<strong>Re-embedding the economy to rethink (sustainable) development</strong>

Juliette Alenda

Sep 8

'On ne développe pas ; on se développe.'

This famous sentence from Joseph Ki-Zerbo could be translated as 'we do not enforce development; we develop ourselves.' However, development paradigms have been largely influenced by external views, mainly those of Western countries. "Development" is considered as a moral concept. Many people around the world suffer and don't have access to welfare programmes that are fundamental to strive, hence the need for development, through the improvement in terms of basic needs and democratic institutions. However, development as a concept is far from having a universal definition, on how to develop and the ultimate goals of this development. Development paradigms are fundamentally linked to ideologies. In particular, the connection between the economics discipline and the dominant development paradigm is deep. Thus, rethinking development also calls for rethinking the assumptions in the economics discipline. In this blog, I summarize the main ideas of a recent paper I published ("From economic growth to the human: reviewing the history of development visions over time and moving forward").

The holy triad of economics: 'market-scarcity-rationality'

Karl Polanyi established two different definitions of economics: a formal one, used to justify the rise of self-regulated markets, and a substantive one, trying to show that markets are not a universal truth in the history of human exchanges. The formal definition refers to the logic of rational action and decision-making based on alternative uses of scarce resources. This formal approach has gradually become the dominant definition of (mainstream) economics, through the theory of utility value, based on the subjective utility associated with the consumption of goods and services. In this view, the primary focus is the individual, captured through the market relationships that he or she enters into. Resources, as natural resources, are allocated through market mechanisms, the main instrument of efficiency in what is called neoclassical economics. The implications of these assumptions are very important for development.

Since the process of formal decolonization began, the mainstream view of development has been founded on the assumption that post-colonial economies can develop in the same manner that Western countries did. In this sense, they are assumed to simply be at a later stage of Western economic history. In this context, economic growth is often considered an indicator of progress. This idea gained currency with modernization theories that started to dominate mainstream development discourse after the second World War, conceiving development as an imitative process, establishing from the onset a distinction between a modern sector (capitalist economy derived from the Global North) and a traditional sector (considered as a subsistence economy, that should be abolished). With the Washington consensus in the 1980s and the resulting structural adjustments, pulling developing countries towards stability, getting them as close as possible to the market ideal was the new goal for development, society becoming an auxiliary of the economy. In the 1990s, the discourse of international financial institutions evolved, as they incorporated political and social dimensions to their economic analyses to better explain the failures of the past. However, instead of challenging the fundamental assumption of this narrative, the new incorporations simply include more ways in which the developing countries need to 'catch up', such as through developing better institutions. We went from economic determinism to institutional determinism and not much has changed over time.

However, the mainstream view of development has been challenged from many quarters. For example, as scholars from the Global South long understood, underdevelopment and development are actually two sides of the same coin, based around the uneven accumulation of capital on a world scale. Dependency theorists, the regulation school, and post-developmentalist theorists all recognized this. Economic growth and capital accumulation in the Global North still relies on continuous patterns of colonization. Even alleged attempts to become more sustainable, as with electric cars or renewable energy, rely on continuous extraction of raw material in the Global South. It is time now for new frameworks for development thinking.