to live in
dignity. Poverty may affect individuals or groups, and is not confined to the
LCDs. Poverty in developed countries is manifest in a set of social problems

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including homelessness and the persistence of slum areas and shanty towns.
In general, poverty:
 Deprives people of their security and well-being;
 Deprives people not only of safe water and adequate food, clothing
and shelter, but also education and healthcare
 Takes away people’s rights, and their freedom, dignity and peace of
mind
 Puts people's lives in danger and robs them of their future

1.10. Leadership
This is the process of social influence in which one person is able to enlist the
aid and support of others in the accomplishment of a common task. It is
ultimately about creating a way for people to contribute to making
something extraordinary happen. It’s a process of enabling others to face
challenges and achieve results under complex conditions. It’s also a process
of directing the behavior of another person or persons towards the
accomplishment of some objective. Leadership is a critical management skill,
is the ability to motivate a group of people toward a common goal. It is
therefore a process by which a person influences others to accomplish an
objective and directs an organization or community in a way that makes it
more cohesive and coherent. Early leadership theories focused on what
qualities distinguished between leaders and followers, while subsequent
theories looked at other variables such as situational factors and skill levels.
Process of social influence in which one person is able to enlist the aid and
support of others in the accomplishment of a common task. It is ultimately
about creating a way for people to contribute to making something
extraordinary happen.
1.11. Gender
Gender refers to the socially constructed roles, behaviors, activities and
attributes that a given society considers appropriate for men and women or
may refer to the different roles and responsibilities attributed to men and

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women in society. Hence, it does not mean the biological definition of sex as
male and female, but how these biological definitions are constructed and
interpreted in a social context, subject to historical and cultural change. It is
different from sex in that sex refers to the biological and physiological
characteristics that define men and women. We can therefore say that
gender means the social rather the biological roles, concerns and priorities
that are given to men and women and hence a broader concept than the
mere biological differences between men and women.

2.0. DEVELOPMENT INDICATORS

2.1. What is a Development Indicator?
Social development indicators are numerical measures that describe the
well-being of individuals or communities. Indicators are comprised of one
variable or several components combined into an index. They are used to
describe and evaluate community well-being in terms of social, economic,
and psychological welfare and hence they provide a characterization of the
level of well-being The Indices of Social Development focus on measuring the
informal social institutions, how they compare across countries, and how
these changes over time. It does this by using existing databases, around the
world, and combining these to find the best possible match with our
definition of social development The Indices of Social Development focus on
measuring the informal social institutions, how they compare across
countries, and how these changes over time. It does this by using existing
databases, around the world, and combining these to find the best possible
match with our definition of social development.

Indicators of Development
1.High Gross Domestic Product (GDP) or Goss national Product (GNP)
This is the total value of goods and services produced within a country divide by the total
population GDP/GNP is an important indicator of economic growth because it tells if the people
are at a position to afford goods and services and hence enjoy quality of life. It is difficult to

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compare the quality of life of people through GDP because the exchange rate do not reflect
local existing power of a currency.

2. High Life Expectancy

Life expectancy means the number of years that people in a given country can expect to live.
Diseases, drought, wars, poor nutrition, HIV/AIDs can limit the years people are expected to
live. Japan has the highest life expectancy in the world of about 88 years( World Bank, 2008).

3. High Literacy Level

The UN development report defines adult illiteracy rate as the percentage of those aged 15 and
above who are able to read and write a short simple statement of their everyday life. UNESCO
defines literacy as the ability to indentify, understand, interpret, create, communicate, compute
and use printed and written material associated with varied context.
-It varies from country to country.

3.1 Factors affecting Literacy Level

 Cultures and systems that we hold e.g. FGM
 Level of urbanization
 Country’s wealth. This is the ability of a country to fund education
 Level of poverty. International poverty level is defined as a situation
where people live below a dollar a day. However Poverty is relative
and therefore the levels vary from country to country.
4. High Employment rate
This is the Percentage of population employed in a country. Unemployment is a major problem
in developing countries.

5. High levels of Technology

High technology levels in a country enable effectiveness and efficiency in all sectors of the
economy.

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3.0 ECONOMIC DEVELOPMENT

Definition of economic development
Economic development is an increase in activity in economy. It is measured as a rate of change
of domestic gross product (GDP) or gross national product (GNP). GDP/GNP is the market
value of all goods and services produced within a country in a given period of
time.In a country like Kenya we refer to the increase in quantity of goods and services as
economic growth but it doesn’t mention how this increase is achieved (we could have black
market e.g. illegal importation of cheap products like Sugar).

Economic growth can be negative (+ve) or positive (-ve). Negative

economic growth is referred to as recession. A recession is a general
downturn in any economy. Economic recession is a period of general
economic decline and is typically accompanied by a drop in the stock
market, an increase in unemployment, and a decline in the. ..Recession occurs
after an average 10 years cycle. There was recession in 1980-1982 and 1990-1991 and in
2007/2008, there was a great recession. Recession affects both poor and rich BUT the poor suffer
more.

3.1 Factors that Cause Recessions

 High interest rates are a cause of recession because they limit
liquidity, or the amount of money available to invest.
 Inflation: It refers to a general rise in the prices of goods and services
over a period of time. As inflation increases, the percentage of goods

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and services that can be purchased with the same amount of money
decreases.
 Reduced consumer confidence is another factor that can cause a
recession. If consumers believe the economy is bad, they are less likely
to spend money. Consumer confidence is psychological but can have a
real impact on any economy.
 Reduced real wages, another factor, refers to wages that have been
adjusted for inflation. Falling real wages means that a worker's
paycheck is not keeping up with inflation. The worker might be making
the same amount of money, but his purchasing power has been
reduced.

Economic Development can be caused by improvement of quality and quantity of factors of

production that a country has.

3.2 Factors of production

 Land - increase its fertility and quality through technology.
 Capital
 Enterprise (business)
 Improving quality and quantity of human resource .Human resource can be improved
by giving people necessary skills for development
 In improving capital we need to improve business, factories, and infrastructure
 For less developing countries to experience growth we need to cultivate culture of
encouraging the locals to invest in business and education.

3.3 Types of economic development

There are two types of economic development
i). Actual economic development is what has been attained. Actual economic growth is the
percentage annual increase in national input. it is the rate of growth in actual output.

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ii). Potential economic – This is what could have been attained. Potential economic growth
is the rate at which a country would grow. It is the percentage annual increase in the economy’s
capacity to produce Potential economic growth can be brought about by many factors such as:-
i) Improving Factors of production
ii) Making proper use of available resources
iii) Embracing new technology which makes processes more efficient.

3.4 Relationship between growth and development

Many people take development to mean the same as growth but in essence the two terms may
not be the same. To grow is to increase in size and numbers of what is being development. (For
example, if we have a heap of garbage and everyday it is increasing, do we then say that the
garbage heap is developing? OR if we increase the intake in our universities but then as a
country we are not able to utilize that human resources, do we say then we have developed?) .
Development is to increase ones ability and desire to satisfy ones own needs and legitimate
desires and those of others without impending the development of anyone. Development is better
reflected in the quality of life, therefore the level of development of a country is better reflected
in the quality of life it provides to its people. For us to equate growth to development, it must
have quality and also positively improves the lives of people.

3.5 Conditions for Economic development to occur

i) Growth. This is the increase in size and numbers of whatever is being developed
ii) Participation. Target group should participate in development because development can
be delivered to people-ownership-sustainability exploit potential
iii) Equitable distribution of the outcome of development. Every citizen must benefit from
any development. Participation in development will depend on the benefits people get.

4. THEORIES OF DEVELOPMENT
What is a Theory?
A theory is an idea or a set of ideas that are intended to explain facts or
events. It is a hypothesis about some phenomenon that has been supported

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through research using the scientific methods. ( A hypothesis is basically an

educated guess).

Characteristics of a good theory

 Reflects facts accurately or with a considerably high degree of
accuracy. Therefore, a theory is not a mere assumption.
 The facts are expressed in a clearly understandable way
 Useful in predicting and explaining present and future events
 Practical in real situations
 Stimulates research and new discovery

4.1 Modernization Theory

Since World War II (1945), scholars and government officials from the west
(US) argue that Less developed countries (LDCs ) are poor simply because
they lack three aspect of Development: Modern economy, Modern
psychological trait and cultures, and modern institutions.

(i) Modern Economy

Modern economy is characterized by the following factors
 High levels of industrialization. The countries manufacture their own
goods and services. The rarely import but mostly export.
 High middle class population. Poverty level is low. Majority of the
population are able to meet their basic needs and wants
 Food security. The countries are able to feed the citizens. They apply
modern technology in agriculture to produce and process food. They
do not depend on rain-fed agriculture.
 Low unemployment rate
 Advanced technology. Technology is felt in every sector of economy
 Educated population. This is because the government facilitates
education

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(ii) Modern psychological traits and culture

This is characterized by:-
 Citizens desire to work hard to achieve their goal. Most citizens in LDCS
place less values on achievement.
 Minimal or no corruption. Most underdeveloped countries (especially
Kenya), report massive corruption deals.
 Citizens have development a culture of Investing and saving from their
income
 Time keeping. To the Western countries, ‘time is money’
 Traditions that hinder development are shunned e.g. FGM
 Population that a country can feed. Sub-Saharan countries have very
high population
 Democratic governments – In Africa and in particular Kenya, especially
before the new constitution, we have been having dictatorship power.
Again, power in Kenya is placed on few individuals who control
development and resources.

(iii) Modern Institutions

This is characterized by:
 Good education systems. The systems emphasis on the talents of the
pupils and not necessarily how they performed academically
 Judicial system – No one is above the law and there is absence of
impunity
 Efficient electoral institution- No electoral crisis like the one we
witnessed in Kenya in 2007/08 (Post election violence), 2017 (repeat
of election, boycotted by opposition which still insists that they won the
presidential election and consequently swearing in of Raila as the
‘people’s president’) and numerous court cases (recounting of votes to
establish who won).

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According to modernization theory, LDCs must modernize if they want to

move from their current situation of being underdeveloped. The propagators
of this theory are blaming the victims for their own underdevelopment.

Modernization theory is a theory of social change because it calls on LDCs to

change their traditional state and embrace modernity. It assumes that with
assistance from western countries, LDCs would be supposedly transformed
into modern countries with modern institutions and ‘modern people”.
Scholars who have come up with this theory argue that the society evolve by
creating and using modern technology and innovation which are very crucial
for economic and social development.

Assumptions of Modernization Theory

 Assumes that less developed countries are traditional and western
countries were once in the traditional state before they were
transformed by modern economic growth and cultural change.
 Traditional society is stagnant and unchanging and people from
traditional society are known to resist change.
 Traditional society is not innovative and there isn’t any attempt to
improve ones standard of living.
 Traditional culture negates progress. LDCs do not embrace progress
and do not have any sense of progress .Poverty in LDCs can therefore
be understood simply as a failure of these societies to embrace
change.

Weaknesses of Modernization Theory

 The theory is ethnocentric- They theorists belief that their culture and
institutions are superior to those in LDCs thus the theory is racist.
LDCs have positive side of their cultures that have greatly contributed
to development (tourism).

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 The theory also beliefs that it is only MDCs (Most developed

countries) can show the LDCs the way to development. MDCs were also
in traditional state and they developed at their own pace.
 The theory greatly underestimates the capacity of poor countries to
develop. The four little dragons;( Honking, Singapore, Taiwan, south-
Korea) have successful stories of development. The countries have
experienced rapid economic growth.

Strengths of Modernization Theory

 Gives challenge and opportunity for LDCs to develop themselves
 Provokes LDCs to rediscover their traditional state.
 Provides a scheme of frame work that can be used to compare
achievement of different countries.
 Point LDCs to pay attention to internal factors and problems that
hinder development e.g. the culture of corruption, impunity, conflicts,
tribalism etc.
Modernization implies the gradual replacement of the traditional productive
structure by another of much higher capital intensiveness structure. As
described by Walt Rostow in 1962, a pattern of development needs to be
taken in order for a country to become a profitable, sophisticated, modern
economy, which in turn, is supposed to enrich the lives of those countries’
citizens.
Stages of Development/Modernization
Countries world are at different stages of development. Rostow has classified the stages of
Economic development into five categories as follows.
i) Traditional society
ii) Pre conditions for take off
iii Take-off
iv)Drive to maturity
v) Age of high mass consumption

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Traditional Society
A country in this stage emphasizes on rain fed agriculture and there is little capital
accumulations, citizens lack the saving culture. Traditional mentality and attitude of people
hamper development. Most of these countries are poor and have unstable governments. The
countries are characterized by high population. The countries also lack factors that promote
economic growth e.g. investments, good infrastructure etc. Examples of countries in traditional
society are Somalia and Sudan.

Pre-conditions for take off

Forces of customs and traditions become less in countries in this stage. Entrepreneurs emerge
and there is improvement of infrastructure i.e. good roads, equipped health facilities, etc . There
is notable increase in agricultural production due to application of new technology. More people
acquire formal education . Bank and other financial institutions emerge. The countries
experience stability. Kenya is an example of a country in this stage.

Take-off
Countries economy record appreciable growth . Citizens are able to save from their income.
There is notable growth of manufacturing sector and therefore these countries do not depend on
agriculture alone (diversification of economy). There countries are more stable and this
facilitates investment. The first countries to reach this stage was Britain in 1783 followed by
France and USA. India falls in this stage.
Drive to maturity
In this stage, there is widespread application of modern technology which becomes felt in all
sectors of economy. Economic growth surpasses the country’s population. This means that the
countries have elaborate and effective social welfare programs. There is abundance of resource
and the countries use their resources to strengthen their military and political might. Resources
are also used for welfare of the citizens. The Countries generally acquires the capacity to
diversify its economy. An example of a country in this stage is china
Age of high mass Consumption

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The Economies of these countries produces consumer goods and services such that the market
becomes dominated by consumer goods and services . Country allocates more and more funds to
cater for welfare of the citizens. In the international; arena countries in this stage would be
striving to show their political might and influence and thus invest heavily in the military sector.

4.2 World System Theory

The theory emerged in 1950 and intensified in 1960. The theory was
propagated by Immanuel Wallenstein. It came to attack modernization
theory. -Scholars here accused the modernization of being inaccurate,
ethnocentric and simply naïve. Immanuel said that the westerns countries
are responsible for global inequality. He postulated that LDCs are not
developed because they are poor and refused to embrace modernization but
they are underdevelopment because of exploited by the MDCs.

Immanuel says that the modern world comprises of capitalist economy which
emphasis on profit. Therefore he also blames capitalistic economy from LDCS
state of being underdeveloped
He says that the gap between the rich and the poor will automatically go
when the capitalist kind of economy disappears. The theory argues that
economic reality of world economic system helps the rich countries to stay
rich and the poor countries to remain poor because of the exploitation of the
poor.

This theory is grounded on past historical events such as slavery, colonialism

and imperialism and the scholar argues that over the past, the rich countries
of the world have managed to exploit the poor countries This kind of
exploit has perpetuated poverty in LDCs and they have very little
opportunity to liberate themselves from underdevelopment.

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The world system theory divides the world into three:- Core countries or
rich; Semi-peripheral or middle level countries and peripheral or poor
countries

(i) Core or rich countries

Characteristics of rich countries
 Highly industrialized
 Exert both political and economic power
 People enjoy high standard of living
 Modern infrastructure – They are highly innovative
 High technology
o Examples of countries here are USA, Australia, Britain etc

(ii) Semi-peripheral countries

Characteristics
 Have achieved at least moderate level of industrialization
 Low levels of poverty. This is because the governments in these
counties have social welfare programs that address citizen’s needs and
wants
 Apply Technology in all levels of economy and innovate technology
 Good infrastructure
o Examples of the countries here are Four little dragons, Mexico,
Brazil, Malaysia, China, etc

(iii) Peripheral countries

Characteristics
 These are the poorest and the weakest countries in the world.
 Poor infrastructure
 Technology is not appreciated because people want to stick to status
quo
 Corruption and impunity because of poor implementation of law

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 Leadership is held by few who are reluctant to hand over power

 High population
 High levels of illiteracy
 Tribalism and tribal wars
o Examples of countries here are Sub-Saharan countries and some
countries in Asia.

 Under development in LDCs is to be explained by exploitation and not

lack of modernity.
 The modern world is largely capitalistic in economy and hence the
MDCs want to maximize profit and this encourages inequality and
exploitation.
 The entire globe is seen to operate as a single system – has many
interdependent parts(various nations).

Weaknesses of the Theory

 Provides too much emphasis on the victims (LDCs)
 Tends to underestimate the role of internal factors in perpetuating
poverty. E.g.
o Mismanagement of resources
o Poor governance and leadership
o Ethnicity and wars
o Inefficient bureaucracy
o Capitalism-people result to corruption because they want to
amass wealth.
 The theory demonizes multinational countries operating in LDCs. The
theory claims that these multinationals exploit LDCs citizens by paying
low wages and overworking them. These multinationals contribute to
the economy of these LDCS they operating from.
 The theory has not captured contemporary issues related to
exploitation for example debt crises. Creditors charge high interest

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rates and the money borrowed not used well hence leading to debt
crises.
 They Theory blames capitalist economy without suggesting a better
Economic system

Strength of the theory

 The LDCs has been and is being exploited by the MDCS. The theory
can open the eyes of LDCS leaders to devise ways to fight exploitation

4.3 Dependency Theory

This theory is closely related to the world system theory. It also blames
capitalistic mode of production emphasized in World systems theory. The
theory divides countries of the world into two:- Rich and Poor. The theory
says that the economy of rich countries dictates global market. It also argues
that the dependency will continue as long as capitalist economy exists.
Unequal exchange is the theme in this theory. Through the unequal
exchange, the rich countries continue to exploit the poor ones e.g. currency-
use of the dollar. The poor depend on rich for grants and loans and this
continue to generate high profits for the rich. It argues that although colonial
masters are long gone neocolonial capitalist dominates the LDCs.

The Strengths of dependency theory

 Propagators of this theory come from LDCs and therefore forcing too
much on capitalist economy as a reason why LDCs are underdeveloped
 Underdevelopment is a process and LDCS can change it.
 The theory is supported by historical evidence of colonialism.
The weaknesses of the theory
 Theory blames external forces and ignores internal forces that
perpetuate underdevelopment
 The theory places too much blame on capitalism.

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 Traditional evidence shows that even under capitalism some countries

have managed to change from underdevelopment.
5. Globalization/Internationalization
What is globalization?
Globalization can be defined as the integration of economic, political and
social cultures and is related to the spreading of modernization throughout
the world. It can be described as a process by which the people of the world
are unified into a single society and function together. When used in an
economic context, it refers to the reduction and removal of barriers between
national borders in order to facilitate the flow of goods, capital, services and
labor. Globalization is often used to refer to economic globalization, that is,
integration of national economies into the international economy through
trade, foreign direct investment, capital flows, migration, and the spread of
technology.

It theorizes the development of a global economy in the sense that the world
is moving in the direction of one cultural society. The broadest definition of
globalization is that people are more connected throughout the globe. We
communicate more. There is more exchange of goods and money. We are
linked in faster and more immediate and intense ways. Globalization can be
technological (the Internet), economic (trade, production), cultural
(television). Globalization can also foster international solidarity. But the
dominant view is that globalization means increased commercial
relations between people of different countries.
Features of globalization
 Technological advancements, especially in the field of information and
communication technologies, have had the effect of connecting and
bringing the world closer together in time and space, making possible
new ways of doing business and profoundly altering social interactions
 Competition has catalyzed a reorganization of production networks,
and a wave of mergers and acquisitions have fostered the restructuring

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of corporations on a global scale, giving them unprecedented size and

power
 New mass media, such as satellite television and the Internet, have
contributed to globalization and the spread of a culture of
consumerism
 The essential factors of production are flowing fully freely and in great
quantity all over the world.
 The economies of all countries are deeply interdependent and are
strongly affected by world economy.
 Mergers of enterprises are multiplied and the size of hyper
transnational companies reaches an unprecedented scope.
 There is inequality between developed and developing countries to the
disadvantage of the latter.
 Expansion of markets as goods, people and capital become
increasingly mobile and transnational
 Multinational/transnational corporations are growing in power and
influence
 Diminished power of nation states as the WTO, IMF and World Bank
take over
 International mobility of labour, making it cheaper and getting
exploited

Advantages of globalization
 Increased free trade between nations
 Increased liquidity of capital allowing investors in developed nations
to invest in developing nations
 Corporations have greater flexibility to operate across borders
 Global mass media ties the world together
 Increased flow of communications allows vital information to be
shared between individuals and corporations around the world
 Greater ease and speed of transportation for goods and people

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 Reduction of cultural barriers increases the global village effect

 Spread of democratic ideals to developed nations
 Greater interdependence of nation-states
 Reduction of likelihood of war between developed nations
 Increases in environmental protection in developed nations
 It breaks down borders that hamper trade to increase prosperity and
interdependence, thereby decreasing the chance of future war
between nations

Disadvantages of globalization
 Increased flow of skilled and non-skilled jobs seeker from developed
to developing nations as corporations seek out the cheapest labour-
brain drain
 Increased likelihood of economic disruptions in one nation effecting
all nations especially in case of recession or economic crunch
 Corporate influence of nation-states far exceeds that of civil society
organizations and average individuals affecting individual stated
sovereignty
 Threat that control of world media by a handful of corporations will
limit cultural expression by those excluded from ownership of the
corporations.
 Greater chance of reactions for globalization being violent in an
attempt to preserve cultural heritage in some states e.g. Muslim
world
 Greater risk of diseases being transported unintentionally between
nations as people migrate
 Spread of a materialistic lifestyle and attitude that sees consumption
as the path to prosperity
 International bodies like the World Trade Organization infringe on
national and individual sovereignty-takes over the control of the world

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 Increase in the chances of civil war within developing countries and

open war between developing countries as they vie for resources.
 Decreases in environmental integrity as polluting corporations take
advantage of weak regulatory rules in developing countries.
 The wealth disparity between the rich and the poor has widened over
the years, with widespread poverty and acute inadequacy of social
services.
 There is a recurring sense of people being left behind and those so
left are exposed to various types of criminal activities and drugs,
prostitution, child labor and human trafficking.
 Transnational crime is one of the biggest downfalls of globalization,
whereby criminal activities have thrived due to the development of
the internet.
 The growth of tourism and the entertainment industry has turned
prostitution into a big business on a global scale, leading to moral
decay.
 It has diminished choices and prospects for many people reinforced
inequalities within and across nations
 Weak labour unions due to trans-border migration of cheap labour
making corporations exploit them.
 It is seen as the promotion of corporatist interests, in which the
increasing autonomy and strength of corporate entities shapes the
political policy of countries

Effects of globalization
Globalization has various aspects which affect the world in different ways
such as:
 Industrial-emergence of worldwide production markets and broader
access to a range of foreign products for consumers and companies.
This is particularly movement of material and goods between and
within national boundaries.

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 Financial-emergence of worldwide financial markets and better access

to external financing for borrowers and generally money transfer
facilities such as Money Gram, Western Union, etc. As these worldwide
structures grew more quickly than any transnational regulatory regime,
the instability of the global financial infrastructure dramatically
increased, as evidenced by the financial crises of late 2008.
 Economic-realization of a global common market, based on the
freedom of exchange of goods and capital. The interconnectedness of
these markets, however meant that an economic collapse in any one
given country could not be contained.
 Political-some use "globalization" to mean the creation of a world
government, or cartels of governments (e.g. WTO, World Bank, and
IMF) which regulate the relationships among governments and
guarantees the rights arising from social and economic globalization.
Politically, the United States has enjoyed a position of power among
the world powers because of its strong and wealthy economy.
 Informational-increase in information flows between geographically
remote locations. Arguably this is a technological change with the
advent of fibre optic communications, satellites and increased
availability of telephone and internet.
 Language- the most popular language is English.
 About 75% of the world's mail, telexes, and cables are in English.
 Approximately 60% of the world's radio programs are in English.
 About 90% of all Internet traffic uses English.
 Competition-Survival in the new global business market calls for
improved productivity and increased competition. Due to the market
becoming worldwide, companies in various industries have to upgrade
their products and use technology skillfully in order to face increased
competition
 Cultural-growth of cross-cultural contacts leads to cultural diffusion,
the desire to increase one's standard of living and enjoy foreign

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products and ideas, adopt new technology and practices, and

participate in a world culture.
 Ecological-the advent of global environmental challenges that might
be solved with international cooperation, such as climate change,
cross-boundary water and air pollution, over-fishing of the oceans, and
the spread of invasive species. Since many factories are built in
developing countries with less environmental regulation, free trade
may increase pollution.
 Social (International cultural exchange)-increased circulation by
people of all nations with fewer restrictions e.g. through the export of
Hollywood movies, worldwide sporting events such as FIFA World Cup
and the Olympic Games.
 Technical-Development of a global telecommunication and greater
trans-border data flow, using such technologies as the internet,
satellites, submarine fibre optic cable, and wireless telephones.
 Legal/Ethical-increase in the number of standards applied globally;
e.g. copy right laws, patents and world trade agreements, the creation
of the international criminal court and international justice movements.

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