Volume 44, Number 174,
July-September 2013
Why is History Important?
A Debate on Economic Development Policy
Pablo Andrade

Once López Castellano sets up the straw dog of his historical arguments of the political economy, he looks for an alternative. The author maintains that post-colonial studies constitute a healthy means of avoiding the “error of generalizing the story of the institutions of the ‘European miracle’ […] to non-European countries.” This would save those who study development from “falling into the myth of modernity, based on the idea of European superiority and its projection to ‘traditional’ societies […]’” (López Castellano, 2012: 35). Post-colonial studies, according to the author, therefore provide a more attentive, careful and precise “historical narrative” of the culture of third-world countries than the narrative told by studies in the school of the new political economy.

This perspective seems logical, but must be examined more closely. As shown in the previous section, political economy studies do not necessarily adopt a modernizing or Europe-centric position. Post-colonial critiques constitute a welcome check for contemporary political economy studies, in the sense that they help the ingenuous reader to detect the ideological bias that favors the “institutional monoculture.” Still, this bias is not inseparable from the political economy of development, but rather from the economic policy “recommendations” formulated by international financial institutions, agencies for development cooperation and even some first-world ngos. It is therefore a political critique that does not necessarily affect the political economy and its theoretical suppositions or its methodological procedures.

There is a second difficulty present in López Castellano’s perspective. Unlike what he states, the new political economy of development does not under-value the “legacy [for post-independence leaders] in the area of the formation of the State and national-economic integration” (idem). On the contrary, contemporary studies of the political economy insist that this historical legacy be taken into account, but not on the terms proposed by the theory of the global system and its post-colonial derivations, nor by postulating a counter-factual that is easy to argue but difficult to maintain, such as the supposed end of the “endogenous evolution of colonies” (López Castellano, 2012: 36). In fact, at least in this specific area, the post-colonial arguments cited by López Castellano do not refute, and in fact support – without adding more knowledge – the findings of the new political economy.

Political economists effectively do not consider the “colonial fact” as a mere parenthesis in the history of colonized people, as López Castellano maintains. Rather, they say that the long-term origin of the current conditions of third-world countries, which suffered European colonization, resides in this historical period. The major difference between post-colonial attempts to offer up a different version of history and the findings of the political economy is that the former, by jumping from the study of history to the ontological criticism of modern European reasoning – from history to Heideggerian philosophy – ends up proposing a new ontology that places the perspective of geographic or cultural conditions at the center, as the base of the absolute difference in the ways of constructing subjectivity for the colonized and European people. Obviously, once this is accepted, it is easy to conclude that “colonial logic, which went hand in hand with European industrial capitalist development and growth, is still current.” But there is an epistemological problem, which is jumping from the historical explanation or description to the ontology without resolving the question of the continuity of “colonial logic.” The post-colonial response that the continuity is due to the very nature of power or “European reason” is unsatisfactory, even from the theoretical base of post-colonialism, because “power” cannot simply be an abstract proposal, and the crises, fractures and heterogeneity of the various paths of the so-called “European reason” cannot be easily ignored.

No contemporary study of development in Latin America, Africa or Asia could doubt that the majority of modern problems experienced by these peoples originate from the behavior of a few elite that have acted or continue to behave as if the citizens of these nations were mere passive subjects of the supposedly rational operations of the state. This mirrors the behavior of colonizers. The problem arises when we find that this elite has behaved in this manner even when embracing – or creating, as was the case of Frantz Fannon – some of the most radical anti-colonial (post and during) ideals. Nothing in post-colonial studies and their ontology provides a satisfactory explanation – or even a simple interpretation – for this behavior. Curiously, post-colonial studies have rather avoided the issue instead of confronting it, and have opted for a remedy to cure the issue – which is shared with the theory of modernization: change the colonialized mentality, through a process of the “de-colonialization” of power (just like this, abstractly).

The persistence of the “dominant structure” is not something that should be accepted but rather explained. The political economy has made rather more useful contributions to this issue than the post-colonial ontology.

The post-colonial elite was installed at the peak of a set of extractive institutions. They failed to modify them, and rather redirected the revenue flowing into the metropolises towards themselves. In Africa, the new elite commanded – and continued to be governed by – institutions created by European leaders in the nineteenth century. In Latin America the institutional heritage mixed the creations of the pre-colonial indigenous empires with the institutions inherited from the Iberian medieval tradition (Acemoglu, Johnson and Robinson, 2001: 1372-1376). This development was unrelated to the (Euro-centric) mentality of the elite, although the image of Europe and the developed world has undoubtedly played a decisive role in attempts by these groups to create new societies (Scott, 1998: 34). Rather, this development was linked to the conditions in which the new elite could really exercise and retain control of the State. We will briefly examine this situation.

Once European colonial powers gained control of the countries that are now developing, they created institutions – at a high cost paid by the conquered people – to defend their property rights. Almost by definition, the colonizers were smaller in number than the populations that inhabited the territories of the new colony. As such, the new political and economic institutions were disproportionately beneficial to this small elite. These conditions were maintained following independence for the colonies. The new governing elite was as small as the old colonial elite, and the cost to change to inclusive institutions was (and is) extremely high for the new elite (risk of losing power or property, for example). As can be seen, it is not necessary to postulate any type of special subjectivity or mentality (colonialized). It is enough to take into account that the (authoritarian) political institutions established by the colonial elite and the (extractive, profiteering) economic institutions complemented each other. These institutions allowed the group in power to not only benefit but also invest in maintaining the order (for example, by paying the army or creating export, mining or land-owning companies groups) (Acemoglu, Johnson and Robinson, 2001: 1376). The new elite of course found it reasonable – although not entirely rational – to maintain the existing institutions, with a few cosmetic changes, and expand State control to new aspects of the lives of their populations.

Moreover, economic policy studies have described the mechanisms that gave rise to the different political/economic institutions that have continued into the period of post-independence. This has provided an explanation for the degree of difference found between currently developing countries. The pattern discovered is fairly simple: in places where the Europeans were threatened by tropical illnesses such as malaria or yellow fever, the colonization strategy was in part influenced by this factor. Europeans established extreme authoritarian States and imposed radically extractive economic institutions, such as in the “Congo Free State.” Once these institutions were established, revolutions for independence were unable to change the economic and political institutions, such as the Republic of Congo under Mobotu. A very different pattern came about in temperate climates and environmental conditions that were relatively more benign for Europeans, such as in Australia, the United States or Canada (Acemoglu, et al., 2001: 1395). A third variation that combines climatic factors with a relative abundance of labor describes the institutions created by the Spanish conquerors in the viceroyalties of New Spain and Peru.

To underline what can be gained from studying development by incorporating post-colonial critique, we can compare the above paragraphs with what López Castellano offers with regards to post-colonial arguments:

[In Africa] they speak of the “transplanted state” […] and the “neo-patrimonial” state […] a policy structure centered on sumptuary consumerism and the absolute disregard for productive investment. In Africa, more than just the state, there is also a simple bureaucratic structure of exploitation, incapable of providing low and order, contracts and infrastructure (López Castellano, 2012: 37).

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PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 195 October-December 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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