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Classic Theories
of Development:
A Comparative Analysis

It matters little how much information we possess about development if we have not grasped its inner meaning.
—DENIS GOULET, The Cruel Choice

Development must be redefined as an attack on the chief evils of the world today: malnutrition, disease, illiteracy, slums, unemployment and inequality. Measured in terms of aggregate growth rates, development has been a great success. But measured in terms of jobs, justice and the elimination of poverty, it has been a failure or only a partial success. —PAUL P STREETEN, Former Director, World Development Institute .

Our new framework is a holistic and integrated approach to development strategies and programs that highlights the interdependence of all aspects of development strategy— social, structural, human, institutional, environmental, economic and financial. —JAMES D. WOLFENSOHN, President, World Bank

Every nation strives after development. Economic progress is an essential component, but it is not the only component. As we discovered in Chapter 1, development is not purely an economic phenomenon. In an ultimate sense, it must encompass more than the material and financial side of people’s lives. Development should therefore be perceived as a multidimensional process involving the reorganization and reorientation of entire economic and social systems. In addition to improvements in incomes and output, it typically involves radical changes in institutional, social, and administrative structures as well as in popular attitudes and, in many cases, even customs and beliefs. Finally, although development is usually defined in a national context, its widespread realization may necessitate fundamental modification of the international economic and social system as well. In this chapter we explore the recent historical and intellectual evolution in scholarly thinking about how and why development does or does not take place. We do this by examining four major and often competing development theories. In addition to presenting these differing approaches, we will discover how each offers 110

Classic Theories of Development: A Comparative Analysis

valuable insights and a useful perspective on the nature of the development process. Newer models of development and underdevelopment often draw eclectically on the classic theories, and we consider them in the following chapter.

Classic Theories of Economic Development: Four Approaches
The post–World War II literature on economic development has been dominated by four major and sometimes competing strands of thought: (1) the linear-stagesof-growth model, (2) theories and patterns of structural change, (3) the international-dependence revolution, and (4) the neoclassical, free-market counterrevolution. In recent years, an eclectic approach has emerged that draws on all of these classic theories.

Theorists of the 1950s and early 1960s viewed the process of development as a series of successive stages of economic growth through which all countries must pass. It was primarily an economic theory of development in which the right quantity and mixture of saving, investment, and foreign aid were all that was necessary to enable developing nations to proceed along an economic growth path that historically had been followed by the more developed countries. Development thus became synonymous with rapid, aggregate economic growth.

This linear-stages approach was largely replaced in the 1970s by two competing economic (and indeed ideological) schools of thought. The first, which focused on theories and patterns of structural change, used modern economic theory and statistical analysis in an attempt to portray the internal process of structural change that a “typical” developing country must undergo if it is to succeed in generating and sustaining a process of rapid economic growth. The second, the internationaldependence revolution, was more radical and political in...
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