- L.I.E.O
- GATT/WTO
- The main mission of the world bank and the IMF is to help the rest of the countries catch up because they are very far behind.
- The world bank has been the main development institution for third world development since the 70s when McNamara took over, done through aid and social program (not loans.)
- The aid is conditional, if they do something asked of them, they will get the aid, but they don’t have to pay it back.
- The IMF intervenes to stabilize currencies. Oversees the financial and exchange rate policies of all states. Only a small portion of what they do is development loans.
- Lots of third world states rely on both of these, and these two things rely on liberalism and the washington institution or the IMO.
- Development doesn’t always happen as a result, and the gap between third and first world countries is growing, not shrinking.
- Do third world states have any sovereignty at all??
- Hierarchy, first world vs third world, the west and the rest, north and the south.
- The north is roughly 50 states, mostly democracies, 0 population growth, 20% of global population, and % of the world wealth.
- The south has 4.4 billion people, ⅗ lack basic sanitation, ⅕ are malnurited, anarchic, sovereign states, not colonies, not a problem of order among these countries.
- For example, no security dilemma between the United States and Ghana. The north is on top, and they don’t have to worry about the southern nations.
- Northern states always look like actions of a hegemon, southern states are never threatened by the northern states’ actions.
- Problem of incorporation, how do you bring the south into the european/western system.
- Phase 1 was colonialism, dominating, exterminating locals, enslaving people, ended with world war II.
- Phase 2 with sovereignty they no longer needed northern states to take care of them and get them by because they were their own states.
- Around 200 states with very unequal power, can the countries of the third world catch up? The problem is how can they make it (development, growth, and distribution) and how can the northern states help them?
- Why is it so hard for the third world to catch up? The context of third world development is very different than the context of first world development.
- How does the international system and distribution of power (hierarchy) affect the ability of third world states to develop and catch up?
- The global south got freedom from the north’s colonialism after world war II, but the north was already on top so even with the same goal and determination to catch up, they were at the bottom of a power structure that they have no control of.
- Does the context of the situation not matter at all, or is it the very reason why the third world countries can’t catch up?
- Does the system affect third world development? What is the alternative reason if not? (Either the system, or a problem within the state like internal dynamics and structure.)
- Two positions are that of the neoliberals and of the critics.
- Neoliberal perspective: See the system as having low impact on development and as benign. globalize industries, keep markets free, foreign direct investment will help diversify, in order to get ahead, third world states are to do all of these things. Liberals know that allowing multinational investment allows other powers into the country. Orthodox since the 80s, ideas known as the Washington Consensus, the viewpoints were the base for the IMF and the World Bank.
- Critics’ perspective: Dependency theory, the system has a high impact on chances for development and it’s a bad system. Partly external, and therefore structural relationship of dependency preventing them from catching up. For third world states, there is a malign structural relationship of dependency.
- Dependency- a structural relationship, one way conditioning situation. One party, the dominant one, conditions the behavior and the development of the dependent one. Not interdependence, the north developed through this (trade relations through equals.) The south is dependent on the north, meaning they’re “not sovereign” and not in control of their own outcome or “destiny.” The dependent party is a reflection of the North’s wishes of them. The south is more vulnerable because the dominant party can leave them and cut off ties, but they can’t leave the north.
- Two important things about dependency:
- Structural, not intentional relationship. Not coercive.
- Not necessarily bad. If the interest of the parties is the same, and the dominant party ensures that their actions support the interests of the dependent parties creates a harmony of interests that can act as a “womb” of sorts that can protect and grow the third world nation.
- Dependency theorists say the there is no harmony of interest, there is a conflict of interest and they think that the third world countries need to throw off dependency.
- Problem of Incorporation:
- Neoliberal: Why is the third world so far behind?
- Culture of capitalism isn’t natural and requires a kind of mindset that values efficiency, rationality, and individualism that are necessary to succeed in capitalism.
- Stages of growth. From agricultural to industrial to final state. “Inevitable” stages of growth. Question of timing is a decision to grow and entrance to mass consumption economy, a function of policy choices and leadership. Governments need to be aware of where they are, and roughly guide the country. Link self to global capital economy. Stable politics, not civil wars, needs good liberal leadership.
- Form of government. Authoritarianism is bad, and prevents states from catching up. If the countries were stable democracies, they would catch up. The debate is whether democracy and capitalism go together.