Development Aid: A Very Brief Introduction

How did Western development aid develop during the 1960s and -70s?

In the 1960s Western development aid was simple, seemingly. Concepts and strategies were shared by OECD member countries. The main doctrine was investment and transfer of knowhow. Real capital was supplied, and local managers were trained. It happened in the form of development projects.

A project was an exemplary activity. Ideally, for every foreign expert there was a local counterpart who would disseminate skills and knowledge to others. Later, local savings were supposed to pay for investment in more machinery and equipment. The expected result was sustained economic growth and the abolishment of poverty. 

During Western industrialization increased levels of investment did in fact go hand in hand with technology transfer. By the middle of the 20th century the American economist Walt Rostow raised the idea that all economic modernization followed the same path. An increased rate of investment was decisive. Another economist, Alexander Gerschenkron, claimed that backward countries could move quickly ahead. When they applied known robust solutions, they could skip trial and error.

That didn’t work in the development projects of the 1960’s. The gap in capital and skill resources between many former colonies and the developed world was wider than between England and continental Europe in the 19th century.

Technology transfer back then took place between profit-driven market economies propped up by the state. Post-colonial development assistance was different. The new independent states were short of many resources, including efficient and committed leaders and civil servants.

Big sums of money were spent on investment, but there was a lack of complementary structures, and the sense of commitment and ownership to projects wasn’t strong enough.

Donors carried a responsibility as well. For managers and staff, it was hard to admit in front of politicians and taxpayers that projects didn’t go the way they were supposed to.

Nevertheless, by 1970 it was clear that problems were serious. Also, renewed anticolonial feelings and the demand for a new international economic order generated pressure on the aid system. The request for pattern-breaking change was translated into the notion that investment should be directly aligned with people’s basic needs.

More attention was now given to infrastructure and utilities: clean water, better roads, physical planning, basic health service. These were not new items, but priorities were shifted. Aid from wealthy nations could help fill out a serious gap, start virtuous circles and empower ordinary people.

With more direct access to useful resources, people’s lives would be better. They could more easily engage in market-related economic activities such as creating businesses or supplying labour. It was hoped that the problem of missing ownership to projects could be reduced.

This was sound thinking. Yet many difficulties persisted. A clear effect of aid on overall development failed to appear. The result was so-called donor fatigue.

The heavy debt incurred by developing countries while growth rates remained low undermined faith in the capacity and political will to govern responsibly. The scene was now set for a new donor strategy: the promotion of good governance.

Third World leaders did not admit systemic dysfunction or own policy failure. They were more inclined to demand compensation for the global economic downturn, high energy prices and massive inflation in those days. It was a deadlock. Indeed, the 1980s later became known as the lost decade for development.

What were the main reasons for Denmark to engage in this field?

Denmark had multiple motives for taking part in the development effort. In the 1950’s there was a desire to ‘put Denmark on the map’. The process of decolonization was underway, and Denmark saw an opening. As a small nation, Danish influence was nil. But now, by multilateral diplomacy and contributions to aid, Denmark might be noticed.

It was first imagined that the best channel was the United Nations. Here, Denmark could earn prestige and project a nation-brand. At the end of the 1950’s, the idea matured of including a bilateral dimension. This meant to carry on in the UN, yet also establish a program of direct assistance to specific countries. This required expansion of annual funds and a more elaborate administrative apparatus. After little hesitation, it was put into practice. A decade later, the Danish government began to aim for a place at the top of the donor hierarchy in terms of aid funding as a percentage of gross national income.

Real humanitarian concern was in fact present among politicians and opinion makers. They felt there was a need and an obligation to eradicate poverty and create a more equitable world. This consideration co-existed with a feeling that if no action were taken, global instability might arise. However, less idealistic motives were present as well.

Development programs and projects were a showcase for products, services, and ideas that Denmark hoped to export on commercial terms. For the moment, it would either be given away or financed on favourable terms. But to a large extent aid was tied to goods and services provided by Danish firms and organizations.

There was, in other words, an important return flow. There was no guarantee of future profits. Still, development assistance represented a potential. And even if net earnings never materialized, one part of the sunk cost stimulated the Danish private sector economy. Development aid enjoyed support from business circles.

Popular movements and NGOs were in favour too. The Government had set up institutions where they would be heard. For that reason, it was easy to mobilize expertise for giving inputs and participating in the practical execution. This led to professionalization. NGOs became dependent on the system for financing projects. Young activists found an appealing way to move into a career. The state found a new way to bring talented people into the fold.

Those serving as agents abroad in development programs would bring back knowledge about the greater world. As they moved into other spheres of activity, they arrived there endowed with useful knowledge. The process of globalisation was getting under way, so the timing was good.

In conclusion, the Danish engagement in the international push for development served several purposes: traditional foreign policy, nation-branding, export promotion, formation of human capital, and the adaptation of Denmark to a globalising world. There was also the good feeling of doing the right thing by helping others. Whether the assistance brought about development in a real sense became a relatively minor issue.

250 Years with Hegel: Philosophy of History and History of the World

[This is a summary of my Danish language article “Historiefilosofi og verdenshistorie: G.W.F. Hegel 1770-2020”, Historisk Tidsskrift 2021:1, pp. 151-200, available at https://tidsskrift.dk/historisktidsskrift/article/view/127110]

Jürgen Habermas recently declared that with G.W.F. Hegel (1770-1831) Western thought crossed the threshold to full modernity. Hegel solved the riddle of how to reconcile permanent ethical values with the immense variability and changing manifestations of human behaviour, culture, politics, and institutions. He introduced the concept of a self-evolving World Spirit based on the fundamental urge to achieve individual freedom within a just and well-ordered commonwealth of men and women. ‘World Spirit’ is a metaphor for the collective preservation and application of ideas to that effect and – particularly ­­– the ongoing conscious reflection on the process, i.e., philosophy. History – material and spiritual, of people and of elite – is the substance and result of the action. It is a totality and must be conceived of as such. Past and present events merge into one coherent and sufficient picture. Consequently, on the premises given by Hegel’s style of thought, mature insight is the tool of freedom and augurs the end of history as we know it.

The present article serves as a general introduction to Hegel’s philosophy of history, beginning with its reception. The approach is limited to the historical and political context, ignoring ontological and epistemological aspects. Philosophically, Marxism was a subset of Hegelianism, yet Marx’ own claim of a materialist turn, rejecting Hegel’s idealism while preserving his method, soon became a source of doubt and controversy. Marxian notions of purely techno-economic determination and denial of gradual societal evolution – as opposed to dialectics – were called into question. True innovation was first provided by Antonio Gramsci who strove to reintroduce national culture and institutions of civil society into political analysis. Among other Italian philosophers Benedetto Croce represented a politically liberal version of Hegelianism. In the Soviet Union, Stalinism distorted and abused the pre-World War I tradition but did not cause its complete disruption.

In mid-20th century Germany, the Frankfurt School to a large degree based its ‘critical theory’ on Hegelian patterns of thought, although abandoning any hope that the end of history, conditioned by clear insight and social emancipation, was due any time soon. In France, the most influential Hegelian, Alexandre Kojève, provided a platform for agents of mainstream politics and social engineering to incorporate society’s fundamental contradictions into a progressive reform process, including the welfare state and European integration, all under the guidance of an academically trained elite. Together with the Frankfurt School this marked a change of direction for Hegel-inspired political philosophy. Critical, yet constructive self-insight in established centres of governance substituted revolutionary Marxism.

Recent decades have witnessed an upturn for the politico-ethical dimensions of Hegelian philosophy, focusing, among other things, on the potential of dialectical historical thinking to further atonement and reconciliation, following the unjust suffering caused by war, exploitation, discrimination etc. that leave communities and nations divided and individuals wounded and mortified after the event.

The following section of the article is a short paraphrase of Hegel’s Lectures on the Philosophy of History. The intention is to provide a clearer image of the substance of history according to Hegel than is usually given by the ultra-short introductions of textbooks dealing with historiography in general. One important element is the role of Christianity. First, the new faith helped disrupt the authoritarian and soulless Roman Empire. It then provided the foundations of modern Europe by combining an appealing liberating, even egalitarian ethos with a firm institutional base, including the congregation and ecclesiastical organization. Yet according to Hegel the liberating Christian endeavour was soon held back by feudal institutions which were counterproductive in and by themselves and stimulated greed and corruption within the ranks of the church. However, Reformation and stable monarchies of nation-states cleared the road for further progress. Even so, its proper achievement required a new political mindset authorizing the rule of law, an independent civil society, and free exchange of opinions, including the right to criticize authorities that ultimately relied on the will of a sovereign. But then again, this new mindset, that emerged as truly influential during the French revolution, turned out to be capable of producing terror and chaos as well, after which authority necessarily came in new demand. Hegel’s ideal was a well-ordered society with a high level of individual freedom, all based on Christian values and a strong but tolerant and liberal state. He saw the Prussian state of his time to represent best practice but remained aware of the inherent conflicts or dialectical tensions of the system. Paradoxical as it may sound, Hegel did not fail in his admiration of French republican ideals. 

Finally, the influence of the Hegelian model on historiography today is discussed by way of a few salient examples from the field of general economic history, political economy, and global history. Expressing classical modern values and faith in the idea of progress through systemic change, the model retains a solid yet contested position, opposed for instance by global historians who shun euro-centric versions of history. In this field of enquiry there is nevertheless an ongoing dialogue. However, one is also able to spot interventions where the whole set of issues raised by Hegel’s philosophy of history, indeed the entire train of classical Western thought on history and politics, is being ignored and forgotten in favour of dualistic denunciations of standpoints that are deemed offensive, measured against values defined within a framework of identity politics. This is illustrated by a recent debate in the journal Security Dialogue regarding possible racist tendencies within political science.

Solidarity Forever? Swedish Wage Levels as an Index of Working Class Marginalisation in Post-Golden Age Scandinavia

This paper was presented at the conference on Wages and Global Development since the 1950s/1960s, University of Artois (Arras, France), 9-10 April 2015, organized by Professor Michel-Pierre Chélini. The intended volume containing the contributions will probably be published at the end of 2021.

Abstract:

In Sweden, over the 1960s, -70s and part of the -80s, pay equalization took place across industries, forms of employment and the gender gap. Subsequently, both the gender- and the industry-based differential among wage earners remained within the limited range now arrived at. Contrary to these fixations, wages began to diverge downwards relative to salaries after c. 1990. All the while, the quantitative balance between blue-collar workers and salaried employees shifted too, in favour of the latter group. This process was gradual and went in the same direction throughout the entire period. Enhanced human capital is a valid partial explanation for both changes, yet the increasingly globalized economic regime plays some role in the relative decline of wages. Blue-collar workers are more liable to lose their jobs because of outsourcing, relocation or new trade patterns. They have fewer attractive alternatives in the predominantly white-collar and gender biased (towards women) labour market of the public sector. For the collective of unionized workers, traditional solidarity is still the best available response to these challenges. For the individual, though, opting out of the blue-collar group is probably the better alternative. Even the better-situated portions of the working class seem caught in a process of socio-economic marginalisation.  

Fra corona-årets undervisning: Finanskrisen

I marts måned 2020 blev den normale undervisning ved Københavns Universitet suspendenderet for at hæmme spredningen af covid-19. I stedet trådte forskellige former for fjernundervisning via internettet. Fra blogindlægget du læser nu, linkes til tre sæt ‘forelæsningsnoter’ som jeg lagde op på Absalon-hjemmesiden for kurset Økonomiske kriser og krisepolitik i Nordamerika og Vesteuropa i det 20. og 21. århundrede (KA).  Noterne er en erstatning for den del af de normale undervisningstimer hvor læreren giver sin udlægning af det læste stof. Det drejer sig her om uddrag af bøger samt artikler om Finanskrisen. Se Finanskrisen (1), Finanskrisen (2) og Finanskrisen (3).

Se også Fra corona-årets undervisning: Globalhistorie.

Fra corona-årets undervisning: Globalhistorie

I marts måned 2020 blev den normale undervisning ved Københavns Universitet suspendenderet for at hæmme spredningen af covid-19. I stedet trådte forskellige former for fjernundervisning via internettet. Fra blogindlægget du læser nu, linkes til to sæt ‘forelæsningsnoter’ med øvelsesspørgsmål som jeg lagde op på Absalon-hjemmesiden for kurset Globalhistorie (3. semester). Noterne er en erstatning for den del af de normale undervisningstimer hvor læreren giver sin udlægning af det læste stof. Det drejer sig her om i alt tre bøger med globalhistorisk fokus. Se Landes og McNeill samt Pomeranz: Great Divergence.

Se også Fra corona-årets undervisning: Finanskrisen.