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The political economy of development
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From ECLA, "Social Change in Latin America in the early 1970s", 1973,
           in ECLA, "Economic Survey of Latin America, 1973",
           United Nations, 1974.
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2. THE POLITICAL CONTEXT AND THE ROLE OF THE STATE

The gap between the prevailing real styles of development and the value-
oriented images of what development should provide have accentuated two
political contradictions that have long been present in the region:

(a) The contradiction between the imposing roles assigned to the State
    as defender of national sovereignty,
       definer of the national purpose,
       arbiter between interest-groups and
       dispenser of services,
    and the frequently
       deficient policy-making,
                      planning,
       administrative and financial
    capacities of the State;

(b) The contradiction between
       political forms
    emphasizing equal rights and democratic procedures, and
       the very uneven distribution of opportunities
       for political participation.

In most Latin American countries, reliance on the State to "solve
problems" of whatever nature is more widely diffused throughout the
population than in most other parts of the third world, and is much more
pronounced than it was at the earlier stages of development of the
countries which are now industrialized. (11)

The leading role of the State derives from historical traditions going
back to the colonial period, and is paradoxically associated with
chronic distrust or condemnation of the real State for its inability to
accomplish what is expected of the ideal State.

In practice, the State has generally represented an unstable compromise
or implicit pact between interest-groups or social classes able to exert
a claim to a share of power, circumscribed in varying ways by
relationships to the world centres.

With urbanization,
     the formation of national markets,
     societal differentiation,
     the introduction of modern mass communications media, and
     the expansion of education,
the size and diversity of the groups able to exert such a claim has
increased without however embracing the whole population.

In the course of trying to reconcile dynamic national development within
the bounds of the prevailing style with the more particularistic claims
of the groups on whose support it has depended, the State has managed,
to varying degrees in different countries,
to modernize some elements of its administrative apparatus,
to capture an increasing share of the national income,
to give employment to a large part of the urban labour force, and
to create or take under its control a wide range of productive and
infrastructural activities.

The quantitative growth and uneven modernization of State activities
have probably proceeded more rapidly than the societal processes of
growth and change with which they are associated.

At the same time, the State has found itself inextricably enmeshed in
the incompatibility of the demands made on it (with each other as well
as with its over-all resources for satisfying them); in the
unavoidability of continual bargaining for support, evasion of issues
endangering the political compromise, and adjustments to the changing
conditions of trade, aid, and investment; in the complications of
legislation expected simultaneously to safeguard the interests of the
different groups and to commit the State to assume new responsibilities;
and in many other difficulties.

The persistent hope of rationalizing these struggles and applying clear
priorities for allocation of resources has to a great extent been
disappointed, although planning initiatives have helped to clarify the
issues.

Under these conditions, the political compromises between groups and the
systems of parties and electoral-legislative procedures through which
the groups have tested their relative strength and conducted bargaining
have periodically run into impasses which have brought about their
replacement by systems of a different kind, frequently with the direct
participation or support of the armed forces.

Such changes have in the past been largely cyclical, with the later
systems in some cases giving way to political alternatives and
compromises, whether because of the difficulty of resolving the
complexities of the societies and economies or because of the
accomplishment of specific objectives.

At present, strains between the prevailing style of development and the
changing social structures (to be discussed below) and the aspiration to
original value-oriented styles (placing still heavier responsibilities
on the State and generating formidable resistances) simultaneously
encourage the assertion of claims by the State (or rather the
institutions or groups controlling it) to an autonomous role, adducing
the interest of the nation as a whole and assuming the right and duty
to determine a strategy of development and to exclude interests
incompatible with that strategy.

Questions of channels and objectives of participation by the masses of
the population are perplexing but inescapable for regimes that have
assumed such an autonomous role as well as for regimes based on
bargaining and compromise.

A style of development featuring economic growth with structural
heterogeneity combined with open political processes does not achieve
general mobilization of the masses in its support, since it cannot
incorporate most of them in satisfactorily productive activities nor
offer them major improvements in their levels of living, but it does
permit -at least for the urban masses, though rarely for the rural- a
limited participation in the political struggle for resources focused on
the State, through the vote and other means. The resulting concessions,
small though they may be, place a strain on the existing distribution of
power and the patterns of production, distribution, and consumption,
commonly with inflationary consequences.

The regimes claiming an autonomous role for the State can exclude this
kind of participation, but since they justify themselves in terms of the
need for greater national dynamism and unity, their aim is that the
masses shall not vegetate in apathetic poverty until economic growth
permits their incorporation.(12) Moreover, all kinds of regimes
recognize their inability to manage through central controls and finance
from public revenues the cumulative responsibilities that the State has
assumed. All of them aspire to decentralize and de-bureaucratize.

Thus, the regimes that take a dim view of "politics" also seek
"positive" participation featuring organized local initiatives to solve
local problems and raise productivity and levels of living. Interest in
the techniques of community development, co-operativism and workers'
self-management continually reappears in spite of the many disappointing
experiences recorded over the past two decades in connexion with most
programmes claiming to apply these principles.

It can be concluded that such initiatives are directed to problems so
persistent and so insoluble by other means that most regimes will
continue to experiment with them whatever their over-all strategy. The
experiences of the resulting programmes in their confrontations with
national realities have been discussed many times, and only a few points
need to be made here.

First, in recent years principles and techniques for awakening the
       consciousness of the disadvantaged strata of the population as
       regards the nature of their problems within the social order and
       stimulating them to think and act autonomously have gained
       currency within the more open national societies, in contrast
       with the previous "community development" supposition concerning
       the feasibility of incorporating the disadvantaged strata into
       the social order through aided self-help and appeals to community
       consensus. (13) These consciousness-arousing principles gained
       appreciable influence among teachers, social workers, and members
       of religious bodies. However, the combined dependence of this
       approach on prolonged educational dialogues guided by persons
       imbued with these principles and on the tolerance of the power
       structures they call into question have, in most national
       settings, rendered attempts to apply them narrow in scope an
       quite vulnerable to defeat. The organized initiatives and the
       persons engaged in them have fared badly in the trend towards
       the assumption of more autonomous roles by the State.

Second, the nature of the "modern" State as it has emerged in Latin
        America -a complex of administrative and legal systems geared
        to standardized procedures, controls, and channels for provision
        of services- means that attempts to decentralize and leave local
        problems to local initiative run counter to its inherent spirit.
        The State cannot avoid seeking to enhance its own power and
        formulating development problems in terms that are compatible
        with generic, routinized solutions. The objectives of economic
        efficiency, administrative consistency and social equity all
        seem to demand this. Such a predisposition encounters, on the
        part of the groups that are capable of organized action, an
        equally strong predisposition to focus such action on the
        obtaining of differential services, subsidies, and protection
        from the State, combined with a predisposition to use any gains
        to respond to "modern" consumption appeals rather than
        investment. It has often been pointed out that local power
        structures are even less likely than the central authorities to
        rest on consensus or to welcome the participation of the
        disadvantaged strata. The attempt to promote decentralization
        and local initiative are thus very likely to terminate in new
        forms of bureaucratized relationships between the centre and the
        local group.

Systematic rejection of the prevailing style of economic growth with
structural heterogeneity has been most pronounced in intellectual and
academic circles and in part of the educated youth. Groups of
intellectuals and academic researchers, particularly sociologists, have
been prone to assess the prevailing style as neither acceptable nor
viable. An extensive literature has accumulated, mainly within the past
decade, analysing the interrelations of external dependency and internal
power structures in generating the prevailing style, and examining the
potentialities of different social classes, interest-groups, and
institutions as destroyers of this style and architects of a different
future. The theoretical and value-based premises for rejection of the
prevailing style have, of course been extremely varied, and the
proposals for action have included predominantly technocratic and
nationalistic approaches as well as revolutionary ones. For the present
purposes, some attitudes of important social groups in Latin America are
identified below:

First, the dependence of some social scientists and educated youth on
       employment in the State administration has resulted in a certain
       ambivalence in their rejection of the prevailing style and a
       certain predisposition to seek means of changing it through their
       own powers of persuasion with groups controlling the State and
       their influence in the formulation of policy. The failure of the
       social classes left behind by the prevailing style to challenge
       it so vigorously as to constitute a serious threat, and the
       apparent capacity of the style in the larger countries to
       maintain itself and support continuing economic growth, has
       presumably strengthened the inclination to work for gradual
       changes from within the system.(14)

Secondly, the strongly critical tone predominating in some academic
          research and teaching circles in regard to the prevailing
          style and its supporters, combined with student militancy,
          has placed many social research institutions in a precarious
          or even worse position.

Thirdly, the critics -particularly among the youth- who have continued
         to find the prevailing style radically unacceptable have
         hardened their intransigence and have demonstrated a
         disposition to resort to any tactics, including violence,
         likely to cripple the ability of the style to function, even
         in circumstances in which they have no apparent likelihood of
         being able to replace it by an alternative order.

_________________________
Footnotes:

(11) One observer, emphasizing the differences between the evolution of
     the "patrimonialist State" in Latin America and the legitimation in
     Europe of the State as a necessary evil to regulate relationships
     between individuals has summed up: "En America Latina se le exigen
     al individuo credenciales para existir, no al Estado" ("In Latin
     America the individual must show his credentials to warrant his
     existence, but not the State"). (Fernando Henrique Cardoso, "La
     ciudad y la politica", in Martha Schteingart, Comp., "Urbanizacion
     y dependencia en America Latina", Buenos Aires, Ediciones SIAP,
     1973)

(12) See Fernando Henrique Cardoso, "La ciudad y la politica", op. cit.

(13) For a presentation of these principles by their main originator,
     see Paulo Freire, "The Pedagogy of the Oppressed" (New York, Herder
     and Herder, 1972)

(14) See Alfredo Eric Calcagno, Pedro Sainz and Juan de Barbieri,
     "Estilos politicos latinoamericanos" (Santiago, Chile-Buenos Aires,
     Ediciones FLACSO, 1972)
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