3. Second Development Decade 1970 - 1980
In the second development decade these concepts were further
developed. The ILO presented an employment-oriented development
strategy in its World Employment Programme. It sent missions
to various countries to explore the possibilities of expanding
employment. Under the quantitative aspect, they had little
success. It was ascertained that most of the people already
had an occupation. One cannot live on unemployment. However,
the findings of these missions led to numerous new points
of view. The problem at hand was not at all unemployment but
a general employment problem involving several aspects. Sometimes,
it was a problem of time when someone did not have enough
work. However, many people worked hard and over a long period
at a low salary so that it was not a problem of time but of
income. Others did not find the work they wanted in the place
they wished, and many worked at a low productivity because
the complementary factors of production were not available.
Each of these circumstances calls for a different policy.
Thus, it is not so much the volume of work available that
is important but the earned income. A rich man does not complain
about too little work. As the emphasis was laid on income,
poverty became the main term in the discussion. Seers (35)
was one of the first to question the increase in the gross
national product as objective and criterion. It was perceived
that the success of growth did not trickle down to the poor.
It also became particularly evident that industry could not
absorb the increasing number of workers. This was caused not
so much by deficiencies in the labour market as by deficiencies
on other markets, e. g., credit subsidies, overvaluation of
currency and other circumstances encouraging high capital
McNamara's (22) famous address, made in 1973, drew attention
to the neglected 40 % of the poorest in the world and, since
these live mostly in rural areas, agriculture again enjoyed
greater consideration. Food prices are, indeed, the most important
factor for the poor people's real income, and the low agricultural
productivity was considered to be the main cause of poverty.
As a result, attention once more turned to the conditions
of agricultural development. Myrdal (26) in 1970 hat already
emphasized the importance of adjusting the institutional framework
conditions as the prerequisite for a successful rural development.
In 1971, Ruttan and Hayami (10) submitted their concept of
an induced agricultural development. According to that concept
the countries, whose resources in production factors vary,
have different effective technological ways of achieving growth,
and factor prices help in selecting the optimal way.
In 1974. Johnston and Kilby (15) analysed the interaction
between agricultural development and the expansion of the
non-agricultural sector. They arrived at the result that numerous
small farms had a greater stimulating influence on industrial
development than a few large farms.
The opening of China has, undoubtedly, also helped to put
a stronger emphasis on income distribution in development
policy. China's recent history shows a development concept
which aims at avoiding an increase of income inequality. The
attractiveness of this model, for Asia in particular, led
to more efforts in the development policies of industrial
countries to fight inequality (,,growth with equity",
All these trains of thought of the early seventies led to
a concise concept which Mellor (24) submitted in 1976, as
an ,,employment-oriented strategy of rural development".
This concept takes into consideration the interdependance
between agricultural and non-agricultural development, the
necessity of growth and distribution, and the emphasis on
production increase as distribution basis. According to Mellor
the starting points of development are the labour-intensive
economic sectors, namely agriculture and the small industries
established in the rural areas, both of which produce consumer
goods that are in demand. An increased food production —especially
cereals —supplies food, employment in processing sectors
and, due to the increasing agricultural income, a greater
demand for labor-intensive industrial products. This strategy
should be supported by reorganizing foreign trade so that
labour-intensive products are exported.
At the same time, at the international level, dissatisfaction
with the results of the development efforts was again on the
increase. The poverty-stricken rural population migrated more
and more to the towns. They were not motivated by the difference
between income in the rural areas and real urban income, but
by the difference between their income at the time and the
expected income in town (Todaro, 38).
It is true that the success of rural development in a few
countries had globally mitigated the problem of food supply,
but all the measures taken hitherto had been of little help
to the poor people in the world. In this situation, a moral
appeal to the whole world population was made. McNamara (23)
declared in 1977, that an equal income distribution called
for changes in industrial as well as in developing countries.
These changes are levelled at the personal interests of the
privileged, influential minorities in all countries. In 1976,
Tinbergen (37) demanded a ,,new world economic order".
At the same time ILO, Jolly and the Overseas Development
Institute of Sussex drew up the strategy of ..basic needs"
(13). The disadvantaged people in the world are not helped
by mammoth projects but by a change in the structure of production,
distribution and consumption. Measures aimed at satisfying
basic needs such as food, clothing, housing and health help
those standing in the background of the development process.
At about the same time it was tried, on the basis of the concept
of integrated rural development, to implement these ideas
and to combine production increase and social improvements
in the same project whose target groups were the poor people.
Thereby, the emphasis was laid on the participation of the
poor. At any rate, this approach, taking up ideas which played
a role in the community development policy of the fifties
already, turned out to be very complex and difficult to implement.
In particular, it meant more influence on the part of the
government due to the requirements for integration and thus
showed a tendency to divert attention from self-help activities.
Uma Lele (20) obtained negative results when conducting
a survey on the success of this concept, especially since
the local institutions could not be sufficiently activated
and since the available knowledge of the local technological
possibilities was scanty. The administrative costs turned
out to be considerable and, therefore, the projects could
not be multiplied. In 1980 the World Bank started to discontinue
support of this approach. It had been recognized that the
emphasis on the basic needs indeed brings about an increase
in welfare but that, unless an economic basis is created simultaneously,
investments into social services are not possible at long
term. The poor benefit more from a reinforcement of the development
basis than from mere redistribution measures, if an appropriate
policy guarantees that the results do not bypass them.