Benutzer:Nils Simon/Studien/2007-Development

This paper is part of my "Political Economy of Development" class which I was taking during my 2006-2007 MA International Relations course in Brighton, UK.

Mainstream Development Theories And the Fallacies of Economic Growth

Introduction

What is development? This question has followed political scientists for at least 60 years since development theory was born. Very different answers have been given to it, yet some do only differ on first sight. One common answer that can be found in all three mainstream development theories of modernization theory, dependency theory, and neoliberal economic theory is “economic growth”. Growth is supposed to enlarge the economic basis of a country, to foster technological progress, and to reduce poverty, to name just a few of its alleged positive effects.

However, these theories' understanding of growth is not free of problems. Relying on growth alone, or on growth as the dominant goal of economic policy, has serious downsides. On the one hand, these include effects on wealth distribution, on poverty, on education, on health, and on other sectors that have to be seen as crucial for human well-being. I call these problems 'internal' ones, because they occur in a belief system which otherwise is uncritical of growth as such. On the other hand, there are the notions of ecological limits towards growth. These encompass the problems that environmental degradation poses to the long-term prospects of societies, while the productive capacity of the biosphere decreases and nonrenewable resources become depleted. They are 'external' problems because they are not merely concerned with the distribution of growing wealth, but offer a perspective in which growth itself appears to be endangered.

In this essay, I will first introduce the above mentioned three mainstream development theories, summarizing their key claims and presenting their implicit or explicit favouring of continuing economic growth. One point has to be noted at this place: One might well criticize about my approach that it does not distinguish clear enough between 'industrialisation' and 'economic growth'. However, it is exactly my point that development theories do not differentiate enough between these maybe distinct spheres, but tend to use them interchangeable.

Second, I will discuss the fallacies of classical economic growth thinking with an emphasis on internal problems of wealth distribution as well as on external problems deriving from ecological limits. I will conclude that mainstream development theories lack a critical assessment of growth and therefore need readjustment.

Development theories and their favouring of economic growth

The scientific and political debate about development experienced some profound shifts throughout the last 60 years. The term 'development theory' did not emerge before the 1950s. Academic research and policy formulation before its appearance was usually and predominantly concerned with the transformation of colonial territories towards more productive and decolonized economies (Leys 1996: 5). Fuelled by the encouraging experience of the Marshall Plan in Western Europe, a “positivist orthodoxy” dominated early development thinking (ibid.: pp. 8). It consisted of the formulation of far-ranging development plans by state bureaucracies and expected developing countries to quickly build up their own industries. However, due to nevertheless persisting underdevelopment these early hopes soon had to be abandoned, leading to the formulation of a theoretical canon which was designed specifically to explain and overcome underdevelopment in the developing world.

Modernization theory

US political scientists and sociologists came up with modernization theory as a response to the apparent shortcomings of positivist orthodoxy (Leys 1996: 9; see also Harrison 1991: pp. 1, and Tipps 1973: pp. 200). Why did development not take place as quickly as it had been predicted? The answer, according to modernization theory, had to be found in the premodern social structures within developing countries. These prohibited the adoption of efficient and rational modes of production that were common in the industrialised world. The fault therefore lied within the developing countries, whose population refused to be reorganized in a modernization-enabling manner. Development could only be achieved if profound changes in these outdated conditions would take place. Hence, modernization was conceived as referring “to those social changes that generate institutions and organizations like those found in advanced industrial societies.” (Feldman/Hurn 1966: 378)

One of modernization theory's key thinkers, Walt W. Rostow, explicitly states the connection between modernization and economic growth, or in fact their unity. Rostow introduces a set of five stages of growth under which all existing societies could be subsumed. These range from the “traditional society” along the “preconditions for take-off”, the “take-off”, and the “drive to maturity” towards the final stage of “high mass-consumption” (1991: pp. 4). The former two stages are conceptualised as preparative for economic growth, while the latter three are all defined as experiencing permanent growth that has its source in ongoing technological and scientific advancement. “The take-off is the interval when the old blocks and resistances to steady growth are finally overcome”, Rostow writes about the third of his five stages, when growth becomes a society's “normal condition.” (Ibid.: 7) In the condition of his fourth stage of maturity “an economy demonstrates that it has the technological and entrepreneurial skills to produce not everything, but anything that it chooses to produce.” (Ibid.: 10) Finally, in the age of mass-consumption a “shift towards durable consumers' goods and services” (ibid.) is supposed to take place, with more and more resources also allocated towards military power and social welfare.

Modernization theory became the standard academic model for analysing development of the rapidly decolonising Third World in the late 1950s and especially throughout the 1960s, even if its influence on actual development policy is seen as “minor” by Colin Leys (1996: 10). It expected developing states to 'catch up' with the industrialised world by following the latter's example to achieve an equal standard of living, including extensive world trade and wide-scale industrialisation. After about one decade, however, it had become clear that development was not going to happen as smoothly as modernization theorists had expected, and the assessments of dependency theorists offered an answer why.

Dependency theory

Dependency theory has its roots in approaches developed by Latin American Marxists in the early 1960s. In the beginning it was predominantly, if not exclusively, being discussed within Latin American scholarly circles around key thinkers like Theotonio dos Santos, until André Gunder Frank made it available to a wide audience of Western scholars (Leys 1996: pp. 11). Hotly debated throughout the late 1960s and 1970s, dependency theory proposed important refinements to Marxist thinking regarding the problem of underdevelopment.

Dependency thinkers strongly opposed modernization theorists and claimed that the pattern of international trade did not foster development, but to the opposite was preventing it. In this view, a 'core' region had formed within the global economic system which exploited the 'periphery' and thereby kept it down and undeveloped (see dos Santos 1970, Valenzuela/Valenzuela 1978, Galeano 1997). Core countries were using their economic might to force the periphery to produce and export raw materials and other low-cost commodities, while the core would enhance on these cheap imports and produce further manufactured and high-tech products which promised high profits. Development in some countries could only be achieved at the cost of underdevelopment in others (Frank 1966). While being discussed in developed countries as well, dependency theory never became the standard paradigm within academic circles of the Western world as it did in the developing world for a short time (see, for example, dos Santos 1970 and Valenzuela/Valenzuela 1978), accompanied by some mostly European scholars.

Overall, dependency theory did not really have a good answer to the question of how development could be achieved by a country in the periphery, except for “[assuming] the availability of some unspecified alternative development path” (Leys 1996: 13). Given the dependent structure of international trade relationships, development was at best seen possible through a strategy of import-substitution (IS), combining state-led industrialisation with external tariff barriers. For example, bodies like the United Nations Economic Commission for Latin America and the Caribbean (ECLA), established in 1948, “called for a concerted effort to diversify the export base of Latin American countries and accelerate industrialization efforts through import substitution.” (Valenzuela/Valenzuela 1978: 543)

Through IS, vital domestic sectors should be enabled to flourish by protecting them from competitive pressure and the economic power of the core countries, an approach adopted especially by Latin American governments. In fact, IS policies were in place throughout the 1950s and sometimes date back even further, until in the early 1970s they were more and more replaced by export-oriented policies, fostered by the right-wing military juntas that overtook the majority of countries in Latin America.1 IS was especially conceived as a strategy for economic growth (Haggard 1990: Ch. 2) and quite successful in generating it (Bergsman 1970), even if some scholars think its success was at least partly “illusory” due to the establishment of internationally uncompetitive enterprises (Morley/Smith 1971: 134-135).

Overall, dependency theorists sometimes get closest to a critical assessment of unspecified growth among the three mainstream development theories included in my essay. This derives from their differentiated assessment of industrialisation, since under the condition of dependence “the industrial and technological structure responds more closely to the interests of the multinational corporations than to internal development needs” (Dos Santos 1970: 234). This does not yet answer concerns regarding a just wealth distribution among the domestic population, but at least it distinguished between some sort of 'good' and 'bad' growth. As a matter of fact, this differentiation did not survive long, and the last Latin American states pursuing IS policies abandoned them in the 1970s. The following years and especially the 1980s saw a drastic shift towards export-oriented strategies based on neoliberal economic theory, which usually hailed growth without any concerns whatsoever.

Neoliberal economic theory

In the 1980s and 1990s, the debate took a decisive turn away from state-interventionist ideas. The neoliberal 'Washington Consensus' became the dominant world view regarding economic issues, and development was seen mostly as a problem of economic performance and not of relations of power. As McMichael (2000: 149-187) puts it, the “development project” of the past decades was replaced by the market-oriented “globalization project”. Abolished tariff barriers should foster international trade, and unrestricted markets should lead to development through growth. The theoretical foundation for the belief in international trade is seen in Ricardo's theory of comparative advantage, first published in 1817. According to Ricardo, all countries can maximise their gain from trade (and thereby maximising worldwide production) if they specialise in the production of goods they can produce comparatively cheapest and then trade these goods with other countries (Ricardo 1996: Ch. 7).

The alternative strategy of import substitution was strictly refused by free traders, since “trade liberalisation is [...] associated with more rapid growth than the final phases of IS which precede it. It was and is in response to this phenomenon that trade liberalisation offers the only way to escape from the ever-slowing growth rates of developing countries.” (Krueger 1998: 1514) According to Jagdish Bhagwati, free trade enhances growth, and growth is beneficial for all people because it reduces poverty (Bhagwati 2004: 53). Underdevelopment supposedly occurs when states are not pushing hard enough for the privatization and liberalization of their economy, and when the advantages of international trade are not made fully available to economic actors through the reduction of trade barriers.

Many of the myths about the assumed miracles of free trade have already been solidly refuted (for a very good collection see Dunkley 2004, esp. 97-135. Compare also Stiglitz 2002). According to Dunkley, one should be careful not “confusing 'growth', which is quantitative and narrow, with 'development', which is broad, longer-term and qualitative.” (Dunkley 2004: 99) Nevertheless, neoliberals are usually very uncritical towards growth.

As I have shown above, despite their obvious and stark differences, and despite the incompatible solutions for the development problem especially between dependency theory on the one hand and modernization and neoliberal economic theory on the other hand, all three approaches have something crucial in common when it comes to overcoming underdevelopment. It is their reliance on economic growth that's supposed to enhance living conditions in developing countries. In the case of modernization theory, the imitation of the Western model is supposed to foster growth that quickly raises living conditions to Western standards. Dependency theory sees nation-wide growth achievable by shaking off the disadvantages that come along with a position in the periphery of the world system. And neoliberal economic theory promises quick growth to all states which follow its textbook examples of reduced government and enhanced market activity. This leads us to chapter 2 of my essay and the fallacies of growth-centred thinking.

Weaknesses of growth-related approaches

As we have seen, mainstream development theory is mostly unconcerned with what may be called 'negative' and 'non-positive' effects of growth. What is meant by this? While dependency theory is at least concerned with the non-positive effects, i.e. effects which do not directly worsen the living conditions of people, but do also nothing to improve them, all three theories do not seriously contemplate about its negative effects, i.e. such effects as environmental deterioration which directly undermine the physical basis of future economic activityies Likewise, contemporary textbooks of development economics are highly unaware of limits to growth, especially ecological ones, and do not go beyond purely technical discussions of saving rates, profit ratios, and rather simple models of ongoing technological progress (cf. Ray 1998: 47-130).

In this chapter, I will first discuss internal problems of growth-centred thinking. These are mostly related with distributional effects of economic activity. Second, I will present relevant insights gained from ecological or systemic approaches towards economic growth. Together, they represent two important strands on which bases the centrality of growth needs to be reconsidered.

Internal problems: Wealth distribution

Mostly neoliberal economic theory and modernization theory, but to some extent also dependency theory do not really push the question about how growth-related increases in income ought to be distributed. The last decades have seen a remarkably raising amount of wealth for the richer part of the world, yet a stagnation or in some cases even a decrease for the poorest. Joseph Stiglitz asks the question “[w]hat could we do about the 1.2 billion people around the world living on less than a dollar a day, or the 2.8 billion people living on less than $2 a day – more than 45 percent of the world's population?” (Stiglitz 2002: 25) Is relying on growth a reasonable answer?

A first point to embark on our search for an answer is the indicator that is being measured if we talk about 'growth', the gross domestic product (GDP). The GDP was invented in 1939 by Colin Clark, and since then it has experienced a fascinating career due to its easy application as a comparing indicator between countries (Wuppertal Institut 2005: pp. 20). It comprises every officially registered economic activity within a country, i.e. it includes consumption, investment, government expenditures and the sum of exports vs. imports of all legally traded goods. But is this everything an economy consists of? Certainly not, even though it is surely a significant part. The GDP does not count activities within the 'shadow economy', and therefore it does not include drug trafficking, illicit work, usually informal activities like prostitution, volunteering or unpaid work, or recreational work like housework or childcare.

When an economy grows, only the mentioned “official” activities are being counted. Due to their nature, there are no reliable statistics available that tell us how large the share of informal or other uncounted activities is. But even if there was such data, the GDP alone would lack a mechanism to ensure that its increase does in parallel lead to an increase in income of all participants in a national economy. It is blind towards questions of equality and justice.

The answer of the dependency perspective towards growth was import substitution, as already described above. Yet, its “internal distortions naturally had distributional consequences. Trade and exchange-rate policies raised the prices of manufactured goods relative to agricultural products, turning the terms of trade against the countryside where the poor were concentrated.” (Haggard 1990: 12) This lead to a mass movement of poor people away from rural areas towards the cities where many of them had to live in slums because there weren't enough jobs available. “Urban marginalization and a skewed distribution of income were the result.” (Ibid.) The experienced growth did not help to improve the situation of these urban poor.

Neoliberal economic theory has similar downsides. Its only answer towards poverty alleviation is the mentioning of 'trickle-down effects'. Trickle-down means that during the process of growth, the biggest share will end up in the hands of the wealthier people in the first place. Through ongoing growth, however, this raised wealth is supposed to trickle down to the poor and improve their living conditions. A contemporary textbook on economic growth concludes that “growth is almost always good for the poor, and so are policies that lead to growth.” (Weil 2005: 373) David Weil brings in two empirical studies to support his conclusion and claims that “[p]oor people in a rich, unequal country are far better off than poor people in a poor, egalitarian country.” (Ibid.: 372) One might be tempted to come to this conclusion if one looks at the GDP per capita, as one of the quoted studies does. But does this tell us a lot about the quality of living? Amartya Sen (2001: Ch. 1) shows that looking at GDP per capita, even if refined by including income distribution, can give misleading answers. The much richer black African men in the United States, for example, “as a group have no higher – indeed, have a lower – chance of reaching advanced ages than do people born in the immensely poorer economies of China or the Indian state of Kerala (or in Sri Lanka, Jamaica or Costa Rica).” (Ibid.: 21) The reasons for this are diverse and complex and cannot be answered by stressing a single indicator. Nevertheless, it tells us that the story of growth automatically helping the poor cannot be held valid. Stiglitz rightly asserts that “[t]rickle-down economics was never much more than just a belief, an article of faith.” (2000: 89) Thus, relying on growth alone is, due to its (positively formulated) neutrality towards an equal wealth distribution, not a reliable strategy in terms of poverty alleviation.

The only way then to ensure higher income for the poorest seems to be politically steered redistribution of wealth. However, under guidelines of the International Monetary Fund (IMF), debt-receiving governments had to submit so-called 'letters of intent' during the past decades, documents that outline far-ranging reductions of governmental interference with the economy, including privatization of state enterprises, cutbacks in social welfare programmes and otherwise decreased government spending. Neoliberal economic theory and global policies drawing on it favoured what they called 'structural adjustment'. Jeffrey Sachs, himself no friend of closed economies as exercised during the era of IS, critically summarises the new order imposed upon developing countries during the era of the Washington Consensus as follows: “Belt tightening, privatization, liberalization, and good governance became the order of the day. There were some truths in the structural adjustment agenda. [...] But the policy and governance problems in the poorest countries were only part of the story, and in many places not the central part.” (Sachs 2005: 81-82)

What does Sachs offer as an alternative? He employs an approach called “clinical economics” (ibid.: 74-89). Clinical economics, Sachs explains, draws on the insights gained from watching the procedures followed in a hospital and applying them for use in economics. When a patient is brought into an emergency room, a very complex diagnosis is undertaken, following the individual symptoms of him or her to heal the underlying illness. Contrary to that, the world financial institutions did apply a single set of instructions towards all of their “patients” mostly located in the Third World, with often disastrous consequences. “The main IMF prescription has been belt tightening for patients much too poor to own belts. IMF-led austerity has frequently led to riots, coups, and the collapse of public services.” (Ibid.: 74) Economics should abandon its one-size-fits-all approach and begin to ask differentiated questions, to treat every individual country according to its individual settings, including its social structure, its geography, its history, its political background, its culture, its poverty pattern, its existing economic policy framework and governance patterns, to name just a few (for a more complete “checklist” see ibid.: 84) Only a thorough understanding of a country's unique situation including all these details is able to come up with useful solutions serving its needs and goals.

Nevertheless, Sachs is very much in favour of growth and thinks it's likely to be accomplished as soon as better economic strategies are being implemented. But still his approach underlines much of the 'internal' criticism that can be stated against growth. Growth alone is a poor indicator for living quality, due to the inadequacies of the GDP, the misleading picture GDP per capita and even income distribution figures paint. But even given the unlikely situation that the world financial institutions and most states would quickly refute their long-held set of favoured statistics and employed clinical economics as suggested by Sachs – is indefinite growth possible given the limitations of the world's resources and the vulnerability of its ecosphere?

External problems: Ecological limits

In 1972, a report named “The Limits to Growth” (LTG), written by Donella Meadows, her husband Dennis Meadows, et al., was submitted to and then endorsed by the Club of Rome. With it, the Club had hoped to foster a debate it thought necessary about environmental effects of an ever growing world economy. Some few thinkers within the movement of critical political economy or political ecology took on the idea and contributed to the debate with further publications (e.g. Lecomber 1975). Overall, however, the public effects of what Meadows et al. had found out were remarkably non-existent outside the environmental movement. To the contrary, the results of Meadows et al. were quickly refuted as inaccurate. Yet, given the quality of these rebuttals, one has to wonder whether anyone referring to LTG has actually read it or one of the two subsequent editions. Gross misrepresentations, exaggerations, and invented claims are the usual mistakes one can find looking into what critics of Meadows et al. since its publication have said (Simmons 2000). Weil (2005: 474-475) is a typical example of the common misinterpretation of the Limits to Growth. He states that “[s]o far, these doomsday scenarios have been utterly wrong. [...] Food production, output per capita, and stocks of nonrenewable resources thus far show no evidence of the “overshoot and collapse” predictions of The Limits to Growth.” Therefore it is necessary to revisit LTG to find out what it actually said by discussing the 30-Year Update (LTG+30) (2004).

First of all, it is a gross mistake to pick one scenario Meadows et al. published and call it “the forecast”, as Weil (2005: 474) does, implying that only one possible scenario had been discussed in 1972. There were 12 different scenarios, each one with a different set of assumptions regarding the amount of nonrenewable resources, possible means to enhance food production, the speed with which new technologies are invented and brought to widespread use, and so on. All these assumptions were fed into a specially designed computer program called World3, created by the Massachusetts Institute of Technology (MIT), to find out how basic indicators about the condition of the world might develop during the 21st century. “Even in the most pessimistic LTG scenario the material standard of living kept increasing all the way to 2015.” (Meadows et al. 2005: xi) Given that the publication year was 1972, this left at least 40 years to bring the world into balance. Consequently, claiming that LTG was basically “pessimistic” or predicting a nearby “doomsday” is not in line with the original study. In fact, Meadows et al. were explicitly denying that they were producing solid predictions. They merely wanted to show a number of possible futures. Nevertheless, “the highly aggregated scenarios of World3 still appear, after 30 years, to be surprisingly accurate” (Meadows et al. 2005: xviii), a conclusion shared by Matthew Simmons (2000).

But what is supposed to happen throughout the remaining 21st century? To describe the dynamics of the contemporary world economy projected into the future, Meadows et al. present the concept of “overshoot and collapse”. Overshoot means to overstretch the limits of a system, e.g. by exploiting it beyond its regeneration rate. They name three causes of overshoot.

“First, there is growth, acceleration, rapid change. Second, there is some form of limit or barrier, beyond which the moving system may not safely go. Third, there is a delay or mistake in the perceptions and the responses that strive to keep the system within its limits. These three are necessary and sufficient to produce an overshoot.” (2005: 1)

When, for example, a forest is lumbered at a rate larger than its trees can regrow, and when the foresters do not see the implications this has, it is a classical overshoot. When the foresters follow their exaggerated lumbering rate for too long, the forest will sooner or later disappear, or collapse in the language of Meadows et al. The pattern is as follows: Production figures raise for some time, followed by a plateau, i.e. output levels keep steady, before production declines and finally vanishes.2 Equally, most of the World3 scenarios in LTG+30 show a rise in industrial output, food production, population, and other key indicators between 1900 (the calculation's starting date) and the 21st century. The dynamics of collapse and overshoot occur some time after the year 2000. Scenario 1, which can be seen as a kind of 'standard run' and is called the “Reference Point” in LTG+30 (Meadows et al. 2005: 168-169), expects industrial output to peak around 2015, together with food production. Coevally peaking are life expectancy, available consumer goods, services, and food per person. World population is expected to rise to 7 billion until about 2030 (after having reached the quite accurate number of 6 billion in the simulated year 2000), and pollution will reach its peak around 2040. Afterwards, the dynamics of collapse occur. All relevant figures show a steady decrease, in most cases towards levels comparable to those reached in the first half of the 20th century. What is especially noteworthy is that “[b]etween 1900 and 2000 only about 30 percent of the earth's total stock of nonrenewable resources is used; more than 70 percent of these resources remain in 2000.” (Ibid.: 168) The figure on page 12 illustrates the evolution of their model.

Most of the scenarios presented (though luckily not all) follow a comparable evolution. Overshoot and collapse occurs when the amount of nonrenewable resources is supposed to be twice as high as in the reference scenario (scenario 3), when pollution-control technology and land yield enhancement is employed (scenario 4), or when beginning in 2002 all families will stick to getting not more than 2 children (scenario 7). Why is that? The first part of the answer, Meadows et al. conclude, lies in the dynamics of growth within a limited system (Ibid.: 17-49). What many people do not realise when they talk about economic growth is that they deal with exponential growth. Zero growth means that in a given year, the achieved output is exactly as high as in the year before.

A steady growth rate of 5 percent (as the CIA World Fact Book tells us was the average figure for the world GDP in 20063) leads to a doubling of the initial value after less than 15 years, to a quadrupling after 29 years, an eight-fold increase within 43 years and a sixty-four fold increase after 86 years from the starting point – the lifetime a person in an industrialised country can expect these days. Within 200 years, the timeframe used by LTG, a constant growth rate of 5% leads to 17,292 times the initial number.4 A growth rate of three percent still leads to a 370 fold increase after 200 years. To reach such astronomic numbers an accordingly rising extraction of resources is needed, both renewable and nonrenewable.

This brings us to the second part of the answer. It lies in the limited capacity of the earth's ecosphere to act both as a source for the demands of an exponentially growing economy, and as a sink for its pollution. Because an ecosphere is not a linear system, we should see some signs of depleting resources and overstretched sinks some time before the collapse. Thus, first we have to ask whether there are signs of overshoot. A useful concept for answering this question is the ecological footprint as developed by Mathis Wackernagel in 1997. Today, Wackernagel and his colleagues collaborate via the website globalfootprint.org, and the World Wide Fund for Nature (WWF) prominently uses the ecological footprint in its biannual Living Planet Report.

An ecological footprint of a nation gives us information about how much area its resource consumption requires, both as a source and a sink. A country whose economy operates sustainably does not exceed its natural area in terms of standardised 'global hectares', an artificial measure used in ecological footprint calculations. If a country uses more hectares than it has, then it's overshooting its limits. If one sets all available global hectares against the global hectares necessary to provide the present human lifestyle, it becomes clearly visible that humanity is in a state of overshoot. The WWF (2006: 2) concludes:

“Since the late 1980s, we have been in overshoot – the Ecological Footprint has exceeded the Earth’s biocapacity – as of 2003 by about 25 per cent. Effectively, the Earth’s regenerative capacity can no longer keep up with demand – people are turning resources into waste faster than nature can turn waste back into resources.”

Second, given the measurable overshoot we have to check for any signs of collapse. The so far largest and most sophisticated account of the status of the world's ecosystems is the Millennium Ecosystem Assessment (MA), published in 2005. It assessed the condition of 24 key ecosystem services. Ecosystem services are services the ecological system of the earth provides, and that are essential to the ability of humans to inhabit this planet. They can be categorised into 'provisioning services', including food, water, or timber, 'regulating services' such as water filtration, climate regulation, or disease control, and 'cultural services', including recreation or spiritual fulfilment (MA 2005: 39-49). Of the 24 assessed ecosystem services 15, or 60%, were in decline due to human activity. Declining means that a production peak has been experienced some time in the past due to an overshoot of natural limits, and that a state of collapse has been entered. For example, numbers of global marine fish catch have peaked in the second half of the 1980s and declined since then (ibid.: 39).5 Similar signs of retreating ecosystem services can be found in many places, be it ongoing desertification (MA 2005a), reduced biological diversity (MA 2005b), or stressed wetlands and water resources (MA 2005c).

Conclusion

In this essay, I have shown that mainstream development theories do without exclusion rely on economic growth. However, some important points connected to this concept have apparently been slipping past the focus of most development theorists. First, what I called the 'internal' problems of growth-centred thinking, is the unsuitability of unspecified growth to overcome problems like mass poverty and related phenomena, e.g. child mortality, illiteracy, or unavailability of health services, to name just a few. To tackle these problems effectively via growth, certain recommendations or assumptions regarding its distribution have to be made. But mainstream development theory has often avoided this central amendment to the positive effects which growth allegedly comprises. Dependency theorists were yet among the more critical thinkers towards these issues, while neoliberals tend to ignore them right away, or regard them as domestic political questions that economic theory was not supposed to answer. Even worse, structural adjustment policies have often led to a decreased ability of governments for mitigating poverty. This set of problems has been called 'internal' because it arises not from a critique of growth as such, but from a critique of what is done with it within certain political structures.

Second, labelled 'external' problems in this essay, are problems related to the concept of growth in a more profound way. To these problems belongs the debate about “Limits to Growth” as pointed out on several occasions by Meadows et al. (1972, 1992, and 2004), and the fact of rapidly deteriorating ecosystems and connected vital ecosystem services all over the world (Millennium Ecosystem Assessment 2005). These phenomena make it plausible to assume that we are overshooting the ecological limits of the earth, and that we are already experiencing signs of collapse. If this turns out to be true, humanity can by no means stick to growth as a central necessity of its economic system and thus of development. It underpins the need for a debate about our preferred model of economy. Whether alternatives as “steady-state economics” (Booth 1998) can be the answer or whether back doors like 'qualitative growth' in the end hold to their promises is at this point impossible to tell. An answer would need an open debate about our economic and ecologic future – a debate which should have been held since 1972, but was delayed until today.

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