Industrial clusters have existed since the early days of industrialization. Clusters exist because of the fact (or perception) that competing firms in the same industry derive some benefit from locating in proximity to each other. These benefits are external to the firm and accrue to similar firms in proximity. Examples include the cotton mills of Lancashire, automobile manufacturing in Detroit, and information technology firms in Silicon Valley. At the firm level, the presence of firms in the same industry, which are located in proximity (in the same region), are expected to increase internal productivity. At the industry level, it is possible to see quantifiable localized benefits of clustering which accrue to all firms in a given industry or in a set of interrelated industries. The sources of this productivity increase in regions where an industry is more spatially concentrated: knowledge spillovers, dense buyer–supplier networks, access to a specialized labor pool, and opportunities for efficient subcontracting. At the metropolitan area level, productivity increases from access to specialized financial and professional services, availability of a large labor pool with multiple specializations, inter-industry information transfers, and the availability of less costly general infrastructure. At the interregional scale, these gains are expected to lead to industry concentration in metropolitan and other leading urban regions. To obtain a complete picture of clustering, one must also consider its absence. If manufacturing and service clusters are associated with regional economic growth, the absence of productive clusters suggests the absence of growth and lagging regions.
This essay focuses on two related “radical theories” of development, dependency and world-systems theory, and shows how they emerged as a critique partly of modernization theory and of the development strategy of import substitution industrialization. The dependency and world-systems perspectives on development were very influential among radical development theorists from the late 1960s onwards, all of whom agreed that capitalism had to be theorized as a world-system. These include Andre Gunder Frank, Fernando Henrique Cardoso, Theotonio Dos Santos, Walter Rodney, Samir Amin, Arghiri Emmanuel, and Immanuel Wallerstein. Some “stronger” versions of dependency, associated with underdevelopment and world-systems theory, have been introduced in recent years. In particular, A. G. Frank proposed the idea that development and underdevelopment are two sides of the same coin. A more nuanced approach to understanding dependency suggested that development and dependence were in some respects compatible. Wallerstein’s world-systems theory has spawned another approach called world-systems analysis. As theories, the ideas associated with both dependency and the world-systems are problematic, failing, for example, to adequately explain the origins of the capitalist world economy. However, both theories remain useful for understanding the current global order. In addition to recognizing that capitalism can in some respects be regarded as a world-system, the two approaches correctly assume that neoliberalism reinforces hierarchies by undermining the capacities of states to shift out of low value production into higher value sectors, as shown by historical patterns of manufacturing.
Robert M. Bosco
The study of religion and development focuses on how the moral and ethical resources of the world’s major faith traditions such as Christianity, Judaism, Islam, Hinduism, and Buddhism might tame the worst excesses of market civilization. Whereas states, corporations, and international development institutions often define “development” as economic growth and all of the adjustments required to achieve it, religious approaches consider the consequences of this conception of development and recommend that the achievement of material gain be tempered by compassion, conscience, a greater concern for social equity, and a responsible application of science and technology to both the social and natural worlds. The origins of the field of religion and development can be traced back to Max Weber's seminal investigations into the elective affinities between Protestantism and the spirit of capitalism. In the 1980s, the majority of scholarly literature grappled with the meaning and significance of Weber’s basic ideas in various contexts and locales as scholars examined whether, when, and how religious traditions enhance or inhibit development at the international, regional, national, or community levels of analysis. After a period of hibernation, the study of religion and development was reenergized in the late 1990s as religious leaders and faith-based organizations played a central role in challenging the policies and practices of international development institutions, especially the World Bank.
The definition of “development” has changed over the years since the inception of development economics as a sub-discipline of economics in the 1950s. Initially, development economics was understood as a study of how the economies of nation-states have grown and expanded, placing the discipline in line with the classical and neoclassical traditions of economics. However, there emerged another definition, this time with a focus on how to improve the welfare of the population and the planet—although much development economics in this Marxist and neo-Marxist vein ultimately also focused on national income. The early economic models were fundamentally classical ones, emphasizing structural change, but they did allow for some state intervention to achieve development, showing the influences borrowed from John Maynard Keynes. Meanwhile, the best-known leftist traditions of development economics are structuralism and dependency theory, or the world systems theory, and the latter two have their roots in Marxist political economy. In the immediate post-World War II period, neoclassical development economics was strongly influenced by the modernization theory—a historical and sociological theory which aimed to create an alternative to neo-Marxist accounts of development based on the need to transform societies from “simple,” traditional, or underdeveloped to complex and modern.
There are three key literatures on the political economy of development that all emphasize the importance of institutions, but in different and somewhat contradictory ways. These literatures focus on developmental states, good governance, and political economic pathways. The developmental states literature is based largely on case studies of East Asian countries that have, since about 1950, largely “caught up” to the already developed nations in Europe, North America, and the Antipodes. The central conclusion of this literature has been that successful late development requires a competent, committed state bureaucracy, independent enough to be capable of imposing its will on domestic businesspeople, but also sufficiently connected to them so as to make good decisions about what will to impose. The literature focusing on good governance, based largely in economics, also sees state actions and characteristics as keys to positive development outcomes. But while the developmental states literature argues that states need to play an interventionist role in “governing” markets (including not infrequently restricting them), the good governance literature usually looks more favorably on free markets. Finally, research in the political economic pathways literature tends to examine much longer periods of time than the other two literatures, and typically emphasizes economic and political developmental outcomes as joint products of differences in the historical trajectories followed by different countries. The key explanatory variables for this literature are a country’s circumstances in the colonial period, and levels and types of social inequality.
One of the most significant structural transformations in postwar capitalist democracies has been the rise of the welfare state. The theoretical intent of the traditional sociological and economic inquiry into the welfare state has focused less on trying to understand the welfare state itself and more on to what extent and under what conditions welfare provisions influence social and economic outcomes such as equality, employment, and labor market behavior. Over time, however, scholars have turned toward historical and political factors. G. Esping-Andersen identified three types of welfare state that seem incongruent with the real worlds of welfare capitalism: the “liberal,” “conservative/corporatist,” and “social democratic.” In contrast to the period until the mid-1980s that focused on welfare state expansion, the late 1980s saw the emergence of new streams of literature whose emphasis was on welfare state retrenchment. More recently, scholars have advanced the argument that the globalization of capital markets has effectively increased the power of capital over governments that seek to expand or maintain relatively high levels of social protection and taxation. Another notable trend is the increased intellectual interest in the relation between development and social policy and the growing interface between social policy and economic policy. A question that arises is whether distinctive welfare regimes have the ability to survive, particularly if their norms clash with those of the competition, or Schumpeterian workfare state.
Global restructuring across the developing world can have profound, if uneven, political, economic, and social consequences. As such, the relationship between diasporas and development is necessarily complex. The diaspora spans all of the local, national, regional, and global levels, its networks and communities set apart from other migration flows in terms both of geography and time. It is contended that these groupings are constituted by three main elements: dispersion across or within state borders; orientation to a “homeland” as a source of value, identity and loyalty; and boundary maintenance, involving the preservation of a distinctive identity vis-à-vis a host society over an extended time period. Yet each of these core elements has been contested, most especially that of continued loyalty to a homeland and an enduring transnationalism that evokes a regularized range of interactions between the host country and homeland. Moreover, there is no one paradigmatic concept of diaspora. While none of the interpretations in the mainstream scholarship is necessarily wrong, they tend to be grounded in a very basic categorization of diasporic identifications and groupings, thus leading to new questions about how to tackle the issue of diaspora in the development process. And although many of the central traits of diasporas are apparently well understood, new interpretations of the shifting politics of the diaspora in the context of broader liberal processes of globalization are needed.
The history of development studies as a field of academic inquiry can be traced most directly back to the Cold War era when public funding for “development studies” went hand in hand with international development as a state project, particularly in the United States. Economists, sociologists, and planners began to take the development of the “Third World” as an object of analysis, partially in response to new funding opportunities and a discursive context legitimating it as a field of study. By the 1960s, geographers began to take (so-called) “Third World” modernization and development as an object of research. Geographers’ engagement with development as intervention, and eventually the exploration of uneven global development as part of the “ebb and flow of capitalism,” can be divided into three waves. The first wave, visible in the early 1960s, took the quantitative spatial models dominant at the time in geography, such as those concerning urbanization patterns, transportation linkages, regional development, and population movement, and began to apply them to “Third World” contexts. This second wave, linked to the turn toward Marxist theory by a new generation of geographers in the 1960s, explored the uneven geography of wealth and power produced by capitalism and launched a powerful critique of development intervention as imperialism. The third wave of debates emerged in the late 1980s–early 1990s and is associated with poststructural and postcolonial critiques gaining traction at the time in geography and related disciplines.
Shirley V. Scott
The vast majority of states in the world today are “developing countries.” The most fundamental characteristic of a developing state is that its income is relatively low in comparison with that of an industrial country. Another characteristic is that they are former colonies. Developing countries are sometimes referred to as the “South” because the developed–developing division amongst countries corresponds roughly to the hemispheric division of the globe. Another related term is the “Third World,” which refers to economically weak countries and those countries undergoing decolonization. The relationship between developing countries and international law can be found in the disciplines of International Law, International Relations, and International History. There are three aspects of the engagement of developing countries with international law: the colonial past and contemporary continuities in international legal approaches and categories; attempts by newly independent Third World states that transform international law through the introduction of specific new legal principles; and whether structural impediments remain to the equitable participation of developing countries in international law. Meanwhile, the literature on the implications of the experience of developing countries with international law concerns the relationship of developing countries with the sources of international law as well as the international dispute resolution. The most obvious dimension to the bias of international law against developing countries is the historical one: international law served the interests of the colonizers rather than the colonized. Nevertheless, international law can also be used advantageously by the weak to resist the invasions of the strong.
There are three factors that persuade a migrant to cross borders: demand-pull in destination areas, supply-push in origin areas, and network factors that connect them. On the basis of this demand-pull, supply-push, and network framework, a distinction can be made between economic migrants who are encouraged to migrate because of a demand for their labor abroad and noneconomic migrants who cross national borders to seek refuge or to join family members living abroad. Many economists argue that trade and migration have similar effects on sending and receiving countries. However, there is no solid evidence showing that more migration accelerates economic development in migrant-sending countries. The effects of international migration on development are often grouped in the 3-R channels of recruitment, remittances, and returns, each of which can operate in ways that speed up or slow down economic development. Recruitment refers to who goes abroad, remittances are the amount of the money earned by migrants abroad that is sent home, and returns focus on what migrants do after a period of employment abroad. Majority of industrial countries have national laws that require all workers to receive minimum wages and migrants to receive the same wages and benefits as local workers. From the point of view of some developing countries, minimum and equal wages are a form of protectionism aimed at limiting the number of migrant service providers. A major challenge of the twenty-first century is how to resolve this trade-off between migrant numbers and migrant rights.