ECONOMIC PROGRESS IN UNDERDEVELOPED AREAS
| Date | 01 June 1956 |
| DOI | http://doi.org/10.1111/j.1467-9485.1956.tb00810.x |
| Published date | 01 June 1956 |
| Author | T. A. F. NOBLE |
SCOTTISH
JOURNAL
OF
POLITICAL
ECONOMY
JUNE
1956
ECONOMIC
PROGRESS IN UNDERDEVELOPED
AREAS
I
IN
the last decade there has been an enormous literature on the
economic development of the relatively poor countries, but a general
economic theory
of
their growth has proved elusive. Concepts derived
from the study of growth in advanced economies do not prove easy
to transfer to economies with a markedly lower level of technology
and
a
completely different framework of social, cultural and political
institutions. For these differences between advanced and backward
cconomies are differences of kind, not merely of degree like differ-
ences in income per head or in the extent of industrialisation, and they
make it difficult for the economist to build a satisfactory model with
the usual types of limiting assumptions. The institutional differences
alone compel him to seek the aid
of
the sociologist, the anthropologist
and others, whose activities on the fringe of economics have too long
been neglected by the model-builders at some cost of realism in
economic theory.
The difficulty
of
theorising about underdeveloped areas, however,
involves more than the differences between them and the advanced
countries
;
for such homogeneity as exists in the economic structure
and social pattern
of
the latter simply cannot be found in the vast range
of
the world's territories which are relatively
poor.
Many, but not all,
are threatened with' a Malthusian population explosion
;
some. but
not many, have vast unused natural resources
;
a few have a relatively
well-organised marketing system covering domestic as well as foreign
trade, whereas others are subsistence economies with scarcely any
experience of the monetary system. In some, an awakened desire for
economic improvement is hampered by the stranglehold of ancient
cultures which inhibit social mobility
;
others have yet to emerge from
97
07
1
98
T.
A.
F.
NOBLE
primitive tribalism and are faced with social disintegration of a more
alarming kind as they begin to respond to new economic incentives.
In
some, there are a dual economy and a dual social structure, in which
the forces
of
'
progress' and
of
'
backwardness' have long marched
side by side, and now threaten to collide or are in collision. Generali-
sation, therefore, is not only difficult. but may be positively dangerous
:
economists' prescriptions may be as false and chancy as the witch-
doctor's potions.
Nevertheless, a hard core of ideas about the solution to the
problems of underdeveloped countries has kept emerging from the
recent literature. and it is the purpose of this essay to examine some
of these ideas in the light of the
'
political economy
of
backwardness
'.l
The writer believes that there is often a paradox between the political
conception of progress widely accepted in the underdeveloped countries
and the formulae for progress offered by their economic advisers.
Con-
fronted by this paradox, their governments are often still handicapped
by inappropriate political shibboleths, probably imported from either
capitalist or Marxist literature, like obsolete armaments discarded and
sold abroad for scrap. The dilemma that confronts them,
if
they
strive to raise standards
of
living in a democratic political system, is
that the economic prescriptions for progress may have toxic political
effects. For example,
'
progress' in such a context must mean a
reduction in the impact of poverty on the people. Not only must
national income
grow
in the aggregate, but the proportion of the people
living at or near the present subsistence level must progressively
be
reduced.a This implies a redistribution of income along more egali-
tarian lines than are traditional
in
such societies. and the pressure
of
The reader will detect many important gaps in my discussion, particularly
the neglect
of
the r8le of external capital and the inadequate treatment
of
balance-of-payments problems.
In
the theoretical literature, amongst the most notable contributions have
been
:
J.
S.
Duesenberry,
'
Some Aspects of the Theory of Economic Develop-
ment
',
Explorations in Entrepreneurial History,
Vol.
111,
No.
2,
December
1950.
pp.
63-102
;
W.
A.
Lewis, 'Economic Development with Unlimited Supplies
of Labour
'.
The
Manchcstcr
School,
Vol.
XXII,
No.
2.
May
1954,
pp.
139-91.
and
The
Theory
of
Econoyic Growth
(1955)
;
H.
W.
Singer,
'
The Mechanics
of Economic Development
,
Indian Economic Review,
Vol.
1,
No.
2,
August
1952
;
R.
Nurkse,
Problems
of
Capital Formation in Underdeveloped Countries
(1953).
'
The Political Economy
of
Backwardness
'
is the title of an interesting article
by
P.
Baran.
The
Manchcstcr
School,
Vol.
XX.
No.
1.
January
1952.
*
See
3. Viner,
lnternational
Trade
and
Economic Development
(1951).
pp.
9!
er
seq..
and
'
America's Aims and the Progress
of
Underdeveloped Countnes
,
in
The
Progress
of
Underdeyeloped
Areas,
Hams Foundation Lectures, edited
by B. Hoselitz
(1952).
especially pp.
185
at
seq.
The panel
of
economists set
up to advise the Indian Planning Commission declared that the 'objectives of
the Second [Five-Year] Plan must
be
a
big enough
(sic)
increase in incomes.
together with substantial expansion of employment. and these should
be
relate!
to the pattern
of
income distribution that is felt to be socially desirable .
Indian Trade and Industry.
Vol. VII. No.
3,
18th February
1955,
p.
64.
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