7.3.10 Development narratives

Look at the two magazine covers in Figure 1. Both were published by the same British magazine, The Economist, eleven years apart. The 2000 cover shows a young man holding a large weapon, photographed close up against a map of Africa. The headline reads ‘The hopeless continent.’ The 2011 cover shows a child running across an open landscape, flying a kite shaped like the African continent in rainbow colours. The headline reads ‘Africa rising.’

In the time between those two covers, global commodity prices had shifted dramatically. Chinese manufacturing growth drove demand for African raw materials through the 2000s, pushing prices up. African economies grew as commodity prices rose. When prices fell again after 2014, growth slowed and the optimism faded. The Economist produced two opposite stories for its main Global North readers, about the same place eleven years apart.

This section looks at a number of explanations that draw attention away from the big picture relationships of global exchange documented in this Subtopic 7.3 and toward explanations located inside the Global South itself. In doing so, they leave the current structure of unequal global exchange largely unquestioned.

A theory, by contrast, proposes a specific, evidenced mechanism and stays open to being revised or dropped if the evidence changes. A narrative may start from a theory, but it keeps circulating whether or not the evidence still supports it, because it feels true.

Development narratives are often produced by institutions: universities, think tanks, international organisations, media outlets, and governments. These institutions have their own interests, funding sources, and audiences. The narratives described below tend to present existing unequal global outcomes as natural, inevitable, or the result of Global South failures. This does not mean that everyone who uses these development narratives is defending existing power arrangements and global inequalities on purpose. Narratives are influential because they feel like common sense. So many people reproduce them without realising why, where they came from, or what their impact is. 

Nigerian author Chimamanda Ngozi Adichie describes this as the danger of a single story, a repeated narrative about a place or a people erasing complexity and fixing power relations in place. Understanding development narratives makes it possible to read them more critically.

Sometimes a theory keeps shaping how people think, and how states and institutions act, long after the evidence has moved on. The two development narratives below are examples of this.

Development stages narrative

One historically influential theory since the 1960s in mainstream development economics is associated with economist Walt Rostow (Figure 3). It holds that all countries pass through broadly similar stages of economic growth, moving from subsistence agriculture through industrialisation to modern service economies. Poorer countries are described as being at an earlier stage on a universal path. Given time and the right policies, the framework predicts that poorer countries will eventually reach income levels similar to those of wealthier ones.

Rostow's framework was one version of a wider idea in economics called convergence theory. This theory claims that poorer economies naturally grow faster than richer ones, and will eventually close the income gap between them. The theory was first developed by economist Robert Solow in the 1950s. Rostow adapted it into a specific set of stages aimed at Global South countries during the Cold War.

The stages of development framework has two significant weaknesses. The first is that it does not explain how the economic gap between core countries and periphery countries first opened. That gap grew during the period of colonial extraction outlined in Section 7.1.2. During those centuries, labour, resources, and value moved from the periphery to the core. Periphery economies were reorganised around the production needs of the core. At the time this process began, many regions of the world had productive and sophisticated economies. Parts of China were at broadly comparable levels of economic development to Western Europe as late as 1750. Advanced urban economies also existed across West Africa, South Asia, and the Middle East long before European colonial expansion. The gap opened through colonial relationships, not through a missing stage on a universal path.

The second weakness is the assumption that industrialisation is the goal for all economies. This assumption is built into the language the framework uses. Calling some economies ‘developed’ and others ‘underdeveloped’ or ‘developing’ implies that there is one correct destination, and that economies which look different have simply not yet arrived. It treats industrial capitalism as the standard against which all other economic systems are measured. This framing does not allow for the possibility that different societies developed different ways of meeting people's needs. It also obscures the fact that many economies described as ‘underdeveloped’ were in fact highly developed in agriculture, trade, crafts, and social organisation before colonial powers restructured them to serve the core countries. 

Convergence theory has also taken new forms since Rostow. In his 2018 book Enlightenment Now, psychologist Steven Pinker argued that global capitalism, and market liberalisation specifically, is driving a great convergence, with poorer countries catching up to richer ones. Versions of this claim continue to circulate in popular media today. The next narrative looks at the liberalisation narrative directly.

Liberalisation narrative

From the 1980s onward, the International Monetary Fund (IMF), the World Bank, World Trade Organization (WTO) and many Global North states promoted a set of policies for Global South countries broadly known as liberalsation: opening markets to international trade and foreign investment, removing controls on movements of finance in and out of the country, privatising state-owned industries, and cutting public spending. This group of policies became known as the Washington Consensus, named after the city in the United States where these institutions are located (Figure 5). The theory was that removing barriers to trade and investment would produce faster economic growth and reduce poverty.

But the countries that achieved the most significant income gains since the 1980s — South Korea, Taiwan, and China — did not follow these policies. They used tariffs, state investment in industries, credit guidance, and controls on cross-border finance to build domestic industries before opening them to global competition. These strategies are called industrial policy. Economist Ha-Joon Chang has shown that Global North countries used these industrial policy tools during their own industrialisation, before advocating open markets for others. He describes this hypocrisy as kicking away the ladder. Rich countries reached economic strength using a set of policy tools, then restricted access to those same tools for poorer countries through trade agreements, IMF loan conditions, and WTO rules (Section 7.2.5). 

The wider record beyond these three countries tells a similar story. Research covering the period from 1960 to 2023 found that the income gap between the core and periphery grew fastest during the 1980s and 1990s, the exact decades when liberalisation policies spread across the periphery. Over the full period, the core's income grew between four and ten times faster than the periphery's.

Despite this record, the liberalisation narrative continued to shape IMF loan conditions and World Bank policy advice for decades after the evidence from East Asia contradicted it, and is still widely repeated today.

Each of the four narratives below names a real, documented cause of poor development. However, each of these is often presented as if it is the whole explanation on its own. In fact, each is one part of a wider web of causality, with unequal exchange and unequal power between the Global North and Global South operating in the background.

Institutional narrative

An influential tradition in development economics argues that the quality of a country's institutions — its property rights, rule of law, and political systems — determines its long-run economic performance. Countries with inclusive institutions, meaning those that distribute power and opportunity broadly, tend to grow. Countries with extractive institutions, meaning those in which elites capture resources and political power at the expense of the wider population, tend to stagnate. 

In 2024, economists Daron Acemoglu, Simon Johnson, and James Robinson received the Nobel Prize in Economics for a recent version of this argument. Their research argues that the type of institutions that colonial powers built in colonised regions depended largely on whether European settlers chose to stay. In places like sub-Saharan Africa and parts of Asia where disease and climate made permanent settlement unattractive, colonial powers built extractive institutions designed to move resources efficiently out of the periphery countries to the core countries. In territories where Europeans settled permanently including North America and Australia, they built institutions that protected property rights and political participation, mainly for the settler population. In both cases, these early institutions shaped the property rights and political power different groups held long after colonial rule ended. 

Development institutions such as the World Bank and IMF have drawn on these ideas about the importance of institutions since the 1990s. Their policies have more recently focused on internal reforms inside periphery countries: reducing corruption, strengthening property rights, and improving governance. But this approach pays little attention to the global extractive relationships that shape domestic institutions in poorer countries in the first place. Reforming institutions inside states in the periphery, while leaving those external relationships in place, addresses only part of the picture.

But the dominant narrative about corruption in the Global South leaves out active Global North participation. Section 7.3.7 documented that illicit financial flows out of the Global South are pervasive. These flows work in different ways. Companies underprice or overprice traded goods to shift money out of the country, a practice called trade misinvoicing. Multinational corporations also move their profits to countries with low taxes, a practice called profit shifting. Wealthy individuals move money abroad to tax havens to avoid paying tax at home. Banks in the Global North advise on these practices. They also receive, hold, and invest this money. Global North states and international institutions maintain the legal conditions that make these flows possible.

Global North states have also intervened directly in Global South governance. This has taken different forms over time, including support for coups against elected leaders, backing for regimes friendly to Global North interests, and pressure through loans and trade deals. These interventions have often installed or propped up the same governments that are then criticised for corruption.

Corruption is real, and it damages development. But it is not a problem unique to the Global South, and it is deeply tied to the unequal power relationships between the Global North and Global South documented across this Subtopic 7.3.

But geography played a smaller role than the colonial extraction described in Section 7.1.2. West Africa, Asia, and other regions had sophisticated economies well before European contact, in climates and terrains no different from today. Geography did not change after 1500, when the economic gap between the Global North and Global South began to widen sharply. Colonial extraction did happen during that period. The timing points to unequal exchange as the main driver of the divergence, with geography as a smaller, contributing factor.

Aid dependency narrative

A final narrative holds that decades of development aid have created dependency in the Global South. It argues that aid weakens local initiative, distorts markets, and slows the growth of self-sustaining economies. Some of this criticism is valid. Aid can reduce the pressure on states to build their own tax systems and state capacity. It can also direct resources toward priorities set by donors, rather than by the countries receiving the aid. Section 7.3.8 discusses these concerns.

The problem with this narrative is that it focuses on aid while leaving out the much larger flows documented in earlier sections of Subtopic 7.3 Estimates suggest that the Global South loses roughly thirty times more through unequal exchange than it receives in aid. Much aid is also delivered as soft loans, which add to a country's debt burden rather than relieving it. Aid often arrives with conditions attached, on trade policy, privatisation, and government spending. These conditions have repeatedly stopped receiving countries from using the industrial policy tools that drove economic growth in East Asia (Section 7.2.5). Aid dependency is a real concern, but it is a small factor next to the much larger flow of resources moving out of the Global South.

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Development narratives are stories about global inequalities that get repeated until they feel like common sense. In some cases, such as development stages and liberalisation, theories become narratives and they survive even when the evidence no longer supports them. In other cases — narratives on institutions, governance and corruption, geography, and aid dependency — single stories are treated as the whole explanation for global inequality. Dependency theorists like Samir Amin and Walter Rodney offer a different explanation. They argued that the wealth of the core countries and the poverty of the periphery come from the same process. Colonial extraction, and the unequal exchange it left behind, built up wealth in the core and drained it from the periphery. The five narratives above look for separate causes inside each region. In fact, each is only part of a complex web of factors, with unequal global power and exchange sitting in the background. 

Many economists are engaging more seriously with economic history and take a wider view of how global exchange systems operate. Subtopic 7.4 looks at what this wider view makes possible. What would different arrangements for global exchange look like? Who is already working to build them?

Concept: Power, systems

Skills: Thinking skills (critical thinking), Research skills (information literacy)

Time: varies, depending on the option

Type: Individual, pairs, or small groups

Option 1: Identifying development narratives in media, policy, education

Time: uncertain, depends on how long it takes to find a narrative example. To shorten it, the teacher could provide some examples from recent media reporting for students to respond to. The writing would take one class period or less.

• Choose one of the narratives examined in this section. Find one real example of this narrative being used in a news article, a policy document, an economics textbook, or a speech by a politician or international organisation. 

• Write a short analysis of 200–300 words that identifies what the narrative claims, what evidence it uses, what it leaves out, and whose interests are served if it is accepted. Alternatively, you could get into small groups to share your examples with each other, explaining your insights.

Ideas for longer activities and projects are listed in Subtopic 7.5

• The danger of a single story — A TED Talk by Chimamanda Ngozi Adichie on how single narratives erase complexity and hold power in place. Difficulty level: easy.

• Why Are Some Countries Rich and Others Poor? — A 45-minute lecture by economist Ha-Joon Chang from the INET Economics for People series. The second half of the lecture directly challenges explanations of global inequality that rely on geography, climate, natural resources, or culture, showing that the same factors are present in wealthy countries and do not explain the gap. Difficulty level: medium.

• Why isn’t the whole world developed? Economic history and imperial interventions - CAGE, an economic history research centre at the University of Warwick, partnered with Discover Economics to produce a series of short videos for secondary school students. The series explores how colonisation and imperial interventions shaped the long-term economic development of Africa and India, drawing on research including the 2024 Nobel Prize-winning work on institutions. Difficulty level: easy.

  • Did colonialism really cause poverty? – Economic historian Lakshmi Iyer explores why some former colonies became wealthy after independence, while others faced decades of poverty.

  • Why are some nations still paying the price of colonialism today? – An economist explains the research linking settler mortality, the type of institutions colonisers built, and long-term economic growth.

  • Why is Africa so poor? – Economic historian Nathan Nunn examines the long-term effects of Africa's slave trades on poverty today.

  • Are Africa's colonial borders holding it back? – Economist Stelios Michalopoulos discusses how European colonisers divided existing ethnic groups across national borders, and the lasting instability this caused.

  • Why India stayed poor until independence – CAGE Impact Director Bishnupriya Gupta discusses how European trade policy and a lack of agricultural investment held back India's economy until independence.

  • Did the slave trade make Britain rich? – Economists examine the connection between the transatlantic slave trade and Britain's Industrial Revolution.

  • Is colonialism responsible for medical mistrust in Africa? – Economist Sara Lowes explains how coercive colonial-era medical treatments have contributed to a lasting mistrust of modern medicine in some African communities.

Acemoglu, D., Johnson, S., & Robinson, J. A. (2001). The colonial origins of comparative development: An empirical investigation. American Economic Review, 91(5), 1369–1401.

Acemoglu, D., & Robinson, J. A. (2012). Why nations fail: The origins of power, prosperity, and poverty. Crown Business.

Adichie, C. N. (2009). The danger of a single story [TED Talk]. TED Conferences. https://www.ted.com/talks/chimamanda_ngozi_adichie_the_danger_of_a_single_story

Chang, H.-J. (2002). Kicking away the ladder: Development strategy in historical perspective. Anthem Press.

Chang, H.-J. (2011). Institutions and economic development: Theory, policy and history. Journal of Institutional Economics, 7(4), 473–498. https://doi.org/10.1017/S1744137410000378

Daley, P., Ndlovu-Gatsheni, S. J., Kimari, W., Obeng-Odoom, F., Tamale, S., Bauriedl, S., Bawa, S., Carstensen-Egwuom, I., Adeniyi-Ogunyankin, G., Al-Bulushi, Y., & Ouma, S. (2026). African decolonial theory: A conversation. Antipode, 58(2), Article e70110. https://doi.org/10.1111/anti.70110

Dutt, A., Alves, C., Kesar, S., & Kvangraven, I. H. (2024). Decolonising economics: An introduction. Polity Press.

The Economist. (2000, May 13). The hopeless continent. The Economist.

The Economist. (2011, December 3). Africa rising. The Economist.

Hickel, J. (2017). The divide: A brief guide to global inequality and its solutions. Penguin.

Hickel, J., & Sullivan, D. (2026). The myth of catch-up development: trends in core–periphery inequality from 1960 to 2023. New Political Economy. https://doi.org/10.1080/13563467.2026.2659076

Kinzer, S. (2006). Overthrow: America's century of regime change from Hawaii to Iraq. Times Books.

Pinker, S. (2018). Enlightenment Now: The case for reason, science, humanism, and progress. Viking.

Pomeranz, K. (2000). The great divergence: China, Europe, and the making of the modern world economy. Princeton University Press.

Rostow, W. W. (1960). The stages of economic growth: A non-communist manifesto. Cambridge University Press.

Coming soon!