1.    SOME BRIEF BACKGROUND - A FLAVOUR OF THE DEBATES

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• Increase in availablilty and improved distribution of essentials: (survival)
• food
• shelter
• protection from natural or external threat
• health
• Raise standards of living for all (efficiency and effectiveness)
• more jobs
• more income
• better education
• Expand the range of personal and social choice and freedom to choose - civilisation? -  (being a peasant may be pleasant, but only if you can chose whether or not to stay being one rather than do or be something else)

• Under-resourced:  Poor, illiterate and ill-educated, under-resourced, limited choices - subsistence and food/shelter provision takes up most effort, with little left over for enjoyment or investment.
• Over-populated - too many people trying to scratch a living from too few resources
• Low productivity - not much out for the effort put in (lack of appropriate technology, or lack of training/skill, or too much risk of starvation associated with available technologies)
• General inequality - a few manage to be relatively well provided for, at the apparent expense of the many condemned to subsistence

• Increase in GDP per head, which can only result from:
• increased capital stock (equipment etc. (including land improvment)) -implies either increased savings or inward investment.
• improved technologies for converting inputs into outputs
• improved management of resources (better allocation of resources to production activites, and better mix of production activities to generate income)
• Increase in Total GDP -
• increase in population, associated with an increase in GDP per head
• Increasing diversity and differentiation in socio-economic activity and occupation, and associated increase in consumer choice - implying structural transformation of the economy, especially the declining importance of agriculture as an occupation
• Increasing complexity and sophistication of social and ideological bases for society
• Increasing trade and geo-poliotical linkages with the rest of the world
• Increasing divergance between the haves and have-nots?? (see below)

• Dependence - underdevelopment a consequence of external exploitation or colonisation etc. (underdevelopment caused by inappropriate and inequitable distribution of gains from development and trade between the rich and the poor)
• Inherent/Internal - underdevelopment a consequence of tyranny, poor governance, market failures, lack of appropriate market institutions and rules, fraud & corruption etc. (underdevelopment essentially problems of economic efficiency (resource allocation) - market failures, many caused by government or policy failures)

Inequality versus Poverty Alleviation?  One of the Major current debates - does economic growth necessarily require growing inequality?

• Does economic growth lead to reduced poverty?
• recent history (1980 - 1998) suggests that total numbers in absolute poverty is pretty stationary (1.2bn people with incomes less than $1/per day, as estimated on a consistent basis by the World Bank - declining since 1980 by 200m people), so proportion is falling (from 31% to 20% of the world's population over 18 years) since world population is still rising. This is a pretty spectacular counter-argument to those who suggest that globalisation condemns more people to poverty and only benefits the rich.
• Average Incomes per head between countries is becoming more, not less, equal (when weighted by population), though rapid growth in both India and China are largely repsonsible for this - excluding these two very l;arge countries alters the conclusion - with no obvioous trend since 1980.  However, what is the ground for excluing 40% of the world's population? (60% in 1980
• Income inequality may have tended to increase within countries in the recent past, though the basis of these estimates are disputed.  The world Bank's experts (David Dollar and Aart Kraay  (Foreign Affairs)) estimates that world-wide income inequality peaked in the 1970s, and that the gap between a randomly selected individual and the world average income per head is now (1995) 78%, roughly were it was in 1950, while the peak in 1970 was 88%.
• However, the evidence can be contested and scholars can be found who can argue persuasively that inequality is growing rather than declining
• Notwithstanding, it seems incontestable that fewer peope (even if still an unacceptably large number) now die or are threatened with absolute starvation than was the case in the 1950s - when awefully huge numbers did actually die of starvation.
• In any event, maybe the extent of world poverty is unacceptable to civilised hearts and minds - 85% of world income goes to 20% of the population, and 6% to 60%.  The absolute gap between rich and poor is still rising, despite the proposition that relative poverty levels are falling (the poor countries tending to grow faster, from low bases, than the rich - so the relative gap is falling, although the absolute gap is still rising)
• But what is the proposed solution to this?  Even with a perfectly equal distribution of income, normal individual life-cycle savings and borrowings would result in 40% of the population owning 60% of the wealth.
• Should the rich donate sufficient of the their earnings to the poor to ensure absolute equality?  What would be the consequences for incentives and penalties to try and do better?  In any event, if the rich will not voluntarily increase their aid donations, what is the solution?
• However, a significantly more equal world does seem likely to be more stable, peaceful and thus prosperous.
• Although one can quarrel with the numbers, and claim that we do not really know how many poor there are, it does seem clear that more rapid economic growth for the poorer regions is the only practical way of reducing poverty - given that the rich are not going to increase their aid donations substantially (unless successfully balckmailed by "terrorism", perhaps)
• Does liberalisation, deregulated markets, prudent macroeconomics (fiscal balance and low inflation) necessarily produce growth?  Or are these exhibitions those of the successful countries, whose growth is otherwise explained by diffusion of technical capacity and adaptation?  It seems clear that agricultural protection has been employed by most developed countries in the interests of income equalisation (protection of declining industries), and only when countries become substantially rich are they willing to reduce this protection.
• Biggest Policy challenge is to accelerate economic growth in poor countries
• Open markets and foreign direct investment both make important contributions to such growth
• Self-sufficiency and protection does not help such growth.
• But do these propositions necessarily mean that full and complete liberalisation of markets is necessarily always a good thing (what about encouraging domestic and local industries?) or necessarily the top priority (there are other things which are necessary to achieve growth)

What is the Development Process?

Streeten (What Price Food?: Agricultural Price Policies in Developing Countries, Macmillan, 1987) encapsulates the necessary elements of an effective economic system for the production and distribution of food under the 6 I headings:

• Innovation technology, especially irrigation, varieties of crops and livestock, and appropriate management practices;
• Incentives the right prices for outputs and inputs);
• Inputs need to be available and accessible, including credit);
• Infrastructure transportation and storage, as well as properly functioning markets, including the management of risk);
• Institutions - the rules and procedures and accepted practices rather than the specific organisations, especially for: laws of contract, lack of fraud, marketing and land ownership & operation and property rights - (the social infrastructure, if you like);
• Information - the extension of techniques as well as marketing information and credit availabilities.

Peter Hazell, International Food Policy Research Institute, Washington, presents a brief but highly relevant and articulate summary of the problems facing the world in
securing food supplies without compromising the environmental base on which it depends in the Introduction to a Special Issue of the journal: Agricultural Economics
(Elsevier) on Agricultural Growth, Poverty, and the Environment, Vol 19, Nos 1-2, September, 1998. In summary:

• Hunger and malnutrition persist, often because past agric. growth was insufficient or failed to benefit the poor (exacerbated by national mismanagement and, in extremis, civil conflict).
• Increases in popn. growth and per capita incomes -> increasing demand -> continued increases in agric. productivity, against evidence of some slowing in this.
• Growth in productivity and limited prospects for expansion of cropped and irrigated areas.
• Environmental problems could check this increase in productivity further, as well as imposing health, welfare and environmental costs both nationally and
• Internationally: where environmental issues generally fall into two categories: over-intensification (typical of developed countries); over-population relative to existing agricultural technology and practice, leading to depletion of natural resource and expansion into more fragile areas (frequently in LDCs)

"Continued agriucltural growth will be a necessity, not an option, for most developing countries. .... These three goals (growth, poverty alleviation and environmental
sustainability) are not necessarily complementary, and cannot be taken for granted. But a high degree of complementarity is more likely to be achieved when agricultural
development is: a) broadly based and involves small and medium sized farms; b) market driven; c) participatory and decentralised; d) driven by productivity enhancing
technological change that does not degrade the resource base."

The post-war history of international development assistance can be roughly described as falling into the following phases:

1950s - 1960s: generating the requirements for agricultural growth as the 6 Is above.

1970s - 1980s: focus shifted to reduce poverty and food insecurity, and added six 'equity modifiers' to the 6 Is for growth, as follows;

• Broad-based development - small and medium farms critical, since economies of scale at farm level are limited (especially in labour rich and capital poor economies), means prioritising smaller farms for inputs, credit, technology, marketing
• Land reforms - where productive land is too concentrated amongs plantations or larger farms
• Invest in Human capital - education, clean water, health, family planning and nutrition
• Women important in the development process and warrant targeted programmes
• Particiaption of all in development is critical
• Rural non-farm economy needs promotion and development

• Priority to backward regions and resource poor areas (where the threat of over-use is greatest)
• R&D should concentrate on broader aspects of land management at watershed and landscape levels, as well as environmental impacts and effects at farm and field levels
• Secure property rights over land and natural resources, making full use of indigenous practices and systems (incluidng either privatising common property resources, or strengthening community rights and management systems
• Resolve externalities through taxes on polluters or degraders (where free market prices may well not be optimal for resource sustainablity
• Devlolve and improve public or common management and institutional systems
• Correct price distortions (remove subsidies on inputs, though make sure the input supply is effective and competitive)
• Monitor resource use and degradation, and educate population on the effects

• A stable State (government), coupled with prudent macroeconomic management - fiscal responsibility and monetary stability & security.
• Security of the person and of property
• Widespread literacy and numeracy
• Basic health
• Adequate infrastructure
• Lack of bureaucratic red-tape and corruption
• Broad acceptance of market forces
• Financial system capable of transfering savings to effective uses
• Possibly some inequality in income and asset distribution (with the rich investing more, in more concentrated and managed form, than the poor)?

• Traditional view that industrialisation led and farming followed (as in Western Europe??)
• Non agricultural sectors expanding, sucking labour out of subsistence farming and rural areas and into factories
• Industrialisation providing the technology for commercial farming to feed the workforce with far fewer people
• A more historically balanced view is that
• agricultural technical and productivity change, (Jethro Tull's seed drill in the UK) allows fewer people to feed more non farm people
• but only if coupled with +/- serious land reform, in which previously subsistance farmers leave the land to commercial agriculture
• and with market development (at least first in the rural areas where most people live) in other sectors than agriculture, increasing the demand for purchased food from the commerical farms and providing the pull factors to encourage people to give up subsistance farming (requires secure and relatively stable markets)
• leads to the the development of an 'industrial' domestic agriculture (few people and large marketable surplus), also led to an industrialisation and commercialisation of the countryside.
• the industrial revolution (substituting steam for animal and human power, and mineral reosurces and engineering for timber) leads to further commercialisation and concentration of industry in larger scale and mainly urban factories
• {where the development process in the New World was also different in the exploitation of 'virgin' lands - denied the present generation of LDCs and economies in transition}
• What does seem clear is that, in most cases, development involves fewer people earning a full time living from farming, and more people earning livings from other things.  Agriculture is a declining industry in the development process, but can only be so if it becomes more productive.  The only exception is in those regions and countries which develop a substantial food export capacity - allowing agriculture to be a leading rather than declining sector.
• What is also apparent from a general view of history is that people (especially when supported by democracy) are not willing to leave the declining sector to the mercy of the market, but seek to support their ancestral heritage (small and subsistence farmers) as and when they become rich and secure enoug to do so - farm support policies are ubiquitous amongst developed countries.
• It is also clear that market price support and protection (based on production) are by far the most obvious and popular forms of such support.  If the world (through the URAA and the WTO) have now decided that these forms of support are not to be allowed,  then there is a serious challenge to policy makers and advisors to provide some equivalently obvious and apparent system of support and transfer to the declining sectors in developing and transition economies.  It is not clear that policy analysis and development is yet up this challenge.

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2.    A PERSONAL VIEW

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Human systems are living systems - they follow a Darwinian logic - making the best possible use of available resources according to the socio-economic and political pressures ruling at the time (which determine the best fit of allocation of scarce resources to best uses), and making use of such technolgies and techniques as are available, tried, tested and trusted.  The best-fitted systems and organisms (firms, organisations etc.) grow better and replicate faster than those which do not fit.

In such systems, specialisation of function and trade between entities (people, communities, localities, regions, sectors and states) are necessary characteristics.

In this sense, Economics is very largely simply a respecification of the principles of darwinian evolution and the survival of the fittest - not, notice, the winner taking all, nor, by and large, domination by single species (except in the most malign, sparse and poor environments).  Economic development, then, should lead to richer environments and greater diversity.  How does this happen in evolutionary systems?

The development process happens as a result of experiments and innovations - new ways of doing things, both technical and institutional (the human rules and habits governing how we do things and for what purpose).  Natural development is the result of historical accidents - most of which fail, and only a few succeed - and are then able to replicate, breed, multiply and succeed.  Arguably, most human (socio-economic) development has also happened by accident - most favourable innovations surviving and replicating while less favourable developments tend not to be able to compete - in the ecological sense.

As with natural ecologies, development status is necessarily context and circumstance specific (where you are and where you come from matter).  The richer the habitats (the more resources) the more extensive and diverse will be the ecologies (economies), but these will differ from one another if they are isolated - the Galapagos and Australasia for example, though available niches will tend to be filled with similar organisms in the sense of filling the same place and role in the food chains and cycles.  Isolated ecologies, though, tend to be vulnerable to invasion and invasive species, which are better fitted to the environment than the natives.

Furthermore, naturally developing ecologies tend to develop their own resource base - making soil from rock etc. - via re-cycling their food stuffs - the socio-economic counterparts being the circular flow of income and the flows of information and knowledge, habits and rules.  In this sense, living systems accumulate resources and capacities.

But human systems are different from natural systems - human systems self-select, whereas natural systems are naturally selected.  Humans think they can make the rules about who lives and who dies, who prospers and who does not. It is the self-selection systems which are critical in human development processes - what signals, incentives and penalities are attached to certain forms of behaviour and activity?

The market system provides one set of incentives and penalties - through explicit or implicit prices on goods, services and factors of production, and thus on the returns and incomes to be made from various activities and the choices made about what to consume and how much to save.  This system - the competitive market place - operates largely according to natural principles - surivival, prosperity and replication of the fittest - leading to obvious inequality, but limited accumulation of power over the natural selection process - the large are necessarily most vulnerable to disruption of their food chains, and are frequently indicator species - a signal of the richness and diversity of the whole surrouinding ecology.  Market power (the ability of producers to dictate what and for whom) is regarded as a market failure, which needs social governance (typically formal government) to offset and overcome.

Our governance systems - from local habits and customs to formal government rules and regulations - provide the other major set of incentives and penalties - which does admit of power, and the fundamental exercise of self-selection rather than natural selection.  Power, then, is the ability to choose and the associated ability to persuade or require others to make particular choices.

The implication is that development is a reflection of the interaction of all these constituent parts and mechanisms - no one part is inherently more or less important than ay other - it is fit which counts, what will fit with what in any particular context and circumstance?  If we change the context and circumstance, we will get a different (not necessarily better or worse) development pattern.  If we change one part (such as substituting democratic control for autocratic control) this will have different consequences depending on what other systems we have in place and what resource base we have.

Trade and specialisation (market systems) naturally evolve in human systems through and from barter as the most efficient and effective ways of making the best use of available resources.  All other forms of human interaction associated with doing things will tend to involve higher transactions costs (be less efficient or effective) except in special circumstances, such as small and highly cohesive communities and families (the human organisation equivalent of single species)  - when different organisations or communities (different species) compete for use of the same resources, then the market system - natural selection - tends to take over as the most efficient form of transaction/transformation.  Ecologies do this through the transmission and transformation of food and energy (the various biological and bio-physical cycles), while economies do it through economic cycles, like the circular flow of income and the interactions between markets.

However, markets and natural selection require that the final arbiter of who lives and dies is external, as a given outside determinant (g.o.d.) - in the natural selection case, as the laws of bio-physics governing the nature of the transactions and transformations of food and energy, and the possibilities for improvement or adjustment/adpatation of practice within these laws.  In the human case, governance takes over from the bio-physical laws as the final arbiter.  Markets exist and are allowed to thrive only insofar as their societies will let them and encourage them.  Hence, it is these governance systems (our habits and rules of social organisation - called institutions by North) which are the key elements of the development process.

Prudent and sensible macroeconomic management (requiring stable and legitimate (legitimised) government) is generally a necessary precursor, as are the major elements of a functioing market system.  However, neither of these is sufficient to ensure sensible development, and both could, perhaps, be overcome by socio-political governance of the 'right' type - i.e. the type which best fits existing contexts and circumstances.

B   Some Implications

• Development Processes are necessarily unique to the time and space within which they happen - the development experience of, e.g. western europe or north america, will be different from each other and will almost certainly not be replicated by other countries development trajectories or opportunities.  For example, the major development phase of the industrial revolution (driven by an extraordinary harnessing of fossil fuels and minerals to the engine of engineering innovation, and more lately production line manufacturing and processing) is unlikely to be repeated in quite the same way now - it has happened already and when and as it happens again (as in India, for instance) it will happen differently.  Similarly, the extraordinary development of North America cannot happen again (as the exploitation of a territory treated as virgin by groups of refugees and ex-patriots from elsewhere).
• The Processes are probably much more important than the structures - who builds and runs a dam, for what purposes and according to whoe priorities, and who gets the rewards, is much more important than the dam itself - similarly with socio-economic organisations such as private companies, banks etc.
• But, mostly our present theories and understandings have to do with structures rather than processes - so our abilities to analyse and understand development is likely to be confused and confusing.  Hence - development remains a very significant challenge to social sciences and practitioners.
• Just possibly, notions more akin to husbandry, cultivation, selective breeding, nurture etc. are more useful to understanding development than much of our more conventional social science tool kits (from whatever discipline). Culture, not just agriculture, is a key?
• But, if so, who governs the cultivators?  The answer must be that future history will govern present cultivators - those trying to do the development.  If it works and fits, it will perpetuate and the future history will judge and govern the present developers.  if it doesn't work, then the present developers will not find their work and ideas replicated.  Problem - this is small comfort to those who are required (through no available alternatives) to suffer the present development experiments.
• The only alternative is to develop a common framework within which the development processes can be commonly understood and discussed - which we do not have at present.  Without this, we cannot hope to avoid the stupid mistakes by taslking about them and thinkning about them before we commit to them.

C.    Some other evidence?
Jared Diamond: Guns, Germs and Steel, a short history of everybody for the last 13,000 years., Vintage, London, 1998, addresses the question of why some societies (especially the north west, seem to have made different progress than other societies, which, furthermore, appear to have become the dominant socieities in the present world.  His underlying rationale is: "History followed different course for different people because of differences among people's environments, not because of biological differences among people themselves" (p 25).  The germ of his argument (thesis, story), which is a good read, is as follows:

• The proximate causes of European expansion into (especially) the Americas appear to be:
• European germs wipping out native peoples
• Horses (unknown in South America)
• Literacy (enabling habits, conventions and institutions to be replicated between generations with more certainty)
• Political organisation - collective action
• Technology - especially guns
• Ultimate Causes of these 'advantages'?
• Food production and cultivation (the progression from hunter-gatherer to farmer - depended on the availability of cultivable and domesticable plants and animals - only locally available grasses (cereals) and domesticable animals, all to be found in central europe but not, typically, elsewhere.
• which could spread only in specific directions, governed by the early geography of the planet
• and which allowed for the development of dense populations, which generated diseases particularly adapted to such populations
• and which also generated the advantages of writing - to pass on the lessons of cultivation and also enable the necessary transactions between commercial farmers and the rest of the population (involving money and contracts).
• and which also allowed for specialisation, including the development of a craftsman and ultimately inventor, entreprenurial and bureaucracy (governing and organising) classes -> technology & political organisation (and necessary investment)
• aided and abetted by relative abundance of raw materials (coal and iron).

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