MSc Development Studies alum, Antonio Ruggiero critiques development ideologies, likening them to the mythological sirens that mislead policymakers to detrimental outcomes, and urges for pragmatic, context-specific strategies that address real needs over rigid adherence to ideological dogmas.
In Greek mythology, sirens were creatures that would entice sailors to their destruction with their irresistible singing. The Odyssey by Homer offers a persuasive account of their destructive beauty. In development economics, one could associate sirens with ideologies that, throughout history, have “informed” policymakers on how to drive economic development. Ideologies are fundamentalist beliefs. They are highly pretentious and reluctant to change. They lack a sound methodology but are often enshrined within ubiquitous buzzwords, such as “participation” or “empowerment”. Redolent with purpose, these words appeal to emotions, inspiring a sense of purposefulness and togetherness. Equally, they can act as powerful linguistic shields whereby the dominant development ideology moves through time unscathed. A perfect example is the neoliberal ideology (e.g., trade liberalization, limited state control): originating in the 1980s, it persists to this day through well-crafted conceptual conjectures (e.g., SDGs, good governance). Sadly, just like Ulysses, countries that relied on ideology were often led to sub-optimal, if not disastrous consequences.
Like every ship, countries need a capable crew (public and private institutions) and an experienced captain (the government) to steer the vessel toward the desired direction. Unfortunately, dominant development ideologies have been predominantly anti-state. Let’s take African economic development as an example. Whether during colonialism or post-independence (neoliberalism), western “interventions” ran counter to the formation of a cohesive and capable state that could design and implement a sound development roadmap. Colonialism, driven by the white supremacist ideology, did so through overtly brutal and cruel mechanisms focused on resource extraction. Neoliberalism, although disguised behind a more institutionalized architecture, e.g., International Financial Institutions (IFIs) and academia, intended a similar plan: under the “efficiency” imperative, western institutions pushed for limited state capacity to establish a solely export-oriented growth strategy, while hampering industrial deepening and domestic competition.
As a result of the neoliberal doctrine, two global economic crises ensued at the onset of the 20th and 21st. In both instances, this ideologically distorted modus operandi received reactionary shocks which, while also anti-egalitarian projects, this time were entirely pro-state. This is no surprise, given that, as Ha-Joon Chang notes, an ideology obsesses with being in every possible aspect the absolute opposite of the previous one. Fascism in Germany and Italy, as well as the more contemporary nationalistic resurgence in the US with Trump or Brazil with Bolsonaro, exemplify said ideological reactionary responses.
What was the difference between fascist Italy and the East Asian developmental states? There is a lack of ideology in the latter and an abundance of it in the former. In strictly economic terms, both regimes showed socialistic traits: a great level of government protection and investment in agriculture and industry. Both valued the private sector and promoted its regulation. Transformative land reforms protected small-holding farming, deemed essential to a more economically productive society. However, it was the ideologically malformed nature of fascism, ensuing from an equally ideologically distorted (anti-state) past, that made Mussolini view his nation as superior to all else, leading to deplorable acts, including the death of thousands of innocent people. Overall, Homeric sirens, whether anti- or pro-state, succeeded in capturing the hearts of shipmen through, respectively, promises of economic freedom and protection from the state under a powerful leader. In both scenarios, the consequences had been destructive.
Latin America vs the East Asian Developmental states
In Latin America, during the “Big Push” era (1945-1980), Import-Substitution Industrialization (ISI) was promoted as the favourable mode of development by the Cepalista movement under economist Raúl Prebish. However, following a not-too-distant colonial past, state institutions were highly inexperienced. As a result, they became more receptive to whichever ideologies the intelligentsia of the time propagated, than to real development needs. As ideologies find it difficult to evolve even within their own framework, the result was the implementation of a very static version of ISI; one centred exclusively on the manufacturing of consumer goods through importation of inputs and machinery. This static view was aggravated by the (false) premise of export pessimism fervent at the time, fuelling the conviction that ISI and export-propelled growth were mutually exclusive and not complementary engines of growth.
Persistently overvalued exchange rates, and precarious investment in higher value-added export activities (e.g., R&D, packaging) are only two examples of how bureaucrats truncated the dynamism of ISI, preventing it from evolving alongside countries’ development needs. As industrialization started to pick up, policymaking entered a state of hyperactive paralysis whereby an abundance of policies centred on one mode of development became a hindrance, stifling competitiveness and causing economic stagnation. Notably, the same mistake was committed in the 1980’s, when Latin America completely scrapped the failing ISI approach and “tried out” a neoliberal modus operandi. At different points in time, Latin American ships ran aground to choruses of sirens as equally deceptive.
On the contrary, the rapid economic growth of countries like South Korea or Taiwan during the second half of the 20th century was inspired by no ideology. Instead, it was the result of a close commitment by elites to resolving urgent development needs, as faced by a state of systemic vulnerability. For example, South Korea, threatened by external factors (its northern counterpart), and lacking a plentiful resource base, had no alternatives but to generate public revenue through industrialization. This time, however, in a more dynamic fashion: currency overvaluation followed by periods of undervaluation allowed the government to couple cheap importation of capital goods with constant accumulation of foreign reserves (via exports). This way, they managed to dovetail industrial deepening with export-propelled growth. Such events demonstrate how disciplined captains were able to coordinate their crews while also committing to broader growth decisions (e.g., foreign exchange management). However, in 1997, following IFIs’ neoliberal advice, these economies started encountering severe financial crises. Ultimately, their boats, too, sank at the singing of (neoliberal) deceitful sirens.
Concluding remarks
How can we awake captains who have been seduced by sirens’ mellifluous singing for so long? Development practitioners should imitate the role of Circe in the Odyssey. She was a minor God who ordered Odysseus and his men to plug their ears with beeswax while tying the captain to the ship’s mast. Translated to development, policymaking must factor in historical power dynamics amongst the captain and her crew, if adequate support that truly respects the country’s institutional configuration is to be provided. Perhaps, just as we saw with the East Asian Miracle, COVID-19 and pervasive climate change disasters usher in an era of contemporary systemic vulnerability, triggering development efforts that better resonate with countries’ needs on the ground.
The views expressed in this post are those of the author and do not reflect those of the International Development LSE blog or the London School of Economics and Political Science.
featured image credit: Etruscan alabaster urn, 3rd – 2nd century BC. Volterra, Museo Guarnacci. Snapped by Egisto Sani via Flickr.
