The Four Basic Development Theories

Development Theories try to explain the same thing this course tries to explain.  Why are we poor?

There are four basic Development Theories

1.  The Dependency Theory  developed by Fernando Henrique Cardoso http://www.youtube.com/watch?v=g84C6Nbhw0Q when he was a college student, later would become President of Brazil and renounced this theory himself.  This theory was made popular by the Argentine Raul Prebisch when he was head of CEPAL ( The UN Economic Commission for Latin America), when he recommended his economic policies based on this theory.  Latin American countries have used and followed Prebisch’s principles for the last 50 years, with, needless to say catastrophic consequences.

This theory was inmortalized by the Uruguayan author Eduardo Galeano http://www.youtube.com/watch?v=_6Ws_lAn2yI in his famous book Open Veins Of Latin America.

This theory claims poor countries are poor because they are exploited by rich countries.  It rolls up or combines nationalism and left wing (Keynesian) economics.  Poor countries are victims, and not responsible for their poverty or underdevelopment.  The rich countries are to blame.  This theory is often referred to as the Zero Sum Theory.

Critics of this theory have denounced it for its lack of accountability, or the ‘it’s not my fault’ kind of attitude.  The Peruvian libertarian  Mario Vargas Llosa calls it the ‘guilty with a clean conscience’ syndrome.
In North America various intellectuals, especially African Americans, have labeled it as the Opression Theory. They use this theory to explain why blacks are poorer than whites. according to them, whites have opressed blacks, thus explaining their lack of prosperity. What it does not explain is why blacks that have come from the Caribbean or are descendant from Caribbean immigrants are better off than African Americans.
Intellectuals like Paul Baran, frantz fannon, Regis Debray, Enzo Falletto have helped create and supported this theory.

The second theory is the Geographic Theory.  It postulates poor countries are poor because of geographic location.  This is also a left wing theory, and it claims strategic geographic location is key to development.  Things like access to oceans, navigable rivers, fertile soil, raw materials are basic for economic success, according to this theory.  When the theory fails to explain cases like Nigeria versus Switzerland, or New Zealand and Venezuela etc. it claims western countries control natural resources or have acquired natural resources by force, cunning or even disease.

The father of this theory is an American professor named Jared Diamond, who wrote the book Guns, Germs and Steele http://www.youtube.com/watch?v=bgnmT-Y_rGQ to bring forth this theory.  This book was an international bestseller. 

Critics of this theory disregard as interesting but plain silly, since the theory claims chance, luck or the environment has separated the haves from the have nots.

The third theory is the Cultural Theory.  This theory claims, cultural aspects of people and not the environment or powerful countries determine economic success.  Things like time management, punctuality, work ethic, religion, time focus, focus on education, political and economic liberty and history just to mention a few are more important to determine development and underdevelopment.

Read this article http://www.washingtonpost.com/wp-dyn/content/article/2006/12/15/AR2006121501814.html written by Lawrence E. Harrison in which he briefly describes his ideas.  Latin Americans like Mendieta, Vargas Llosa, Borges and Montaner have embraced this theory.  Its critics label it as covert racism. 

The fourth theory is labeled as Institutionalism, and its father is Hernando de Soto the Peruvian economist.  He claims prosperity only happens in a society where the rule of law is clearly established.  Progress only occurs in a society where titles, deeds, ownership, property, laws are effeciently documented and respected. 

In other words, development does not happen in societies where the ‘rules of the game’ are not clearly stated.  Of course all of this only happens, according to De Soto, in societies where Democracy and Liberty exist.

Access De Soto’s Instituto para la Libertad y Democracia’s website to learn more about it http://www.ild.org.pe/en/organization/desoto 

Make a comment on what you have found on the internet and comment on AT LEAST TWO of your classmates’ comments.

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31 responses to “The Four Basic Development Theories

  1. Juan Diego Welchez

    I like this theories now I understand why Honduras is a poor country.

  2. Pablo Enamorado

    Mr I think that the theory that has more credibility for me is the cultural because it makes sence that depending on our culture, our development ill be. In other words I think that the cultural theory is the one that is correct upon the others because our acts, decisions, ways of being and values are the things that most affect our development. I’m in total opposition with the zero sum theory because its basicly communism and I dont like communism.

  3. The Four Development Thaeries explain us on hopw we have to know. Characteristis that remain in how the consequences on how poor countries are exploited by rich countries and how the location on itself can be a way on how a key of development. The cultural theory remains cultural features of a country and region to have sucessful economy. The fourth theory be the road to have a prosper and good society were democracy and liberty exist. By the way it explain a clearly description of our country position in today.

  4. I agree with Juan Diego because remains the position in Honduras and how the theories makes us understand that Honduras is a poor country.

  5. I like this theories and I believe that the one i like the most is the dependency theory or zero sum theory no mattering if the creator of it doesnt believe on it anymore….And I agree with Juan Diego because now I truly what is the principal cause of Honduras poverty

  6. Fredy Canizales

    This is a very good summary of the theories of development. It clearly explains why we are poor, in different points of view. It is a matter of opinion to follow one theory, but I agree the most with the Culture Theory. Most of this theories have their good reasons. I think that it is a lot of more complicated to explain why we are really poor? Years of history, and many errors commited by all the people. It takes part of all of this Development Theories to understand “why we are poor?”

  7. Fredy Canizales

    The cultural theory is the one with most arguments that explain the real reasons and really show facts of why we are poor? Us in Latin America we lack of many important facts of “how to make money”, like: punctuality, work ethic, education focuses, and political and economic liberties

  8. I do not have a full idea aboput all the development theories yet. However, right now I am heading toward a Cultural Theory explanation of us being poor. The lack of moral values, the lack of happiness when accomplishing an honest and with effort job. Disorders of political parties and through th time diversity culture confronts. Honduras is a region with a lot of tolerance toward different believeshowever, when crisi strikes this tolerance is lost and badchoices are made. Remember bad choices make a country poor.;(

  9. I think each of the theories contributes to the fact that some of the countries are poor or in our case why are we poor.
    For example the dependency theory tells us that we depend on greater countries and they exploits us. For example Honduras has a huge debt with United States and every time that dept is becoming bigger and bigger as time passes. I think that right now that they have cut us some of the help they give us we are truly learning how to depend on ourselves an create our own economy or something like that. I dont agree so much with the geographic theory beacuse each country has its own resources and its theri responsability to exploit them to its maximun point. The cultural theory is kind of true if people grew up with the values of responsability hard work and many others out country could be far more advanced and more stronger enconomically wise. I totally disagree with the Institutionalism. Ill put a great example Aristóteles Onassis came to America with only 60 bucks and he became one of the strongest millionares in the world and he was no rich man he didnt have a masters or something like that. So that my point of view on the theories it was really interesting

  10. Gabriela Contreras

    I agree with the Cultural and the Institutionalism theories because for example in the cultural the people in society is the one who have to worry about how to help solve poverty in some many countries, people have to learn that things are not easy and are not donde by magic but by work. And I also agree with the Instituionalism because if laws are not clear the a disorder occurs not only potical but financially.Things need to be in order to start doing new things to help control poverty.
    I agree with Santiago, our cuntry is suffering poverty because the people that have the control of our country are fighting one against the other instead of giving all their ideas and making one up to solve the problem not to create new ones.

  11. As for what I know by now, I would think Institutionalism is the most accurate (this is just my opinion). I think it is right because of the need of organization and how there are examples of how developed countries have a good institutional rganization as those that don’t have that are not developed lack that kind of organization. I think corruption could be mentioned as well.

  12. The theories that I most like is the Dependency Theory becuase I agree in what Eduardo Galeano says that the mayor countries control the poor people and because we have to depend by ourself and that we cant be opress by other countries.This theory is about that big countries opress poor countries and that we depend of other countries.I agree with Angel that Dependency Thoery is the best from the four theories of development and that Honduras poverty is because we depend of the mayor country of America.

  13. Pablo Enamorado

    Mr. Im in total agreement with the cultural theory because for me all the moral values, statutes, agreements and choices can affect the economy of a country. As you know, we the Hondurans are characterized mostly as lazy and desobedient people, this, as a matter of fact, are cultural effects of what we have learned, so I think that our poverty and crisis is mostly because of our lack of ethics and moral values. We will never find a country that culturally is complete and as a result, we’ll never find the perfect development. I agree in mostly what the cultural theory explains and for me its the most credible.

  14. Pablo Enamorado

    I agree with Santiago that our lack of moral values and thelack of happiness when doing thins or the effort of our job can affect what we are or what we are passing through. So for me, as I said in my last commment, the lack of moral values and ethics are affecting us and as aresult we should stop or at kleast try to change a little bit.

  15. According to what I read, I would agree with the Cultural and Institutional theories to explain why are we poor. In general, we are known as having few or no moral values. Like the Cultural theory states, we have lost focus on education, if we ever had it. Personally I believe the lack of education has caused the poverty in our country.
    As for the Institutional theory, I would say it hits right on the spot, because in our country laws are not taken seriously. How do we expect to have a progress in our economy if we don’t even respect our laws? They are an important factor for the poverty in the country.
    I agree with Santiago that the Cultural theory may be an explanation for the poverty in our country. I also agree with Nolasco that the lack of organization has interfered with the progress of the country.

  16. Estefania Gallardo

    I’m still not 100% sure with what theory I agree with, but I would say that the cultural theory is more convincing to me. I agree with Santiago in that the lack of moral values, like tolerance for other people’s beliefs, and the fact that we always blame others when we don’t get to succeed, are affecting us.
    We are mediocre and we take whatever we can get instead of trying to get the best and working hard for it.
    I think this is just a product of how we have been raised and how our parents were raised and so on.

  17. Pablo Enamorado

    Mr. Im in total agreement with the cultural theory because for me all the moral values, statutes, agreements and choices can affect the economy of a country. As you know, we the Hondurans are characterized mostly as lazy and desobedient people, this, as a matter of fact, are cultural effects of what we have learned, so I think that our poverty and crisis is mostly because of our lack of ethics and moral values. We will never find a country that culturally is complete and as a result, we’ll never find the perfect development. I agree in mostly what the cultural theory explains and for me its the most credible.

  18. Connie Romaña 10 A

    In my opinion,I believe that the theories that are apply to our country Honduras will be…
    ***The Dependency Theory: because we are an extremely poor country,missing of economic resources;Depending until this date of U.S.A. help,adjunting to this at the external debt that every honduran citizen will have the obligation to pay until his last generation.
    Another theory will be…
    ***The Geographic Theory:with the huge enviromental resources that we have in Honduras,we should try to explote the to the imit in order to approachand we will have a new & better path to our childrens in the future…But unfortunattely we don´t think in the future now,we only thing in our present and we SHOULD try to get a benefit of our resources, which we don¨t use them in a good way for our benefit or reward; In this way I share the idea of my classmates that support this two awesome theories!!!
    Connie Berenice Espinoza=)

  19. Pablo Enamorado 10 A

    Mr. Im in total agreement with the cultural theory because for me all the moral values, statutes, agreements and choices can affect the economy of a country. As you know, we the Hondurans are characterized mostly as lazy and desobedient people, this, as a matter of fact, are cultural effects of what we have learned,so I think that our poverty and crisis is mostly because of our lack of ethics and moral values. We will never find a country that culturally is complete and as a result, we’ll never find the perfect development. I agree in mostly what the cultural theory explains and for me its the most credible.

  20. I think the Zero Sum Theory is the best to describe how countries get developed or not. We can see how it has been since the time of spanish, british, french conquistadors. They all got rich because of the resources they got from the people they invaded. In modern times, the USA and other countries “suck´´ all the money and resources in and very few is left for the countries that are not so well developed.

  21. Mr. Im in total agreement with the cultural theory because for me all the moral values, statutes, agreements and choices can affect the economy of a country. As you know, we the Hondurans are characterized mostly as lazy and desobedient people, this, as a matter of fact, are cultural effects of what we have learned,
    so I think that our poverty and crisis is mostly because of our lack of ethics and moral values. We will never find a country that culturally is complete and as a result, we’ll never find the perfect development. I agree in mostly what the cultural theory explains and for me its the most credible.

  22. lourdes sabillon

    I totally agree with the cultural theory,so I agree with nancy.Today people is inmmoral,as this thoery says I think lack of work ethic,education and aldo lack of unity we are poor and remmeber we also need to start making good choices.
    Also I agree eith estefania today’s people is so mediocre and most of the time we are conform with the neccesary and we never fight to be the best.

  23. Marcela Salgado

    This all four theories, make an explain why Honduras is a poor country. The theory that explain more why we are poor is the cultural theory, because our situation is more of moral values, we have alot of percentage in our country with few or no education. We also have fame for no accomplish our goals. I also understood really well the zero sum theory, which explains alot Honduras position. We depend in other rich countries that make our country advance, I think we have never be an independent country in the economic way.

  24. Marjorie Hernandez

    I am fully agree witth Nancy and Santiago that the cultural theory is the one closest that explains why are we poor.This country is poor because we have a conformist attitude and we have lack of values such as responsability,hard work. It is true..we are accostumed to depend from other strong countries, but we also need to stop thinking it’s their fault because as a country we need to become more independant by making things as they should be done, respecting the laws.

  25. roxana figueroa

    I understand about this blog is that there are 4 type of developments theories that try to explain why are poor countries poor; this theories are:
    The Dependency Theory :which said that a contries are poor because they depend from other counries too much and because they are exploited by rich countries .Base on this we can conclude that`s the reason Honduras is poor
    then we had
    Geographic Theory:which claim that countries are poor because of its location .And depending of the location natural resources varied; and depending of the natural resources will help the country develop.
    Cultural Theory.:said that countries are poor because of the lake of educaton in a country exist and because people actitud, because of there way of be or think countries can not develop when they had a bad actitude or an incorrect way of thinking
    Institutionalism theory :said that countries are poor because law are not respect or not well stated
    I think as well it is a relly informative blog

  26. roxana figueroa

    my comment about a classmate coment is that I completly agrre with Daniel Valle comment as well with Santiago Pombo explanation about the article we had just finish reading

  27. Santiago Pombo 10A

    Katy I disagree with you totally not only because Karl Marxs is one of the considered fathers of Zero Sum Theory. Remmeber Historical Materialism, also represented by him was totally disacredited by scientists, its objectives contrdaict itself and solutions proposed are irrational. The same occurs with the explanation of a country being poor because bigger countries take advantage. We are the poor silly victims ? Personally, I do not believe it.

    Daniel, I really enjoyed reading your comment, providing a lot of facts I was not aware of . More reasons why I still agree cultural theory is the correct theory that explains why we are poor.

  28. RAMON PONCE 10 B

    I understanded that there exist 4 basic theories that explain us why we are poor.The first one that was the dependency theory tell us that we are poor because we depend on other countries as north american countries and european countries. Our country have never be alone but there is going to be a time in which we are going to be alone and maybe become a better society, but this means a long process for us to follow. The second theory is the geographic theory that explain us that we are poor because of our location, but i dont really believe this yheory in one part. For example some classmates are arguing that only north american countries are developed and central american countries are not, but if look at Costa Rica, they are a developed country. But this theory could truly be accepted in the factor that the location also depends on the resourses that a country havve.
    Third theory is cultural theory taht tells us that we are poor because of the lack of education and that we are based in other things that are not important. The last theory is called istitutional theory that tells us that we dont respect the laws and there is lack of respect against authority.

    I will finally say that this information of the 4 theories of why are we poor is the reallity of wwhat is happening now. I also contribute in Roxanas and Valles comment.

  29. jmmm I think that some theories are true but I dont agree with some of them like the geographical theory…

  30. Gustavo Paz 10A

    I think that the geographic theory have to be; why are we poor.But I really dont think that the geographic theory makes us poor. The one who makes us poor is the cultural theory because many people dont like to work and because of our ignorance.

  31. Arnold The Best

    I think where poor mostly because of cultural theory and institucionalism i dont think that its geographic because honduras is in a goos fertile land

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