A holistic understanding of development presumes the factual possibility of an actor ensuring the accumulation of both material wealth and non-material advantages. The former includes economic, political, and institutional formation. The latter encompasses cultural, ethical, and moral values.
The synthesis of these two types of development makes possible the concept of holistic development, a universal and logically complete concept in which both dimensions complement each other. The research presented here considers the two types of development plus their holistic synthesis, their core principles, and their applicability in practice.
Development as wealth accumulation does not necessarily lead to the non-material development of human freedom and capabilities. The former can spill over into the latter if the appropriate institutional conditions are present.
1. Understanding development
Development is a complex and endlessly versatile concept. What is development? How can we measure it? Is it a process, a state of being, or contingent upon special conditions? When does it occur? Humanity has been seeking appropriate answers to these fundamental and even sacred questions for centuries.
After emerging from the Stoic school of Greek philosophy (or perhaps even earlier), the concept of ‘development’ was elaborated in different ways by many thinkers, from Thomas Aquinas to Machiavelli, Spinoza, and Adam Smith, until it was established at the top level of Hegel’s science-centric vision. Attempts to revise and improve the conceptualisation of development continue today, in ways that exceed the scope of this paper. Because I do not examine of this vast diversity, my scope of consideration will cover three particular types of development.
Indeed, the possible interpretations of development are limitless, just like the process itself. Following Hegel’s lead, human understanding perpetually expands to include more sophisticated paradigms, which can be changed once a new dimension is discovered. Hence, development is firstly a kind of process. As I will argue in this paper, however, a comprehensive understanding of development requires subdividing the concept into three different types. Development can be understood as 1) exclusively material; 2) non-material (or spiritual); and 3) holistic, representing a fusion of the first two.
The first of these three types of development – material development – is directly related to the accumulation of wealth on both micro and macroeconomic levels. My analysis of material development builds on the scrutiny of Acemoglu (2009), Acemoglu, Johnson, and Robinson (2005), Rodrik (2005) and other modern authors, whose works shape the general framework of development as a matter of economic, political, and institutional (i.e., material) formation.
The second type, by contrast, refers to development as a special state of affairs, in which people are able to defend their dignity by exercising their freedoms and rights and realising their capabilities, as guaranteed by respective social institutions and authorities. Therefore, this second type of development is not only a process but also a particular condition, in which appropriate opportunities are made possible. This second type of development is informed by the work of Sen (1999), Alkire and Deneulin (2009), Nussbaum (2000), and other authors who have helped push the perception of development out of solely material economic determinants.
As the Nobel laureate Amartya Sen argues, „Without ignoring the importance of economic growth, we must look beyond it“ (Sen, 1999, p. 14). The third type of development, which I refer to as ‘holistic’, presumes the factual possibility of an actor ensuring accumulation of both material wealth and non-material virtues. We can think of the relationship between these three types schematically (see Figure 1), as a tension between polar opposites that can only be resolved in the space between them, where their domains overlap.
The first type delimits the domain of economic, political, and institutional formation, and the second type represents the domain of cultural, ethical, and moral values. It is only where the power of these poles converges, in the centre, that a comprehensive concept of development can take shape.
To prove this thesis, the two polar concepts of development must be considered separately in order to understand their core principles, their applicability in practice, and whether something else can be discerned in the space between them. Development as the accumulation of wealth, and development as the fulfilment of human freedom, do not necessarily contradict each other, even if some scholars believe that they do.
Complementing each other, rather, they enable us to consider the same questions of political, economic, and cultural life from different angles (again, see Figure 1) within a holistic concept of development that draws upon both domains. Considering development as a process of wealth accumulation spills over into considering it as something more than just economic growth while insisting that there should be institutional conditions necessary for such progress. Development as wealth accumulation does not necessarily lead to this second type of development.
This thesis applies to the level of international affairs, i.e., how states and global actors realise these three types of development. If development is reduced to the expansion of solely material, economic determinants, it may well be doomed to failure. As the celebrated sociologist and former president of Brazil, Fernando Henrique Cardoso, stated, “economic expansion is meaningless if we do not take into consideration the political and historical aspects with which economic factors are intimately related” (Cardoso, 1972, p.169).
A proper definition of the term ‘development’, therefore, one that will satisfy the general aims of my research, must describe it as both a process and a state or condition.
2. ‚Unfair‘ economic development
The classification of development based on economic principles can be determined by levels of income, differentiating between low, middle, and high-income groups, using several measures such as GDP, GDP per PPP, GNI, etc. (a more detailed discussion can be found in Schafer et al., 2012, p. 7). At the same time, the very concept of development is inextricably linked to the notion of progress, which should be understood from a Hegelian perspective. It transcends a strictly economic meaning, revealing deeper philosophical roots associated with human progress and betterment.
Discussions about the multidimensional nature of development can be dated to the 19th Century and, more precisely, to the emergence of the “tantalizing possibilities for general human welfare that industrial capitalism offered and their failure to materialise for a majority of the people in the world under capitalism” (Desai, 2012, p. 47). Regardless of that failure, capitalism remains the dominant economic system worldwide. It is, therefore, necessary to determine: 1) the main reasons why some states succeeded under capitalism, leaving others at the periphery of economic development; and 2) how those states that fell behind can catch up with those at the leading edge of economic development.
Both of these tasks can be considered from different angles. First, there are deep historical roots that have caused the current state of affairs. The economic discrepancies around the world did not come from nowhere. The gradual, centuries-long expansion of a European model of political affairs and economic development, in which nation-states have promoted the development of capitalism both at home and abroad, gradually caused the situation in states with other institutional formations to deteriorate. As the American scholar Jessica Schafer argues, “colonial conquest and occupation by European military and political powers caused poverty in colonised societies and left them with economic structures that made development difficult if not impossible.”
This state of affairs has led other scholars to make broader assumptions, affirming that the very nature of capitalism “requires that some countries remain poor while others profit” (Schafer, et al., 2012, p.4). However, understanding the historical roots of the current situation worldwide does not tell us much, all other things being equal, about how the economic gap between the laggards and frontrunners can possibly be narrowed, if not erased outright.
This goal requires scrutinising the primary factors in the history of economic development in greater detail, discerning the “deep determinants of development, those institutional or political factors that ultimately shape the proximate determinants of growth” (Adam and Dercon, 2009, p. 174) and cause material wealth accumulation in some states, while leaving others underdeveloped. In this regard, the American economist Daron Acemoglu identifies ‘fundamental causes’ of economic divergence in the initial institutional and technological prerequisites that prompted further broadening of the economic gap.
At the same time, his approach to explaining economic development downplays culture and tradition as explanatory variables, and totally diminishes the role of luck, meaning that development cannot be a matter of coincidence (Acemoglu, 2009, pp. 20-22). According to Acemoglu, the opportunities for backward states to obtain the same level of economic development as their predecessors have already been missed.
The world economic order dictates that those states that have been left behind can potentially narrow the margin with advanced countries, but only to a certain degree. They will not be able to catch up with them completely, both because of the already-missed moment and also because of the consistent rapid development of advanced countries, which do not remain in the same position, but rather continue moving inexorably forward on the leading edge of economic development.
This vision is defended by other foundational thinkers (Cardoso, 1972; Wallerstein, 1979; Gunder Frank, 1970), who reduce the relationship between developed and underdeveloped (or even developing) states to the relationship between a materially rich centre (largely understood as Western Europe and North America, along with economic superpowers like Japan) and materially poor or semi-poor periphery regions. The development of states in the periphery can occur only to the extent that it does not endanger the supremacy of central states, which in turn make the periphery economically dependent on them, retarding those underdeveloped states’ ability to develop politically.
It is important to understand that development under such conditions means dependent development, i.e., development that exists only in a limited space. Capitalism and dependent development have not just been adapting to a changing and globalising world, but rather shaping globalisation by themselves, using the technological tools of modernity in order to entrench the existing order of the things. As Cardoso explains:
That is the reason why ‘technology’ is so important. Its ‘material’ aspect is less impressive than its significance as a form of maintenance of control and as a necessary step in the process of capital accumulation. Through technological advantage, corporations and states make secure their key roles in the global system of capital accumulation (Cardoso, 1972, p. 175).
Therefore, the principle of strictly limited economic development – one that is oriented towards the maintenance of underdevelopment in the periphery – not only has a seemingly universal character, now encompassing almost all the states of the word, but it is also in many ways timeless: so long as capitalism exists, it will too.
For example, Acemoglu argues that the gap between the poorest and richest countries has only been expanding for the last two hundred years. In the middle of the 1960s, levels of development were more similar, relatively speaking, than they are now (Acemoglu, 2009, p. 3, Figures 1.1 – 1.4). As the evidence suggests, the tendency of central states to break away from the periphery continues. A number of rich countries, bound to each other by conditional convergence, are currently moving away from poorer countries due to the phenomenon known as stratification of states. Cardoso discerned this trend in the early 1970s in his analysis of Brazil and other South American states, broadening the theoretical scope of the concept and perceiving underdevelopment in other states and regions.
Like Acemoglu, Cardoso turns to historically shaped institutional formations in order to explain the difference between underdeveloped and advanced states. In light of the entrenched dependency of some states on others, “the relations between advanced capitalist countries and dependent nations lead rather to a ‘marginalization’ of the latter within the global system of economic development” (Cardoso, 1972, p. 176). Under these circumstances, ‚backwards‘ states have been left with only two options: either to gradually strengthen their own institutional, technological, political, and economic environments, adapting economic models, tools, and other requisites from successful advanced states, but remaining within the limits of restricted (permissible) development (Acemoglu, et al. 2005, Cardoso, 1972).
Alternatively, they could use ‘search and discovery’ techniques as an “unconventional mix of standard and non-standard policies” (Rodrik, 2005, p. 989). The former option pushes developing states towards institutional design, which can vary significantly according to local geographical and historical contexts, but still typically presumes a blueprint based on the required standards of advanced countries (for example, the well-known Washington Consensus). The latter option prompts those states to perceive the notion of development differently, recognising that it entails more than simple economic advancement.
The most vivid examples are the post-World War Two histories of countries such as South Korea, Singapore, and Taiwan, which economically and culturally succeeded without using the exclusively economic methods of advanced states as a blueprint, sometimes even vigorously opposing them, as was the case with capital control policies and regulations (Grabel, 2011).
This helps explain why development must be understood as a complex phenomenon, one that should not be equated with the growth of an economy alone. In addition, the vision articulated by Acemoglu, Cardoso, Andre Gunder Frank, and others may leave some states dissatisfied, since it requires that we accept that, roughly speaking, global economic inequality, which predetermines the wealth of people, is simply insurmountable. Hence, even if the economic understanding of development is extremely important, it represents only one aspect of development as a whole.
No state or society has an exclusive right to development. Rather, development is a universal concept and should be applied to each and all, taking into account the fundamental needs and demands of each and every state and society. In determining what a particular state requires, it is necessary to determine both the volume of support and the target groups that need it most. For example, from the standpoint of reforms intended to grow national GDP, China appears to be a country with decades of spectacular economic growth. Yet we cannot infer that this success has solved all of the issues surrounding its pathway to the status of a fully developed nation.
This helps explain why, regardless of China’s economic development as a whole, there are still a sizable number of people there who do not have enough food to eat and require essential improvement of their living conditions, simply because of income disparity and unequal wealth distribution (see Figure 2 below). The same problem is present in a number of other countries, including those considered to be developing states, but which have consistently struggled against inequality regardless of their development (see Figure 3 below).
Obviously, it is first and foremost the responsibility of national governments to reduce inequality and provide those who are starving with at least minimal support. Hence, the success or failure of promoting development depends not only on external factors – such as the quantity of foreign aid, or relative economic dependence on donors – but also on the decisions of domestic governments, which should be “capable, credible and committed” (Commission on Growth and Development, 2008, p. 3) in adopting a long-term perspective oriented towards versatile development, instead of seeking only short-term benefits.
Even developed countries, regardless of their economic achievements, can perform poorly in solving certain domestic issues, which may be a long way from being perfectly addressed. In this respect, it is crucial to always remember that “poverty is not just about income levels; it also has social, political, psychological, and moral elements – and this is true in both the developing and the developed world” (Schafer, et al., 2012, pp. 12-13). Income itself cannot be an absolute goal, otherwise people would tend to guarantee it unconditionally. For example, although child labour helps some families earn enough income to achieve a better standard of living, most of them would refuse to rely upon it if they were able to secure adequate public services and healthcare (Alkire and Deneulin, 2009, p. 30), even if that meant a reduction in their household income.
Now we arrive at a conclusion that I have hinted at several times above: development must be recognised as a multidimensional concept. Even though development is reflected in economic indicators, it cannot be reduced to them, because an increase in wealth is not enough to guarantee the emergence of other types of development, such as the ethical-moral one. As Figure 1 suggests, “economic growth therefore becomes only one subset of the human development paradigm” (Alkire and Deneulin, 2009, p. 30, Box 2.2). Without ignoring the importance of economic growth, we should look beyond it.
Development as a process of wealth accumulation may spill over positively into development as something more than just economic growth, but only if the appropriate institutions are in place to guide this progression. From my perspective, this means establishing and maintaining democratic institutions capable of enriching people’s civil consciousness, enhancing their socio-political participation, and increasing the political accountability of national governments to civil society.
For this spill-over to take place, economic growth cannot be considered the ultimate goal. Rather, it is a tool, which should be directed into opening new possibilities, first and foremost, for all those who lack development the most and who have been consistently unable to accumulate the same level of wealth as others. As Amartya Sen argues, money should not be taken as a value in and of itself, but as a way to provide opportunities for obtaining what is truly valuable. Riches must not be pursued for their own sake, but “because, typically, they are admirable general-purpose means for having more freedom to lead the kind of lives we have reason to value” (Sen, 1999, p. 14). This is where the ‘capabilities approach’ to development makes its presence felt.
Income Inequality in China in Gini coefficients, 1981-2012. Source: Terry Sicular (2013) The Challenge of High Inequality in China.
Poverty Reduction and Equity Department. World Bank. Inequality In Focus. Vol. 2, N.2: August 2013, p.1
3. Human freedom and capabilities: On the way to holistic development
Development as merely economic growth cannot guarantee the improvement of all aspects of human life. Poverty is not only a state of financial deprivation but also a deprivation of basic capabilities or freedoms. This is what the proponents of the second type of development emphasise. Humans who have been deprived of a set of values, abilities, and freedoms are in need of development, which will help them to realise fully their dignity and potential.
How can these freedoms be institutionalised? How can a state systematise their distribution? If wealth accumulation is not enough to guarantee holistic development, understood not only as material enrichment but also as the realisation of non-material virtues and freedoms, what else can be done to bring it about?
Given the scarcity of resources, material wealth is strictly limited and distributed in a highly disproportionate way, and in some cases can be considered as the only determinant of freedom. Does this suggest that those who lack it are doomed to be deprived in other ways? Not necessarily, because wealth is not the only way of acquiring these values and freedoms, which include gender equality, access to health care, political liberties, and civil rights. Even if people are deprived of material welfare, they may still enjoy other freedoms.
Obviously, this fact does not justify financial deprivation. But it does indicate that human development is not linked exclusively to income level and can be achieved if there is sufficient social and political will to establish and maintain institutions capable of guaranteeing opportunities for non-material development. The more opportunities for non-material development are made available to us, the more freedom we have to enhance “the ability of people to help themselves and also to influence the world.” These matters are “central to the process of development” (Sen, 1999, p. 18). It is only when such opportunities can be realised that holistic development is possible.
At the same time, it is also necessary to recognise that there is a crucial distinction between development as a form of perpetual betterment and the achievement of particular forms of freedom. We can ponder scenarios in which the people of a country achieve absolute political liberty in all social spheres, but eventually find themselves disappointed by the results of liberty. After all, even Adolf Hitler’s Nazi Party came to power via a series of democratic elections. This is why I argue that holistic development provides opportunities to achieve and improve something, but does not in itself constitute that achievement. It is a process, not a product.
It can also be asserted that the very presence of final output would mean finality, or perfection of development, which in fact is not achievable as long as humanity is represented by different cultures and bounded by different borders. In other words, no matter how universal values might become in the age of globalisation or post-globalisation, the uniqueness and diversity of human culture will always keep development diversified without any possibility that its potential will be exhausted.
This diversity, recognised by Daniel A. Bell and Yingchuan Mo as the combination of peaceful order – meaning the absence of violence – and harmony, best understood in terms of the Confucian emphasis on social justice, balance with nature, and international constructivism (Bell and Mo, 2013, p. 804-809) – is one of the main factors that keep the international community from the sort of radical universalisation that will end diversified development. While the end of diversified development would mean the end of history, precisely as articulated by American political scientist Francis Fukuyama (2006), we are still much further away from attaining that end than he imagined.
Apart from understanding holistic development as an endless process during which material and non-material improvements overlap, it is important to look more closely at the connections which underlie non-material development. Although, human “values tend to be somewhat heterogeneous” (Alkire and Deneulin, 2009, p. 31), the process of realising them still proceeds along similar lines. We can think of it as a chain: willingness, to opportunity, to capability (freedom), to development.
Pure willingness and opportunity are not very useful without a clear definition of the goals that a state or society are keen to achieve. And that means they need to know which capabilities and freedoms they want to have. In this respect, the two poles of development, material and non-material, function similarly. They both require 1) the systematisation of a state or society’s willingness to create real opportunities for achieving the accumulation of wealth or the betterment of human life, and 2) a concise differentiation of goals towards which that state or society aspires. If we want to improve the situation for human life and dignity, we need to achieve the forms of freedom presented above.
We can think about this quest as a nesting of goals. If the overall goal is international development and the sub-goals are those forms of freedom, we can further differentiate those sub-goals in the way that Martha Nussbaum (2000) proposes, identifying ten central capabilities necessary for human dignity: human life; bodily health and bodily integrity; senses, imagination and thought; emotions; practical reason; affiliation; other species apart from human beings; play; and control over one’s environment (Nussbaum, 2000, pp. 78-80). For these abstract capabilities to be more empirically oriented, the willingness to realise their potential must be systematised and then institutionalised.
At the international level, the systematisation of efforts and differentiation of the aforementioned goals can help to realise them more precisely, addressing palpable issues – such as poverty – more thoroughly and consistently. Consequently, to understand poverty in a more informed way, „as a deprivation of basic capabilities“ (Sen, 1999, p. 20), the international community needs to establish appropriate institutions which will, in turn, set particular targets.
This issue has found a partial solution with the establishment of the Human Development Index (HDI) and Millennium Development Goals (MDIs), which aim to systematise countries’ efforts and differentiating goals, in order to achieve greater precision in outcomes. The MDGs and the HDI are meant to assess quality of life and be an advocacy tool for its improvement. Obviously, the real success of the HDI and MDGs can be questioned, even though they are not the main topic of discussion here.
For example, the achievement of the MDGs is relative because, regardless of the systematisation of international efforts and differentiation among goals, the initiative is far from accomplishing its purpose, even if the overall world situation is improved (Nelson, 2007; Nayyar, 2013). At the same time, the very existence of MDGs and the HDI proves that the international community has a common agenda, regardless of geopolitical and national economic interests.
Regardless of the criticism it has faced, the United Nations is still the only supranational institution able to help national authorities follow the MDGs. The MDGs and HDI are also important because they do conceive of development as I have advocated in this paper, framing it as a multidimensional concept encompassing both the accumulation of wealth and the realisation of freedoms, thus proving once again that is wrong to consider these two pursuits to be mutually contradictory.
4. Concluding remarks
Development as the accumulation of wealth and development as the realisation of human freedoms and capabilities are not contradictory but included within the concept of holistic development as two interrelated approaches. Even if we agree that it is impossible for developing and underdeveloped countries to achieve the same level as advanced states, we would be wrong to conclude that decent living and the preservation of human dignity can only be guaranteed by economic tools and measures.
If material and non-material development were truly at odds, the very process of attaining them, as institutionalised and systematised in the forms of HDI and MDGs, would be out of reach for most of those who act within the framework of these global initiatives.
At the same time, advanced states, those which have already secured their economic development and are genuinely closer to securing non-material development – in keeping with what the spill-over model suggests – should recognise their responsibility towards other countries and regions that have long been perceived as just dependent peripheries from which resources may be extracted. Entities like the United Nations and its sub-institutions should guarantee corresponding actions to help developing states secure their material and non-material development.
To be an advanced state should not be perceived as a privilege, but rather as a responsibility to support those states and regions which historically inherited underdevelopment and which, due to objective reasons, have been unable to attain the same level of development as the former ones.
This does not mean that the domestic governments of developing states can fully rely on the international community and external support. On the contrary, they must also take responsibility for their own success, because, unless the people who live there are persuaded that the reforms necessary to bring positive changes are right, the promotion of development will not be successful.
PhD candidate at the Russian-Armenian University.
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 In this respect, the author’s vision is similar to the post-positivism of Kuhn (1970) and Lakatos (2004).
 Such as the ‘third way’ of development understood as harmony (Bell and Mo, 2013).
 A good example of this issue is provided by Sen in comparing the average life expectancy of African Americans in the United States and some other populations of the ‘Third World’. See: Sen, 1999, pp. 21-24.
 At the same time, there can be other fundamental values not directly tied to money such as love, patriotism, altruism. Realisation of these values in life may be done via material abilities to obtain them, e.g., altruism through philanthropy: rich people materially helping the poor without compensation, etc.
 Generally, Hegel presents development as a history of perpetual progress. Its ’spirals‘ include new features at every new loop of development, strongly tied to the previous path. For more rigorous explanation, see the Stanford Encyclopedia of Philosophy (2014) and Spenser and Krauze (1996).
 Usually the advanced states of the Western hemisphere.
 The tiers monde.
 ‚The notion of a developing state should be distinguished from the notion of a state in transition (Rodrick, 2005). Depending on the context, the term ‚transition‘ can have a diametrically opposed meaning to the term ‘development’.
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