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Contemporary Economic Shifts and Global Development Models

Contemporary Economic Shifts and Global Development Models

In the second half of the twentieth century, in the wake of World War II, social scientists began to tweak development models that were built and based on the economic trajectory of the West. Their hope was to use these models as guides for policymaking and forecasting. They also hoped to make economic growth and institution building seem manageable and understandable worldwide. There was every reason for optimism: from the late 1950s, those models were close approximations to Western reality.

The United States and its European and Asian allies were enjoying stable economic growth. There was no depression on the horizon and no war between global powers that were waging the Cold War through proxies. Advances in technology were bringing about higher wages, social mobility and better health and quality of life. Little wonder then that those social scientists looked to the West’s experience to build their models of international development through bilateral and multilateral assistance. They held that the processes of change’ often referred to as modernization’ would produce rising incomes, improved health, economic openness and cooperation, as well as greater pluralism and tolerance. History would end with a broad convergence of the world’s nations, operating with free markets and limited government, and the most productive and desirable mode of social order would prevail.

The upheaval of the first two decades of the twenty-first century has shocked social scientists in great part because they continue to update their development models, still hoping to portray a world of converging ideals. But, their models are failing in the real world to predict important patterns in the development of the global economy. In truth, they worked best for closed systems near or at equilibrium. The convergence that modernization would produce worldwide has been predicated on the belief that the global system in which it would occur was also edging toward some state of equilibrium. Scholars are not sure what the right model is, but there is no longer a general consensus on the direction of social and economic change. The race is on for an underlying intellectual framework that will help us to understand the change processes we are experiencing and to conduct policy analysis amidst greater uncertainty.

It is now clear that this relationship between economics and political liberalism is not straightforward. Prosperity appears alongside nationalism and intolerance. It coexists with religious violence. It can be found coincident with nuclear proliferation and heightened risk of war. It thrives in authoritarian states as readily as full-fledged democracies. Meanwhile, convergence seems well out of reach, over some ever-shifting horizon. What becomes clear then is that global societies are not part of a single, overarching, convergent social order that can be fine-tuned and managed with equilibrium models. Instead, global societies are, as they have always been, parts of open, adaptive, complex systems. Not only are their dynamics less predictable than we are comfortable acknowledging, but they are also subject to large cyclic swings and cascades of change.

Here is where the models have failed: Contemporary social thought in the West uses the ideas of ‘globalism’, ‘world order’, ‘modernization’ and ‘models of development’ as if these were synonymous and reflecting a continuum in which one instantiates the other. Yet once we start to recognize that global society is a complex adaptive system, we must begin to consider the dynamics to which such systems are prone. This also raises a fundamental question upon which future inquiry will rest: Is change best conceived in terms of mechanical or organic processes?

In some quarters, there is hope that big data will save us, but to use it effectively requires valid conceptual frameworks for interpreting patterns in the data. Meanwhile, we live in a world in which political leaders insist on narratives to justify the policies they advocate. This often entails pretence of knowledge that is unsupported by scientific evidence. Since we are nowhere near the point of model validation, today uncertainty plays a larger role in people’s decisions. College students are anxious about what profession to choose; investors are not sure about what projects will yield economic returns and scholars are unsure about which paradigms will resolve the uncertainties we are facing. People are living more in the present and clinging to familiar identities based on an imagined past. But this is an unproductive reaction to the challenges we face. A complex systems approach to global-political economy will contribute a more realistic treatment of uncertainty and thereby support productive policymaking.

Sustainable Development & Its Objectives

Sustainable development is development based on patterns of production and consumption that can be pursued into the future without degrading the human or natural environment. It involves the equitable sharing of the benefits of economic activity across all sections of society, to enhance the wellbeing of humans, protect health and alleviate poverty. If sustainable development is to be successful, the attitudes of individuals as well as governments with regard to our current lifestyles and the impact they have on the environment will need to be changed.

Sustainable development was defined in the World Conservation Strategy report as ‘the integration of conservation and development to ensure that modifications to the planet do indeed secure the survival and wellbeing of all people’. Development was defined as ‘the modification of the biosphere and the application of human, financial, living and non-living resources to satisfy human needs and improve the quality of human life’. Development could prove to be a threat unless resources were conserved and so conservation of resources was defined in the report as ‘the management of human use of the biosphere so that it may yield the greatest sustainable benefit to present generations while maintaining the potential to meet the needs and aspirations of future generation’.

Sustainable development has some forward looking and broad based objectives, which transcend class, caste, language and regional barriers. These objectives are a charter for liberating one’s economy from the clutches of exploitative mindset, which has depraved nations and defied their biomass wealth. These objectives are:

1. To maintain the standards of living of the largest number of people with equity and justice. The consideration of Trans-boundary and cumulative impacts in decision-making has to be realised.
2. To conserve and protect earth’s natural resources from misuse and wasteful consumption. This demands respect for the land and its diversity as the foundation for healthy communities.
3. To innovate new technology and scientific techniques, which work in unison with laws of nature and are not opposed to it. There needs to be a consideration of sharing the risks and benefits from developmental policies undertaken by different nations.
4. To respect diversity and involve local and indigenous communities for a more grassroots’ oriented and relevant developmental policies. This would involve consideration of economic viability, culture and environmental values, as policies and programmes are developed.
5. To decentralise governance institutions and make them more resilient, transparent and accountable to people. They should have an open, inclusive and participative decision-making.
6. To plan international institutions, which recognise the requirements of poor nations and support them to achieve their growth targets without destroying their natural wealth and environment.
7. To seek peaceful coexistence of all nations of the world because only peace can allow them space to innovate for the larger interests of humanity. This may demand honouring of treaties and fiduciary obligations and international agreements.

Sustainable development is a value-based concept, which appeals to the universal themes of mutual coexistence and respect for others. It is a continually evolving process bringing together cultural, social, economic, environmental and political concerns. It is a desired direction of change and provides a framework to decide developmental actions by nations, communities and individuals.

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