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Peter de Haan
Whatever Happened
to the Third World?
A History of the Economics
of Development
Whatever Happened to the Third World?
“Whatever happened to the Third World is a concise yet masterful analysis of the
sources of economic growth and its implications for poverty reduction in develop-
ing countries. Peter de Haan does an excellent job in reviewing past growth theo-
ries against recent performance of the shrinking ‘Third World’. The volume is a
must read both for university students and development practitioners.”
—Constantine Michalopoulos, Advisor to international organisations including
the IMF, the World Bank, UCTAD and the EU Commission
“Economic development, international trade and globalisation are such vast fields
that it takes an excellent guide as Peter de Haan to understand their meaning and
relevance for the Third World. Adding his personal experience, he lively describes
how the developing world fared, how successive generations in development eco-
nomics looked at it, and how they explained what happened. Experts, students and
practitioners alike will enjoy this sparklingly written book.”
—Arie Kuyvenhoven, Professor Emeritus of Development Economics, Wageningen
University, and Visiting Professor, Nanjing Agricultural University, China
“…Peter de Haan, drawing from his rich life-long experience working on the field
as a diplomat and development expert, has written a fascinating book on the devel-
opment and evolution of the economics of development. This very readable intel-
lectual journey should be a required reading for policy makers, politicians, and
students of economic development and the century-long fight on poverty, for an
illuminating insight into this fascinating field of human endeavor. Delightful
reading!”
—Ronald MacLean-Abaroa, Former Minister of Finance, Sustained Development,
and Foreign Affairs, and four-term elected Mayor of La Paz, Bolivia
Peter de Haan
Whatever Happened
to the Third World?
A History of the Economics of Development
Peter de Haan
The Hague, The Netherlands
© The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer
Nature Switzerland AG 2020
This work is subject to copyright. All rights are solely and exclusively licensed by the
Publisher, whether the whole or part of the material is concerned, specifically the rights of
translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on
microfilms or in any other physical way, and transmission or information storage and retrieval,
electronic adaptation, computer software, or by similar or dissimilar methodology now
known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this
publication does not imply, even in the absence of a specific statement, that such names are
exempt from the relevant protective laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and information
in this book are believed to be true and accurate at the date of publication. Neither the pub-
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tional affiliations.
This Palgrave Macmillan imprint is published by the registered company Springer Nature
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The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
To Simone
Preface
vii
viii PREFACE
subject deserves a balanced, yet critical, analysis which is beyond the scope
of this book. The same also applies to environmental issues relevant to
developing countries.
Here and there, I share some of my forty years’ experience in develop-
ment assistance. However, scholarly books, papers, and reports constitute
the principal basis of my analysis.
I hope that students and scholars of development economics, economic
history, and political science will find this book useful. What follows can
also be enjoyed by everyone taking an interest in economic growth and
development of developing countries.
The book contains seven chapters and a brief epilogue. Chapter 1 pres-
ents an overview of the book’s contents. Chapter 2 describes, in fairly
broad terms, how the Third World evolved and what categories of coun-
tries emerged, ranging from successful ones, via middle-income countries,
low-income countries, to fragile and failed states. Chapter 3’s title: What
preceded development economics, reflects what this chapter is about. Set
before World War II, the chapter provides a brief description of what dif-
ferent scholarly disciplines (i.e., geography and economics) had to say
about growth and development of colonies and other poor tropical coun-
tries. Chapter 4 introduces the first generation of development econo-
mists, who developed theories and formulated proposals with a view to
help newly-independent developing countries achieving their aim of rapid
economic growth. Dissenting views on proposals of the first generation
are presented as well. The proposals and actions of their successors—mem-
bers of the second generation of development economists—are described
in Chap. 5, again, including dissenting views. The question arose, whether
the second generation would be succeeded by a third generation. In
response, Chap. 6 presents not just one, but various schools of thought
that greatly contributed to the contemporary broadened growth and
development literature. Finally, Chap. 7 attempts to answer the question
to what extent developing countries have benefitted from international
trade and globalisation.
* * *
The author has worked for forty years in development. First as a Junior
Professional Officer at the Pacific Regional Office of the United Nations
Development Programme, after which he was appointed Asia Bureau
Chief at the Dutch Non-Governmental Organisation NOVIB (now
PREFACE xi
xiii
xiv ACKNOWLEDGMENTS
1 Introduction 1
Epilogue299
Index305
xv
List of Figures
xvii
List of Tables
xix
CHAPTER 1
Introduction
1.1 Introduction
Gapminder Institute’s founder, Hans Rosling (1948–2017) is fondly
remembered. He playfully refuted the conventional wisdom about devel-
oping countries, i.e., that they were a hopeless lot, characterised by cor-
ruption, squalor, endless poverty, inadequate health care, and low literacy
rates. In short, the assumption was, said Rosling, that there was no hope
that these countries would ever develop, let alone shed their poverty.
Supported by statistical evidence, Rosling demonstrated in his TED lec-
tures and in Factfulness that a lot of progress has been made over the past
50 years.1 Even ‘hopeless’ sub-Saharan Africa (SSA) took-off, economi-
cally speaking—the impossible appeared to be possible! Indeed, SSA is
making progress.
Not only is the developing world’s past economic record pretty impres-
sive, the same can be said about progress made in poverty alleviation, life
expectancy, sanitation, and literacy. For example, the number of the
world’s poor declined from 1.9 billion in 1990 to 836 million in 2015.
China alone managed to lift 600 million people out of extreme poverty
over the past forty years. The average child born in 1950 lived 48 years;
now this child can expect to live 71 years. Over two billion people have
gained access to safe drinking water and toilets. More children go to
school. This good news is a reflection of the Millennium Development
Goals (MDGs) that have been achieved, thanks to the collective efforts of
recipient and donor countries.
The Third World, as originally conceived in the early 1950s, has fallen
apart. Some countries- in particular East Asian countries, which used to
form an integral part of the Third World, took off, while others have not
done so well. Unfortunately, quite a number of developing countries dete-
riorated into fragile or failed states.3
Despite the similarities presented above, the Third World was more
heterogeneous than one would think at first sight. After all, it included
giants such as India and tiny countries such as Malawi. It also included
relatively well-developed countries like Brazil, but also undeveloped
Nepal. In other words, the term Third World was to some extent defined
by what it was not: it was not Europe, it was not America, and neither was
it the Soviet Union. Yet, as Branko Milanovic argues, the term was by and
large not unreasonable as it allowed us to organise the world in a rather
tidy fashion. It also corresponded broadly to a division in economic
1 INTRODUCTION 3
The new world order shares with the last decade of the previous century the
belief in the inevitability of interdependency and connectivity, but it com-
bines it with the recognition of division and conflict, where borders become
increasingly diffuse but cultural and civilizational differences do not, giving
rise to a permanently unstable compound of heterogeneous elements.8
Ja kun voisi uskoa, että lapsi, jota Anna kantoi, on oma lapsi, olisi
helpompaa ja elämä vieläkin voisi muuttua, sammua kirvelevä suru
edes hetkiseksi, mutta sitäkään ei voinut.
Tähän saakka oli häntä pitänyt yllä heikko toivo siitä, että
jotenkuten saattaisi kaikki vielä selvetä ja muuttua. Oli syntynyt
sairaalloinen mielikuva, joka saattoi joskus ajattelemaan, että kaikki
olikin ehkä vain leikkiä, keksitty kiusaksi hänelle. Pikku Matti voi olla
hänen samoin kuin toinenkin. Anna vain kiusaa häntä sanoakseen
joskus, että se onkin ollut vain leikkiä, pilaa kaikki tyyni.
— Kenelle?
— Sinä olet ollut aina hyvä toveri ja ystävä minulle, virkkoi hän
tukahtuneesti Jannelle. Etkö tekisi minulle vielä yhtä palvelusta?
— Ja sitten…
— Ja sitten?
— Niin teenkin.
— Sitten?
Tuomas pysähtyi.
— Onkohan tämä nyt vaan kaikki oikein, että sinä näin…? arveli
Kustaava veljelleen.
— En minä sitä tarkoittanut. Sitä minä vain, että kun sinä näin
vapaaehtoisesti…
Siihen se nyt jää kaikki, toiselle. Parhaiksi kun ehti kiintyä, täytyy
siitä luopua.
Itsemurha!
Laine repäisi irti venheen ja pyörre alkoi sitä vetää alas, mutta nyt
tunsi Tuomas jo voiman käsivarsissaan jännittyvän. Venhe kääntyi
ylös ja ponnistaen äärimmilleen sai hän sen nousemaan.
Hetkiseksi tuli painava ajatus, että hän oli aikonut häpeäänsä vain
lisätä, eikä miehen tavalla sitä kantaa, mutta se häipyi yhtä pian kuin
painajainen äsken. Hän tunsi yöllä taistelleensa suuren taistelun,
käyneensä kuoleman läpi. Ja niin kuin uudestaan aloittaisi hän nyt
elämänsä.
Hän oli pyrkinyt. Pimeys oli ympäröinyt hänet joka puolelta. Miten
hän oli niin saattanutkaan…?
*****
Janne nyökkäsi.
— Nyt minä vasta lähdenkin, virkkoi hän hiljaa. Tule sinä sitten,
kun joudut. Ehkäpä siellä toisessa maailmassa voimme aloittaa uutta
elämää.
Anna nyyhkytti.
Updated editions will replace the previous one—the old editions will
be renamed.