Studies in Economic Development With Special Reference to Conditions in the Underdeveloped Areas of Western Asia and India

304 Pages·1998·18.514 MB·English

by  Alfred Bonne

The International Library of Sociology
STUDIES IN
ECONOMIC DEVELOPMENT
Founded by KARL MANNHEIM
The International Library of Sociology
ECONOMICS AND SOCIETY
In 11 Volumes
I The Danube Basin Bad
II The Economic Development of
the Middle East BonnP
III Economics of Migration Issal
IV Economy and Society Parsonse t al
V The History of Economics Stark
VI The Ideal Foundations of Economic
Thought Stark
VII The Political Element in the Development of
Economic Theory My&l
VIII Population Theories and the Economic
Interpretation Coontz
IX The Social Problems of an
Industrial Civilization Mayo
X Studies in Economic Development Bond
XI Transitional Economic Systems Dough
STUDIES IN ECONOMIC
DEVELOPMENT
With special reference to Conditions
in the Underdeveloped Areas
of Western Asia and India
by
ALFRED BONNl?
First published in I957 by
Routledge & Kegan Paul Ltd
Reprinted in 1998 by
Routledge
11 New Fetter Lane, London EC4P 4EE
Printed and bound in Great Britain
0 195 7 Alfred Bonn6
All rights reserved. No part of this book may be reprinted or reproduced
or utilized in any form or by any electronic, mechanical, or other means,
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and recording, or in any information storage or retrieval system, without
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British Library Cataloguing in Publication Data
A CIP catalogue record for this book
is available from the British Library
Studies in Economic Development
ISBN O-415-17534-8
Economics and Society: 11 Volumes
ISBN O-415-17819-3
The International Library of Sociology: 274 Volumes
ISBN O-415-17838-X
CONTENTS
PAGE
INTRODUCTION vii
PART ONE
MEASURE AND CHALLENGE OF INEQUALITY
CHAPTER
I ECONOMIC DEVELOPMENT: AN AUTOMATIC OR INDUCED
3
PROCESS?
19
II THE DEMOGRAPHIC ASPECTS
31
III LEVELS AND COMPOSITION OF NATIONAL INCOME
IV CONSUMPTION LEVELS IN UNDERDEVELOPED COUNTRIES 43
PART TWO
THE MOVE TOWARDS ADJUSTMENT
V THE ROLE OF THE INCENTIVE 67
VI RISE IN REAL INCOME THROUGH HIGHER PRODUCTIVITY
VII INDUSTRIALISATION IN UNDERDEVELOPED COUNTRIES 2
VIII DEVELOPMENT PROSPECTS IN UNDERDEVELOPED AGRI-
CULTURE 135
IX LAND TENURE CONDITIONS AND ECONOMIC DEVELOP-
MENT 166
X THE FINANCE OF ECONOMIC DEVELOPMENT 184
A. The Scope of Financial Requirements
B. Sources and Methods of Capital Mobilisation
I. The Potential of Domestic Resources
II. The Potential of Lending from Foreign Sources
(a) Chief Sources of Foreign Investment in the Past
(b) Grants-in-Aid and International Capital
C. Lessons of the Period
V
CONTENTS
CHAPTER PAGE
XI PROBLEMS OF APPRAISING PROSPECTS OF ECONOMIC
DEVELOPMENT 230
XII IMPLANTED ECONOMIC DEVELOPMENT IN UNDER-
DEVELOPED COUNTRIES 241
APPENDICES
I INSTITUTIONAL RESISTANCES TO ECONOMIC CHANGE 261
II TABLES 272
INDEX 289
vi
INTRODUCTION
SIN CE the end of the First World War our ideas on the desirable
political and economic relations between the nations and com-
munities of the world have been deeply affected by the events
on the social and political plane which, for three decades, stirred up
the Old World in a nearly ceaseless sequel. Many established patterns
of thought and behaviour in international affairs have not survived
the test of this crucial period. Classification of the countries of the
globe by political and social criteria as used a few decades ago has
become out-dated.
The drive for the political liberation of subjugated peoples and
nations, which gave direction and content to an important segment
of international relations during the first half of this century, has
been extended to a new area: rights to economic and social equality,
or at least to adjustment of the profound differences between the
various living standards of the human race, have been added to
the older demands. Political equality only a short time ago highly
coveted, means little, when the share in economic and social benefits
which modern civilisation can offer remains as appallingly inequal
as before.
Such a demand for the economic and social adjustment of nations
and regions is a formidable goal. It implies a huge transformation
of human and material conditions within national boundaries and
beyond them. It requires a new orientation of national and inter-
national policies which will have to rely much more than before
on the findings and recommendations of science and arts. It raises
problems of a magnitude which defy all but the most determined
attempts at solution.
The first industrial revolution came to a world which accepted the
division of society and nations by political status and possessions
as a dictum of fate. The new political credos which grew out of the
turmoil of the first half of this century and were strengthened by
the formidable potential of the second industrial revolution bear the
marks of an activism which was absent in earlier periods; these
credos direct pressure against the inequalities of human society and
vii
INTRODUCTION
endeavour to make the benefits of modern civilisation available to
all. The advance of underdeveloped societies throughout the world
has thus become the central economic issue of the second half Of
this century.
The question arises: in what way can the social scientist cope with
this subject? His task is twofold: he has first to survey conditions in
underdeveloped countries, to become acquainted with existing facts
and trends, to analyse them from the viewpoint of whether and how
an improvement is possible. His second task is then to use his
findings in the formulation of development policies. The elaboration
of such findings and policies requires, as he will soon discover, an
exceptional command of sources and methods which is much beyond
the scope of an individual effort. Thus social scientists who work on
these problems on a broader scale increasingly feel the inadequacy
of any single-handed attempt made in this field. Nearly all recent
surveys of existing conditions in given areas and their analysis have
been the result of teamwork of specialists well supported by national
and international agencies. Individual writers cannot compete with
these group efforts. In addition, the material itself is’frequently not
available or freely accessible to the individual author; nor can he
organise detailed investigations over a wide range of subjects, or
organise joint discussions of the issues in the way teams are able to
employ collective efforts. Still, many though the shortcomings may
be in an individual contribution, it may also have certain advantages.
An individual attempt is, as a rule, less hampered in the expression
of views than the work of official or semi-official bodies. The treat-
ment of a wider range of subjects increases-simultaneously with the
danger of spreading over less familiar ground-the perspective, the
absence of which is sometimes felt in the more specialised official
studies. The opportunity which I have had over many years to learn
about the problems of many underdeveloped countries on the spot
and to obtain an immediate sense of the prevailing conditions has
probably induced me to persist in an effort which for the reasons
mentioned will be inadequate in other respects.
Over a long period, I have consistently expressed my belief in the
development capacity of important underdeveloped regions, where
such potentialities do exist largely as untapped human and material
resources. I certainly maintain these views now when a more dynamic
approach to these issues has become generally accepted. This adher-
ence to an expansionist school is, I feel, compatible with a critical
evaluation of the new experience and facts which are constantly
added to our knowledge and of the sometimes exaggerated claims
based on them.
The present treatise is basically an empirical study. The analysis
. . .
Vlll
INTRODUCTION
of the new trends of thought on economic development at the end
of this volume does not and cannot aim at a full discussion of its
theoretical aspects: it is my hope to resume work on this subject
when more data are available and permit an appraisal of results of
major development activities in important countries.
The area dealt with in this book lies chiefly in Asia. The treatment
leans heavily towards those regions in Asia withwhich the author has
become more closely acquainted than with others-namely, the
Middle East and India. Though this might appear to be a somewhat
incidental motive of delimitation, it is not the case. The regions of the
ancient Orient from the Eastern Mediterranean to the Ganges share
important features in human and physical landscape: the impact of
ancient and medieval civilisations on present-day society is felt here
more than in other parts of the world. The dry climate creates the
necessity of irrigated agriculture, which profoundly influences labour-
land and capital-output ratios. Pace and rates of population growth
show a similarity throughout the region which tempts the student
towards generalisations. Though these marks point to the existence
of certain patterns of development specific to the regions dealt with,
it is hoped that the conclusions may be of relevance also to other
underdeveloped areas.
I wish to express my gratitude to the colleagues and friends who
readily offered advice for the improvement of the book.
In particular I owe thanks to Professors W. A. Lewis, H. S.
Frankel, G. Myrdal, A. Lowe and H. Bloch, Dr. A. Morag and
H. Smith for their readiness to go over the whole or part of the
manuscript and to provide me with helpful suggestions. My thanks
are also due to my former assistants Ephraim Ahiram and Elieser
Sheffer for their help in the preparation of part of the statistical data.
Needless to say that I am alone responsible for any mistakes and
faults which may be found in the text.
I am much indebted to Mrs. Judith Shorr for her contribution to
the readability of the style and to Mrs. Aliza Argov for her devoted
work in the preparation of the typescript. Finally I wish to thank the
Editors of Annals of the American Academy of Political and Social
Science, and Kyklos respectively, for permitting the inclusion of the
chapters ‘The Role of the Incentive’ and ‘Towards a Theory of
Implanted Economic Development in Underdeveloped Countries’,
published before in these periodicals.
ALFRED BONN&
The Eliezer Kaplan School of Economics and Social Sciences,
The Hebrew University,
Jerusalem, June 1956
ix
LIST OF TABLES IN APPENDIX II
1 Crude Birth Rates page 272
2 Crude Death Rates 273
3 Natural Increase 274
4 Income Increases and Birth Rates within 33 Nations 274
5 Per Capita Income (1925-34 Dollars) and Birth Rates
(1935-9) per 1,000-33 Nations 275
6 Expectation of Life 276
7 Percentage Distribution of the Gainfully Occupied Popula-
tion in Certain Underdeveloped and High Income
Countries 277
8 National Income-Net Geographical Product by Industrial
Origin at Current Prices 278
9 Real Per Capita Income at Constant Prices 280
10 Percentage of Net Domestic Product contributed by Manu-
facturing, 1938, 1939 and 1949-52 280
11 Index Numbers of Volume of Total and Per Capita Food
Production (pre-war average = 100) 281
12 Coefficient of Industrial Absorption of the Population 282
13 Estimated Consumption of Major Sources of Energy
Expressed in Terms of Coal Per Capita 283
14 Estimated Consumption of Steel Per Capita 283
15 Electric Power: Installed Capacity and Production in
Selected Countries 284
16 Per Capita Production of Basic Raw Material-Kilograms 285
17 Percentage Average Annual Increase (+) or Decrease (-)
in Manufacturing and Population 286
18 Major Components of Government Receipts in Selected
Countries, 1939 and 1949 to 1953 287
19 National Income: Government Expenditure and Revenue,
Development Expenditure and Direct Taxes on Income
and Wealth as Percentages of National Income 288
X