Modernization Theory vs Dependency Theory
The path to modernization is one never clearly defined. The following report will attempt to analyze and critique our nation's potential options concerning social and fiscal policy and use this information in an attempt to recommend future policy agenda.
We will be dealing with primarily two theories on national (i.e. LDC) policy - modernization theory and dependency theory. Both have their own sets of costs and benefits as well as they do policy approaches. But before we go further, we must compare the two in attempt to see if either would compromise our government's mandate.
Currently our nation has found itself at a crossroads between the progress the western world has to offer and our own historical values and cultural integrity. We have various entities prodding us toward opposite ends of the spectrum. Our foreign investors wish only for further industrialization and perhaps political stability to further their own aims while certain conservative elements at home fear we our losing our cultural identity. A modernist approach would align itself with that of our foreign investors and MNC's operating within our country. The theory claims that our society suffers from being traditional in so far as that we sacrifice economic and industrial progress by placing too great a focus on our cultural heritage (which largely includes religious ideals). The theory goes on to state that in order to modernize we must make further efforts to secularize our governmental processes and as have many western-industrialized nations separate church and state to as great a deal as possible#. While such an approach may satisfy foreign monetary interests we run a very real risk of a political backlash due to this cultural-imperialism of the west. If this backlash were to lead to internal instability we may not only scare off potential foreign investments but also compromise our own legitimacy to rule. This may effectively place our state in a worse position than with which we began!
The approach of the dependencistas however would allow for much greater cultural preservation though it is an approach not as much favored by the western powers-that-be. Dependency theory supports the notion that the western world wishes to impose its customs/ideals/etc. upon all - regardless of the cultural consequences, in order to further its own interests. By adopting this approach we again run the risk of alienating our foreign investors, though the potential for a morale boost in the citizenry could be in our best interests. However, we must be careful to temper this zeal if we choose to embrace our cultural heritage, as it could (as above) kindle anti-western feelings and furthermore, if left unchecked could result in a radical-conservative challenge to our standing government.
These things being said, before we can hope to implement a successful economic program, we must first ensure that we can retain the support of the people in our endeavors. Significant economic progress may be difficult or impossible to accomplish if we cannot maintain internal stability. We need only to look to the status of the second world to recognize this fact. Open markets do not encourage western investment when coupled with uncertain governing bodies.
Considering now again the two base theories, we are faced with a decision to make concerning economic policy. Globalization will be the first practice we may consider. Essentially this involves a western-style model for the state - free-markets, easy transfer of goods and capital, western values/ideology. It is perhaps the most direct way to capture the attention of the west and accordingly - their investments. We may be able to more easily receive IMF approved loans as well and enjoy a bit of added regional security due to the increased vested interest of the west. The biggest problem with adopting this philosophy is perhaps the...
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