The Relationship Between Development and Modernisation

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The developed countries applied their parallel experiences on modernization and development on the developing countries , better known as the Third World.  They believed that poor developing economies will simply experience an economic take-off in a supportive environment of a world economy (Henry, 2003).  The case of the Middle East is a good example on how First World experiences are not applicable because internal institutional factors do not allow it and these were not taken into account (Henry, 2003).  One factor, a political Islam cannot find its place in a system patterned after western democracies.

  The paper aims to discuss the relationship between development and modernization.  Changes essential for industrialization were also tackled.   Part of the discussion dwells on the shortcomings of modernization which in many cases were not applicable in the Third World.

  1. History of Modernization

Since the second half of the twentieth century modernization theory developed in three significant waves (Theorieenoverzicht, 2007):

  1. First wave (1950s and 1960s)

Western styles of living and technological innovation started to spread and gained acceptance with the perception it represents superior secular and materialistic culture.

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  With the help of media, western practices were adopted in many countries even if some of these were impractical.  The adaptation covered various facets of life: clothing, food, housing and others.  The youth formed the demographic segment that readily embraced foreign Western culture.  The adults watched and little by little assimilated the Western practices.  Areas farther away from the cities did not have much access to media and this is where traditional culture was preserved.

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Western education was considered far more advanced and it was a dream for many to get their education in the developed countries.  There was no doubt western education was better and government and private institutions sent their scholars to get proper training to be able to tap to the fullest the benefits of the anticipated take-off towards industrialization.  However, not all these scholars would return to their native countries.  The opportunity to earn more and enjoy higher living standards made many of them to stay in the developed countries.  As a result, the advanced training they received in the western colleges and universities were not passed on in their respective countries.

Technological development focused on strategic military superiority as the rivalry between the West and the communist countries became pronounced.  However, there was significant technological development in the industrial sector, particularly manufacturing.

  1. Second wave (1970s and 1980s)

Western modernization was criticized and was identified as a case of cultural and economic imperialism.  The same sector which readily embraced western culture realized that modernization has not brought prosperity to their countries and protested the continuing influx of western culture.  Many of the developing countries are producers of raw materials and it was perceived that the developed countries were only interested in their supply.  At this time, the Cold War was raging and the western countries were wary about the economic advances in the communist countries.

The western countries, particularly the United States, supported the theory that authoritative governments can bring about development and the enjoyment of the fruits of development will lead to conversion to democracy.  This was applied in the whole of the Third World, including the Middle East.  Since oil has become a political commodity at this time, the western countries supported the monarchies then reigning in the region.

However, Western modernization was already suspect as to its objectives as the negative effects were already being experienced by the Arab world.  This led to the toppling of monarchies and which were replaced by autocratic regimes.  The emergence of these autocratic governments was tolerated by American foreign policy in the hope that development in the region will contribute towards the shift to democratic governments.  But the change did not occur, and the gap between the rich and the poor became wider.

  1. Third wave (1990s)

The theory tries to identify the shortcomings of the modernization process and how it impacts on individuals in society.  At this point in time, the influence of modernization stretched beyond what traditional societies can imagine through the use of mass media and interactive media.  Digital technology grew at a phenomenal rate.  It provided a basic infrastructure for electronics and communications, setting the start of an information revolution.  Internet technology was already available to the private sector.  The influence of modernization reached places far away from the cities and the weakening of traditional culture continued.

Pockets of resistance to modernization developed and was very evident among the Muslim nations.  Using the same technology that modernization has brought, Islamic groups were able to initiate terrorist activities in proportions never before experienced.  Their main adversary was the United States for it is perceived as the champion of capitalism and free market economy.  Furthermore, the US is the main supporter of Israel.  The humiliation of the Palestinian people experienced as a result of the formation of the Jewish nation has always been recognized as one the main causes of political instability in the Middle East.  But this argument may be subordinate to the inequitable distribution of wealth leading to the spread of poverty in the oil-rich region.

At this time, western economic thought espoused the view that the integration of world economies will lead to rapid change in the developing countries.  The western countries promoted free trade arrangements that will ultimately  bring down trade barriers.  Many developing countries use trade barriers as protection, along with tariff and export subsidies.  Among the free trade arrangements that evolved were the North American Free Trade Agreement (NAFTA), the Asia Pacific Economic Cooperation (APEC).  The European Union went further by integrating currency with the creation of the Euro Dollar.  The objective of  integrating the world economy will be achieved through what is known today as globalization.

Modernization theory relied on the mechanisms of comparative advantage that will bring forth the desired take-off and economic development among nations and the respective changes required for industrialization.  On the other hand, globalization theory is similar to modernization theory but emphasizes the free flow of information, resources and people (Jrank, 2007).

With the dismantling of protective barriers, developing economies found themselves at the mercy of international trade competition.  Agricultural producers, industrial manufacturers and service providers were unable to compete with more advanced foreign technology and more efficient financial capital.  As a result, dislocations occurred and the threat of ever growing poverty continue to exist among developing nations.

  1. Changes Needed to Support Industrialization

For modernization to be successful, there is a need for societies in developing countries to implement changes that impacts on almost all aspects of individual and community way of life.  These changes may be classified into institutional, cultural, social and political.

  1. Institutional

  1. a) Bureaucracy

An efficient bureaucracy is necessary for the government to carry out its functions effectively.  Experience shows that many multilateral and bilateral financial aids are tied up with programs aimed at improving and streamlining the bureaucracy.  A common concern is the bureaucratic red tape common in developing countries which is viewed as hindrance to the delivery of services to the various sectors of society.  In many developing countries, the bureaucracy is bloated way beyond the required workforce.  This may be the result of political patronage which is an accepted practice in the Third World.

  1. b) Fiscal system

Tax collection is vital in the efforts of the government to pump prime the economy.  Many developing countries have a low collection rate due to administrative inefficiencies resulting from a poor fiscal system.  Aggravating this problem is the prevalence of graft and corruption.  The government imposes taxes not only to fund the national budget.  Tax rates are designed so as to help in narrowing the great divide between the rich and the poor.

  1. c) Trade and Capital Flow

Industrialization is based on the premise countries trade due to existing comparative advantages.  Many developing countries, however, impose various forms of trade barriers to protect their industries.  Likewise, developing economies have imposed capital flow restrictions in order to cushion fluctuations in the exchange rate and protect its monetary system from capital flight.  Developing countries have utilized various measures to bring down these barriers.  Through the multilateral financial institutions, debtor states were forced to remove or soften trade barriers and foreign exchange controls.  This occurred after the international debt crisis of the 1980s (Henry, 2003).  More improvements were imposed as a result of the more recent 1997 Asian financial crisis.

  1. Cultural

  1. a) Entrepreneurialism

A developing economy needs entrepreneurs who will take the risk of initiating and running the business sector.  For this reason, many developing countries allot the majority of the budget on education, expecting a more productive workforce.  Educational curricula have been adjusted to support entrepreneurialism.  Many have adopted the Dual system of education where students are exposed to working conditions.  As a result, graduates are better prepared when they enter the workforce.  The governments’ effort to produce trained and efficient work force fails in the light of poor pay and working conditions.  Brain drain results as many college graduates seek greener pastures in more developed countries (Case and Fair, 2005).  But not all graduates migrate to find work abroad.  There are those who stay and engage in small and medium business enterprises.

  1. b) Western Culture

There is a predominating perception that the developed countries are richer and, therefore, Western culture is more progressive.  On the other hand, this relegates traditional culture in underdeveloped countries to the thought of being backward needing transformation to western practices (Marglin, 2003).  According to Marglin, this leads to cultural imperialism as western practices are imposed on the local population.

Western culture has brought about both positive and negative results to emerging economies.  It has introduced ways of thinking and lifestyles that has shaped attitudes and behavior that will help in adjustments required by modernization.  However, the outright imposition of a culture, perceived as better, over that of traditional culture seem grossly unjust to the people involved.  In the case of the phenomenal economic growth of Japan in the 1960s, traditional culture was preserved.  Japanese society was able to assimilate modern ideas from western culture, including technology; but there was no imposition.

  1. Social

  1. a) Urbanisation

Industrialization results in job creation thereby inviting population to migrate to primary cities.  In the case of the development of the Baltic states under the Soviet Union, the result was a change in population distribution leading to the overcrowding of cities and a shortage in the supply of labor in the agricultural sector (Idzelis, 1984).

Due to rapid urbanisation, government is not able to provide sufficient social infrastructures such as housing and health care.  The result is deterioration in the living conditions of the work force.  Peace and order is likewise adversely affected resulting in the growth of crimes against property and persons.  The drug abuse problem continuous to worsen although this was not as serious during the onset of modernization.  The fast growth in urban population resulted in the establishment of illegal human settlements.  With government’s inability to provide basic services, urban decay sets in.  A solution is to turn over this function to the private sector.  The profit motivation of the private sector can also contribute to higher costs of living.

The labor shortage in agriculture could have been offset by the application of modern technology but lack of capital and the slow growth of income low-income groups prevent this from happening.  The younger generation in the agricultural sector prefers to migrate to the urban areas where, through the influence of electronic and print media, they perceive there is greater chance of getting employed.

  1. Political
  1. a) Equity and Income Distribution,

Experience in the developed countries showed a strong middle class evolving from the fruits of industrialization.  However, present development trends show that incomes among low-income groups rise slowly resulting in increasing income inequality (Jinglian, 2004).  One reason may be due to the acceptance in developing cultures that family and political connections are more important than ability (Case and Fair, 2005).

Governments have responded with policies aimed at redistributing wealth.  Among these redistributional policies are: tax and transfer programs, minimum wages, free education, subsidized housing (OECD, 1996).  But the effectiveness of these programs remain in question, as the outcomes are contrary to desired objectives.

The taxation system as directed by fiscal policy is hampered by collection problems and graft and corruption.  To alleviate the problem, government has requested help from multilateral financial organizations to finance the acquisition of equipment and systems to make collection efficient and effective.

The minimum wage policy resulted in the erosion of comparative advantage since productivity has not risen proportionally.  As wages increased, the prices of prime commodities increased at a proportional rate.  The purchasing power of labor remained weak prompting this sector to ask for more wages.  The private business sector then protests as increasing labor costs erodes the profitability of their products.  With government unable to meet their demands, there is a tendency for labor to turn militant and engages in work stoppages and work slowdowns.

Government’s free primary and secondary education policy will not be effective in the absence of new classrooms and books to meet the ever growing student population (which results from a high population growth rate).  The results are overcrowded classrooms and dilapidated textbooks.  The quality of education deteriorates and fails to provide the needed training and background to the new members of the labor force.

In developing countries where vast tracts of private agricultural land remained idle, land redistribution was effected through land reform programs.  However, many of these programs lacked financial planning and were carried out for political considerations.  Take the case of Taiwan where land reform was successfully implemented.  Government bought agricultural land and redistributed them to farmers who were given inputs financing.  On the other hand, landowners were paid based on fair market value and productivity of the land.  The former landowners then invested their cash holdings in the financial, manufacturing and service sectors helping to promote economic growth and development in Taiwan.

Not all land reform programs have been successful.  The inability of government to provide support to the new farmer-landowner resulted merely in the transfer of ownership of agricultural land.  The process did not in any way contribute to agricultural production.  Payment to landowners are not based on fair market value so that there is undervaluation of the acquired properties.  Furthermore, it takes years before the landowner receives the payment.

  1. Issues on Modernization and Development

The needed changes for industrialization and modernization as discussed above already hints on the potential problems such change will bring about.  Today, some issues stand out from the rest but the main causes seem to point to the politicization of economic development thought.

  1. Failed Development Blueprints

In the post-war era, there was a belief that dictatorships promote development and development, in turn, promotes democracy.  This argument served as one of the foundations of international economic development thought and the foreign policy of the United States (Przeworski, 2003).  History proves this logic fallacious as the period from 1951 to 1999 showed that the difference in gross domestic product growth rate between democracies and authoritarian regimes were negligible.  This thinking has its roots in the western world’s reaction to the gains of the communist regimes, particularly the Soviet Union.

  The threat of the spread of communism worldwide prompted knee jerk reactions in a game of adding or maintaining allies.  US foreign policy tolerated the existence of autocratic regimes as it champions democracy.  The irony was too blatant for the victims of these autocratic regimes.  Therefore, the US and the western nations became suspect, as to what their intentions really are.  In time, suspicion turned to hatred.  Western culture became unacceptable and militancy grew.

There is no question that modernization has contributed to the lives of people in developing countries.  However, modernization theory may have been more effective were it not imposed as ready-made blueprints for development.  Allowance should have been made for the assimilation of elements of traditional culture which a nation values and will hold on to.  The western world failed to realize that the strength of basic social components prevents the implementation of a blueprint for modernization.  In developing countries, the members of the senior generation are not sent to homes for the aged.  They are taken cared of by members of the family who otherwise would have been productive in the labor force and not be part of unemployment or underemployment statistics.

The adherence to traditional practices is one reason why multinationals have to adjust their marketing and manufacturing processes and the products themselves.  In India, McDonalds’ stopped using oil based on beef fat because cows are revered and treated with respect.  In both the microeconomic and macroeconomic sphere, cultural traditions have to be taken into serious consideration.  Of course governments can be asked (or coerced) to align their policies to accommodate modernization in their own societies.  In this case, individual decisions are not important but the collective temper of the population may one day lead to protests.

  1. The Case of the Middle East

The present growing influence of Arab militants calling for the establishment of Islamic states as against maintaining the economic and political reforms forced on Middle East governments in the 1960s finds the latter in a “global pressure cooker.” Making modernization efforts to achieve development more difficult.  The issues involving development and modernization in this part of the world now requires urgent concern due to the rise of terrorism (Henry, 2003).

The issues against modernization are not localized in the geographic area of the Arab world.  But the case of the Middle East is a classic example of how politicized economic thinking can back fire on the advocates.  Monarchies were toppled and replaced with authoritarian regimes.  Some governments turned Islamic fundamentalists and reverted back to the traditional requirements of Islam, a good example is Afghanistan.  After the 9-11 tragedy, the US government found a reason to topple the Taliban government.  It served as a base for worldwide terrorism.  But some would claim that terrorism stems from poverty and the hatred against western culture.  Both these factors are the unexpected outcomes of blueprint modernization.

  1. Modernization and Cultural Identity

Undoubtedly, modernization has contributed to the betterment of lives in the Third World.  This can be seen in improved infant and child mortality rates, more food, better access to education and health services.  However, only a small portion of these benefits reach the marginalized sector of respective populations due to the tremendous imbalance in wealth distribution.  Furthermore, modernization imposes Western values with disregard to native cultural identity (Marglin, 2003).  The adverse effects of modernization seem to have no effect on western foreign and economic policy.  Today, the specter of globalization looms over the marginalized sectors of developing economies.

To put it simply, globalization is modernization in a rapid pace.  The expected outcome is rapid economic growth and development.  Will globalization result in the rapid growth of anti-western sentiments?  Will traditional culture ever become extinct and replaced by western lifestyle and behavior?  For as long developing nations can see how the Japanese handled modernization, they are expected to opt for selective assimilation of whatever western culture can positively contribute to the lives of people in the developing countries.  However, government regimes can impose its own people to accept western thinking and practices should it decide that it is for the good of its people.


Modernization theory stems from a belief that Western culture is superior.  On this premise, it was imposed on developing economies disregarding the traditional culture of the native population.

Where some societies were able to embrace modernization, others clung strongly to their traditional culture.

The Western world believed that authoritarian governments can bring about development and development, in turn, can lead to democracies.  This politicized economic development theory emphasized industrialization as the key for development of emerging economies.  Developing nations followed this line of thinking and their efforts were supported by bilateral and multilateral financial support.  In the end, however, these developing nations’ economies never took-off.  They ended indebted leading to the international debt crisis of the 1980s.  Because their respective cultures tolerated preference for strong family and political ties, the gap between the rich and the poor widened.  Today, poverty haunts the Third World.

Many in the Third World consider modernization as a guise for imperialism.  The victims of modernization are themselves fodders for terrorism which aims to stop what it perceives to be US imperialism.  The Western world still promotes modernization with emphasis on worldwide economic integration which we know call globalization.  Will it lead to rapid positive change? Will developing nations ever experience the kind of economic development that the Western countries once experienced?





Henry, C. 2003, ‘A clash of globalizations obstacles to development in the Middle East’, Development and Modernization, Vol. 25 (1) – Spring 2003, Available at:

Przeworski, A. 2003, ‘A flawed blueprint, the covert politicization of development economics’, Development and Modernization, Vol (25) (1) Spring 2003, Available at:

Marglin, S. 2003, ‘Development as poison rethinking the western model of modernity’, Development and Modernization, Vol 25 (1) – Spring 2003, Available at:

Theorieenoverzicht, 2007, `Modernization theory’, Available at:


Case, K., Fair, R., 2005, Principles and Foundations of Economics 7th ed.,Pearson Education Education South Asia Pte Ltd., Singapore

Idzelis, A., 1984, Organization and change in the Baltic republics, Lithuanian Quarterly Journal of Arts and Sciences, Vol. 30, No. 2 – Summer 1984, Available at:

Jinglian, W., 2004, Does china need to change its industrialization path?, World Bank, Available at:

Jrank, 2007, Modernization theory – globalization theory, Available at:

OECD, 1996, Growth, equity and distribution – OECD economic outlook and policies, OECD Economic Outlook, Dec, 1996, Available at:

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The Relationship Between Development and Modernisation. (2017, Mar 24). Retrieved from

The Relationship Between Development and Modernisation
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