DVM 2106 Chapter Notes - Chapter 13: New International Economic Order, Paul Streeten, Kuznets Curve
20 Aug 2016
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DVM 2105
October 2nd 2015
Chapter 13 — Poverty and Exclusion: From Basic Needs to the MDGs
-Paul Streeten (1998) offers four practical reasons for pursuing poverty reduction:
-as a means of achieving higher productivity by contributing to a ‘well-nourished, healthy,e
educated, skilled and alert labour force’
-it would lower fertility rates
-its good for the physical environment
-can contribute to a healthy civil society
-many scholars argue that state signatories of international treaties are legally obligated to
engage in the struggle to eradicate poverty
-one view holds that:
-rich have no responsibility
-poor countries have only themselves to blame for wrong-headed economic policies and
civil wars
-poor countries are doomed because of their unfavourable geography and climate
-another view holds that:
-poverty as a global construction is new
-poverty arose from the economization of life and the forced integration of unique societies
into the world economy
-official development assistance (ODA) formed post-Cold War when Western states agreed
to give small percentages of their public expenditures into foreign aid
-development economists were supremely optimistic that poverty would decline in the wake of
economic growth
-Kuznets curve: predicted that as agricultural economies moved toward industrialization,
inequality would initially increase but then decrease
-the ripple effects of economic growth would result in a trickle down of benefits, the relative
share of income would rise and the people would be lifted out of poverty
-foreign aid was seen as one means of speeding up growth in backward areas
-academic observe argued that technology and human capital were also needed to change
methods of production
-Rondinelli (1987) summarizes the major assumptions:
-all societies could modernize and grow economically
-the process could be sped up through the transfer of resources and technologies from
industrialized nations
-leaders would provide moral and political support necessary to reach these goals
-the late 60s called for a New International Economic Order (NIEO) that would rein in
multinational corporations and foster beneficial changes in the rules of international trade
-questioning began surrounding the effectiveness of developmental assistance:
-right wing scholars argued it was a wasteful intervention in the marketplace
-left wing scholars argued it was a capitalist tool for exploitation
-foreign aid became highly controversial
-failure of the trickle down effect was everywhere
-doubts were increasing about economic growth as the pathway to development
-Robert McNamara, World Bank president (1973): growth is not equitably reaching the poor
-policies aimed at accelerating economic growth have benefitted mainly the upper 40% of
the population
-the World Bank sponsored a major study, Redistribution with Growth (RWG), which was
tacked on to the prevailing ideas of economic development without changing anything
fundamental
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DVM 2105
October 2nd 2015
-there remained a clear preference for market over government mechanisms
-it paid insufficient attention to factors that generate poverty, and operated within an idealist
conception of the need for a coalition of interests that would capture power and see some
advantage in directing more investment to the poor
-did not redistribute anything
-1976; the World Employment Conference of the International Labour Organization attempted
to push RWG with the basic human needs (BHN) approach
-was appropriated to relabel ongoing activities
-spawned narrowly technocratic programming that viewed the poor as target groups rather
than participants in development
-further legitimated poverty as an ODA goal separate from growth
-BHN was not well received by governments in aid-recipient countries
-efforts to make ODA conditional on meeting basic needs were resented and seen as
distracting attention from the problems connected with underdevelopment
-with the states and UK both taking a more conservative government (Reagan and Thatcher,
respectively), the utility of the World Bank and poverty-oriented programming was questioned
-neoliberal structural adjustment and the Washington Consensus became the economic
blueprint for developing countries
-the South was told to grow out of debt by exporting
-Western aid agencies were just beginning to support the BNH-oriented programming when
the World Bank and IMF decreed that poverty reduction should take a back seat to debt
service and adjustment
-Ferguson (1992) characterized ‘scientific capitalism’ which called for reforms aimed at
getting prices right, reducing external and fiscal imbalances, privatizing public enterprises,
downsizing the state and promoting the private sector as the engine of development
-aid was granted with tighter strings than ever before as the rest of the donor establishment
began to make project-specific and budget assistance conditional on IMF and World Bank
prescriptions
-1980s were mostly remembered for their failures:
-human conditions deteriorated and poverty deepened
-sub-Saharan Africa had debt compounded by drought, famine, violent conflict, corrosion of
the economic infrastructure and intense pressures on ill-equipped institutions
-food security, nutrition and health suffered
-the alarming spread of HIV/AIDS added a new dimension to human insecurity
-the prospect of peace at the end of the Cold War was quickly evaporated as Western
industrial countries became more tight-fisted in response to both the diminished geopolitical
impetus for aid and a preoccupation with their own fiscal and foreign deficits
-Eastern Europe and Russia became competitors for declining resource transfers
-understandings differ radically on what is needed to make governments more accountable to
the people they supposedly serve even despite the broad consensus about the desirability of
strengthening human security or reducing public expenditures on armaments or curbing
corruption
-OECD Council in 1996 endorsed a global effort to achieve goals that seek to give real
meaning to the improved quality of life, which is the aim of sustainable development
-claimed to place stronger emphasis than ever not he developing country itself as the
starting point for development cooperation efforts
-conditions continued to reflect a neoliberal one size fits al approach that still sees economic
growth and open markets as the main solutions to poverty
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Document Summary
Chapter 13 poverty and exclusion: from basic needs to the mdgs. Paul streeten (1998) offers four practical reasons for pursuing poverty reduction: As a means of achieving higher productivity by contributing to a well-nourished, healthy,e educated, skilled and alert labour force". Can contribute to a healthy civil society. Many scholars argue that state signatories of international treaties are legally obligated to engage in the struggle to eradicate poverty. Poor countries have only themselves to blame for wrong-headed economic policies and civil wars. Poor countries are doomed because of their unfavourable geography and climate. Poverty as a global construction is new. Poverty arose from the economization of life and the forced integration of unique societies into the world economy. Of cial development assistance (oda) formed post-cold war when western states agreed to give small percentages of their public expenditures into foreign aid. Development economists were supremely optimistic that poverty would decline in the wake of economic growth.
