LDC Advisement: 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).
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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 nature of the benefits themselves.
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This added reliance upon the western world would place our country’s economic fate heavily in the hands of foreign investors and in addition, we run the aforementioned risk of internal discontent. This approach may be more effective as a short-term rather than an ultimate goal; though still the result of a very delicate and gradual process. We can find evidence to suggest that a gradual method is better suited to maintaining stability when we compare the current status of the former Soviet Union to that of The People’s Republic of China. Slow and steady would appear to be key in this respect as the west has traditionally shown a tendency to favor market stability over liberal reform. Another economic approach suggested by the Dependency theory is one of Import-Substitution Industrialization (ISI).
This strategy would be a sort of vie for greater autonomy.
Rather than relying upon the west for our lion’s-share of manufactured goods we could instead begin production within our home front. This strategy however, may require more capital than we possess. It would require heavy support on the part of our public-sector either though state-owned businesses or subsidies. While this strategy would create more jobs at home and help to emancipate our nation from some western restraints, it may be difficult to sustain in the long term. Eventually peak consumer demand will inevitably be reached and we will be forced to compete in export amidst the diminished marketplace. To compete with the west in this respect we will be forced to undercut them in price – as it will be quite difficult to match or succeed them in quality due to our smaller capital / resource base.
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We simply cannot afford at this time to compete directly in the business of manufactured goods for long-term export. Of the two theories, after considering the social and economic costs and benefits of each, it is to be believed that dependency theory is superior in philosophy while modernization theory is superior in (at least short-term) practice. We, as a nation, should initially begin to make reforms that will appeal to western interests as per modernization theory suggests. Our markets and governmental procedures should be made more preferable to western investment but we should minimize cultural compromises whenever possible. This may be done by creating advisory council positions to give major national and religious elements / organizations an active voice in national affairs. This will hopefully minimize any discontent caused by cultural concessions we may be forced to make in order to appease the west in our attempt to further modernize.
The strategy here is that the elements of our society that have the potential to cause internal discontent will be consulted before any policy decisions are enacted, and politically volatile issues may be dealt with as needed. Political stability will be the paramount goal in both the short and long-terms. In the short-term we will encourage western investment and promote cultural-exchange rather than cultural-imperialism. The increased revenue from the short-term adoption of modernization theory should be applied towards our long-term goals which should be based more on dependency theory strategy. Successful adoption of modernization tactics would empower our people with very beneficial educational opportunities via both increased state revenue and technological exposure.
This revenue and education could then be applied to ISI preferably in the high tech field. It is to be a very gradual process. Once again, it cannot be stressed enough that consistent political stability is of utmost importance. We must make a goal not simply to fully appease the western world, but rather to earn their trust in us as a stable nation. Modernization theory leads us to believe that we can reform politics at a much slower rate than we can economic conditions, and there is evidence to suggest that reforms in LDC’s should take place in this order to ensure the most overall economic and political progress / stability (ex.
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PRC and Indonesia vs. India).
So the conclusive recommendation entails as follows: The country needs to set both short and long-term goals for itself, each based on a specific theory of development. In the near future we need to ensure internal political stability while adopting a modernization approach to development.
Groups that may present opposition to any resulting cultural changes need to be dealt with in some way – preferably a peaceful way, as we make our country more attractive to western investment. As more revenue / educational -opportunity / technological -exposure / etc . becomes available we should begin reinvesting in the infrastructure of our nation via ISI. The increased capital and knowledge we will have gained as the result of cooperation with the west should allow us to be much more competitive in the international marketplace. Specialization in a high-tech field could help us see further autonomy in the international realm. Education, goal-setting, and political stability will all be of top priority if our development plans wish to have a chance of succeeding.
If we can maintain focus in our policy, we should be able to achieve much greater levels of development with only minimal cultural disintegration.