Academic journal article Capital & Class

Structural Adjustment, Global Trade and the New Political Economy of Development

Academic journal article Capital & Class

Structural Adjustment, Global Trade and the New Political Economy of Development

Article excerpt

Biplab Dasgupta Structural Adjustment, Global Trade and the New Political Economy of Development London: Zed Books, 1998, pp.434. ISBN 1-85649-595-7 hbk $69.95, L49.96 ISBN 1-85649-596-5 pbk $25.00, L17.85

Reviewed by Paul Burkett

For development economics, as traditionally taught and practised in the three decades after the Second World War, `getting the prices right' was secondary to structural transformation of third world economies through high rates of capital investment, industrialization, and mobilization of surplus labour. While international trade and capital inflows would play important auxiliary roles, national development would be led by an economically active state engaging in selective trade protection, management of relations with developed country enterprises and governments, allocation of resources in line with explicit sectoral targets, and even moderately inflationary finance. Rather than an overriding goal of all policy, balance in external payments was viewed as a growth constraint relaxable through inflows of foreign aid and increases in the share of value added domestically. Any `structural or discrete policy adjustments necessitated by adverse external shocks were viewed as temporary blips on the road to self-sustained growth and development. The Cold War, the growth of national liberation struggles and postrevolutionary development regimes, and the general increase in third world development aspirations, provided the political and ideological background for this traditional development thinking.

With the global slowdown and restructuring of capital accumulation, intensified competition on a world scale, and the end of the Cold War, traditional development economics has been submerged by a set of processes and policies variously described as globalization, free-market thinking, neoliberalism, or the Washington consensus. Biplab Dasgupta provides an impressive synthetic overview and critique of this `New Political Economy' in theory and practice. Among the areas he surveys are the increasing power of multinational corporations, the growth of far-reaching and coercive trade agreements, and the imposition of structural adjustment policies on third world countries by the IMF and the World Bank.

Dasgupta's perspective is basically an updated version of traditional development thinking informed by recent structuralist analyses of the role of state activism in the development successes of Japan, Taiwan, and South Korea (see the work of Alice Amsden and Robert Wade). The strength of the book is not in the originality of its theory or evidence, but in the breadth of its vision, especially its extension of structuralist analysis to incorporate the Sub-Saharan Africa experience with structural adjustment as well as environmental issues including recent international conventions on global warming. (However, an important gap in Dasgupta's synthesis is the lack of treatment of gender and development issues.) Despite this wide scope, Dasgupta maintains a reasonably sharp focus on issues connected with structural adjustment and national development. Together with his non-dogmatic presentation, this makes the book appropriate for undergraduate courses in economic development and development policy. Its effectiveness for this purpose is enhanced by the handy list of acronyms prior to the text, although a matching glossary would also have been helpful. The book's bibliography is representative and reasonably comprehensive.

Many global surveys of this type are more useful as reference works than as teaching tools, insofar as they are more effective at cataloguing than at critical analysis of institutions and processes. Such is not the case with this book, as each chapter reveals important dynamic tensions built into the New Political Economyproviding much food for thought and debate. …

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