Fallacies of Economic Development and Simple Development Formulae

Posted 6 months, 4 weeks ago | Originally written on 11 Sep 2008

The one notion that repeatedly comes up in development debates is that the government has a central role in creating both the impetus and oil for the development machinery to function. While superficially sensible, I think it fails miserably for the primary reason that the government cannot be held accountable except, in democracies, by the ballot. The fatalities suffered are never learned and the error is faithfully repeated in subsequent regimes ad infinitum. The government, like any other 'organisation', is constituted of the same rot that makes Men. They have their own agenda to serve. Development cannot be pegged on a few individuals' 'good will'! 

By taking a market-based approach towards solving development problems it is possible, not only to ignite the impetus, but to, from it, create the positive-spiral that will lead to a situation similar to China's explosion on the world's markets. Players in academia must be the first to approach those in industry to ask for funding to solve local problems creating the much-needed symbiosis that spurs Industrialisation. On the other hand, players in industry must be willing to 'risk' their shareholder's capital to develop home-grown solutions that will serve to build local R&D confidence. 

It's only when local problems find local solutions in market needs that development can take off. Thereafter, government will be too busy trying to enhance the situation due to pressure from both parties that the symptoms of development will be evident: improved infrastrure, better standards of living, and health and wealth for most, if not all. Ironically, these are claimed to be the precursors to development! 

Local Industrialisation (LI) = Local Problems (Ingredient) + Local Solutions (Participant) + Market Conditions (Environment)

Fundamental equation of industrial advancement.

Extended Industrialisation (EI) is similar to the above with the exception that the problems are not locally confined and extend outside the point of influence (PoI).

Solving an additional range of problems outside the point of influence multiplies industrial output.

Development is the result of sustained Industrialisation.

Development is not an end in itself but serves the principal objective of enhancing the environment conditions (also enabling market conditions) that will achieve further industrialisation. Industrialisation precedes Development; never the other way around.

All Industrialisation is Internally-Oriented i.e. it serves a point of influence's development ambitions.

Example: The formation of the European Union is intended to serve several aims chief of which are: a) the sustained domination of Europe over its former colonies, and b) contain the advancement of US and Asia's growing dominance especially in industries that lay claim to the future.