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ThirdWorld Quarterly, Vol 16, No 2, 1995 Economismand critical silencesin developmentstudies: a theoretical critiqueof neoliberalism JOHNBROHMAN

Because ofthe recentness of neoliberalism’ s rise inpopularity within develop- mentstudies, it has onlybeen in the last few years thatit has beensubject to closescrutiny in the development literature. Moreover, much of thecriticism of theneoliberal approach has beenfocused on the immediate consequences of structuraladjustment and other neoliberal policy instruments on countries.However, there is alsoa theoreticalcritique that can be applied to neoliberalismwhich can help explain the root causes ofmany of its shortcom- ingsas adevelopmentstrategy. Given the close links between neoliberalism and neoclassicaltheory in general, much of this theoretical criticism concentrates on basicproblems of theneoclassical framework. This paper particularly focuses on theproblem of economism and the consequent neglect of three important areas ofdevelopment studies: sociocultural and political relations, the intersubjective realmof meanings and values in development, and the environment and issues ofsustainability.

Thenarrowness of and associated neoclassical assumptions Themultifaceted and dynamic nature of development processes makes it necessary totakean interdisciplinary approach to thestudy of development, one thatincludes sociocultural, political, and environmental factors as wellas those economic.However, neoliberalism and other mainstream development frame- worksthat draw their conceptual roots from neoclassical have virtually omittednon-economic factors of development from serious consideration. 1 As Hirschmannotes, `The discipline became professionally more narrow at pre- ciselythe moment when the problem [of development] demanded broader, more political,and social insights’ . 2 Characteristically,neoclassical theory treats people as atomisticindividuals whoare boundtogether only through forces. People are reducedto isolatedcreatures of the marketplace, devoid of history, cultural traditions, politicalopinions and social relationships beyond simple market exchanges. 3 The conventionalassumption is thatnon-market relations and institutionsÐ the broaderenvironments within which economies operateÐ are universal,unchang- ing,and have no signi® cant impact on economic activities. 4 Economiestake on anahistorical, static nature and economic change becomes solely the result of exogenouschanges in tastes andtechnology. 5 Strippedof their social relations

0143-6597/95/020297-22 Ó ThirdWorld Quarterly JOHN BROHMAN andhistorical dynamism, economies are reducedto simpletechnical devices for allocatingscarce resources.The consequences are oftenunrealistic and trivial resultsderived from narrow, simplistic analyses that ignore the complexities surroundingThird World economic realities. Thegap between theory and reality within neoclassical is largely rootedin aseries ofunrealistic assumptions, especially those linked to the homo economicus postulate.The concept of homoeconomicus ®rst emergedwith the birthof marginalist or , as itbecame known, around 1870.From its origins, neoclassical theory has basicallyconceived of a world composedof scarce means andunlimited desires, within which individuals must makechoices. The role of homoeconomicus withinthis world becomes one of de®ning the `best’ choices, ie thosethat maximise an individual’ s endsgiven the limitedmeans available. Homoeconomicus performsthis function as a`rational, self-interested,instrumental maximizer with ® xedpreferences’ . 6 Socialprocesses are reducedto a universalpsychological endÐ utilityÐ which supposedly moti- vatesall economically rational behaviour. Homoeconomicus ,then,represents yet another universalistic Western con- cept:economic behaviour in all places at all times follows the strictures of economicrationality. This universal rule of economic rationality determines whichchoices are best(ie which maximise ) in allsituations. Barnes notes that homoeconomicus providesneoclassical theory with a methodological agenda`based upon reducing the complexity of economicevents at any time or placeto the universal trait of rational choice making; a traitthat, because of its deterministnature, is easilyrepresented in a formalmodel’ . 7 Inthe end, such reductionismmeans that homoeconomicus existsneither in thereal world of the Southnor the North. The real world is insteadcomposed of individuals and socialgroups whose behaviour may change across timeand space accordingto complexinterconnections between individual attitudes, beliefs and motivations, onthe one hand, and the in¯ uence of historically constituted societal structures andrelations, on the other. Ultimately,what neoclassical theorists have to understand is thatthere is no independent,universal sphere of economic rationality that is explicableby equilibriumequations and formal models based on assumptionsof individualistic exchangerelations. By precluding attention to elementsof humanbehaviour that donot® titsnarrow de® nition of economicrationality, neoclassical theory leaves itselfno mechanismfor understanding and explaining the often messy empirical worldthat so de®es itsmodels. Moreover, even rational behaviour (eg the pursuitof pro® ts) cannotbe understood without paying attention to non-market values,rules, relations and . Development is notsimply ,but also involves critical changes in social relations and institutions. Changesin practices spring from mutual actions and relations among classes and socialgroups; they cannot simply be understood as aggregationsof isolated individualactions, as is positedby neoclassical theory. 8 Inevitably,neoclassical theorists pay a heavyprice for the simplicity and eleganceof their models: empirical ignorance, a misunderstandingof socioeco- nomicprocesses, and,as aresult,the advocacy of unrealisticand bizarre policy recommendations. 9 Inorder to explain how actual economic activities unfold in 298 ECONOMISM AND CRITICAL SILENCES INDEVELOPMENT STUDIES theirreal-world settings, we must understand the local historical and geograph- icalcontext in which these activities take place. This means movingaway from universalmodels based on absolutes, such as the homoeconomicus assumption, towardsthe adoption of amorerelativist stance. A centraltenet of relativismis thathuman activities cannot be explained by recourse to theoretical absolutes, butneed to be examined within their particular contexts. This position is especiallyrelevant to the study of development processes inThird World countriesthat normally unfold in contexts that bear only a super®cial and often misleadingresemblance to their counterparts.

Neglectof factors differentiating markets Because theirdevelopment strategies are basedon market-led growth, neoliber- als andother neoclassical theorists especially need to develop a betterunder- standingof thedifferent ways that markets work in developingcountries and the factorsthat contribute to these differences. It is normallyassumed thatmarkets are essentiallysimilar and that reactions to market signals by the private sector willbe equivalent from country to country. Indeed, the overall dependence of market-ledgrowth strategies on the `trickle-down’ mechanism assumes abasic uniformityin ThirdWorld markets based on open and economically rationalbehaviour by entrepreneurs.However, these universal assumptions about marketsand the private sector have little historical evidence to support them. Suchassumptions appear to be particularlyunrealistic for more underdeveloped economiesmarked by dualisticstructures in poorer,predominately rural areas of theSouth (eg much of Africa, South Asia). As Stewartcomments: `Traditional elementsin theeconomy have different organisation, operate in different labour andcapital markets, pay different for these resources, and have quite differentaccess totechnology, from ® rms operatingin the modem sector.’ 10 In thecase ofAfrica, for example, Havnevik states that`it is wrongto think that [Western-style]land, labour, credit, and product markets exist naturally ¼ Factor,product, and ® nancialmarkets [have been] historically rare inAfrica’ . 11 Itfollows that if development in these areas is toconform to neoclassical prescriptionsfor market-led growth in the Western image, new market institu- tionswill somehow need to be created and sustained in an environment likely tobe rather inhospitable. Thegeneral effectiveness of neoclassical trickle-down strategies also presup- poses thepresence of a capitalistclass thatis ableand willing to respond to marketincentives with investments and other accumulation activities. However, class differencesbetween countries may profoundly affect investment patterns andother key elements of theaccumulation process. Within developing econom- ies,domestic capitalist ® rms oftenplay a relativelysmall role in comparison to state-ownedand family enterprises, both of which normally make production decisionsbased on criteria that diverge from neoclassical assumptions of pro® t maximisation. 12 Moreover,particularly in Africa and , domestic capitalshave generally remained quite weak, while innovative entrepreneurs withsigni® cant investment capacities have yet to emerge in most countries. 13 Underthese circumstances, market incentives may be largely ineffective in 299 JOHN BROHMAN stimulatingthe investment needed to create added employment and income.This means thatif the trickle-down strategy is notto be short-circuited byinsuf® cient investment, capital will need to originate from abroadÐ an especiallydubious proposition for exactly those more underdeveloped countries whichmost often lack a domesticcapitalist class. Thetrickle-down process is furtherrestricted in much of the South by tendenciestoward monopolisation in keyeconomic sectors. 14 Inmany countries, economicmonopolisation has beenassociated with state protectionism of exist- ingenterprises and resource constraints that prevent new ® rms fromentering markets.15 Lackof competition, however, is notjust a commontrait of the South’s domesticmarkets. The global food and markets upon which manyThird World exporters are especiallydependent are typicallydominated by afewtransnational agribusinesses based in the USA andother industrialised countries.16 Ateither the national or international scale, then, the distributional impactof market-led growth cannot be speci® ed a prioriÐas trickle-down theoryattempts to do. Each country has itsown historically evolving class and socialstructures and occupies a particularposition in the international economic order,both of whichwill in¯ uence the strength of anytrickle-down mechanisms. Infact, Booth comments that `trickle-up’ might be a moreappropriate term to describethe distributional impact of development in the severely polarised agroexporteconomies of areas suchas CentralAmerica and the Caribbean. 17 Thedifferent ways that internal and external structures may affect market processes illustratethe fact that the market is atroot a socialprocess. Develop- ment,whether market led or not, is nota functionof abstract economic mechanismsoperating in asocialvacuum, but necessarily also involves changes insocial relations, structures and institutions. This is notto argue that the importanceof economic growth to the South should be neglected, but that a broader,more balanced approach to development be taken that links the economicperformance of regions and countries with the historical constitution ofsociocultural and political structures. As Dietzand James note:`[Neoclassi- cal]economic orthodoxy pays far toolittle attention to how powerful social and politicalforces canencapsulate and steer marketforces’ . 18

Under-theorisationof the state,institutions andrelations ofpower Theassumption of methodological individualism that produces the neoclassical worldof atomistic individuals devoid of social relations is particularlyill- equippedto come to grips with the structured context within which relations of powerarise. However, as Kleinremarks, `There is scarcelyan assumption or an implicationof conventional economic theory which is notaltered when the realitiesof economic power are incorporatedin the analysis’ . 19 While it is a truismthat the market in¯ uences resource allocations in allcapitalist systems, if weexamine the structures out of which relations of are created,powerful vested will inevitably be found that shape how marketsoperate. 20 Moreover,this pattern is undoubtedlymost pronounced in manyof the highly polarised and authoritarian of the South in which thevested interests of the elite monopolise state access tothe exclusion of the 300 ECONOMISM AND CRITICAL SILENCES INDEVELOPMENT STUDIES popularsectors. Little if anything meaningful can be understoodabout the effects thatsuch power relations can produce on (eg restrictions onmarket participation by some classes andsocial groups, limitations on aggregatedemand rooted in societal polarisation) by using the neoclassical `adding-up’approach of methodological individualism that neglects people’ s socialand political make-up. Alongwith its neglect of power relations, neoclassical theory has also affordedlittle attention to the institutional dimension of development. In recent years,an institutionalistcritique has emergedof the one-dimensional, universal- istlogic of neoclassical theory that tends to equate state intervention with economicinef® ciencies and predatory policies regardless of the historical, institutionaland political context. 21 Itis notedthat countries within the same geographicregion often share institutionalcharacteristics that distinguish them fromcountries in other regions. 22 Theseinstitutional differences are, in turn, linkedto underlying historical, sociocultural, and politico-ideologi calfactors. Suchfactors mean that the feasible range of institutionalchange associated with developmentmay differ widely; change that may generate bene® ts inone country,given its particular social make-up, may produce disastrous results in another.Onis comments, for example, that within the institutional and political contextof EastAsia, bureaucratic autonomy has beenassociated with extremely effectiveforms ofstate economic intervention. However, he also notes that it was notbureaucratic autonomy per se thatproduced effective state intervention, butrather a wholeset ofbroadersocietal factors that collectively established the preconditionsallowing for effective state action. 23 Bycontrast, similar types of stateintervention might be quite counterproductive in other countries that lack suchpreconditions. Abasicinconsistency pervades the neoclassical and, by extension, neoliberal attitudetowards state intervention. On the one hand, the Third World state is typicallycharacterised as almostcompletely omnipotent in its ability to set policyaccording to its macroeconomic objectives. On the other hand, it is also describedas virtuallytotally impotent and incapable of acting in an economi- callyrational and ef® cientmanner (unless, of course, it effectively follows neoclassicalpolicy prescriptions). Contrary to thisrather naive, monistic view of ,however, the state is neitherall-powerful nor completely powerless. In reality,both states andtheir polities are highlydifferentiated. Sources of state differentiationoriginate both from the internal composition of thestate itself (eg bureaucraticstructures, types of government) and from its broader social composition(eg relations with powerful classes, regionalgroups, familial and ethnicgroups). As aresult,states oftenhave divergent technical capacities and othercapabilities with which to carry out policy. Moreover, states are normally permeatedby contrasting interests and tensions that may be re¯ ected in diverse forms ofeconomicintervention and other political behaviour. Economic as well as politicalactors struggle to make dominant those forms ofintervention from whichthey and their allies will bene® t most.Therefore, neither the structures nor thefunctions of the state should be seen as monolithic. Boththe internal and external structural features of thestate, then, may affect itsability to devise and carry out different forms ofeconomic intervention. 301 JOHN BROHMAN

Giventhe tremendous structural diversity of Third World states andtheir societies,one would think that forms ofstate intervention ought to be corre- spondinglydiverse. Indeed, a numberof recentcomparative political studies has emphasisedthe considerable variety that marks forms ofstate intervention in developingcountries. 24 However,despite their focus on (reducing) state inter- vention,neoliberals have devoted remarkably little analysis to either the causes orconsequences of different forms ofsuch intervention. Characteristically, a simplisticunivariable de® nition or indicator of state intervention is presented ratherthan any serious attempt to elaborate the different ways that states may interveneeconomically. This neglects analysis of the nature of the state and of itsrelations with the broader , both of which are necessary tounderstand thenature of state interventions. In Africa, for example, Mengisteab and Logan ®nddifferences in forms ofintervention according to the social composition of variousstates: policiesin Mobutu’ s Zairetended to conform to the elitist interestsof the andstate functionaries, while those in Nyerere’ s Tanzaniaor Mugabe’ s Zimbabwewere directed towards the redistributive interestsof the poor majority. 25 Similarly,O’ Donnell® ndsthat particularities withinboth internal and external state relations have affected forms ofstate interventionin Latin America: before the mid-1980s, the neocorporatist or bureaucratic±authoritarian regimes of the Southern Cone carried out a mixtureof coerciveand neopopulist measures whichre¯ ected both their authoritarian politicalstructures and the traditional strength of corporatistrelations within the region’s polities. 26

Disregardfor culture andhistory Inthe long run, the viability of any economic strategy depends on a hostof historical,political and cultural variables. In order to be useful, a strategymust beableto adaptto historically changing conditions, while keeping interrelation- shipsbetween economic and non-economic factors under constant and rigorous scrutiny.A growingnumber of development theoristsÐ including some within economicsitselfÐ has reachedthe conclusion that neoclassical theory has overemphasisedthe technical analysis of abstracteconomic and scienti® c issues, tothe neglect of other aspects ofdevelopment that are basedin real-world processes andare moreimmediately relevant to the well-being of the majority inthe South. 27 Suchcriticism has touchedoff a rathervitriolic debate within developmenttheory that is beingwaged both within and outside economics. On theone hand, some commentators(including a feweconomists) have charged thatneoclassical theorists are toocomfortable in theirabstract world of universal assumptionsand formal models to wantto enter into the more messy andchaotic worldof real social processes: Whenyou dig deep down, are scared to deathof beingsociologists. The onegreat thing [they] have going for [them]is the premise that individuals act rationallyin trying to satisfy their preferences. That is an incredibly powerful tool becauseyou can model it. 28 Onthe other hand, many neoclassical economists contend that the inclusion of 302 ECONOMISM AND CRITICAL SILENCES INDEVELOPMENT STUDIES non-economicfactors in explanationsof economicgrowth and development will onlydetract from the scienti® c rigorand precision of their framework. As the followingstatement illustrates, some ofthe leading ® guresin the neoliberal counterrevolutionhave been particularly disdainful of research (especiallyby othereconomists) that seeks toestablish the causal relevance of non-economic factorsin processes ofgrowth and development: Peopledelight in putting forward ex-postexplanations, or rationalizations, for observedphenomena. Economists are no exception. Those who have failed to understand,nay foresee, actual developments because of faulty or inadequate economicreasoning fall back on noneconomic explanations, just as our ancestors thoughtto ® ndthe causes of lightning and thunder in the supernatural. Explaining intercountrydifferences in economic growth rates is no exception. With little knowledge,but fertile imagination, economists have wandered onto the ® eldsof culturaland social phenomena when their models have failed them. 29

Problemof discipline-centrism andfragmentation Acommonproblem affecting economics, political science, psychology, soci- ology,and, to a lesser extent,other disciplines such as socialanthropology and geographythat are involvedin , has beenthe persistence of `discipline-centrism’. 30 Thedevelopment process is compartmentalisedby each disciplineto suitits own areas ofspecialisation,research methods,and theoreti- calframeworks. For the most part, interdisciplinary approaches to development haveyet to attain intellectual respectability; development theorists commonly contendthat interdisciplinarity tends to lead away from more important `sci- enti®c’ and `rigorous’ research withindisciplinary specialisations. Instead of beingconstituted as adistinctarea ofintellectual enquiry because of itspeculiar issues andproblems, the ® eldof development studies has becomeincorporated, inbits and pieces, into various disciplines. For example, economics (which in recentyears seems tohave got away with the biggest haul) tends to emphasise factorssuch as ,capital, investment stimuli, and so on.By contrast, politicalscience stresses equality,participation, responsive public of® cials and politicalaccountability, while highlights modernity, specialised roles andpluralism. 31 Theproblem with this disciplinary segmentation is thatdevelopment processes are inherentlymultifacetedÐ involving a complexweb of sociocultural,political, economicand environmental factors. It follows that the traditional subject matter ofany one discipline cannot adequately deal with the complexity of this topic. Yet`purists’ within particular disciplinary segments often limit their interaction withthose in otherbranches who may have somewhat different concerns or may use unfamiliarresearch methodsor theoretical . The increasingly knotty,interwoven nature of development problems, however, demands new methodsand insights that the traditional disciplinary orthodoxies have failed to provide.In order to be able to understand, explain and act effectively, develop- menttheorists and practitioners need to adoptmore open, pluralistic perspectives thatincorporate recent conceptual and methodological advances in a varietyof disciplines,as wellas indigenousinsights into development from a rangeof 303 JOHN BROHMAN sources withinthe South itself. To do this, however, they need to eschew intellectualand disciplinary arrogance, escape theconceptual and methodologi- calstraight-jackets of the traditional disciplinary specialisations, and avoid the close-mindedadherence to ideological convictions that has unfortunatelycome tocharacterise much of development studies.

Dominationof positivist modesof enquiry Despitethe recent rise ofpost-positivist forms ofexplanation in most of the socialsciences, the ® eldof development studies still largely remains dominated bypositivist modes of enquiry. Indeed, it might be argued that, with the rise of neoliberalism,mainstream development theory is probablymore dominated by positivistmethods today than at any time in thepostwar era. This is inlargepart aresultof the continuing domination of the positivist philosophy of science in afewof the central disciplines concerned with development studies, especially economics.As Wilbernotes, it has onlybeen quite recently that the positivist dominanceof postwar economics has beenchallenged and, up to now, the developmentof alternative theoretical discourses has mostlytaken place on the marginsof the discipline. 32 Moreover,the in¯ uence of within eco- nomicsis particularlystrong in many of themost prestigious universities of the North,particularly in theUSA, thathave advanced graduate programmes, major sources offunding and other resources neededto support development research onan ongoing basis. Many of the key actors in both the academic community andmajor development institutionsÐ such as the IMF andWorld BankÐ that are responsiblefor the rapid ascendancy of neoliberalism within develop- menttheory are connectedto this select group of leading First World universi- ties.33 Anexamination of the basic principles of positivism demonstrates its close connectionswith neoclassical economics and, by extension, mainstream devel- opmenttheory as practisedat these leading universities. Among the important principlesthat de® ne positivism as adistinctphilosophy of scienceare: abelief innaturalism or the essential unity of all science under the `scienti® c method’ ®rst developedin the natural sciences, an ontological focus on the empirical worldof observable events and phenomena, the derivation of universal causal lawsor generalisations based on empirical regularities, and the conviction that anobjective world exists that can be accessed andexplained by objective research methods.Like all positivists in the social sciences, neoclassical economistsbelieve that any differences between research inthe social and naturalsciences are differencesin degree rather than kind. No essential differ- ences are thoughtto exist that would render the human-based subject matter of economicsinappropriate for research methodsdeveloped in thenatural sciences. If explanationsin economics have yielded less predictableresults than those in thenatural sciences, this can be attributed to therelative immaturity of positivist modelsand techniques in economicsÐ something that can eventually be over- comeas morerigorous research progressively® llsthe gaps of knowledge. Asinthenatural sciences, the ontology of neoclassicaleconomics is basically composedof an empirical world of observable events and phenomena. Other 304 ECONOMISM AND CRITICAL SILENCES INDEVELOPMENT STUDIES partsof reality that cannot be observed and measured (eg values, meanings, socialrelations) are consideredto lie beyond the boundaries of proper science. Itis fromregularities or correlations among empirical facts thatneoclassical economistsderive causal laws or generalisations upon which explanations are based.Because theseempirical facts are investedwith a universality,questions concerningtheir social constitution and historical meaning are excludedfrom analysis.Causality ¯ owsout of simplerelations between isolated empirical facts themselves,rather than from analysis of eithertheir `inner constitution’ (ie their socialcomposition according to class, gender,ethnic and other social relations) orthe historically changing contexts within which they occur. The neoclassical worldof these empirical facts is thoughtto be objective and to be explainable usingobjective research methods.This means thatneoclassical research typically payslittle attention to ideological biases andother non-objective factors that may in¯uence the framing of research questionsor themethods by whichstudies are carriedout. Moreover, neoclassical research characteristicallyemploys a priori modelsand that rule out subjective factors and separate the observer (researcher) fromthe observed (research subjects).As aresult,neoclassical developmentstudies tend to treat people as objectsto be studied rather than as subjectsof developmentin theirown right, whose knowledge and interpretations ofthe world might contribute not only to the ® ndingsbut also to the design of research projects.

Asubjectivist critique: omission ofvalues andmeanings Atthe core of much of the criticism of positivism within the social sciences is aconcernfor the human factor and for the subjective realm of values,meanings andinterpretations. Many researchers whohave adopted post-positivist positions (iethose based on one of the humanist approaches, realism, structurationism, postmodernism)have concluded that the postwar social sciences, in theiranxiety ofbecomemore `scienti® c’ or `objective’ , haveadopted positivist methods that are inappropriateto thestudy of socialsubjects and that neglect many important issues relatedto methods of acquiring knowledge in the social sciences. Individualsand social groups are treatedlike atomistic facts orthings that are devoidof any social content or meaning and follow universal laws which determinetheir behaviour. Historically constituted values and meanings, which mayvary considerably over both time and space, are eitherexcluded completely fromanalysis or are treatedas simpleuniversals in awaythat denies their social construction. Withinneoclassical theory, for example, economic values are basedon the universalconcept of consumersovereignty and are thusassumed tobestableand consistent.This denies possibilities for differentiation within the subjective realmof values, interpretations and meanings which might be based either on broadprocesses ofsocial change or on individual variations among people’ s perceptions,aspirations and access toinformation and resources. In practice, the universalisationof values within neoclassical theory has systematicallyexcluded thewishes and aspirations of dominated classes andsocial groups, particularly thepoor, women, and minority ethnic groups. These silences underscore the fact 305 JOHN BROHMAN thatneoclassical economics, like all discourses, is intersectedby relations of power.Recognition of connectionsbetween power relations and particular forms ofdiscourse (ie scienti® c paradigms)leads away from positivist notions of objectivityand the distinction between facts andvalues. Within development theory,it also highlights the need to examinethe ways in whichthe neoclassical paradigmhas furtheredthe power and in¯ uence of certain groups (ie those of globalcapital, core capitalist countries) at the expense of other needs and desires,particularly of the poor and disadvantaged in Third World countries. Ingeneral,subjectivist critiques of theneoclassical framework in development studiesemphasise the need to pay more attention to human complexities and to thedynamic, open-ended, and non-determined nature of social processes. Em- phasisis placedon processes ofsocial change, non-equilibrating tendencies, localdiversity and human creativity. It is believedthat efforts should be made toexplore various subjective elements of development among different classes andsocial groups, alongside the usual studies of overtmaterialist behaviour and themore objective features of development.This involves attempts to `bringthe actorsback’ into development studies in the particular economic, political, and socioculturalcontexts within which they operate. Research triesto interpret others’understanding of their world from their own special vantage points and withoutpreconceived notions and conceptions. Contrary to neoclassical theory, itis neitherassumed thatthe economic sphere is dominantnor that social processes conformto some sortof predetermined universal logic. Moreover,advocates of alternative conceptions of development contend that aprimaryconcern for `humaneness’ , includingsocial, ethical and moral consid- erations,should replace the abstract, technical focus that the science of econom- ics has givento development theory. 34 Inevitably,this raises questionsof purposewithin development studies and brings issues suchas socialjustice and environmentalsustainability to the forefront. Accordingly, new questions and criteriaare neededto assess developmentperformance in diverse areas suchas employmentand equity, family life, individual freedom, cultural values, com- munitywelfare and ecological soundness. Questions that presently revolve aroundnarrow concerns of `How much economic growth?’ in neoclassical theoryare transformedinto broader issues of`Economic growth for what and for whom?’ 35

Needfor a hermeneutic componentfocused ondevelopment values and meanings If developmentis aboutprocesses ofhuman action and interaction rather than justabout and resources, then it is clearthat development theory must deepenits understanding of whatit is tobe human.This involves incorporating ahermeneuticcomponent into development studies that addresses theways in whichmutual actions and social relations are linkedwith intersubjective values andmeanings. A hermeneuticapproach focuses onquestions of , meaningand interpretation. It contends that empirical facts are notobjectively givenand universal but are sociallyconstructed within particular historical settings.Moreover, human practices are composedof modes of mutual action 306 ECONOMISM AND CRITICAL SILENCES INDEVELOPMENT STUDIES andsocial relations which cannot be addressed by frameworks that treat them merelyas aggregationsof atomistic individual actions. A hermeneuticview of developmentwould stress thatone must understand the discourse, or the underlyingcon® guration of interpretationsand meanings, before one can under- standsocial practices. Social practices which may on the surface appearto be similarmay be interpreted quite differently and may take on distinct meanings fordifferent groups of people. Thehermeneutic environment of social practices is profoundlyhistorical ratherthan universal in nature. Neoclassical theory assumes aworldcomposed ofdetached, rational agents who perceive their situations from a transcendent universalposition. Optimal actions are supposedlycalculated from disinterested observationsthat have no bearing on other (economic) agents. By contrast, hermeneuticagents are situatedwithin a historicallyconstituted social context. Ratherthan being detached and merely self-interested, they are embeddedwithin acomplexstructure of social relations that requires them to make calculations ortradeoffs based on the perceived impact of their actions on others. This is particularlytrue for many Third World societies in which traditional values and meaningsare so closelylinked to local social structures (eg kinship, ethnic, communityties). Within these settings, individuals and social groups are both productsand constitutive parts of the historically changing ensemble of econ- omic,political and sociocultural processes thatmake up particular societies. Theirpractices both shape and are shapedby thedistinct structures of valueand meaningthat constitute those societies.

Neglectof the environmentand issues ofsustainability Issues relatedto environmental deterioration and the of develop- menthave only recently begun to receive attention in development studies. 36 Overthe past decade, however, a growingnumber of authorshas linkedvarious typesof environmental problems to mainstream strategies of development, especiallythose which focus on maximising economic growth through large- scale agriculturaland industrial projects. Because thesuccess ofany long-term developmentproject ultimately depends on the sustainability of theenvironment, thereis increasingagreement that sustainability should be explicitlyincluded as oneof thecentral goals of development strategies. 37 Thisrequires broadening the focusof development beyond simple considerations of economic growth; in manycases, itmay also entail reconciling dif® cult tradeoffs between develop- mentobjectives (eg between maximising economic growth and managing resources appropriately).In addition, it means thatwe must recognise that no onemodel of development can offer a universalsolution for achieving environ- mentalsustainability in all places at all times. Even the most elegant and internallycoherent models that ignore variations in society± nature relations are doomedto failure because they neglect the different ways that social groups interactwith their environment over time and space. Because ofthis, they have littlechance of being appropriate to the diverse needs and desires ofthose that mustimplement them; they will therefore quickly be discarded by Third World countriesas foreignand unworkable. 307 JOHN BROHMAN

Theenvironment and issues ofsustainability have been largely ignored not onlyby mainstream development studies but also by neoclassical theory in general.When they are consideredat all,natural resources are basicallyregarded as inputsfor processes ofproduction and consumption. In the same wayas scarcitiesof other inputs (eg labour and capital) force choices, of naturalresources forcedecisions over the ends to whichthey will be put.Given thedifferent ends of various economic agents, natural resource use canbe portrayedas anoptimisation problem: `environmental quality [or deterioration] is theresult of the aggregated decisions of all individual economic agents, weighingthe bene® ts derivedfrom increasing production and consumption againstthe bene® ts enjoyedwhen the environmental quality is improved’. 38 Thebasic analytical framework of neoclassical theory was developedduring thelate 19th and early 20th centuries when the availability of natural resources was notgenerally regarded as anobstacle to economic growth. Perhaps this explainswhy the neoclassical approach contains so fewcategories and concepts suitablefor analysing environmental problems, especially those occurring on a largeand global scale. 39 Withinneoclassical theory, environmental problems becomesimple negative . As such,they represent effects onecon- omicagents that are externalto the central focus of the theory on the market itself. Followingthe classic workof Hotelling,neoclassical theorists have especially tendedto equatenatural resources withother economic assets worth`holding’ in thepresent. 40 Certainmaterial and energy-yielding natural resources are es- peciallyworth holding because of the threat of their future from continuingdepletion. Therefore, policy ought to be set bylocating an optimal rateof extraction or depletion for these economically valuable assets. Forany particularresource, this will depend on its relative scarcity (ie its `shadow’ ) overtime in comparison to other`natural’ or economicassets. Relativescarcity, inturn, depends on factors such as technologicaladvance, possibilities for substitution,, market imperfections, patterns of property rightsand the `renewability’ of the resource. 41 Moreover,the optimal rate of exploitationfor a resource,just as forany other economic asset, shouldbe most ef® cientlyderived from the unhindered operation of market forces. Such neoclassicalorthodoxy tends to produce an ahistorical, technical and quite optimisticview towards resource depletion and related environmental problems: `Thereseems tobelittlereason to worryabout the exhaustion of resources which themarket already treats as economicgoods’ . 42 Giventhe prevalence of this viewpoint within mainstream economic theory, developmentstudies has paidlittle attention until recently to concerns over environmentaldestruction and the sustainability of development.During the last decade,however, a growingnumber of development analysts, including many economists,has beguncalling for a criticalre-examination of the way in which naturalresources andthe environment have been treated in the theory and practiceof development. On the one hand, this has beenprompted by an increasedawareness ofthetheoretical critique to which the neoclassical develop- mentframework has recentlybeen subjected over issues ofsustainability. This critiquehas especiallybeen pioneered by groupsof environmentalists,conserva- 308 ECONOMISM AND CRITICAL SILENCES INDEVELOPMENT STUDIES tionists,and ecologists, as wellas bysome academicdisciplines (eg geography, resourcemanagement, biology and other natural sciences) thatare strugglingto ®nda placealongside economics in development studies. 43 Onthe other hand, callsfor an alternative framework have also been propelled by a growing realisationof the substantial and, in many cases, irreversibledamage that has beenin¯ icted on the environment as apracticalconsequence of neoclassically drivendevelopment projects. 44 As aresult,many multilateral and bilateral developmentorganisations have become critical of the negative impact that postwardevelopment projects have often made on the environment. 45 The ,for example, recently engaged in the following self-criticism: ¼numerouspublic investmentsÐ often supported by development agencies, in- cludingthe World BankÐ have caused damage by failing to take environmental considerationsinto account or to judge the magnitude of the impacts. Indonesia’ s transmigrationprogram, Sri Lanka’s Mahawelischeme, and Brazil’ s Polonoreste projectsare examples of large programs that caused unanticipated damage in earlier years.46

Principal problems with the neoclassical treatmentof the environment Inthe last few years, a multifacetedcritique has emergedin the development literatureover the way in which the neoclassical paradigm treats environmental questionsand issues. Thiscritique may be divided into the following eight problemareas. First,neoclassical theory assumes thatvalues are createdexclu- sivelyby themarket, based on theindividual preferences of economicagents. A problemarises overhow to aggregate these individual preferences into a collectivestatement on the of speci®c naturalresources andother environ- mentalfactors. Attempts at aggregation meet with problems of cardinalmeasur- ingof utility and of interpersonal comparisons of utility, especially among differentsocieties over time. 47 Inmany cases, thepreferences of economic agentsare eithernot known (particularly for future generations) or, at best, only partiallyknown (among various social groups in different societies). But, unless individualpreferences can be satisfactorilyaggregated, it becomesimpossible to weighthe value a societyputs on the production and consumption of goodsand services thatdamage the environment (eg through pollution or species extinc- tion) vis-aÁ -vis thevalue the society puts on environmental conservation. Second,a relatedproblem arises overhow the environmental costs and bene®ts ofdevelopment can be expressed as marketprices in order to ® tinto neoclassicalcalculations. In most instances, the social costs ofenvironmental damagecan be measured. However, problems often arise intrying to determine thevalue of bene®ts, particularly the bene® ts ofavoidedenvironmental damage. Thisproblem is illustratedby the following example: ¼thecosts of decreasing the pollution level of a riverthat contains heavy metals from theef¯ uent of a ®rm alongthat river, equal the puri® cation costs of the pollutedriver plus the costs of adapting the polluting production process. Problems arisewhen the bene® ts ofa cleanriver have to be estimated. Some bene® ts canbe expressedin marketprices, such as thelower costs of producingdrinking water and thehigher proceeds from ®shing.Many bene® ts, however, cannot be expressed in 309 JOHN BROHMAN

marketprices, simply because there are no marketsfor publicgoods like ecosystems andlandscapes. What is, for example,the price of a squaremile of wetlands? 48

Third,environmental concerns are normallyexcluded from standard income-ac- countingtechniques, such as themeasurement of growth by (GDP),basedon market transactions. Measurements of GDP typicallydo notaccount for depreciation in the form of costs formaintenance of either physicalcapital stock or stock. 49 Indeed,expenditures on inputs requiredto offset the effects ofenvironmental depreciation are normally recordedas extra(gross) income.If environmentaldestruction (eg pollution, soil erosion,depletion of non-renewableresources) wereto be fullyaccounted for by makingappropriate deductions from GDP ®gures,measurements of development performancemight be dramatically altered. 50 Thiswould be particularlytrue for manyrecent industrialisers (eg Brazil, South Korea, Mexico and Thailand) that are facingescalating environmental costs inthe form of physical damage and resourcedepletion, loss ofamenities and rising health problems. Extensive remedialspending to correct such problems (eg public spending on relocation, cleaningup polluted areas, convertingpolluting processes) willaffect future growthrates andwill represent a negativecounterbalance to past growth that omittedenvironmental depreciation. As theMalaysian Prime Minister recently admittedin Penang,`We have been misled by theway we havebeen measuring growth’.51 Thisrealisation has ledseveral development analysts to call for the incorporationof environmental accounting into the System of National Ac- counts.52 Fourth,neoclassical methods typically neglect issues ofintergenerational gainsand losses resultingfrom the impact of development on the environment. Inparticular, the choice of an appropriate discount rate raises importantques- tionsconcerning the rights of futuregenerations. 53 Theneoclassical methodology assesses thevalue of contributions to future income (whether positive or negative)by discounting them to the present at an agreed rate, which representsthe `social rate of discount’ . Althoughthey should be crucial to all long-termdevelopment decision making, rates ofdiscounting that would be appropriatefor different times and places have yet to be devised. In practice, manydevelopment agencies simply declare the discount rate to be 10%. However,at a discount(interest) rate of 10%, the present value of a dollar’s worthof costs incurred30 years hencewould be less thansix cents. 54 Using this typeof calculation, the question becomes, who will pay any attention to the long-termeffects ofpresent development practices? Risks ofirrecoverable damageto environmental systems (egfrom `irreversiblities’ , `thresholdeffects’ ) are notfactored into such calculations. Neither are theneeds and desires of futuregenerations, to whom considerable environmental costs are oftenbeing transferred.As theBrundtland Commission noted, the of this intergener- ationaltransfer of environmental costs are highlyquestionable:

[Theremay be] pro® ts on thebalance sheets of our generation, but our children will inheritthe losses. We borrowenvironmental capital from futuregenerations with no intentionor prospectof repaying¼We actas we dobecausewe canget away with 310 ECONOMISM AND CRITICAL SILENCES INDEVELOPMENT STUDIES

it;future generations do not vote; they have no political or ® nancialpower, they cannotchallenge our decisions. 55

Fifth,the way in which neoclassical theory treats environmental questions fails toconsider the impact of imbalancesof powerwithin and among societies. This means thatneoclassical methods neglect equity issues notonly among genera- tions,but also among current classes andsocial groups. Imbalances of power presentdominant economic and political groups with opportunities to put their individualand short-term interests ahead of thecollective and long-term interest ofasustainablesocial and physical environment. Neoclassical recommendations tointernalise external `diseconomies’ disregard imbalances of power.It has been pointedout that forces inmost societies with interests in such diseconomies are muchmore powerful than forces infavourof asoundenvironment. 56 Moreover, manypoor and otherwise disadvantaged people may be virtually defenceless to preventenvironmental damage resulting from pollution and other `diseconomies’ generatedby others. Broad and Cavanaugh, for example, offer the example of poorfamilies on Palawan Island in the Philippines who were powerless to stop thedestruction of their traditional ® shinggrounds by environmentally unsound loggingpractices pursued by large corporations with close ties to the national government. 57 Sixth,both neoclassically driven development initiatives and environmental agendasare commonlyimposed by the North on the South, a process thathas gainedmomentum in recent years withthe rise ofneoliberal development strategies.It has longbeen recognised by dependency theorists and others that theorigin of development initiatives in the North is keyto understanding their socialand environmental impacts on the South. Given that there is a`low incomeelasticity of demand for environmental protection in developing coun- triesand the opposite in developed countries’ , 58 manydevelopment analysts are becomingincreasingly concerned over tendencies by transnational corporations toshift environmentally destructive operations to the South in order to lower costs andescape regulations.Potentially severe con¯icts have also been noted betweenthe liberalised regimes advocated by neoclassicaltheorists and the protectionof global environmental standards. 59 Thelack of proper regulations overthe rapidly expanding global trade in highly toxic substances serves to underscoresuch concerns. Increasingly, not only major development initiatives butalso the environmental agenda for the South is beingdirected by theNorth. 60 Risingconcerns in the North over the global impact of environmental destruction inthe South (eg from the destruction of tropical rainforests) has prompted internationaldevelopment organisations (including multilateral institutions, bilat- eralaid agencies and nongovernmental organisations) to take the lead in setting theenvironmental agenda for many Third World countries. Consequently, many analystshave begun to question whether the issues andthe methods of this agendawill be appropriate for the South, particularly the interests of its poor. Seventh,the neoclassical framework’ s focuson linear relations and equilib- riumconcepts is inappropriatefor the analysis of many issues relatedto environmentalsustainability. New developments in areas suchas thermodynam- ics andcatastrophe theory in a varietyof disciplines have demonstrated that 311 JOHN BROHMAN ecologicalsystems are proneto sudden changes that cannot be predicted by linearmodels or equilibrium concepts. Whereas traditional positivistic frame- worksbased on linear relationships maintain that small changes produce small effects inecological processes, newways of thinking that allow for nonlinear andchaotic behaviour within ecosystems pointin the opposite direction. It is nowcommonly thought that the slightest perturbations in, for example, the climaticregime may throw a fragileecosystem into disequilibriumÐ with poten- tiallycatastrophic and largely unpredictable results. Many processes innature and,hence, human interventions in these processes appearto be hardly predict- ablefor at least three reasons: theexistence of synergeticeffects thatincrease the combinedimpact on the environment of separate practices (eg industrial emis- sions),the presence of critical thresholds in most ecosystems andthe fact that manypractices have a delayedeffect on the environment. 61 Thismeans that devastatingand largely unpredictable long-term consequences may sometimes beproduced by even small human-produced changes in an ecosystem, such as increases inatmosphericcarbon dioxide resulting from deforestation or industrial pollution.At aminimum,these new insights should alert development strategists tothe possibility that the ecosystems whichsustain development are sensitive andfragile. Given the devastating implications of suddenenvironmental change, thisrequires that we incorporate new ways of thinking and new practices into developmentstrategies that emphasise sustainability. Eighth,neoclassical theory’ s treatmentof the environment and natural re- sources as `externalities’does not contribute to strate- gies.Externalities are so termedbecause they are externalto the market trading process uponwhich neoclassical theory focuses. Moreover, externalities, as the termimplies, are normallyviewed as `peripheral,expendable, or of very low priority’relative to the exigencies of economic growth within neoclassical models.62 However,from a sustainabledevelopment perspective such externali- tiesare integraland fundamental to ecological processes uponwhich all developmentis based.Rather than being relegated to the margins of develop- mentstrategies, a concernfor externalities ought to be put at the centre of developmenttheories and practices. Externalities may arise froma varietyof sources towhichsolutions may be applied.For example, current property rights inmost countries provide little incentive to protect the environment. Institutional failuresand development projects narrowly conceived to maximise economic outputhave also frequently contributed to increasingexternalities. Proponents of sustainabledevelopment contend that, in the broadest sense, externalitiesrep- resentthe complex web of interrelationshipsbetween human and natural systems uponwhich overall systemic balance and well-being depends. Because ofthis, attentionto the production of externalities ought to assume greaterconceptual andpractical importance in development strategies, rather than being treated peripherallyas anafterthought or add-on.

Newissues andalternative directions forsustainable development Theescalating costs ofexternalitiesproduced by currentdevelopment practices, manyof which have yet to be explored, have provided the focus for a growing 312 ECONOMISM AND CRITICAL SILENCES INDEVELOPMENT STUDIES numberof studies employing a varietyof sustainable development perspec- tives.63 Someof these studies emphasise the high `opportunity costs’ associated withirreversible environmental damage that may foreclose future options for usingcertain areas. Otherstudies have highlighted the neglect by neoclassical theoryof the essential `utility-yielding ’roleof ecosystems andtheir environmen- talfunctions. And a thirdgroup of studieshas broadenedthe discussion to issues of`coevolutionary development,’ or interrelationships between social and eco- logicalsystems inwhich feedback mechanisms that previously maintained ecosystems havebeen progressively shifted to the social system. Many of these studiesof sustainable development challenge neoclassical theory to re-examine aseries ofenvironmental and distributive questions that have largely been neglected.It is arguedthat development is notwell measured by focusing on economicgrowth alone. Instead, attention should be given to issues suchas redistributivejustice and egalitarian ethics, human capital development, protec- tionof the environment and species survival,and the diverse interests and desires oftraditionally excluded groups such as minoritiesand indigenous peoples.64 Strategiesthat may generate high growth but also produce widespread alienationand distributional disparities in areas suchas income,health, edu- cationand employment ought to be avoided, particularly in already polarised ThirdWorld countries. Likewise, growth-orientated strategies that generate unacceptablelevels of environmentaldestruction should be abandonedin favour ofalternative approaches that address theneed for ecosystem maintenance and thepreservation of biodiversity. Inmany cases, thiswill require the imposition of speci® c standardsand regulationsby localcommunities, national governments, international bodies and otherauthorities to ensure that development practices are sustainablefrom a socialand ecological point of view. These standards should be derived from scienti®c knowledgeof the functioning of ecosystems, as wellas ethicalviews concerningthe current and inter-generational of resources (iethe quantityand quality of natural resources thatare availableto different classes andsocial groups within and among countries, both currently and for future generations).Both `command and control’ and economic instruments may be usedto ensure that development practices conform to ecological standards and socialgoals. The choice between types of instruments will depend on the conditionsprevailing in particularcountries and should be measuredby theusual criteria,such as effectivenessand ef® ciency.However, given the destructive legacyof past development practices in most Third World countries, as wellas themany theoretical shortcomings of the neoclassical model, it should be emphasisedthat sustainable development cannot be fostered by depending on market-drivendevelopment programmes or theoretical frameworks. The devel- opmentliterature is fullof examples of how the exposure of Third World peoplesto thefull rigors of theprice system has producedboth economic misery andenvironmental destruction. In most cases, itappears that goals of social equityand environmental sustainability would have been better served by creatingdemocratic institutions at various scales tofacilitate popular partici- pationin environmental decision making. This would force development to 313 JOHN BROHMAN conformto environmental standards and social goals that, at best, can only be partiallyattained by adhering to neoclassical market-led principles.

Conclusion Overthe past decade, neoliberalism has experienceda meteoricrise inpopular- ity,moving from the margins to the centre of mainstream development studies. Ithas onlybeen in the last several years, therefore, that analysts have been able tosubject the neoliberal framework to close scrutiny. Much of thecriticism that has subsequentlybeen levelled at neoliberalism has beendirected at the disap- pointingresults that neoliberal development strategies have produced in many ThirdWorld countries. However, given the close association of neoliberalism withorthodox neoclassical theory, there is alsoa theoreticalcritique which can beappliedto thisdevelopment approach. A centralcomponent of thiscritique is thetendency of neoclassical theory to slide into a narrowtype of economism whichdenies conceptual space forsociocultural and political relations. This is theprincipal cause ofthe yawning gap that has appearedbetween development theory,as itis postulatedby the neoliberal approach, and the realities of developmentin variousThird World countries. It isalsoclosely connected to the neoliberalframework’ s neglectof two increasingly important concerns of developmentstudies: the intersubjective realm of meanings and values in developmentand the area relatedto the environment and sustainable develop- ment. Thegap between theory and reality in neoclassical theory is largelyrooted in aseries ofunrealisticassumptions, especially those linked to the homoeconomi- cus postulate.The concept of homoeconomicus attemptsto reduce the com- plexityof real-world decision making to the universal trait of economically rationalchoice making. Such reductionism strips development processes of possibilitiesfor variation and change based on individual motivations and beliefs,as wellas thein¯ uence of historicallyconstituted societal structures and relations. Homoeconomicus becomesa creaturesolely of the marketplace, devoidof ahistory,culture, and social and political relations. Moreover, markets are assumed toreactsimilarly everywhereÐ as ifnon-marketmechanisms had no bearingon market outcomes. The sphere of market exchange is abstractedfrom therealm of production and relations of power. In the end, an ideological conceptionof the market is offeredas asubstitutefor particular, historically constitutedmarkets in differentcountries. Likewise, a highlyideological concep- tionof the state is offeredin place of a carefulanalysis of variations in state intervention,institutional structures and power relations. In reality, both states andtheir polities are highlydifferentiated among Third World countries. Sources ofthisdifferentiation originate both from the internal structures of thestate itself andfrom the broader realm of state±society relations. In order to address sources ofthis political differentiation, as wellas variationsin social, cultural and economicrelations in general, development studies need to avoid the type of ideologicalnarrow-mindedness and discipline-centrism to which neoliberalism has unfortunatelysuccumbed. Closelyrelated to neoliberalism’s problemswith economism is itsdependence 314 ECONOMISM AND CRITICAL SILENCES INDEVELOPMENT STUDIES onan essentially positivist mode of scienti® c enquiry.More broadly, positivist methodsrestrict research tothenarrow empirical world of observable events and phenomena.Other components of reality, such as socialrelations, values, meaningsand interpretations, are excludedfrom serious consideration. Individu- als andsocial groups are treatedlike atomistic objects or things that follow universallaws and are devoidof any social content or meaning. However, if developmentconcerns processes ofhumanaction and interaction rather than just goodsand resources, it isimportantto deepenour understanding of whatit is to behuman.This necessitates incorporating a hermeneuticcomponent into devel- opmentstudies that addresses howhuman actions and social relations are linked withintersubjective values and meanings. The hermeneutic environment of socialpractices is profoundlyhistorical in nature, rather than being universal as is assumed inneoclassicaltheory. Social practices, which in the closed empirical worldof neoliberalism may appear to be similar, may in the real world be interpretedquite differently and may take on distinct meanings across timeand space. Anotherserious theoretical shortcoming of the neoliberal development frame- workthat stems fromits neoclassical roots is itsinappropriate treatment of issues relatedto the environment and sustainability. Natural resources andecosystems haveeither been ignored completely or treated peripherally as mere externalities byneoclassical models and development projects. Thanks largely to the efforts ofenvironmentalistsand others interested in creating more sustainable forms of development,a multifacetedcritique has emergedof the neoclassical treatment ofthe environment. This critique may be divided into the following problem areas: theaggregation of individual preferences into collective values on the environment,the expression of environmental costs andbene® ts as market prices,techniques of environmental accounting and the measurement of de- preciation,issues ofintergenerational equity and the choice of an appropriate discountrate, imbalances of powerand equity issues withinand among societies, theimposition by theNorth on theSouth of bothneoclassically driven develop- mentinitiatives and environmental agendas, the use oflinear models and equilibriumconcepts to study ecological processes, andthe treatment of the environmentand natural resources as externalities.Given these basic theoretical problems,as wellas thepoor environmental record of neoclassically driven developmentprojects in many Third World countries, many analysts are calling forchanges in both development theories and practices. To provide more sustainableforms ofdevelopment, economic mechanisms must be comple- mentedby speci® c regulationsdesigned by the state and other authorities to ensurethat development practices conform to ecological standards and social goals.In order to be effective, this will also mean the creation of democratic institutionsat various scales tofacilitate popular participation in environmental decisionmaking.

Notes 1 There are, however,other traditions within economics that place more stress onthe contributions that non-economicfactors make towardseconomic growth and development. focused attention 315 JOHN BROHMAN

onthe psychological factors involvedin economic growth. Ragnar Nurske emphasised thesocial and politicalfactors uponwhich economic development is basedalongside capital formation. criticised tendenciestowards `economic reductionism’ in development theory and called onanalysts to pay attentionto sociocultural and institutional factors. 2 AOHirschman, `Therise anddecline of ’ ,in Essays inTrespassing: Economics to Politicsand Beyond ,Cambridge:Cambridge University Press, 1981,pp 1± 24. 3 SBowles &GGintis,`The revenge of homo economicus: contested exchange and the revival of ’, Journalof EconomicPerspectives ,7,1993,pp 83± 102; P Nicholaides,`Limits to the expansion ofneoclassical economics’ , CambridgeJournal of Economics ,12,1988, pp 313± 328; P Streeten,`Markets andstates: againstminimalism’ , WorldDevelopment ,21,1993, pp 1281± 1298. 4 HBruton,`The search fora developmenteconomics’ , WorldDevelopment ,13,1985, p 1105. 5 MFeldman,`What kind of economics for what kind of planning?’ , Journalof the American Planning Association ,53,1987, p 428. 6 PHirsch,S Michaels &RFriedman,`Dirty hands versus clean models:is sociologyin danger of being seducedby economics?’ , Theoryand Society ,16,1987, p 322. 7 TJBarnes, `Rationalityand relativism ineconomic geography: an interpretative review ofthe homo economicusassumption’ , Progressin Human Geography ,12,1988, p 477. 8 TBarnes &ESheppard,`Is there aplace forthe rational actor? Ageographicalcritique of the rational choiceparadigm’ , EconomicGeography ,68,1992, pp 1± 21; P Nicholaides,`Limits to the expansion of neoclassical economies’ ,pp313± 328. 9 Several analystshave noted that this has beena problemnot only in the Third World but also in Eastern Europe,where outsideneoliberal advisors have imposed policy measures thathave often been unworkable because ofa lack ofbasic knowledgeof existing conditions within the countries of the region. Winiecki, forexample, states: `Thearchitects ofª heterodoxºstabilization programs for post-STEs [Soviet-type economies]in East andCentral Europe clearly neglectedmost of the legacy of these countries’past economicsystem. Thisomission meant thatpolicies and particularly policy measures takenwithin the framework ofstabilization cum liberalizationwere sometimes expectedto deliver outcomes that a better knowledgeof the STE regime wouldregard as unattainable.’J Winiecki,`Knowledge of Soviet-type economyand heterdox stabilization-based outcomes in Eastern Europe’, Weltwirtschaftiches ,129,1993, p 405. 10 FStewart, `Review ofDeepak Lal:the of developmenteconomics’ , Journalof Development Studies , 21,1985, p 285. 11 KHavnevik(ed), The IMF andthe World Bank in Africa ,Uppsala:Scandinavian Institute of African Studies, 1987, p 425. 12 Family® rms commonlyintegrate production and consumption decisions, which may lead tooutcomesquite differentfrom those in which production and consumption decisions are made separately (as is assumed in neoclassical theory).Analysts of ThirdWorld rural development have particularly objected to depictionsof peasant behaviour(ie as conservative,economically irrational, afraid totake risks)that are basedon neoclassical assumptionsof pro® t maximisationwithin the sphere of production (M Lipton,`Limits of price policyfor agriculture: which way forthe World Bank?’ , DevelopmentPolicy Review ,5,1987,pp 197±215). Similarly,parastatals oftenmay notfollow the maximising criteria ofneoclassical theory,but may commonlybe directed by various types of bureaucratic/ satis® cingbehaviour designed to meet different goals. 13 SBitar,`Neo-conservatism versusneo- in Latin America’ , CEPAL Review,34,1988, pp 45± 62; FCardoso& EFaletto, Dependencyand Development in Latin America ,Berkeley,CA: University of CaliforniaPress, 1979;H Stein& EWNafziger, `Structuraladjustment, human needs, and the World Bank agenda’ , Journalof Modern African Studies ,29,1991, pp 173± 189. 14 GKHelleiner, TheNew Global Economy and the Developing Countries: Essays inInternational Economics andDevelopment ,Brook®eld, VT: Grower, 1990. 15 KMengisteab& BLogan,`Implications of liberalization policies for agricultural development in sub-Saha- ranAfrica’ , ComparativePolitical Studies ,22,1990, pp 437± 457. 16 Corbridgenotes, for example, thatthe global market infoodgrains is dominatedby just ® ve`merchants of grain’(S Corbridge,`Urban rural relations and the counterrevolution in development theory and policy’ , in RPotter& TUnwin(eds), TheGeography of Urban± Rural Interaction in Developing Countries , London: Routledge,1989, pp 253± 254). Domination of globalmarkets byFirst World importers particularly affects theprice ofprimary exported by the poorest and most dependent rural-based Third Worldcountries, many of which are concentratedin Africa. 17 DBooth,` and development sociology: interpreting the impasse’ , WorldDevelopment , 13, 1985, pp 761±787. 18 JDietz &DJames, `Trendsin development theory in LatinAmerica: fromPrebisch to thepresent’ , inDietz &James (eds), ProgressToward Development in Latin America: FromPrebisch to Technological Autonomy,Boulder,CO: Lynne Reinner Publishers, 1990, p 9. 316 ECONOMISM AND CRITICAL SILENCES INDEVELOPMENT STUDIES

19 PKlein,`American institutionalism:premature death,permanent resurrection’ , Journalof Economic Issues , 1978, p 266. 20 Drawingon evidence from a widerange of Third World markets, Whiteidenti® es fourdifferent types of powerthat shape the way markets operate:the politics of state involvementor therealm ofstate powerand regulation;the politics of market organisationor the realm ofassociational power and internal market regulation;the politics of ;and the politics of social embeddednessinvolving various forms ofsocial,cultural, and ideological power (G White,`Towards a politicalanalysis of markets’ , IDSBulletin , 24,1993, pp 2± 3). 21 Dietz &James, `Trendsin development in Latin America’ ,pp1± 11; Z Onis,`The logic of the developmentalstate’ , ComparativePolitics ,24,1991, pp 109± 126. 22 TBanuri& EAmadeo, `Worldswithin the Third World: labour market institutionsin Asia andLatin America’ ,inT Banuri(ed), EconomicLiberilization: No Panacea: The Experience ofLatin America and Asia,New York:Oxford University Press, 1991,p 173. 23 ZOnis,`The logic of the developmental state’ ,p125. 24 TJBiersteker, `Reducingthe role of the state inthe economy: a conceptualexploration of IMF and World Bankprescriptions’ , InternationalStudies Quarterly ,34,1990, pp 477± 492; Mengisteab & Logan, `Implicationsof liberalization policies’ , pp437± 457; P Streeten,`Markets and states’ ,pp1281± 1298; R Wade,`Managing trade: Taiwan andSouth Korea as challengesto economics and political science’ , ComparativePolitics ,25,1993, pp 147± 167. 25 Megisteab& Logan,`Implications of liberalization policies’ , p454. 26 GO’Donnell,`Re¯ ections on thepatterns of changein the bureaucratic± authoritarian state’ , LatinAmerican Research Review ,13,1978, pp 3± 38. 27 SBitar,`Neo-conservatism versusneo-structuralism in Latin America’ ,pp45± 62; S Chakravaty,`Develop- ment strategies forgrowth with equity: the South Asian experience’ , AsianDevelopment Review , 8, 1990, pp133± 159; S Rashid,`Economics and the study of its past’ , WorldDevelopment ,16.1988, pp 207± 218; PSteidlmeier, TheParadox of Poverty: AReappraisalof EconomicDevelopment Policy ,Cambridge,MA: Ballinger,1987. 28 Charles Schultze,former presidentof the American EconomicAssociation, quoted in R Kuttner,`The povertyof economics’ , AtlanticMonthly ,February1985, pp 74± 84. 29 BBalassa, `Thelessons of East Asian development:an overview’ , EconomicDevelopment and Cultural Change,36(3), 1988, p S274. 30 GGJoseph,V Reddy& MSearle-Chatterjee, `Eurocentrismin the social sciences’ , Race andClass , 31, 1990,pp 1± 26; A HSomjee, DevelopmentTheory: Critiques and Explorations ,Basingstoke:Macmillan, 1991. 31 A H Somjee, DevelopmentTheory , pp 43±44. 32 CWilber,`Methodological debate in economics: editor’ s introduction’, WorldDevelopment ,14,1986, pp 143±145. 33 Thisis truenot only for development specialists fromthe North, but also for many professionals from the Southwho are responsiblefor designing and implementing development policies in their respective countries.Many leading Third World development professionals have received thebulk of their graduate trainingwithin a handfulof economics departments and associated disciplinesin well knownFirst World universities.An important part of such training involves a `socialisationprocess’ inthe subject areas, theoreticaldiscourses and methods of analysis that are deemed appropriatefor the advanced study of development.Given this type of academic socialisation,other types of subjects, concepts and theories, and research methodsthat do not easily ®ttheestablished parameters ofthe accepted modelsmay seem peculiar andout of place. Thismay eveninclude forms ofindigenous knowledge from the home countries of Western-educateddevelopment professionals who have spent a prolongedperiod away fromtheir own Third Worldcountries. In effect, these developmentprofessionals have adopted the discourse and methods of the internationalcommunity of mainstream development`experts’ that serve theinterests ofglobalcapital and thecore capitalist countries. 34 JDreze &ASen, Hungerand Public Action ,Oxford:Clarendon Press, 1989;B Ingham,`The meaning of development:interactions between new andold ideas’ , WorldDevelopment ,21,1993, pp 1803± 1821; P Streeten,`Markets and states’ ,pp1281± 1298. 35 RDHamrin, `Ethicaleconomics: a new paradigmfor and stewardship’ , Futures, 21, 1989, p 609. 36 PDasgupta& MMaler, `Theenvironment and emerging development issues’ ,paperpresented to the Annual Conferenceon Development Economics, Washington, DC: World Bank, 1990; M Munasinghe,`Environ- mental issues andeconomic decisions in developing countries’ , WorldDevelopment ,21,1993 pp 1729± 1748. 37 Itshould also be noted, however, that there is probablyless agreement onthe concept of sustainable developmentitself. For some, sustainabilitypermits maximisingeconomic growth, albeit with strict environmentalconstraints. For others, sustainability means protectingand preserving ecosystems through minimisinguses ofthe natural environment beyond those that meet people’s basic material needs. 317 JOHN BROHMAN

38 FDietz &Jvander Stratten, `Rethinking : missing links between economictheory andenvironmental policy’ , Journalof Economic Issues ,26,1992, p 29. 39 Ibid, p 42. 40 HHotelling,`The economics of exhaustible resources’ , Journalof Political Economy ,39,1931, pp 137±175; E Barbier,`The contribution of environmental and resource economicsto an economics of sustainabledevelopment’ , Developmentand Change ,20,1989, p 430. 41 EBarbier,`The contribution of environmental and resource economics’ ,p431. 42 WNordhaus& JTobin,`Growth and natural resources’ ,inR Dorfman& NDorfman(eds), Economicsof theEnvironment ,New York:W WNorton,1977, p 402. 43 Fromthe Club of Rome’ s`limitsto growth’ approach (M Mesarovic& EPestel, Mankindat the Turning Point:The Second Report to the Club of Rome ,New York:Dutton and Co, 1974) to the ’s conceptof sustainabledevelopment (World Commission on Environment and Development, OurCommon Future ,New York:Oxford University Press, 1987),various theoretical frameworks have recentlybeen popularised as alternatives tothe treatment ofnatural resources andthe environment by neoclassical developmenttheory. In general, these alternativeframeworks emphasise theecologically boundedpossibilities of usingnatural resources as anormativestarting-point for the formulation of amore environmentallysensitive strategy of development. 44 WAscher &RHealy, NaturalResource Policymakingin Developing Countries: Environment, Economic Growthand Income Distribution ,Durham,NC: DukeUniversity Press, 1990;L Taylor,`The World Bank andthe environment: the World Development Report’ , WorldDevelopment ,21,1993, pp 869± 881. 45 There issome question,however, whether such recognition has ledto fundamental changes not only in the rhetoricof these internationalorganisations, but also in their actual practices. 46 World Bank, WorldDevelopment Report ,New York:Oxford University Press, 1992,pp 13± 14. 47 Deitz &vander Stratten, `Rethinking environmental economics’ ,p31±32. 48 Ibid, p 31. 49 GKHelleiner, `Conventionalfoolishness and overall ignorance: current approaches to global transformation anddevelopment’ , CanadianJournal of Development Studies ,10,1989, pp 107± 120; M Munasinghe, `Environmentalissues andeconomic decisions’ , pp1729± 1748. 50 Forexample, astudyby theWorld Resources Institutelowered the historical growth rate ofIndonesia from 7%to4% totake intoconsideration the underlying depletion of itsforests, soil fertility and oil reserves (R Repetto,W Magrath,M Wells,C Beer &FRossini, WastingAssets: NaturalResources inthe National IncomeAccounts ,Washington,DC: WorldResources Institute,1989). 51 InJ Winpenny,`Environmental values and their implications for development’ , DevelopmentPolicy Review , 9,1991, p 383. 52 Forexample, Munasinghedescribes recent exploratorystudies in Mexico and Papua New Guineaby the WorldBank and the United Nations Statistical Of® ce totry to develop a new Systemof NationalAccounts whichwill yield an Environmentally-Adjusted Net Domestic Product( EDP)andan Environmentally-Ad- justedNet Income ( EDI).MMunasinghe,`Environmental issues andeconomic decisions’ , p1733. 53 SAmin,`Can environmental problems be subjectto economic calculations?’ , MonthlyReview ,45(7), 1993, pp16± 32; G KHelleiner, `Conventionalfoolishness and overall ignorance’ ; BIngham,`The meaning of development’, pp1803± 1821. 54 GKHelleiner, `Conventionalfoolishness and overall ignorance’ , p118. 55 WorldCommission on Environment and Development, OurCommon Future , p 8. 56 Dietz &vander Stratten, `Rethinking environmental economics’ ,p37. 57 RBroad& JCavanaugh,`Marco’ s ghost’, TheAmicus Journal ,11,1989, pp 18± 29. 58 BIngham,`The meaning of development’ , p1816. 59 LTaylor,`The World Bank and the environment’ , pp869± 881. 60 PAdams, `TheWorld Bank and the IMF insub-Saharan Africa: underminingdevelopment and environmen- tal sustainability’, Journalof International Affairs ,46,1992, pp 125± 144. 61 SAmin,`Can environmental problems’ , pp16± 32; Dietz &vander Stratten, `Rethinking environmental economics’ ,pp27± 51; Winpenny, `Environmental values’ , pp381± 390. 62 GFrancis,`Great Lakes governanceand the ecosystem approach:where next?’, Alternatives ,3,1986,p 66. 63 See Barbier,`The contribution of environmental and resource economics’ ,pp429± 459. 64 SBatie, `Sustainabledevelopment: challenges to the profession’ , AmericanJournal ofAgricultural Economics ,71,1989, pp 1083± 1101.

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