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Published online by Cambridge University Press: 18 July 2011
The heightened interest of many economists in recent years in the subject of economic development has been accompanied by their recognition of the importance of the role of non-economic forces in the initiation and pursuit of development. The present article is an attempt to explore the power of some of these forces and the circumstances under which they operate. I shall give particular attention to nationalist ideology and leadership, owing to their pre-eminence among non-economic forces. Throughout, the focus will be on underdeveloped countries outside the Western Hemisphere and outside the Communist bloc.
1 The research and writings of Simon Kuznets over many years have established this point. See in particular his Underdeveloped Countries and the Pre-industrial Phase in the Advanced Countries, Rome, U.N. World Population Conference, 1954, and Six Lectures on Economic Growth, Glencoe, Ill., 1959. See also Mason, Edward S., Economic Planning in Underdeveloped Areas: Government and Business, New York, 1958Google Scholar, ch. 1.
2 Myint, H., “An Interpretation of Economic Backwardness,” Oxford Economic Papers, VI, No. 2 (June 1954), pp. 159–63.Google Scholar
3 Gerschenkron, Alexander, “Economic Backwardness in Historical Perspective,” in Hoselitz, Bert F., ed., The Progress of Underdeveloped Areas, Chicago, 1952, p. 27.Google Scholar
4 Criticism has come from many quarters. The papers of Kuznets and Gerschenkron at the 1960 meetings of the International Economic Association are leading examples.
5 Foreign national minorities, to whom some writers attribute an important role in technological change and development, are indeed invaluable. But, as private entrepreneurs, they emerge only later, after the initial thrust has been made.
6 Writing about the USSR, Gerschenkron has said that “The delayed industrial revolution was responsible for a political revolution” (Hoselitz, ed., op.cit., p. 28). Equally true is the fact that it was the political revolution that made possible the full fruition of the industrial revolution in the USSR.
7 Only rarely do the old, established leaderships accept some of the new ideas and incorporate them in their philosophy of action. The ruling group in Iraq tried this in the early 1950's; the ruling group in Iran in the mid-1950's; the ruling group in Turkey all through the 1950's. In these and other cases, some political and social ideas of great significance to the articulate minorities were left out. Hence the revolutions of Iraq and Turkey which Iran has so far been spared. Christ's saying about the futility of putting new wine in old bottles is still as good as when He uttered it.
8 In societies where a traditional attitude of “God will provide” predominates, a shift to the attitude of “The state will provide” cannot be very difficult to make.
9 Up to this point, business risks are likely to be oppressive and inhibiting, except for the most daring of entrepreneurs. Moreover, “Where risks are great, only the biggest bureaucracy can carry on, and not uncommonly this has been the state. As risks lessen, the private firm with state support is enabled to invest with some hope of commensurate return. It is only in unique environments that state action may retreat well into the background, with some allowance for lag in the process.” (W. T. Easter-brook, “State Control and Free Enterprise in Their Impact on Economic Growth,” in Hoselitz, ed., op.cit., p. 66.) For an examination of the arguments for and against government-initiated development, see Mason, op.cit., esp. ch. 3.
10 Only in a broad sense does the use of the term here coincide with that of Hirschman, Albert O. in The Strategy of Economic Development, New Haven, Conn., 1958.Google Scholar
11 See my “The Place of Agriculture in Economic Development,” Land Economics, XXXV, No. 4 (November 1959), pp. 297–305.
12 Several writers have discussed this issue. Of special relevance is Gerald M. Meier's discussion of the significance for underdeveloped countries of maximizing production rather than worrying about the choice of an optimum combination of productive resources on a production possibility or transformation curve. See “The Problem of Limited Economic Development,” in Agarwala, A. N. and Singh, S. P., eds., The Economics of Underdevelopment, Bombay, Oxford University Press, 1958, pp. 57–59.Google Scholar
13 This in substance is a point made in several places by Mason, op.cit.; see also his Promoting Economic Development: The United States and Southern Asia, Claremont, Calif., 1955.