Are there viable strategies of development that privilege the poor? This section begins with a discussion of what would constitute an alternative: an alternative must be both economically feasible and superior in performance of poverty-alleviation objectives. I then turn to a range of economic policies and programs that show some promise of satisfying both criteria: asset redistribution, entitlement reform, employment-expansion policies, agricultural development, and expansion of state-funded amenities for the poor.
There is a more or less coherent development orthodoxy today. The central assumption of the development gurus is that growth in per capita income is the fundamental goal of economic development and that efficient markets, privatization of economic life, and a severely restricted role for the state in welfare and economic regulation are the central means. On this approach, economic development is a largely technical process involving the improvement of market institutions, price reform, and free-market entrepreneurial activity. Growth and efficiency are preeminent. Free markets and privatization are emphasized. And it is generally held that distributive goals should not intrude; the state is regarded as a predatory, rent-seeking agency which almost inevitably interferes with efficient growth. A chief goal, therefore, is to minimize the role of the state-including subsidies and welfare systems. Market institutions should be permitted to select the most efficient techniques of production, products, and uses of resources.
Survey of the cases considered above suggests the following hypothesis: that market-driven rural development strategies that work through existing property relations have a built-in structural tendency towards favoring the interests of the rich over the poor-large landowners over small, owners over tenants, and managerial farmers over hired hands. Such schemes do not do very well at improving the welfare of the lowest stratum of rural society, and they work to extend rather than narrow rural inequalities.
These conclusions rest on several converging lines of argument. First is a political point: development strategies are the object of intense political activity within the LDC, and the extreme inequalities in political powers between large landowners and peasants guarantees that the former will have the preponderant voice in this political struggle. As a result, we should expect that development strategies will emerge that are biased towards the interests of the landowner.
Second, there is a structural tendency stemming from the character of stratified property holdings themselves that leads to deepening inequalities between landowners and landless workers. Excluding tax revenues, incomes are generated through two basic sources-income on property (rent, profit, interest) and income on the sale of labor power. The effect of rural development is to increase the productivity of rural farming systems-ultimately, to increase the yields on land. These increased yields are then converted into increased earnings for the owners of land and other capital resources. Wages increase only if the demand for labor rises; but to the extent that mechanization is part of the package of technological changes that are introduced, the opposite is more likely. Thus there is a tendency for the larger share of the gains through innovation to flow to the owners of land and capital.
This tendency leads to greater inequalities between land owners and the landless; but another important feature of rural inequality is that between large and small owners (managerial farmers and landlords, on the one hand, and subsistence peasant farmers, on the other). How does rural development affect the micro-farmer? There is much debate on this question in the literature, but several factors appear fairly clear. The very small farmer faces serious barriers to successful implementation of technical innovations of the Green Revolution. First, his plot is very small-often too small to fully satisfy subsistence needs. He has little access to credit, since he has little collateral and little political influence. His current cultivation is frequently a food crop, whereas the available spectrum of innovations are oriented towards riskier market crops. And many-though not all-of the available innovations are indivisible, requiring a minimum acreage to be efficiently used. This is particularly true of mechanized innovations-tractors, harvesters, etc. Finally, the small farmer is in the most precarious economic position: frequently heavily indebted, with few cash reserves, a bad harvest or slump in the commodity market can lead to the loss of the land that he owns or rents. Moreover, as the potential return on land increases through development, there will be more pressure on the smallholder to relinquish his land. Thus foreclosure, abrogation of tenancy, and intimidation should result, pushing some small farmers into the wage labor sector. The net result is that it would appear as a practical matter that larger farmers and landowners are in a substantially better position to implement Green Revolution technologies; to the extent that this is so, however, we would expect a widening gap between earnings on the two types of farms. And we should expect a significant slippage in the number and size of small farms, as peasants are proletarianized or marginalized by changing economic circumstances.
A central argument here is that the distributive characteristics of rural development schemes are largely determined by the specifics of the institutional arrangements through which these work, including chiefly the form of ownership of land and the distribution of political power. I will thus be working within a framework of analysis that identifies the social relations of production, and system of surplus extraction that they represent, as the fundamental determinant of the distribution of income, wealth, and political power. [1]
We may distinguish broadly between two families of development strategies: those that funnel development through existing property relations and political power alignments and those that involve a redistribution of property and political power in favor of the dispossessed. In the circumstances of many parts of the less-developed world, the existing property relations define an agrarian class structure based on highly stratified land ownership, and existing political institutions that are highly responsive to the political organizations of the elite defined by this property sys tem. Somewhat oversimply we may say that "Laissez-faire" strategies of development are those that aim at diffusing technology, new investment funds, expertise, etc., through these existing private property arrangements, and then let the distributive chips fall where they may. "Poverty-first" strategies undertake to alter these fundamental institutional arrangements in such a way as to confer more power, autonomy, and welfare on the least-well-off strata of rural society.
[1] This framework is very elegantly described by Robert Brenner: "Class structure . . . has two analytically distinct, but historically unified aspects. First, the relations of the direct producers to one another, to their tools and to the land in the immediate process of production-what has been called the `labour process' or the `social forces of production'. Secondly, the inherently conflictive relations of property-always guaranteed directly or indirectly, in the last analysis, by force-and by which an unpaid-for part of the product is extracted from the direct producers by a class of non-producers-which might be called the `property relationship' or the `surplus extraction relationship'. It is around the property or surplus extraction relationship that one defines the fundamental classes in a society-the class(es) of direct producers on the one hand and the surplus-extracting, or ruling, class(es) on the other" (Brenner 1976:31).