COURSE

GUIDE

POL 431
THIRD WORLD DEPENDENCY AND DEVELOPMENT

Course Team Dr. Jacob Audu (Course Writer) – ABU

Dr. Fidelis Achoba (Course Reviewer) –
FULOKOJA
Dr. Mathew Ogwuche (Course Editor) - NOUN

NATIONAL OPEN UNIVERSITY OF NIGERIA

POL 431 COURSE GUIDE

© 2020 by NOUN Press

National Open University of Nigeria
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All rights reserved. No part of this book may be reproduced, in any

form or by any means, without permission in writing from the
publisher.

Published by:
National Open University of Nigeria

Printed 2020

ISBN: 978-978-058-009-4

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POL 431 COURSE GUIDE

CONTENTS PAGE

Introduction……………………………………………. iv
Course Aim……………………………………………. iv
Course Objectives……………………………………... iv
Working through This Course………………………… v
Course Materials………………………………………. v
Study Units……………………………………………. v
Textbooks and References…………………………….. vii
Assessment Exercises…………………………………. vii
Tutor-Marked Assignments…………………………… vii
Final Examination and Grading………………………. vii
Course Marking Scheme……………………………… vii
Course Overview Presentation Scheme………………. viii
How to get the most from This Courses……………… x
Facilitators, Tutors and Tutorials……………………… xi
Summary………………………………………………. xii
List of Acronyms……………………………………… xiii

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POL 431 COURSE GUIDE

INTRODUCTION

Welcome to POL 431 - Third World Dependency and Development.

This course is a three-credit unit course for undergraduate students in
Political Science. The course material has been developed to meet
global standards, with Third World countries in view. This course guide
gives you an overview of the course. It also provides you with relevant
information on the organisation and requirements of the course.

COURSE AIM

The course attempts a systematic theoretical and empirical study of

political economy of underdevelopment in the third world, with
emphasis on Africa. Students will be exposed to the theories of
imperialism and neo-colonialism and their relevance in understanding
the problem of underdevelopment in the Third World. The aim of this
course is to develop student’s awareness of political and economic
contexts of underdevelopment in the Third World, particularly in
Africa. Thus, the broad aim will be achieved by:

 introducing you to the concepts of Development,

Underdevelopment, Imperialism, Neo-colonialism, Third World
and Dependency
 providing you with the theoretical and empirical explanations to
the causes of underdevelopment and dependency in Third World
Countries
 enabling you to evaluate the relevance of these explanations to
contemporary Third World development crisis
 familiarising you with the current debate on the development of
Africa

COURSE OBJECTIVES

To achieve the aim set out above, POL 431 has broad objectives. In
addition, each unit also has specific objectives. The unit objectives are
outlined at the beginning of each unit. I advise you to read them before
you start working through the unit. You may refer to them in the course
of the unit to personally monitor and evaluate your progress.

On successful completion of the course, you should be able to:

 define the concepts of Development, Underdevelopment, Third
World and Dependency, Imperialism and Neo-colonialism;
identify countries referred to as Third World and their
commonalities
 explain the two different theoretical paradigms that attempt to
provide explanations to the causes of Third World backwardness

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POL 431 COURSE GUIDE

 discuss the process of emergence of capitalist mode of

production from the simple commodity through expanded
commodity production and monopoly stage and its consequences
on Third World countries
 explain the role of Third World States in the development
process especially in the era of globalisation
 acquaint you with the current debate on Africa development

WORKING THROUGH THIS COURSE

To complete the course you are required to read the study units and
other related materials. It is also necessary to undertake practical
exercises for which you need a pen, a notebook, and other materials that
will be listed in this guide. The exercises are to aid you, and to facilitate
your understanding of the concepts and issues being presented. At the
end of each unit, you will be required to submit written assignments for
assessment purposes. At the end of the course, a final examination will
be written.

COURSE MATERIALS

The major materials needed for this course are:

1. Course Guide
2. Study Units
3. Assignments File
4. Relevant textbooks including the ones listed under each unit
5. You may also need to listen to political, social and economic
programmes and news reports on electronic media (local and
foreign)
6. In addition, you are also expected to read newspapers,
magazines, journals and interact with internet resources.

STUDY UNITS

There are 5 modules broken into 25 units in this course. They are listed
below:

Module 1 Understanding the Third World and its Descriptive

Taxonomy

Unit 1 Understanding the Concepts of Third World,

Development, Underdevelopment and Dependency
Unit 2 Descriptive Taxonomy and the Commonalities of the
Third World Countries

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POL 431 COURSE GUIDE

Unit 3 Theoretical and Empirical Explanations to the Causes of

Third World Development Crisis
Unit 4 Critique of the Theoretical and Empirical Explanations
Unit 5 Growth Theory of Development

Module 2 The Emergence and Development of Capitalism and

Imperialism

Unit 1 The Emergence of Capitalism from Simple Production

Expanded and to Monopoly Production
Unit 2 Theories of Imperialism
Unit 3 V.I Lenin’s Theory of Imperialism
Unit 4 Globalisation as an International System
Unit 5 The Relationship between Development and
Underdevelopment

Module 3 The Forms, Nature and Structure of Dependency and

Underdevelopment

Unit 1 Forms of Dependence

Unit 2 Externalities of the Systems of Dependence and
Underdevelopment
Unit 3 Internal Factors and Mechanisms of Underdevelopment
Unit 4 Nature of Dependence and Underdevelopment in Africa
Unit 5 The Paradox of Globalisation and the Third World

Module 4 The Political Economy of Third World Development

Unit 1 Theoretical Explanations of the State in the Third World

Unit 2 The Role of the State in the Third World
Unit 3 Africa’s Response to the Development Crisis
(NEPAD/APRM)
Unit 4 Corruption and Third World Development
Unit 5 Finding Proper Roles for the State in the Third World

Module 5 Africa’s Response to the Development Crisis

Unit 1 The Nexus between Democracy and Development in the

Third World
Unit 2 Third World and Democratisation Process
Unit 3 Third World and the Challenges of Governance
Unit 4 Foreign Aid and Debt Crisis in the Third World
Unit 5 Response to Third World Underdevelopment

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POL 431 COURSE GUIDE

TEXTBOOKS AND REFERENCES

Certain books have been recommended in the course. See the list of
books at the end of each unit. You may wish to purchase them for
further and personal reading.

ASSESSMENT EXERCISES

An assessment file and a marking scheme will be made available to you.

In the assessment file, you will find details of the works you must
submit to your tutor/facilitator for marking. There are two aspects of the
assessment of this courses the tutor marked and the written
examination. The marks you obtain in these two areas will make up
your final marks. The assignment must be submitted to your tutor for
formal assessment in accordance with the deadline stated in the
presentation, schedules and the assignment file. The work you submit to
your tutor for assessment will account for 30% of your total score.

TUTOR-MARKED ASSIGNMENTS (TMAs)

You will have to submit a specified number of the (TMAs). Every unit
in this course has a tutor-marked assignment. You will be assessed on
four of them but the best three performances from the (TMAs) will be
used for computing your 30%. When you have completed each
assignment, send it together with a tutor-marked assignment form, to
your tutor. Make sure each assignment reaches your tutor on or before
the deadline for submissions. If for any reason, you cannot complete
your work on time, contact your tutor for a discussion on the possibility
of an extension. Extensions will not be granted after the due date unless
under exceptional circumstances.

FINAL EXAMINATION AND GRADING

The final examination will be a test of three hours. All areas of the
course will be examined. You are to find time to read the unit all over
before the examination. The final examination will attract 70% of the
total course grade. The examination will consist of questions, which
reflect the kinds of self-assessment exercise, and tutor marked
assignment you have previously encountered. You should use the time
between completing the last unit, and taking the examination to revise
the entire course.

COURSE MARKING SCHEME

The following table lays out how the actual course mark allocation is
broken down.

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POL 431 COURSE GUIDE

Assessment Marks
Assignments (best three assignments out of four = 30%
marked)
Final Examination = 70%
Total = 100%

COURSE OVERVIEW PRESENTATION SCHEME

The dates for submission of all assignment will be communicated to

you. You will also be told the date of completing the study units and
dates for examinations.
Units Title of Work Week Assignment
Activity (End-of-
Unit)
Course Third World Dependency and Development
Guide

Module 1 Understanding the Third World and its Descriptive

Taxonomy
Unit 1 Understanding the Concepts Week 1 Assignment 1
of Third World,
Development,
Underdevelopment and
Dependency
Unit 2 Descriptive Taxonomy and Week 2 Assignment 2
the Commonalities of the
Third World Countries
Unit 3 Theoretical and Empirical Week 3 Assignment 3
Explanations to the Causes
of Third World Development
Crisis
Unit 4 Critique of the Theoretical Week 4 Assignment 4
and Empirical Explanations
Unit 5 Growth Theory of Week 5 Assignment 5
Development
Module 2 The Emergence and Development of Capitalism and
Imperialism
Unit 1 The Emergence of Week 6 Assignment 1
Capitalism from Simple
Production expanded and to
Monopoly Production
Unit 2 Theories of Imperialism Week 7 Assignment 2
Unit 3 V.I Lenin’s Theory of Week 8 Assignment 3
Imperialism

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POL 431 COURSE GUIDE

Unit 4 Globalisation as an Week 9 Assignment 4

International System
Unit 5 The Relationship between Week 10 Assignment 5
Development and
Underdevelopment
Module 3 The Forms, Nature and Structure of Dependency and
Underdevelopment
Unit 1 Forms of Dependence Week 11 Assignment 1
Unit 2 Externalities of the Systems Week 12 Assignment 2
of Dependence and
Underdevelopment
Unit 3 Internal Factors and Week 13 Assignment 3
Mechanisms of
Underdevelopment
Unit 4 The Paradox of Globalisation Week 14 Assignment 4
and the Third World
Unit 5 Internal and External Week 15 Assignment 5
Context of Development and
Underdevelopment
Module 4 Theoretical Debate on the Nature and Character of The
State in the Third World
Unit1 Theoretical Explanations of Week 16 Assignment 1
the State in the Third World
Unit 2 The Role of the State in the Week 19 Assignment 2
Third World
Unit 3 Africa’s Response to the Week 20 Assignment 3
Development Crisis
(NEPAD/APRM)
Unit 4 Corruption and the Third Week 21 Assignment 4
World
Unit 5 Finding Proper Roles for the Week 22 Assignment 5
State in the Third World
Module 5 Africa’s Response to the Development Crisis
Unit 1 The Nexus between Week 23 Assignment 1
Democracy and
Development in the Third
World
Unit 2 Issues in Nigerian Politics Week 24 Assignment 2
and Nation Building
Unit 3 Third World and the Week 25 Assignment 3
Democratization Process
Unit 4 Third World and the Week 26 Assignment 4
Challenges of Governance
Unit 5 Response to Third World Week 27 Assignment 5
Underdevelopment

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POL 431 COURSE GUIDE

HOW TO GET THE MOST FROM THIS COURSES

In distance learning, the study units replace the university lecture. This
is one of the great advantages of distance learning; you can read and
work through specially designed study materials at your own pace, and
at a time and place that suits you best. Think of it as reading the lecture
instead of listening to the lecturer. In the same way a lecturer might give
you some reading to do, the study units tell you where to read, and
which are your text materials or set books. You are provided exercises
to do at appropriate points, just as a lecturer might give you an in-class
exercise. Each of the study units follows a common format. The first
item is an introduction to the subject matter of the unit, and how a
particular unit is integrated with the other units and the course as a
whole. Next to this is a set of learning objectives. These objectives let
you know what you should be able to do by the time you have
completed the unit. These learning objectives are meant to guide your
study. The moment a unit is finished, you will significantly improve
your chances of passing the course. The main body of the unit guides
you through the required reading from other sources. This will usually
be either from your set books or from a reading section. The following
is a practical strategy for working through the course. If you run into
any trouble, telephone your tutor. Remember that your tutor’s job is to
help you. When you need assistance, do not hesitate to call and ask your
tutor to provide it.

1. Read this course guide thoroughly, it is your first assignment.

2. Organise a study schedule. Design a ‘course over’ to guide you
through the course, Note the time you are expected to spend on
each unit and how the assignments relate to the units. Whatever
method you choose, you should decide on and write in your own
dates and schedule of work for each unit.
3. Once you have created your own study schedule, do everything
to stay faithful to it. The major reason why students fail is that
they get behind with their course work. If you get into difficulties
with your schedule, please, let your tutor know before it is too
late to help.
4. Turn to unit I, and read the introduction and the objectives for the
unit.
5. Assemble the study materials. You will need your set books and
the unit you are studying at any point in time. As you work
through the unit, you will know what sources to consult for
further information.
6. Keep in touch with your study center. Up-to-date course
information will be continuously available there.
7. Well before the relevant due dates (about 4 weeks before due
dates), keep in mind that you will learn a lot by doing the

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POL 431 COURSE GUIDE

assignment carefully. They have been designed to help you meet

the objectives of the course and, therefore, will help you pass the
examination. Submit all assignments not later than the due date.
8. Review the objectives for each study unit to confirm that you
have achieved them, if you feel unsure about any of the
objectives, review the study materials or consult your tutor.
9. When you are confident that you have achieved a unit’s
objectives, you can start on the next unit. Proceed unit by unit
through the course and try to pace your study so that you keep
yourself on schedule.
10. When you have submitted an assignment to your tutor for
marking, do not wait for its return before starting on the next
unit. Keep to your schedule. When the assignment is returned,
pay particular attention to your tutor’s comments, both on the
tutor marked assignment form and also the written comments on
the ordinary assignments.
11. After completing the last unit, review the course and prepare
yourself for the final examination. Check that you have achieved
the unit objectives (listed at the beginning of each unit) and the
course objectives (listed in the course guide).

FACILITATORS, TUTORS AND TUTORIALS

Information relating to the tutorials will be provided at the appropriate

time. Your tutor will mark and comment on your assignments, keep a
close watch on your progress and on any difficulties you might
encounter and provide assistance to you during the course. You must
take your tutor-marked assignments to the study center well before the
due date (at least two working days are required). They will be marked
by your tutor and returned to you as soon as possible. Do not hesitate to
contact your tutor if you need help. Contact your tutor if you do not
understand any part of the study units or the assigned readings. Also
contact your tutor when you have a question or problem with an
assignment or with your tutor’s comments on an assignment or with the
grading of an assignment.

You should try your best to attend the tutorials. This is the only chance
to have face-to-face contact with your tutor and ask questions which are
answered instantly. You can raise any problem encountered in the
course of your study. To gain the maximum benefit from course
tutorials, prepare a question list before attending them. You will learn a
lot from participating in discussion actively.

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POL 431 COURSE GUIDE

SUMMARY

This course guide has been designed to furnish you with the information
required for a fruitful adventure in the course. In the final analysis, how
rich you get from the course is essentially dependent on how much of
your time, effort and planning you put in. So, your success in Pol 431
and in the entire programme is a function of the commitment and
dedication you put into it. We wish you success with the course and
hope that you will find it both interesting and useful.

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POL 431 COURSE GUIDE

LIST OF ACRONYMS

ACCs - Advanced Capitalist Countries

C-M-C - Commodity Money Commodity
DCs - Developed Countries
FDI - Foreign Direct Investment
GATT - General Agreement on Tariffs and Trade
GDP - Gross Domestic Product
HDI - Human Development Index
IFIs - International Financial Institutions
IMF - International Monetary Fund
LDCs - Less Developed Countries
MNCs - Multi-National Corporations
NCC - Nigerian Communication Commission
NICs - Newly Industrialized Countries
NIES - Newly Industrialized Economies
SAP - Structural Adjustment Programme
TWCs - Third World Countries
UN - United Nations
WTO - World Trade Organization

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 MAIN
COURSE

CONTENTS PAGE

Module 1 Understanding the Third World and

its Descriptive Taxonomy………………. 1

Unit 1 Understanding the Concepts of Third

World, Development, Underdevelopment
and Dependency…………………………. 1
Unit 2 Descriptive Taxonomy and the Commonalities
of the Third World Countries…………… 10
Unit 3 Theoretical and Empirical Explanations
to the Causes of Third World
Development Crisis……………………… 16
Unit 4 Critique of the Theoretical and Empirical
Explanations…………………………….. 26
Unit 5 Growth Theory of Development………… 35

Module 2 The Emergence and Development of

Capitalism and Imperialism…………… 38

Unit 1 The Emergence of Capitalism from

Simple Production Expanded and to
Monopoly Production……………………. 38
Unit 2 Theories of Imperialism………………….. 45
Unit 3 V.I Lenin’s Theory of Imperialism ……… 53
Unit 4 Globalisation as an International System… 60
Unit 5 The Relationship between Development
and Underdevelopment…………………... 71

Module 3 The Forms, Nature and Structure of

Dependency and Underdevelopment….. 74

Unit 1 Forms of Dependence……………………. 74

Unit 2 Externalities of the Systems of Dependence
and Underdevelopment………………….. 81
Unit 3 Internal Factors and Mechanisms of
Underdevelopment………………………. 87
Unit 4 The Paradox of Globalisation and the
Third World ……………………………... 94
Unit 5 Internal and External context of
Development and Underdevelopment …... 105

Module 4 The Political Economy of Third

World Development……………………. 108

Unit 1 Theoretical Explanations of the State

in the Third World……………………….. 108
Unit 2 The Role of the State in the
Third World……………………………… 115
Unit 3 Africa’s Response to the Development
Crisis (NEPAD/APRM)…………………. 124
Unit 4 Corruption and Third World
Development……………………………... 131
Unit 5 Finding Proper Roles for the State
in the Third World……………………….. 138

Module 5 Africa’s Response to the

Development Crisis…………………….. 146

Unit 1 The Nexus between Democracy and

Development in the Third World……….. 146
Unit 2 Third World and Democratisation
Process…………………………………... 155
Unit 3 Third World and the Challenges
of Governance…………………………… 162
Unit 4 Foreign Aid and Debt Crisis in the
Third World……………………………… 170
Unit 5 Response to Third World
Underdevelopment………………………. 179
POL 431 MODULE 1

MODULE 1 UNDERSTANDING THE THIRD WORLD

AND ITS DESCRIPTIVE TAXONOMY

INTRODUCTION
This module which is the introductory module exposes students to the
concepts of Third World, Development, Underdevelopment and
Dependency, Theoretical and Empirical explanations to the causes of
Third World development crisis, and critique of the Theoretical and
Empirical explanations. This module is made of four units aimed to give
students the basic foundational knowledge about the course.

Unit 1 Understanding the Concepts of Third World, Development,

Underdevelopment and Dependency
Unit 2 Descriptive Taxonomy and the Commonalities of the Third
World Countries
Unit 3 Theoretical and Empirical Explanations to the Causes of
Third World Development Crisis
Unit 4 Critique of the Theoretical and Empirical Explanations
Unit 5 Growth Theory of Development

UNIT 1 UNDERSTANDING THE CONCEPTS OF THIRD

WORLD, DEVELOPMENT,
UNDERDEVELOPMENT AND DEPENDENCY

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Conceptualising the Third World
3.2 Conceptualising Development
3.3 Conceptualising Underdevelopment
3.4 Conceptualising Dependency
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

This unit is the first among the four constituent units of this module. The
main thrust of this unit is to identify and operationalise the concepts that
are fundamental to understanding the course. This is to enable you
overcome some misconceptions and ambiguity surrounding these
concepts arising from the multicultural and multidisciplinary approach to

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

it and to also appreciate the reasons behind the classification of some

societies as Third World Countries (TWCs). This unit therefore forms the
foundation upon which other modules are built on. You are therefore,
expected to give it maximum attention it deserves.

2.0 OBJECTIVES

By the end of this unit, you will be able to:

 explain Third World, development, Underdevelopment and

Dependency and the relationship between them
 define the concept of Third World, Development,
Underdevelopment and Dependency
 identify and describe countries referred to as Third World and their
common characteristics
 explain the causes of backwardness of the Third World Countries
(TWCs)
 assess the relevance of the theoretical and empirical explanations
of the causes of Third World backwardness.

3.0 MAIN CONTENT

3.1 Conceptualising the Third World

To start with, it is important to note that today, there are about 7 billion
people on planet earth and over 5 billion of them live in nations
categorised as Third World. These people live in Africa, Asia, Latin
America, the Caribbean and the Middle East. It covers the majority of the
human population as such, it cannot be ignored.

The concept of Third World was introduced by a French Economist and

Demographer, Alfred Sauvy who, in an attempt to describe the different
categories of economic conditions suggested that there were three worlds
on the planet. The first is the old world of Europe, which was built on the
agricultural society and governed by the system of feudalism. The second
world is known as the new world, which described the discovery and
settlement throughout the Americas both North and South. This was the
era of Industrial Revolution, which laid the foundation for the modern,
technical and mechanical societies. The final one refers to the Third
World.

The concept of Third World is not only popular but generally used by
different people, yet defined in different ways by scholars, policy makers,
politicians and experts of International Relations. Samples of these
definitions are given below:

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POL 431 MODULE 1

According to Munroe (2001:216), Third World nations refers to people

who were not allowed to participate or benefit from the industrial
revolution despite the fact that the sweat and blood of these people
became the human slab on which the foundation of the Industrial
Revolution was laid.

According to Handelman (2001:1-2) Third World refers to the nations of

Africa, Asia, the Middle East, Latin America and the Caribbean that
belong neither to the first world (Japan and the Western Industrial
Democracies, the first countries to develop industrial economies and
liberal democracies) nor to the now defunct second world (the bloc of
former communist nations, that included the Soviet Union and Eastern
Europe). Third World is essentially a residual category. Countries fall
under its banner not because of any specific quality, but simply because
they are not members of either the first or the second worlds.

Third World is widely used in practice as a synonym for developing

countries or less developed countries. From the above definitions, it is
instructive to note that despite the differential conception of the concept
of Third World, there are considerable agreements in what constitute the
essential elements common to societies or countries referred to as Third
World Countries which will be described in the next unit.

Conversely, it will be empirically wrong to still view the notion of Third

World purely from a geographical lens as it were. The classical notion of
Third World generally classified the countries in Africa, Asia, the Middle
East, Latin America and the Caribbean as Third World. Over time, the
development success story of the South-East Asian counties, popularly
referred to as the Asian Tigers is a refutation of the classic notion of Third
World. Today, the Asian Tigers such as Malaysia, Indonesia, Singapore,
Taiwan, Thailand, and even China, and Japan are by no means Third
World countries. Therefore, the notion of Third World is no longer
geographically determined by a sundry of countries whose indices of
dependence such as poverty rate, unemployment rate, the ratio of
importation to exportation of goods, mortality rate, illiteracy rate,
indecencies of physical violence, technological dependence etc are more
than the global bench mark. The countries under this conceptualization
are found in Africa, Asia, Latin- America and the Caribbean

SELF-ASSESSMENT EXERCISE

i. Conceptualise the classical notion of third world.

ii. Demonstrate your understanding of how the development success
story of some Asian countries has refuted the classic notion of
Third World.

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

3.2 Conceptualising Development

Development is a complex and highly contested concept that does not

lend itself to any generally acceptable definitions due to the
multidimensional nature and multidisciplinary approach to it and the
value laden attached to it. However, some scholars have tried to provide
meanings to the concept but in doing that, some scholars have
misconstrued development for growth, modernisation, progress and
westernisation.

Even though all these are necessary, they are not sufficient conditions for
development. It is possible to have growth without development, so also
progress, modernisation and westernisation. While development is more
than growth, progress, modernisation and westernisation, all these are
sine qua non for development. So what is development?

According to Walter Rodney (1972),

Development is a many-sided process implying for the individual, skills
and capacity, greater freedom, creativity, self-discipline, responsibility
and material well-being. The process involves the development of tools,
skills and the mobilisation of required resources for development
purpose.

According to Okwudiba Nnoli (1979),

Development refers to a checklist of technical artifacts. To him, the
availability of schools, hospitals, road networks, electricity, boreholes
and other infrastructural faculties are indications of development.

To V.I. Lenin (1968) development means: A progressive movement,

ascension from lower to higher stages and from simple to complex
situations- the simple/lower stage(s) refers to the state of nature in which
society finds itself in the process of social evolution.

According to Seers (1969:5) the question to ask about a country’s

development are therefore: What has been happening to poverty? What
has been happening to unemployment? What been happening to
inequality? If all three of these have declined from high levels then
beyond doubt this has been a period of development for the country
concerned. If one or two of these central problems have been growing
worse, especially if all three have, it would be strange to call the result
development, even if per capita income doubled.

The World Bank in World Development Report (1991) stressed that the
concept of development has economic, social and political attributes such
as sustainable increase in living standards including consumption,
education, health and environmental protection, equality of opportunity

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POL 431 MODULE 1

and liberties and political freedom. From the definitions above, there is
clear indication that development does not have precise definition;
nevertheless, the following viewpoints can be discussed as common
grounds of agreement:
 development is a process and not a state and this process is many-
sided
 development involves action which emphasises the conscious
efforts of the state to induce development in the society
 it focuses on quantitative and qualitative changes in the structure,
composition and performance of the forces of production.
 it also emphasized an increasing capacity to make rational value
and use of natural and human resources for meeting people’s
social ends
 it ultimately brings about qualitative improvement in the standard
of living of the people.

Above all, a study of development provides you an insight to

understanding the direction of societal change, its causes and dimensions.
The onus of providing theoretical and empirical explanations for these,
strand by strand constitute directly the thrust of this course.

SELF-ASSESSMENT EXERCISE

Identify and briefly discuss the various misconceptions of development.

3.3 Conceptualising Underdevelopment

The concept of underdevelopment as first used in the 1940s is shrouded

like development in controversy arising from scholars seeing it in
different ways. The concept as it is used is an all-inclusive. It refers to a
society’s political organisation, economic characteristics and social
institutions. But according to Andre Gunder Frank (1968),
underdevelopment is not at all the same as undeveloped. If by the latter
we mean a relative lack of development which was prevalent in almost
all countries of the world in the pre-capitalist and pre-industrial times.
But as Foster-Cater (1985:3) had observed: Underdevelopment, far from
being a stage on the way to development is a totally different situation-
on a road that leads to nowhere. And this in turn is because it is not or not
only a process but a relation; it is something someone has done to
someone else. So what is underdevelopment?

Some scholars see it as the direct opposite or the other side of

development, while others conceive it by comparing the levels of
development of two or more societies and others see it as the absence of
development. But according to Gunder Frank (1968), underdevelopment
involves imperialism and exploitation. Third World societies have been

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

prevented from developing because their economies serve the interest of

the west.

According to Alanana (2006:5) underdevelopment is a process in which

a country has not sufficiently developed. This status of insufficient
development, he added, was acquired under certain historical
circumstances. These historical conditions includes centuries of slavery,
colonialism and neo-colonialism.

According to Frank (1969) underdevelopment refers to an active process

of distortion, characteristic of the relatively modern fate of the Third
World, and hence in no way to be equated with tradition or any sort of
original state.

The underdevelopment concept, understood not simply as retardation, but

as a distortion of economic development, suffers from the fact that, apart
possibly from the U.S.A, England and France, there has never been a so
called normal development of industrial capitalism in any country. From
the above definitions, underdevelopment can be said to be neither the
opposite nor absence of development because every society had
experienced a form of social progress at a historical point of time;
especially in its process of social formation. However, underdevelopment
can be seen as a process which is synonymous with exploitation and
plunder of one country by another under historical circumstances of
capitalist expansion, imperialism and colonialism and has continued in
this neo-colonial stage. The outcome of this process is the gross
inequality in wealth distribution and lack of development at the local,
national and international levels.

Underdevelopment could also be a state of economic dependence,

presence of high rate of poverty, unemployment, illiteracy, mortality,
infrastructural decay, educational decay, technological dependence etc as
a result of bad governance.

The above definitions imply that:

i) there exists a link or relationship between the Capitalist
Industrialised Countries and the Third World Countries
ii) economic links between the Advanced Capitalist Countries and
the Third World Countries are structurally and historically
developed and has conditioned the Third World Countries to be
perpetually dependent on the Advanced Countries.
iii) it also implies underdevelopment could be as a relationship
between governance politics and economy

6
POL 431 MODULE 1

SELF-ASSESSMENT EXERCISE

Briefly discuss the concept of underdevelopment.

3.4 Conceptualising Dependency

Dependency as a concept becomes externally tricky in an increasingly

integrated world economy. However, political independence means
nothing without economic independence. It is within this context that
Kwame Nkrumah (1965), former president of Ghana in his work: Neo-
Colonialism: The Last Stage of Imperialism observed that: The Third
World Countries would not make a forward march towards economic
independence until neocolonialism or neo-imperialism was vanquished.
To give credence to this assertion, decades after political independence
for most of the Third World Countries, they have remained perpetually
dependent. What is Dependency?

According to Offiong (1980:73) dependency refers to the situation that

the history of colonial imperialism has left and that modern imperialism
creates in underdeveloped countries. According to Johnson (1972: 72),
dependency is imperialism seen from the perspective of
underdevelopment. Dependency from this perspective is not an external
factor but as a conditioning situation in which the specific histories of
development and underdevelopment transpired in various societies.

To Dos Santos cited in Offiong (1980:73-74), dependency refers to a

situation in which a certain group of countries have their economy
conditioned by the development and expansion of another economy, to
which the former is subject. The relation of interdependence between two
or more economies and between these and world trade assumes the form
of dependence when some countries (the dominant) can expand and give
impulse to their own development, while other countries (the dependent)
can only develop as a reflection of this expansion.

From the forgoing definitions, there seemed to be some common

agreement by these scholars on some issues which include:
i) that development and dependency is relational
ii) that global inequality in wealth and development is situated within
the historical exploitation of poor societies (Third World
Countries) by the rich countries (Advanced Countries)
iii) that the dominant (Advanced Countries) are capable of dynamic
development responsive to their internal needs whereas the
dependent (Third World) have reflex type of development
iv) that the development alternatives open to the dependent nations
are defined and limited by its integration into, and functions
within the world capitalist market

7
POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

v) that the basic situations of dependence leads to a global situation

in dependent countries that situated them in backwardness and
under the exploitation of the dominant countries.

SELF-ASSESSMENT EXERCISE

Identify two or more definitions of dependency.

4.0 CONCLUSION

The crisis of development plaguing the third world countries has attracted
the attention of scholars, policy makers, government and non-
governmental institutions. In this course, attempt has been made to
conceptualise the concept of Third World in its historical evolution. Other
concepts that are fundamental to understanding the course such as
development, underdevelopment and dependency have been
operationalised. In doing this, some of the misconceptions are identified
and to avoid ambiguity, students are introduced to some of the key
characteristics that make their definitions to be acceptable.

5.0 SUMMARY

In this Unit, effort has been made to operationalise the basic concepts that
are central to understanding the course. You have learned that there are
various definitions to the concepts as presented by scholars of political
economy. Despite the multidimensional and multidisciplinary approach
to the definition of these concepts, certain key characteristics that are
paramount in all are identified for proper understanding and
comprehension.

6.0 TUTOR-MARKED ASSIGNMENT

1. Briefly define the concepts of Third World, underdevelopment,

developmental and dependency and show the linkages.
2. Identify the various misconceptions of the concept of development
and explain the most appropriate to you.
3. Discuss the relationships among the concepts of development,
underdevelopment and dependency.

7.0 REFERENCES/FURTHER READING

Abba, et al. (1985). The Nigerian Economic Crisis: Causes and Solution.
Zaria: A.B.U. Press.

Alanana, O.O. (2006). Sociology of Development. Kaduna: Joyce

Publishers.

8
POL 431 MODULE 1

Baran, P. (1973). The Political Economy of Growth. Harmarsworth:

Pengiun

Cockfoft, J.M. et al. (1972). Dependence and Underdevelopment:

LatinAmerica’s Political Economy. New York: Anchor Books.

Foster-Carter, A. (1985). The Sociology of Development. London:

Causeway Press.

Frank, A.G. (1967). Capitalism and Underdevelopment in Latin America.

New York: Monthly Review Press

Frank, A.G. (1975). On Capitalist Underdevelopment. Oxford University

Press.

Handelman, H. (2005). The Challenge of Third World Development.

New Jersey: Pearson Prentice Hall.

Johnson, D. (n.d).“Dependence and the International System.” In:

Cockfoft, J.M.etal (1972). Dependence and Underdevelopment:
Latin America’s Political Economy. New York: Anchor Books.

Lenin,V.I.(1972). Fundamental of Marxism –Leninism. Moscow:

Progress Publishers.

Nkrumah, K. (1965). Neo-colonialism: The Last Stage of Imperialism.

London: Panaf Books.

Nnoli,O.(1979). Path to Nigerian Development. Senegal: Codesria.

Offiong, D.A.(2001). Globalisation, Post Neo-dependency and Poverty

in Africa. Enugu: Fourth Dimension Publishers.

Preston, P.W. (2002). Development Theory. UK: Blackwell Publishers

Rodney, W. (1972). How Europe Underdeveloped Africa. Tanzania:

L’overture.

Seers, D. (1969). “The Meaning of Development.” IDS Communication

44.

9
POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

UNIT 2 DESCRIPTIVE TAXONOMY AND THE

COMMONALITIES OF THIRD WORLD
COUNTRIES

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Descriptive Taxonomy of Third World
3.2 Characteristics of Third World Countries
3.3 Third World Commonalities
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

It will be erroneous and misleading to generalise the categorisation of all

Third World countries. This is because the societies which compose it are
exceedingly diverse, as such, this unit will give a brief description of what
Third World countries is, the basic characteristics and commonalities.

2.0 OBJECTIVES

By the end of this unit, you will be able to:

 describe countries categorised as the Third World

 mention the characteristics of countries referred to as Third World
 explain the common features of the Third World countries.

3.0 MAIN CONTENT

3.1 Descriptive Taxonomy of Third World

There is not even agreement on a collective name for the approximately

140 countries that constitute the third world countries, because they can
be found in different parts or regions of the world. But simply put, Third
World Countries refers to the nations of Africa, Asia, the Middle East,
Latin America, and the Caribbean. This section shall provide brief
information about these regions that makes up the third world countries
but our focus will be on Africa and Latin America.

Africa, particularly Sub Sahara Africa, had a very specific experience of

the world system of slavery, colonialism and neo-colonialism. During the

10
POL 431 MODULE 1

slave period, millions of people were forcibly taken to the America with
drastic effects on their societies. Colonialism, even though started late
after the Berlin conference of 1884-85, was very comprehensive and
almost universal except for countries of Ethiopia and Liberia that
escaped. Most of these countries are characterised by explosive
population and urban growth, agrarian and low level of technology. It is
important to note that of all the third world countries, Africa looks to be
the least developed and have the worst problems.

Latin America, to a large extent, is the original Third World. It was

colonised early, from the late 15th Century, mostly by Spain and Portugal.
It was also independent early, from as long ago as the 1820s, before most
of Africa had even been colonised.

In this century, some larger countries within this continent- Brazil,

Mexico, Argentina have undergone a certain degree of industrialisation,
but whether this has or will transform the basic structure of
underdevelopment is mostly debated, and it is no surprise that it was Latin
America that gave birth to dependency theory.

3.2 Characteristics of Third World Countries

Here, we shall focus on the characteristics that distinguished these

countries from Advanced Countries. The most salient characteristics of
the Third World countries are their poverty. This is manifested at both
individual (in terms of unemployment, sub-standard or low standard of
living, poor health conditions, and inadequate nutrition, etc; and at
national levels, (manifested in a combination of low per capita income,
low Gross Domestic Product (GDP), highly unequal income distribution,
poor infrastructure, limited use of modern technology, and low
consumption of energy.

Robert McNamara, one-time World Bank President, defines poverty,

particularly absolute poverty as conditions of life so characterised by
malnutrition, illiteracy, diseases, squalid surroundings, high infant
mortality, and low life expectancy as to be beneath any reasonable
definition of human decency.
According to Griffith (1989:127),

The critical problem facing certain third world countries, therefore is the
hundreds of millions of our fellow human beings who like us have been
created in the image of God but who live in condition of appalling
deprivations.

Another principal characteristic defining Third World Countries (TWCs)

is their peripheral economic and cultural status relative to the major

11
POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

advanced countries of the world. As such, even wealthy nation such as

Saudi Arabia or stable economies such as Costa Rica are still considered
part of the TWCs, because their economic and political systems are
largely shaped and dependent on the developed world.

In describing the characteristics of the Third World, Offiong (1982:200)

sees it as:

The state of an economy of a satellite economy characterised by

underemployment of human and material resources, such an economy is
characterised by low real income per capita in comparison with those of
North America and Western Europe. It is characterised by illiteracy,
poverty, over population and disease.

Such are the hallmarks of underdeveloped or third world countries. Of

course there must be difference between Third World countries but to
maintain that no common ground exists is to make any discussion outside
or across the frontiers of a single country meaningless. The Third World
is important because of the massiveness of its poverty. It is hazardous to
try to generalise too much about the 143 member countries of the United
Nations (U.N.) that constitute the Third World while almost all are poor
in money terms, they are diverse in culture, economic conditions, and
social and political structures.

According to Ujo (1995:51-52), one of the ways of measuring

underdevelopment is to use statistical index. Based on this criterion,
underdevelopment can be measured through the following indices
categorised under economic, demographic, cultural and political and
technological indicators.

Economic indicators include: A high proportion of the population in

agriculture and over population in agriculture where it is possible to
reduce the number of workers in agriculture and still obtain the same total
output; considerable disguised unemployment; very little capital per
head; low income; low savings; major proportion of expenditure is on
food; export of raw materials; low volume of trade; poor credit facilities
and poor housing. Demographic indicators include: high fertility rates,
high mortality rates; poor nutrition; and poor hygiene.

Cultural and political indicators include: High degree of illiteracy, child

labour, wide gap between the rich and the poor, women occupy inferior
status, predominance of traditional values; and, political instability.
Technological indicators include: low technology in agriculture, low
technology in industry; and crude technology.

12
POL 431 MODULE 1

SELF-ASSESSMENT EXERCISE

Outline the characteristics of Third World Countries.

3.3 Third World Commonalities

It is instructive to note that despite the endless variety of geography,

history and cultures of Third World Countries, there is also at some level
an element of commonality in economy, politics, in experiences or
structure. However, there are two variants to the claim of this
commonality. The claim can be categorised under:
a. Recapitulation or diffusion perspective
b. Unevenness or dependence perspective

According to the recapitulation perspective, what the TWCs shares is

being behind the advanced countries in various ways. These countries
also share low Human Development Index (HDI), the most
comprehensive and composite measurement of school enrolment,
literacy, infant mortality, life expectancy and income. It also shares the
opportunity or prospects to ameliorate this by receiving benefits diffused
from the world, and it will share a common feature in following gradually
in the West’s footsteps.

The unevenness or dependence perspective on the other hand, claim that

what the TWCs share is a similarity of experience; namely: being
historically subjugated and reduced to a subordinate position in the world
economy, which is not like anything the West went through and which
must be escaped from, not built upon if real development is to take place
in the Third World Countries. This perspective also described Third
World governments as agents of the local economic elite who colluded
with Western Multinational Corporations.

These countries also have poor public social policy which is supposed to
help determine the share of the country’s economic resources that is
invested in education, sanitation and health care. Despites their
variations, however, Third World nations share a common set of
problems both domestic and international that define their state of
underdevelopment. The common problem shared in varying degrees by
most Third World countries include: widespread and chronic absolute
poverty; high and rising levels of unemployment and underemployment;
wide and growing disparities in the distribution of income; low and
stagnating levels of agricultural productivity; sizeable and growing
imbalances between urban and rural levels of living and economic
opportunities; serious and worsening environmental decay; antiquated
and inappropriate education and health systems; severe balance of
payments and international debt problems; and substantial and increasing

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

dependence on foreign aid and often inappropriate technologies,

institutions and value system.

However, common characteristics of Third World countries include: low

living standard, comprising low income, high inequality, poor health and
inadequate education; low levels of productivity; high rates of population
growth and dependency burden; high and rising levels unemployment
and underemployment; significance dependence on agricultural
production and primary products export; and, dominance, dependence
and vulnerability in international relations.

SELF-ASSESSMENT EXERCISE

Identify the common characteristics that Third World Countries have.

4.0 CONCLUSION

In the light of foregoing, we conclude this unit by stating that despite the
substantial differences among Third World countries, they still share a
number of common characteristics. For instance, all of them suffer from
some aspects of political, economic or social underdevelopment.
However, while some TWCs are underdeveloped in all major aspects of
modernisation and development, other TWCs are far more advanced in
some areas of development than in others, like countries of South East
Asia.

5.0 SUMMARY

This unit has examined a description of the countries and other

characteristics that qualified them to be called Third World Countries.
The unit observed that even though these countries vary on so many
issues, they share some commonalities.

6.0 TUTOR-MARKED ASSIGNMENT

1. Describe the characteristics of Third World countries.

2. Identify the commonalities of Third World countries.
3. Mention any Third World country of your choice and discuss the
characteristics and common features it shares with others.

14
POL 431 MODULE 1

7.0 REFERENCES/FURTHER READING

Foster-Carter, A. (1985). Sociology of Development. England: Causeway

Books.

Handelman, H. (2005). The Challenge of Third World Development.

New Jersey: Pearson Prentice Hall.

Offiong, D.A. (2001). Globalisation: Post Neo- dependency and Poverty

in Africa. Enugu: Fourth Dimension Publishers.

Ujo, A.A. (1995). Understanding Development Administration in

Nigeria. Kaduna: Joyce Publishers.

Hoogvelt, A. Globalisation and the Post-Colonial World: The New

Political Economy of Development. London: Palgrave, 2001.

15
POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

UNIT 3 THEORETICAL EXPLANATIONS TO THE

CAUSES OF THIRD WORLD COUNTRIES’
UNDERDEVELOPMENT

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Emergence of the Modernisation Theory School
3.2 Basic Postulations of the Modernisation Theory
3.3 Emergence and Proponents of Dependency Theory
3.4 The Basic Postulations of the Dependency School.
4.0 Summary
5.0 Conclusion
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

The crisis of underdevelopment and dependency plaguing the Third

World Countries has attracted the attention of social scientists. However,
understanding the nature, character and causes of dependency of these
countries have generated complex debates by social scientists.
Consequently, the question about the origin and causes of
underdevelopment and dependency elicit very different responses from
social scientists. Frequently, their evaluations reflect their personal,
cultural backgrounds or ideologies.

In the light of the foregoing, two competing paradigms have shaped

scholarly analysis of the debate. The first is the modernisation school and
the other is the dependency school. This unit attempts the discussion of
the two theoretical and empirical paradigms (modernisation and
dependency) used in providing explanations to the causes of wealth and
poverty of the Advanced Capitalist Countries (ACC) and the Third World
Countries (TWCs).

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

 explain the causes of Third World countries backwardness

 show why Capitalist development has not taken place in the Third
World countries
 explain the postulations of modernisation for explaining Third
World development crisis

16
POL 431 MODULE 1

 discuss the postulations of dependency in explaining the causes of

TWCs backwardness
 analyse which theoretical explanations best explains the causes of
Third World backwardness.

3.0 MAIN CONTENT

3.1 Emergence of the Modernisation Theory School

The origin and emergence of modernisation theory could be traceable to

the 1950s and 1960s, as the demise of European colonialism produced a
vast number of independent nations in Africa, Latin America and Asia.
Western Social Scientists began to study Third World countries’ politics
and economics intensely. From the study came the modernisation theory.
The theory which emerged in the 20th century gained popularity in the
U.S.A in 1960s.

The emergence of the modernisation theory is a product of three (3)

historical events in the post-World War II era. These events are:
i. the emergence and rise of the United States of America as a global
power after the Second World War
ii. the spread of communism from the defunct USSR, Korea and
China to the new nations emerging from colonial domination
iii. the disintegration of European colonial empires in Africa, Asia
and South America.

Against these historical events and factors, the newly independent nations
were in desperate search for development models for their economy in
order to secure their political independence and safeguard their economic
freedom. Consequently, America showed interest and encouraged
bourgeois elites to support research efforts of their young social
scientists. The outcome of this research brought about the modernisation
theory.

SELF-ASSESSMENT EXERCISE

Briefly trace the emergence of the modernisation theory.

3.2 Basic Postulations of the Modernisation Theory

Modernisation generally implies a process of change towards those types

of social, economic and political system which had developed in Western
Europe and North America from the 17th Century and had then spread to
other European countries in the 19th and 20th centuries in South America,
Asia and African Continents. Modernisation represents a change in

17
POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

values, behaviour or attitude of a society towards the direction of

developed societies.

Modernisation is multidisciplinary in structure and content. At the level

of sociology, it maintains that change and transition from traditionalism
to modernity is gradual and achieved through structural differentiation as
seen in the works of Talcott Parsons, Neil Smelser, etc. At the level of
economics, its emphasis is on the increase in production and capital
investments. This is indicated in the works of (W.W. Rostow’s Stages of
Economic Growth: A Non Communist Manifesto published in 1960. At
the level of Political Science, it emphasises, the need to enhance the
capacity of the political system as is reflected in the works of Gabriel
Almond, James Coleman, Samuel Huntington. This is indicated in the
theory of political development where some of the scholars are primarily
concerned with the absence or weakness of political culture and
institutions as reasons for Third World backwardness. While there are
variations and disagreement among modernisation scholars, they
generally share on a number of underlying postulations which are:

i) Within the modernisation theoretical prism, the Third World

countries (TWCs) can never developed because their traditional
values, norms, behaviours and institutions are antithetical to
development;
ii) The theory believes that the yardstick and standards of
development of the TWCs are developed countries of America and
Europe;
iii) Modernisation theory argued that the TWCs, would and should
follow a path of political and economic modernisation paralleled
to the one first travelled by the Advanced Western nations. To
achieve, they insisted that TWCs had to acquire modern cultural
values and create modern political and economic institutions.
iv) They see development as internally induced due to atavistic and
incompatible traditions and institutions.
v) Finally, transforming the traditional cultures was seen as the first
step in the modernisation process.

A Major proponent of the economic aspect of the school is W.W. Rostow

who popularised the theory in his work: Stages of Growth: A Non
Communist Manifesto published in 1960. According to Rostow, growth
and development are historically linear process discernible into five (5)
stages through which all TWCs must pass through to develop.

The stages are:

(i) traditional societies
(ii) pre-condition to take-off
(iii) take off

18
POL 431 MODULE 1

(iv) drive to maturity

(v) the age of high mass consumption.

SELF-ASSESSMENT EXERCISE

Use the modernisation theory to discuss underdevelopment and

dependency of the Third World Countries.

3.3 Emergence and Proponents of Dependency Theory

The dependency theory was originally propounded by Paul Barran (1967)

and then popularised by Andre Gunder Frank (l967), Theotonio Dos
Santos (l970), Samin Amin (1972), Walter Rodney (1972), Claude Ake
(1981) among several others. The Dependency Theory incorporates a
variety of perspectives; each attempting to isolate the factors that can be
held accountable for the underdevelopment of the Third World Countries
(TWCs). To Jhingan (2007) there is a plurality of dependency views;
different meanings are accorded the concept of dependence, and different
analysis are offered to explain underdevelopment as a result of the
interplay between internal and external structures in developing nations.

Dependency theorists are, therefore, often classified as Marxists, neo-

Marxists and structuralists. Tadoro (1994) classifies them as Neo-
colonial Dependence Model, the False Paradigm Model and Dualistic
Development Thesis. Notwithstanding the varying perspectives, there
appears to be a consensus about the main thrust of the postulations of the
theory

SELF-ASSESSMENT EXERCISE

Name the proponents of dependency theory and briefly discuss the

circumstances that led to the emergence of the theory.

3.4 The Basic Postulations of the Dependency School

The main argument is that the cause of the underdevelopment of the

TWCs can be located within the dynamic and contradictory growth of the
global capitalist system. That this underdevelopment has not stemmed
from some original state of affairs, as claimed by Western modernisation
theorists, but rather from the same historical process by which the now
developed capitalist countries of Europe and America became developed.

Consequently, the whole world has now become divided into two ˜sets of
countries: the developed countries (DCs) of Europe, North America and
Japan and the less developed countries (LDCs) which are mostly found
in Africa, Asia and Latin America. The former are also referred to as the

19
POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

Centre while the latter are called the Periphery. Frank (1976) calls the
DCs as Metropolis and the LDCs, Satellite countries.

The phenomenon of dependency, according to Dos Santos (Quoted by

lhingan2007:81):
Is a situation in which the economy of certain countries is conditioned by
the development and expansion of another economy to which the former
is subjected. A dependent relationship results between two or more
economies when some countries (the dominant ones) can expand and be
self-sustaining, while other countries (the dependent ones) can do this
only as a reconnection of that expansion, which can have either a positive
or a negative impact on their immediate development.

The consensus among the dependency theorists can be summarized into

four by (Jhingan, 2007:6);
(i) Identification of underdevelopment with the expansion of
industrial capitalist countries;
(ii) The view that development and underdevelopment are parts of a
united system;
(iii) The conception that underdevelopment is a persistent natural
condition, not a temporary, pre-capitalist, state; and
(iv) Agreement that dependence affects internal politics, society and
culture. It is the content ion of Frank (1967) Dos Santos (1970)
and Amin (I976) that the prevalent state of underdevelopment in
the LDCs is a consequence of an international historical process
which involved the formation, expansion and consolidation of the
capitalist system.

This process was consummated through the incorporation of the LDCs

into the world economy by the forces of colonialism and the imposition
of capitalist relations of production on them. Through the phenomenon
of international division of labour, the LDCs have been consigned to the
role of producers of raw materials or primary products for industries of
DCs and serving as markets for their manufactured goods. According to
Raul Prebisch (2009) the international economic order was divided
between an industrial core and an agrarian periphery whereby the
colonising core countries dominated world trade and geopolitics, and
systematically deprived the colonised peripheral nations.

Through emphasis on comparative advantage, the global economic

system consigned some countries (in the South) to being exporters of raw
materials and importers of manufactured goods in perpetuity (Quoted by
Potter, Binns, Elliot and Smith 2008). This situation created a cycle of
poverty and disadvantage whereby poor countries always imported high
value goods without earning enough to pay for imports. LDCs have,
therefore, become dependent on selling limited range of raw materials on

20
POL 431 MODULE 1

highly prejudicial terms by using the currencies of the most industrialized

countries such as the G7.

Dependency of the LDCs is also a function of their heavy dependence on

the DCs for foreign capital. Foreign capital, according to Jhingan (2007,
p.2l) ‘it leads to external orientation of LDCs by exportation of primary
commodities, importation of manufactured goods, thus making them
dependent for the industrialisation of their economies’. It is also the view
of Amin (1976) that foreign aid stunts agriculture, encourages trade and
investment dependencies and reinforces the dominance of exploitive
elites of LDCs. country own resources, collective self-reliance based on
mutual cooperation and economic integration and a demand for a New
International Economic Order based on transfer of technology to the
LDCs, control of natural resources by the LDCs, higher prices for raw
materials of LDCs and access to the markets of DCs for manufactures of
the LDCs thereby subjecting Nigeria and other LDCs to use the
currencies of the so-called industrialized countries as unit of exchange in
international trade. The compelling reason for the adoption of the
Dependency Theory for this study is borne out of the continuous use of
the industrialized countries currencies and its attendant consequences on
DCs’s economy. As a consequence, the condition of the masses in most
DCs, in recent years have consistently worsened or deteriorated as more
and more economic hardship is been experienced.

To this end, the Dependency Theory is of the view that international trade
does not guarantee equitable or equal distribution of global wealth and
has not alleviated or reduced poverty in Nigeria. Hence low state of
domestic production in LDCs may become the source of gains for DCs,
since the essence of trade is to make profit.

It is important to note that all dependency scholars take seriously the

colonial relationships which have historically marked the growth of the
TWCs. They argue that outside of an explicit recognition of the
consequence of that relationship, no accurate understanding of the present
situation of these countries is possible.

The basic arguments of the dependency school are:

i) The dependency scholars rejected the claim that the TWCs could
follows the same path to development as Western nations had
because the advanced industrialised nations changed the landscape
for those that followed them. When Britain became the world’s
first industrial power, it faced no external economic competition;
today; however, newly industrialising countries must compete
against such well-established industrialised giants as the U.S,
Japan, Germany, etc. As Dos Santos added:

21
POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

TWC will have to borrow from financial capital and purchase

advanced technology from the developed countries, thereby
making them dependent on external economic forces beyond their
control and weakening their development.
ii) They also argue that while modernisation scholars view western
influence in the TWCs as beneficial, because it spreads modern
values and institutions, dependency theorists maintain that
Western colonialism and economic imperialism themselves
initially turned Africa, Asia and Latin America into sources of
cheap labour, food and raw materials for the colonial powers.
iii) Underdevelopment and dependency is not the TWCs’ fault but
rather the result of foreign domination and exploitation. Hence,
TWCs’ backwardness is due to exploitative and unequal
relationships that exist between the TWCs and the developed
countries. Consequently, the underdevelopment of the TWCs is as
a result of the dependence on the developed countries who exploit
them and their resources for selfish development of the developed
countries.
iv) They recommend that if these unequal and exploitative
relationship continue, TWCs will remain backward except they
severe the link either by delinking or breaking away the
relationship with the advanced countries.

A major proponent of the dependency theory is Andre Gunder Frank

through his popular notion of the development of underdevelopment. His
popular work on this subject is titled: Capitalism and Underdevelopment
of Latin America published in 1969.

He employed the concept of Satellite-Metropole for his analysis. He saw

the countries as the satellites and he continually serve as engine of
development for the advanced countries which he referred to as
metropole. He saw development and underdevelopment as two sides of
the same coin. By siphoning surplus from the TWCs, the advanced
capitalist countries had enriched themselves.

The Satellite-Metropole model for explanation are linked in such a way

that the development of the centre leads to corresponding
underdevelopment of the periphery. Paul Baran, in his work, The
Political Economy of Growth (1957) argued that the modernising elites
who were supposed to be the catalyst for modernisation were not helping
the situation because they were allies of the bourgeoisie of the Advanced
Capitalist Countries (ACCs) helping to exploit their homeland.

SELF-ASSESSMENT EXERCISE

Briefly discuss the basic postulations of the dependency theory.

22
POL 431 MODULE 1

4.0 CONCLUSION

In the light of the above, we can conclude this unit by stating that the
questions about the causes and nature of underdevelopment and
dependency of the Third World Countries elicit very different responses
from social scientists. Hence, two competing paradigms have provided
explanation to the origin, causes and nature of Third World
underdevelopment and dependency. While, modernisation which
emerged in the U.S.A. blamed TWCs’ backwardness on traditional
values, dependency on the other hand, condemn Western exploitation as
the root cause of TWCs underdevelopment and are particularly popular
among Latin American and African scholars. However, it must be noted
that despite their divergent views, both modernisation and dependency
agree that there exists enormous inequality in the global economy and
both suggests that changes are required to redress the inequality between
the TWCs and the ACCs. But the nature of changes varies.

5.0 SUMMARY

In this unit, effort has been made to trace the origin and emergence of the
two competing and often contradicting theoretical paradigms that attempt
to provide explanations to the nature and causes of underdevelopment of
Third World Countries. While Modernisation theory which emerged
from European and American Scholars, argued that the causes of TWC
backwardness is essentially internally induced arising from their culture,
behaviour, attitudes and institutions that are incompatible to
development, the dependency theory explains global inequality and
poverty crisis of the TWCs from the perspectives of the historical
exploitation of poor societies by the rich from the period of slavery
through colonialism, and neo- colonialism.

6.0 TUTOR-MARKED ASSIGNMENT

1. Discuss the contributions of modernisation school to the

underdevelopment and dependency crisis of the Third World
Countries.
2. Explain the postulation of the dependency theory to the
dependency crisis of the Third World Countries.
3. Identify and discuss the circumstances that gave rise to the
emergence of the modernisation theory.

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

7.0 REFERENCES/FURTHER READING

Abubakar, D. Globalisation, Social Sciences and Nigeria in the 21st

Century. Nigerian Social Scientist, 4 (1). 2001

Alanana, O.O. (2006). Sociology of Development. Kaduna: Joyce

Publishers.

Bhagwati J. and Scrinvasan, T. Trade and Poverty in the Poor

countries.American Economic Review Papers and Proceedings,
Vol. 92. No. (2), 2002.

Bono, R. Inequa1ity and Growth in Panel of Countries.Journal of

Economic Growth, Vol. 5, No. (1): 1999.

Bigesten, J. Growth, Income Distribution and Poverty: A Review

Goteborg. Scandinavian Working Paper in Economics, No. 32.
2001.

Cockfoft, J.M. et al. (1972). Dependence and Underdevelopment: Latin

America’s Political Economy. New York: Anchor Books.

Foster-Carter, A. (1985). Sociology of Development. England: Causeway

Books.

Frank, A.G. (1967). Capitalism and Underdevelopment in Latin America.

New York: Monthly Review Press.

Frank, A.G. (1975). On Capitalist Underdevelopment. Oxford University

Press.

Handelman, H, (2005). The Challenge of Third World Development. New

Jersey: Pearson Prentice Hall.

Johnson, D. (1972). “Dependence and the International System.” In:

Cockfoft, J.M.etal (1972). Dependence and Underdevelopment:
Latin America’s Political Economy. New York: Anchor Books.

Ochoga, O.E. The Impact of Globalisation on Poverty Reduction in

Nigeria,2000-2012. M.Sc Dissertation to Benue State University.
(unpublished, 2012)

Owolabi, E.A.“Globalisation, Liberalisation and theRisk of

Marginalization of Nigeria” in CBN Research Dept. Seminar
Paper No. 5 CBN. Abuja, 1998.

24
POL 431 MODULE 1

Preston, P.W. (2002). Development Theory. UK: Blackwell Publishers.

Rodney, W. (1972). How Europe Underdeveloped Africa. Tanzania

L’overture.

Yusuf, S. Globalisation and the Challenges for Developing Countries.

World Bank, Development Economies Research Group, DERG,
April 30, 2000.

25
POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

UNIT 4 CRITIQUE OF THE THEORETICAL

EXPLANATIONS

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Critique of the Modernisation Theory
3.2 Critique of the Dependency Theory
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

Theoretically we attempted in the preceding unit to explain the inequality

between and among nations in the international economic system within
the capitalist system of production and social relations of production.
These theoretical explanations are found in the various works covering
different paradigms from classical modernisation to the radical
underdevelopment and dependency theory to explore the phenomenon of
global inequality. This unit is intended to do a critique of these theories
in order to ascertain their relevance in understanding and explaining
causes of underdevelopment and dependency of contemporary Third
World countries.

2.0 OBJECTIVES

By the end of this unit, you will be able to:

 discuss the critique of the modernisation school

 discuss the critique of the dependency school
 explain the relevance of these theories in understanding
contemporary crisis of underdevelopment and dependency of the
Third World countries.

3.0 MAIN CONTENT

3.1 Critique of the Modernisation Theory

The modernisation theory has been criticised on certain ground. To start

with, Offiong (1980:49), The European American scholars do not explain
Africa’s underdevelopment because they all belong to the mainstream of
European- American sociology which has carefully avoided the issue of

26
POL 431 MODULE 1

dependency and colonial imperialism critical factors in Africa or Third

World countries’ development.

In other words, Offiong (1980:50) added that:

Development far from being an original or natural condition of the poor
societies is a condition imposed by the international expansion of
capitalism and its inalienable partner, imperialism.

Modernisation is also criticised for its pro-western bias by neo-classical

Marxist and dependency theorists among others, advancing that
traditional societies were often destroyed without gaining promised
advantages leading to the replacement of traditional poverty by a more
modern forms of misery.

Modernisation theory was criticised to be essentially ahistorical. The

diverse experience of the countries of the TWCs was aggregated in terms
of a notion of traditional society and these countries failed to exhibit the
traits of modern societies. The model of the modern was the model of the
U.SA. In this way, the historical experience of the countries of the TW
was both denied and assimilated to the historical experience of the
developed West.

Modernisation is also accused of being unidirectional in its assumption

of change and development. That is- for TWCs to develop there is just
one path to follow, the path of America. Critics asked why it is necessary
for the TWCs to follow this path to development. Modernisations seem
to have ignored the fact that TWCs have the option to select an alternative
path to development as South Korea, Taiwan and other Asian countries.
This shows that the TWCs have alternative path to development outside
the path of Europe and America.

They are also Eurocentric and racist in outlook. For instance, nearly all
the modernisation scholars were either Americans or Europeans. They
were born and raised in the western tradition. As such, they believe that
their cultural values are natural, God ordained and superior to every other.

Having looked at the general critiques of the modernisation theory, it is

imperative to look at W.W. Rostow which is apparently the most popular
and influential scholars of the modernisation school. However, it is
instructive to identify some of the key theoretical traits which Rostow
arguably shares with others.

i. The theory is evolutionist: that is-he sees socio-economic change

as unfolding through a fixed set of stages.

27
POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

ii. Is also unilinear. All Third World Countries must pass through the
same route in the same order to develop. There are no leaps,
shortcuts, choices and alternative routes.
iii. It is internalist. That is, outside or external influences do not play
any role in the Third World Countries underdevelopment crisis.
iv. The theory is recapitulationist. That is the presently
underdeveloped countries today have to follow precisely the same
basic path as did the now developed countries in their day.

According to Frank, author of a major critique of the modernisation

school and Rostow’s theory in particular, argues that three criteria for
assessing any theory in social sciences are: empirical validity, theoretical
adequacy and policy effectiveness. Put in another way, does the theory
fits the facts? Does it make sense? And is it any use? Rostow, as Frank
(1969) argues is found wanting in all. He further pointed out that a
number of countries in Latin America and elsewhere never had a
traditional stage at all, yet seems locked into underdevelopment.

Rostow’s theory, more than anything else, was faulted for not having any
usefulness or help for policy purposes. Gunder Frank also stressed that,
Rostow’s theory attributes a history to the developed countries but denies
no history to the underdeveloped countries. Rostow neglects the past of
the underdeveloped countries but confidently predicts a future for them.

Finally, modernisation was criticised to be too optimistic. That the

western countries had developed through this model, what makes them
think that the TWCs would develop if they follow the same model or path
of development.

SELF-ASSESSMENT EXERCISE

Briefly discuss the critique of the modernisation theory of

underdevelopment.

3.2 Critique of the Dependency Theory

As Rodney (1972) contends, under colonialism, the things that developed

were dependency and underdevelopment. The central claim of the
dependency theory was that the circumstances of the Third World
countries were to a large extent shaped by the global structures within
which they found themselves in particular, the dominance of the west.
However, before looking at the critiques of the dependency theory, it is
necessary to give a summary of the theoretical explanations which the
proponents share together:

28
POL 431 MODULE 1

i. The importance of considering both the historical experience of

peripheral (Third World countries) and the places of their
involvement within wider encompassing systems;
ii. The necessity of identifying specific political, economic and
cultural linkages of centres and peripheries;
iii. The requirement of active State involvement in the pursuit of
development.

Andre Gunder Frank is seen as the leading proponent of the dependency

school. His key term, the development of the underdevelopment can be
seen as the radical counterparts of Rostow’s take-off stage. He argued
that the development of the satellites is limited simply because they are
satellites. Development along metropolitan lines is precisely not possible
for satellites given their subordinate position in the international division
of labour.

Using the same three indices as yardstick for assessment, Frank is also
found wanting empirically. His view that no real development at all is
possible under capitalism is far from real. It is difficult to identify his
metropole-satellites with any actual sociological entity; rather, they are
mix of geographical and social. There are also policy problems. His
delinking from the Western world capitalist system is still problematic.

Dependency theory also ignored the internal factors that may play critical
role either to facilitate development or distort the processes of
development. For example, values, leadership, discipline, corruption, etc.
constitute these internal obstacles that can ruin the process of
development. Dependency ignored the possibility of cultural resistance
as well as the right of a tribal society to reject or accept change and
innovations, as this diffused into the TWCs. Dependency suffers from
serious failings. Just as early modernisation scholars over emphasised the
internal causes of underdevelopment, dependency theorists erroneously
attributed virtually all of the TWCs problems to external economic
factors.

The most systematic critique of dependency is that of Cardoso, who

argues that their theories are based on five interconnected erroneous
theses concerning capitalist development in Latin America. These are:
i. that capitalist development in Latin America is impossible;
ii. that dependent capitalism is based on the extensive exploitation of
labour and tied to the necessity of underpaying labour;
iii. that local bourgeoisie no longer exist as an active social force;
iv. that penetration by multinational firms leads local states to pursue
an expansionist policy that is typically sub imperialist; and,
v. that the political path of the sub-continent is at the crossroads with
the only conceivable options being socialism or fascism.

29
POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

Palmer (1974:39) had observed that:

If one agrees with Cardoso(1976:1) that the standard that one has to use
to assess the analytical adequacy, the interpretative and predictive
capacity and the creative strength of new explanatory believes in the
social sciences is the sensitivity with which they detect new social
process and the precision with which they are able to explain mechanisms
of social reproduction and modes of social transformation, one should
agree that the dependency analyses which have attempted to construct a
formal theory of underdevelopment are of relatively low standard; they
have been unable to meet these requirements in their study of the
economic development and political domination of the peripheral
nations.

Finally, dependency emphasised the importance of economic forces

especially international forces at the expense both of politics and of the
cultural and historical peculiarities with in nations. Its preoccupation with
class as an analytical category underplayed the importance of indigenous
or hybrid social institutions. It was useful in analysing small countries
which depended heavily on the export of one or two primary
commodities, but it was less adequate at assessing larger, more complex
political economies. It neither anticipated nor explained the rising of
newly industrialising countries on the periphery of the international
economic system and the re-emergence of liberal political regimes in
places like India after the emergency and Brazil, Uruguay, Argentina and
Chile in the 1980s. In other words, continuing using dependency theory
to analyze the underdevelopment of Nigeria as a third world would
amount to reductionist or/and of pertinent internal factors that have
hindered development in contemporary Nigeria.

Thus, the dependency analysis as could be best described as a theory

which it emergence was epoch based. As such, a decade after
independence of Nigeria and most African countries from colonialism
exploitation, it would amount to conceptual confusion to solely attributes
the development crisis of Nigeria (for instance) to the exploitative nature
and character of the slavery and colonialism. In other words, dependency
theory provides historical understanding to the underdevelopment of
third world countries, but the current developmental quagmires of Nigeria
for instance cannot only be attributed to those historical forces. This is
the angle in which the relevance the dependency theory in contemporary
Nigeria development crisis is been emphasized. Particularly, Joshua
Agbo has counteracted Walter Rodney’s thesis of ‘How Europe
underdeveloped Africa’ with an anti-thesis,’ How Africa underdeveloped
Africa. Thus, this new vestal of knowledge is antithetical to the
intellectual metaphors of the dependency theory.

30
POL 431 MODULE 1

SELF-ASSESSMENT EXERCISE

i. Briefly attempt a critique of the dependency theory of

underdevelopment.
ii. Joshua Agbo’s book title How Africa underdeveloped Africa is an
anti-thesis of the dependency theory. Discuss

3.3 Empirical Example to Justify the Contemporary Relevance of

Dependency Theory

The essence of this section is to ascertain the relevance of the theoretical

explanations of the dependency theory to the causes of underdevelopment
of the Third World Countries using some empirical examples. As against
the postulations of the dependency who portrayed the Third World
Countries as a helpless pawns with no way out of their poverty and
underdevelopment, East Asia’s economic development miracle most
notably in South Korea, Taiwan, Hong Kong and Singapore has
confounded dependency theory. These countries have linked themselves
very closely to the developed world through trade, credit, investment and
technology transfers. Contrary to what even the more sophisticated
dependency scholars had predicted, however, they achieved spectacular
economic growth coupled with comparatively equitable income
distribution. Countries like Singapore and Taiwan now have standard of
living approaching or even matching those of the advanced world.

Furthermore, the recent blow to the dependency theory is India; Asia’s

second largest nation has become one of the fastest growing economies
by opening its doors to foreign trade and investment. Contemporarily,
China’s phenomenal development, often referred to as second industrial
revolution arising from their export oriented development strategy cannot
be ignored. However, Warren (1973) has observed that since 1960 and
the rapid increase in foreign investment, per capita economic growth in
third world countries has been drastically reduced. He further added that
even the growth paragon of Brazil sustained in the 1970 a foreign debt of
5.2 billion, with debt interest payments alone eating away one third of
that country’s foreign exchange earnings. Even Fernando Henrique
Cardoso, one of the foremost dependency scholars later embraced foreign
investment, trade and technology transfer for Brazil in his role as the
country’s former Minister and later its president. Today, Brazil is among
the Newly Industrialised Countries (NICs).

To this end, the theoretical weakness of dependency analyses

particularly, when confronted with the economic dynamism of South and
East Asia, has contributed to a reassessment of the role of the State in
development. Principal among such reassessments was the so-called neo-

31
POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

Weberian paradigm associated with the work of the American political

sociologist Skocpol. Drawing historical inspiration from Weber and
Hintze, the neo-Weberians sought to re-emphasise the role of agency in
the social sciences, and in particular the role of autonomous States. In
attempting to avoid reiterating realist and neorealist conceptualisations of
the State, Skocpol et al. sought to stress the role of State elites within an
insulated bureaucracy, particularly in the success story of the NIES of the
South. Thus, while the success story of the NIEs has refuted the major
assumptions of the underdevelopment and dependency theories against
the backdrop of the underdevelopment of the South, the role of the State
in economic development has been clearly demonstrated as fundamental
by virtue of the miracle story of NISs of Asia. Thus, the present crisis of
development in Nigeria is a product of leadership failure of the Nigerian
State. The past cannot be undone but the future can be amended.
Therefore, continue blaming the West for been responsible for our
economic woe is an attempt to prolong the crisis of development.

SELF-ASSESSMENT EXERCISE

With relevant empirical examples, discuss the relevance of the

dependency school to understanding contemporary development crisis of
the Third World Countries.

4.0 CONCLUSION

Today, few observers and analysts would accept either modernisation or

dependency theory in its entirety, particularly not in their original
postulations and formulations. Indeed, the diverse nature and processes
of political and socio-economic development of the TWCs are too
complex to be explained by a single or universal theory. This does not
mean that the insights offered by the dependency and modernisation are
not useful. It is important to note that our current understanding of
development draws on the strengths of both theoretical paradigms while
recognising their limitations.

5.0 SUMMARY

In this unit attempt was made to provide the relevance of the dependency
theory, based on empirical examples to understanding contemporary
development crisis of the Third World countries. The two broad
competing paradigms or models of theoretical understanding that seek to
explain why some countries are poor and the other are rich have been
examined with their critiques highlighted in other to ascertain their
relevance in contemporary development crisis of the Third World
Countries.

32
POL 431 MODULE 1

6.0 TUTOR-MARKED ASSIGNMENT

1. Attempt a critique of the modernisation theory of

underdevelopment.
2. The dependency theory has lost its relevance as a theoretical
framework to the understanding of the contemporary crisis of
development of the Third World Countries. Discuss.
3. Compare and contrast the modernization theory and dependency
theory as theoretical frameworks in the understanding third world
development crisis.

7.0 REFERENCES/FURTHER READING

Alanana, O.O. (2006). Sociology of Development. Kaduna: Joyce

Publications.

Baran, P. (1973). The Political Economy of Growth. Harmarsworth:

Pengiun.

Cockfoft, J.M. et al (1972). Dependence and Underdevelopment: Latin

America’s Political Economy. New York: Anchor Books.

Foster-Carter, A. (1985). Sociology of Development. England: Causeway

Books.

Frank, A.G. (1967). Capitalism and Underdevelopment in Latin America.

New York: Monthly Review Press.

Frank, A.G. (1975). On Capitalist Underdevelopment. Oxford University

Press.

Handelman, H. (2005). The Challenge of Third World Development. New

Jersey: Pearson Prentice Hall.

Johnson, D. (1972). “Dependence and the International System.” In:

Cockfoft, J.M.et al. (1972) Dependence and
Underdevelopment: Latin America’s Political Economy. New
York: Anchor Books.

Offiong, D.A. (1980). Imperialism and Dependency: Obstacles to

Development. Enugu: Fourth Dimension Publishers.

Offiong D.A. (2001). Globalisation, Post Neo-dependency and Poverty

in Africa. Enugu: Fourth Dimension Publishers.

33
POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

Palmer, G. (1978). “Underdevelopment and Marxism: From Marx to the

Theories of Imperialism and Dependency”. Institute of
Development Studies, London.

Preston, P.W. (2002). Development Theory. UK: Blackwell Publishers.

Rodney, W. (1972). How Europe Underdeveloped Africa. Tanzania

L’overture.

34
POL 431 MODULE 1

UNIT 5 GROWTH THEORY OF DEVELOPMENT

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Understanding the Growth Theory of Development
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

This unit is designed to teach students the assumptions and the relevance
of the Growth theory of development and underdevelopment. Students
would at the end of the unit critique the theory using it assumptions and
the political, economic and social realities of third world countries.

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

 state the basic assumptions of the Growth Theory of development

and underdevelopment
 discuss whether the Growth Theory of development and
underdevelopment is eurocentric and neo-liberal and could
explain the development of Nigeria and other third world
countries.

3.0 MAIN CONTENT

3.1 Understanding the Growth Theory of Development

This theory measures development of a society in terms of Gross

Domestic Product (GDP). Any country that wants to develop should
focus on policies and programmes that would increase it GDP. The theory
emphasis on the importance of savings and investment and the
concentration of wealth in the hands of few individuals for investment
which would later have triple down on the masses in terms of wealth
creation. It advocates for trade off or sacrifices to pay by the masses for
them to enjoy the pay off at the long run. The tradeoff are:
(i) The needs trade off
(ii) The equality trade off
(iii) The liberty trade off

35
POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

The needs trade off believes that people should forget about the basic
needs temporary, for there is need for investment to reduce expenditure.
The people should reduce expenditure on food; cloths, shelter, etc. but to
laid much emphasis on investment. This school of thought believes that
for a country to develop people must be compelled to save towards
investment. The neo-liberalists believe that Nigeria and other third world
countries are underdeveloped because of the absence of trade off culture
by government and the people. This notion suggests why the International
Monetary Fund (IMF) packaged the Structural Adjustment Programme
(SAP) to Nigeria and other third world countries in the 1980s. The
conditionality attached to the same loan exemplified all the tradeoffs.

The equality trade off believe that state seeking development should
adopt policies that would entrench inequality in their society. This
theoretical ideological premise advocates for the concentration of
national wealth in few hands while the vast masses would endure to enjoy
the payoff thereafter. To the theorists, inequality in a society enhances
development by concentrating wealth in the hands of few capitalists. The
theory holds that a state seeking development has to constrain liberty of
its citizens for the purpose of achieving development at the long run. In a
nutshell, the theory emphasises on the savings, productive activities,
concentration of resources in a few hands, unequal distribution off
national wealth and there is need for the poor to endure the pains of the
tradeoff for a while (Ochoga,2012).

4.0 CONCLUSION

A critical examination of this theory of development shows that it is one

thing for the masses to endure the trade off, and it is another thing entirely
for the wealth in the hands of the few capitalists to triple down on the
masses. The SAP circumstance in Nigeria has reputed the hypothesis of
the growth theory.

5.0 SUMMARY

The proponents of the Growth theory of development equate growth with

development. A country may record economic growth without economic
development. The neo-liberal notion of development does not in any way
a panacea to the underdevelopment quagmires of the Third World
countries. Growth has to do with increment in GDP, GNP and National
Income and other macro-economic induces. But development addresses
poverty, inequality, unemployment, etc.

36
POL 431 MODULE 1

6.0 TUTOR-MARKED ASSIGNMENT

1. Explain the basic assumptions of the Growth Theory of

development
2. The Growth Theory of development is too eurocentric and neo-
liberal to explain development of Nigeria and other third world
countries. Discuss.

7.0 REFERENCES/FURTHER READING

Ake, C. (1981). A Political Economy of Africa. Nigeria: Longman.

Ochoga, O.E., The Impact of Globalisation on Poverty Reduction in

Nigeria, 2000-2012. M.Sc Dissertation to Benue State University.
(unpublished, 2012).

37
POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

MODULE 2 THE EMERGENCE AND DEVELOPMENT

OF CAPITALISM AND IMPERIALISM

INTRODUCTION
This module is basically designed to enable students to understand the
emergence and development of capitalism and imperialism in the
international system. At the end of the module, students will be able to
know how capitalism emerged from simple production and to monopoly
production. The module will equally expose students’ to the theories of
imperialism and particularly that of V.I Lenin’s theory of imperialism.
The last part of the module focuses on capitalism, imperialism and
contemporary Third World dependency and development crisis
globalisation as an international system.

Unit 1 The Emergence of Capitalism from Simple Production

Expanded and to Monopoly Production
Unit 2 Theories of Imperialism
Unit 3 V.I Lenin’s Theory of Imperialism: The Highest Stage of
Capitalism
Unit 4 Globalisation as an International System
Unit 5 The Relationship between Development and
Underdevelopment

UNIT 1 EMERGENCE OF CAPITALISM FROM SIMPLE

PRODUCTION- EXPANDED PRODUCTION AND
TO MONOPOLY PRODUCTION

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Emergence of Capitalist Mode of Production
3.2 Commodity Production
3.3 Monopoly Capitalism
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

Every hitherto existing society has seen five successive modes of

production: Primitive/communal, Slave owning, Feudalism, Capitalist
and Communist. But in this unit, we are concerned with the capitalist

38
POL 431 MODULE 2

mode of production. Capitalism today differs fundamentally from all

previous economic system because production is carried on in large units
employing hundreds or thousands of workers. The capitalist mode of
production unquestionably generated a momentous long run expansion
from simple production through commodity to monopoly production,
with expansion of productivity and economic output at the centre but
without a corresponding expansion at the periphery or the Third World
countries.

This unit shall attempt to explore the emergence of capitalist mode of

production and its expansion from simple production, through
commodity production to monopoly production.

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

 explain how capitalist mode of production emerged and developed

from commodity production-expanded production to monopoly
production.
 identify the basic features of capitalist mode of production
 describe the main stimulus of capitalist mode of production.

3.0 MAIN CONTENT

3.1 Emergence of Capitalist Mode of Production

An understanding of capitalism must begin with an understanding of how

there came into being, on the one hand, the propertied class owning the
means of production-the capitalist class; and, on the other hand, the
property less class, free and yet compelled by necessity to sell its labour
power to the capitalist class. With the development of feudal society,
trade and commerce grew. During the eleventh and twelfth centuries
there was a great expansion of trade, mainly maritime trade from country
to country, which stimulated the growth of rich trading centres and
commerce. The development of commerce and merchant’s capital, write
Marx cited in Brown (1984:46) brings forth everywhere the tendency
towards production of exchange values, increases its volumes, multiplies
and monopolises it, develops money into world money. Capitalist
production at first developed slowly within the feudal society.

Its early forms were restricted and encumbered by the old order; once,
however, capitalism had won its political and therewith economic
freedom, it revealed with startling speed the dreamed –of forces of
production that lay hidden in social labour. Merchants and well to do
craftsmen, in their eagerness for more plentiful and cheaper supplies of

39
POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

goods to sell than they could obtain from the urban guilds turned their
attention to production from new sources.

Following the phase of slavery or slave mode of production, the new

synthesis of production (Feudalism) was reached, and the owners of land
became the new dictators. Under feudalism, production was organised in
a peasant agriculture basis; the ruling classes were those who owned land.
These comprised the feudal lords and the kings who were the heads of
government of the country, was also the most important feudal
landowners. Political power was again in the hands of the economic
dictators, this time the feudal landowners. With the development of the
factory system, the small village handicrafts became factories so that the
small factory owners became the new controllers of the means of
production thereby paving way for the development of capitalist mode of
production. The transition from the feudal mode of production takes two
roads. The producer becomes a merchant and capitalist, in
contradistinction from agricultural natural economy and the guild circle
handicrafts of medieval town industry.

The capitalist mode of production is a social mode of production of

material benefits, based on private capitalist ownership of means of
production and the exploitation of wage labour. The capitalist mode of
production according to Karl Marx refers to:
Social mode of production under which the process of production is
subordinated to capital that is which is founded on the relationship
between capital and hired labour.

The main economic law and the stimulus of the capitalist mode of
production is the creation of surplus value by the workers and its
appropriation by the capitalists. The capitalist mode of production was
not governed by the satisfaction of human needs but by the drive to
extract surplus value from a class of wage labourers, to realise this surplus
value by finding a market for the commodities in which it was embodied
and to capitalise this surplus value in new means of production. However,
it is also more progressive than other modes of production as it ensured
the higher level of development of societies’ productive forces, radically
raised the productivity of social labour completed the socialisation of
production and labour on a higher scale, sharply increased the volume of
production.

The main contradiction of the capitalist mode of production is between

the social character of production and the primitive capitalist form of
appropriation. With the development of capitalism, the degree of
exploitation of the working class increases all the contradiction of the
capitalist mode of production and the class struggle intensifies and
becomes even fiercer. With the transition of capitalism to the highest and

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POL 431 MODULE 2

last stage of its development- imperialism, the contradictions of the

capitalist mode of production deepen and become particularly acute.

The capitalist mode of production has two main features:-

i. The means of production are unevenly distributed;
ii. The second major characteristic of capitalist mode of production
is commodity production. It gives capitalist society some of the
characteristics of a market. The capitalist mode of production in
which capital has penetrated and taken over production. That
means, production is geared for sale and this becomes commodity
production.

Marx in Kapital (Volume1) distinguished capitalist mode of production

by stating that:
i. It produces its products as commodity. The fact that it produces
commodities does not differentiate it from other modes of
production, but rather the fact that being a commodity is the
dominant and determining characteristics of its production in the
relation between the entire characters of the mode of production.
ii. The production of surplus value as the direct aim and determining
motive of production.

In Africa, capitalism found it root through imperialism that was shrouded

in the garment of colonialism. The colonial authorities used the
instrumentalities of colonial rule to create conducive political and
economic environment for capitalist mode of production to strive intheir
colonies. Prominent merchandise from the metropol used the leverage of
colonialism to achieve their imperialistic tendency in the colonies,
Nigeria inclusive.

SELF-ASSESSMENT EXERCISE

i. Describe the emergence of capitalist mode of production.

ii. Capitalism in Nigeria is shrouded in colonialism. Discuss.

3.2 Commodity Production

In capitalist mode of production, the production of commodities is

predominant because production is essentially for sale and ultimately for
profit. The production of commodity as a system of social relations in
which individual producers create diverse products and in which all these
products are equated to one another in the process of exchange. At a
certain stage in the development of commodity production, money
becomes transformed into capital. The formula for commodity circulation
is C-M-C where
C- Commodity

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

M- Money
C- Commodity

What this implies is that, the sale of commodity is for the purpose of
buying another. The production of output under the commodity
production is for exchange through sale and purchase. It exists owning to
the social dimension of labour. In commodity economy, goods are
produced by independent and isolated manufacturers. Commodity
production appears in the period of disintegration of the primitive
communal system and establishment of slave owning system.

There are basically two types of commodity production.

i. Simple Commodity Production. This is based on private ownership
of the means of production by petty commodity producers based
on their personal labour; while,
ii. Capitalist or extended commodity production. This is based on
private ownership by capitalist and characterised by exploitation
of wage labour.

Under simple commodity production, it is only the product of human

labour that serves as the goods, while under capitalism; man’s labour
power also becomes a commodity. The capitalist or extended commodity
production is universal and dominant because it involves large production
controlled and concentrated in the hands of the capitalist.

Simple commodity production as an economic system exists in pre

socialist formation and also in the period of transition from capitalist to
socialism. Craftsmen and peasants were the typical representative of
simple commodity production. Under the extended commodity
production, expansion of production, the surplus value which the
capitalist gets by investing his capital is itself a potential source of
additional surplus value, that is- if he uses it as capital. Once it is seen
that way, accumulation of capital generally pre-supposes the expansion
of production, and it becomes clear how the drive for maximum surplus
value leads to the expansion of production. The drive for maximum
surplus value also leads to the expansion of production because it is done
in a context in which capitalists are competing among themselves for
market. To compete effectively, capitalist try to expand production.

As production expands, the organic composition of capital increases, that

is, that share of capital which goes into material output such as machinery
increases. As the organic composition of capital increases, the rate of
accumulation of surplus value tends to be reduced. Long before the
appearance of capitalism on the scene of history, production for exchange
and trade, for the market, developed and existed alongside the production
for use in ancient slave society and feudal society. This development for

42
POL 431 MODULE 2

exchange and the market was a necessary precondition for the

development of capitalism; capitalism could not have developed if
commodity exchange had not developed first. Moreover, the growth of
trade aided the rise of capitalism by breaking down the old social
relationships and creating new class division both in the villages and in
the handicraft guilds in the towns.

3.3 Monopoly Capitalism

Monopoly capitalism is used to indicate the passage of capitalism from

its earlier stage of more or less free competition to one in which giant
firms, trusts and cartels dominate the market. The expansion of
production tends to go hand in hand with a rising organic composition of
capital. Increase in the organic composition of capital in turn goes hand
in hand with the concentration of capital, that is, with monopoly in
production. As a branch of production becomes more mechanised, it
becomes difficult for new entrepreneur to enter that branch of production
because of the cost of investing in machines to remain competitive with
those who are already in the line of production. It is because of such
factors that a rising organic composition of capital leads to monopolistic
capitalism -a form of capitalism in which the economy is dominated by a
few large enterprises who controls the market and make it extremely
difficult for new entrepreneurs to break into their line of production.

The principal distinctive feature of this stage of capitalism is the

dominance of monopoly capital in the economy, politics and ideology.
Monopolisation of capital may be as a result of the rising organic
composition of capital and also by competition among capitalists. When
competition reduces the number of enterprises to a few large ones, these
few large ones will tend to cooperate to reduce competition among
themselves by fixing prices and driving the market. Such arrangement
will offer a better prospect of maximising surplus value than the
continuation of unrestricted competition.

Finally, free enterprise capitalism developed into imperialism at the turn

of the century. However, the main stimulus of capitalist production is still
the pursuit of profit with the monopoly deriving monopoly surplus profit.
But replacement of free enterprises by monopoly domination does not
eliminate competitive struggle but simply makes it more involved and
destructive.

4.0 CONCLUSION

This unit concludes that the capitalist mode of production has been
dominant in the western world since the breakup of feudalism.
Fundamental to the capitalist mode of production is the relations between

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

private owners of the means of production (the Capitalists) and the

proletariats, whose labour is commoditised or offered for sale. Under the
capitalist mode of production, decisions concerning production are made
by private business owners (capitalists) operating for private profits.

Capitalism emerged with expansion in simple production to expanded

commodity production and finally monopoly production. This means that
the capitalist mode of production evolved from the state of mercantilism
where merchants built sufficient capital and engaged in competitive
production. Historically therefore, the emergence of capitalism began
with mercantilism- imperialism- free trade imperialism and the monopoly
stage which is the third stage which Lenin’s imperialism is
conventionally identified with, that is, the monopoly level of imperialism.

5.0 SUMMARY

In this unit, effort has been made to describe the capitalist mode of
production and trace its emergence from simple production to expanded
commodity production and finally monopoly production. You have also
learnt the characteristics of the capitalist mode of production and
identified surplus profit as the main stimulus of capitalist mode of
production.

6.0 TUTOR-MARKED ASSIGNMENT

1. Describe the emergence and development of capitalist mode of

production.
2. Identify and discuss the characteristics of monopoly capitalism.
3. Explain the relationships among simple commodity, extended
commodity and monopoly capitalist production.

7.0 REFERENCES/FURTHER READING

Ake, C. (1981). A Political Economy of Africa. Nigeria: Longman.

Brown, B.M. (1984). Models in Political Economy. England: Middlesex

Partisan Press.

Volkor, M. I. (1985). A Dictionary of Political Economy. Moscow:

Progress Publishers.

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POL 431 MODULE 2

UNIT 2 THEORIES OF IMPERIALISM

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Meaning of Imperialism
3.2 Theories and Phases of Imperialism
4.0 Summary
5.0 Conclusion
6.0 Tutor-Marked Assignment
7.0 References/ Further Reading

1.0 INTRODUCTION

The experience of western imperialism, particularly colonisation to date,

remains the most decisive event in the history of the Third World
countries. The Transplanting of Capitalism from Western Europe to Third
World countries was accomplished through colonising imperialism. In
the previous unit, attempt was made to review theoretical explanations to
the causes of TWC backwardness and dependency. It was stated that
TWCs’ underdevelopment and dependency is a function of imperialism.
This theory of imperialism takes as a point of departure two of the most
glaring facts about this world: the tremendous inequality, within and
between nations, in almost all aspects of human living conditions,
including the power to decide over those living conditions and the
resistance of this inequality to change.

This unit will therefore examine the meaning and theories of imperialism
as it relates to the dependency of the TWCs.

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

 explain the meaning of imperialism

 discuss the different theories that explain imperialism.

3.0 MAIN CONTENT

3.1 What is Imperialism

Imperialism is the highest of capitalism. In other words, capitalism

transcended into imperialism. Babatola et al (2012) describes imperialism
as a political and economic ideology of Western Europe in the 19th and

45
POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

20th centuries employed to justify the economic and political activities of

the western nations across their borders. Thus, the concept of imperialism
is closely related to the concepts of capitalism and colonialism. In fact it
can be said to be an off shoot of these concepts. The industrial revolution
which heralded the capitalist economic system gave rise to increased
production of goods, the replacement of humans with machines in the
production process and the need for more raw materials, which
incidentally engendered imperialism (Hussain, 2004; Salami 2009).

The implication of this was that the non-industrialised countries

constantly exported raw materials at cheaper rates to the industrialised
countries, while they purchased from the latter manufactured goods at
exorbitant prices. However after the Second World War, Multi-National
Corporations (MNCs), generally acclaimed to be the main vehicle of
imperialism, particularly after the Cold War emerged, undertaking the
production of goods and services in the industrialised countries. These
MNCs, though they engender growth due to their large size in terms of
capital, labor and infrastructure, display monopolistic tendencies,
dominating whatever sector they find themselves in. The implication of
this is that indigenous firms might be pushed out of the sector, and even
infant industries intimidated. They are also being accused of damaging
the environment, corruption, human rights abuses, over-invoicing and
capital flight (Ozoigbo and Chukuezi, 2011; Osuagwu and Ezie, 2013).
In other words, they are replicating what the industrialized countries did
during the colonial era which is exploitation of less industrialized
countries and transferring profit to their home countries, thereby
developing their home countries at the expense of the host countries.
According to Sutcliffe (1999:139), imperialism is “essentially the idea
that the world contains an undesirable hierarchy of nations in which some
oppress or exploit others, or strive to do so”. The first wave of
imperialism as described by him occurred between 1890 and 1917, when
force was applied in the expansionist activities of Europe as well as the
struggle for domination between its major powers.

The second wave views imperialism as collective domination of Third

world countries by a few industrialised countries, as well as the gap
between developed and underdeveloped countries. Tucker (1999:1)
describes imperialism as “a process whereby the lives of some peoples,
their plans, their hopes, their imaginations, are shaped by others who
frequently share neither their lifestyles, nor their hopes, nor their values”.
V.I Lenin illuminated the concept and philosophy of imperialism,
situating it within the context of economic process. According to him:
…The relation of interdependence between two or more economies and
between these and world trade assumes the form of dependence when
some countries (the dominant) can expand and give impulse to their own
development, while other countries (the dependent) can only develop as

46
POL 431 MODULE 2

a reflection of this expansion. This can have positive and or negative

effects on their immediate development. In all cases, the basic situation
of dependence leads to a global situation in dependent countries that
situates them in backwardness and under the exploitation of the dominant
countries. The dominant countries have a technological, commercial,
capital resources and social-political predominance over dependent
countries (with predominance of some of these aspects in various
historical moments). This permits them to impose conditions of
exploitation and extract part of the domestically produced surplus...
(Lenin, 1965).

According to Lenin, imperialism hinges the economy of a less developed

country to a more developed country, such that the growth of the former
is dependent on the latter. This indicates that acts such as colonialism are
imperialist in nature. Kegley (2007:12) views imperialism as
“international imposition of one’s state power over another, traditionally
through territorial conquest, but more recently through economic
domination”. Gartzke and Rohner (2011) argue that the end of World War
2 marked the end of the custom of territorial expansion- however;
institutions and economies of the new nations are created to manage the
legacies of colonial rule, which makes them highly dependent.
Economides and Wilson (2001:49) examined the concepts of ‘formal and
informal’ imperialism. According to them, the former refers to the
“acquisition of and direct control over specific territories, while the latter
denotes less explicit, even covert, control, influence or domination”.
Informal imperialism does not tamper with the country’s formal
sovereignty or constitutional independence, but covers a particular sphere
of influence - Forinstance, an economically powerful state influencing
greatly, the economic policies of a weaker state.

Gillis et al (1983) view imperialism as barriers placed by advanced

countries on the path of progress of poor countries. They argue that the
drain of surplus from the developing countries is not the only problem,
but also the misuse of the surplus in these countries. In other words,
developing countries should be left to supply raw materials as “industrial
growth within the developing country would be harmful to both goals,
since local industry products will compete with imports and would also
bid for local raw materials” (Gillis et al, 1983:32). They also recognise
the presence of “commercial capitalists in the developing countries that
align with foreign investors because “they make their living from existing
pattern of trade and do not want competition from newer patterns” (Gillis
et al, 1983:32). The impetus for imperialism according to Karl Marx
(1970) is capital accumulation via the creation of surplus value, driven
by the need to profiteer. The surplus value demands a market and source
of raw materials, hence the imperialist activities.

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

The nature of imperialism is as profound as its history is chequered. But

imperialism cannot be comprehended as a general phenomenon, but only
in relation to the stages of development of societies. This is the basic
reason why the past, present and future of Third World Countries and the
industrialised countries cannot be fully understood without the proper
understanding of the role of imperialism in their history. This relation
encompasses the processes of the expansion of capital, inequality,
domination and exploitation which are fundamental variables of
imperialism. Based on the foregoing conceptualization, the notion of
imperialism is shrouded in controversy as diverse interpretations have
been given to it. According to Ake (1981:20):
Imperialism refers to the economic control and exploitation of foreign
lands arising from the necessity for counteracting the impediments to the
accumulation of capital engendered by the internal contradictions of the
domestic capitalist economy.

It can also be seen as the outward drive of certain peoples, to build empire
both formal colonies and privileged positions in markets, protected
sources of raw materials and extended opportunities for profitable
employment of labour. It has also been associated with an unequal
economic relationship between states, not simply the inequality of large
and small, rich and poor trading partners but inequality of political and
economic dependence of the latter on the former. Imperialism, according
to Offiong (1980:65) refers to:

The economic subordination or domination of one country or a group of

countries by another for the main purpose of formal or informal control
of domestic economic resources for the benefit of the subordinating
power and at the expense of the local people and their economy.

To James O’Connor (1970:101) Imperialism refers to the expansion of

political power by one state over another. He further added that this has
been a principal feature in all human relation. Hobson (1902) conceived
colonialism as the reflection of the unfulfilled promise of liberal
democracy. He further added that inequalities in wealth and income
distribution in Britain had weakened the consumption power of the
British working class, and this in turn rendered it impossible for
producers to utilise fully their industrial capacity. Lacking in domestic
investment outlets, British capitalists turned their attention to the
economically under exploited region of the world. Britain then
established colonies as archives for their surplus capital. Imperialism is
also conceived of as a dominance relation between nations. It is a
sophisticated type of dominance relation which cuts across nations.
According to Galtung (1973), imperialism is a relation between a centre
and a periphery nation so that:

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POL 431 MODULE 2

i. there is harmony of interest between the centre in the centre nation

and the centre in the periphery nation;
ii. there is more disharmony of interest within the periphery nation
than within the centre nations; and
iii. there is disharmony of interest between the periphery in the centre
nation and the periphery in the periphery nation.

SELF-ASSESSMENT EXERCISE

What is the notion of imperialism?

3.2 Theories and Phases of Imperialism

There is a general agreement in associating imperialism with economic,

political, cultural and territorial expansion. However, there is much
controversy arising from the meaning of Imperialism but despite the
controversy, James O’Connor (1971) has discerned and identified three
general doctrines that will help us understand the theories of imperialism.
The first theory is predicated on the assumption that there is no
relationship between capitalism and imperialism. This school is
represented by Joseph Schumpeter, who contended that imperialism is a
heritage of the autocratic state and would never have emerged by the
inner logic of capitalism. The inner logic of capitalism is nothing more or
less than free trade and where there is free trade, no class interest in
forcible expansion and as such, goods of every nation can move in foreign
countries as freely as though those countries were politically their own.
Hence, he concluded that nations struggle for power for the sake of power
alone and not informed by other economic considerations.

Schumpeter sees imperialism mainly as atavism characterised by an

aggressive expansionism which has no objective beyond itself, and its
non rational. Far from being the cause of imperialism, capitalism is
antithetical to imperialism. He was criticised on the ground that his
postulation cannot be useful analytically as he was not able to
disassociate imperialism from capitalism.

i. The second doctrine states that monopoly capitalism, colonialism

and Imperialism are fundamentally the same phenomena. This
position is often seen as neo-Marxist represented by J.A. Hobson.

Hobson (1902) put forward some psychological motives for the

explanation of imperialism. National pride, quest for glory and bellicosity
but said there are not major cause. He argues that the major dominant
motive for imperialism was the quest for market as well as opportunities
for higher returns on investments. The need for this quest arises, he
added, partly because, as a result of the development of capitalism in the

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

West, Industry was more productive and needed greater imports of raw
materials, more food for the urban population growing in response to
industrialisation; and products to meet the rising demands for luxury
goods created by a rising standards of living. There was a need therefore
for those who own capital to persuade the state to aid them in securing
new markets by the establishment of protectorates, colonies and spheres
of influence. This was the option that led to imperialism.

Hobson, who was the first to attempt a theory of imperialism, argues that
inequalities in wealth and income distribution in Britain had weakened
the consumption power of the British working class people, and this in
turn rendered it impossible for producers to utilise fully their industrial
capability. Lacking in domestic investment outlets, British capitalists
turned their attention to the economically under exploited regions of the
World. He concluded that imperialism is really the vehicle of the growing
cosmopolitanism of capital. He rejects imperialism as the inevitable and
integral aspect of industrial progress.

ii. The third doctrine sees imperialism essentially as a necessary

outcome of capitalism. This postulation is contained in Marx
theory of capitalism which contains an implicit theory of
imperialism. To him, the capitalist cannot survive and remain
competitive without progressive accumulation or the continuous
reproduction of this capital on a continually expanding scale. This
therefore suggests a relationship between capitalism and
imperialism. Marx shows that capitalism is inherently
expansionary and that the contradiction of capitalist accumulation
will tend to transport capitalism to economically backward
countries of the Third World.

Lenin further developed and popularised it that the primary reason for
capital expansion was the immense increase in the supply of Capital in
the metropolitan countries, especially Britain. It is imperative to note
therefore that, anyone looking for the origin of the theory of
underdevelopment must begin his search in the writings of Marx and
Lenin. Marx took a keen interest in the effects of British capitalism in
India, China and Ireland; and Lenin not only wrote a detailed study of the
development of capitalism in Russia down to 1899, but also formulated a
general theory of imperialism.

Four phases of imperialism have been identified with respect to their

productive forces, property relations and dominant ideologies. These
phases are rooted in the different stages in the development of world
capitalism.

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POL 431 MODULE 2

i. Mercantilist Imperialism. This was anchored to the feudal mode

of production and based on feudal merchant capital in Western
Europe, until about the middle of the 18th century. Essentially, it
involved the enslavement, colonisation and plunder of
underdeveloped states and expropriation of European peasants. It
also rested on unequal trade between Western Europe and
underdeveloped states.
ii. Free Trade Imperialism. Free trade imperialism emerged after
the Industrial Revolution in Britain in the epoch of industrial
capitalism. The dominant motive was to raise the profitability of
mass production through cheaper sources of raw materials and
food, as well as lucrative markets for manufactured goods. This
required free trade for greater exploitation. Adam Smith and David
Ricardo provided the ideological and intellectual rationalisation
for it. This era lasted until about the 1870s.
iii. Monopoly or Corporate capitalism. Monopoly or corporate
capitalism was based on finance capital. The merger of bank and
finance capital coincided with the centralisation and concentration
of enormous capital in a few hands, requiring capital export,
monopoly combines, multi-national corporations and the division
of the uncolonised world.
iv. Multilateral imperialism. This also refers to contemporary phase
of imperialism. It is marked by U.S.A. hegemony in the effort to
deal with the worsening of capitalist contradiction after the World
War II. This new imperialist strategy has involved the dissolution
of bilateral colonial markets under an open door policy requiring
the re-division of the world since the U.S. was excluded in the
earlier partition.

4.0 CONCLUSION

In conclusion, from the variegated and theoretical explanations given

above, imperialism can be seen according to the Dictionary of politics as
the practice by a country of acquiring and administering colonies and
dependencies after it has achieved national unity and embarked upon
commercial or industrial expansion. Generally, imperialism can be used
to denote the economic domination of one country by another.

5.0 SUMMARY

In this unit, attempt was made to provide various definitions as presented

by scholars and the theories of imperialism were also highlighted.
Though there are different meanings of imperialism, it can be said that it
generally refers to the expansion of capital for appropriation of surplus
from the periphery. It is an all-embracing relations between stronger
countries and weaker and underdeveloped ones.

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

6.0 TUTOR-MARKED ASSIGNMENT

1. Describe the concept of Imperialism.

2. Identify and describe different theories of Imperialism.
3. Mention and discuss the various phases of imperialist capitalist
system.

7.0 REFERENCES/FURTHER READING

Ake, C. (1981). A Political Economy of Africa. Ibadan: Longman

Publishers.

Cohen, B.J. (1973). The Questions of Imperialism. New York: Basic

Books.

Egeonu, P. (1997). “Transitional Corporations as Agents of

Imperialism.” In: Ndoh, E.A. & Emezi, C.E. (1997) (Eds).
Nigerian Politics. Owerri: CRC Publications.

Galtung,J. (1973). The European Community: A Super Power in the

Making. London: George Allen and Unwin.

Hobson, J.A. (1902). Imperialism: A Study. London: Allen and Unwin.

Lenin, V.I. (1971). “Imperialism: The Highest Stage of Capitalism.” In:

Lenin Selected Works. New York: International Publishers.

O’Connor, J. (1971). “The Meaning of Imperialism”In: Fann, K.T. &

Donald,C.H. (Eds). Readings in U.S. Imperialism. Boston: F
Porter Sargent Publishers.

Offiong, D.A. (1980). Imperialism and Dependency: Obstacle to

AfricanDevelopment. Enugu: Fourth Dimension Publishers.

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POL 431 MODULE 2

UNIT 3 LENIN’S THEORY OF IMPERIALISM: THE

HIGHEST STAGE OF CAPITALISM

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Lenin’s Theory of Imperialism
3.2 The Characteristics of Lenin’s Theory of Imperialism
3.3 Relevance of Lenin’s Theory of Imperialism to Third
World Development
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

Central to Lenin’s theory of imperialism is the analysis of the process of

material production and thus, the analysis of the state capitalism is the
Marxist materialist critique of political economy. The analysis of the state
contradiction of accumulation of capital, more specific to the analysis of
the state in peripheral capitalism is the Marxist theory of imperialism
provided by V.I. Lenin’s analysis of the monopoly stage of capitalism.
The Marxist theory of imperialism derives not directly from Lenin
application of Marx methods to a study of the economic and political
development which brought about the First World War in his famous
work, Imperialism: The Highest Stage of Capitalism. While other Marxist
of his generation made important contribution to the theory, it is
undoubtedly to Lenin’s work that the supporters and critics must alike
turn if they wish to understand the nature of the Marxist theory.

V.I. Lenin provided a comprehensive scientific analysis of imperialism

in his work: Imperialism: The Highest Stage of Capitalism published in
1917. Lenin’s theory of Imperialism was the greatest contribution of
Marxism to the development and expansion of capitalism on a global
scale. In this unit effort shall be made to describe the contribution of
Lenin’s theory of imperialism to the crisis of development of the third
world countries. In doing that, it shall identify and describe the basic
characteristics of Lenin’s theory of Imperialism and its relevance to
understanding the development crisis of the third world countries.

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

• describe Lenin’s theory of Imperialism

• identify the basic characteristics of Lenin’s theory of imperialism
• explain the relevance and contribution of Lenin’s theory to Third
World development crisis.

3.0 MAIN CONTENT

3.1 Lenin’s Theory of Imperialism

In his 1916 pamphlet, Lenin offers both an analysis of the world’s

predicament at the time and a call for further action. He outlines the
development of monopoly stage of capitalism and the domination of the
world’s leading countries by finance capital. In order to escape declining
rates of profit at home, capitalists invest abroad with the support of their
governments. As more and more land is seized by imperial powers,
economic and military competition between the capitalist nation states
escalates.

Lenin argues that imperialism grows out of the logic of the capitalist
system but goes beyond Marx to specifically state that imperialism
symbolises a particular stage in the development of capitalism. It reflects
a transitional stage of capitalism to a higher economic order, a transitional
stage extended by the displacement of capitalist monopoly. According to
him, the economic foundation of imperialism is monopoly.

This monopoly which has grown out of capitalism exists in the general
environment of capitalism, commodity production and competition. The
monopoly stage of capitalism is also a stage in which the accumulation
of capital has reached in gigantic proportions where super abundance of
capital is created. Capital exists side by side with the poverty of the
masses in third world countries. The primary reason for capital expansion
was the immense increase in the supply of capital in the metropolitan
countries especially Britain. The tendency of the rate of profit to fall has
resulted in the surplus of capital and capital exploitation and monopolistic
industry. Imperialism, to Lenin, is not a new mode of production but a
stage in the development of capitalism.

Lenin combined the dominant tendencies in capitalism observable in a

number of countries into a composite picture of monopoly capitalism.
Lenin stressed that monopoly capitalism was a necessary outgrowth of
from the old style competitive capitalism, that it took over in a very
uneven way and produced new antagonism and contradictions. He

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POL 431 MODULE 2

associated these new forms capitalism, arising within the nation state,
with the division of the world into empires and spheres of economic
influence and hence with the international rivalries and tensions which
had produced the World War I. He thus drew together the principal
economic and political trends of the period in order to define the nature
of the epoch of imperialism.

In Lenin’s treaties on imperialism, the highest stage of capitalism, he

identified five characteristics in this stage in the development of
capitalism. It must be stated that in doing this, Lenin derived inspiration
from Karl Marx’s work such as Das Kapita Volume 1. He based his
argument on three aspects which are:-
i. The problem of realisation: This problem has to do with how the
capitalist would maximise his profit within a fixed national
boundary. When the capitalist produces goods within a fixed
national boundary, he is bound to face a problem of consumption
because there would be surplus goods within the national
boundary. The solution is to seek market outside its boundary.
ii. The tendency of the rate of profit to fall. This implies that in the
process of production, there is tendency that the organic
composition of capital which is made up of technical/variable
capital to be affected. The tendency is that the technical
composition of capital increases in inverse proportion to variable
capital. In other words, in order to increase his profits, the
capitalist looks for more efficient ways of production which is
technology but the more technology in production, the less labour
is expected in production- meaning workers would be laid off.
This will directly affect the consumption of the goods produced.
The capital faces this dilemma up till today and in order to avert
the tendency of the rate of profit to fall, the capitalist looks for
external markets.
iii. The process of concentration and centralisation. The process had
taken place in the process of industrial production in the 19th
century where monopolists squeeze out competition and those
who are eliminated seek for alternative market.

These three aspects explain the development in capitalist production as

fundamentally responsible for capital outward expansion from national
boundaries to other parts of the world. It is these that informed Lenin’s
theory of imperialism.

3.2 Characteristics of Lenin’s Theory of Imperialism

In his studies of the imperialist stage of capitalism, Lenin singled out its
five basic economic features. These are:

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ii. Concentration of production and capital. Here, there is high

concentration and centralisation of production and capital to a high
stage to the extent that it has produced monopolies which play the
decisive role in the economy of the world.
iii. The fusion/merging of banking capital and industrial capital. And
the creation, on the basis of this financial capital to form financial
oligarchy. While there is room for different interruptions of the
relationship between industry and the banks, and for discussions
about where control really lies-this can only be settled by
empirical enquiry-dominant role of a recognisable financial
oligarchy can hardly be questioned.
iv. The export of capital. This is distinguished from the export of
commodities acquires exceptional importance and dominance.
Here again, the role of export of capital from the U.S.A in
particular has been fundamental importance in the development of
capitalism in recent decades.
v. The formation of international capitalist monopolies. Which
shared the world economy among the strong economic power of
the world bringing about cartels, syndicates, etc.
vi. Territorial division of the world. This was completed by the
creased capitalist power on a global scale. The climax of this was
the Berlin Conference of 1884-85, where the territorial division of
the world among the major capitalist powers was completed.

All these features have remained valid today as they were 100 years ago.
The major feature of the last quarter of the 19th century was the growth
and consolidation of transnational corporations whose roots lie in Europe
and America. It was the intense competition for access to and controls
over sources of raw materials, sources of markets for finished goods and
cheap labour that led to the formal colonisation of most countries in
Africa, Asia, Latin America and the Middle East often referred to as the
third world countries.

In the light of the above, if it were possible to give the briefest possible
definition of imperialism, we should have to say that imperialism is the
monopoly stage of capitalism. Such a definition, according to Lake and
Frieden (1995:112) would include what is most important on the one
hand, finance capital in the bank capital of the few big monopolist banks,
merged with the capital of the monopolist combines of manufacturers;
and, on the other hand, the division of the world is the transition from a
colonial policy which has extended without hindrance to territories
unoccupied by any capitalist power, to a colonial policy of the
monopolistic possession of the territories of the world which have been
completely divided up.

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SELF-ASSESSMENT EXERCISE

Briefly identify and describe the basic features of Lenin’s theory of

Imperialism

3.3 Relevance of Lenin’s Theory of Imperialism to Third World

Development

Lenin’s theory of imperialism has made us to understand that imperialism

has not accepted the loss of its political domination in the third world
countries but is trying to continue to exploit these countries through neo-
colonialism and dependency, controlling their economics and politics.
Lenin’s theory of imperialism helps to provide basic understanding of the
basic features of modern capitalism and its profound contradictions and
exposes the methods used by the imperialists to retain their domination.

In addition to the above, what is important to us is that Lenin’s theory of

imperialism emphasises the inevitability of capitalist development taking
place worldwide. He (Lenin) has advanced that it is the export of capital
that will lead to the development of capitalism worldwide. Therefore, the
outward expansion of capital from metropolitan centres to backward
social formations should lead to capitalist development in these capital
recipient countries. But this inevitability of capitalist development is
called into question by the fact that peripheral socioeconomic formations
remain backward and underdeveloped. Thus, imperialism heightens all
the contradictions of capitalism to the extreme. Finally, the major
classical theorists on imperialism including Lenin agree that the impetus
for imperialism comes from economic interests. That imperialism is
related to the process of capitalist accumulation but they differ on the
precise nature of relationship between capitalist accumulation and
imperialism.

Lenin is concerned more with effects rather than with causes and with the
lessons which the socialist movement had to draw from the passage of
capitalism into the monopoly state. According to him, imperialism
emerged as the development and direct continuation of the fundamental
characteristics of capitalism in general.

Within the Marxist tradition, it is Lenin’s work that we find the first
systematic attempt to provide a concrete analysis of the development of
capitalism in a backward nation. In his analysis, he formulated with
simplicity what would be the core of the dependency analysis. This is the
form of articulation between the two parts of a single mode of production
and the subordination of one mode of production to the other.

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We are poised to ask is there under capitalism any means of remedying

the disparity from the development of productive forces and the
accumulation of capital on the one side, and the division of colonies and
spheres of influence by finance capital on the other side- other than
resorting to war. This is the essence of Lenin’s pamphlet on imperialism
which attempt to provide answer to this question.

Finally, it can be noted that as long as imperialism exists, the human race
cannot be certain of its future. This is because, imperialism has not
changed its essence and what Lenin called parasitic and decaying
capitalism has taken a lot longer time to die than he expected, not because
of its inherent strength but as a result or consequence of the crisis of
leadership in the socialist movement.

4.0 CONCLUSION

From the foregoing, we can conclude this unit by stating that imperialism
according to V.I. Lenin is not a new mode of production but a stage in
the development of capitalism, as such it is imperative to note that
imperialism has not lost its important feature of capitalist nature.
Underlying imperialism are the general foundations of the capitalist mode
of production before.

In the meanwhile, the antagonisms, contradictions and unevenness of

development which Lenin stressed as inseparable from the epoch of
imperialism have manifested themselves to the full up till today. The
significance of Lenin’s contribution lies in his ability to bring together all
the contradictory features of advanced capitalism under a single head. He
found the term imperialism at hand to fuel his purpose and it is difficult
to see how he could have invented a better one. Finally, it can be noted
that as long as imperialism exists, the human race cannot be certain of its
future.

5.0 SUMMARY

In this unit, effort has been made to explain Lenin’s theory of imperialism
as the last stage in the development and expansion of capitalism. The unit
also highlights the basic characteristics of Lenin’s theory of imperialism
and its relevance to the third world countries’ development crisis.

6.0 TUTOR-MARKED ASSIGNMENT

1. What do you understand by Lenin’s theory of imperialism?

2. Identify and describe the five basic characteristics of Lenin’s
theory of imperialism.

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3. Explain the relevance of Lenin’s theory of imperialism to Third

World countries’ development crisis.

7.0 REFERENCES/FURTHER READING

Ake, C. (1981). A Political Economy of Africa. Ibadan: Longman.

Hobson, J.A. (1902). Imperialism: A Study. London: Allen and Unwin

Publishers.

Igwe, S.C. (2010). How Africa Underdeveloped Africa: Port Harcourt:

Professional Printers and Publishers.

Lenin, V.I. (1971). “Imperialism: The Highest Stage of Capitalism.” In,

Lenin Selected Works. New York: International Publishers.

Marx, K. & Engels, F.(1975). Manifesto of the Communist Party.

Moscow: Progress.

Marx, K. (1962). Capital Volume III-A Critique of Political Economy.

Moscow: Progress.

Offiong, D.A. (1980). Imperialism and Dependency: Obstacle to African

Development. Enugu: Fourth Dimension Publishers.

Spero, J.E. (1977). The Politics of International Economic Relations.

New York: St. Marlin Press.

Weisskopf, T.E. (n.d). “Imperialism and Economic Development of the

Third World.’’ In, Wilber, C.K. (1978). The Political Economy of
Development and Underdevelopment. New York: Random
House.

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

UNIT 4 GLOBALISATION AS AN INTERNATIONAL SYSTEM

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 The Notion of Globalisation
3.2 Globalisation as Global Capitalism: The Contradictions for
Third World Countries
3.3 Tools of Globalisation
3.4 Consequences of Globalisation on Third World Countries
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

In the last unit, the operation of globalisation as a phenomenon is rooted

in the imperialism and deregulation and others. Thus, the key concepts in
this work are clarified in this section. This is necessary to avoid
ambiguities and misconceptions that usually trail the use of certain
concepts. This unit shall attempt to explore and discuss globalisation as
it affects third world countries.

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

 explain the notion of globalisation (how it is the off-shore of

capitalism and imperialism)
 discuss globalisation as global capitalism and its contradictions for
Third World Countries
 state the tools of Globalisation
 discuss the consequences of globalisation on Third World
Countries.

3.0 MAIN CONTENT

3.1 The Notion of Globalisation

If imperialism is the highest stage of capitalism, then imperialism has

transcended into globalisation. The notion of globalisation now takes
prominence in the international economic system. Globalisation is a
word, a concept or a phenomenon, which either rallies public support or

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evokes opposition or protests-sometimes-violent protests. It creeps up in

virtually every discourse-be it political, economic, social and cultural no
wonder, Globalisation according to Akinboyo (2003:8) is the process of
shifting autonomies economies into the global market or the systematic
integration of autonomies economies into global system of production
and distribution. This invariably involves an efficient and dynamic
financial sector that it necessary for the facilitation of intermediation and
exchange of goods and services. Sala-I-Martin, (2002a, 2002b) made it
clear that globalisation has emerged over the last two decades and it either
increase or reduce within country poverty. To him, globalisation is a
multi-faceted process characterised by a wave of privatisation, reform
and financial market both domestically and internationally, taxation
system and liberalisation of labour market.

According to Jacob (2007:8), globalisation is the “creation of a united

global market and global division of labour in international arena”. On
his part, Khor (2000:11) argues that globalisation is the “breaking down
of national economic barriers, the growing power of transportation and
the international spread of trade”. While Kwanshie (1999:2) argues
globalisation is an increased integration of national economies with the
rest of the world to create a more coherent global economy. Thus, the
propelling forces of globalisation such as liberalisation, financial
markets, technologies as well as movement of labour have accelerated the
expansion of economic activities globally and share increase in the
movement of tangible and intangible goods across national and regional
boundaries. Ochoga (2012:34) sum up that, globalisation is the
systematic integration of national economies into the world capitalist
system through the removal of all forms of encumbrances for easy flow
of goods and services across national borders, where the developed
countries of the North use all manners of economic strategies to exploit
and subjugate countries in the south for perpetual domination.

3.2 Globalisation as Global Capitalism: The Contradictions for

Third World Countries

From this pint we wish to consider globalisation from a structuralist

perspective that is to contemporary system of global capitalism. This
global economy is structured: there is the ‘core’ North and there is the
peripheral South. What accounts for this the distribution of power in
system between the North and the South. The North enjoys structural in
the system. This structural power is defined by Bello (2004:1) as ‘a
system of global economic governance’ whose functions is the
‘maintenance of the hegemony of the system global capitalism and
promotion of the state and economic interests that mainly benefits from
it.’ Soederberg (2004:7-8), also defines structural power as ‘the power to
shape and determine the structures of the global political economy within

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

which other states, then political institutions, and their economic

enterprises have to operate.’

This power is essentially economic, but is also needs the political power
of coercive; in the ‘core alliance’ coercion is achieved mainly through the
G-7 and other summits over alliance members (Soederberg, 2004). This
is by making them adhere to agreements undertaken by them or imposed
by the USA, as it were. This makes it easier for the North to propagate
neo-liberal policies of trade and trade in service deregulation like the case
of the Nigeria’s telecommunication sector. This ideological stance is now
sold to the world, but particularly the South, as ‘common sense’ or
universal standard’.

This second task of coercion is directly at the South. The South is required
to adopt neo-liberal policies as such liberalization, etc. Thus, by different
kinds of designs of institutional arrangement, the North tries to achieve
‘a class-based’ strategy targeted at recreating existing power relations in
the global political economy mostly notably transnational financial
capitals and the United States by ensure that both public and private
sector in the South comply with neo-liberal rules of free capital mobility
(Soederberg, 2004:2). At this point the policy connection comes clear.
Persuaded by the need to access international capital markets the South
elites (Nigeria inclusive) adopt policies, often prescribed by the
International Financial Institutions (IFIs) which ensure they meet neo-
liberal standards.

This means such South states must open up themselves to international

capitals to come in and leave as they want, without controls. In other
words, adopting neo-liberal policies such as privatization, liberalisation,
deregulation etc was the basic requirements for Nigerian and other
countries in the South can access loans or grants from North. This
singular consensus notion was what necessary propelled Nigeria to
quickly liberalise the telecommunication sector upon the return of the
country to democratic rule in 1999 (Ochoga, 2012:43). This premise
accounts for Nigeria’s liberalisation of the sector to allow foreign capitals
to flow into the telecommunication sector. Broadly speaking, therefore,
what now obtains in the international political economy, or the current
international capitalist, might be likened to Robert Cok’s idea of
historical structure, where ‘ideas and pressures give rise to institution.’
Globalisation is one such historical structure which places the global
North especially the USA, on top, with the rest of us, the South,
subordinated.

The Nigerian Telecommunication Act, 2000 is indeed a public policy

enacted to achieve certain ends and Ochoga (2012:27) has argued that the
imperialists (now the global capital owners) often induce Nigerian

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leaders to uses public policy in order to implements certain interest of the

foreign capitalists. In Nigeria, the manipulation of public policy serves
the ends of accumulation, not just for the local elite, but also for the
international capital. The arguments of the international political
economy sketched above provide grounds for our main assumption that
globalisation has not only caused poverty in Nigeria, but has exacerbated
poverty in the country. This is because ‘the upshot of this neo-liberals
orthodoxy has not only been increased poverty, dependence and
vulnerability in the developing world but also the concentration and
centralisation of the wealth in the G-7 countries ’ (Soederberg,2004:181)
and their close allies in developing countries. Thus, the above submission
has been the position of most scholars of third world extraction against
globalisation generally.

3.3 Tools of Globalisation

Globalisation is a multidimensional process of unprecedented rapid and

revolutionary in the extensiveness and intensity of interconnection on a
truly global scale. This global scale has some inherent social forces which
unleashes and accelerate the onward penetration to make it an
unstoppable phenomenon across the world. Therefore, it was against this
background that we, attempt to examine the tools responsible for the rapid
spread and penetration of the wind of globalisation and as well as the
agencies that enhance the forces worldwide.

(i) Trade
Trade has always been a major force of economic integration. Opening
up of new markets have always been a moving force in global expansion
of the world economy. This is why contradictions were engendered in the
capitalist system in the Western Europe and competitive capitalism
became monopoly capitalism, the capitalist had to look for markets
outside Europe. This led to imperialism and later colonialism. That is why
Ake (1991:52) argues that, in the early years of colonialism, trade was
the vehicle for extending capitalism into the colony. It helped to create
consumerist orientations; while stimulate the growth of a money market
and capitalist financial institution, extending the scope of the money
economy.

Any discussion of globalisation that excludes the roles of the

International Monetary Fund (IMF), World Bank and World Trade
Organization (WTO) will be a reductionism. Since the primary goals of
globalisation is the issue of global capital and trade liberalisation. In this
direction, the WTO has played crucial role in the enthronement of trade
liberalisation.

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

More fundamentally, one dynamic and fundamental force in

contemporary globalisation process is economic liberalisation, which has
been embraced by virtually all countries and major international
institutions within the global system. Economic liberalisation refers to the
process of achieving unobstructed economic activities. It seeks to remove
all obstacles to trade, production to trade, production and investment;
emphasises freedom of economic activities and dominance of private
enterprises, and aims ultimately at the state from the economy (Onyekpe,
2001). At the global level, economic labialisations attempts to make all
economic fully open for free inter-penetration and inter-state access.

Issues relating to the forces or economic liberalisation are generally more

complicated than and not as obvious as in technology. The developed
countries order the auspices of industrialized (G8) countries that work
intimately with the world financial (IMF, World Bank) and trade (WTO)
institutions, and pursue a broad and ambitious agenda that attempt to
build international capitalism on the foundation of open world trade and
capital flows, privatization, balanced budget, freeing up of exchange
controls and similar deregulation and liberalisation measures (Usman,
1999).

For instance, the Asian-Tigers who had gone through economic

liberalisation process, achieved unprecedented growth in their fragile
economics. The countries in addition to economic liberalisation have
used other policy interments to expand Foreign Direct Investment (FDI)
and attain higher economic growth. These includes developing a strong
production bases, opening up of new investment areas, as well as
designing and implementing sound macro-economic policies. They have
also created conducive climate and stable political and economic
environment to attract foreign investments. These policy measures have
enhanced the expansion of the countries, and led to their rapid growth and
development. Other groups of countries that have achieved momentous
feat as a result of economic liberalisation include the transition economics
of the Eastern Europeans as well as the Latin American countries. Also
included are the African States, most of which suffered tremendously
from extreme poverty and lack of policy focus (Akinboye, 2008). Thus,
it is obvious that economic liberalisation is now a common venture in
contemporary economic relations.

Globalisation has rapidly quickened with world trade rising nearly as fast
as world GDP characterised by financial market liberalisation and
accelerated by private flows via the activities of the Brotton Woods
Institutions particularly the IMF. The IMF guarantee exchange-rate
stability and as well as providing short-term loans for member states
confronted by temporary balance-of —payments difficulties in
international capital mobility has emerged as a potentially strategies force

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in integrating national economic. It is proper to say that the rapid growth

of international transactions and capital flows as one of the single most
propounds outcomes of globalisation.

Another area in which trade liberalisation as a tool of globalisation as

worked in Nigeria is seen in the deepening effort towards salvaging the
worsening situation culminated into the 1986 Structural Adjustment
Programme (SAP). This aimed at the restoration, in the medium term of
healthier path of national economic development. A key course of action
of SAP towards realization of the new-liberal policy intention was to
reform public enterprises so as to lessen the dominance of unproductive
investments in the economy, improve their efficiency and intensify the
growth of potentials of the private sector through the removal of all forms
of encumbrances on trade and investment.

(ii) Information Technology

The fact that the world is currently experiencing phenomenal changes in
social, political, economic and technological spheres cannot be disputed.
One fundamental instrument for this increasing transformation is
technology, especially computer. Technology and the evolution of low
cost, global communications system which constituted major challenges
that will dominate and fundamentally shape developments in the 21
century, particularly in the economic and financial sectors. (Usman,
1999). The revolution in computer technology, has led to advancement
of information technology, which has in turn enhanced the level of
information transmission and business transaction across the global
system. Indeed the revolution change that have occurred in computer
technology since the better part of the 20th century have brought about
tremendous improvement in all of human Endeavour.

Today, the use of computer has increasingly become quit common place
in pure scientific research, the social sciences especially in managerial
decisions. The significance of the strong force of technology can best be
illustrated by references to the financial system (Usman, 1999).
Globalisation and information technology have thrown up formidable
challenges for national economics, especially the financial system, by
reducing the world further into a global village, and as well by providing
environment information through a wide range of inter- connectivity. The
inter-connectivity (network) of computers has given rise to the
development of internet, which constitutes the largest reservoir of all
types of informa

As in most developing countries, the Nigerian economy until recently

witnessed a growing involvement of the state in economic activities the
expansion of state-owned enterprises into diverse economic activities
was viewed as an important strategy for fostering rapid economic growth

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

and development. Adoful (2008:196) maintains that Nigeria is probably

the only country in the world that carried out a hybrid programme of
privatisation and deregulation simultaneously. The telecommunication
industry in Nigeria witnessed the deregulation of telecommunication
services in 1992 through the promulgation of Nigerian communication
commission (NCC) Degree No 75 of 1992, introducing private
participation in the provision of telecommunication services ending the
state owned Nigeria telecommunication services (NITEL) Monopoly of
the sector and using in competition. Out of curiosity the progenitors of
economic globalisation, the new National Telecommunication policy was
born in 2000 which gave birth to the ICT revolution in Nigeria. As agued
by Winston (1993) ICT enhance the expansion of globalisation through
competitive market environment and instantaneous sharing of market
information as well as the use of technology in production and trade
services. Be that as it is, the JCT as tool of globalisation has immensely
connected Nigerian economy with the global economy.

3.4 Consequences of Globalisation on Third World Countries

Globalisation leaves African and other third world economies in a way

weak competitive position owing to:
a) Lack of required degree of sophistication on the part of the
managers of emerging financial markets to match those of their
counterparts in the developed countries.
b) Inferior levels of technological development as computerisation;
and poor infrastructural facilities for banking (financial) operation
compared to what obtains in the industrialised economies and even
in the emerging or transitional financial markets in developing
Asian and Latin American countries (Lamido,2009).

Another consequence relates to the vitality of financial markets while

raises the problem of the stability of the financial system in general and
capital flight in particular. Since across border financial flows tend to be
more volatile than domestic flows especially equity flows, such flows
strengthen the risk of financial crisis. Foreign Direct Investment, for
instance cannot be relied upon let medium term balance of payment
support because it tends to give high profit repatriation payment well as
causes high distortions on the host country’s economy which form related
activates (Soludo,2007). The changing roles of World market, reflected
to slow growth of world trade in commodities and higher growth and
manufactures and Nigeria in particular given her greater dependence on
export of primary commodities and mineral products. Low income
electricity of demand (Engel’s Law) for primary commodities (mainly
food) and the deciding intensity of raw materials used in manufacturing
production processes explain the decline in the share of commodities
trade in world total trade (Crockett, 2001).

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From the views of the scholars above, we can submit that globalisation is
not harmful itself, but its operations pose challenges to some countries.
One of the fundamental consequences of globalisation on developing
nations like Nigeria is basically dependent economy. Hence globalisation
emphasises on removal of encumbrances for free flow of import, export
serves and foreign direct investment. By implication, the presence of
foreign goods and Multinational Corporation in most cases leads to the
collapse of domestic industries hence such industries lack the fund and
technology to compete favourably with the foreign counterpart. This by
implication, the government lose control of the economy and on the other
hand, it affect negatively on the GDP since the country’s import exceed
export and by logical extension its causes domestic currency devaluation,
unemployment and poverty.

4.0 CONCLUSION

The arguments advanced in this unit have revealed that globalisation and
all that accompanied it is not something to be accepted without question.
It is something to be embraced with wisdom and reservations. A leper
may be embraced, but only with caution. And from all indications,
globalisation is associated with some risks and costs, and may have
adverse indications for international economic stability and poverty
reduction. This notwithstanding, it also has its own potential benefits. But
for a developing nation like Nigeria, he risks and costs association with
globalisation seems to outweigh its potential benefits.

5.0 SUMMARY

This unit has attempted to explain global reach of capitalism or

globalisation is not so new: it is at least five hundred years old. As an
international economy system, it has not been able to achieve equity. This
has been the main arguments of the neo-Marxists, whether dependency
theorists such as Andre Gunder Frank, or structuralists like Johan
Galtung and Immanuel Wallenstein. Apart from blaming the national or
educated elite of the Third World for what the unfair economic system
does to their countries, even these writers have not put proper perspective
the place of public policy in those countries. This work assumes that the
poor economic experiences of the Third World countries results from the
kind policies their leaders adopt as a result of being dependent or
structurally tied to the metropoles of the world.

6.0 TUTOR-MARKED ASSIGNMENT

1. Discuss the metamorphosis of capitalism to imperialism and to

globalisation in contemporary international economic system.
2. Explain the tools of globalization.

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

3. Discuss the consequences of globalization.

7.0 REFERENCES/FURTHER READING

Abubakar, D. Globalisation, Social Sciences and Nigeria in the 21st

Century. Nigerian Social Scientist, 4 (1). 2001.

Acemoghi, O. & Ventura, J..“The World Income. Distribution”,

Quarterly Journal of Economics Vol. 117, No. (3), 2002, 659-94.

Ajavi. S. What Africa Needs to do to Benefit from Globalisation. Finance

and Development Vol. 38, No. (4). 2001.

Ake, C. (1981). A Political Economy of Africa. Ibadan: Longman.

Akinboyo, O. Globalisation Information Technology and the Nigerian

Financial System. NES 2003 Annual Conference, Ibadan,
2003.

Aryeetey F. Recent Development in African Financial Markets: for

Further Research. Plenary Paper AERC Workshop, Kenya, 2-7
Dec. 2000.

ASSU. The State of the National. Ile-Ife: Academic Staff Union of

Universities. March, 2002.

Bhagwati J. & Scrinvasan, T. Trade and Poverty in the Poor countries.

American Economic Review Papers and Proceedings, Vol. 92.
No. (2), 2002.

Bigesten, J.. Growth, Income Distribution and poverty: A Review

Goteborg. Scandinavian Working Paper in Economics,
No. 32. 2001.

Bono, R. Inequa1ity and Growth in Panel of Countries. Journal of

Economic Growth, Vol. 5, No. (1): 1999.

Deninger, K. & Squire, L., A New Data Set Measuring Income

Inequality. World Bank Economic Review Vol.10, No. (3).
1996.

Dollar, D. & Kraay A. Growth is Good for the Poor. Washington D.C.
World Bank Working Paper, No. 2587, 2001b.

Dollar, D. & Kraay, A. Trade, Growth and Poverty. Washington D.C.

World Bank Working Paper, No. 2615. 2001a.

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POL 431 MODULE 2

Hobson, J.A. (1902). Imperialism: A Study. London: Allen and Unwin

Publishers.

Hoogvelt, A. Globalisation and the Post-Colonial World: The New

Political Economy of Development. London: Palgrave, 2001.

Igwe, S.C. (2010). How Africa Underdeveloped Africa. Port Harcourt:

Professional Printers and Publishers.

Kuznet, S. Economic Growth and Income Inequality. American

Economic Review. Vol. 45, No., 1955.

Kwanashie. M. The Concept and Process of Globalisation. CBN

Economic and Financial
Review Vol. 36, No. (40) December, 1998.

Magdoff, H. (1978). Imperialism: From Colonial Age to the Present.

London: Monthly Review Press.

Mandel, E. (1985.). “The Nation State and Imperialism.” In: Held etal
(Ed.). (1985). States and Societies. Oxford: Basil Blackwell.

Nkrumah, K. (1966). Neo-Colonialism: The Last Stage of Imperialism

New York: International Publishers.

Ochoga, O.E.. The Impact of Globalisation on Poverty Reduction in

Nigeria, 2000-2012. M.Sc Dissertation to Benue State
University. (unpublished, 2012)

Offiong, D.A. (1980). Imperialism and Dependency: Obstacle to African

Development. Enugu: Fourth Dimension Publishers.

Owolabi, E.A.. “Globalisation, Liberalisation and the Risk of

Marginalization of Nigeria” in CBN Research Dept. Seminar
Paper No. 5 CBN. Abuja, 1998.

Rodrik, D. Comment or ‘Trade, Growth and Poverty by D. Dollar and A.

Kray. Cambridge Mass Havard University, Mimeo, 2000.

Sala-I- Martin, X. The World Distribution of Income (Estimated form

Individual Country Distribution). Cambridge (Mass), NBER
Working Paper No. 8933, 2002b.

Sala-I-Martin, X. The World Distribution of Income Inequality.

Cambridge (Mass) NBER Working Paper No. 8904., 2002

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

Soyibo, E. Financial Liberalisation and Bank Restructuring in Sub-

Sahara Africa, Some Lessons for Sequencing and Policy Design.
Plenary Paper AERC Workshop, 4-9 December, 2002
Nairobi, Kenya.

Spero, J.E. (1977). The Politics of International Economic Relations.

New York: St Marlin Press.

Spillimbergo, A., Londono, J. & Sezekely, M. Income distribution.

Factors Endowment and Trade Openness, Journal of
Development Economics, Vol. 59,No. (1), 1999.

Stislitz. J.. Globalisation and its Discontents. New York, W.W Norton,
USA. 2002

Thornton, A.P. (1977). Imperialism in the Twentieth Century.

Minneapolis: University Press.

UNDP, Human Development Report, Oxford: Oxford University Press.

2019

Weisskopf, T.E. (1978). “Imperialism and Economic Development of

the Third World.” In, Wilber, C.K. (1978). The Political Economy
of Development and Underdevelopment. New York: Random
House.

Winters, L. ‘Trade, Trade Policy and Poverty: What are the Links?
London, CERP Discussion Paper, No. 2382, 2000.

Yusuf, S. Globalisation and the Challenges for Developing Countries.

World Bank, Development Economies Research Group, DERG,
April 30, 2000.

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POL 431 MODULE 2

UNIT 5 THE RELATIONSHIP BETWEEN DEVELOPMENT

AND UNDERDEVELOPMENT

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Politics of Development and Underdevelopment
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

This unit is designed to teach students the relationship between politics

and development and other underdevelopment on the other hand. The
essence is to establish the centrality and novelty of politics in the
development of the third world countries. The ability of State leadership
to formulate policies and programmes determines the level of
development of the productive forces. This is the contemporary
international economic system is shrouded in power complexity.

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

 explain why is politics of development crucial in the

understanding of development and underdevelopment of Nigeria
and other third world countries
 justify that the development of the productive forces is essential to
the understanding of development and underdevelopment of
Nigeria and other third world countries.

3.0 MAIN CONTENT

3.1 Politics of Development and Underdevelopment

There are many conceptualisation of the notion of development, as there

are scholars who have attempted to analyse politics of development.
Taking from David Easton, he sees politics as the authoritative allocation
of value. Value is scare commodities and that is why people compete in
order to obtain them and thus there is crisis or conflict of interest even at
the international level. The most important aspect of society it gives rise
to conflict and determine the nature and character any society’s material

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

well-being or economic interest. Politics in this context deals with

conflicting interest in order to have social order to allocate scare
resources is central to politics of development. Political leadership of any
state must take of the development processes of their countries or else
sustainable development would remain an illusion or/and a mirage.

It is clear that those who succeed in power in most third world countries
do so or are sponsored to protect foreign interest, mostly outside the
policies and decision taken tend to reflect their interest at the detriment
of their country’s development. This analogy explains the linkage
between politics and development in third world countries. The history
of a political class determines the nature and character of the development
of the country. This notion is has expression in the policy and ideological
orientation of the national government especially at the level of policy
formulation and implementation stage. The nature and character of the
state leadership and it class composition explain the development of the
state. The history of Nigeria and the nature of it classes for instance, is
the bane of the country’s development.

The productive forces determine development. Claude Ake says’,

capitalism has failed due to low level of the development of productive
forces in Africa. ’ This notion can be explained in third world situation.
The low level of productive force is a function of African history back to
colonialism which had negative impact on development. Colonialism led
to the exploitation of African raw-material which today has far reaching
effects on Africa and other third world economies (Ochoga, 2012). Due
to the low level of economic development, political struggle became
intense and violent and it relegated the culture of development to the
background. This is because asses to scare resources can be attained by
the acquisition of political power (Ochoga, 2012). The more the
productive forces are underdeveloped, the easier the exploitation by the
capitalist countries.

The mode of production comprises means of production and the social

relations of production. The social relations of production comes as the
relationship people or/and countries enter into in the course of production
of material existence at epoch. It is the relationship that gave rise to the
legal and political structure, that the social contradiction. It is a
relationship that defines the ownership of the means of production and
the non-owner. The social relations of production cannot be left out of
scientific analysis. The key issues are how and where are the goods
consumed in third world countries produced? Who appropriate or
monopolize the surplus value? These issues that are crucial in the study
of third world and dependency.

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POL 431 MODULE 2

4.0 CONCLUSION

The productive force is central to the understanding of the notion of third

world and development. The productive force is major determinant of
development. The Nigeria and other third world countries many countries
continue to depend on the developed of the west if the political leadership
did not use the instrument of the state to develop the productive forces.

5.0 SUMMARY

The unit has discussed the importance of politics in the development of

any nation, and the nature and character of development in such a
country. The unit has explained that the development challenges
confronting third world countries is a result of politics of class interest
which serves the interest of the developed countries at the determent of
the development of the forces of Nigeria and other third world countries.

6.0 TUTOR-MARKED ASSIGNMENT

1. Why is politics of development crucial in the understanding of

development and underdevelopment of Nigeria and the other third
world countries? Discuss.
2. The development of the productive forces is essential to the
understanding of development and underdevelopment of Nigeria
and other third world countries. Discuss.

7.0 REFERENCES/FURTHER READING

Ake, C. (1981). A Political Economy of Africa. Nigeria: Longman.

Ochoga, O.E. The Impact of Globalisation on Poverty Reduction in

Nigeria, 2000-2012. M.Sc Dissertation to Benue State University.
(unpublished, 2012).

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

MODULE 3 THE FORMS, NATURE AND STRUCTURE

OF DEPENDENCY AND
UNDERDEVELOPMENT

INTRODUCTION
This third module teaches students the forms, nature and structure of
dependency and under development. The aim is to enable students to have
full knowledge of the forms of dependence in contemporary international
economic relations and as well as the externalities of the systems of
dependence and underdevelopment. The last module discusses on the
nature and character of the internal factors and mechanisms of
underdevelopment. And the last part of the module exposes students to
the paradox of globalisation and the Third World.

Unit 1 Forms of Dependence

Unit 2 Externalities of the Systems of Dependence and
Underdevelopment
Unit 3 Internal Factors and Mechanisms of Underdevelopment
Unit 4 The Paradox of Globalisation and the Third World
Unit 5 Internal and External context of Development and
Underdevelopment

UNIT 1 FORMS OF DEPENDENCE

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 An Overview of Development Crises of TWCs
3.2 Interaction between TWCs and Developed Countries and
its effects
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

Decades of preoccupation with development in the Third World countries

have yielded meager returns. African economies, for instance, have been
stagnating or regressing. For most African, real income are lower than
they were three decades ago, health prospect are poorer, malnourishment
is widespread and infrastructure is breaking down as are some social
institutions. African leaders, Ake (1981:9), argued that:

74
POL 431 MODULE 3

Now that independence had been won, the overriding task was
development, without which political independence could not be
consolidated and African countries would not be able to eradicate the
humiliation of colonialism.

Dependency certainly has its consequences. A dependent nation has no

control over its economy and in many cases governments. The ties
between the rich and the poor countries have not been helpful. This unit
is intended to investigate the development crisis in post independent
Third World states and the forms of dependence it engenders.

The post-colonial economy does not necessarily mean an economy has

been decolonized that is- no longer possesses the features of a colonial
economy, but refers to an economy at a particular historical period after
the winning of formal political independence. By contrasting the
structures of Third World economies in their colonial and post-colonial
phases, there is an implicit assumption that the winning of the political
independence was a watershed in the history of Third World countries
and that it was a change which could reasonably be expected to have had
a major if not decisive impact on the future development of these
countries.

2.0 OBJECTIVES

By the end of this unit, you will be able to:

• describe the development crises of the post independent TWCs

• explain the nature and forms of dependency of the Third World
countries.

3.0 MAIN CONTENT

3.1 An Overview of Development Crisis

The United Nations General Assembly resolution 1710 (XVI) designated

the 1960s as the United Nations Development Decade. The objective of
the first development decade as cited in Offiong (1980:1) was to:

Accelerate progress towards self-sustaining growth of the economy of the

individual nations and their social advancement so as to attain in each
underdeveloped country a substantial increase in the rate of growth, with
each country setting its own target, taking as the objective a minimum
rate of growth of aggregate national income, of 5 per cent at the end of
the decade.

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

At the time the UN Secretary General was writing the report stated above,
the estimate of the growth rate of national incomes of all developing
countries, together, was about 3 ½ per cent a year. The task therefore, for
the Third World countries, was to raise the figure by about 1 ½ per cent
within a few years and by another 1 ½ per cent to get it over 6 per cent
per annum at the end of the decade. It was also observed that all the Third
World countries have in their physical and human resources potential
means for achieving a decent standard of living for their people.

The developmental crises plaguing Third World countries of Africa,

Asia, Latin America, the Caribbean and the Middle East appears
daunting. Even though many of those problems exist in industrialised
nations, the scope and persistence of the Third World countries’ political,
economic and social challenges ultimately draw our attention. At various
times during the 1970s and 1980s, most of these countries suffered from
political and economic decay, and today many remain trapped on a
political or economic treadmill. In the late 1990s, even the previously
thriving economies of East Asia were plunged into a crisis from which
some countries are yet to fully recover. In fact, for an extended time
periods, many of these Third World countries have shown few or little
signs of political and economic development.

The last part of the 20thCentury witnessed the decolonisation of Third

World countries. It also marked the conspicuous failure of Third World
countries to close the gap in living standards between TWCs and the
advanced countries. Available statistics reveals that while this gap was
more or less stable during the 1960s and 1970s and 1980s and 1990s.
Between 1960 and 1980s, average income as per capita of GNP in the
industrialised market economies fluctuated between 16-18 times more
than the average level in the TWCs. By the 1990s, this ratio had risen to
22-23. Since the 1980s, the population in the TWCs has witnessed
significant increase and in spite of slight increase income per head, a
combination of income disparities, budget deficits, and debt burden
combined to impoverish large sections of the population. The growing
inequality between rich and poor nations can be found in the historicity
of colonialism.

The continuation of this trend in spite of the conscious attempts to tackle

poverty has been a global concern. Since 1950s, the industrialised
economies, acting individually and multilaterally, through the World
Bank and the International Monetary Fund (IMF) institutions have
contributed or diverted significant resources to poverty alleviation
programmes. The ultimate failure of this strategy in reducing the gap after
some respites in the 1950s and 1960s raises fundamental question about
the capacity of the present world economic order to bring about the
mitigation of the growing inequalities. This steady and consistent decline

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POL 431 MODULE 3

can be summarised into phases in terms of the interaction between the

TWCs and the advanced or developed countries.

3.2 Interaction between TWCs and Developed Countries and its

Effects

The post war period is often characterised as the period of

neocolonialism. This term is meant to designate the view that the formal,
political independence, gained by almost all the former colonial
territories, has not substantially modified the relations of domination and
exploitation by the developed capitalist countries over the Third World.
It implies that formal political independence has not significantly
improved the prospects of independent industrialisation and development
in the periphery.

The growing relationships between the TWCs and developed countries

have produced results in different phases. These phases are:

i) Dashed Hopes of Take-off

The euphoria and the optimism of the initial post-independence phase
when the prospect of achieving self-sustaining growth seemed plausible
was blown apart in the early 1970s by the collapse of the primary
commodity market. Against this background, the nationalism of
independence which was reflected in large scale social provisioning and
large outlays on public infrastructures came to an end in the wake of
primary commodity prices collapse such as cocoa. Consequently, most
TWCs faced the crisis of fiscal reproduction -meaning that, there was no
sufficient income to fund development projects.

The state of economy, especially as regards national participation, the

number of educated and skilled personnel, and the physical infrastructure
at independence of most Third World countries has become an issue that
calls for immediate attention.

ii) Decline into Debt Peonage (slavery)

In the 1980s, multilateral lending from the IMF and the World Bank
accounted for 14 per cent of Africa’s debt. By 1993, it is closer to 25 per
cent. Multilateral debt cannot be rescheduled and was preferred creditors;
the Bank and Fund tend to get paid back first. This has meant that
multilateral lending loom large in Africa’s debt servicing bill despite the
concessional nature of some facilities. Multilateral debt servicing for
some countries in Africa have become both a large and burdensome parts
of their debt obligations.

The onslaught of global recession in the 1970s left many TWCs with so
many external imbalances, particularly if those countries are dependent

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

on petroleum income which price increased ten times since the Arab oil
embargo of 1973. In a brief period, Western bankers were encouraged to
loan TWCs in a belief that primary commodities price will increase just
as oil. The resulting large scale of corrupt lending for mostly non viable
projects and nonexistent projects came to an end with the Mexican crises
of 1982 when Mexico declared insolvency. By this time, most TWCs had
accrued debt which they could not service. In Africa for instance, the
region’s financial distress aggravated by stagnant export earnings as
commodity prices continue to fall, which is seen in the ballooning of
arrears on its debt payments.

For sub Saharan Africa, these are estimated to have jumped by 20 per
cent in 1992, according to World Bank World debt table. Foreign debt
has become a millstone on the neck of Third World countries particularly
Africa. In sub Saharan Africa for instance, the debt is now equivalent to
60 per cent of the regions Gross Domestic Product (GDP) and constitutes
a major obstacle to the resources of private investment. Debt, worsening
terms of trade and negative capital flows present enormous difficulties to
Africa’s development prospects. Consequently, the most important
challenge facing national economies of Third World countries
particularly Africa is diversification. The dependence of most African
countries on just a few export commodities defies common sense, since
it leaves them vulnerable to unfavourable international market conditions
and impels them to import a large proportion of consumer goods.

iii) Structural Adjustment Programme and Liberalisation

The 1970s witnessed the transformation of the Nigerian economy from
one dependent on agriculture to one heavily dependent on oil. For
instance, the share of agriculture in Gross Domestic Product (GDP)
declined from about 40 per cent in early 1970s to about 25 per cent in
1980. By the latter year, oil contributed about 22 per cent of GDP, 81 per
cent of Government revenue and 96 per cent of export earnings. The so-
called oil boom of the 1970s brought about profound changes n the
Nigerian economy. Efforts were made by the authorities during this
period to use the relatively massive oil revenue in restructuring the
economy and some progress were made in the areas of social and
economic infrastructure. However, widespread distortion and imbalances
in the economy emerged during this period. The increased intervention
of government in the economy, which was fostered by the boom in
revenues, resulted in a proliferation of parastatals and some public
investments which were of doubtful design and viability and in retrospect
beyond the executive capacity of the relevant government agencies.
There was also a proliferation of manufacturing industries which were
heavily dependent on imported inputs with very low local value added.

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POL 431 MODULE 3

Finally, the heavy dependence of the country on oil and imported inputs
rendered the economy highly vulnerable to external shocks.
Consequently, with the collapse of the world oil market, Odife (1989:45)
had observed that:

The restrictive exchange and trade control measures pursued over a

period of about two decades in Nigeria failed to deal effectively with the
fundamental economic and financial problems confronting the country…
It is against this background of largely inappropriate and ineffective
policies of the past and payment crisis generated by the collapse of oil
prices in the early 1986 prices that the new administration mustered the
political will to initiate the far=reaching measures under the SAP.

Faced with worsening structural deficits, poor countries were confronted

with drastic measures to cut public spending in order to contain the
growing arrears on debt service. At the same time, the International
Financial Institutions (IFI) insisted on the removal of structural barriers
to trade as conditionality, among others like, currency devaluation. The
result was that most TWCs were progressively unable to protect their
industries and subsidise domestic production in the face of external
competition that benefited from superior economies of scale. Up to a
decade of intensive structural adjustment has left low income countries
still barely growing in per capita terms, and at rates that are inadequate
for rapid poverty reduction. Adjustment has left much to be desired in
terms of restoring growth and social welfare to Third World countries.
Both exports and saving responded weakly in African and other low
income Third World countries, that total investment fell on average, and
with few exceptions, private investment remains generally at inadequate
levels.

The net effect of this in the case of Nigeria was de-nationalisation of

economic policies which translated into de-indigenisation. Other factors
such as currency weakness and capital flight cumulatively led to
regressive indices in public spreading and increased indebtedness. In the
case of East Asia, it was able to subsidise their export driven industries,
still then, the East Asian miracle was still affected by the financial crisis
of the mid 1990s because their export economies were heavily dependent
on the International Financial Institutions. The need to confront this
challenge raised by the chronic failure to stimulate development in the
Third World which initially was ignored by the developed countries has
become a priority today. In spite of the hype about the emerging market
in the Third World, the reality of civil breakdown in different parts of the
Third World has begun to threaten the business interest of the advanced
countries. Structural adjustment programme had an inadequate impacts
on SubSaharan countries partly because, SAP may have been too
ambitious and included too many conditions to ensure sustainability

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

compared to other regions, there was also below average success in

implementing SAP conditions in sub Saharan Africa, resulting to damage
in credibility of the reforms and the investor uncertainty.

4.0 CONCLUSION

The low level of development in Third World countries, coupled with the
worsening poverty and the collapse of the social fabric and in the worst
case scenarios, the collapse of the state itself has been a subject of vast
amount of policy and intellectual discourse. Given a broad overview of
the structures and present conditions of the Third World, it is important
to focus on the reforms and constitutional frameworks of independent and
dependency.

5.0 SUMMARY

This unit has attempted an overview of the development crisis in the

Third World countries, and how the interaction between the Third World
and advanced countries has produced negative tendencies identified in its
different phases.

6.0 TUTOR-MARKED ASSIGNMENT

1. Identify and discuss the forms and structure of dependency and

underdevelopment of Third World countries.
2. Discuss the impact of structural adjustment programmes on any
Third World country of your choice.
3. Explain the development crises of post independent Third World
countries.

7.0 REFERENCES/FURTHER READING

Alanana, O.O. (2006). Sociology of Development. Kaduna: Joyce

Publishers.

Foster-Carter, A. (1985). Sociology of Development. England: Causeway

Books.

Ghali, B. (1996). “Global Leadership after the Cold War”. Foreign

Affairs. pp. 86-98.

Odife, D. (1989), Structural Adjustment and Economic Revolution in

Nigeria. Ibadan: Heinemann Books Nigeria limited.

Offiong, D.A. (2001). Globalisation: Post Neo-Dependency and Poverty

in Africa. Enugu: Fourth Dimension.

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POL 431 MODULE 3

UNIT 2 EXTERNALITIES OF THE SYSTEMS OF

UNDERDEVELOPMENT

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Direct Economic Dependence
3.2 Trade Dependence
3.3 Financial Dependence
3.4 Technical Dependence
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

The World Capitalist system as we have noted in the preceding unit,

consists of the core, or the metropole and the periphery or satellites which
together are known as the Third World. The Third world nations are
dependent because they have relatively little or no control over their
national economies. Economic activities in their respective countries are
a mere reflection of what happens in the industrialised or advanced
countries. This dependent relationship often involves a triple alliance
among multinationals generally based in the industrialised nations of the
West and Japan; the governments of the Third World countries and their
local elites. These governments and elites have never hesitated to use the
instruments of the state power at their disposal to aid the operations and
profitability of the multinationals.

Neo-colonial dependence attributes the existence and continuation of

Third World underdevelopment primarily to the historical evolution of a
highly unequal international capitalist system of rich country- poor
country relationships. Whether because rich nations are intentionally
exploited or unintentionally neglected, the coexistence of rich and poor
nations in an international system dominated by unequal power relations
between the centre (advanced countries) and peripheral(Third World
countries) renders attempts by poor nations to be self-reliant and
independent difficult and sometimes, even impossible. Certain groups’ in
the Third World countries such as political elite, military elite,
entrepreneurs, public officials who enjoy high incomes, social status and
political power constitute a small elite ruling class whose principal
interest, whether consciously or not, is in the perpetuation of the
international capitalist system of inequality and conformity by which they

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

are rewarded . Directly or indirectly, they serve and are rewarded by

special interest or power groups including multi-national corporations,
national bilateral aid agencies and multilateral assistance organisations
like the IMF/WB, which are tied by the allegiance or funding to the
wealthy capitalist countries.

This unit therefore, attempts to identify and describe the various forms of
dependence and underdevelopment of the Third World countries.

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

• describe the nature of dependence of the Third World countries

• evaluate the various forms of dependence of the Third World
countries.

3.0 MAIN CONTENT

3.1 Direct Economic Dependence

One of the most forceful statements on dependence was made by Dos

Santos that:

Underdevelopment, far from constituting a state of backwardness prior to

capitalism, is rather a consequence and a particular form of capitalist
development dependence known as dependent capitalism… A
relationship of interdependence between such economies and the world
trading system becomes a dependent relationship when some countries
can expand through self-impulsion while others, being in a dependent
position, can only expand as a relation of the expansion of the dominant
countries which may have positive or negative effects on their immediate
development. In either case, the basic situation of dependence causes
these countries to be both backward and exploited.

Different mechanisms are manipulated by people, which accentuate the

situation of wealth for some and poverty for the rest. These mechanisms
which are maneuvered directly or indirectly by the more developed
countries, by the very functioning, favour the interests of the people
manipulating them. But in the end, they suffocate or condition the
economies of Third World countries to be perpetually dependent and
underdeveloped. Some of the mechanisms for dependence are
highlighted below.

Direct economic dependence refers to the situation in which the key

sectors of the economy is controlled from outside by foreign monopoly

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POL 431 MODULE 3

capital. This is the most dominant form of dependence as it ensures direct

exploitation of the underdeveloped countries. The systematic plundering,
appropriation and expropriation of surplus produced by the labour force
in Third World as well as the product of petty commodity producers. This
form of dependency is a product of the colonial heritage. In this regards,
after independence, their relationship assumes a neocolonial character. In
most Third World countries, the post-colonial states are mere extension
of the metropolitan states. The elites that control the states are more of an
appendage to the metropolitan states. In most post-independence Third
World states, especially in the immediate aftermath of political
independence, the economic sector was firmly under the control of
foreign multinationals essentially from the former colonial powers.

SELF-ASSESSMENT EXERCISE

Briefly explain what you understand by direct economic dependence.

3.2 Trade Dependence

The colonial economies of the Third World countries depended primarily

on the metropolitan countries which colonised them for their external
trade. This dependence reflected in the exploitative structural integration
of the colonial economies to the capitalist system of the metropoles.
Trade dependence is a logical outcome of direct economic dependence in
that the colonial powers become the major trading partners of their former
colonies. Similarly, the structure of dependence that was established
since colonial incorporation persists up to date. Most Third World
countries, particularly African Countries’ trade in primary commodities
which continued up till today. They still remain importers of finished and
manufactured goods from the developed countries and export in raw
materials which prices are subject to the vicissitudes and vagaries of
international market prices controlled by the advanced countries. In trade,
the old pattern of dependence largely remains the bulk of exports of most
of the Third World countries particularly African countries that go to the
former colonising powers and their Western allies for trading activities.
The consequence of the emphasis on export of primary products is that
they are unable to feed themselves and it further inhibits development of
economic diversity. The TWCs also lack diversification and this renders
them quite vulnerable to such external shocks as fluctuations in world
commodity prices and even climate change. There is also potential danger
for TWCs to be further marginalised in the multilateral trading system
should they fail to implement their World Trade Organisation (WTO)
agreements effectively.

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

3.3 Financial Dependence

In the early days of colonisation, particularly in Africa, there was very

little indigenous capital and development. The level of domestic savings
was small because a single percentage or proportion of the wealth
accruing to the indigenous colonial trade was spent on imports. Colonial
capitalism, with its tendency to lapse into primitive accumulation left the
indigenous population with little or nothing to accumulate wealth. All
these led to the dependence on foreign capital while capital resources
were so drastically limited, the need for them was very great especially
in the infrastructural development to aid exploitation. The lack of
domestic capital resources on the one hand, and the pressure for
investment capital on the other hand, made Third World colonial
economy to be highly dependent.

The ties of financial dependence are strongest in countries where the

financial systems and by extension the monetary and credit policies are
under the control of Multi-National Corporations (MNCs). This form of
dependence is a direct consequence of direct economic dependence as a
result of colonialism. In such a situation, the Credit policies pursued by
the foreign owners of capital will determine which sector(s) of
development are promoted. Logically, foreign financial institutions will
not promote sectors that are in direct competition with their own business
monopoly. Basically, the investment and industrial policy of foreign
financial institutions promote the development of department too, that is-
production in the capital goods sectors as against consumptive
production.

Direct financial dependence was very obvious during the colonial period.
However, after independence, a milder but a more enduring form of
financial dependence is the one which ties the currency of the under
developed countries foreign exchange. Dependence is also related to the
structure of foreign trade, in the area of international trade as it is only
logical that any country that buys or sells most of its export or imports in
the traditional metropolitan market will be in a position of dependence in
matter of foreign exchange. Once there is a close relationship between
two countries then the charging in the foreign exchange position of the
dominant countries will make themselves felt in the dependent.

Furthermore, an increasing important form of financial dependence are at

the same time the principal means by which neo-colonial relations are
maintained- through the loans and grants that are received either
bilaterally or multilaterally. As a result of the inadequacy of internal
accumulation, the narrowness of the domestic market and lack of
domestic capital the unfavourable terms of trade and profit repatriation
of foreign monopoly. The underdeveloped countries usually need

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POL 431 MODULE 3

substantial financial resources for financing their development projects,

compensating for budget deficits and offsetting advance balance of
payment deficit.

In the light of the foregoing, as long as Third World countries continue

to face the problem of profit repatriation, narrowness of domestic market,
high rate of deficit as a requirement of socio-economic challenges, they
will continue to look for loans and grants with the attendant consequences
of remaining perpetually dependent on the advanced capitalist countries.

3.4 Technical Dependence

This is one of the most critical forms of dependence of the colonial

economy. Colonial Africa for instance depended on the capitalist West
for virtually all her technology. This put the colonial economy in a
position that can be described as a producer who has no instrument of
labour. Such a producer is not only helpless but totally at the mercy of
those who are in a position to give her the instrument of labour.

This structure of dependence refers to the dependence on intellectual

imports either in their materialised form or in their live form, that iseither
as importation of products and finished goods, patents or in terms of the
reliance on technical expertise, import advisers, teachers, etc.

In the area of technological transfer, the dominance over products,

licenses, patents and markets ensure that developing countries produce
goods and the specifications and permission as stipulated by developed
country. In many cases, industrial establishments are set up as
compliments to industries of metropolitan countries. In this case, the
management of these industrial firms is still in the hand of expatriates
while indeed, the lack of autonomy in the production of knowledge
ensures intellectual and cultural dependence. In some cases also, one of
the strategies adopted by the Third World include import substitution
industrialisation which depends on technological transfer. However, the
success of this strategy depends on a lot of factors but most importantly
the role of the state.

The argument about technical dependence has a number of strands, that

the underdeveloped countries are forced to rely on western technology
which is unsuited to their conditions in various ways especially through
labour savings; that they cannot get access to western or advanced
technology, except on prohibitive terms; and that the dynamism of the
advanced capitalist economies plus their existing enormous technological
lead is such as to keep them permanently ahead of the underdeveloped
countries and thus, permanently dominating them. Technology has
always been the basis of metropolitan monopoly. The underdeveloped

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areas have been unable to establish industries possessing at the same time
the most complex and advanced technology. In that case, the basis of
dependence today has shifted not to a new category, technology, but to a
new more restricted group of capital goods industries.

4.0 CONCLUSION

The dawn of political independence also marked the beginning of

neocolonial relations. After independence, post-colonial Third World
countries embarked upon ambitious development programmes designed
to raise the social, cultural, health and educational standards of the
people. But this raising standard is in direct contradictions with the
financial capacity of these states, therefore loans and grants were taken
to bridge the gap. But experience has shown that many countries that
based its development programmes principally on foreign forces must be
ready to remain perpetually dependent and underdeveloped.

5.0 SUMMARY

This unit has attempted to identify the structures of dependence and how
it has conditioned Third World countries to remain perpetually dependent
and underdeveloped.

6.0 TUTOR-MARKED ASSIGNMENT

1. Mention and explain the various forms of dependence.

2. Describe the nature and impact of financial dependence on the
Third World countries.
3. Analyse the nature and implications of trade dependence on the
underdevelopment and dependency of the Third World countries.

7.0 REFERENCES/FURTHER READING

Alanana, O.O. (2006). Sociology of Development. Kaduna: Joyce

Publications.

Foster-Carter, A. (1985). Sociology of Development. England: Causeway

Books.

Offiong, D.A. (2001). Globalisation: Post Neo- Dependency and Poverty

in Africa. Enugu: Fourth Dimension Publishers.

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UNIT 3 THE INTERNAL FACTORS AND MECHANISMS

OF UNDERDEVELOPMENT

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 The Disintegration of the Mode of Production and the
Distortion of the Economic Structure
3.2 Manifestation of the Externally Non Integrated Economies
of the Third World Countries
3.3 Internal Factors and Dependence of the Third World
4.0 Conclusion
5.0 Summary
6.0 Tutor- Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

Dependency scholars predicated their postulation on externalisation of

the sources of underdevelopment. It is important however, to point out
that internal factors are also primary in as much as we relate them to the
external factors. In other words, source of underdevelopment are only
partially explained by external factors. It is therefore important to note
that we will have a better explanation if we look at the internal factors as
agents as it were who became further catalyst to further
underdevelopment.

This unit will therefore identify the various internal factors that serve as
catalyst to the underdevelopment crisis of the Third World countries.

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

• explain that Third World underdevelopment is not restricted to

external factors alone
• discuss the various internal factors that conditioned Third World
underdevelopment and dependency.

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3.0 MAIN CONTENT

3.1 The Disintegration of the Modes of Production and the

Distortion of the Economic Structures

The disintegration of the mode of production was due to the fact that it is
not the logic of economic forces internal to Third World countries but it
was a result of the organic link to the world economy. Consequently, the
elements of a more modern form of production and society were imposed
on a traditional and political setup from outside as an isolated element
within the framework of colonialism. This integration or transformation
of the mode of production has no logic of its own because it was done by
colonial force. In this case, they became enclaves. These enclaves were
from the beginning outwardly oriented because they were to serve
external interest and as such, could not become the driving force for
development because they were not in contact with their environment
neither were they in contact with the other sectors of the economy.
Furthermore, the externally nonintegrated character of the economy
manifests itself in various forms.

In Nigeria for instance, the attack on the Nigerian food sector has
disrupted and distorted pre-colonial patterns of integration between areas
of food production and food consumption. The food sector in Nigeria
agriculture was systematically and severally attacked by the colonial
government in order to dethrone it as one of the most important means of
exchange and of the accumulation of wealth by farmers, traders and food
processors. During the First and Second World Wars, the terms of trade
between Nigerian agriculture and British manufactured goods were
officially manipulated in favour of British imports. While prices of
imported goods rose, those of agricultural products, including the prices
at which food items could be sold were officially fixed at a very low level.
This was aptly captured by Abba, et al (1985:21) thus:

This sustained attack on the food sector of the Nigerian agriculture, the
denial of capital investment to it, the unfavourable terms of exchange
imposed, and the taxation imposed on it all, ended in blocking and under-
developing the food sector in Nigerian agriculture. This blockage and
underdevelopment was however accompanied by population growth
partly due to improvements in public health, and by increase in school
enrolment, increases in numbers of people who were working outside
agriculture and living urban non food producing conditions. Thus
populations increased, while an increasing significant proportion of it
became totally non-food producing. Agriculture for the majority of
farmers was becoming a permanent zone of poverty. This situation
continued, and deepened, into the present food crisis.

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In the light of the foregoing, it can be observed that the general line of
colonial economic policy became that of intensive exploitation of
Nigerian farmers and their soils, while forcing both the farmer and the
soil down to the lowest minimum diet required to keep the one alive, and
the other fertile.

3.2 Manifestations of the Externally Non-Integrated Economy of

the Third World Countries

The externally non- integrated economies of the third world manifest in

two different ways:
• the dualism of the modern and traditional socio-economic sectors
the co-existence of export economies and subsistence economies
• sectoral disarticulation.

Dualism has a very long history in the 18th Century colonial period in the
East Indies when the colonial masters introduced the Western style of
plantation in Indonesia and its failure led to the underdevelopment of the
people. Dualism emphasises that economic laws that are found valid in
the advanced capitalist countries, do exist in Third World countries. That
is, the process of modernisation has led to the polarisation of the world.
At the international level, the process had led to the development of two
worlds- the developed countries with their peculiar characteristics and
developing countries’ characteristics. Also within each country of
developing world there is a domestic dualism-the country is internally
polarised with a modern and primitive sector existing side by side.

The characteristics of dualism are as follows:

i. The existence of two sets of conditions- both modern and
traditional institutions. For example, we have a highly developed
modern economic sector coexisting with a traditional economic
system.
ii. The coexistence is permanent and not transitional. The difference
in development between the two sectors is not a temporary thong
which can be removed overnight.
iii. The gap between the two sectors is widening. The degree of
superiority or inferiority is on the increase. For example, the gap
between advanced industrial countries is developing and does not
show any sign of diminishing.
iv. The backwash effect. This characteristic implies that the
interrelations between superior and inferior elements are such that
the existence of the superior or advanced capitalist countries retard
the development of the inferior- the Third World countries.

According to Todaro (1982), there are two types of dualism, namely

domestic and international dualism with each having distinct

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characteristics. Dualism may also take sociological and technological

dimension.

Sociological dimension of dualism refers to the co-existence of imported

social system with an indigenous social system. The features of
sociological dualism which the traditional society manifests according to
Boeke cited in Ujo (1994) are as follows:
• limited needs
• complete absence of profit making
• aversion to capital (dislike of investment)
• lack of business qualities
• lack of good organisation and discipline
• fatalism and resignation to fate
• lack of mobility of labour
• absence of regular labour
• export is the main motive of business.

Technological dualism involves the use of different production functions

in two sectors of the society. Meir (1976:131) asserted that:

The modern sector is composed of plantation, oil fields, large scale

industries, technically oriented and production is capital intensive with
peasant agriculture handcrafts and small industries.

This implies that there are traditional and modern sector and development
means that the modern sector will gradually spread its influence and
absorb the traditional sector. The dual economic thesis or economic
dualism is crucial to understanding Third World underdevelopment and
dependency. It is argued that in the Third World countries, a dual
economy is transformed by the coexistence of peasant subsistence
agriculture and cash crop production of basic commodities or industrial
goods for the international markets. It is further argued by Alanana
(2006:33) that:

Because the peasant or rural economy is separate from urban industrial

economy, the penetration of capitalist mode of production into the rural
economy would transform the entire rural economy.

However, it is critically argued that rural economy does not get

transformed entirely with the penetration of capitalism. There are certain
aspects of rural economies which are preserved to serve capitalism. On
the issues of two separate economies existing side by side one another, it
is observed that there is neither difference between rural and urban
economies nor between capitalism and peasant economies. Both
economies are organically linked to one another. This is indicated in the
economic recession which Europe experienced and the extension of same

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to the Third World. The rural economy supplies all the necessary
industrial raw materials to the urban or metropolitan cities.

Furthermore, the distorted socio-economic structure means that there

exist a considerable pre-capitalist sector and most often than not, they
were diametrically opposed. The state in the Third World is always faced
with the crises of expanding capitalist accumulation by the conflicts it
generates. An informed study of Agrarian society in Nigeria has shown a
history of peasant uprising. For example: Bakolori in 1982 when peasant
agriculture was to give way to capitalist farming (FADAMA), the
existence of a large urban mass displaced from the rural sector through
large scale farming, absentee farming, etc, would serve to explain the
sources of urban crisis such as Maitatsine, etc. The state in the Third
World in many cases has to manage the crises emerging from the
distortional destruction and the imposition of new socio economic
systems and relations.

The heterogeneous social structure in accordance with the disintegration

and distortion of the production and economic sectors in the Third World
countries, the class structure is also disintegrated and distorted. Colonial
incorporation broke up the old mode of production. Side by side with the
modern section is the traditional sector that sometimes becomes blockage
to the development of the modern sector. The internal changes such as
the breaking up of the old system took place under specific circumstances
under colonialism and semi colonial conditions.

These changes were not as a result of internal laws of the

underdevelopment or traditional economy, but they were determined by
the interest of monopoly capital. In this process of transformation and
subordination of pre capitalist feudal and communal societies, the old did
not completely disappear. The new was not built on the ruins of the old
but amongst the remnants of the old. In addition, the penetration of the
modern society was not uniform even where it did so; the old system still
retained its influence. For example, feudalism existed side by side with
capitalism. Summative, modern relations became associated with
traditional relations. What we witness today is the existence of both the
traditional and the modern society side by side; just as peasant
subsistence agriculture exists side by side with capitalist form of
agriculture.

Finally, foreign capital is interested in the destruction of old form of

social relation as long as they impede capitalist accumulation. However,
the externally induced capitalist development restricts the emergence of
a proper capitalist class. The indigenous bourgeoisie is weak, and in this
case their capacities to promote capitalist development are hampered by
the nature of externally induced capitalist domination itself. It is this

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complexity in the class structure of the indigenous classes and their

relationship to international capital through the mediating agency of the
state that hinder the Third World countries dependent and
underdeveloped.

3.3 Internal Factors and Dependence of the Third World

There seem to be an ineradicable tendency among Third World countries

that whenever we articulate reason (s) for our underdevelopment, we
always heap the blame on our past colonial experience. As such we have
mistaken historical explanation for historical justification for the
persistent crisis of development but available evidences have shown that
internal factors have contributed tremendously to the crisis of
development in Third World countries. There are internal forces and
productive structure that may prohibits the development of the productive
forces. According to Tam David West (2003) the reason for the difference
between us and the developed countries is that while the leaders are
literally with every ticking of the clock seriously addressing the problem
and concerns of the moment and finding solutions to them, in
underdeveloped countries especially Africa, leaders expend their
energies more in devising more and more sophisticated machinery for
subverting the system, economically or electorally. They loot and subvert
the system for their own self aggrandisement and indulgence. Basil
Davison (1992), observed that by far the greatest singular contributor to
Africa’s continued underdevelopment is bad leadership. Leaders he
added, who claim to be visionary but in fact have no vision at all for
development. Internal factors play critical role to distort the processes of
development. For example, values, leadership, discipline, corruption, the
possibility of cultural resistance as well as the right of a tribal society to
reject or accept change and innovations, as this diffused into the TWCs
constitute these internal obstacles that can ruin the process of
development.

4.0 CONCLUSION

It is important to point out that internal factors are also primary in as much
as we relate them to that external factors. Such factors are essentially the
lack of social and economic integration and the dual distorted socio
economic structure. The existence of a disintegrated dual structure refers
to the historical root of underdevelopment as explained from the external
environment. In a nutshell, it can be posited that the internal structure of
the underdeveloped countries is not only a product of the penetration of
external and internal forces but that once this has become established, it
provides the basis for maintaining such relations. In order words, source
of underdevelopment and dependency are only partially explained by
external factors, internal factors provided the catalyst for its success.

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5.0 SUMMARY

This unit has attempted to explain how internal factors served as the
catalyst to the external factors. As such, beyond the postulation of
dependency scholars, internal factors also provide vintage to
understanding the underdevelopment and dependency of the Third World
countries.

6.0 TUTOR-MARKED ASSIGNMENT

1. Critically discuss how internal factors serve as catalyst to under

development and dependency of Third World countries.
2. Explain the concept of dualism and discuss how it conditioned the
underdevelopment of the Third World underdevelopment.
3. Discuss the impact of colonial economic policies on the
underdevelopment of the Nigerian agricultural sector.

7.0 REFERENCES/FURTHER READING

Abba, A. et al. (1985). The Nigerian Economic Crisis: Causes and

Solution. Zaria: Gaskiya Publications.

Ake, C. (1981). A Political Economy of Africa. Ibadan: Spectrum Books.

Alanana, O.O. (2006). Sociology of Development. Kaduna: Joyce

Publications.

Davidson, B. (2005). The Black Man’s Burden: Africa and the Curse of
the Nation State.

Meir, G.M. (1976). Leading Issues in Economic Development. Oxford

University Press.

Offiong, D.A. (2001). Globalisation: Post Neo- Dependency and Poverty

in Africa. Enugu: Fourth Dimension Publishers.

Tam, D.W. (2003). “How Africans Underdeveloped Africa.” Ibadan:

Spectrum Books

Foster- Coster, A. (1985). The Sociology of Development. London:

Causeway Press Ltd.

Ujo, A.A. (1994). Understanding Development Administration in

Nigeria. Kaduna: Joyce Publications.

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UNIT 4 THE PARADOX OF GLOBALISATION AND THIRD

WORLD

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Understanding Globalisation
3.2 Characteristics and Dimensions of Globalisation
3.3 Impacts of Globalisation on the Third World Countries
3.4 Globalisation, Economic Dependence and Profile of the
Nigerian Economy
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

The main force propelling the world at the end of the 20th century is
globalisation. The interest in globalisation is motivated partly by the
thinking and perception that the fate of individual national and
communities is more and more tied together.

Globalisation is neither a theory nor a concept but a process that captures

the development of international system at different level from the more
familiar concept of imperialism. It is a comprehensive term that describes
the emergence of global society in which economic, political, social,
environmental and cultural events in one part of the world globally comes
to have a significant influence for people in another part of the world. It
is also used or often seen in some cases as a triumph of capitalism over
socialism with the end of the Cold War and collapse of the defunct USSR.
This unit is designed to explore globalisation as a current and forceful
trend in the international political economy and identify it unique
characteristics and its impacts which is paradoxical on the Third World
countries would be highlighted.

2.0 OBJECTIVES

By the end of the Unit, you will be able to:

• explain the meaning of globalisation

• identify the distinguishing characteristics of globalisation
• describe the impact of globalisation on the Third World countries.

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3.0 MAIN CONTENT

3.1 Understanding Globalisation

Globalisation is a highly contested and a very complex process that can

be understood in different perspectives, economic, social, political and
cultural perspectives. But according to Ewan (1995) globalisation can be
defined: from an institutional perspective as the spread of capitalism.
Offiong (2001:1) defines globalisation as:

The multiplicity of linkages and interconnectedness that surpasses the

nation-states together constitutes the modern world system. It sets up a
process through which events, decision, and activities in one part of the
globe can and do have great consequences for individuals and
communities in very distant parts of the world. Currently, he added,
information, goods, capital, people, language, images, communication,
crime, culture, pollutants , drugs, fashions entertainment, beliefs, among
others, all immediately move across territorial boundaries.

In another development, Oman (1994:27) defines globalisation as:

Often used in at least two efferent implications in terms of their policy
focus. In one sense, globalisation is used to mean multilateralism in
which case the global trading system, multilateral trade liberalisation and
government policies are the focus. Here globalisation is understood to
mean a multilateral towering of policy impediments to the movement of
goods and services across national as well as regional boundaries. In
another sense, globalisation is seen more as a macroeconomic
phenomenon, driven by the strategies and behaviour of corporations;
here, it is the changing dynamics of global competition and international
competitiveness.

According to Boutros Ghali (1996: 3), globalisation is seen as:

Creating world that is increasingly interconnected in which national
boundaries are less important, and it is generating both possibilities and
problem.

In the light of the foregoing, globalisation can be defined as the process

of intensification of economic, social and cultural relations across
international boundaries. It is principally aimed at the transcendental
homogenisation of political and socio-economic theories across the
globe.

SELF-ASSESSMENT EXERCISE

Briefly explain the meaning of globalisation as you understand it.

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POL 431 THIRD WORLD DEPENDENCY AND DEVELOPMENT

3.2 Characteristics and Dimensions of Globalisation

There are certain characteristics that distinguish globalisation from other

historical forms of capitalist expansion such as imperialism, colonialism
and neo-colonialism.
i) The emergence of the Trans-National or Multi-National
Corporations (T/MNC) as the major agent for the worldwide
expansion of private capital and the capitalist market. This has
brought about a fast growth in trade by transnational and
multinational corporations.
ii) It organises increasingly integrated economic and financial
activity across national borders and produces, sources and markets
its raw materials and products worldwide in its unceasing quest for
competitive advantage. This has enhanced rapid growth in
international financial transactions propelled by surge for Foreign
Direct Investment (FDI) largely controlled by the Multinational
Corporations (MNCs) thereby creating a global market.
iii) Communication Revolution. This revolution makes possible both
the speedy and safe transportation of goods and money to all
corners of the world and an instantaneous all-day and all night
communication from one end of the world to another. The
diffusion of technologies and ideas through trade expansion of
globalised transportations and communication. These have been
facilitated by production and finance.

SELF-ASSESSMENT EXERCISE

Briefly describe the characteristics and dimensions of globalisation.

3.3 Impact of Globalisation on the Third World Countries

The central feature of the idea of globalisation is that most contemporary

problems cannot be adequately studied at the level of nation –state, which
is –in terms of each country and its international relations, but instead
needs to be seen in terms of global process of interconnectedness and
interdependence which portends both possibilities and negative impacts
on Third World countries.

Globalisation can be seen as phenomenon of capitalist expansion and

accumulation. In order to promote expansion of this capitalist movement
in the TWCs, the international financial institutions supported by the
advanced capitalist countries have imposed a package of reform which
includes, the downsising of the state, withdrawal from economic
enterprise, elimination of all state subsidies, deregulation of the economy,
including external trade, currency devaluation, free flow of information,
transparency in governmental process, policy predictability, public

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accountability, and the rule of law and later multiparty democracy was
added. In various ways, these reforms and policy platforms are source of
conflict and insecurity in Third World countries.

Economists generally view globalisation rather positively. To Owan

(1994:9),

Globalisation frees the forces of competition that help to channel the

energies of people and the resources of countries into activities where
they are likely to be most productive. They therefore see free global
market essential to the future.

Calhoun, Light and Keller (1997:492) have raised two fundamental and
interesting questions that will help us to appreciate the paradox of
globalisation. In their work: The Phenomenon of Globalisation, they
asked: Global Village or Global Pillage and secondly, whether
globalisation is an opportunity or a threat? Are we on becoming global
village or witnessing global pillage of the planet and its people?

Globalisation may have knit the world closely together through

interconnectedness and interdependence but has also divided the world
and its population into winners and losers across nations and regions of
the world. Globalisation is thus, limiting instead of helping some people.
In the light of this Offiong (2001:3) observes that:

Multinationals increase profits not through greater efficiency but by

pitting countries and people against one another in a race to the bottom.
Underdeveloped countries attract investors by offering them the cheapest
labour, the lowest taxes and the least regulations; their national
economies may show signs of expansion but at the great cost of falling or
low living standard.

Third World Countries are trapped between this sustained and

widespread opposition to the IMF and the WB induced reform and the
pressure to implement the programme, have adopted four pronged
strategies: Accommodation of local demands; Cooptation, Divide and
rule and Repression. Globalisation has centralised and identified external
access to and exploitation of Third World resources especially Africa,
while marginalisng and pauperising the Africa people. Trade
liberalisation as demanded by the multilateral institutions has led to
deindustrialisation of Third World countries.

Finally, globalisation is failing to reach all peoples in a positive way. Too

many people in the Third World are excluded, unable to obtain access to
the prosperity that globalisation offers.

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3.4 Globalisation, Economic Dependence and Profile of the

Nigerian Economy

Nigeria at independence in 1960 was largely a producer and net export of

primary products. The six major agricultural products then were cocoa,
rubber, palm oil, groundnut, cotton and palm kernel. Although there
existed mining and quarrying activities those were of negligible
percentage and never counted for the economy as a whole. In other words,
agricultural produce and raw materials constituted the sole foreign
exchange earner for the country.

Specifically, the Nigerian state, an exporter of agricultural goods had

69.4% of its total GDP for the year 1963 and 1964 comprising the six
aforementioned agricultural commodities (Olaku, 1979). The trend of
having agriculture as the main foreign exchange earner for Nigeria
stopped in the early 1 970s when the country was suddenly awash with
petrol dollar arising from the quadruple increase in the prices of oil in the
world market. From 1972 onwards, oil gained ascendancy over all the
commodities as the contributor to the GDP, and also as a major foreign
exchange earner (Obadina, 1998). Thus, the over depending on crude oil
for foreign exchange and source of revenue was no doubt became
intensified with the introduction of Structural Adjustment Programme
(SAP) in 1985 by the then President Ibrahim Babangida’s administration
which among other things compelled Nigeria to liberalise the economy
via the removal of all forms of trade encumbrances to enhance foreign
investors to invest as well as free flow of goods and services across
national borders.

In a related manner, an overview of Nigerian economy has it that, oil-rich

Nigeria has been engulfed with instability, corruption, inadequate
infrastructure, and poor macro-economic management, but in 2008
Nigeria began pursuing economic reforms, that globalisation has failed
to allow Nigerian leaders to diversify the economy from its over
dependence on the capital intensive oil sector, which provide 95% of the
foreign exchange earnings and about 80% budgetary revenues (CBN,
2011). The quest to reform the economy led to the signing of an IMF
stand-by agreement in August 2000, Nigeria relieved a debt restructuring
deal from the Paris Club and a $l billion credit from the IMF, both
contingent on economic reforms. Nigeria fuelled out its IMF programme
in April 2002, after failing to meet targets, making it ineligible for
additional debt forgiveness from the Paris Club. In November 2005,
Abuja won Paris Club approval for a debt-relief deal that eliminated $1
8billion of debt in exchange for $l2billion in payments a total package
worth $30billion external debt (Akano, 2011). Even after the debt relief
saga, globalisation has continued to hurt Nigerian financial sector and the
entire economy (0choga, 2012).

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Empirically, Nigeria’s Gross Domestic Product (GDP) composition by

sector, shows that agriculture had 34.6% in 2001, 37.4% in 2002 and 3
1.9% in 2019. While the industry had 33.5% in 2001, 28.8% in 2002 and
32.9% in 2019 and services had 29.9% in 2001, 33.8% in 2002 and 33.2%
2019 respectively. It is obvious that the country’s worsening low
productivity forces was primarily responsible for the deteriorating state
of the nation’s industrial sector in the period under review. Against the
background of low contribution of the industrial sector to the country’s
GDP, it was clear that the Nigerian economy is to large extent an agrarian
economy. Based on these statistics, therefore, there is no gainsaying that
the industrial sector is highly ineffective and disarticulated as it contribute
little to the country’s GDP. There is no doubt, is an indication of over
dependency on agricultural produce and raw materials for foreign
exchange.

Similarly, the concentration of exporting of agricultural produce signified

high employment provision on the country labour force. For instance,
CBN (2011) reported that the total of 48.33 million Nigerians composed
the country’s labour force in 2019 while statistic for labour force
distribution by occupation had it that the agriculture employed 70%,
industry 10% and service 20% in 2009 respectively. Thus, a critical
analysis of the statistics revealed that Nigerian economy is basically an
agrarian economy because the sector provides employment for about 70
percent of the work force. By implication, the industrial sector employ
about 10% while bulk of the population are engage in subsistence
farming. It was against this background that the CBN (2007) reported that
about 70% Nigerian population are below poverty line and to support this
assumption Todaro (1992:18) argues that;

The ineffective of the industrial sector and the subsistence agricultural

system have places a large segment of Nigerians in the vicious circle of
poverty which is characterised by low productivity that leads to low per
capita income and low capita income results in low level of saving per
head, while the low of saving leads to low level of capital accommodation
per head which further leads to low productivity.

Also, apart from the fact that economy is agrarian one that is subsistence
in nature, another feature of the economy is the mono-cultural nature of
the economy which had made it highly susceptible to fluctuation and
uncertainties in the international prices of crude oil. According to Akano
(2005:477), the commodity accounted for 95% of government revenue
and 97% of total export earnings in 2004. This shows that Nigeria is at
the extreme end of the spectrum being dependent on one single primary
commodity-oil-for more than 95 percent of export earning which
contributes more than two thirds to revenue and about 12.00 percent to
GDP. According UNCTAD report in 2008, Nigeria’s agriculture

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recorded in terms of diversification within the economy Nigeria has

achieved very little progress as oil still constitute major source of
government revenue. Invariably this revealed that there is no coherency
as the various sectors of the economy are not in complementing order.
This in turn resulted to import-based economy system.

Another feature of the Nigeria economy is dependency. It is not a

dogmatic assertion to say that the country imports virtually everything
compressing of machinery, chemicals, transport equipment,
manufactured goods, food and live animals etc. Giving the fact that the
dependency status of the economy has a history which is dated back to
colonialism, in recent time, the openness of the economy was intensified
by series of trade policies enunciated by successive government. This is
why Iganiga and Idris (2000:12) assert;

The end of the last century witnessed the beginning of a new economic
policy in Nigeria; federal government of Nigeria headed by Olusegun
Obasanjo has evolved a policy of liberalisation, privatisation and
deregulation. Deregulation is nothing more than to free a trade or other
business activities from certain rulers and countries, these economic
policies were adopted with a view to attract foreign investor and goods
into the country.

This policy which was believed will stimulate the economy by way of
encouraging foreign investors, imported goods and services into the
country further worsened the situation. This is not to say however that
globalisation do not have its merits and demerits of courses, there are
thus, the advantages of the developed countries of the north are the
disadvantages of Nigeria in particular and countries in the south. More
empirically, according to UNCTAD (2004), and CBN (2010) reports on
Nigeria share of world trade in millions of dollars on exports and imports
transactions. Based on the reports Nigeria had export of $20975 with
0.28% while import of 58721 with 0.13% in 2000. In 2001 the export was
$1.7261 with 0.28% while the import was $11586 with 0.18%. In 2002
the export was 15107 with 0.24% while the import was $7547 with
0.12%. In 2009 the export was amounted to $59.32 billion while was
$29.05 billion and in 2010 the export was $76.33 billion while the import
was & 34.18 billion respectively. Paradoxically, the CBN (2011) report
on exports commodities indicated that petroleum and petroleum products
contributed 96% while cocoa, rubber and others had the rest percentage
respectively to Nigeria export trade.

Thus, a critical analysis of these statistics revealed that Nigerian economy

is at the receiving end in the world economy which to large extend is an
indication of dependency on import partners like China, US, Netherlands,
South Korea, UK and France for goods such as machinery, chemicals,

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transport equipment, manufactured goods, food and live animals etc.

Hence petroleum and petroleum products constitute about 95% of
Nigeria’s export annually by a logical implications, the country’s import
is more than export. Still on the implication, Young (2002:2) avers that;
The import based nature of Nigerian economy has a devastating latent
effect on the country quest for economic growth and development. The
absolute dependency on imported goods has led to the closure of 30
factories and 35,000 jobs lost as a result of the large scale dumping of
finished textiles and second-hand clothes in Nigeria due to Nigeria
wholesome commitment to World Trade Organisation rules and
regulations.

Young also argues that:

This problem is observed in other sub-sector of the manufacturing
industry, the cocoa industry alone talks of l0000 jobs lost due to the
barrage of foreign food and beverage items that compete with local
products to the extent that majority of these factories have been forced to
close down.

The openness of the economy which poses threats to local industries may
be responsible for the ineffectiveness of the sector. On their assessment
of the profile of the Nigerian economy, Peter and Akwele (2005:5 1)
pinpointed that:

Most of the goods produced locally are perceived to be of inferior quality,

they continuously facing stiff competition from foreign goods that are
normally dumped or smuggled into the country.

This is an indication that the dependent nature of the economy has

negative effects on the value of domestic currency (naira) in the
international market and the development of the productive forces
because the economy would not grow and Naira would not appreciate, if
import always exceeds export.

Finally, the assessment of the profile of Nigerian economy would not be

completed without examining the monopolistic nature of the economy.
The nexus that exist between industrialisation and the macroeconomic
variables has made industrialization become the supreme goal of any
nation that wants to be counted among great nations. In the case of
Nigeria, Iganiga and Idris {200:13} observe that:

Vital technology of operation in the industrial sectors is still in the hands

of foreigners: virtually all the Multinational Corporations (MNCs) in
Nigeria depend mostly on foreign expatriate workers for their technical
operations, it is not just that technology has not be transferred but the
MNCs have made it difficult for the local industries and manpower to

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operate even with the existence of Petroleum Technology Development

Fund (PTDF) established to develop local manpower in the petroleum
industries, a key sector of the economy.

The MNCs have made the market difficult for the few local industries to
operate hence the indigenous industries lack the requisite technology and
capital to compete effectively with the foreign counters. And as such
Nigerian economy is not benefiting much from the advantages associated
with competition as advocated by the exponents of capitalism. Invariably,
the foreign investors more often monopolize the market for surplus value
and control the economy.

Be that as it may. it has evidently clear that globalisation has not allow
sustainable and corresponding growth and development of the Nigerian
economy as the study revealed that the profile of the country’s economy
is basically agrarian, mono-cultural, import-based and monopolistic in
nature. And as such by these status, the economy may not effectively,
provide the needed economic opportunities to reduce poverty in the
country. These ugly trends have continued to intensify via the activities
of the agents of globalisation with the aim to perpetually dominate and
exploit Nigeria in the global economy, which is the cardinal view of the
dependency theory. That is why Schumann (2003:2) highlighted that:
The effects of globalisation on the developing country like Nigeria is
rooted in the enormous potentials of globalisation is in danger of being
lost because governments of the economically strong nations are not
shaping the process of global integration in such a way that the benefit of
the global division of labour really do lead to economic success and rising
prosperity for all

Based on the profile of the Nigerian economy and the activities of the
agents of globalisation, our findings indicate that globalisation poses the
following challenges to the economy:
i. Lower consumer demand for domestic goods occasioned by
preference of Nigerians for imported goods;
ii. Low level of wages in general leading to low effective demand;
iii. Low level of effective demand for domestic goods lending to
underutilization of capacity;
iv. Low value of the nation’s currency the naira making it difficult
and expensive to replace machines;
v. Shortage of raw materials and other production inputs due to
shortage of foreign exchange;
vi. Porosity of our national frontiers, which makes the smuggling of
contra bound goods a lucrative business;
vii. Problem of under-invoiced goods from the African countries,
which makes some foreign products cheaper than domestic ones;

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viii. The problem with the importation of fairly used cloths and other
products which affects the demand for domestic ones.

From all indications, the evidence presented, in the foregoing discussion

is nothing but a reflection of the fact that Nigerian economy is operating
in a difficult and unfavorable economic climate in the global economy.

4.0 CONCLUSION

Third World societies have been dichotomised in terms of standard of

living, quality of life and life styles. The dichotomous are self-evident in
the various forms of resistance to globalisation across nations of the
TWCs. There are paradoxes of integration and marginalisation where
there is exclusion of large section of the TW from the cutting edge of
research and modern technology. There is also a paradox of culture and
cultural isolation where global cultural homogenisation has succeeded in
interjecting a small segment of TW societies into the global family while
effectively disconnected them socially and culturally from people of their
own country as a consequence.

5.0 SUMMARY

This unit has examined the concept of globalisation and highlights of its
characteristics from other forms of capitalist expansion noted and its
impacts on the Third World countries discussed.

6.0 TUTOR-MARKED ASSIGNMENT

1. Discuss the various definitions of globalisation.

2. Critically evaluate the impact of globalisation on Third World
countries.
3. Mention and discuss the various dimensions of globalisation.
4. Discuss the impacts of trade liberalisation on the economies of
Third World countries.
5. X-ray Nigerian economy under the globalisation.

7.0 REFERENCES/FURTHER READING

Calhoun, L. & Keller. (1997). “The Phenomenon of Globalisation.” In,

Offiong, D.A. (2001). Globalisation: Post Neo- dependency and
Poverty in Africa. Enugu: Fourth Dimension Publishers.

Ghali, B. (1996). “Global Leadership after the Cold War.” Foreign

Affairs.

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Mann, M. (1997). “Has Globalisation Ended the Rise and Rise of the
Nation State?” Review of International Political Economy. Vol.4.
No.3.Taylor and Francis Publishers.

Nnoli, O. (2006). National Security in Africa: A Radical New

Perspective. Enugu: PACREP.

Offiong, D.A. (2001). Globalisation: Post Neo- Dependency and Poverty

in Africa. Enugu: Fourth Dimension Publishers.

Oman, C. (1994). Globalisation and Regionalism: The Challenge for

Developing Countries.Paris Development Centre.

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UNIT 5 INTERNAL AND EXTERNAL CONTEXT OF

DEVELOPMENT AND UNDERDEVELOPMENT

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Internal and External Context of Development
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

The understanding of the internal and external context of any state is

central to the understanding of it stage of development and
underdevelopment. Thus, this unit exposes students to the issues
considered as internal and external context of third world countries

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

 examine the centrality of the internal and external context of

development and underdevelopment
 assess the internal and external environments as central to the
study of third world and dependency.

3.0 MAIN CONTENT

3.1 Internal and External Context of Development and

Underdevelopment

To start with, the question that why is South-African is developed than

Nigeria is central to the understanding of this unit. In order to answer this
question in a satisfactory manner and there is need to place the whole
issue in a proper historical perspective, we need to look at both internal
and external contents of Nigeria and South-Africa. The internal context
has to do with the nature of the post-colonial political system in which
the State is likely to function as an obstacle to development rather an
agent of socio-economic transformation.

On the other hand, the external context has been backed by western
development strategies with neo-liberal policies for third world countries

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to adopt. The proper interrogation of the external environment in this

context is necessary. The neo-colonial influence on Nigeria and other
third world states is another factor to be interrogated while discussing
development and underdevelopment of the third word.

In most third world countries, the state leadership and the masses do not
share the same aspirations and vision for the state. This divergent vision
frustrates development in most third world countries. In addition to seek
from arbitrary rules of the colonialist, the masses in the third world
wanted better education, quality health care centers, electricity, pipe
borne water, and above all, security for lives and property. The governing
elites in third world are guilty of bad governance epitomized by
corruption.

Development is driven by ideology. Most third world countries unlike the

Asia-Tigers do not have ideological notion of development. The
Confucianism of China for instance propelled and stirred the Chinese
development politics. The absence of institutionalization of development
driven ideological inclination in Nigeria and most third world countries
frustrates the quest for development (Ochoga, 2012).

4.0 CONCLUSION

The unit has discussed the importance of internal and external context in
the understanding of development and underdevelopment of the Third
World. Some of these factors are historical while other is contemporarily
induced by the post-colonial States. While the historical perspective
creates historical insight into the nature and character of development and
underdevelopment of the third world, the contemporary context could
rewrite the history to attain development. The extent to which state
leadership could do this forms the recipe for further interrogation.

5.0 SUMMARY

Understanding the internal and external environment of any country is

central to the understanding of it stage of development and
underdevelopment. Both the internal and external context enables
students to interrogate the politics of development and underdevelopment
of a country.

6.0 TUTOR-MARKED ASSIGNMENT

1. Evaluate the claim that every state has it internal and external
context of development and underdevelopment.
2. Explain why the internal and external environment is central to the
study of third world and dependency.

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7.0 REFERENCES/FURTHER READING

Ake, C. (1981). A Political Economy of Africa. Nigeria: Longman.

Ochoga, O.E. The Impact of Globalisation on Poverty Reduction in

Nigeria, 2000-2012. M.Sc Dissertation to Benue State University.
(unpublished, 2012)

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MODULE 4 THE POLITICAL ECONOMY OF THIRD

WORLD DEVELOPMENT

INTRODUCTION
This module is designed to expose students to the theoretical debate on
the nature and character of the States in Third World. With this, the
module focuses on the theoretical explanations of the States in the Third
World in general. And the role of the State in Third World is also
discussed. The role of the State is central in the understanding of politics
of development and underdevelopment in particular.

Unit 1 Theoretical Explanations of the State in the Third World

Unit 2 The Role of the State in the Third World
Unit 3 Africa’s Response to the Development Crisis
(NEPAD/APRM)
Unit 4 Corruption and Third World Development
Unit 5 Finding Proper Roles for the State in the Third World

UNIT 1 THEORETICAL EXPLANATIONS OF STATES IN

THE THIRD WORLD

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Background to the Theoretical Explanation
3.2 The Command Economy
3.3 Neo- Classical/ Liberal Models
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

The political economy of the Third World matters to their social and
economic development. However, the dynamics engineered by the
interaction of certain social and political structures in so many TWCs are
not propitious to development. In addition, the optimism expressed by
early modernisation theorists regarding TWCs’ economic development
seemed ill founded during the 1980s in the face of deep economic
declines in Africa and Latin America. In South Asia, Sub Saharan Africa
and other TWCs, the war on poverty often seemed unwinnable. On the
other hand, dependency theory’s persuasive pessimism about the limits

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of development in the periphery seemed to have been belied by East

Asia’s spectacular growth from the 1960s into the 1990s.

In recent decades, research on the TWCs has often focused on its political
economy- the dynamic interaction between the forces of politics and
economy.

This module therefore focuses on several important issues as regards the

role of the state as it relates to stimulating and regulating economic
growth and development in the TWCs and what are the major strategies
for development. In this unit therefore, effort will be made to explore the
theoretical explanation of the role of state in promoting development. It
will also discuss a number of alternative strategies or models prescribing
the role of the state in Third World economies ranging from command
economy to the very limited state intervention.

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

• identify the theoretical explanations of the state in the TWCs

• discuss the major strategy relevant for the development of the
TWCs
• review the theoretical debate about the developmental state.

3.0 MAIN CONTENT

3.1 Background to the Theoretical Explanation

Theoretical postulation on the evolution, nature and character of the state

is crucially justified because it throws light on the role of the state, by
using its apparatuses. It is therefore of great significance to understand
the various theoretical explanations that are fundamental to their roles in
the society.

The state, once the corner stone of development is now the millstone
around otherwise efficient markets. States, especially in Third World
countries have been described as the ‘rentier state’, the ‘overextended
state’, the ‘parasitical state’, the ‘predatory state’, the ‘lame leviathan’,
the ‘patrimonial state’, the ‘prebendal state’, the’ crony state’, the
‘kleptocratic state’, etc. Such states, it has been argued are to delink,
reduce or roll back, to stabilise the economy, deregulate, privatise the
economy, to engage in good governance, to democratise themselves and
society and create an environment for the private sector to thrive.

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In the light of the foregoing, the growing interest in the nature and role of
state therefore represents the revival of a major intellectual and
theoretical concern of the 1950s and 1960s.

SELF-ASSESSMENT EXERCISE

Briefly describe the theoretical background to the role of the state in Third
World countries.

3.2 The Command Economy

Most of the dependency theorists believe that an exploitative relationship

between core industrial nations and peripheral Third World countries is
an inevitable outcome of capitalist trade and investment; they felt that
only a socialist economy could achieve economic independence and
development.

Theorists of the command economy have viewed market capitalist

economies as anarchistic because they leave the most fundamental
decisions over the allocation of resources and the determination of prices
to the whims and caprices of the forces of demand and supply. They also
believe in centralised state control over the economy. A command
economy initially established in the Soviet Union has two main central
features:
• the means of production are primarily owned and managed by the
state that includes factories, banks, major trade and commercial
institutions and retail establishment, etc
• decisions concerning production are not set by market forces but
rather by centralised state plans.

However, the collapse of Soviet Union and Eastern European communist

nations revealed or exposed the weaknesses of the centralised and
command economy. Despite the phenomenal impacts of the command
and centralised economy in the defunct USSR, China and even Cuba, its
weakness overshadows their accomplishments. In Latin American
countries, the state has often played a key economic role, seeking to be
an engine of economic growth. In the period between the two World
Wars, many Latin American nations first pursued state- led
industrialisation. That process accelerated during the Great Depression of
the 1920s and 1930s, when countries in the region had difficulties finding
markets for their goods and raw materials exports and, consequently,
lacked foreign exchange for industrial imports. Unlike the communist
countries, Latin American nations left most economic activity in the
hands of the private sector and did not centralise control over the
economy.

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In general, Latin America’s development model introduced two

important areas of inefficiency that will help us understand why it failed.
i. Many state owned enterprises were frequently over-staffed and
poorly run. Very few, if any, have the skilled and disciplined
personnel required for effective performance.
ii. The Latin America’s model encouraged inefficiency in the private
sectors

According to Handelman (2005:259-260), Government throughout the

world have effectively used protectionist means to help infant industries
get started during the early stages of industrialisation. But overtime, the
level of protection needs to be scaled back or domestic firms will have
little incentive to become more productive and internationally
competitive. Instead, Latin American protectionism, rather than serving
as a temporary stimulus, became embedded in the economy.

Against this background, starting from the 1980s, almost all Latin
American nations, forced by the region severe debt crisis economic
depression reversed their earlier statist policies. While Latin America has
been struggling since the early 1980s, a number of East and South East
Asian economies have grown at a phenomenal rate. Infant, from 1960 to
the late 1990s, these economies grew almost three times as fast as Latin
America and five times as fast as Sub-Saharan Africa. The growth in
these economies was essentially attributed to government, playing a key
role in stimulating economic growth.
In conclusion, not only has the spectacular successes of the East Asian
Tigers led to a re-evaluation of the role of state in development process
but it has also raised the question of replicating their policies and
experiences in other third world countries.

SELF-ASSESSMENT EXERCISE

Briefly describe the command economy theoretical postulation of state’s

role in the development of Third World countries.

3.3 Neo- Classical/ Liberal Models

Unlike the command earning model, the neo-classical or neo liberal

model assigns government a very limited economic role. The state, it
argues, should provide certain fundamental public goods such as national
defense, police protection, a judicial system and an educational system.
Neo classical economists insist that free market forces should determine
production decision and set prices without government interference. They
criticised government policies designed to stimulate industrial growth
such as protective tariffs and import quotes that restrict free trade and
thereby drive up prices of exports and imports; state subsidies to

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producers, consumers, and governments control on prices and interest

rates. All of these measures distort the choices made by producers,
consumers and government. Only when these artificial restraints are
removed, will the economy grow and development be achieved.

In addition, reliance on market forces and the adoption of market driven

export oriented development strategy was said to have led to efficient
exploitation of the comparative advantage of the countries in cheap
labour (new labour perspective) with its minimalist’s view of the state is
essential to Third World development.

Contemporarily, the neo liberal policies seemed to a large extent to have

won over the debate against the advocates of extensive state intervention.
However, that Africa and some Latin American countries and third
nations have liberalised their economies, deregulating the private sector,
removing trade barriers and freeing prices, government subsidies for
industries and consumers have reduced, does not necessarily mean the
neo liberal have won because these reforms resulted from the pressure
from the multilateral institutions and the earlier statist models that failed.
In addition, the central issue is one of the state and the market but it is not
a question of intervention thesis Laissez Faire a popular dichotomy but a
false one. It is rather a question of popular division of responsibilities
between the two and of efficiency in their respective functions. The
relations between government and the market can be seen under the
following interrelated categories:
• human and physical infrastructures;
• competitive climate for enterprises; and
• macroeconomic management and institutional development.

The most important investment government needs to make are on people.

Markets in Third World countries often cannot be relied upon to provide
people especially the poor with adequate education, health care and
nutrition. For instance, a child born in Africa today is more likely to be
malnourished than to go to school at all, and is more likely to die before
the age of five than to go to secondary school.

The general observation is that governments in Third World countries

have done too much of the things they cannot do well- regulating markets
and producing ordinary goods and too little of the things they must do
well-maintaining macroeconomic stability and making necessary
investment. In core states of the world we all experience the state as a
supplier of public goods and concerned with the efficiency of this
provision. Equally important to our modern way of life is the state as a
regulator and facilitator. Here the state operates macroeconomic and
other policies to support the economy within its territory. It involves the
roles of the state in producing the physical infrastructure for the smooth

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running of the economy. Undoubtedly, the most important theory of the

state in capitalist social formations is the state as arbiter. Here, the state
is deemed to be above the endemic conflicts of society and therefore can
act as a neutral umpire in adjudicating disputes. These theories underlie
most political activity within the core states of the world economy. It can
therefore be said that theoretical explanation of states in Third World
countries are relatively superficial description of state’s functions.

4.0 CONCLUSION

The state is seen as the harbinger and the main instrument of social
change, progress and development which in the European content meant
being the trigger for and projection of the modern institutions associated
with industrial capitalism. During the 16th-17th Century, major European
powers were guided by the philosophy of Mercantilism which viewed
nation’s economic activity as a means of enhancing the political power
of the state and its monarch. Government was viewed as both source, and
beneficiary of economic growth. Mercantilism was challenged by 18th
Century economists, Adam Smith, who argued for a minimised state
function that allowed market forces a relatively free hand. In the 19th
century, Karl Marx, reacting to the exploitative nature of early capitalism,
proposal assigning the state a dominant role, at least through the
ownership of the means of production and centralised direction of the
economy. Finally, in the 20th Century, Sir John M. Keynes, responding
to the great depression, advocated a substantial degree of government
economic intervention but rejected Marx position of state ownership. All
these provided the theoretical foundations and philosophical basis for the
role of the state.

5.0 SUMMARY

In this unit, attempt has been made to expose you to the background that
brought about the theoretical postulation of the evolution, nature and
character of state that defines its role in promoting developments. Two
basic theories have been explained: the command economy and neo
liberal economic policies

6.0 TUTOR-MARKED ASSIGNMENT

1. Describe how the command economic policies affect states in the

Third World.
2. Discuss the neo-liberal economic policies under their impact on
states in the Third World.
3. Identify the major strategy relevant for the development of the
Third World Countries.

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7.0 REFERENCES/FURTHER READING

Abass, I.M. (2010). State, Class and Management of Local Governments

andNigeria. Zaria: A.B.U Press.

Ake, C. (1996). Democracy and Development in Africa. Washington

D.C: the Brookings Institution.

Fritz, A. & Menocal, R. (2006). Re-Building Developmental States from

Theory to Practice. London: Overseas Development Institute.

Handelman, H. (2005). The Challenge of Third World Development. New

Jersey: Pearson Prentice Hall.

Mkandawire, T. (2008). “Thinking About Development States in Africa.”

Initial file assessed 18/09/08 Nandy, A. (1999). “State” In:
Sachs,W.(Ed.) (1999). The Development Dictionary. London: Zed
Books (pp. 264-274).

Supple, B. (1990). “States and Industrialisation: Britain and Germany in

the Nineteenth Century.” In, Held, D. et al. (Ed.). (1990). States
and Societies. Oxford: Basil Blackwell.

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UNIT 2 THE ROLE OF THE STATE IN DEVELOPMENT IN

THE THIRD WORLD

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 The Role of the State in Development
4.0 Summary
5.0 Conclusion
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

The purpose of the state has been a subject of intellectual and

philosophical debates even among the classical and modern philosophers.
This is because it is the wish of every Third World countries even the
most corrupt and incompetent to promote development. The role of the
state in promoting economic growth and social progress in the Third
World countries has been a subject of contestation for the past 50 years.
At the end of the Second World War, state led development strategy was
embraced and encouraged in the TWCs intended to bring about
industrialisation and entrepreneurship through intensive and deliberate
effort and state intervention.

This unit is intended to explore the role of the state in promoting

development. A key premise in this unit is the states and their political
economy factors and the social underpinnings lie at the heart of why some
states functions better than others. The dynamics engendered by the
interaction of certain social and political structure s in many TWCs are
not propitious to development.

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

• explain the role of the state in development

• discuss why some states have been capable and more supportive
of development than others
• outline what the role of the state should be in stimulating and
regulating economic development in TWCs.

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3.0 MAIN CONTENT

3.1 The Role of the State in Economic Development

The question of the state’s proper economic role has been at the centre of
political and economic debates for 100 years, first in the Western
industrialised economies and more recently in Third World countries.
While shying away from a strict Laissez Faire or free market approach,
Summers and Thomas (1995:423) advocates a limited role for
government in development and the adoption of market friendly
economic reforms. In particular, they maintain that a state should
primarily invest in human and physical infrastructure, create a
competitive climate for business and establish sound macroeconomic
policies. The role of the state in promoting economic growth and
development in the TWCs has been a subject of contestation among
international development experts and policy analysts for the past 50
years after the end of the World War II, coupled with the emergence of
newly independent states in Africa and Asia, the international community
embraced a state led model of development intended to bring about
development through deliberate and intensive effort and state
intervention.

A review of the record indentifies some important characteristics of

successful government interventions. Most of these follow from the
general principles of supporting rather than supplanting, markets and the
related idea that the important thing for government is not to do things
which individuals are doing already and to do them a little better or a little
worse; but to do those things which at present are not done at all. Market
development itself requires government action; this is because the
establishment of the rules of the game by the government is crucial to the
success of market reforms.

A remarkable transformation prevailing views about how governments

best promote economic development has occurred in recent times. While
it was once thought that government needed to occupy an economy’s
commanding heights by allocating credit, rationing foreign exchange,
ensuring against dependence, and operating key industries; today it is
widely accepted that government’s responsibility for directing the
production and distribution of goods and services should be much
reduced and the private sector’s role much enhanced. For some time now,
the advice of the World Bank and International Monetary Fund has
reflected the view that economic progress is impeded by government that
seeks to supplant, rather than supports markets. In a synthesis of what has
been learned to date, the 1991 report described the emerging consensus
in favour of what was labeled the ‘market friendly strategy’, one in which
government sustains rather than supersede markets. According to the then

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World Bank President, Barber Conable, he summed up the prevailing

remarks of the 1990 thus:

If I were to characterise the past decade, the most remarkable thing was
the generation of a global consensus that the market forces and economic
efficiency were the best way to achieve the kind of growth which is the
best antidote to poverty (Broad, et al,1995:434).
The challenge for Third World countries is to establish a strong and
effective, but not overbearing state that can promote growth, equitable
distribution, and a healthy environment, while avoiding unwarranted
interference in the market, crony capitalism and authoritarianism. Even
though many Third World countries have now embraced East Asia’s
Export Oriented Industrial Strategy, the recent Asian financial crisis
demonstrates that even the most sophisticated and apparently successful
development models can run into serious difficulties as new challenges
develop and weaknesses surface.

The Economic Commission for Latin America (ECLA) was at the

forefront of espousing such an approach. By the late 1970s, the state-led
model of development had come under strain in Africa, as well as Eastern
Europe and Latin America. State intervention in these countries was often
wasteful with highly inefficient state enterprises or parastatals as a prime
examples leading to bloated states that proved incapable of delivering
development outcomes. This resulted in a succession of national
economic crises.

By the early 1980s, a growing concern ensued from academics,

researchers, policy makers calling for the abandonment of the state led
model of development. This idea was championed by the IMF and the
WB in what later came to be known as the ‘Washington Consensus’. At
the core of this theoretical postulation was the insistence that TWCs adopt
Structural Adjustment Programmes designed to reduce the size and reach
of the state. Instead, TWCs should rely on the market as the most effective
mechanism for allocating resources and promoting economic growth.
Key recommendations included eliminating government controls,
promoting trade liberalisation and fostering a greater role for the private
sector in the economy.

According to the World Bank in World Development Reports (WDR)

(1991:9), Government intervention should be used sparingly and
anywhere most needed. Put simply, government need to do less in those
areas where markets work or can be made to work, reasonably well.
Structural Adjustment Programme (SAP) in the TWCs affected the
provision and delivery of basic social services where neo-liberal policies
had little or no solutions. Consequently, services lapsed, affecting the
welfare of the poor in particular. The World Bank (1989) acknowledged

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the importance of the state in managing developments and social change

and brought back on the agenda the proactive role of the state in
development.

The viability of development models based on free market principles has

been challenged. It has been argued that the newly industrialising
countries of East Asia have not totally had successful developments as
experienced by their recent labour unrest and ecological destruction; that
the socialist command economies failure was not due primarily to their
eschewal of market mechanisms; and that policies of structural
adjustment have not set the stage for sustained development. It is within
this purview that Broad et al, (1995) advocates for development strategies
that promote broadly representative government, equitable income
distribution and ecologically sound policies. There are fundamental
issues in the success story of the new industrialized economics of the Asia
that exemplified the role of the State in economic development. This
section basically x-rayed contradictory issues as regards the success story
of the new industrialised economics for further discussion in the backdrop
of the view point of the underdevelopment and dependence theory. The
State perspective on economic development, State autonomy and the
capitalist developmental State in East Asia come to mind here:

(i) Statist Perspectives on Economic Development

The principal work on East Asian development came from renewed
interest in the state in the social sciences during the 1970s, which
emerged partly as a critique of dependency analyses (e.g. Amsden, 1979;
Evans, 1979). In addition the economic success of the NIEs raised
important questions about the role the state had played in facilitating this
success (Amsden, 1979; Rimberger, 1978). As a result of this renewed
interest, the Joint Committees on Latin American Studies and on Western
Europe of the Social Sciences Research Council set up the Committee on
States and Social Structures to carry out research into the role of states.
Among the scholars involved in this enterprise were Peter Evans, Albert
Hirschman, Peter Katzenstein, Ira Katznelson, Stephen Krasner, Dietrich
Rueschemeyer, Theda Skocpol and Charles Tilly. The influential
publication Bringing the State Back In (1985) grew directly out of the
work of this committee and laid the basis for the emergence of what
became known as the neo-Weberian paradigm. Although this paradigm
draws inspiration from Weber, in particular his concept of the state as an
autonomous structure, many of those who have subsequently been
identified with it do not deny the importance of economic factors, class
relations or many other facets of the (orthodox).

The mercantilist tradition initially inspired a whole host of works on the

Japanese State (Johnson, 1982; Sheridan, 1993; Williams, 1994), which
in turn generated other country-specific studies of which Wade’s study

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of Taiwan (1990) and Amsden’s work on South Korea and Taiwan (1989;
1979; 1985) are notable. Amsden’s work is of particular importance for
this study she was one of the original contributors to Bringing the State
Back In, and can therefore be legitimately classified as a neo- Weberian.
Thus, the dependency theory did not emphasis on the role state in
development.

(ii) State autonomy

Probably the most important concept in the neo-Weberian paradigm is
the idea of State autonomy. The State conceived of, is a compulsory
association claiming control over territories and the peoples within them,
with ‘administrative, legal, extractive and coercive organisations’ at its
core (Evans et al., 1985:7). However, to enjoy autonomy, the State must
be able to formulate policy and pursue goals that ‘are not simply
reflective of the demands or interests of social groups, classes, or society’.
For neo-Weberians such autonomy is not a fixed, static feature, but
something that can ebb and flow. The Southeast Asia provides an
example of the moments when the state can exercise autonomy for the
good of all and sundry.

(iii) The Capitalist Developmental State in East Asia

The development of capitalists in the NIEs played crucial role in the
miracle story of the NIEs. To start with, all Sates intervene in their
economies for various reasons…the question is how the government
intervenes and for what purposes’ (Deans, 2000 17–18). To illustrate this
point Johnson, and also Henderson (Applebaum and Henderson, 1992;
Henderson, 1993), distinguish four different forms of government
interventionism: market-ideological, market-rational, planideological
and plan-rational. Although similar classifications are made by
Dahrendorf and Dore, the original inspiration for such categorisation can
be traced, perhaps unsurprisingly, to Weber. For example, Johnson
himself comments that, ‘[i]n modern times Weber began the practice with
his distinction between a “market economy” (Verkehrwirtschaft) and a
“planned economy” (Planwirtschaft)’ (1982:18). A market-ideological
political economy is one in which the State, ‘merely allocates those
resources and responsibilities that have been traditionally under its
control’ (Henderson, 1993:88) namely: national defence, internal security
and the provision of the necessary legal structure within which market
relations can safely operate. Policy is driven by ideological dogma
usually expressed by neo-classical economic think-tanks and is
‘relatively impermeable to argument and empirical evidence which
contradicts its basic values’.

Johnson argues that market-rational political economies are a product of

early industrialising nations. The functions that the State performs in
such economies are mainly, ‘in the interest of maintaining competition,

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consumer protection and so forth’ (1982:19). The market-rational State

will have no industrial policy and the most important evaluative standard
will be efficiency rather than effectiveness. Essentially then the role of
the State is to set the parameters in which private companies
operate…(while) investment, production and distributional decisions are
the preserve of (those) companies and their actions’ (Henderson,
1993:87) for the overall good of all and sundry

4.0 CONCLUSION

Against the foregoing, we can conclude this unit by stating that, while it
is now admitted that the State has played a central role in the development
of Asian countries, it can be said that the roles of the state began with
state led development in the 1950s and 1960s. This role was later
criticised as inefficient and distorting in the light of the growing debts
and macroeconomic instability in the 1970s and 1980s in Africa and Latin
America. Later, the implementation of the structural adjustment
programmes and market oriented reforms as prescribed by ‘Washington
consensus’ compounded problems for Third World countries.
Consequently, the role of the state in development is reevaluated based
on the successful experiences of state led development in several Asian
countries.

5.0 SUMMARY

In this unit, effort has been made to present the role of the state in
development from both statist and neo- liberal perspectives. The unit also
established that the successes of any of this strategy in any country of the
world cannot be replicated in other Third World countries because of
their peculiarities.

6.0 TUTOR MARKED ASSIGNMENT

1. State the role of the State in promoting development in the Third

World.
2. Discuss why some States have been capable and more supportive
of development than others.
3. Explain what the role of the State should be in stimulating and
regulating economic development in the Third World.
4. Examine the role of the State in the economic development of the
NISs of Asia

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7.0 REFERENCES/FURTHER READING

Abbott (eds), State Strategies in the Global Political Economy, London:

Pinter.

Ake, C. (1996). Democracy and Development in Africa. Washington

D.C: The Brookings Institution.

Anifowose, R. (1999). “State, Society and Nation.” In, Anifowose R. &

Enemuo, F. (Eds). (1999). Elements of Politics. Lagos: Sam
Iroanusi Publications.

Bernard, M. and Ravenhill, J. (1995). Beyond Product Cycles and Flying

Geese: Blackburn (eds), Japan’s Emerging Global Role, Boulder:
Lynne Reinner.

Bukharin, N. (1972). Imperialism and World Economy, London: Merlin.

Bukharin, N. (1972b). Imperialism and the Accumulation of Capital,

London: Allen Lane. Cambridge University Press.

Cumings, B. (1987). ‘The Origins and Development of the North-East

Asian Political Economy.

Deans, P. (2000). ‘The Capitalist Developmental State in East Asia’, In,

R.P. Palan & J.P. Development Trajectories’, Third World
Quarterly, 17(4): Special Issue on the Developmental.

Dos Santos, T. (1970). ‘The Structure of Dependence’, American

Economic Review, LX, May.

ECLA, (1950). The Economic Development of Latin America and its

Principal Problems, New EUDEBA.

Evans, P., Reueschemeyer, D., & Skocpol, T., (1985). Bringing the State
Back in, New York:

Frank, A.G. (1967). Capitalism and Underdevelopment in Latin

America: Historical Studies of Frank, A.G., (1969/70), Latin
America: Underdevelopment or Revolution, New York: Monthly.

Frank, A.G. (1984), Critique and Anti-Critique: Essays on Dependence

and Reformism, London.

Frank, A.G., (1971). The Sociology of Development and the

Underdevelopment of Sociology.

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Frank, A.G., (1972). Lempenbourgeoisie: Lumpendevelopment. New

York and London: Monthly.

Furtado, C. (1970). Economic Development of Latin America.

Cambridge: Cambridge University.

Furtado, C., (1966) Subdesarollo y estancamiento en America Latina,

Buenos Aries:

Gill, S. (ed.), (1993). Gramsci, Historical Materialism and International

Relations. Cambridge:. Cambridge University.

Gill, S., 1990, American Hegemony and the Trilateral Commission.

Cambridge: Cambridge

Gill, S., 1991, American Hegemony and the Trilateral Commission.

Cambridge: Cambridge

Gills, B. and Palan, R.P. (1994) Transcending the State-Global Divide.

Boulder, Lynne Reinner.

Gills, B. & Philip, G., (1996). ‘Editorial: Towards Convergence in

development Policy?

Gilpin, R. (1981). War and Change in World Politics, Cambridge:

Cambridge University Press.

Gilpin, R., (1987). Political Economy of International Relations,

Princeton: Princeton

Gilpin, R., 1993, ‘The Debate About the New World Economic Order’,
In, D. Unger, & P. Guenther Roth and Claus Wittich (eds.).
Berkeley: University of California.
Haggard, S., (2000). The Political Economy of the Asian Financial Crisis.
Washington:

Handelman, H. (2005). The Challenge of Third World Development. New

Jersey: Pearson Prentice hall.

Hinkalammert, F., 1972, Dialectica del Desarrollo Desigual, Valparaiso,

Ediciones Hurst and Co.

Nandy, A. (1999). “State.” In: Sachs, W. (Ed.). (1999). The Development

Dictionary. London: Zed Books.

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Omeje, K. (2007). State and Society Relations in Nigeria: Democratic

Consolidation, Conflicts and Reforms. London: Adonis and
Abbey Publishers Ltd.

Palma, G., (1978) ‘Dependency: A Formal Theory of Underdevelopment

or a Methodology for Policies, Brighton: Harvester Wheatsheaf.

Shannon, T.R., (1990). Introduction to World System Perspective,

Boulder CO: Westview. Universitarias de Valparaiso. University
Press.

Wallerstein, I. (1980). The Modern World-System, Volume II.

Mercantilism and the State. The Analysis of Concrete Situations
of Underdevelopment’, World Development.

Wallerstein, I. (1975). World Inequality, Montreal: Black Rose Books.

Wallerstein, I. (1979). The Capitalist World-Economy, Cambridge:

Cambridge University Press.

Warren, B. (1973). ‘Imperialism and Capitalist Industrialisation’, New

Left Review,

Warren, B. (1980). Imperialism, Pioneer of Capitalism, London: Verso.

Waters, R. and McGee, T. (1997). New Geographies of the Pacific Rim,

London:

Weber, M., (1978). Economy and Society: An Outline of Interpretive

Sociology, 2 Vols. York: United Nations.

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UNIT 3 AFRICA’S RESPONSE TO DEVELOPMENT

CRISIS-NEPAD

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Africa at the Dawn of the 21st Century
3.2 Background to the Formation of NEPAD
3.3 Objectives of NEPAD
3.4 APRM Strategy
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

Africa is an important continent with so much to offer to the world in

terms of natural and human resources. It is the third largest continent with
a population of over 500 million. Modern science recognises it as the
cradle of civilisation. Paradoxically, it is the poorest of all the continents,
weighed down by poverty, illiteracy, diseases, by a burden of un-payable
debts, characterised with conflicts and war.

Africa had a very specific experience of the world system of slavery,

colonialism and neo-colonialism associated with post independence
governance crisis. Reviewing the situation in Africa at the beginning of
the 21st Century, Aluko (2003:5) posted that:

Africa was the poorest region in the world with not less than half of its
total population living on less than $1 per day. Africa also accounted for
only 1 percent of the global gross domestic produced and the most
marginalised region with only 1.7per cent of world trade, and 1 out of 5
Africans lived under armed conflict, creating doubt about the continent’s
future.

To overcome this challenge, it is argued that African countries are

required to consciously formulate a coherent ideology, based on the
African conditions, peculiarities and heritages. This is predicated on the
argument that the major obstacle to development of Africa is the
predominance of foreign ideology such as capitalism and socialism.
Retrospectively, there have been several attempts by African leaders to
provide the policy framework which will serve as a platform and guide
Africa to development.

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This unit will therefore explore Africa’s response to the crisis of

development through the framework of New Partnership for Africa’s
Development (NEPAD) through the instrumentality of Africa Peer
Review Mechanism (APRM).

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

• discuss the basis for Africa’s response to development crisis

• mention the objectives of NEPAD
• explain the platform of APRM and its structure of operations.

3.0 MAIN CONTENT

3.1 Africa at the Dawn of the 21st Century

Available statistics on Africa at the dawn of the 21st century has shown
that more than half of the population of Africa lives on less than US $1
per day. The mortality rate of children under five years of age is 140 per
1000 and life expectancy of birth was only 54 years. Only about 58
percent of the population have access to safe water, the rate of illiteracy
for people over 15 years was 41 percent. Africa has less than 1 percent
of global trade with business done more out of the continent than within.
Above all, most of the sub-Saharan countries depend on foreign aid to
make over 50 percent of their annual national budget.

In the light of the foregoing, it can be observed that the poverty and
backwardness of Africa stand in stark contrast to the prosperity of
Advanced Capitalist Countries. Africa’s place in the global community
is defined by the fact that the continent is an indispensable resource base
yet the poorest continent. Talking about war and conflict in Africa, it has
been observed that between 1960 when most countries of Africa got
independence and 1998, there are about 32 civil wars fought with over 7
million lives lost.

SELF-ASSESSMENT EXERCISE

Briefly describe the situation of Africa at the dawn of the 21st century.

3.2 Background to the Formation of NEPAD

The emergence of New Partnership for Africa’s Development (NEPAD)

formed in July 2001, is the latest in a long line of policy frameworks,
intended to place Africa on a path of growth or development. Before
NEPAD there have been several attempts by African leaders to provide

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the policy frameworks, which will serve as a platform and guide to

African development. However, the African Continent had been littered
with failed initiatives, development plans and programmes of action. Of
note were the regional initiatives of the Lagos Plan of Action in the early
1980s, Abuja Treaty establishing the African Economic Commission
(AEC) in the early 1990s. All these initiatives failed essentially because
they were dependencies driven. African backwardness and development
challenge was blamed on external forces thereby exonerating post-
colonial elites; they also failed to consider issues of bad governance,
corruption and accountability. In summary, these initiatives sought to
externalise the sources of Africa’s development crisis.

The process that eventually crystallised into NEPAD dates back to 1999
when, President A Boutefika, President Thabo Mbeki, President
Obasanjo and President Wade, were at the time the chairmen of the OAU
(AU) the Non-Aligned and the G77 respectively. They seized the
opportunity of their unique positions to address the problems of peace,
security, as well as poverty and underdevelopment in Africa. President
Mbeki became the arrow head of Millennium African Recovery Plan
(MARP); soon after, President Wade sponsored the Omega Plan.
Following the directive of the OAU (AU), both initiatives were merged
to form NEPAD.

Conversely, NEPAD is distinct from the rest because it addresses

Africa’s development crisis such as bad governance and leadership. In
addressing the problem of bad leadership and governance crisis, NEPAD
internalises the source of development. Hence, NEPAD, according to
Audu (2008:211) can be defined as:

“The collective vision of African leaders is to resolve the crises of

governance and development in their region in the 21st century”. NEPAD
is therefore, Africa’s home grown economic reserve plan.
The Organisation of African Unity(OAU) (now African Union(A.U.), an
umbrella body for independent African States endorsed and adopted the
New Partnership for Africa’s Development. This represents the latest
attempt by African countries to promote economic and social
development in this economically backward continent.

SELF-ASSESSMENT EXERCISE

Briefly trace the origin and emergence of NEPAD.

3.3 Objectives of NEPAD

The Objectives of NEPAD were designed to synchronize and regulate the

Millennium Development Goals (MDGs). Essentially, the long term

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objectives of NEPAD is to eradicate poverty in Africa and to place

African countries, both individually and collectively on the path of
sustainable growth and development and thus halt the marginalisation of
Africa in the age of globalisation. Talking about the prime aim of
NEPAD, President Kaunda pointed that:

The prime aim of NEPAD is to foster closer economic cooperation with

the developed world-works hand in hand with the U.S. Initiatives like
African Growth and Opportunity Act (AGOA) which presents
opportunities to African countries to access American Markets.

In addition, Isaac (2003:25) a member of NEPAD steering committee

broadly specified NEPADs Objectives as:

i) to eradicate widespread and severe poverty; ii)to promote

accelerated growth and sustainable development; iii)to halt
marginalisation of Africa in the globalisation process; and,
ii) to restore peace, security and stability.

He summarised the objectives of NEPAD as constituting a bold and

imaginative attempt to launch total war on the endemic problems of
widespread poverty, severe underdevelopment, peace and security to
Africa.

It is interesting to note that NEPAD seeks to achieve these objectives

through a number of preconditions. One of these was that African
countries must commit themselves, to the African Peer Review
Mechanism (APRM). This was part of NEPAD’s Democracy and
Political Governance initiative.

SELF-ASSESSMENT EXERCISE

Briefly describe the objectives of NEPAD.

3.4 APRM Strategy

The declaration on democracy, political, economic and corporate

governance also committed participating states to establish on African
Peer Review Mechanism (APRM) to promote adherence to and
fulfillment of its commitment. The Durban Summit adopted a document
setting out the stages of Peer Review and the principles by which the
APRM should operate. In 2003 the NEPAD Heads of State and
Governments Implementation Committee in Abuja adopted a
Memorandum of Understanding (MOU) on the APRM. It came into
effect immediately with the agreement of six countries to be subject to

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the terms. Those countries that do not accede to the document are not
subject to review.

In addition, the March 2003 meeting also adopted a set of objectives,

standards criteria and indicators for the APRM. The meeting agreed to
the establishment of a secretariat for the APRM and the appointment of a
seven-person panel of eminent persons to oversee the conduct of the
APRM process and ensure its integrity.

The APRM process is based on a self-assessment questionnaire

developed by the APRM secretariat and is divided into 4 sections viz:
Democracy and Political governance; Economic governance and
management; Corporate governance, and Socio economic development.
Its questions are designed to assess states compliance with a wide range
of African and International Human Rights treaties and standards.

The APRM questionnaire was formally adopted in February 2004 in

Kigali, Rwanda, by the first meeting of the APRM, made up of
representatives of the Heads of States and Governments of all states
participating in the APRM. APRM is designed to provide a system of
tracking non state operations in the delivery of services and with the
corporate sector both of national level and at a developed community
level.

The mandate of APRM is to encourage conformity in regard to political,

economic, and corporate governance, values, codes and standards among
African Countries and the objectives in socio-economic development
within the NEPAD. It is however a voluntary mechanism open to any
A.U member. As at 2011, 31 countries out of the 53 African Countries
had joined the APRM.

For effective performance of the APRM, it comprises of the following

structures:
i) APR Forum: It is the committee of the Heads of States and
Governments of the countries voluntarily participating in APRM.
It is the highest decision making body. They appoint the APR
panel, overlook the funding, discuss the country’s reports and
apply the peer pressure and transmit the report to the relevant A.U
structures.
ii) APR Panel: It is the management and executive arm of the APRM
that directs and manages its operation. They are appointed to
oversee the review process, to ensure the integrity of the process,
to consider reports, and to make recommendations to the APR
forum. It consists of seven persons.
iii) APR Secretariat: The secretariat provides all the secretarial,
technical, coordinating and administrative support services for the

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APRM. The Secretariat is based in Midrand, South Africa, not far

from NEPAD Secretariat.
iv) APR Country Review Team: They are appointed by the APR
panel, one of whose members heads the team, and are constituted
only for the period of the country’s review visit. Their composition
is carefully designed to enable an integrated, balanced, technically
competent and professional assessment of the reviewed country.
v) APR Focal Point: This is a national mechanism set up by a
participating country in order to play a communication and
coordination roles. It serves as a liaison between structure and
continental ones such as the APR Secretariat and the APR panel.
vi) National Coordinating Structure: Here, the actual
implementation of the APRM at the national level happens.

4.0 CONCLUSION

In conclusion, it is imperative to state that NEPAD has observed correctly

that Africa’s contemporary development crises arises from deficit of
leadership characterised by bad governance devoid of accountability and
transparency. It is also bedeviled by personal rule, neo-patrimonial
politics, prebendalism and corrupt practices. NEPAD’s attempt at
situating the development crisis of contemporary Africa internally is a
good development and its strategy of APRM is a good policy framework
in that it creates synergy between the various regional blocs in Africa,
ECOWAS, SADCS, etc. These regional blocs are to provide and
harmonise tariffs and customs regime to ultimately promote greater intra-
regional trade.

The idea behind NEPAD therefore is noble, as it attempts to put Africa

on a self-reliant path to development where the processes are owned by
Africans themselves. However, while we appreciate this initiative as a
giant stride aimed at pulling Africa away from the path of
underdevelopment and dependency, what are its chances of success.
Considering the fact that Africa’s foreign debt profile is above $200
billion and the economy of most of African states is not only structurally
shallow but heavily dependent on primary sector and monocultural; and
how many of the national leaders have domesticated the policy focus of
NEPAD and APRM at national levels. Above all, NEPAD is widely seen
as idea that does not originate from Africa but part of the provision of
what is referred to as the ‘Washington Consensus’ and the prescriptions
of multilateral institutions as the best strategy to adopt for Africa’s
development.

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5.0 SUMMARY

In this unit, attempt has been made to explore Africa’s response to

underdevelopment and dependency crises through the instrument of the
New Partnership for Africa’s Development (NEPAD) where the source
of the contemporary development crises of Africa is traceable to bad
leadership characterised by poor governance, lack of accountability and
transparency. It also examined the strategy of Africa’s Peer Review
Mechanism (APRM) where some of these governance crisis identified
are to be tackled.

You are expected to have understood Africa’s response through NEPAD

and the strategy of APRM to promote good governance, accountability
and transparency in Africa.

6.0 TUTOR-MARKED ASSIGNMENT

1. Describe Africa’s response to contemporary development crisis

and explain the extent of successes and challenges.
2. What do you understand by NEPAD?
3. Mention the objectives of NEPAD and evaluate the efficacy of the
instruments of APRM to the realisation of governance challenge
in Africa.

7.0 REFERENCES/FURTHER READING

Abel, E. & Uche, C. (2005). “South Africa, NEPAD and the African
Renaissance.” African Studies Centre, Working Papers 64.

Alkali, R.A. (2003). Issues in International Relations & Nigeria’s

Foreign Policy. Kaduna: North Point Publishers. Pp 116-125.

Audu, J. (2008). “Africa at the Dawn of the New Millennium.” Zaria

Journal of Social Sciences. Vol. 1 No 2.Pp 207-220.

Isaac, A. O. (2003). “Mobilising Capital Flows for NEPAD.” Nigerian

Tribune, October 16.

Kebonang, Z. & Moswen, S. (2003). NEPAD and the Challenges of

Attracting Foreign Direct Investment to Africa.

NEPAD Documents (2001). Abuja Nigeria. The New Partnership for

Africa’s Development (NEPAD) Declaration on Democracy,
Political Economic and Corporate Governance.
(NEPAD/HSGIC/03-2003/APRM/MOU/Annex).

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UNIT 4 CORRUPTION AND THIRD WORLD

DEVELOPMENT

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Meaning of Corruption
3.2 Causes of Corruption in the Third World
3.3 Dimensions of Corruption in Third World
3.4 Corruption and Development in Third World Countries
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

The concept of corruption has been re-occurring topic of discussion

among social students of third world countries. This unit therefore raises
the premise of understanding corruption, not only as a social evil, but also
as an overwhelming effect on the development or underdevelopment of
Third World countries, in order to reduce our tendency to blame outsiders
for our woes and to look inward to the socio-economic and political
challenges facing us. After all, global capitalism has provided some of
the advantages that other Third World countries in Asia and Latin
America have gained, so why not Africa? This unit may also provide
answers to this and other related questions.

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

 define corruption
 identify causes of corruption
 highlight dimensions of corruption in Africa
 discuss the impact of corruption on Africa development.

3.0 MAIN CONTENT

3.1 Meaning of Corruption

Although, corruption has been re-occurring in society ever since it only

recently that it has only been given more attention. Corruption means a
lot to different individuals hence the question of corruption means

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divergent things. Some see corruption as from perspective of bribery,

kickback, favoritism, blackmail, theft, misappropriation and other vices
in the social and working environment of daily routines. While most
people quickly point their finger at the government and the authorities as
the incarnation of corruption and apologize for the wrongdoing. The
buck-passing may as well make it difficult for single definition to capture
corruption, as the acts are better known and described than its definition;
nevertheless, the following attempts are worth mentioning:

Corruption in general involves money laundering, theft of intellectual

property and piracy, embezzlement, bribery, smuggling, looting
including all sort of corrupt practices, illegal mining, illegal arms deal,
human trafficking, and child labour, tax evasion, foreign exchange
malpractices including counterfeiting to currency, open market abuse,
prohibited goods, wastes, and dumping of toxic.

According to Khan (1996)

Corruption is any act which deviates from the rules of conduct, including
normative values, governing the actions of individuals in a position of
authority or trust whether in the private or public domain, because of
private-regarding motives (that is nonpublic or general) such as wealth,
power status, etc….

Obasanjo, (1995) asserted that corruption as an anti-social behaviour

conferring improper benefits contrary to legal and moral norms, and
which undermines the authorities capacity to secure the welfare of all
citizens. Corruption is, therefore, the phenomenon that contravened the
normal legal convention and shortcuts the benefits of many entities for
few individuals.

The definitions above are based on the violation by government officials

or agents for personal gain by the established rules of government and,
therefore, corruption is an act of any state agent in the use of the resources
for the purpose of self-agrandising or neo-patrimonialism. This is known
as political corruption, and is different from other corruption like
institutional corruption, individual corruption.

3.2 Causes of Corruption in the Third World

Although corruption differs from country to country, it is possible to

identify some of the key common driving forces that generate it. The
causes of corruption in the third world are myriad and apparent. However,
greed has been the major motivating factor of corruption in third world
countries. The Third World's historical past is characterized by European
colonisers' practices that have changed the socio-political and economic
systems of these nations. Naturally, colonisation did not allow the

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indigenous peoples to be open and responsible and the colonial conquest

process was characterised by bribery and coercion, and the colonial
position was often an incentive to white peoples to live in luxury and to
treat indigenous peoples sub-humanely (Okeke, 2015).

Onimode (2003) recognises the building blocks of capitalism as a

covetous element of corruption in the third world, as greed, individualism
and selfishness. The survival of world capitalism was cited as the main
impetus for corruption by primitive accumulation in the peripheral
economies.

The phenomenon of corruption is strongly influenced by the political and

economic environment. The more is the economic activity in the country
regulated and limited, the higher the authority and the power of officials
in decision making and the greater the possibility of corruption, since
individuals are willing to pay or offer payment in order to avoid
restrictions. A great potential for corruption is especially there where the
officials are under the regulation given the opportunity to decide on the
basis of discretion.

The institutional framework defined as instrumental to corruption by

Klitgaard (2014) includes: the hegemony of authority on the part of
officials; the degree of control that officials are permitted to exercise; and
the degree to which accountability and disclosure structures operate
within an agency. The monopoly of power by Third World officials is
huge, especially with regard to infrastructure and the provision of
sensitive documents. The same may also be said of the certificate of
occupancy (CO) given to landowners requiring the permission of the
Governor. The procedures leading to the signature of the Governor are
most frequently burdensome-and certain officers extort the public's
resources in order to move the files from one level to the other. The same
is true of those who manage contracts, because bribes and kickbacks were
part of the deals, as those people had the ultimate burden of signing these
contract papers. In most cases, regulation is not enforced by due process
as provided by statute and often the legislation is too poor to verify the
government officials' actions (Okeke, 2015).

The institutional framework manifests as lack of professional ethics and

deficient laws regulating corruption as a criminal offense, and the
prosecution and sanctioning of it in third world countries. A great
influence comes also from the ineffective sanctioning of corruption,
which only increases the possibility of continuing the corruptive actions
of those involved, creating at the same time a strong likelihood that others
will join in the corruption due to this inefficient sanctioning.

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Corruption also generates a lack of transparency and a lack of control by

supervisory institutions. Therefore, where there is insufficient legal basis
or sufficient political will to control, which enables a non-transparent
functioning of both politics and the economy, corruption flourishes.
Corruption is also affected by the extensive, non-transparent or
incomplete legislation, where laws can be interpreted in different ways
(for the benefit of the one who pays).

Poverty may not be directly responsible for corruption, but it fuels

corruption in third world countries. Studies have shown that corruption is
also strongly influenced by the low salaries of public administration
employees (state officials), who are therefore trying to improve their
financial position by receiving bribes, and consequently, the socio-
economic situation of the government officials also affects the
phenomenon of corruption. This is demonstrated also by Allen et al.
(2018) in their study where they find that corruption arises because
agencies, institutions and the government can no longer control
corruption effectively due to underpaid officials, which is a problem
especially in the developing countries, where they do not have the
sufficient tax revenue to properly reward the local officials. However,
low wages are not the only cause of corruption; the poor state of the
public administration, which is a consequence of political
“overcrowding” of officials, due to which loyalty usually prevails over
professional standards, also strongly affects the corruption. As an
important factor influencing corruption.

3.4 Corruption and Development in Third World Countries

There is nothing to be gained from the fact that corruption has remained
the single biggest factor delaying the growth and development of the
African continent despite the enormous amount of natural and human
resources. Its adverse effect is felt in the educational, economic and
socio-political domains.

The administrative capacity of third has not developed due to the

recruitment of non-qualified members of the civil and public services. It
affects their schooling, growth, and the capacity to handle their respective
offices, which makes mediocrity the norm in the system and unethical
practices and ego allegiance the criterion for advance against
meritocracy. The sum is the consistently weak administrative structure
and culture which, as expected from modern bureaucrats, can hardly
anchor any complex envelope model. This is why the inadequate public
services, especially in Nigeria, have become the hallmark across the
continent (Okeke, 2015).

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Economic impacts of corruption are simplified by observing the huge

unemployment of skilled labourers, academics, exacerbated by an
increasing flight from capital and the infrastructural deficiencies and
decline caused by the long-term economic decline and their multiplier
impact on monumental poverty problems such as homelessness, urban
vagrancy and disturbing emigration.

The following are some of the ways corruption has threatened sustainable
development in third world countries:
i. Non-institutionalisation of democracy, rule of law, human rights
and Economic development.
ii. High incidence of prevalence of conflict, violence, crime,
insecurity and instability due to antagonistic competition,
inequality, poverty and lack of access to basic necessities of life.
iii. Erosion of values of hard work and integrity.
iv. Lack of access to productive opportunities and diverting energies
of youth to crime, deviance, violence and sundry forms of anti-
social behaviour.
v. Low foreign investment because of corruption induced
bureaucracy and other obstacles.
vi. Lack of investment in the real sector by both foreign and domestic
investors because of high profitability of contracts in service and
supplies motivated by corruption.
vii. Dependence on foreign sources for goods and services resulting in
under development of indigenous technological and productive
capabilities.
viii. Leakages of national assets to foreign countries through money
laundering and conspicuous consumption.
ix. Misallocation of resources towards programmes and projects
amenable to corrupt practices.
x. Perpetuation of patron — client relationships that undermine
democracy, efficiency in public and private sectors.
xi. High cost of doing business and low investment in productive
sectors resulting to widespread poverty and unemployment, high
prices of goods, low purchasing power resulting in low capacity
utilisation by producers and manufacturers which in turn result to
retrenchment of workers.
xii. Political ethno-religious and communal conflicts and violence as
different groups in the society struggle to control state power as
avenue for corrupt enrichment and ability to disperse patronages
to their cronies, relatives and associates.
xiii. Loss of public trust and legitimacy by the government.

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SELF-ASSESSMENT EXERCISE

i. What is your understanding of corruption? Explain with domestic

examples.
ii. Outline and discuss briefly four causes and the impact of
corruption in the Third Countries.

4.0 CONCLUSION

In the world of underdevelopment, and indeed in Africa, corruption

remained the main factor. This leads to migration of capital, brain drain,
political uncertainty and consumer base and distribution policy as well as
economic decline and poverty which generate many negative
underdevelopment indexes that can occur in these countries across the
globe.

5.0 SUMMARY

In the Third World countries and indeed Africa in the unit we addressed
the centrality of inequality in terms of underdevelopment. Corruption is
generally regarded as any act which leads to a state agent or his associate's
violation of confidence and personal benefits. In the socio-political and
economic field of the Third World, and indeed Africa, we identify
structural and regulatory factors that facilitate corruption and that
manifest. We took a speech to correlate corruption to development in the
African continent and concluded it was not compatible, as empirical
evidence suggests overwhelmingly that corruption is antithetic to the
Third World development.

6.0 TUTOR-MARKED ASSIGNMENT

With concrete examples discuss the impact of corruption on the

development of any African country of your choice?

7.0 REFERENCES/FURTHER READING

Allen, Franklin & Qian, Jun & Shen, Lin, (2018). Corruption and
Competition, CEPR Discussion Paper No. DP13218. Available at
SSRN: https://ssrn.com/abstract=3262543

Franz Fanon. The Wretched of the Earth.

Igwe, Stanley (2010). How Africa Underdeveloped Africa. Port Harcourt:

Professional Printers and publishers.

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Khan, Mushtaq H. (1996). “A Typology of Corrupt Transactions in

Developing Countries”. In, Barbara Harriss-White, and Gordon
White [eds]. “Liberalisation and the New Corruption”. IDS
Bulletin 27 (2): 12-21

Klitgaard, Robert (2014), Addressing corruption together, The

Organisation for Economic Co-operation and Development
(OECD), Symposium on Anti-Corruption Development
Assistance: Good Practices among Providers of Development Co-
operation, Paris on 11-12 December 2014.

Okeke, G.S.M, (2015), Pol 324: Politics of Development and

Underdevelopment. NOUN, Abuja.

Onimode B (2001). Overview of Corruption and Organized Crime in

Africa. In Fighting Corruption and Organized Crime in Nigeria:
Challenges for the New Millennium. Ibrahim L and Femi O (eds)
Spectrum Books Limited, Ibadan.

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UNIT 5 FINDING PROPER ROLES FOR THE STATE IN

THE THIRD WORLD

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Justification for Redefining the Role of the State
3.2 Finding the Proper Role for the State in Third World
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

There is a widespread awareness that everything is not well with the state
of States in the Third World countries. That calls for finding a proper role
for the state. The need to find a new role for state in development has
become imperative considering the experiences with state led
development in East Asia on the one hand and Latin America and
especially Africa on the other. Developmental states have been
spectacularly successful in promoting growth and development in a
number of Asian countries in recent decades in contrast; they have largely
failed in Africa.

In addition, the need to redefine the role of the state has become
imperative because a huge majority of TWCs have failed to develop to
walk successfully the odious path of progress laid out so considerably by
the dominant school of the post-World War II and they have failed to
develop viable nation states along the lines prescribed.

States in the Third World countries have evolved considerably since the
late 1980s. In particular, the role of the state was rolled back in many
places where attempts at state-led development had not been successful.
At the same time, state effectiveness has remained missing ingredients in
most places. Here, it is the design of this unit to gauge where states in
Third World countries stand now and what should be their roles.
This unit shall therefore present the legitimacy and basis for re-thinking
or redefinition of the role of the state and present a proper role for the
state in promoting development in third world countries.

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2.0 OBJECTIVES

By end of this Unit, you will be able to:

• state the justification for a redefinition of the role of the state in

the Third World
• evaluate the proper role of the state in promoting development in
the TWCs.

3.0 MAIN CONTENT

3.1 Justification for Redefining the Role of the State

With political independence came the onerous responsibilities for

inexperienced leaders of the newly independent states of the Third World
of addressing the promises made to the people during the nationalist
struggle. They asked their leaders for a life free from poverty, hunger and
diseases. They asked for schools, and other social amenities. But it is
impossible to realise those things without substantial economic growth.
Political independence had given the newly independent Third World
countries the power to unlock the door of economic and social progress
but the question is how they are going to approach it. For them, only
organised and forceful action could bring them economic freedom.
Accordingly, they proffered their solution cited in Offiong (2001:16)
thus:

Their point of departure was Marxist, their rallying cry, neo-colonialism,

and their argument that the colonial system had survived independence
and was thriving through a variety of devices-economic alliances
engineered between former dependencies and nations, support of puppet
regimes frequently come to power through corruption, deliberate
sabotage of efforts at genuine inter-African unity, economic infiltration
through loans and capital investment, even direct monetary control over
emergent states whose finances remained in the hands of time colonial
powers.

In trying to answer the question of what role should the state play in
development, Third World countries were guided by two dominant
ideologies in the era of cold war- capitalism and socialism. Some leaders
felt that political independence was a sham shielding continued colonial
economic domination. The structural adjustment programme advocated
by the multilateral institution with its capitalist or neo-liberal frameworks
were not designed to help Third World countries overcome their
economic and development problems. Instead, it seems to be a carrot and
stick strategy to coerce Third World countries to open up their markets to
the industrialised nations who themselves have not given up protection.

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It seeks to coerce Third World countries to abandon their nationalistic

policies and programmes. The failures of structural adjustment
programme have compelled even the most dogmatic institutions to
recognise the positive role the state can play in the process of
development.

In the light of this, socialism, with its strong state control economy was
the solution with the national wealth being made to benefit its citizens.
Influenced by the prevailing development economics theories, Western
educated Third World elite’s views development as economic
development that would enable their autonomy from the North, and
sought strategies to rectify the causes of underdevelopment rather
ameliorates its effects. The state therefore, was to embark on planning
and regulation and though this, government could mobilise surplus
production for investment, and foreign aid would be carefully scrutinised,
to be accepted only where clearly consonant with the goals of national
development.

The second strategy of development was the very opposite of the first.
This group consisted of pragmatic, capitalist materialist that encouraged
continued association with the erstwhile imperialist powers. This group
was in romance with the modernisation who argued that western powers
had the key to solving global inequality. They also favoured foreign
assistance and other forms of aid from their former colonial master.

Today, the collapse of the Soviet bloc’s centrally controlled command

economy and the poor economic performance of the remaining
communist nation which have largely abandoned Marxist economics
have discredited the advocates of state dominated economies.

At the same time, no government embraces full laissez faire (allowing

market forces a totally free reign with no government intervention). In
the real world therefore, Third World governments must decide where to
position themselves between the extreme poles of free market and a
command economy. However, one choice for the TWC is contentions
because of the following:
i) the fragile nature of many TWCs
ii) their high level of poverty
iii) their poor distribution of wealth and income
iv) their extreme dependence on International market forces
v) their enlarged natural environment
vi) many TWCs lacked a strong entrepreneurial class and substantial
private capital for investment.

In the light of the above, state economic intervention traditionally has

been more pronounced in Africa, Latin America and much of Asia than

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in the West. In recent decades, a world-wide trend toward neo-liberal

economic policies has sharply reduced government economic
intervention in both the developing and developed world. It is against this
backdrop that Nandy (1999:264) has observed that state in these societies
often looks today like some kind of specialised coercive apparatus or
private business ventures.

Furthermore, the economic crisis of the 1970s, the demise of the

theoretical armour for state intervention, the ideological hegemony of
neo-conservatism in key funding institutions and donor countries. The
palpable failure of development planning in many countries, stagnation
and the crisis of accumulation- the socialist countries and the changing
mood toward Third World countries and the cynicism of the development
establishment about its counterparts in the recipient nations and all these
pointed to government failures more insidious than the market failure that
state policies had purportedly been designed to correct. However,
although some of the argument against state intervention is based on an
idealised and dogmatic view of markets, there is now widespread
acceptance of market failure on the grounds of economies of scales,
imperfect information, etc. While it is now admitted that the state has
played a central role in the development of Asian countries, it is
suggested that replication of the same is practically impossible in other
Third World countries.

SELF-ASSESSMENT EXERCISE

Briefly describe the justification for or rationale for redefining the proper
role of state in Third World countries.

3.2 Finding the Proper Role for States in Third World Countries

In thinking about development strategies for Third World countries, we

must be able to blend the proper role of the state and market in the
economy as a decisive factor. Finding proper roles for the states in Third
World countries have become imperative because, state in the Third
World today is the most demonised social institution, vilified for its
weaknesses, it’s over extension, its interference with the smooth
functioning of the markets. The state once seen as the cornerstone of
development is now seen as the millstone around otherwise efficient
markets and has become not only dysfunctional in terms of the
management of larger societal issues but also by its withdrawal from state
dominated economic and social space. The dramatic ascendancy of neo-
liberalism; partly as a result of the rise and political triumph of capitalism
over socialism created a formidable impetus for the need to rethink a new
roles for the states especially in Third World countries. In addition, not
only has the spectacular success of the East Asian Tigers led to re-reading

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and rethinking of the role of the states in the development process, but it
has also raised the question of replicating.

According to Mkandawire (2008:4),

The general conclusion is that market failure so prominent in
development economies is still a problem that warrants government
intervention and that since such failures differs in intensity, scope and
location, a selective set of interventions is required. The most significant
lesson has been the central role played by a developmental state in the
process of development.

Since the mid-1990s, another shift in understanding the role of the state
in development has become perceptible arising from in large part on the
recognition that there has been a very different experiences of state led
development in a number of Asian countries, especially South East Asia
that underwent rapid economic growth and a radical socio-economic
transformation, moving from being poor agrarian societies in the 1960s
to producers of high technology value added goods by the 1990s. The
1997 World Development Report (WDR) was thus dedicated to
rethinking the state role in development and re-affirmed the position that
the state is central to economic and social development.

Finding a new role for the state is predicated on the recognition of the
development success of East Asia which has led to the thinking on what
states should do to accomplish development. Their experience has shown
that even market based economies require functioning capable states in
order to operate and to grow. This justifies the position of the report of
commission for Africa recognising state capacity and effectiveness as a
key bottleneck in Africa’s ability to meet the Millennium Development
Goals (MDGs). The effectiveness of the state is a key and critical variable
explaining why some countries succeed whereas others failed in meeting
development goals.

The states in the Third World is called to intervene in order to remove

class biases in access to public services and redistribute income and
probably asset from powerful; social classes to those whose economic
and political power is currently insubstantial. Finding new roles for states
in Third World countries therefore, requires meeting the basic needs of
the people which also implies lessening of the dependence of the Third
World on the markets, capital and technologies of the industrialised; a
greater potential for trade expansion among developing countries; an
improvements in their terms of trade vis-à-vis the industrialised world; a
reduced dependence on and role for multinational corporations and
sophisticated technologies; a reorientation of development assistance.

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A basic needs approach opens up the possibility of autonomous, self-

sustained growth for the Third World. This strategy would thus appear to
be a core potent means of realising the Third World demands for
restructuring of the world economy than endless, protracted strikes,
violence and civil unrest. In addition, promoting development especially
in the present global economic order is as much a political as well as a
technical problem. That is, the problem is that of mobilising the political
will to undertake radical change, as well as one of appropriate planning,
resource allocation, etc.

Two political prerequisites for basic needs approach is:

i. an effective, decentralised and democratic administrative structure
to translate policies into dreams and actions; and,
ii. Mass participation in the development processes by the poverty
groups.

According to Ghai et al. (2005) to find a proper role for a developmental

state it must possess at least two essential attributes. These are:
i) the state must have the capacity to control a vast majority of its
territory and possess a set of core capacities that will enable it to
design and deliver policies
ii) the project must involve some degree of reach and inclusion and
have an institutional long term perspective that transcends any
specific political figure or leader.

4.0 CONCLUSION

The choice of which strategy and what proper role the state should play
in development is contentious because of the fragile nature of many of
the Third World countries, their high levels of poverty, their poor
distribution of income and wealth, etc. Consequently, governments have
to intervene to play some of these roles.

It is therefore not surprising that state economic intervention traditionally

has been more pronounced in Africa, Latin America, and much of Asia
than in the west with little or failed results. The problem associated with
these failed states’ intervention project was rooted in what can be
described as state capture-where some powerful or influential interest
groups used the state to foster their own interest and extract rents rather
than to promote a developmental vision.

Finally, as difficult as the political and economic task of establishing such

state may be, it is within the reach of many Third World countries
struggling against the ravages of poverty and underdevelopment. By and
large, in order to achieve all these hitherto mentioned, there must be true
or advanced democracy in third world states. This is because promoting

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democracy is the most effective way of advancing technology and

national interest. Democracy is all about meeting the needs of the people,
so if election to leadership positions are not manipulated and the people’s
will prevail, those elected to public offices will definitely serve public
good.

5.0 SUMMARY

In this unit, attempt has been made to discuss the rationale for redefining
the role of the state in development. It has also been stated that because
of the fragile and peculiar nature of states in Third World countries,
identifying proper roles for state is contentious but however conclude that
if states are able to meet with some conditions, they can perform their
role in the development of Third World countries.

6.0 TUTOR-MARKED ASSIGNMENT

1. Explain the proper role of state in the development of Third World

countries.
2. State the justification for a redefinition of the role of the state in
Third World countries.
3. Mention and explain why it is difficult to replicate the Developed
World development success story in other states in the Third
World.

7.0 REFERENCES/FURTHER READING

Ake, C. (1996). Democracy and Development in Africa. Washington DC:

The Brookings Institutions.

Fritz, A. & Menocal, R. (2006). Re-building Developmental States from

Theory to Practice. London: Overseas Development Institute.

Ghai, D. “Introduction.” In: Ghai, D. et al. (1991). IMF and the South:
The Social Crisis and Adjustment. New Jersey: Zed Books.

Handelman, H. (2005). The Challenge of Third World Development. New

Jersey: Pearson Prentice Hall.

Mkandawire, T. (2008). Thinking About Developmental States in Africa.

Mhtml: Initial file. Assessed 18/09/08.

Nandy, A. (1999). “State.” In: Sachs, W. (Ed.) (1999). The Development

Dictionary. London: Zed Books.

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Offiong, D.A. (2001). Globalisation: Post Neo-Dependency and Poverty

in Africa. Enugu: Fourth Dimension Publishers.

The World Bank (1989). “Sub-Saharan Africa: From Crisis to

Sustainable Growth”.

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MODULE 5 AFRICA’S RESPONSE TO DEVELOPMENT

CRISIS

INTRODUCTION
This module is mainly an introduction to Africa development policy with
particular emphasis on issues in Nigerian politics and nation building.
Emphasis is laid on the Nexus between democracy and development in
the Third World; the Third World and democratisation process; and the
Third World and the challenges of Governance. The module will enable
students to know whether democracy is a means to an end or an end itself.
Students will be exposed to the debate on whether Nigeria or/and other
third world countries need democracy first or development later.

Unit 1 The Nexus between Democracy and Development in the

Third World
Unit 2 Third World and Democratisation Process
Unit 3 Third World and the Challenges of Governance
Unit 4 Foreign Aid and Debt Crisis in the Third World
Unit 5 Response to Third World underdevelopment

UNIT 1 THE NEXUS BETWEEN DEMOCRACY AND

DEVELOPMENT IN THE THIRD WORLD

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Foundation of a Democratic State
3.2 Democracy First, Development Later?
4.0 Summary
5.0 Conclusion
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

The second half of the 20thcentury was characterised with the most
dynamic Third World countries’ economies typically governed by
authoritarian regime. Almost all of Asia’s most impressive economic
miracles transpired under authoritarians or semi authoritarian
developmental state. It is against this development that some have argued
that authoritarian governments are better equipped to control wage
demands from labour and to impose development plans. However, for
every authoritarian success story, there have been several economic

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disasters, corrupt dictatorship throughout Africa, the Middle East, Central

America, and the Caribbean have plundered their country’s limited
wealth and used the economy to reward their political allies. To this end,
this unit will enable student students to understand whether democracy is
means to an end or an end itself

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

 trace the origins and models

 describe the foundation of the democratic State
 discuss good governance as an essential ingredient of democracy,
 determine whether democracy should come first and development
later.

3.0 MAIN CONTENT

3.1 Foundation of a Democratic State

Democracy as a system of governance has tenets which are not only

universally recognised and been propagated by proponents of democracy
in the international system. The answer to the question whether
democracy is means to an end or an end itself, largely depends on how
these tenets are instutitionalised and operated in any political system. To
start with, political party is bedrock of democratic. It is a building block
when individuals and groups political aspiration are articulated and
aggregated. This could be possible when the political actors
institutionalised these tenets which include-: periodic election-of which
it conduct should reflect the wishes and preferences of the electorates;
guarantee of civil liberty-where the civil society have the freedom to
question government on issues of development regarding it policies and
programmes with unlimited freedom of expression and association of
citizens; independent of the judiciary is not only necessary but crucial
for sustenance of democracies and as well as adherence the doctrine of
the rule of law. Basically, the essence of these tenets is to ensure the
institutionalization of the culture of good governance, because good
governance is a key to the well-being of citizens of any political system.
And the next segment of this section discussed why good governance as
an essential ingredient of democracy.

The issues of good governance have dominated democracy and

development studies literature since the 1980s when the wind of
democracy started blowing across the new states of Africa and South
America. This may not be unconnected to the fact that good governance
has also become a highly priced commodity by actors in government.

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Good governance forms the bedrock of general development in a country,

eradication of poverty, hunger, provision of quality education and respect
for human rights.

Good governance has the features of participatory, transparency and

accountability in government. It has been empirically demonstrated that
the absence of good governance results in snail speed development, lack
of transparency and accountability, escalating hunger, illiteracy and
human rights abuses. The extension of the above is frustration and
aggression which breeds various conflicts (Agidi, 2018). Africa has been
noted to be suffering from the absence of good governance which
provides veritable causes of the underdevelopment crisis in Africa. There
is a clear causal effect and linkage between the absence of good
governance and development. The causes of the development crisis in
Africa are traced mainly to the absence of good governance (Agidi,
2018).

Good governance is one of the issues that have gained prominence in

modern development literatures Okolo and Agidi (2018) noted that the
concept of good governance has occupied enormous space in
development literature especially in democratic nations where the
citizens has voted willingly for representatives to represent then in
various capacities. Good governance as the running of the affairs of
government in positive and progressive manner beneficial to the
governed and which delivers the public goods (Shedrack, 2007). The
World Bank (1989) in its document on Sub-Sahara conceptualised good
governance using four key parameters namely public sector management,
accountability, legal framework for development and transparency. Also
the World Bank (1992) gave further clarifications on good governance to
mean the manner in which power is exercised in the management of a
country’s economic and social resources for development. Agidi (2013)
opined that good governance means the ability of a government to
maintain peace, guarantees law and order, create condition necessary for
economic growth and ensures a minimum level of social security.

The UNDP (2002) viewed good governance as striving for rule of law,
transparency, equity, effectiveness, efficiency, accountability and
strategic vision in the exercise of political economic and administration
authority. Kola et al (2017) stated that good governance by implication is
when the government can carry out the activities that can ensure the good
of all the citizens in the society.

3.2 Democracy First, Development Later?

In the academic world, the links between democracy and development

have studied and discussed for decades (Ake, 1996; International

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IDEA2011; Anna 2013). Thus, it has been debated whether ‘development

first and democracy later, or nations should seek democracy first then
development comes later. In a specific manner, Carothers and de
Gramont (2013; 207) pinned that there are three perspectives to this
debate:
(a) The democracy governance Camp, which they can be importance
of democratic governance for development;
(b) the development state camp, which believes that the
developmental State comes first and democracy later; and
(c) the multiple camp, which emphasis politics but also highly
context-specific paths to development.

All the above views are subject to debate and their proponents have
argued. Thus, the view in the development State camp is that the key to
rapid growth and economic transformation is centralised decision-
making, a commitment to development, massive investment, and an
autonomous and capable bureaucracy (Anna,2013). Taking Anna’s
submission, the proponents of this view believe that a centralized
decision-making system of governance create the conducive environment
for owners of capital to invest the economies. In other words, provided
governance create development driven atmosphere for massive
investment, the wealth will be controlled by the virtue of the centralised
decision-making, the dividend of the conducive of economic
environment would triple down the masses. And as such, democracy
strives better in economic developed countries than less economic
developed countries. It is against this premise that Anna (2013:29)
contends that:

This is builds on the tremendous developmental successes of Asia

countries, such South Korea, Taiwan and Hong Kong, from this
perspective, countries centralised power and kicked off development.
Similar patterns can be found in China, Ethiopia, Rwanda and Vietnam.
In fact, the development success of China provides a strong new
argument in of this approach.

Another proponent of this approach, Khan (2013) argued that emphasis

should be on the importance of investment and new technologies to
development rather than political goals, simply to democratise a nation.
This scholar underlines the need for collective actions and State
efficiency rather than democracy. In other words, investment in economy
and technological advancement lends to development not necessary
democracy. Using the China and South-East Asian countries’ success
story as a recipe, to the proponents, development comes first and then
democracy comes later.

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Other scholars who have argued in favour of this approach are Ochoga
and Shishi (2015). These scholars averred that democracy ideally has
essential recipes to course development but it applicability is completely
depended on the willingness of political actors. This implies that to
achieve political goals, the actors must be visionary and nationalistic. To
them, democracy does not automatically guarantee development. This is
why Ochoga and Shishi (2015) concluded that democracy is antithetical
to unilateral decision-making, and centralised decision-making has
evidently proven in China and else-where to be catalyst for development.
No wonder, Boroth (2012:19) argues that:

The barriers to growth in Africa are clientilistic political systems with

problems of collective action. Research on service delivery in several
countries shows Rwanda to be effective with its up-down, disciplined
approach. There is a reluctance towards, which is seen as a stand in
opposition to the powerful, politically neutral State devoted to growth.

From the foregoing analysis, the basic approach of the multiple path camp
can describe ‘politics is important, but must be organised according to the
situation’. That is why Carothers and de Gramont (2013) described the
Camp as seeing governance as a critical factor in development, but also
no single best model exists. Carothers and de Gramont (2013:2)
specifically contend that ‘development has been achieved by different
governance systems, and the best one for any particular country will
vary’. In other words, no particular system of governance is an essential
recipe for development. This could be why this camp advocates that
economic growth comes first and democracy later.

The perception is that, only once there is a middle class-creating growth

and creating through investments can democratic transformation take
place. Before that democracy could be even harmful (Anna, 2013). This
could be the reason why Oteh (2019:4) argues that ‘poverty and
ignorance are critical threat to democracy in Nigeria’. In practice,
political goals have remained separate from socio-economic development
programmes. This is fundamental difference between policy and practice
is explored to be the thrust of this thesis.

Accordingly, there is a case for democracy in that citizens across the

world want it. There is a case for democracy in universal normative
instruments. There is a case for democracy in academic studies of aid.
Nevertheless, the ‘developmental State’ camp sees to rule in practice,
often underpinned by references to China, Vietnam, Ethiopia and
Rwanda. This situation begs the question, if there is a case for
democracy’s ability to deliver on development.

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In this regards, Anna (2103) made a case for democracy whether or not it
delivers. Reacting in affirmative to Anna’s question, democratic
governance is not an end itself, but means to an end. In other words,
democracy as a system of governance has some inherent ingredients
(tenets) that are typical to course political actors to formulate policies,
make decisions and utilise commonwealth for the greatest happiness of
all and sundry. Therefore, the actuality and the extent to which
democratic states have achieved this claim is the angle in which the
proponents of development first have a case against democracy.

Also, there is strong empirical evidence that counters the case for
authoritarian state development. In the area of the ensuring of human
welfare, there is a positive story to tell of the links between democracy
and development. Several studies have shown that democracy delivers
economic and social benefits for citizens. This is not to only true for
developed economies, infact, poor democracies outperform poor
autocracies in delivering services and human well-being (Siegle,
Weinstein and Halperin, 2004). Specifically, Siegle, Weinstein and
Halperin, (2004:1) assert that:
Data on low income countries from 1960-2004 shows that, poor
democracies grow as rapidly as poor autocracies. Outside Eastern Asia,
the median per capita growth rates of poor democracies have been 50
percent high autocracies. Moreover, the risk that poor autocracies will
experience serves as economic contradictions twice that of poor
democracies.

The foregoing submission by Siegle, Weinstein and Halperin (2004)

suggest that democracies stand the chance to do better development wise
than autocracies. This could be the reason why it is believe that
democracies are far better at avoiding development catastrophes (Ochoga
and Shishi, 2015). A classic example was put forward by Sen (1999:1),
who averred that ‘no democracy with free press has ever experienced a
major famine’. Although, Sen (1999) failed to interrogate further whether
or not starvation could be an effect of the poor politics.

4.0 SUMMARY

In this unit, attempt is made to explore the link between democracy and
development with a view to unraveling the ambivalence surrounding
them, particularly as regards their relationships. Within the context of the
TWCs particularly Africa, we have argued that democracy remains a real
harbinger of development.

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5.0 CONCLUSION

Be that as it may, none of the these studies or the finding are undisputed,
but them shown considerable empirical support for the view that
democratic (politics) on top of being desirable in terms of human rights
and the rule of law, certainly not development at large. To this end,
Ochoga and Shishi (2015:1) sufficed to say that ‘if there is an express
positive correlation between underdevelopment and democratic regimes,
then most African countries would be been among the most developed
countries in the world’. On the contrary, these scholars were quick to
bequeath democratic regimes to the antiquity of non-development driven
museum, without recognising the most countries in Europe and America,
even in Australian have attained sustainable developmental status under
democratic regimes.

From whatever camp or perspective one may view the argument from,
democracy and development are both about the politics. And as such,
both work better when politics is less inclusive and less extractive. It is
as a result of this premise that Acemoglu and Robinson (2012:1) posit
that:

Many countries that show all the trapping of procedural democracy are
still haunted by grossly extractive politics, characterised by politicians
who play every tricks in the book when it comes to political manipulation
of the State and society.

From the above argument as put contended by Acemoglu and Robinson

(2012), perhaps the most essential of these challenges is the relationship
between political corruption and the state of democracy. Consequently,
Africa may peculiar developmental needs, but political realities vary from
countries to countries. The realities are reflection of their political culture,
and the nature and character of the political culture, to a large extent
shapes the impact of democracy on development of their countries.

At this juncture, this premise takes us to admit that governance is crucial

to development outcomes. Every system of governance be it democracy
or autocracy has political culture. The countries that have attained
development under authoritarian regimes achieved that not by autocratic
magic, but by domesticating and institutionalising the culture of
governance that is development- driven. That is what political scientists
referred to as political well. Absence of this political well even in
democracies will make development to be an illusion. That is why study
is the opinion that, in as much as democracy has what it takes (the tenets)
to facilitate development, it actualisation largely depends on the
willingness of the political actors. In other words, democracy is means to
an end, but not an end itself, this could be why Ake (1996:18) argues that

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‘the main obstacle to development in Africa is political. The point is not

so much that the development project has failed, but has never got started
in the first place.

6.0 TUTOR-MARKED ASSIGNMENT

1. What do you understand by the notion of democracy?

2. Is democracy a means to an end or an end itself? Discuss.
3. Do Nigeria and other third world countries need democracy first
or development later? Explain.

7.0 REFERENCES/FURTHER READING

Acemoglu, D. & Robinson, J. (2012). Why Nations Fail: The Origins of

Power, Prosperity and Poverty. New York: Crow Publishers.

Agidi E.P. (2012). ‘Good Governance: The Nigeria Experience.’ In, V.T.
Jike. (Ed.) Contemporary Public Issues in Nigeria for Schools and
Colleges. Ekpoma Golden Edge Prints.

Agidi, E.P., (2018). Good Governance as Viable Instrument for Conflict

Prevention in Africa.

Ajene. O. (2003). ‘The Role of Political Parties in Good Governance in

Benue State.’ In, Sorkaa, A.P. et al. (eds.). Nigeria Journal of
Political and Administrative Studies,1 (4). Markurdi: Aboki
Publishers.

Ake, C. (1996). Democracy and Development in Africa. Ibadan:

Spectrum Books Limited.

Anna, L (2103). Development First, Democracy Later. Stockholm,

Sweden: IDEA

Booth, D (2012). Politics and Poverty Reduction Strategies: Lessons

from Latin American. London: ODI, Universidad Centromericana.
Institute Latinoamerican investigaciones sociales de .

Carothers, T. and de Gramont, D. (2013). Development Aid Confronts

Politics: The Almost Revolution. Washington. DC:
Carnegie Endowment for International Peace.

Dada, J.P, Shishi Z, and Ochoga, O.E. (eds). Handbook on Conflict

Prevention in Nigeria. Ibadan: WISS Publishers.

Dalh, R. (1963). Modern Political Analysis. New Delhi: Parsons Books.

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Diamond, L. (1989). The Democratic Rollback: ‘The Resurgence of the

Predatory State’’, Foreign Affairs (March/April)

Enemuo F. (1999), Democracy, Human Right and the Rule of Law. (eds)
Enemou. F. and Anifowose, R. 1999. Elements of Politics.
Ibadan: Multhouse.

International IDEA (2011). Political Design and Sustainable

Development. New York: Human Rights Watch.

Ochoga, O.E. & Shishi, Z. (2015), Interrogating Issues in Nigeria 2015

General Elections. WISJ Journal of Politics. No.1. Vol.No2.

Okolo O.O and Agidi E.P. (2018) Governance Failure and Terrorism in
Nigeria. EBSU Journal of Social Sciences and Humanities. Vol. 8
(1)

Oteh, C. (2019). Democracy and Good Governance in Nigeria:

Challenges and Prospects Global Journal of Human- Social
Science (F). Vol. 15 No. 3,

O’Donnell, G., Schmitter, P.C. & Whitehead, L. 1986. Transitions from

Authoritarian Rule. Baltimore: Johns Hopkins University Press.
Vol. 4

Przeworski, A. & Limongi, F. 1993. Political Regimes and Economic

Growth. The Journal of Economic Perspectives 7 (3).

Sen, A. (1999). Development as Freedom. New York: Anchor Books.

UNDP (2002) Governance for Sustainable Human Development. United

Nations Development Programme.

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UNIT 2 THIRD WORLD AND DEMOCRATISATON

PROCESS

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Understanding Democratisation
3.2 Waves of Democratisation and the Third World
4.0 Summary
5.0 Conclusion
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

It is instructive to note that the politics of the last half of the 20th century
and the first decade of the 21st century is not only remarkable but
constitute unifying and accelerated processes of democratisation in the
world. This phenomenon and its highlights were symbolised in the defeat
of fascism at the end of World War II, as well as the rise of
antiimperialism and nationalism in the Third World resulting into the
achievement of political independence of these countries in the 1950s,
1960s and even 1970s. The collapse of the defunct USSR, which also
marked the triumph of capitalism over socialism, as well as the more
recent rise of popular protests and favour of democratisation across the
globe tends to indicate that the growing scope and relevance
generalisation in world or global affairs. This unit therefore, is an
exposition of democratisation process, its evolutions and relationships
with Third World countries. This has become imperative as some have
argued that democratisation is motivated or pushed by external donors
who now link it to practical conditionality.

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

• discuss the concept and features of democratisation

• describe both external and internal factors that motivated it
• explain the impact of this wave on third world countries.

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3.0 MAIN CONTENT

3.1 Understanding Democratisation

Democratisation generally refers to a process of moving or a transition

from an authoritarian system to a democratic political system. It
embodies a transition, beginning with the dissolution of an authoritarian
rule and consolidation for an enduring democracy. According to
Nwabueze (1993), democratisation must involve concerted effort to
instill the spirit of liberty, democracy and social justice in the people. In
more specific terms, Nwabueze (1993:3) added that democratisation must
involve the following twelve things:
i) multiparty system under a democratic constitution having the
force of supreme, overriding law;
ii) a complete change of guards and the exclusion of certain other
categories of persons from participation in democratic politics and
governments;
iii) a genuine and meaningful popular participation in politics and
government;
iv) a virile civil society;
v) a democratic society;
vi) a free society;
vii) a just society;
viii) equal treatment of all citizens by the state;
ix) the rule of law;
x) an ordered stable society;
xi) a society infused with the spirit of liberty, democracy and justice;
and,
xii) an independent self reliant, prosperous market economy.

Democratisation, according to Osaghae (1999:5) is the process of

establishing, strengthening or extending the principles, mechanism, and
institutions that define a democratic regime. In another instance, Potter
(2000:368) defines democratisation as:

A political movement from less accountable to more accountable

government from less competitive (or nonexistent) election to fuller and
fairer predicted civil and political rights, from weak(or nonexistent) to
continuous associations to more numerous associations in civil society.

Democratisation can simply defined as the process of entrenching

democracy.

From the definitions above, democratisation implies a process of getting

to a stable or consolidated democracy or transitional process. It is
therefore, instructive to note that a democratic regime is the ultimate goal

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of democratisation and the extent to which democratisation establishes

these elements determine the extent of its success or failure. The process
of transition from a military or authoritarian regime to a democratically
elected government may be described as a process of democratisation.
However, it is instructive to note that transition to civil rule as important
as it is, and even constitute a prerequisite to a transition to democracy
but democratisation goes beyond that.

It involves the operation and institutionalisation of democratic principles,

values, structures and processes leading to a fully sustainable democratic
form of governance. Democratisation encompasses full operation of civil
and political rights, as well as, effective political participation in policy,
making through workable democratic institutions and redistribution of
economic resources to enhance the political, social and economic
empowerment and equality among the citizenry. Democratisation also
involves liberalisation of the processes of governance through an active
participation of civil society groups.

The ultimate of democratisation process is the consolidation of

democracy. This can take place only when democratic institutions,
practices, and values have become deeply entrenched in society.
Democratic consolidation is a process through which democratic
normsthat is- democratic rules of the game become accepted by all
powerful groups in the society including businessmen, labour, religious
groups, the military and no important political actors contemplate a return
or reversal to dictatorship.

It is consolidated when it becomes, according to Linz and Stephans

(1996) the only game in town, even in the face of severe economic or
political adversity. According to Linz and Stephan (1996:15-16):

Behaviourally, democracy becomes the only game in town when no

significant political opposition seriously attempts to overthrow the
democratic regime or to promote domestic or international violence in
order to secede from the state…Attitudinally, democracy becomes the
only game in town when, even in the face of severe political and
economic crises, the overwhelming majority of the people believe that
any further political change must emerge from within the parameters of
democratic procedures. Constitutionally, democracy becomes the only
game in town when all of the actors in the polity become habituated to
the fact that political conflict within the state will be resolved according
to established norms and that violation of these norms are likely to be
both ineffective and costly. In short, with consolidation, democracy
becomes routinised and deeply internalised in social, institutional and
even psychological life as well as in political calculations for achieving
goals.

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The above implies that democratisation involves the process of achieving

broad and deep legitimation to the extent that all stakeholders and
political actors (both political elites and the masses) believe that
democratic system is better for their society than any other system or
political regime and must be ready and willing to contain and contend
with several constraints to democratisation process.

3.2 Waves of Democratisation and the Third world

Third world countries have played a significant role in the world’s most
sweeping transition from authoritarianism to democracy. There can be no
denying the fact that the worldwide trend towards democracy since the
1970s has been palpable. Samuel Huntington (1991) noted that the
current surge of democratic expansion is, in fact, the ‘third wave’ that the
modern world has experience since the early 1800s. In each phase,
democratic political forces and intellectual trends in key countries had a
contagious effect on other nations.

The first democratic wave (1828-1926) by far the largest began under the
influence of the American and French Revolutions (as well as the
Industrial Revolution) and ended not long after the end of World War I.
Change was largely confined to Europe and to some few former British
colonies.

The second democratic wave, much shorter wave (1943-1962) was

precipitated by the struggle against fascism during World War II and the
subsequent collapse of European colonialism in Africa and Asia. In this
period, democracy was introduced to a number of Third World countries,
but in most cases, the new governments at best only met standards of
electoral democracy.

The recent Third wave (1974-date) is the most popular and has drawn our
attention because of its pervasive and seemingly lasting reverberations in
Third World countries. The third wave transitions were so dramatic in the
former Soviet Union and its European Communist allies. This wave of
democratisation continued into the start of the new century with some
notable setbacks in some Third World countries. At the close of the 20th
century, Nigeria also restored to democracy on May, 29, 1999. It has been
observed that as at 1974, only 27.5% of the world’s countries allowed
free and fair national elections. But by 1996, that proportion had risen to
63%.

The recent Arab Spring in North Africa and Middle East cannot be
overemphasised as it could serve as a trigger for further democratic
reforms in Third World countries which has the tendency to shape the
future of democracy in these countries. The unprecedented popular

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protests in North Africa, demanding for greater political freedom, human

dignity and economic opportunity that captivated world attentions in
2011 and the subsequent resignation of long time autocrat in Egypt and
Tunisia and the toppling of the Gaddafi regime in Libya and a shift
towards a constitutional monarch in Morocco have the tendency to
reshape statecitizen relation in the long run especially in other already
democratic state. The Arab uprising may generate some spillover effects
to other countries.

One of the greatest lessons from the Arab spring is that democracy is not
bestowed but earned by the citizens. Once initiated, it is not passive
citizens or self-perpetuating governance model but one that requires the
active engagement of citizens. Arab spring has instigated changes in
expectations that Third World countries must own and control their
government. The geo-political implications of the revolution have drawn
the region into a global attention. The regional unrest has not been limited
to the countries of the Arab as it has spread to neighbouring countries.
The bid for statehood by the Palestine at the UN on 23 September 2011
is also regarded as drawing inspiration from the Arab spring after years
of failed peace negotiations with Israel. The 15 October 2011 global
protests and the occupy Wall Street movement which started in the
United States and has since spread to Asia and Europe drew direct
inspiration from the Arab spring.

Across Arab countries, Arab revolution have led to a new balance

between social forces, as well as a new found awareness of the
importance of working together. It has also ignited how difficult if not
impossible it is to impose custodianship over state institutions. The Arab
revolution can therefore be said to have commenced a new era that severs
relations with authoritarian regimes and lays foundation for rule based on
institutions representing the majority’s choice and aspirations.

SELF-ASSESSMENT EXERCISE

i. Define democratisation and mention some of its basic

characteristics.
ii. Discuss the various waves of democratisation known to you.
iii. Describe external and internal factors that gave rise to
democratisation process in Third World countries.

4.0 CONCLUSION

In conclusion, it is instructive to note that until recently, most imperial

viewpoints championed by multilateral institutions tend to promote the
impression that politics ought to be, and remain divorced from
economies. But after decades of consistent failure of various development

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processes advanced by these institutions and imposed on TWCs, they

have finally come to advocate democratisation with its neoliberal policy
as the most required conditions for TW development; in addition to being
the major defenses against the consistent tendency for foreign imposed
economic policies and programmes.

5.0 SUMMARY

This unit has attempted to look at the concept of democratisation in its

historical evolution and trends as it affects Third World countries.

6.0 TUTOR-MARKED ASSIGNMENT

1. Discuss the concept and features of democratization.

2. Identify the various waves of democratisation process and explain
its impacts on the Third World countries.
3. Discuss both external and internal factors that motivated
democratisation process in Third World countries.

7.0 REFERENCES/FURTHER READING

Abbas,F.(2011). “Genesis of the Arab Rebellion.”The Nation, Friday

February 25. Pg.45.

Ake, C. (2003). Feasibility of Democracy in Africa. Britain: Antony Peve

Ltd.

Barash, D.P. (2001).Understanding Violence. USA: Allyn and Bacon.

Handelman, H. (2005). The Challenge of Third World Development. New

Jersey: Pearson Prentice Hall.

Jibril, I. (n.d). “Democratic Transition in Africa: The Challenge of a New

Agenda.”In: Chole, E. & Jibril, I. (Eds). (1995). In:
Democratisation Process in Africa, Problems and Prospects.
Dakar: CODESRIA Books.

Norbrook, N. (2011). “The Young and the Brave.” The Africa Report.
No 28, March. Pg 22

Nwabueze, S.O. (1993). Democratisation. Ibadan: Spectrum Books.

Linz, J.J. & Stephan, A.(1996). “Towards Democratic Consolidated

Democracy.” Journal of Democracy. Vol 7 No.2.

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Omotola, J. S. (2007). “Democratisation Good Governance and

Development in Africa: The Nigerian Experience.” Journal of
Sustainable Development in Africa: Vol. 9 No. 4.

Osaghae, E.E. (1999). "Democratisation in Africa: Faltering Prospects,

New Hopes." Journal of Contemporary African Studies. Vol 17,
No.1 January.

Smith, P. (2011), “After the Revolt, the Change.” The Africa Report. No
28, March. Pg 4.

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UNIT 3 THIRD WORLD AND THE CHALLENGES OF

GOVERNANCE

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Understanding Governance and Good Governance
3.2 Good Governance and Third World Development
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

The concept of good governance has developed in the practice of relevant

international organisations and some donor governments as a guide for
rebuilding and reforming government structures. Hence, the international
community has increasingly accepted good governance as the standard
for democratic rule and consolidation and overall development of a
country, especially Third World countries. The good governance agenda
emerged in the 1990s out of a growing concern about the detrimental
impact of state capture and other forms of distorted state interference on
state capacity and developmental effectiveness. Out of a growing concern
about this detrimental impact of a rent seeking, prebendal and
klelptocratic state and its effect on state capacity to perform, the World
Bank and International Monetary Fund (IMF) and donor agents in the
1990s began to emphasise the importance of governance or the way in
which government and power are exercised.

One serious challenge that continues to be a source of concern to the post

independent states of the Third World Countries (TWC) is the crises of
underdevelopment. Even though development literature is replete with a
plethora of diverse and divergent attempts to explain the origin, nature
and character of the crisis; contemporarily, the World Bank sees it as the
crises of governance. Until the early 1980s, when a considerable number
of TWCs came under IMF/WB prescriptions, the dependency and
modernisation perspectives jostled for dominance. By the end of the
decade, coupled with the collapse of the former USSR, neo-liberalism
championed by the IMF/WB emerged as the triumphant political and
economic philosophy in the development literature of the TWCs, with
their insistence on good governance.

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It is against this background that this unit seeks to critically examine the
extent to which WB/IMF’s insistence on good governance is consistent
with other policy framework required for TW countries developments or
underdevelopment crisis.

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

• define governance and good governance

• explain whether neo-liberal policy platform of good governance
will promote Third World countries’ development or not.

3.0 MAIN CONTENT

3.1 Understanding Governance and Good Governance

Even though governance and government have the same etymological

root, governance as a concept is much broader than government. This is
because it encompasses the process of carrying out the activities of
government. The definitions or meaning of governance vary, depending
on who is defining it, and the interest he/she represents. However,
according to Jeff Huther and Anwar Shah, (2005:40)

Governance is a multifaceted concept encompassing all aspects of the

exercise of authority through formal and informal institutions in the
management of the resource endowment of a state.

This line of argument is shared by a recent World Bank study that argues
that:

Governance is the manner in which public officials and public institutions

acquire and exercise the authority to provide public goods and services,
including the delivery of basic services, infrastructure and a sound
investment climate.

Despite the multiplicity of conceptual views arising from

multidimensional approach to it, almost all the definitions share two
broad practical implications. These are how we approach poverty
reduction and development. These are: i. A governance perspective helps
us to systematically think of a range of formal and information
institutions, structures, organisations, and stakeholders and their
interdependent relationships and linkages in the context of public
policymaking and their implementation as well as improving government
performance and service delivery. In a well-functioning governance
system, each group has capacity to and helps create accountability

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relationships which ensure that a government provides public goods and

services; public policy serves broad public interests as opposed to narrow
individual interests; a check and balance mechanism control. On the other
hand, in a weak governance system, groups lack capacity and
accountability relationships do not exist.

The concept of governance has another important practical dimension.

As an interdisciplinary and cross sectoral concept, governance plays an
important role in the development process of the Third World countries.
Governance is a variant of the political economy with politics dictating
the pace of the economies while the latter sustains the former. The
growing concern about the centrality of governance as a key variable for
the explanation of underdevelopment and dependency of the TWCs
acknowledges the primacy of politics as prerequisites for development.
Governance is not a new expression in development studies and literature
as it generally refers to the task of running a government or any other
organised entity. The concept was popularised in the literature on
development which sees the crisis of development of Third World
countries especially Africa, as the crisis of governance.

According to Boeninger (1991.6), Governance refers to the good

government of society. Good government according to him therefore
guides the country along a course leading to the assigned good-
development.

The term good governance describes government performance in relation

to internationally established norms (or best practices), including
freedom to organise political parties, holding public rallies, holding
regular free and fair elections, upholding media freedom, respect for the
rule of law, etc. In a nutshell, the notion of good governance refers to the
smooth running of democratic institutions in any given country.

Good governance can be defined broadly as the responsible use of

political authority to manage a nation’s affairs. It is often treated as a
basket of many practices: a professional civil service, diminution of
corruption in government, a predictable, responsible and responsive,
accountable and transparent administration, democratic decision making,
the supremacy of the rule of law, independent judiciary, among others.
The most popular definition that has gained worldwide acceptability is
the one given by the World Bank that sees governance as the exercise of
political power to manage a nation’s affairs (WB: 1989:50).

The concept of governance is usually prefixed with the adjectival word

good. The implication of this is that governance can be qualified good or
bad depending on who is defining it. Hence, the definition of what good
governance means is somehow tricky as what is good for one person,

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country, nation and organisation may not be the same for others. But
according to Okpaga (2011:378),
Good governance is the process through which a state’s affairs are
managed effectively in the area of public accountability, responsiveness
and transparency, all of which must show in the interest of the governed
and the rulers.

SELF-ASSESSMENT EXERCISE

Briefly discuss the concept of governance and good governance.

3.2 Good Governance and Third World Development

At the heart of any progress or meeting development goals is the quality

of governance. In general, there are at least five fundamental principles
of governance that should guide a process in the pursuit of development
goals:
i. Accountability. Accountability implies probity, efficiency and
effectiveness in resource management, public goods and service
delivery. It also refers to government responsibility to explain its
activities and responsiveness to the needs and values of its
citizens.
ii. Transparency. Transparency is about openness to public scrutiny
and clarity in the decision making process in a government. It
often refers to various measures of public information disclosures
and access such as freedom of information acts and administrative
procedure acts.
iii. Participation. Participation is another key element of good
governance. It implies citizens’ engagement and empowerment in
the decision making process. It underscores that everyone has
fundamental rights to be recognised and their voices heard in
policy making and implementation process. Participation is
critical to improving efficiency, effectiveness, and sustainability
of public service delivery and development projects.
iv. Social equity. Social equity implies the fair, just and equitable
management and distribution of public services and resources. It
also means that government and its services should treat all
people, groups and regions regardless of age, gender, cultural or
ethnic backgrounds as equals.
v. Rule of law. Rule of law concerns the consistency, predictability
and transparency of the law. It means that a country’s formal rules
and regulations are known to the public, equally applied to all
citizens, and enforced in a predictable manner through transparent
procedures.

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In a similar vein, UNDP (1997), in examining the characteristics of good

governance states that good governance is, among other things,
participatory, transparent and accountable. These constitute the core
elements of good governance.

It is imperative to understand good governance not only as a means to

enhance existing approaches to development and poverty reduction but
also as a vision of development itself. It is therefore increasingly adopted
as postulated by the WB/IMF that good governance can enhance
economic development. The World Bank (1989) effectively introduced
the notion of good governance as a precondition for reverting Africa’s
crisis of development. The study further goes ahead to specify a set of
policies which is closely related with governance as sponsored by neo-
liberal scholars. Such policies include reduced state intervention in
economic decision making, reduced public sector and more efficient
transparent public sector administration, elimination of unnecessary
public sector subsidies. World Bank (2003) expanded the
conceptualisation of good governance in a publication titled: Better
Governance for Development in the Middle East, and North Africa and
gave a detailed component of good governance. Here the World Bank
contends that:

Governance consist of the exercise of authority in the name of the people

while good governance is doing so in ways that respect the integrity and
needs of everyone within the state (World Bank, 2003:25).

In the light of this definition, good governance rests on two core values
Inclusiveness and Accountability. Inclusiveness means that all citizens
are equally guaranteed certain basic rights including equality before the
law and the right to participate in the governance process on equal basis.
Conversely, it means absence of exclusion and discrimination in all
citizens’ dealings with government.

Accountability in governance process on the other hand, according to

(WB 2003:26), refers to the idea that those who are selected or elected as
the case maybe to act in the name of the people and answerable to the
people for the failure, as well as credited for their success. Expanding the
concept of accountability further, WB identified two major cornerstones
on which accountability rests. These are contestability and transparency.
Contestability denotes that citizens should have choices among
government leaders, policies and agencies, while transparency
encapsulates citizens’ rights to regular and periodic information or what
public officials are supposed to be doing, what they are actually doing
and who is responsible.

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The issue of governance centres on the political, economic and corporate

decisions. Nigeria, like most of the Third World countries had since 1986
attempted to join the global economy by implementing the structural
adjustment programme, as prescribed for it by the IMF/WB which has
brought a lot of hardships on the people. The economies of the Third
World countries have worsened due to the unfriendly economic policies
prescribed for these countries by the WB/IMF.

One of the notorious conditionalities that the WB/IMF imposed on Third

World nations, whether seeking their assistance or not, has been not to
offer subsidies to the potentially productive and technologically driven
sector of the economy. The implementation of structural adjustment
programmes in Nigeria, like other Third World countries, negates good
governance in a fundamental way. It replaces government accountability
to the people with accountability to WB/IMF. As Akokpari (2001:92)
sees it:

It is this tendency of neo-liberal state to become unaccountable to its

people that make SAP antithetical to democracy. He added, adjustment
may prove inimical to democracy in the sense that it positions the states
in a corner where they become more responsible and accountable to
International Financial Institutions (IFIs) rather than to their own
constituencies. The states are subject to international creditors who
dictate details of economic policies, including the financial allocations to
departments in the national budget. In this regard, not only does SAP
truncate democracy but they also atrophy state sovereignty.

With regard to accountability and transparency, neo-liberal policies have

made Third World countries to be more accountable to the IMF/WB.

SELF-ASSESSMENT EXERCISE

Briefly explain how good governance has conditioned the

underdevelopment and dependency of Third World countries.

4.0 CONCLUSION

From the above, we have attempted to explore the link between the World
Bank inspired implementation of neo-liberal policies and the demand for
good governance in the Third World countries. Our analysis suggests that
while the IMF/WB seeks to promote good governance in the Third World
countries, the implementation of neo-liberal policies paradoxically
undermine good governance and democracy and consequently truncate
development and keep TWCs perpetually dependent and
underdeveloped.

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5.0 SUMMARY

This unit has attempted a discourse on the concept of governance and

good governance and established the link between good governance and
the Third World countries’ development in order to prove how the
neoliberal policies espoused by the IMF/WB and its attendant demand for
good governance as a precondition for aids, loans and grants has kept the
TWC perpetually underdeveloped and dependent. It also states that
governance can be good according to the WB/IMF, if it has the basic
ingredients of what makes a system acceptable to the generality of the
people not minding its implications on Third World countries.

6.0 TUTOR-MARKED ASSIGNMENT

1. Describe the relationship between good governance and Third

World Development.
2. Explain what you understand by the term governance and good
governance.
3. To what extent can neo-liberal policy platform of good
governance promote Third World countries’ development?

7.0 REFERENCES/FURTHER READING

Akopkari, J.K. (n.d). “Meeting the Challenges of Sustainable

Democracy.” In, Ahmed, et al. (Ed.). (2001). Globalisation,
Democracy and Developing. Addis Ababa: OSSREA Pp 83-100.

Boeninger, S.I. (1991). “The Central Dimension of Governance.” In,

Proceedings of the World Bank, Annual Conference on
Development Economics. The World Bank, pp 325-35.

Okpaga, A. (n.d). “Ideology and the Challenges of Good Governance and

Development in Nigeria.” In: Edoh, T etal. (Ed.).
(2009).Democracy, Leadership and Accountability in Post-
Colonial Africa. Makurdi: Aboki Publishers.

Omotola, J.S. (2007). “Democratisation, Good Governance and

Development in Africa: The Nigerian Experience”. Journal of
Sustainable Development in Africa. Vol. 9. No. 4.

World Bank (1989). “Governance and Development.” World Bank,

Washington DC.

World Bank (2003). “Better Governance for Development in Middle East

and North Africa.” Washington D.C.

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World Bank (1989). “Sub-Saharan Africa: From Crisis to Sustainable

Growth.” Washington D.C. World Bank.

UNDP (1997). “Governance for Sustainable Human Development.”

UNDP Policy Document.

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UNIT 4 FOREIGN AID AND DEBT CRISIS IN THE THIRD

WORLD

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Nature of Foreign Aid and Debt in Third World Countries
3.2 Foreign Debt and Third World Debt Crisis
3.3 Third World and Debt Management
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

We live in a global economy once often dominated, as in the 1920s, by

International Financial Capital. It has been observed that before 1970, 90
per cent of all international investment was accounted for by trade and
only 10 per cent by capital flows. Today, despite a vast increase in global
trade, that ratio has been reversed with 90 per cent of transactions
accounted for by financial flows not directly related to trade in goods and
services. The accumulation of external debt is a common phenomenon in
Third World countries, at the stage of economic development where the
supply of domestic savings is low, current account payments deficit are
high, and imports of capital are needed to augment domestic resources.

In this unit we shall look at foreign aid as an important concept in

international economic relations more so as it relates to the undeveloped
world. The unit seeks to provide an insight into the basis or justification
for foreign or external loan and consequent debt burden and how it has
conditioned the dependent and underdeveloped nations of the Third
World.

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

• discuss the perspectives associated with foreign aid

• describe debt crisis
• explain the implications of debt crisis on third world countries.

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3.0 MAIN CONTENT

3.1 Nature of Foreign Aid and Debt in Third World Countries

Foreign aid is the material and immaterial financial help which a country
in need receives from another country, country and/or international aid
agencies. Foreign support is provided in a range of ways and is used for
a number of purposes. Some assistance involves clear financial subsidies,
some concessional loans and some shared technical expertise. Official
Development Assistance (ODA), most of the bilateral foreign aid-that
means money flows from one country to another directly. A further
growing proportion is now being channeled into global
intergovernmental organisations, such as the World Bank. The aim of the
aid is to reduce poverty through economic development, environmental
protection, reduced military spending, enhanced economic governance,
the promotion of democratic governance and human rights, etc.

In other words, foreign assistance will be any financial, material or

human assistance from a donor country to a recipient country. It may be
in the form of money, humanitarian (e.g. rescuers, medical doctors,
lawyers, engineers, etc.) or materials such as food , medicines, building
materials, weapons, etc. Almost every developed nation has an aid
agency to help the poor countries of the world. In addition, government-
to - government loans and United Nations multilateral assistance finance
numerous development projects at a lending rate below the level of trade.
Aid funds are often used to help establish leading sectors of the economy
that can then, through links to less developed sectors, pull the
development process along. Critics of foreign aid have provided a
number of arguments to justify why it has not been successful in fostering
growth. In the first place, the amounts are pitiful given the magnitude of
the problem.

One reason for a wide-ranging debate on aid is that so many diverse

objectives drive its allocation that it is difficult to assess how effective it
is. While economic growth is clearly not the sole objective of foreign aid,
it is one of the few areas where empirical evidence permits evaluation.
Development is also necessary because, without progress, it is difficult,
if not impossible, to accomplish all the other priorities – stability, human
rights, democracy – assigned to assistance. There is a negative link
between assistance flows and development output in many economically
developed countries. Africa, for example, receives 10 times more per
capita aid than Latin America or East Asia, and is still far worse off by
most or all economic measures. There are a few theories, but one thing is
simple. By eliminating a significant budget restriction, assistance inflows
to a nation will delay the creation of a domestic agreement on the need
for difficult economic reforms. Research shows that countries with high

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inflation appear to carry out more ambitious changes and therefore

experience higher overall growth rates than countries that are only
muddled with low inflation.

Conditionality, which is how most of the aid is appropriated, is usually

applied ex ante; that is, borrowing countries must meet certain conditions
in order to be eligible for a loan and must then continue to meet those
conditions as the aid is disbursed. However, following a substantial
growth in conditional loans over the past decade and also an increase in
the amount of conditions on each loan, conditionality has not been
especially successful in ensuring that lenders cooperate. In fact, the
higher number of conditions seems to reduce the ownership of the
reforms by the borrower. It creates a vicious cycle: weak compliance with
the conditions prompts donors to impose more conditions; increased
conditions make it even more difficult for recipients to comply, thus
increasing the incentive not to comply; and so on. On the donor side, the
incentive structure rewards continued lending rather than stopping
financial flows in response to compliance infringements. At the end of
the day, multilateral organizations are financial institutions that will lend
to stay operational. Thus, the average World Bank loan officer has a
greater incentive to disburse loans on time than to enforce strict
compliance on the part of the recipients of those loans. As a result, many
countries tend to accept loans even though they have weak enforcement
and government policy reforms.

Increasing insights into the impacts of foreign aid upon African

development are provided by Ake (1996), Macamo (2005), and Burnside
and Dollar (1997). For example, Burnside and Dollar (1997) noted that,
where good economic, monetary and commercial policy is in place,
foreign aid appears to have a positive effect on development. According
to Erixon (2005), the aid proponents argue that poor countries are poor
because there are not enough funds to invest in the facilities which would
allow for economic activity.

This argument was initially used by Erixon to explain major

developments in infrastructure, such as bridges, electricity plants, dams
etc. But support from Erixon does not lead to development and growth.
He says that Africa received approximately $ 400 billion from 1970 to
2000, while gross national income (GNI) growth continued from 1970 to
1995 to approximately 5% in 1970 and peaks in 1995 to 18%. In the same
period, however, GDP growth was declining and poverty was also
significantly increased. In March 1990, the Paris newspaper, Le Monde
in March 1990, “Every franc we give impoverished Africa comes back to
France or is smuggled into Switzerland and even Japan”. Further
confirmation was obtained from the World Bank review that almost 40%
of Africa's total wealth is stored in foreign bank accounts (Aderinokun,

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2003 and Macmillan, 2005). Thus, until African leaders, politicians and
business tycoons decide to bring these funds back home, Africa will
remain synonymous with underdevelopment.

SELF-ASSESSMENT EXERCISE

Describe briefly the politics of foreign aid in third world countries

3.2 Foreign Debt and Third World Debt crisis

Debt crisis has assumed a prominent dimension in the third World

countries as is making development very difficult. Third World countries
are so tied to debt trap to the extent that virtually all their foreign
exchange earnings are spent on debt service. In the period between 1970
and 1992, the external debt of developing countries grew from $68.4
billion to just under $2trillion, an increase of more than 2,000%. The debt
crisis has truly become a worldwide problem with serious economic
implications for both developed countries and Third World countries. In
fact, the debt crises of the 1980s called into questions the stability and
viability of the international financial systems.

Consequently, the democratisation process which culminated in the

installation of democratic governments in Third World countries has the
potentials to promote development in these countries but this potential is
constrained by indebtedness or debt crisis. For instance, many severely
indebted Third World countries, particularly those in Africa, are thus
caught in a vicious cycle in which the repayment of debt creates a drag
on economic growth, but accelerated growth is the only viable basis for
escaping the confines of the debt trap. The external debt crisis of sub-
Saharan Africa like its Latin American and other Third World countries
is not yet over. A significant number of countries in the TWCs adopted a
development strategy that relies heavily on foreign financing for both
official and private sources. This according to Ajayi (2003:105) has
meant that: For many countries in the region the stock of external debt
has built up over recent decades to a level that is widely viewed as
unsustainable.

This has given rise to concerns about its deleterious effects on investment,
development and principally the well-known debt overhang. In Nigeria
for instance, external debt is 65 per cent of Gross Domestic Product
(GDP) while annual debt service is nine times the annual health budget.
Domestic debt is also an issue, ballooning to an estimated US $8.6 billion
by the end of 2001.

Foreign debt has further compounded the development crisis of the

TWCs. According to Ghali (1992), talking about Africa and debt crisis,

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he described the external debt as a millstone around the neck of Africa.

The debt burden creates difficult problems for the economic recovery
programmes of most TWCs. For many African countries, multilateral
debt servicing is currently both large and burdensome part of their
obligation. As part of the effect of foreign debt on TW economies, it
discourages investors. Foreign investors will not risk funds if domestic
investors are not prepared to take the same risk.

Debt service repayments are perhaps the greatest financial hemorrhage

that the continent has experienced. Debt service payment must be made
with foreign exchange. In other words, debt service obligation are met by
its export earnings The heavy and unbearable external debt burden of
Africa and Third World countries has led to the paradoxical situation that
such countries have become net exports of capital to developed countries
and multilateral financial institutions. Until significant debt relief is given
to Third World countries particularly sub-Sahara Africa, these countries
will remain in its dark tunnel of economic difficulties for many years.
The burden of debt amortisation in terms of payment has tended to drain
the nations resources and reduces the possible expenditure of resources
on productive ventures difficult.

In Africa for instance, until 1970, debt was not an issue in the
development of African countries. The reasons for this development,
according to Bangura can be attributed to the following:
i. The early post independent period in Africa did not witness any
significant growth in the level of opportunities for the expansion
of foreign investment capital.
ii. Most African states found it difficult to raise loans from the
international capital market as private banks were wary about
advancing loans to Third World countries in the 1960s.
iii. The ideology of development that predominated the 1960s acted
to discourage heavy borrowing by Third World countries from the
international capital markets and this was thought to be
inappropriate for normal economic wisdom.

However, in the 1970s, the situation changed and most western creditors
became anxious to offer loans to African countries. The reasons for this
state of affairs according to Bangura cited in Ujo, (1995:143) include:
The world capitalist crisis which started in the early 1970s created a
serious problem of profitability for many multinational companies. A
serious problem of realisation was also created in which firms found it
difficult to sell their products. Because of the general drop in business,
banks were unable to make new borrowing as investors were skeptical
about the investment climate and the prospect for global economic
recovery. The events surrounding the Arab-Israeli war of 1973 which led
to the Arab oil boycott of the West did not help matters. This is because

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the quadrupling of oil prices which resulted from the boycott plunged
western industrial establishment into a further problem of increased
production costs which in turn worsened the realisation problem.

A common outcome of the foreign debt crisis throughout the Third World
was the increase in the power and influence of IFIs, particularly the IMF
and WB, which had greatly diminished in the 1990s. As private sector
lending dried up following the Mexican crisis of 1982, the IMF turned
from its traditional role of lender of last resort to the only available source
of external financial assistance and became the leading agency in the
management of the crisis. Consequently, the IMF assumed a key role of
restructuring the countries’ foreign debt, conditioning financial
assistance to the promotion of structural reforms along free market
principles. Similarly, WB changed its role from lending money for Third
World development projects in areas such as physical infrastructure to
the promotion of structural reforms that involved fundamental changes in
economic policy. As a result of these role changes, the IMF and WB’s
relations with Third World countries became highly politicised and open
to the charge that unaccountable multilateral institutions were forcing
democratically elected governments to adopt policies that hurt the poor
and privileged the interests of the foreign interests over the welfare of the
people. Foreign debt crisis has increased the IMF’s position and influence
over the economic and policies of the Third World countries. In addition,
conditionality was at its strongest on issues of debt service in the early
1980s, and shifted towards structural reform in the later years and present
decades.

SELF-ASSESSMENT EXERCISE

Briefly discuss the Impact of debt crisis on Third World countries’

development.

3.3 Third World and Debt Management

That most of Third World countries are heavily burdened by external debt
is no longer news. What would perhaps be news; even good news is when
these debts is adjudged efficiently managed, sustainable and promote
development. But experiences over the years have shown that the
management of these debts over the years has been weak and inefficient
debt management has largely caused the debt problems to assume a
burdensome dimension. The Nigerian debt management just like other
TWCs, for instance, has taken the following dimensions:
i) Continued increase in the debt stock even when no fresh ones are
contracted;
ii) Excessive borrowing in relation to weak profitability and poor
export earnings;

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iii) Inappropriate borrowing terms; and

iv) Inadequate information in the volume, composition, and maturity
profiles of debts.

In addition, compounding the debt position of the TWCs is the poor and
inefficient use of the loans, thus raising issues of poor governance and
corruption. Most of the loans which, were procured with unfavourable
terms, were either diverted or utilised for projects that were unable to
generate funds for servicing the underlying debt.

The most effective strategy for debt management today is debt

forgiveness and or cancellation and productive investment of the faculties
in a transparent, accountable governance environment.

SELF-ASSESSMENT EXERCISE

Briefly explain what you understand by debt management.

4.0 CONCLUSION

The rationale for raising external loan by Third World countries has
always been to bridge the gap between domestic gap and available
resources capacity in order to accelerate economic development. In the
light of that, no one would blame Third World countries for resorting to
borrowing provided the proceeds are utilised in a productive venture that
will facilitate the eventual servicing and liquidation of the debt. But
instead, debts in Third World countries exist as the key mechanism for
the transfer of wealth from weak to strong, from debt nations to
international creditors, from tax payers and wage earners to the holders
of paper claims and from productive to financial authority. It is therefore
simply impossible to speak of any significant measure of development,
for as long as we are obliged to allocate so much of our lean resources for
debt servicing.

In conclusion therefore, the struggle of TWCs to find their place in the

global scheme of economic opportunity, political progress social
advancement and cultural identity and above all development seemed to
be fraught with external burden. However, the burden of the global debt
crisis must be ultimately shared by all. Many of the developing countries
may have to undergo a period of difficult adjustment. At the same time,
industrialised countries will have to relax restrictive monetary policies
and encourage imports from the developing countries.

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5.0 SUMMARY

Unequal trade challenges have plunged the poor countries of the world
otherwise known as the TWCs into deep and deepening indebtedness to
industrialised societies of the Western societies and Japan. According to
the World Bank report (1993), the poor nations of the globe are indebted
to the rich and powerful countries in excess of $1 trillion. This staggering
debt has become a financial yoke for these countries to bear.

This unit has examined how excessive debt drains the resources of poor
countries, destabilises their economies making things worse for these
nations already reeling from their narrow export oriented economies and
lack of industrial capacity to the extent that they have earned for
themselves millstone around the neck.

6.0 TUTOR-MARKED ASSIGNMENT

1. Describe how the debt crisis has conditioned the development of

Third World countries and prescribe possible solutions to the debt
crisis.
2. Discuss Debt Management in Third World countries.
3. To what extent has foreign debt conditioned the dependency and
underdevelopment of Third World countries?

7.0 REFERENCES/FURTHER READING

Alkali, R.A. (2003). Issues in International Relations and Nigeria’s

Foreign Policy. Kaduna: Northpoint Publishers.

Bhagwati, J. (1976). The Economics of Underdeveloped Countries.

Oxford University Press: World University Library.

Easterly, W. (2005). Can Foreign Aid Save Africa? Clemens Lecture

Series.

Harms, P. & Rauber, M. (2004). Foreign Aid and Developing Countries.

Study Centre, Gerzensce, University of Konstanz.

Lahiri, I. S. (2007). (Ed.). Theory and Practice of Foreign Aid.

Amsterdam: Elsevier

Michael, V. (2005). Introduction to International Political Economy.

New Jersey: Pearson Prentice Hall.

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Munther, N. (2007). “Foreign Aid in Developing Countries: Does it

Crowd out the Recipient Countries Domestic Savings?” In,
International Research Journal of Finance to Economic Issue II.

Offiong, D.A. (1980). Imperialism and Dependency: Obstacles to

African Development Enugu: Fourth Dimension Publishers.

Offiong, D.A. (2001). Globalisation: Post Neo-Dependency and Poverty

in Africa. Enugu: Fourth Dimension Publishers.

Okonjo-Iweala, N. et a.l. (Ed.). (2003). The Debt Trap in Nigeria.

Trenton: Africa World Press.

Swaroop, V. & Devarajan. (1998). The Implications of Foreign Aid

Fundability for Development Assistance. World Bank
Development Research Groups, Washington DC. USA.

Ward, B. & Baver, P.T. (n.d). “Two Views on Aid to Developing

Countries”. Institute of Economic Affairs, London. World Bank
Report 1990.

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UNIT 5 RESPONSE TO THIRD WORLD

UNDERDEVELOPMENT

CONTENTS

1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Good Governance
3.2 Intolerance for Corruption
3.3 Diversification of the Economy
3.4 Cultural Re-Orientation
3.5 Regional Cooperation
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Reading

1.0 INTRODUCTION

This is the last unit of the course itself in this series. It has helped you,
we believe, to understand especially the problems of the Third World and
underdevelopment. The crucial question is what has been the response of
leaders of third world states against underdevelopment? Is there no hope
for the countries of the Third World? This unit therefore concentrates on
policy strategies and measures that can provide the necessary panacea for
development in third world states.

2.0 OBJECTIVES

By the end of this Unit, you will be able to:

• examine good governance as a response to underdevelopment

• underline the importance of diversified economy in development
• discuss the influence of fight against for corruption in the
development of Third World countries
• highlight the need for regional co-operation.

3.0 MAIN CONTENT

3.1 Good Governance

Developmental issues are inextricably related to governance problems.

Until state, regional and national governments carry out their assigned
duties and do so in a tolerable way, there will be no respite from hunger,
illness, illiteracy, terrorism, civil war, and other problems afflicting the

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developing world. There is only so much that international bodies, non-

governmental organisations and market forces can do. Ideas in good
government arise in the philosophical philosophy in utilitarianism, the
pursuit of the common good over moral and primary concern. Eneanya
(2009) succinctly refers to it as "the ability of those in leadership positions
to manage the affairs of a nation in a popularly acceptable manner by
shaping its political, economic and social environment to meet the
standards set by society." This easily turns the light on the leadership and,
in our study, Third World leadership. Most of the policies and programs
of Third World leaders are driven from outside by neo-colonial structures
of their political economy. The result is the failure of such polices to help
residents who need a transition to a people-oriented and guided strategy
without the political benefits of the members. The absence of primary
interest in policy development and execution, as well as the abolition of
clientelism, personalism and patrimonialism in Third World government,
is a veritable factor in productivity, wastefulness and mediocrity in the
management of wealth and relations by the state (Okeke, 2015).

Good governance makes a state an independent body willing to mediate

impartially to protect the general welfare to interest of community needs.
When instituted and implemented, enormous resources would be saved
from corruption and mediocrity; they could be channeled to the renewal
of infrastructure and other public goods. This will also ensure that the
processes for obtaining loans from development partners are transparent
enough for citizens to understand and monitor the implementation of the
project for which such loans were intended, as well as government
budgeting, revenue and expenditure. If they are achieved, investors that
are confident about the investment climate and rules governing such
investment will be attracted (Okeke, 2015).

3.2 Diversification of the Economy

It is a fairly obvious that the role in the global economic system of

periphery states, which are specialised in exporting prime and extractive
goods without added value is one of the key causes of third world
underdevelopment. The competitive benefit and low overall price of such
goods demonstrated that this monoculture means fewer profits for these
countries; further aggravated by gang-ups by big West buyers;
legitimised reliance and its inconsistencies (Okeke, 2015). Furthermore,
the over reliance on mono-economy by most third world countries has
led to economic instability and unpredictablity. For instance, the collapse
of oil prices tipped the Nigerian economy into a five-quarter recession in
2016, from which it is now just recovering. Angola, Equatorial Guinea,
Congo Republic and Gabon also experienced sharp economic slowdowns
in 2015-2016 due to low oil prices. Zambia, where copper accounts for
60% of exports, was also hard hit by the slump in copper prices. These

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experiences underscore the need to diversify economies and build

resilience against such large external shocks (Adedeji, 1993).

The solution is to diversify the economy from mono-components to

multi-components and leaders from third world countries have taken
advantage of new technologies that have led to steep declines in transport
and communications costs. Resource rich states like Nigeria and South
Africa are implementing frameworks for effective exploitation of the
countries resouces. Chile for instance is an example of a diversified
economy, exporting more than 2,800 distinct products to more than 120
different countries. Zambia, a country similarly endowed with copper
resources, exports just over 700 products. Other low-income countries
have similarly limited diversified economies. Malawi, for example,
export around 550 and 310 products, respectively. Larger countries that
export oil, such as Nigeria (780 products) and Kazakhstan (540 products),
however have failed to substantially expand the range of products they
produce and export (Bach ed. (1999).

While economic diversification is of particular importance for mineral-

and commodity-dependent countries, it is a challenge for most
developing countries as they seek to deliver higher-productivity jobs for
growing workforces. However, with appropraite policies to support
reallocation of resource to new sectors, investments in infrastructures,
government interventions that target specific market, policy and
institutional failures whch address shortcomings in the marketplace;
diversification of third world economy is gradually having positive light.

3.3 Intolerance for Corruption

In this study the main cancer-worm in Third World Countries has been
corruption. The consequence has been the massive wasting-out of these
countries' wealth, capital flight and brain drain. Many of the negative
impacts of corruption in these nations have been discussed. In view of the
overbearing effect of this cancer procedure, a proactive and decisive
action must be taken to stop the threat. The creation of the Economic and
Financial Commission (EFCC) and the Freedom Corrupt Conduct
Commission (ICPC) in Nigeria was supposed to accomplish this goal, but
has failed miserably due to the non-autonomous structure of the Nigerian
state. In order to be effective, the state must be autonomous and empower
the institutions set up to fight corruption with all the necessary support.
Hong Kong and Singapore have taken such action and the system has
been cleaned up.The prescribed sentence for corruption should be capital
punishment, which would serve as a dissuasion, compared to the present
plea bargaining and prison terms, which give the looters the opportunity
to enjoy their loot.

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Indonesia Malaysia and other countries have taken similar measures

against drug offences, which have reduced the threat in those countries;
the same token should therefore be applied to corruption. In addition, an
early signal detection mechanism would be more effective to nipple its
occurrence in the bud. The pace of the inquiry and adjudication will be
quick and successful in order to reduce the lack of facts faced in Nigeria.
It is also important to improve and remove the legal system from
unethical forces that compromise justice for personal purposes. Among
other Third World nations, China's anti-corruption policy can be a
blueprint (Okeke, 2015).

3.4 Regional Co-operation

In the third world countries, the economic and political context is

changing continuously. The living conditions and problems of people are
different from one place to another and also in each world. There are
many examples of development, including Ethiopia-Eritrea peace and
worsening of conflict in the Sahel region. Many barriers to development,
such as military conflict, lack of human security or inadequate
governance, are transnational or affect several countries.

In their constitutions, a variety of countries have restricted freedom of

speech and association. Human rights abuses, particularly in conflicts and
in the sense of refugee crises, are widespread in many countries. Most
countries in the region have high economic growth, but poverty is steadily
decreasing, partially due to unequal allocation of wealth and fast
population growth. Many efforts by the African Union (AU) and the
Regional Economic Communities (RECs) have expanded opportunities
for international cooperation and free trade. There is a policy framework
for democracy and human rights and gender equality, but the
implementation process is slow (Bach ed. (1999).

But regional integration nonetheless remains key to narrowing the gap

between the continent’s promise and its reality, Ibrahim Mayaki, former
prime minister of Niger and now head of the New Partnership for Africa's
Development, said in an interview with Yale Insights. Policymakers must
“understand that the optimal solution to our national programs is not at
the national level, but at the regional level,” he said. Whether looking at
issues related to energy generation, healthcare, transportation, or
education, successful efforts must focus on “key regional cross-border
projects” rather than national-level projects.

4.0 CONCLUSION

Third World Development is expected to be brought together by the

leadership in these countries. Globalisation brings huge possibilities, as

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shown by the sudden rise of India, China, Brazil's economic evolution

and the rejuvenation of Russia's distressing economy. The challenge is
therefore to ensure the right policies and the oversight of corruption is
implemented by third-world leaders. It is time to take responsibility for
individuals and stop accusing foreigners of some self-inflicted injuries.

5.0 SUMMARY
Culture reorientation, good governance, economic diversification and
restructuring, zero-tolerance for corruption and interregional economic
cooperation are all the solutions for Third World underdevelopment.
These and other measures can generate positive economic growth and
development indexes when implemented.

SELF-ASSESSMENT EXERCISE

i. Discuss solutions to Third World Underdevelopment.

ii. How can the Third World countries overcome the challenges of
corruption in their economies?
iii. Analyse the potentials of Third World cooperation on the
development of their economy.
iv. Discuss the relationship between good governance and
development in the Third World countries.
v. With concrete examples, explain the relevance of diversification
of economy to Third World development.

6.0 TUTOR-MARKED ASSIGNMENT

Prescribe and discuss solutions to the Third World underdevelopment.

7.0 REFERENCES/FURTHER READING

Adedeji, Adebayo. (1993). ‘The case for remaking Africa. In, Action in
Africa.’ D. Rimmer, (Ed.). London: James Currey.

Bach, Daniel. (Ed.). (1999). Regionalism in Africa. Integration and

disintegration. London: James Currey

Eneanya, A. (2009). Public Administration in Nigeria: Principles,

Techniques and Applications. Lagos: Concept Publications.

Igwe, S. (2010). How Africa Underdeveloped Africa. Port Harcourt:

Professional Printers.

Okeke, G.S.M. (2015). Pol 324: Politics of Development and

Underdevelopment. Abuja. NOUN.

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