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Theory of DevelopmentTheory of Development

Garry Jacobs & Robert Macfarlane

Seminar on Development Theory

Chennai 1997

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“Thinking on development is the greatest intellectual challenge of the coming years.”

Boutros Boutros-Ghali

Intellectual ChallengeIntellectual Challenge

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ObservationsObservations

Pace of development is accelerating Malthusian projections have not

materialized

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Development ExplosionDevelopment Explosion

12 fold population growth in 200 years Urban pop. grew from 3% to 40%

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““500 yrs Progress in 50 yrs” 500 yrs Progress in 50 yrs” UNDPUNDP

Poverty eradication -- famine, life expectancy, infant mortality, literacy, disease

Since 1950, average global pci has tripled

From 1965-85, real per capita consumption rose 70% in developing countries

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National Per Capita Output National Per Capita Output is Doubling Faster than Ever is Doubling Faster than Ever

UK 58 yrs from 1780 US 47 yrs from 1839 Japan 24 yrs from 1880s After WWII

Indonesia -- 17 yrs S. Korea -- 11 years China -- 10 years

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Real PCI (ppp) Growth 1960-90Real PCI (ppp) Growth 1960-90

12 times in Korea 7 times in Japan 6 in Egypt & Portugal 5 in Indonesia and Thailand.

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Regional Differences in Regional Differences in PCI Growth (1965-90)PCI Growth (1965-90)

East Asia 5.5% South Asia <2% Subsahara <.25%

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Transition Economics Transition Economics Disastrous Results (1990-93) Disastrous Results (1990-93)

GDP declined 10% in Poland GDP declined 45% in Russia GDP declined 75% in Armenia

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Capital alone does not generate Capital alone does not generate developmentdevelopment

Since 1990, Germany invested $1.1 trillion in East,

Unemployment in East Germany has risen above 25%

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Uneven Employment GrowthUneven Employment Growth

US employment rate at historic peak European unemployment still rising

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New EconomicsNew Economics

Best gets cheaper and cheaper Function per $ continuously increasing

New goods & services being created more rapidly than ever

Value related to plentitude, not scarcity Law of increasing returns

Networks grow in value exponentially Getting more out of less material

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Status of Development TheoryStatus of Development Theory

Variety of factors identified Primary focus is economics Specific events & periods explained No theory universally applicable

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Some ConclusionsSome Conclusions

Past achievements have been unconscious

We have experience of development, not knowledge effective everywhere.

The greatest achievements have not produced a generally applicable formula.

Conscious knowledge is a great power for accomplishment

Need for comprehensive theory

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Theory Reveals Potentials Theory Reveals Potentials

Social theory can accelerate growth as medicinal theory improves health.

Fundamental laws are known Role of organs understood Interaction & integration of systems Stages of development Preventative and curative treatments Precise statistical measures for

diagnosis

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PurposePurpose

To develop a comprehensive theory of social development that can be applied to increase the speed and efficacy of development efforts.

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Scope of Project Scope of Project

Phase 1: Theoretical foundations & principles

Phase 2: Historical applications

Phase 3: Current & future applications

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Purpose of this meeting Purpose of this meeting

Phase 1 -- BIG PICTURE Test rationality and consistency Clarify our thinking Challenge the ideas Direct us to relevant ideas & resources

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AgendaAgenda Introduction Opportunities & Barriers Central Thesis Emergence of New Activities Powers of Organization Infrastructure & Resources Three Stages of Development Internet Conclusions & Next Steps

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IssuesIssues

What questions should the theory answer?

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Theory Must Help Us Theory Must Help Us UnderstandUnderstand

What powers have made the already great advances possible?

What more can be accomplished through the use of these powers?

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Current SituationCurrent Situation

There is potential to increase the speed of the social process.

Theory must be able to confirm or deny possibility of acceleration.

Theory should reveal the precise relationship between the factors required to achieve greater results.

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PeacePeace Theory must evaluate impact of internal

and external social stability on progress. War is a destroyer of development. Drains talents and resources. End of Cold War.

Greater International Stability Great reduction in expenses-$400 billion Increase of pace of world development Rapid re-allocation of resources Rapid re-alignment of economies

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DemocracyDemocracy Provides stable & conducive basis for

more rapid social progress. Raises human aspiration Encourages individual initiative for

advancement Release greater energy

Theory must explain the dynamics of the process by which the political and social factors impact on economic performance.

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Social VelocitySocial Velocity

Development is a function of the velocity of social transaction.

Theory must account for speed in the past and how it has shaped history and how the increasing speed will shape the future.

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Technological ApplicationsTechnological Applications

Gap between innovation, diffusion and application.

Wide variation within and between countries.

Significant determinant of social policy. Theory needs to explain variations and

shows how they act as determinants of developments.

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Global Growth EnginesGlobal Growth Engines

Shift from single or a few local centers to multiple centers.

Increase overall momentum of world energy.

Theory can not be limited to national policies.

Must look at development of global society.

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Essential factors are available Essential factors are available for faster growth for faster growth

Education Technology Information Investment Management know-how

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Theory must explainTheory must explain The process by which new potentials

are created & their role in development. How potentials combine and intersect

to determine its speed and direction? Why achievements fall significantly

below the maximum potential? What are the unseen barriers to the

process?

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Barriers to DevelopmentBarriers to Development

Limited Perception Outdated Attitudes Anachronistic Behaviors

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Perceptual Walls Limit Perceptual Walls Limit Further DevelopmentFurther Development

Most common problem is that society is unable to envision its own future.

Tendency to see potentials as unattainable obstacles.

We still have a significant number of perceptual barriers today.

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Outdated attitudes not physical Outdated attitudes not physical barriers are the most persistent barriers are the most persistent obstacles to human obstacles to human development. development.

Distrust of new inventions Distrust of new ideas Today we insist on our privilege

to maintain outdated attitudes

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Anachronistic behaviors also Anachronistic behaviors also

retard developmentretard development

High birth rates Indian Gold UNDP $40 Billion

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The theory must reflect the role The theory must reflect the role of man in both determining and of man in both determining and overcoming self-imposed limits overcoming self-imposed limits on social progress.on social progress.

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Development isDevelopment is

a process, not a program or result the upward directional movement of

society from lesser to greater levels of energy, efficiency, quality, productivity, complexity, comprehension, enjoyment and accomplishment.

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Central ThesisCentral Thesis

Development occurs by the creation of higher levels of organization in the society capable of accomplishing greater acts with more efficient use of social energies.

People’s energy, knowledge, aspiration, skill & attitudes drive development.

Society develops by organizing knowledge, human energies & material resources.

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Universal PrinciplesUniversal Principles

Principles of development are applicable to all fields of social life.

Principles of development are the same for individuals, organizations, nations and global community.

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Three Social ProcessesThree Social Processes

Survival Growth Development

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Types of DevelopmentTypes of Development

Subconscious learning through trial and error experience.

Conscious initiative from knowledge to action.

Natural vs. Planned development

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Green Revolution -- ContextGreen Revolution -- Context

Subsistence agriculture Dependence on imports Threat of severe famine Commitment to self-sufficiency

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Green Revolution -- Strategy 1Green Revolution -- Strategy 1

Induction of advanced production technology

Seed import and replication National demonstration plots Attractive price & assured market for

farmers FCI to distribute surplus production

to food deficit areas

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Green Revolution -- Strategy 2Green Revolution -- Strategy 2

Increased import and domestic production of fertilizers

Expanded warehousing facilities Reorganization of agricultural

research & education under ICAR Higher pay and status for scientists

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Green Revolution -- ResultsGreen Revolution -- Results

FAO projection foodgrain 10% growth by 1970

Actual growth 50% by 1970 Self-sufficiency in five years 100% in 10 years

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GreenGreen Revolution – Conclusions Revolution – Conclusions

Rare instance of conscious development. People’s accomplishment, not just gov’t Technology--valuable input, but not the key Tapped farmers’ preparedness & aspiration Created new organizations to supply missing

links in society Elevated entire social organization of

agriculture in the country

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Some QuestionsSome Questions

Why have so many other planned development initiatives failed?

Under what circumstances can the role of government be taken over by society?

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Emergence of New ActivitiesEmergence of New Activitiesin Societyin Society

What is the process that stimulates the emergence of new organizations?

What are the stages through which its proceeds?

What are the agents that determine its direction?

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Steps in the ProcessSteps in the Process

Social Preparedness Initiative of the Pioneers Social Imitation Multiplier Effect Social Organization Institutionalization Cultural assimilation through family

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Three Conditions Determine Three Conditions Determine Level of Social PreparednessLevel of Social Preparedness

Energy Awareness Aspiration

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EnergyEnergy Existence of surplus energy to support

movement from one level to another. Available when society not fully absorbed

in meeting the challenges at current level. Surplus is a measure of mastery and

accomplishment at the previous level. The generation of new ideas, scientific

experimentation and technical innovation are signs of surplus energy.

Energy is the fuel for growth of individual, organization and societies.

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AwarenessAwareness

Energy creates the circumstance but requires awareness of potentials to produce results.

Awareness can grow naturally or be thrust on a community.

Speed of development increases as awareness spreads.

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AspirationAspiration

Society must have felt need to achieve at a higher level.

Aspiration grows as awareness of external opportunities & internal capabilities increases.

Common problem is lack of aspiration.

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Theory must explain Theory must explain When motivation for development is

released or curtailed? How different classes and communities

respond differently? How perception about the type and

character of goal affects motivation? Rapid spread of aspiration for

development. Alternations between rising urge and

rising satisfaction.

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Initiative of the PioneersInitiative of the Pioneers

Individual pioneer is the instrument of accumulated social energy.

Pioneer sees & acts on opportunities that others do not see.

Pioneer exhibits new understanding, attitudes, skills & behavior.

Pioneer initiates the collective process. Society expresses its intention and

aspiration through the pioneer.

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Initiatives of the Pioneer - 2Initiatives of the Pioneer - 2

Without the pioneer, society lacks the vision to see the next stage of social progress.

The pioneer is not a rare exception. Pioneer shares aspiration, knowledge and

values of society with one new attribute. Pioneer reveals a new opportunity based

on society’s previous accomplishments.

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Social ImitationSocial Imitation

Responses to the pioneer. Premature development of the pioneer

often leads to revolution. Timely development built on social

preparedness leads to smooth evolution. Successful action of pioneer in tune with

social aspiration encourages other dynamic individuals to imitate.

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Multiplier EffectMultiplier Effect

Widespread adoption of the idea unleashes a development movement.

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Social OrganizationSocial Organization

Each significant developmental advance leads to the emergence of a host of new organizations designed to support it

Puts pressure on existing organizations to elevate their functioning to meet higher demands of the new phase.

Each new organization increases range, scope, quality, convenience, productivity and efficiency of the social energies.

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InstitutionalizationInstitutionalization

An organization matures into an institution when the social acceptance becomes total.

Institutions are supported by customs, beliefs and social tradition.

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Cultural Assimilation Cultural Assimilation Through the FamilyThrough the Family

When an activity has matured to the point that the family plays a very active role in its transmission, the activity becomes a part of the culture of the society.

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Types of OrganizationTypes of Organization

Physical Social Mental

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Physical OrganizationsPhysical Organizations

Roads Railways Town Telecom links

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Social OrganizationsSocial Organizations

Family Military Agrarian community Market Money Industy

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Mental OrganizationsMental Organizations

Newspapers & books Technology Education Science Encyclopaedia

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Power of OrganizationPower of Organization

Roman army East India Company Henry’s Crystal Palace

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Characteristics of OrganizationCharacteristics of Organization

Utilizes human energy & capacities more efficiently.

Make every resource more productive. Abridges space. Abridges time. Make possible what is otherwise

impossible. Admit infinite development.

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Organizations are skills of societyOrganizations are skills of society

Skills of pioneer are institutionalized as organization.

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What gives organizations power?What gives organizations power?

Authority Complexity Systems Integration with the society Values

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Power of AuthorityPower of Authority

Personal and impersonal Leadership Laws Policies and rules Systems Standards

Centralized and decentralized

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ComplexityComplexity

Division of labor Specialization of function Coordination of multiple fields of

activities Integration of multiple levels of activity

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SystemsSystems

Create predictable responses Increase efficiency Increase speed Improve quality Limit the need for expertise

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Integration with societyIntegration with society

Organizations acquire life from social integration.

Natural outgrowth of society’s energy, awareness, aspiration, skills & values.

External models often fail. Can be adapted to cultural variations.

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ValuesValues

Internalized social aspirations Focused authority Powerful organizing principle Psychological skills of society Ultimate determinants of development Evolve with society

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Infrastructures are the Infrastructures are the foundations of the society’s foundations of the society’s previous achievements on which previous achievements on which new organizations are built.new organizations are built.

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Types of InfrastructureTypes of Infrastructure

Physical--roads, ports, rivers,railways, electric power.

Social-- laws, systems, administrative, commercial, productive and financial organizations.

Mental--level of education, awareness in society, availability of information.

Psychological--collective social energy, aspirations, attitudes and values.

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Nature of InfrastructureNature of Infrastructure

Each successive level of development requires the establishment of an essential infrastructure to support it.

Each activity requires multiple types of infrastructure to be successful.

The result of a new activity depends on the strength and quality of the underlying infrastructures.

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ImplicationsImplications

Before undertaking any development initiative, essential infrastructures need to be identified and put in place.

Supplying missing links can energize development.

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Resources areResources are

Inputs for carrying out any activity.

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What makes a resource?What makes a resource?

Mind discovering a use for anything.

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Characteristics of ResourcesCharacteristics of Resources

Actual vs. potential Essential and non-essential Four types

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Physical ResourcesPhysical Resources

Land Water Fuels

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Social ResourcesSocial Resources

Organizations Systems Money

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Mental ResourcesMental Resources

Information Technology Knowledge Creativity

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Psychological ResourcesPsychological Resources

Energy Skills & capacities Attitudes

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Nature of ResourcesNature of Resources

There is no such thing as a natural resource.

The mind is the creator of all resources. As society develops, the application of

mind increases the productivity of materials and processes.

The more open and flexible mind is in its outlook, the greater its power.

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Limitless Potential of ResourcesLimitless Potential of Resources

Vast potential to increase the productivity of physical resources.

Vast potential to decrease consumption by improved efficiency.

Application of non-physical resources enhances value of physical ones.

Higher resources are not limited. As society develops non material

resources play increasingly important role.

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The Human ResourceThe Human Resource

All development reduces itself to the development of human beings.

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Restatement of TheoryRestatement of Theory Development is the process of

increasing the scope and complexity of the fabric of social organization and its intricate interrelationships by quantitative expansion qualitative enhancement spatial extension of organized fabric integration of existing and new elements

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Stages of DevelopmentStages of Development

Three overlapping stages on a continuum

Progress is non-linear. Progression from each stage to the

next stimulates exponential increase in productivity.

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Three Stages of DevelopmentThree Stages of Development

Physical Vital Mental

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Characteristics of Physical StageCharacteristics of Physical Stage

Focus on survival, protection & preservation

Feudal agrarian society Land is wealth Physical strength is power Ideas based on tradition & superstition Rights and power physically inherited Human resource is physical labor

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Characteristics of Vital StageCharacteristics of Vital Stage Focus on expansion, enterprise and

conquest Religious reformation Mercantilism replaces feudalism Money is wealth Economic strength is power Merchant class supplants aristocracy Ideas based on practical utility Human resource is social energy

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Characteristics of Mental StageCharacteristics of Mental Stage Focus on power of knowledge Enlightenment & birth of science Political idealism -- human rights Technology applied in industry Information & knowledge is source of

wealth & influence Universal education Information Age Human resource is mental capacity

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Three Overlapping StagesThree Overlapping Stages

0

1000

2000

3000

4000

5000

6000

1500 1550 1600 1650 1700 1750 1800 1850 1900 1950 2000

Year

Physical Vital Mental

l

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Organization in the 3 StagesOrganization in the 3 Stages

Language, agriculture & urbanization Money & commercial institutions Industry, technology, education

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Power of Money -- 1Power of Money -- 1

Exponential impact on development A convention or symbol for value Increases speed, size, efficiency of

transactions like language Convertible into any other resource Store results over time Transport results over distance

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Power of Money -- 2Power of Money -- 2

Its power multiplies with wider usage Increasing velocity increases its

productivity Creates standard for measurement Capacity to evolve new forms Increases freedom of choice Impersonalizes & democratizes

transactions

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Money as an OrganizationMoney as an Organization

Created by surpluses Depends on authority of political and

economic institutions Based on social complex infrastructure Promotes complex transactions Relates & integrates all social activities Based on values of trust & confidence

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Organizations in Each PhaseOrganizations in Each Phase

Physical- Language Social- Money Mental

Schools Universities Libraries Internet

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Conditions for EmergenceConditions for Emergence

Political freedom Global affirmation of human rights Abundant social energy Irrepressible mental inquisitiveness Accumulation & codification of knowledge Universal education Global revolution of rising expectations Explosion of inventiveness Increasing organizational creativity

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The Emerging Social WillThe Emerging Social Will

High levels of political freedom High levels of social expression High levels of individual empowerment Wide spread prosperity Extensive higher education Anticipation and excitement over

scientific discoveries Insatiable thirst for information Rapid assimilation of new technologies

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Infrastructures Supporting the Infrastructures Supporting the Creation of the Internet Creation of the Internet

Physical infrastructure - Convergence of two technologies Computer Telecommunication Incremental improvements in many

technologies Standard languages interface

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Internet Infrastructures - 2Internet Infrastructures - 2

Social infrastructure- Change from isolated specialized use of

computer to creation of vast networks. Creation of a new model of social

organization without centralized authority or hierarchy.

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Internet Infrastructures - 3Internet Infrastructures - 3

Mental infrastructure- Scientific knowledge and technical

capacities. Spread of general education. Computer literacy and skills. New mental energy and capacity to

accept and adapt a new medium.

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Internet Infrastructures - 4Internet Infrastructures - 4

Psychological infrastructure Social leveling Thirst for information Lack of fear of technology. Public enthusiasm and readiness to

adopt

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PreconditionsPreconditions

Huge accumulation of surplus capital Mental energy Leisure time

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Powers of the InternetPowers of the Internet Universal access to information New medium for commercial transactions Levels playing field between companies Medium for financial transactions Medium for distance education Low cost communications Creation of special interest groups Low cost way to publish views and ideas Access to knowledge and expertise Direct access to the democratic process

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Value for Developing CountriesValue for Developing Countries

Commercial & technical information. Access to markets and customers. Access to new products and processes. Access to outside expertise. Access to scientific knowledge. Alternative delivery system for

broadcasting, telephone etc. Support global citizenship & community.

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Impact of InternetImpact of Internet

Increases speed of information exchange. Makes many transactions instantaneous. Increases speed & quality of decisions. Increases access to goods and services. Makes customized and personalized

services affordable and accessible.

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Potentials as Internet DevelopsPotentials as Internet Develops

Releases greater mental energy. Encourages mental creativity. Make results available to wider

community. Drives the growth of a new self directed

society without external compulsion. Creates new skills to increase

productivity of society.

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Potentials - 2Potentials - 2 Creates maximum # of connections

between different fields of activity. Drives the spread of strong values. Empowers the individual with unlimited

access to knowledge. Reduces the limitations placed on

humanity by space and time. Elevates people from physical to mental. Symbolizes collective accomplishment,

shared inheritance and human unity.

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ApplicationsApplications

Not a substitute for economic theories Creates perspective for specific theories Identifies need for other specific

theories Starts with perception of social

aspirations & preparedness

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Summary of Principles -- 1Summary of Principles -- 1

Development is a process, not a program.

Natural process of development is unconscious

Conscious development can be ten-fold faster than unconscious.

Principles are same for individuals, organizations and societies.

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Summary of Principles -- 2Summary of Principles -- 2

Development is the creation of higher levels of organization.

The motive force is human need and aspiration.

Driving force for development is the collective will for higher accomplishment.

Development occurs on basis of surplus energy, awareness of opportunity and aspiration.

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Summary of Principles -- 3Summary of Principles -- 3

Development takes place when society imitates the activities of pioneers and organizes to support those activities.

Organization matures as institutions & culture (values).

Organization admits of infinite development.

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Summary of Principles -- 4Summary of Principles -- 4

Development is founded on four levels of infrastructure.

Four types of resources support development.

Social organization is a single, interconnected fabric of organized activities and relationships.

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Society develops through three overlapping stages -- physical, vital and mental.

Progress from each stage to the next stimulates exponential increase in productivity.

Summary of Principles -- 5Summary of Principles -- 5

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Global population has multiplied 60,000 times since invention of cultivation.

Qualitative development has been proportionate.

Rate of advancement is accelerating. Each advance brings a new set of

limits to overcome.

Overview of Human ProgressOverview of Human Progress

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What are the limits?What are the limits?

The ultimate resource is Mind, the creator of all resources.

No limit to mind’s capacity to create, so resources are endless.

All development is development of human beings.