Examine the relevance of the modernization theory, dependency theory and the developmentalist

perspective in explaining causes of poverty in developing countries.

Poverty is a multifaceted concept. According to Sen (1999), the most widely used measurement
of poverty is based on poverty lines which measure deprivation of income needed to meet basic
needs for maintenance of physical efficiency. Poverty can also be defined as lack of capabilities
rather than income. This therefore implies a focus not on the utility but welfare benefits of an
income such as being educated, being well fed and free to exercise choice hence the absence of
the above means one is poor. Africa, houses plentiful economic resources, however the continent
languishes in poverty as evidenced by high prevalence of famine, disease and ignorance
(Buthelezi, 2007). Therefore the most salient characteristics of the third world countries are their
poverty. This is manifested at both individual and at national levels, highly unequal income
distribution, poor infrastructures, limited use of modern technology and low consumption of
energy. This paper will examine applicability of the modernization, dependency theories and the
developmentalist perspective in explaining the causes of poverty in developing countries.

Soon after most African states attained Independence they could not sustain their economies
hence engaged the West for financial assistance. The developmentalist perspective suggests that,
through its aid and trade policies, Washington has worked to restructure the economic policies of
the Southern nations. Starting in the 1980s the World Bank and the IMF started to premise aid
agreements on acceptance of a package of economic reforms and adherence to their
prescriptions. SAPs generally entail severe reductions in government spending and employment,
higher interest rates, currency devaluation, lower real wages, sale of government enterprises,
reduced tariffs, and liberalization of foreign investment regulations, (Rodney 1972). SAPs share
a common objective which is to move countries away from self-directed models of national
development that focus on the domestic market and toward outward-looking development
models that stress the importance of complete integration into the dominant global structures of
trade, finance, and production. Largely championed by the Reagan administration and Margaret
Thatcher’s government in Britain, the neoliberal principles that shape SAPs gained prominence
in the Bretton Woods institutes in the 1980s. The debt crisis, which reached crisis proportions by
1982, gave the IMF and the World Bank the leverage needed to impose SAPs on the debt-ridden
countries of the South. With the waning of North-South private capital flows, indebted countries
became increasingly dependent on the SAPs, which conditioned new lending on the
implementation of SAPs. In the 1980s, SAPs became virtually synonymous with World Bank
and IMF lending. Virtually all developing countries in Latin America and Africa, and
increasingly in the transition countries of east and central Europe implemented SAPs. In their
wake, SAPs have bankrupted local industries, increased dependency on food imports, gutted
social services, and fostered a widening gap between rich and poor. For most of the world’s
developing countries, the 1990s were a decade of frustration and disappointment. Reid (1995),
asserts that, the economies of sub-Saharan Africa, with few exceptions, failed to respond to the
prescriptions meted out by the World Bank and the IMF. Latin American countries were buffeted
by a never-ending series of boom-and-bust cycles in capital markets and experienced growth
rates significantly below their historical averages. Most of the former socialist economies ended
the decade at lower levels of per-capita income than they started it and even in the rare successes,
such as Poland, poverty rates remained higher than under communism.

Dependency can be defined as an explanation of the economic development of a state in terms of

external influences which are political, economic and cultural on national development, (Rostow
1960). The common characteristics of the dependency theory are that the international system is
comprised of dominant and independent states. The dependent states are those states of Latin
America, Asia and Africa which have low per capita GNPs and which rely heavily on the export
of a single commodity for foreign exchange earnings. External forces which include
multinational corporations, international commodity markets, foreign assistance and
communication are used by advanced industrialized countries to represent their economic
interests abroad. The dependency perspective claims that developing countries are historically
subjugated and are reduced to a subordinate position in the world economy, which is not
anything the west went through and naturally causes poverty in the developing states. This
perspective also described third world governments as agents of the local economic elite who
colluded with Western Multinational Corporations. The interactions between the two sets of
states further reinforce and intensify the unequal patterns hence the developed states will benefit
at the expense of the developing nations resulting in the core-periphery scenario.

The dependency theory also recognizes the establishment of multi- national corporations in
developing countries as another factor contributing to their poverty, (Hussain and Tribe, 1981).
Many nations, especially those of the Third World are still operating under inefficient
governmental or administrative systems that do not have enough resources to manage
multinationals. Though competition has allowed states to gain more control over MNCs, it is
still limited when projects are capital intensive. Also, MNCs will have bargaining power due to
the uncertainty of the success of many projects which allows MNCs to negotiate better terms and
fewer regulations. Additionally, though many states have used nationalization to reduce the
influence of MNCs, this strategy has numerous consequences. Tonstenson (1982) propounded
that, developing states do not have the same access to resources as the MNCs therefore, newly
nationalized industries suffer from problems of inefficiency or inoperability. Likewise, many
states need access to the global market access that usually only comes with the presence of
a multinational. Without MNCs, many of the world's poorest nations would be cut off from the
global supply of materials, technology, capital and information. Moreover, a state that adopts a
nationalization strategy will most definitely ruin its reputation in the international arena. Few
corporations would be willing to make an investment due to the high risk of losing their assets.
Such an increase in risk decreases a state's bargaining power in future negotiations. Nyerere
(1973) noted that, States also face domestic constraints on their potential power over MNCs. It is
also possible for MNCs to practice political intervention to achieve their goals for example, the
United Fruit Company organized a coup in Guatemala when the government there was showing
signs of gaining power. In a similar fashion, ITT helped overthrow the elected government of
President Allende in Chile. These instances are clear demonstrations of how MNCs can
overpower states. This strategy involves the establishment of circumstances to ensure that the
cost to the host staff for altering the status quo is far too great thus MNCs are able to impair
government power. Even though states have control over the territory occupied by MNCs, they
are not always in a position to use this advantage as a method of control. This scenario is
especially true in developing nations needing economic assistance and capital inflows to compete
and even survive in the international system.

The dependency thinkers also put forward that developing states are poor because they were
coercively intergrated into the European economic system only as producers of raw materials or
to serve as repositories of cheap labour, and were denied the opportunity to market in any way
that competed with dominant states, (Korten 1990). An example is when Zambia delinked from
the West and tried to sell its copper on the world market which was its main foreign currency
earner. The West reduced the price of copper since it controls the world market and Zambia
suffered a major blow financially and hence poverty became the order of the day. In Zimbabwe,
tobacco production had boost foreign currency earnings and improved livelihoods of the farmers
but however due to political interferences by the West there has been campaigns against
Zimbabwean tobacco therefore the farmers have to sell it for less and losses have been incurred.
Samir et al. (1987), propounds that the West are able to impose dependency on the poor nations
due differences in power dynamics. Hence the westerners always want an upper hand and to
create a core/periphery situation thus causing poverty in the developing nations.

According to Rostow (1960), and other proponents of modernization, modern societies are those
that resemble western capitalist societies and traditional societies are a residual category
comprising the rest of the world including peoples of Africa, Asia and Latin America. One can
observe that the focus of modernization theory shows its ethnocentric and self-serving world
view which characterized non-western cultures and traditions as unimportant or obstacles to
development Modernization theory maintains that traditional societies will develop as they adopt
more modern practices. According to Shenton (1996), proponents of modernization theory claim
that modern states are wealthier and more powerful and that their citizens are freer to enjoy a
higher standard of living. Developments such as new data technology and the need to update
traditional methods in transport, communication and production, it is argued, make
modernization necessary or at least preferable to the status quo. Supposedly, instead of being
dominated by tradition, societies undergoing the process of modernization typically arrive at
forms of governance dictated by abstract principles. Traditional religious beliefs and cultural
traits, according to the theory, usually become less important as modernization takes hold. The
focus of the modernization school is on the Third World, especially on how to promote
development in the Third World while implicitly holding the First World as a model. According
to the modernization school, there is something wrong within the Third World nations that
makes them economically backward. For example, sociologists have stressed the persistence of
traditional values and institutions, psychologists highlighted the low achievement motivation,
demographers are appalled by the population explosion, political scientists emphasized the
inefficient and corrupt bureaucracies, and the economists pointed to the lack of productive
investment. In this respect, it can be said that the modernization school has provided an internal
explanation of the problems of Third World causing everlasting poverty.

Rostowian linear development of nations states that development occurs in stages. Gabriel
(1991), argues that the basic argument of the movement to modernity is related to the increase in
the so called modern values of production such as automation, the use of computers,
specialization and application of science in production of economic goods and services.
According to Huntington (1968), modernization is a multidimensional process that includes
transformation of human views and activities. Modernisation theorists characteristically view
western countries as perfectly modern while undermining non-western societies as traditional
and unchanged by contrast, (Gilman 2003). This orientation of modernization holds the idea that
non-western countries are substandard even though they share the same living conditions.
Rostow (1960), presented a model considered as the blueprint of modernization approach, sign
posting development as a series of stages such as underdevelopment, transition and modernity.
Modernization is implicitly meant in the model as the associations of production and standard of
living characteristic of western countries such as America. Thus modernists believe that poverty
in the developing nations is caused by the absence of advanced mechanisms and substandard
lifestyles experienced in developing nation.
However besides the above mentioned causes of poverty in developing nations there are some
causes which are locally manifested. Frank (1967), asserts that poverty in Africa can be
internally manifested. Examples include the recent devastating political conflict in Zimbabwe
and the current conflicts in Lybia and Sudan as well as corruption which is very high in most
developing nations have robbed the nations of their development gains thus causing poverty. It is
also believed that issues such as wars, conflicts, natural disasters and pandemics may force poor
countries to always be in poverty by moving backwards, Ndulu (2004). Natural disasters such as
the Tokwe-Murkosi and cholera outbreak in Zimbabwe forced the government to channel its
limited funds and resources towards alleviating such situations instead of other productive
activities hence resulting in poverty.

In conclusion the developmentalist perspective, the mordenisation theory and the dependency
theory provide evidence to a greater extent of the causes of poverty in developing countries.
They put across colonization, neo colonization, differences in levels of technology and
conditional aid as the main causes of poverty in developing nations. However natural disasters,
corruption, wars and pandemics also cause poverty in most of the developing nations. Thus
poverty can be man made or occur naturally depending on the circumstances of its occurrences.
References:

Frank AG (1967). Crisis in the Third World, New York. Holmes and Meier.

Gabriel T (1991). The Human Factor in Rural Development London: Belhaven Press.

Galtung J (1980). Self- Reliance, Concepts, Practice and Rationale. In Galtung J, O’Brien P
Preiswek R(eds) Self-Reliance: a strategy for Development Studies, Geneva.

Hussain A, Tribe K (1981). Marxism and the Agrarian Question: German Social Democracy and
the Peasantry 1890-1907. Hong Kong: MacMillain Press Ltd.

Korten DC (1990). Strategies of Development-Oriented NGOs. Robin:

Ndulu BJ (2004). Human Capital Flight: Stratification, Globalization, and the Challenges to
Tertiary Education in Africa, JHEA/RESA, 2(1): 57–91

Nyerere J (1973). Freedom and Development Nairobi; University of Tanzania.

Reid D (1995). Sustainable Development: An introductory Guide. London: Earthscan

Publications Ltd.

Rodney W (1972). How Europe Underdeveloped Africa. Dar es Salaam: Tanzanian Publishing
House.

Samir A, Chitala D, Mandaza I (1987). SADCC Prospectus for Disengagement and

Development in Southern Africa: Studies in African Political Economy-United Nations
University, London: ZED Books Ltd.

Shenton RW , Cowen MP (1996). Doctrines of Development. London:

Tonstenson T (1982). A Dependence and Collective self-reliance in southern Africa: Research

Report no 62, Scandinavian Institute of African Studies: Uppsala.

Sen A (1999) Development as Freedom, Oxford University Press

Rostow W.W (2012) The stages of Economic growth: 3rd Edition, Cambridge University Press