The Political Economy of Development,
Post-colonial Analysis and “Bad Samaritans”
Fernando López
Date submitted: April 10, 2011. Date accepted: October 12, 2011
Abstract

The aim of this paper is to present the most relevant features of the new institutionalist view of economic development and its criticisms. To this end, the main arguments for the “New Political Economy of Development” and the “political economy of colonization” are highlighted. Reflections by analysts connected with postcolonial study are then presented. These throw into doubt the validity of schemes of political analysis underpinning the interpretations of conflict in postcolonial Africa, and those of Latin American theorists associated with the rejection of Westernization. The study concludes with critical reflections on the historical reconstruction of the development process created by orthodox economics and their disproportionate emphasis on the relationship between institutions and development.

Keywords: New institutionalism, political economy of development, political economy of colonization, modern state.
INTRODUCTION

New institutionalism seeks to shed light on the unknown factor of development by emphasizing the solid link between institutional frameworks and growth. The “political economy of development” linked to new institutionalism of “rational choice” focuses on the political aspects of development. Supported by the “narratives” on the birth and evolution of the Western world, it explains the appearance of the modern nation state, analyzing the role of violence as a source of prosperity (wellbeing) and institutional quality, on the basis of its public or private provision. Starting out by with a parallelism between the under-developed world and Hobbes’ unsafe society, in which control over violence is private, this article centers on the causes that have prevented contemporary, third-world countries from following in the development footsteps of modern states.

The new institutional focus has been widened to include the study of colonization, following two lines of argument: the “political economy of conquest” and the “political economy of economic failure.” The former holds that the types of colonization defined different political, economic and social institutions and these would explain the divergences in growth rates; the latter that the numerous indigenous people and abundant precious metals explain the emergence of high levels of economic and political inequality to significantly hinder economic development.

The aim of this paper is to present the most relevant features of the “new orthodoxy” in regards to economic development. To this end, it looks at the main arguments for the “new political economy of development” and the “political economy of colonization.” It also examines the main criticisms of new institutionalist explanations: those found in postcolonial studies that throw into doubt the validity of schemes of political analysis underpinning the interpretations of conflict in postcolonial Africa, and those of Latin American theorists, associated with the rejection of Westernization. The study concludes with critical reflections on the historical reconstruction of the development process created by orthodox economics and its disproportionate emphasis on the relationship between institutions and development.

* Senior Professor at the University of Granada, Spain. Email: flopezc@ugr.es