Understanding development : Theory and practice in the third world

In some respects, this phrase, which opened the first edition of this book, still captures the present state of the development debate. The terms "left" and "right" distinguish competing sides of the debate in terms of their attitude to the state's role in the development process. In the twentieth century, the left which included not only socialists and communists but also modern liberals generally, if not always, favored using the state as an agent of social transformation. The state, it was held, could both develop economies and later societies in such a way as to make them suit human needs. Underlying this was a belief that the state could embody collective will more effectively than the market, which favored privileged interests. Although the old right, from conservatives through to fascists, also favored strong states and held an equal suspicion of the market, as a political force it declined throughout the post-World War II period. In its place emerged a new right based on recreated the freedom and productive potential and the market. In the early postwar period, development thought, like conventional economic wisdom, was really neither left nor right. These existed a broad consensus that economies needed more state intervention than they had been given in the past (in fact, in Latin America it was right-wing authoritarian regimes that began employing statistic development strategies). Mean while, the horrors of the Depression and postwar political developments had given Keynesian economics pride of place in both academic and policy circle in the first world. This influenced third-world academics, whose confidence in the state was further reinforced by the emergence of structuralist economies. Aware of the imperfections in the market and global capitalism, and confident that the state could overcome them, development theories proposed models that assigned the state a leading role in the economy.