ADEYEMI COLLEGE OF EDUCATION, ONDO

DEPARTMENT OF GENERAL STUDIES

LECTURE NOTE

GSE 324: POLITICAL ECONOMY

LECTURERS:
DR. O. ADEDAYO
MR. U. D. NOSIRI
Mrs. A. L. OKE-SAMUEL
MR. A. O. NWAOZOR
&
Mrs. T. OLORUNMOTA

1
 CONCEPT / MEANING OF POLITICAL ECONOMY
Before we define political economy, it is pertinent to define what politics and economics
mean
Economics
Different scholars have defined concept of economics differently. The definition of
economics has been shifting over time. Adams Smith defined economics as “an inquiry into the
nature and causes of the wealth of nations.” J. S. Mill defined economics as the practical science
of the production and distribution of wealth. While A. Marshall sees economics as the study of
mankind in the ordinary business of life. Furthermore, L. Robbins defined economics as the
science which studies human behavior as a relationship between ends and scarce means which
has alternative uses.
Economics can be seen in general framework as a social science, which covers the
actions of individuals and/or groups of individuals in the process of producing, exchanging and
consuming goods and services (Nnamocha, 2002). Nnamocha (2002) further added that
economics is an “organized scientific study of the process by which scarce resources which have
alternative uses are allocated among competing wants with the objective of maximizing
welfare.”
Economics is a social science that studies human behavior in aspect of production,
distribution, exchange and consumption of goods and services and how scarce resources that
have alternative uses are allocated to competing interest in order to realize the best satisfaction of
needs. In an attempt to understand economics, it is very necessary to note that:
i. It is the human being that is concerned
ii. He is allocating his scarce resources which can be used in very many other ways
iii. He wants to achieve the best of satisfaction in his very many ends. (Nnamocha, 2002).
Politics
There are several definitions of politics. David Easton define politics as the “authoritative
allocation of values”. It can also be defined as the struggle for power in society which deals with
power and influence. While Lasswell defined it as who get what, when and how. Nnoli (2003)
defined politics as “all activities that are directly or indirectly associated with the emergence,
consolidation and use of state power.
Politics seen as the struggle for power between individuals or groups in order to
determine who gets what, when and how in the state or society. According to Anifowose (1999)
“while there is no best definition of politics, most political scientists agreed that politics has
something to do with power, influence and authority which are the central organizing concept of
the study of politics”
Hague and Harrop (2010) defined politics as “the activity or process by which groups
reach and enforce binding decisions affecting the collectively as a whole.” Therefore, the process
of trying to arrive at a particular decision between groupinvolves element of politics. Ekeman
(2013) sees politics as the “art of resolving contradictions or conflicts for the purpose of serving
human socio-economic interest.” Johari (2009) viewed that politics involves three connotations:
1. Political process which means that efforts by which conditions of conflicts are created
and resolved.

2
2. Political process which involves those agencies that have the role in the decision making
process.
3. Political power which means the capacity of an individual or groups to influence and
modify the conduct or behaviour of others.
Heywood (2007) went further to observe that politics involves different perspectives:
1. Politics as the art of government that governs the affairs of the people
2. Politics as public affairs, which concerns public life.
3. Politics as compromise and consensus which consists on dialogue, debates and making of
agreement of issues or policies.
4. Politics as power and distribution of resources. This means that politics involves the use
of power in order to allocate resources to different sectors, people in the society.
Political Economy
Political economy can be defined as a social science that study the relationship or
interaction between politics and economics. It deals with the production, distribution and
exchange of goods and services and how it is been affected by politics and how the issue of
production, distribution and exchange of goods and services influence political activities.
According to Akpuru-Aja (1998) political economy is an organic unity or synthesis of political
and economic forces, which help determine the inner laws influencing production and
organization of labour in national economies and even, the structure of world economic system.
Therefore, political economy is concerned with the interaction between economics and politics.
Furthermore, political economy studies production and the basis of society from the point of
view of the economic relations between people in the production process. Political economy does
not only deals with production, but the social relations of men in production and the social
system of production (NOUN, 2010). Political economy is the field of study that deals with the
interrelationship of political and economic processes such that socio-political evolution is
explained from economic point of view. It is premised on the fact that the distribution of power
in a society can better be explained in relation to the existing economic relations within a
particular society (Ikuejube & Olupayimo, 2013).
The subject matter of political economy is therefore the production (economic) relations
between people, the relationship of various social classes to political power and the inter play of
politics and economy in the determination of power relations within the comity of nations
(NOUN, 2010). Political economy focuses on:
i. Forms of ownership of the means of production.
ii. The position of the various classes and social groups in production and their interrelations,
iii. The forms and socio-political implications of the distribution of material wealth; and
iv. The interplay of politics and economy in the international division of labour and
exchange (NOUN, 2010).
Political economy also deals with the development of economic relations between people and
clarifies the laws governing production, distribution, exchange and consumption of the material
wealth in human society at various stages of its development.

3
 PERSPECTIVES ON POLITICAL ECONOMY
There exist major contending perspectives to the understanding of the logics of political
economy. These perspectives are:
1. Classical Political Economy / Bourgeois Political Economy
This perspective can also be referred as a Laissez fare political economy. It believes on
private ownership and control of means of production, distribution and exchange. It is based on
free enterprise or private ownership and control of business or enterprise. The classical political
economy discourages the active involvement/intervention of government in production process
or economic activities rather, the state should focus on its primary functions of maintenance of
law and order.
This perspective support or represent the interest of commercial capital. The thrust of this
perspective is the rationalization and justification of private-sector-led economic growth and
development and the universal standard path to modernization. The classical perspective also
believes that the process of goods and services should be determined by the forces of demand
and supply and government has no business on it. The classical political economy believes on
free trade, abolition of trade restriction but support financial and trade liberalization. Major
scholars in classical political economy are: Adam Smith, David Ricardo, J. S. Mills, Thomas
Malthus, etc.
2. Marxian Political Economy
The Marxian political economy has an opposing view to classical political economy. It
seeks capitalization or private ownership of means of production as an unnecessary evil because
it sees the capitalist system as promoting the exploitation of workers by the capitalists.
This perspective discourages private ownership and control of business or means of
production. It encourages active government intervention in determining the price of goods and
services and government ownership and control of the means of production. The scholars of
Marxian orientation have the expectation that state monopoly of the production process will
make for a better redistribution income in the society.
The Marxian political economy started with Karl Marx and Fredrick Engels and their
work was a revolution in political economy. They claimed to have discovered a truly scientific
political economy, which proved that capitalism was historically challengeable and that given its
law of development, it was bound to give way to a new socialist society. Marx and Engels
viewed political economy as a comprehensive social science of change from the profit and
exploitative capitalist system to a human, social and public property system (socialism) (Akpuru-
Aja, 1998). The Marxian political economy seeks to expose the weakness of bourgeois view of
social relations of production and to provide the working class a guide post on how to overthrow
the capitalist system and become part and parcel of the creation and management of wealth of the
society (Akpuru-Aja, 1998).
The Marxian political economy assumed a radical approach or position in its
interpretation of the economic process. The Marxian interpretation of history places emphasis on
social classes, productive forces and the social relationship of production. Marx maintained that
the economy is the substructure upon which other substructure and overall superstructure edifice
of society revolves. (NOUN, 2010). With the logic of historical determination and dialectical
materialism, Marx established the evidence of antagonistic contradictions in every economic
epoch from slavery to capitalism and as such the existence of class struggle in each epoch.
(NOUN, 2010).

4
 The cornerstone or one important aspect of Marxian political economy is the theory of
surplus value that had helped to expose the hidden processes of capitalist production and
exploitation of workers by the capitalist.
3. Neo-Classical Political Economy
This perspective is mainly associated with the writing of John Keynes. Scholars in this
school avoid the extremes of bourgeois/ classical and Marxist perspectives in the study of
political economy. The neo-classical political economy believes on some limited intervention of
government in the economic process if there must be full economic production. It posits that
state intervention in the economic process is relevant for the attainment of full employment,
control of inflation and general economic recession. Therefore, government intervention is
highly needed to control the flow of money in the economy and further accommodate the
preference of government’s fiscal and monetary policies to national economic development
(NOUN, 2010). This perspective gain popular sympathy with the Great Depression of the late
1920s and 1930 in the globalist capitalist system.
John Keynes argued that the decisions of private sector sometimes cause inefficient
macroeconomic outcomes that require active policy response by the public sector, particularly
monetary policy actions by the government in order to stabilize output over the business cycle.
To solve the economic decline (depression or recession), the Keynesian theory suggest for active
response or intervention of government through two approaches namely:
a. A reduction in interest rate (Monetary Policy) and;
b. Government’s increase in spending (most especially investment in infrastructure (fiscal
policy)

MODES OF PRODUCTION/MAJOR EPOCHS IN POLITICAL ECONOMY

5
 Karl Max viewed that in any mode of production, there exist two opposing classes: the
ruling class and non-ruling class. The ruling class that uses state powers and ideology to maintain
its dominance over the non-ruling class. In every mode of production, there is a conflict or class
struggle between the ruling class and non-ruling class, rich and poor, have and have not. When
this conflict escalate leads to formation of other mode of production. That is why Karl Max
viewed that “the history of all hitherto of the existing societies is the history of class struggle”.
Here we discuss the major historically successive epochs of mode of production in
human history identified by Karl Marx. They are as follows:
i. Primitive communal mode of production/primitive communalism
ii. Slave-holding mode of production/slave owning mode of production/slave mode of
production
iii. Feudalism/feudal mode of production
iv. Capitalist mode of production/capitalism
v. Socialist mode of production/socialism
i. Primitive Communal Mode of Production/Primitive Communalism
This mode of production corresponded historically to the early stages of man’s savage
existence. Here there was communal sense of belonging. That is, there is communal ownership
of means of production and there were no class differences. There was communal property and
no private property.
In this period, man must have been physically strong but weak and powerless in the face
of nature. This is because nature never provided man with ready-made food, shelter and housing.
His initial effort was how to combine his physical and mental skill in order to control nature for
his material and spiritual needs. The physical environment was for man and man was for
physical environment. The first tool of man were stone, implements, spear and hunting traps that
he use against his prey (Akpuru-Aja, 1998).
With growth in population, they began to form communes. Each commune owned its
means of production but some members of the commune privately owned certain tools that were
also used as weapons for defense against predators. In this mode of production, there was no
clear division of labour and specialization and the only form of division of labour was that
between sexes and age-grades.
The development of primitive mode of production led to increase in specialization and
division of labour between communes which further led to surplus goods. The primitive mode of
production later led to accumulation of surplus wealth by few people and wars were waged
occasionally to loot property and captives became slaves who were used to produce more wealth
for their master. Therefore, the primitive mode gradually gave way to slave-mode of production.
ii. Slave-holding Mode of Production
The slave mode of production marked the beginning of private property, class antagonism,
politics and the emergence of state. It was the first epoch in human history where man’s
exploitation by man became a way of life. It was seen as the slavery was the first, most flagrant
and avert form of exploitation which existed virtually everywhere (NOUN, 2010). This mode of
production appeared first on the banks of the Nile and Euphrates and probably about the same
time in India and China and later in Greek civilization (Akpuru-Aja, 1998). This is where few
men/masters began to enslave many people who were either capture in purposefully waged wars
or those under debt bondage. The slave was an exclusive instrument of the master.
The relation of production in slave society was based on the slave owners having in their
possession both the means of production (the land, instrument of labour and so on) and the

6
production worker – (the slaves). Here, the slaves were referred as a property and as a tools or
object that can be used anyhow by its master. The exploitation of slaves was extremely severe
and slaves were treated worse than cattle. The slave-owner assimilated the entire product of slave
labour while the slave received the most meager quantity of means of subsistence as to prevent
him from dying from hunger and allow him continue to work for his master. (NOUN, 2010). The
slave-owners/masters were able to accumulate a lot of wealth or surplus production through
slave labour.
As the slave economy developed, there was increase in intensity of conflict between the
master (oppressor) and slaves (oppressed) which further led to slave revolts or uprising against
the slave-owners and therefore leading to its final collapse in Roman Empire.
iii. Feudal Mode of Production
This is the mode of production that was based on land ownership of property. The feudal
mode of production differs from the slave-owning/holding mode because the slaves had no
freedom but the serf had relative freedom than the slaves. The feudal lords who owned the lands
gave the serf (peasantry) a measure of freedom and incentive to increase production. Therefore,
the feudal lord did not feel absolutely possessive of the serf as was the case with slave mode of
production. The political economy of the feudal system was such in which individuals relation to
the land tended to determine his political rights and duties.
This mode of production dominated in the medieval era where land ownership emerged
as referred as a very crucial factor and important source of wealth. The effect of this was that
every individual, including the king and his fighting forces derived their social, economic and
political status and right from their relationship to land (NOUN, 2010). In social relations of
production, the serf had the feudal lord’s land on lease or rent. He (the serf) had to work, first for
his lord for certain number of days in a week and some days for himself and his family. Even
though, the serf had relative freedom and incentive to increase production, the feudal lord still
exercised exploitative control over him. Under this system, an individual would first become
servants to the lord, before the state and the relationship between the individual and the state
were secondary. This is because the individual’s civic duties were to subsumed in his
relationship with the feudal lords whose duty it was to protect his serf. (NOUN, 2010).
The plots of land handed out on these terms were called fief, and the people who received
them-feudal lords. Those who received land sometimes had to do military service. The land
continued to be worked by small serf or peasants but they were now personally dependent on
their new masters. (NOUN, 2010).
Another remarkable feature of a feudal era is the pattern of structured vested interest
which runs through the community. Structurally, the king is the sole land owner and his barons
are tenants of the king and land owners by virtue of land which the kings extends to them for
special services rendered. The barons will in turn have tenants on the land granted to them by the
king while the serfs are at the bottom of the ladder. It is also expected that the baron will raise
some number of men for the feudal army to the service of the king and each baron was to
command his own men (NOUN, 2010).
The feudal lords’ private ownership of the land and his partial ownership of the serf
provided the basis for the relations of production in feudal society. The serf was not a slave for
he had his own household. Alongside the property of the feudal lords, there existed the property
of the peasants serfs and craftsmen-tools and their private holdings. Generally, the working time
of the peasant serf was divided into the necessary time and the surplus time (NOUN, 2010).
According to Ikuejube & Olupayimo (2013) the features include:

7
a. The holding of land by a vessel from a lord
b. The existence of a close personal bond between the lord who owns the land the vessel
who toils the land for the lord use;
c. The full or partial rights of sovereignty which the holder of an estate had over those
living on it.
With the revolts by the serfs and the emergence of industrial revolution necessitated the
need for another mode of production.
iv. Capitalist Mode of Production
This mode of production differs from others because it emphasizes on capital and
freedom of economic enterprise. This mode of production encourages the private ownership of
means of production. Individual can own capital or property and control the means of production,
distribution and exchange and focuses on profit maximization. In this mode of production, the
prices of goods and services are determined by forces of demand and supply. Therefore, it
discourages state intervention in economic affairs. This means that the state should be non-
restrictive but a regulatory agent. This is premised on the political doctrine of capitalism that a
state that intervenes least governs the best.
Two dominant classes emerged in this mode of production namely:
a. The capitalist (bourgeois) class – who owned and controlled the means of production like
factories, mines, machinery etc.
b. The working class (Proletariat) – who represent the propertyless class that are free to sell
their labour to the capitalist.
In this mode of production, the capitalist were at liberty to hire wage-workers. It is based
on the principle of free enterprise and practical rejection of governmental interference such that
the industry should be independent of government control, that competition should regulate
prices and that wages and hours of labour should be entirely a matter of supply and demand
(price mechanism). It preaches on the fundamental rights of individual and the rights of the
individual to use the major factors of production like capital, labour, land and entrepreneur
(Ikuejube & Olupayimo, 2013). Features of capitalist political economy include:
i. Private ownership of property and means of production
ii. A competitive profit incentive system/highly competitive and project oriented economy.
iii. Individual initiatives comprising industrial for the creation of wealth and jobs,
iv. An absence of government restraints on ownership and production.
v. A market economy that is dictated by the interplay of the forces of supply and demand
vi. Free enterprises with robust price mechanism devoid of any governmental interference.
v. Socialist Mode of Production
This mode of production discourages private ownership of capital or means of production.
Socialist mode emphasizes on state ownership and control of means of production, distribution
and exchange. It is based on state ownership and control of enterprises and businesses. It is based
on institution of social property not private property. The main aim of socialist mode of
production is to discourage exploitation of workers by few individuals, ensure equality among
people and remove greed in accumulation of capital.
The transition from capitalism to socialism is governed by laws common to all countries
that set out building socialism. These are:
i. Conquest of political power by the working class and establishment of a dictatorship of the
proletariats.

8
ii. A union of the working class and the bulk of the peasantry and all other strata of the working
people.
iii. Elimination of capitalist property and establishment of public ownership of the means of
production.
iv. A gradual socialist transformation of agriculture on the basis of cooperation as practiced in
the Kibbutz system in Israel.
v. Planned balanced development of the national economy geared to building socialism and
communism and raising the working peoples’ standard of living.
vi. A socialist revolution in spheres of ideology and culture and the creation of a numerous
intelligentsia devoted to the working class and the working people, as well as the cause of
socialism.
vii. Elimination of national oppression and establishment of equality of rights and fraternal
friendship between nations.
viii. Consolidation and development of the socialist state, defence of the gains of socialism
against attacks by external and internal enemies, and
ix. Solidarity of the working class of a given country with that of other countries, i.e. proletarian
internationalism.
x. Nationalization of the means of production (NOUN, 2010).

DEVELOPMENT & UNDERDEVELOPMENT

Development

9
 Development can simply be defined as an improvement in quality of life plus growth, it
can be defined as improvement on the political, economic and social life of people in a state or
society. According to Anderson and Woodrow (cited in NOUN, 2010) development is a process
through which people’s physical/material, social/organizational, motivational/attitudinal
vulnerabilities are reduced and capacities are increased Goulet (cited in Thirlwill, 2008)
identified that three basic components must be in place for development to take place namely:
life sustenance, self-esteem and freedom, life sustenance means provision of basic needs,
(housing, clothing, food, education). Self-esteem means the feeling of self-respect and
independence while freedom involves the capability of people to decide their own destiny
without undue interference. To Thirlwill (2008) development is a multi-dimensional concept
which embraces multifarious economic and social objectives concerned with the distribution of
income, provision of basic needs and the real and psychological well-being of people.
Development does not simply mean capital accumulation and economic growth but also
the condition in which citizens have adequate food and job and income inequality among them is
greatly reduced (Dele & Ukeaga, 2019). According to Dele and Ukeaga (2019) development is
now more applied to the improvement of human condition constituted by the alleviation of
unemployment, poverty, misery and social inequality. It is providing opportunities,
empowerment and security … it implies increased skill and capacity, greater freedom, creativity,
self-discipline, responsibility and material well-being. In addition, development is the process
that involves steady and systematic changes in the cultural, economic and political spheres of
society in a way that increased production, empowers the people and their communities, protects
the environment, strengthens institutions, grows quality of life and promotes good governance.
(Ekundayo, 2015). Gauba (2003) added that development is a process in which a system or
institution is transformed into stronger, more organized, more efficient and more effective forms
and moves to be more satisfying in terms of human wants and aspirations.
Development must be conceived as a multidimensional process involving changes in
structure, attitudes and institutions as well as the acceleration of economic growth, the reduction
of inequality and eradication of absolute poverty (Ikuejube & Olupayimo, 2013). According to
Ikuejube and Olupayimo (2013) “It is incontrovertible that development in any society must at
least have the following three objectives:
a. To increase the availability and widen the distribution of basic life – sustaining goods to
all members of society
b. To raise levels of living including in addition to higher income, the provisions of more
jobs, better education and more attention to cultural and humanistic values.
c. To expand the range of economic and social choice to individuals and nations by freeing
them from servitude and dependence not only in relation to other people and nation state but also
to the forces of ignorance and human misery.
The indices or indicators of development are:
i. High per capita income
ii. High rate of savings
iii. High level of technology
iv. High standard of living
v. High rate of industrialization
vi. High life expectancy
vii. Freedom from extreme exploitation and oppression
viii. Increase in self-esteem and independence

10
ix. Increase in employment rate
x. Equitable distribution of income and resources.
xi. Protection of Human rights
xii. Increase in security
xiii. Political stability
xiv. Improvement in infrastructural development
xv. Increase in people’s participation in decision making
xvi. Equality of people/equal opportunities
xvii. Strong institution
xviii. Reduction of poverty rate
xix. High literacy level

Underdevelopment
Underdevelopment can be defined as the inability of a state, society, community to
improve on the quality of life of its people. It is the inability of people or society to achieve
improvement in political, economic and socio-cultural lives of the people. Joseph and Elem
(2019) see underdevelopment as the inability of a nation, state or community to improve the
socio-economic and infrastructural well-being of the people in provision of education, road,
electricity, pipe-borne water, hospital.
Underdevelopment does not simply mean absence of development because every society
or country has a given level of development. The concept of underdevelopment was derived
from a comparison in the degree of development between one country and another or among
countries.
According to Akpuru & Aja (1998) underdevelopment is a relative condition in which a
society lacks autonomous capacity to control and mobilize socio-economic formation for a
sustainable economic growth and development necessary to effect physical, mental, material and
technological fulfillment without dependence on external stimuli. Underdevelopment can mean a
condition of economic and technological backwardness which, together, constraints the evolution
of stable and enduring political system and dynamic external relation. Ikuejube and Olupayimo
(2013) identified three components of underdevelopment as: Low level of income per capita, low
self-esteem and limited freedom.
The indices to measure underdeveloped societies are:
i. Low per capita income
ii. Low standard of living
iii. Insecurity
iv. High rate of unemployment
v. Low incidence of savings
vi. Technological backwardness
vii. Low level of literacy
viii. Poor investment
ix. High rate of inequalities
x. Poor functioning of institutions
xi. High death rate
xii. Political instability
xiii. Low level of industrialization
xiv. Violation of human rights

11
xv. High rate of poverty rate
xvi. Existence of extreme exploitation and oppression
xvii. High rate of infrastructural decay
xviii. High rate of marginalization of some groups

Causes of Underdevelopment
i. Corruption: Corruption has served as one of the major problem to the development of
any state especially Nigeria. Evidence has shown that high rate of embezzlement,
misappropriation and diversion of funds meant for capital projects and recurrent expenditure
(salaries and wages) led to incompletion of development projects for the development of the
society.
ii. Bad Governance: The inability of government to effectively and efficiently deliver
service and govern the affairs of the people undermines development effort.
iii. Weak Institutions: The incapability of public sectors to discharge their functions also
militates against the development of any state. For instance, Nigeria public institution, most
especially the civil service, is characterized by red-tapism, poorly trained personnel, low
productivity, poor motivation etc which make them dysfunctional in implementation of
government programmes or policies for development.
iv. Mono-economy/Non diversification of the Economy: The failure of Nigeria to
diversify its economy is a challenge to economic development. The high dependence on oil has
not augured well for national development in Nigeria.
v. Lack of Political will and poor commitment by government: Most of the time,
government lacks the political will or show low commitment towards pursuing and
implementing development oriented policies and programmes. This militates against the
development of any state. Nigerian government can make suitable policies for development but
lacks the will or commitment to translate such policies to reality.
vi. Lack of people’s participation or involvement in the development process:
Development can never be realized if the people are not consulted or allowed to participate in the
formulation, implementation and evaluation of development projects or programmes. People’s
participation in development process will enable government to know the peculiar needs,
problems and interest of the community for development to be realized.
vii. Issue of Insecurity: High level of insecurity is a challenge to the development of any
state. Insecurity like kidnapping, terrorist activities, militancy, communal clash, civil war etc
disrupt or undermine any activities that would encourage development. The activities of Boko
Haram in Nigeria has led to closure of commercial activities, businesses (SMEs) and destruction
of infrastructure needed for betterment of people way of life in the Northern Nigeria. Also, the
issue of Fulani herdsmen and farmers has contributed to poor agricultural development which
further undermine food security or led to food scarcity in the affected area.
viii. Lack of inward looking development approach: Our over dependence on the
technology and goods/product of industrialized societies has led to underdevelopment of Nigeria
and other third world countries. Neglecting indigenous technology and ways of doing things will
not go well for development of any state.
ix. Lack of promotion of local industries
x. Lack of national unity and integration
xi. Technological backwardness

12
xii. Issue of Neo-colonialism: The continued excessive control and exploitation of the third
world resources and activities by the western powers through its companies or international
institution has contributed to the underdevelopment of a state.
xiii. Over population: It will be very difficult for a state or society to achieve development if
its resources are not equal or cannot be sufficient to cater for the needs of the people.
xiv. Poor Natural Resources
xv. High Cost of Governance

Strategies or Recommended Measures for Solving the Problem of Underdevelopment

For Nigeria and other developing societies to come out from issue of underdevelopment,
the following measures need to be adopted:
i. Effective fight against corruption in the public sectors and among political leaders and
politicians
ii. Provision of relevant infrastructures required for development like good roads, ICT
facilities, pipe borne water, electricity, building of schools, health centers etc.
iii. Government must adopt down to top development approach. That is government must
ensure full participation or involvement of local people in development issues that concern them.
iv. Provision of adequate security measures in order to prevent destruction of infrastructure
and closure of business and poor food supply.
v. Government must show political will, adequate commitment and sincerity in the
implementation of developmental policies and programmes.
vi. Provision and creation of enabling environment for employment opportunities.
vii. Promotion of growth/development of local industries like SMEs.
viii. Promotion of technological growth/development mainly the indigenous technology.
ix. Diversification of national economy
x. Strengthening of government institutions in order to be operational in delivering service
for national development.
xi. Valuation of the currency
xii. Policies for encouragement of exportation and discouragement of importation
xiii. Price control mechanism in order to protect against excessive inflation.

MODERNIZATION AND DEPENDENCY PERSPECTIVES ON DEVELOPMENT

13
Modernization Perspectives/Theories on Development
Modernization perspective of development refers to a model of a progressive transition
from a pre-modern or traditional to a modern society. The modernization theory is said to
originate from the idea of German Sociologist Max Weber, which provided the basis for the
modernization paradigm developed by Harvard Sociologist Talcott Parsons. Other supporters of
this theory include: W.W. Rostow, Gunnar Myrdal etc
This school believes that development is progressive movement away from the traditional
society to modernity in which society adopts certain progressive western ethics in all
ramification of its society while moving along the paths taken by the countries of western Europe
and America in their quest for development (Ekwonna, 2014). Furthermore,the theory looks at
the internal factors of a country as a determinant to development. It looks at the internal
dynamics while referring to social and cultural structures and adaptation of new technology
(Modernization Theory, 2019).
The modernization theory or school argued that the underdevelopment of the third world
is caused by factors internal to these societies which is located in the root of existence of
conservative culture and traditional institutions that are not receptive to development (NOUN,
2013). Therefore, it shows that the third world countries cannot achieve full development if they
fail to modernize or adopt the modern ways of doing things. So, the traditional societies will
develop if they adopt more modern practices. The underdevelopment of the third world is
because of their inability to follow the modernize way of life or inability to modernize their
traditional culture and social values in order to make them conducive to development and good
governance (NOUN, 2013).
Scholars of modernization theory posits that the third world or traditional societies must
adopt some qualities like high achievement motive, innovative, entrepreneurial drive,
universalism, specificity, adoption of modern technology

Dependency Perspective on Development

This perspective was originated from two papers published in 1949 – one by Hans Singer,
the other by Raul Prebisch – which the authors observed that the terms of trade for
underdeveloped countries relative to the developed countries had deteriorated over time: The
underdeveloped countries were able to purchase fewer and fewer manufactured goods from the
developed countries in exchange for a given quantity of their raw materials exports (Dependency
theory, 2019). This theory was developed from a Marxian perspective by Paul A. Baran in 1957
with the publication of his book called “The Political Economy of Growth”. Other scholars are:
Paul Sweezy, Andre Gunder Frank, Walter Rodney, Anibal Pinto, Samir Amin, Celso Furtado
etc.
The essential doctrinal kernel of this theory is that the external forces which are nothing
but the central capitalism, condition the social and economic development of the less developed
countries (LDCs) (NOUN, 2013). Therefore, this theory holds that the underdevelopment of the
third world or less develop countries (LDCs) is not as a result of internal factors but as a result of
external factors which is caused by their interaction with the developed capitalist societies in the
international political economic system. Such interaction led to unequal relationship where the
developed capitalist societies exploit the third world societies. Therefore, this relationship has
favoured the developed societies at the expense of the third world.

14
 The argument is that underdevelopment is the result of the dependent and asymmetrical
relationship between the third world and industrialized nations. They further maintain that the
backwardness of developing economies can be explained by exploring the process through which
western capitalism broke into the indigenous pattern of development and its effects on the pattern
of growth and development in these societies (NOUN, 2013).
From African perspective, the dependency theorists believe that the triple tragedies of
slave trade, colonization and neo-colonialism are vital to the understanding of the
underdevelopment of the third world most especially in Africa. This is because these events
highly distorted and disarticulated the domestic economies of the third world, which led to
economic stagnation, and underdevelopment of the third world and these countries now occupy a
disadvantaged position in international division of labour and exchange. They further noted that
the historical processes or phenomenon (slave trade, colonialism and neo-colonialism) that led to
underdevelopment of the third world societies is the same historical process that facilitated
development in the developed economies of Europe and America (NOUN, 2013).
Dependency theory holds the notion that resources flow from a periphery of poor and
underdeveloped states to a core of wealthy states, enriching the later at the expense of the former.
The central contention is that poor states are impoverished and rich ones enriched by the way
poor states are integrated into the world system (Dependency theory, 2019).
The dependency theory argued that for the third world countries to achieve development
there is need for them to extricate themselves or come out of the strangulation by the western
metropolis or from the international political economic arrangement. Therefore, the third world
countries should look inward and utilize their local resources in order to compete with the
developed societies and achieve development.
From another perspective, dependency scholars further trace the unequal development in
the global economy to the capitalist system of division of labour, which restricts the
underdeveloped countries to the production of raw-materials (non-industrial goods) and receive
loss for their exported primary products while the developed societies will continue to focus on
manufactured goods which the underdeveloped societies import in high cost or prices. This
unequal exchange perpetuate underdevelopment gap between the centre (developed economies)
and the periphery (developing economies) of the global capitalist system thereby, increasing the
rate of underdevelopment in the third world, most especially Africa.

15
 POVERTY
Meaning of Poverty
Different scholars have defined the concept of poverty severally. Scholars and
development economists admit that the concept of poverty is complex and multidimensional and
as such, a more definition may not give a clear picture of its complexity (Obona, 2018).
Poverty can be defined as a condition or situation where individual, people or community
are deprived from having access to basic needs of life like shelter, food, income, security etc.
Poverty is as well seen as a situation where people are subjected to hardship and lack resources
that would have assisted them seek means of assuaging their conditions (Nkewede & Obona,
2018). According to Nkwede and Obona (2018) despite the difficulty in definition of poverty,
they agreed that poverty has one peculiar instrument which they explained to be involuntary
deprivation hence they see poverty as involuntary deprivation which a person as an individual,
household, community or nation faces. At the individual level, deprivation could include: When
a person is not able to have access to basic needs of life (like food, shelter, education, health care
services). At the household level, poverty manifest when a man is unable to take care of his
immediate family members like sending the children to school and paying their school fees, take
household members to hospital when the need arises and access the health care services as well
as taking care of family members nutritional needs. While at the community or national level,
deprivation can be seen when community or nation is unable to create access to socio-economic
and infrastructural services and create jobs and income generating opportunities to the people
(Nkwede & Obona, 2018).
To Nnamani (2003) poverty is not just having sufficient income to take care of basic
needs of life, but the account of how people were denied the opportunity to have access to the
means of production to better their lot. The Copenhagen Declaration (1995) sees poverty as a
condition characterized by severe deprivation of basic needs, including food, safe drinking water,
sanitation facility, health, shelter, education and information. World Bank definition of poverty
means a “pronounced deprivation in well-being and comprises of many dimensions, it includes
incomes and the inability to acquire the basic goods and services necessary for survival with
dignity. Poverty also encompassed low health and education, poor access to clean water and
sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity
to better one’s life”.
Based on the above definitions, poverty is characterized with the following:
i. Poor of access to health facilities/services
ii. Low income or lack of access to adequate income
iii. Poor access to food (hunger) or under-nutrition
iv. Low level of education
v. Poor level of participation
vi. High risk of homelessness. Poor access to shelter
vii. Poor access to portable water
viii. Poor sanitation
ix. Poor infrastructure like electricity, roads, etc.
x. Poor access to employment.

16
Causes of Poverty
The causes of poverty include the following:
i. Corruption – mainly in terms of misappropriation of public funds by government officials.
ii. Inadequate access to clean water and nutritious food
iii. Little or no access to livelihood or jobs
iv. Conflict/large scale protracted violence/insecurity
v. Inequality
vi. Poor education
vii. Climatic change – climate event like flooding, drought, severe storms and other natural
disasters
viii. Poor infrastructure
ix. Poor implementation of government policies on poverty eradication or reduction related
programmes
x. Over population
xi. Non-diversification of the economy
xii. Poor economic system – like economic recession and depression

Effects of Poverty
i. Insecurity: When people lack the access to basic needs of life, some of them are likely to
engage in activities that may pose threat to national security. For example, some people joined
the Niger Delta Militant, Boko Haram insurgency and other armed group as a result of poverty
ii. High death rate: The more there is poverty in an area; there is high tendency for high
death rate. Once people lack access to food, shelter and other basic needs of life they are more
prone to sickness and disease, which invariably leads to death.
iii. Social vices like prostitution. People engage in this act in order cater for their basic needs.
iv. Corruption/Fraudulent activities like internet fraud
v. Low enrollment of children to schools. Most children dropped out of school because of
inability of the parent to provide fund/money for school fees.

17
 PRIVATIZATION AND COMMERCIALIZATION
Privatization
Privatization refers to as the reduction or total withdrawal of public sector intervention in
economic activities. Privatization means the transfer of public or state-owned business or
enterprise to the hands of private sector. That is transformation of public or government owned
enterprise to private-sector enterprise.
It involves the surrender of part or all the equity and other interest held by the
government or its agency in enterprises whether wholly or partly owned by the government,
reduction in state provisions, reduction in state subsidies and reduction in state regulation of
industries/enterprises (Eyiuche, 2000 cited in Okeke, 2006). According to Ezeani (2006)
privatization means:

A deliberate government policy of stimulating economic growth

and efficiency by reducing state interference and broadening the
scope of private sector activity through one or all of the following
strategies: transfer of state-owned assets to private-ownership
through sale of shares; private control or management of state-
owned assets, encouraging private sector involvement in public
activity and shifting decision making to agents operating in
accordance with market conditions.

The objectives of privatization is to improve economic efficiencies, reduce fiscal deficits;

reduction of government interference; broadening ownership of business; generation of new
investment; reduction of administrative burden of government.
Privatization can be total or partial. Total privatization is when government fully divest or
sell all its equity shares and stake in an enterprise while partial privatization is when greater
proportion of the shares of public enterprise are sold to private hands while a small proportion of
shares is retained (Okeke, 2006).
Argument for/Advantages of Privatization in a state
i. Improvement of competition
ii. Reduction of government borrowing
iii. Managerial efficiency
iv. Reduction of corruption
v. Improvement of productivity
vi. Elimination of political interference/government interference
vii. It encourages private initiatives
viii. It enhances the level of profitability of the enterprise by reducing wastage and
idleness of resources
Argument against/ Disadvantages of Privatization
i. Exploitation of the masses through high cost of goods and services
ii. Concentration of wealth or shares in the hands of few wealthy individuals
iii. It lacks public control and accountability
iv. It can contribute to increase in poverty/and low standard of living
v. Job loss: Retrenchment of workers
vi. Reduction of wages and salaries and other benefits

18
 vii. It creates income disparity because the few that acquire these companies get richer
through profit from such firms
viii. It is not always easy to determine the share values of the company
ix.
Conditions for Successful Privatization Programmes
a. Political commitment/will
b. Transparency of the privatization process
c. Visible benefits to the economy
d. Appropriate policy
e. Adequate communication or information. Public enlightenment is necessary to create
awareness about the need for privatization.
f. Resolution with labour unions
g. Allaying or removing the fears of foreign domination

Commercialization
This refers to the total restructuring of a government-owned public sector enterprise such
that it operates as fully independent profit oriented venture that does not really depend on the
government for subvention. Commercialization is the process by which government owned
companies products are sold at market price without subsidy or subvention from government.
(Oyeniyi, 2008). It shows that government owned company will be making profit and
commercial oriented. In commercialization, the government enterprises will be driven by
marketing forces and the price of goods and services will be determined by forces of demand and
supply (Oyeniyi, 2008).
Commercialization can be full and partial. Fully commercialize firm is where the firm
can raised fund without government subvention of guarantee. While a partially commercialized
firm does not enjoy total autonomy to source and invest funds. It is still assisted by the
government in terms of capital grants, and grants to finance capital-intensive projects in order to
keep prices of its products low in order to be affordable to all.
The advantages of commercialization include:
a. It enhances efficiency in management of the enterprise
b. It reduces government expenditure in terms of subventions to such enterprise
c. It enhances effective utilization of available resources
d. It helps to increase more revenue or funds to government
e. It ensures fair returns on investment made by government.
The disadvantages of commercialization are:
a. Prices of goods and services produced by commercialize firm may be high
b. The principle of collective ownership may be lost
c. It encourages or facilitates privatization, which reduces government control of such firms.
d. It can lead to unemployment.

19
 GLOBALIZATION
Different scholars have given different definitions of globalization. The term
globalization is derived from the word globalize which means the emergence of an international
network of economic system (Globalization, 2016). Abdullahi (2015) defined globalization as
“the trans-border diffusion of knowledge and information through new technologies such as the
worldwide web, mobile telephone and liberalized media.” Onimisi (2014) sees globalization as
“the process of the integration of economic, political, social and cultural values across
international boundaries.” According to Tony and Jan (2003 cited Onimisi, 2014) “globalization
is a process integrating not just the economy but culture, technology and governance.” This
means that globalization represents the growing worldwide interdependence of the people and
countries (Ogbonnaya, 2013 cited Onimisi, 2014). To Aliyu (cited in Okeke, 2006) globalization
is the process of increasing inter-dependence and integration which occurs as money, people,
images, values and ideas flow ever more swiftly and smoothly across national boundaries.
Globalization is the process of international integration arising from the interchange of
world views, products, ideas and other aspects of culture. And advance in transportation, such as
the steam locomotive, steamship jet engine, container ships and in telecommunications
infrastructure, including the rise of the telegraph and its modern offspring, the internet and
mobile phones have been major factors in globalization generating for their interdependence of
economic and cultural activities (Globalization, 2016).
Globalization is the intensification of worldwide social relations which link distant
localities in such a way that local happenings are shaped by events occurring many miles away
and vice versa (Okechukwu, 2013). To Swedish journalist Thomas Larsson, globalization is the
process of world shrinkages of distances getting shorter, things moving closer. It pertains to the
increasing ease with which somebody on one side of the world can interact, to mutual benefits,
with somebody on the other side of the world (Okechukwu, 2013).
Globalization can also be seen as the process of increasing political, economic, socio-
cultural integration and interconnectedness between states, groups, individuals etc across borders
with the use of modern information and communication technologies like telegraph, telephone,
mobile phones, internet, satellite etc which set to erode the borders of sovereign state and makes
interaction of people very easy and closes the distance between countries to be shorter.
Kolodiko (cited in NOUN, 2010) categorized the globalization process into three significant
epochs:
a. Globalization of the Age of Exploration between the sixteenth and mid-seventeenth centuries.
b. Globalization of the Industrial revolution between the mid-eighteenth century and nineteenth
century and;
c. Globalization in the Age of computers and internet around last quarter of 20th century and the
beginning of 21st century.

Advantages of globalization include the following:

i. Promotion of economic integration among states which foster global solidarity
ii. Reinforces the necessity for collective intervention in addressing problems like
environmental degradations, global terrorism, diseases, etc.
iii. Encouragement of economic growth through higher capital inflow and foreign direct
investment.
iv. Promotion of international cooperation
v. Promotion of scientific growth

20
vi. Promotion of democratic principles
vii. It makes people to keep in touch to global events
Disadvantages of Globalization
i. It promotes cultural hegemony and erosion of indigenous culture of the third world
(Africa)
ii. Economic globalization is fuelled by market forces that have much more interest in
profits than in advancing the ideals of humanity.
iii. It has culminated in the erosion of the sovereignty of states and narrows the ability of
government and people to make choice from options in economic, social and cultural policies.
iv. It has serve as a boost to criminalities like money laundering, cybercrimes or fraud,
trafficking of persons, trafficking of illegal goods.
v. It has strengthen terrorist activities and other armed groups
vi. Encouragement of worldwide epidemics/diseases like ebola, HIV/AIDS, etc.
vii. Promotion of unequal relationship between the western societies or developed or
industrialized and under-industrialized or third world society.
viii. Economic depression or meltdown in one country adversely affect the economy of other
countries or across the globe.

21
 INTERNATIONAL ECONOMIC RELATIONS
International economic relations studies how politics and economies interplay in
determining the interactions between states, organization, economic actors and private
corporation in areas of economic trade, finance, science and technology. International economic
relations means our understanding of the relationship between politics and economics in respect
of the flow of natural resources. International trade, commerce, international finance,
international investment and tendencies towards economic integration and corporation (Akpuru-
Aja, 1998).
Here we will discuss some areas of international economic relations which include:
 Multinational corporation
 Bretton Woods Institution

Multinational Corporations (MNC) / Transnational Corporations (TNCs)

Multinational corporation or transnational corporations can be defined as a large business
organization that operate globally and has several subsidiaries or branches beyond the parent
country. That is MNC has branches or subsidiaries in different states. MNC is a business
conglomerate that their operation across national boundaries. Their activities usually transcend
the frontiers of different countries by establishing branches in other countries (NOUN, 2010).
MNCs or TNCs are giant private business companies with global organizational characteristics
in host countries. MNCs are in global business for profit making (Akpuru-Aja, 1998). According
to Kegley and Wittkopf (cited in NOUN, 2010) “MNCs are business enterprises organized in one
society with activities abroad growing out of direct investment (as opposed to portfolio
investment through shareholding). To Vaugel and Curban (cited in Ezeanyika, 2002) MNCs or
TNCs is any large industrial manufacturing conglomerate listed in the Fortune 500 with
subsidiaries in six or more states. According to Ezeanyika (2002) one central and recurrent
element in these definitions is that for a corporation to qualify as an MNC, it has to have
operative branches in other nations than the one in which it originates. Also, important is the
point that all of those other branches are subordinate to home office and depend on it for
direction and all-important decisions.
Multinational corporation or transnational corporation or Multinational Enterprise is a
corporation that is registered in more than one country or that has operations in more than one
country. It can also be refered as international corporation. Such companies have offices and or
factories in different countries and usually have a centralized head office where they co-ordinate
global management (Okechukwu, 2013).
The features of MNC or TNC or MNE are:
i. Giant Size
ii. International operations
iii. Oligopolistic structure
iv. Spontaneous evolution
v. Collective transfer of resources (Okechukwu, 2013).

Advantages of MNC/TNC as an agent of Development

i. Job creation or employment opportunity
ii. Skill training/technological transfer
iii. Economic development
iv. Social and welfare services

22
 v. Promotion of economic interdependence
vi. Increase in the volume of world trade
vii. Generation of income and wealth
viii. Underwrite research and development that allows technological innovation
ix. Promotion of national revenue and economic growth
x. Finance loan and service international debt
xi. Assist the aggregation of investment capital that can fund development
xii. Creation of competition among domestic companies

Negative effects of MNCs/TNCs as an agent of underdevelopment

i. Environmental pollution
ii. Repatriation of salaries and projects
iii. Lack of interest in local investment
iv. Over-invoicing
v. Excessive intervention in the host country’s politics therefore challenging national
sovereignty
vi. Evasion of taxes
vii. Limit wages offer to workers
viii. Exportation of technology that are ill-suited for underdeveloped and developing
economics.
ix. Frustrate the growth of local or infant industries thereby making the third world
dependent on them.
x. Discouragement of growth of local technological expertise in the less-developed
countries
xi. Collude to create cartel that contribute to inflation.
xii. Increase the wealth of local elite at the expense of the poor.

Bretton Woods Institution (Bretton Woods Sisters)

The Bretton Woods Institutionn include the World Bank and International Monetary
Fund
World Bank
The World Bank was established in July 1945 under the Bretton woods conference
agreement of 1944. It was created along with IMF, which they were together referred as the
Bretton woods sisters or institutions. The World Bank was created originally to assist and
provide loans for the economic reconstruction of the World War II damaged western European
economies. World Bank is an international financial institution that provides loans to countries of
the world for capital projects. The World Bank is referred as a component or part of the World
Bank group. It involves two institutions known as the International Bank for Reconstruction
and Development (IBRD) and the International Development Association (IDA).
The International Bank for Reconstruction and Development (IBRD) is an institution
or part of World Bank that offers loans to middle income developing countries. The IBRD
provides commercial-grade or concessional financing to sovereign states to fund projects in order
to improve transportation, infrastructure, education, domestic policy, environmental
consciousness, healthcare, food, sanitation etc (International Bank for Reconstruction and
Development. The IBRD is governed by the World Bank’s Board of Governors while the daily

23
activities of IBRD is being oversee by the President. The IBRD is a development finance
institution that aim at development assistance and poverty reduction. It comprises of 189
members.
The International Development Association (IDA) is another part of World Bank and
World Bank Group that is responsible for offering concessional loans and grants to the world
poorest developing countries and created with the purpose for development assistance and
poverty reduction. The IDA and IBRD are both referred as World Bank because they have the
same executive leadership and same staff strength. The president of the World Bank oversees the
daily operations and directions of IDAs. It comprises of 172 member states and they make
contributions in every three years. The members of IDA must be members of IBRD
Membership
In terms of membership of the World Bank, the number of members differs based on two
institutions. The International Bank for Reconstruction and Development (IBRD) has 189
members’ countries, while the International Development Association (IDA) has 173 members.
The members of IBRD are also the members of the International Monetary Fund (IMF). The
members of IBRD are allowed to join the IDA. Therefore, before you become a member of
World Bank, you must be a member of IMF.
Aims/Objectives of World Bank
The aims of World Bank/World Bank Group include the following:
i. To assist in reconstruction and development of member states by providing long-run
capitals
ii. To promote private foreign investments
iii. To increase productivity, high standards of living and better condition for labour
iv. To provide a long-run capital to member states
v. To induce long-run capital investment for assuring balance of payment (BOP)
equilibrium and balanced development of international trade.
vi. To provide loans granted and other projects to member states.
vii. To ensure or monitor the implementation of development projects.
viii. To finance basic development projects like dams, communications and transport facilities
and health programmes by insuing and guaranteeing private loans
ix. To bridge economic divide between poor and rich countries
x. To reduce the rate of poverty in the world.
Criticisms
The operations of World Bank/World Bank group have been criticized based on the
following reasons:
i. World Bank has been criticized because of the way it is governed. That is, it has been
dominated by few countries because these powerful countries provides most of
institution’s funding; have the highest voting power; have the authority to choose the
leadership and senior management positions.
ii. The World Bank has been accused of placing too much emphasis on growth of GDP
without focusing on economic development or whether growth contributes to standard of
living .
iii. The World Bank has also been criticized by giving unfair conditions that have not
promoted development rather increased under development.
iv. Some scholars have accused World Bank Group as serving as the agent of imperialism
because it set to serve the interest of the powerful countries.

24
International Monetary Fund (IMF)
The International Monetary Fund (IMF) also known as the Fund is an international
organization headquartered in Washington D. C. which was formed in 1944 at the Bretton
Woods Conference, where 44 non-communist countries assembled to chart the course of a future
international economic system. The IMF came into official existence in 27 December 1945 when
29 countries signed its Articles of agreement, and it started functioning (commence financial
operations) on March 1, 1947 with 39 countries. The IMF currently has 189 members.
“The principal aim of the formation of IMF was to avoid the economic mistakes of the
1920s and 1930s”. It was formed to promote economic and financial cooperation among
members, facilitate the growth or expansion of balance of World trade, secure financial stability,
and achieve high employment and sustainable economic growth.
Aims/Objectives of IMF
The objectives or aims of IMF can be found in Article I of the Articles of Agreement
(AGA) that stipulates or spells out six purposes. Theses aims are:
1. To promote international monetary cooperation through a permanent institution that provides
the machinery for consolation and collaboration on international monetary problems.
2. To facilitate the expansion and balanced growth of international trade, and to contribute
thereby to the promotion and maintenance of high levels of employment and real income and to
the development of the productive resources of all members as primary objective of economic
policy
3. To promote exchange stability, to maintain orderly exchange arrangements among members
and to avoid competitive exchange depreciation
4. To assist in the establishment of a multilateral system of payments in respect of current
transactions between members and in the elimination of foreign exchange restrictions which
hamper the growth of world trade
5. To give confidence to members by making the general resources of the fund temporarily
available to them under adequate safeguards thus providing them with the opportunity to correct
maladjustments in their balance of payments without resorting to measures destructive of
national or international prosperity.
6. In accordance with the above, to shorten the duration and lessen the degree of disequilibrium
in the international balance of payments of members.
Key Activities of IMF
 Policy advice to government and central banks
 Research, statistics, forecasts and analysis based on tracking of global, regional and
individual economies
 Loans to help countries overcome economic difficulty
 Concessional loans to help fight poverty in developing countries
 Technical assistance and training to help countries improve the management of their
economy (Okechukwu, 2013).
Membership
The IMF comprises of 189 member states. Moreover, not all members of IMF are
members of United Nations. This involves non-sovereign states such as Aruba, Curacao, Hong
Kong, Kosovo and Macaw (International Monetary Fund, 2017). All the IMF members are also
members of International Bank for Reconstruction and Development (IBRD) and vice versa. UN
states like Andoma, Liechtenstein, Monaco and North Korea do not belong to IMF.

25
IMF conditionality
These IMF conditionalities, which are located under the structural adjustment, are:
1. Cutting expenditures (use of austerity measures)
2. Focusing economic output on direct export and resources extraction
3. Devaluation of currencies
4. Trade liberalization
5. Increasing the stability of investments
6. Balanced Budget rather than surplus Budget
7. Removal of government subsidies and Price control
8. Encouragement of foreign Direct Investment through laws
9. Improving governance and anti-corruption
10. Privatization or divestiture of all or part of state owned enterprises
11. Retrenchment or Downsizing of Work Force.
Achievements
So far, the IMF has positively contributed in the following ways
1. It has acted as a financing and an adjustment-oriented International Institution. It has offered
several financial assistances to deficit countries in order to meet their balance of payment
problems, most especially the developing countries.
2. It has contributed in promotion of exchange rate stability
3. It has assisted member states in their formulation of appropriate monetary fiscal and trade
policies
4. It has helped in expansion of world trade
5. Setting up of multilateral trade and payment system
6. It has removed the short-term disequilibrium of balance of payment
7. It has contributed towards solving the problem of International Liquidity (which led to the
creation of Special Drawing Rights (SDRs)
8. It has acted as a forum for discussion and consultation on formulation of economic, fiscal and
financial policies of member states
9. The IMF has succeeded in admitting centrally planned economy countries (Socialist countries)
as members.
Criticisms
Despite the contribution of IMF in development of world economy, IMF has failed in the
following ways:
1. The IMF has most of the time failed to improve on the development or worsen the
underdevelopment of developing countries.
2. The IMF has been criticized as a modern instrument of imperialism because most its
conditionalities are to favour the developed societies at the detriment of the least developed
economy. IMF has contributed in putting the global economy on a path of inequality and
exploitations.
3. The IMF has also been criticized for a discriminating treatment in favour of certain members
in its day to day functioning. It has mostly favoured the Western countries at the expenses of the
interest of least developed countries.
4. In aspect of voting power, the IMF policies has favoured few countries (most especially
developed societies) like USA, Japan, China, Germany, UK etc. This situation has made the
developed countries to have a more dominant role or control over less developed countries.

26
5. The IMF has been criticized to fail to eliminate foreign exchange restrictions imposed by its
members, which hampers the growth of trade .
6. It has been criticized that the IMF has not encouraged full representation of all member states
in terms of its voting shares and leadership positions.
7. The IMF has been criticized for undermining the sovereign powers of countries most
especially the least developed societies. It has shown that the IMF has been interfering on the
economic policies of poor and developing countries. This in line with the argument of Loxley
(1987) that the conditionality of IMF has hampered the economic and political sovereignty of
receiving states.
8. The IMF has been accused on relying or using biased method of extending credit based on
quotas instead on the basis of needs. This is because, most of the underdeveloped member states
are not getting adequate financial support as a result of their small quotas.

DEMOCRATIZATION IN AFRICA
Meaning of Democracy

27
 The concept of democracy is derived from Greek two words namely demos meaning
“people” and kratos meaning “rule”. Therefore, democracy means “rule by the people” “in
modern usage, democracy means a system of government in which the citizens exercise power
directly or elect representatives from among themselves to form a governing body. According to
Uhere and Agba
Democracy is a way of life or system of government that
encompasses freedom to make choices about what one does, where
he lives and how he uses his earnings, the operations of institutions
– the home, the church, local, state and federal government; the
right of justified property ownership, social justice and fairness,
the absence of social and class barriers, equality of opportunity and
the solution of common problems through exercise of the free will
of the people.
Gauba (2003) defined democracy as a form of government where the ultimate authority of
government is vested on the people in order to ensure that public policies are made or formulated
to conform to the will of the people and serve the interest of the people.”
Heywood (2007, p. 72) viewed that democracy can involve the following points:
i. A system of rule by the poor and disadvantaged
ii. A form of government in which the people rule themselves directly and continuously without
the need for professional politicians or public officials.
iii. A society based on equal opportunity and individual merit, rather than hierarchy and privilege.
iv. A system of welfare and redistribution aimed at narrowing social inequalities.
v. A system of decision-making based on the principle of majority rule
vi. A system of rule that secures the rights and interests of minorities by placing checks upon the
power of the authority.
vii. A means of filling public office through a competitive struggle for the popular vote.
viii. A system of government that serves the interests of the people regardless of their
participation in political life.
Furthermore, Sargent (2009) identified the key elements of modern democracy as:
a. Citizens involvement in decision-making
b. A system of representation
c. Electoral system based on rule of majority
d. Some degree of equality among citizens
e. Education
f. Some degree of liberty or freedom granted or retained by citizens
g. The rule of law

Meaning of Democratization
Democratization can be defined as the transition to a more democratic regime. It can also
mean the transition from an authoritarian regime to a full democracy. It can also mean transition
from an authoritarian regime to semi- democratic regime or from semi-authoritarian/semi
democratic regime to a full democratic system. Democratization can mean the advancement of
democratic norms in a political system by making a society more democratic in nature. While

28
Ozegbe defined democratization as the introduction of democracy into a society and
entrenchment of its principles in all areas of governmental process.
Nature of Democratization
In the process of democratization, certain features must be observed:
i. Conduction of regular free and fair election
ii. Transfer of power
iii. Institutionalization/Presence of stable political party
iv. Respect for rule of law
v. Independence of judiciary
vi. Institutionalization of separation of power
vii. Respect for opposition party
viii. Respect for fundamental human right
ix. Accountability and Transparency
x. Citizenship Participation

Challenges of Democratization Process in Africa

Even though most of the African states are on the process of democratization, most of
them are still finding it very difficult to democratize fully. This can be as a result of certain
features or factors:
i. Politics based on ethnicity or sectionalism. Political parties are formed along ethnic lines.
Even the citizen voting behaviours are influenced by ethnic or sectional interest.
ii. Frequent political violence or insecurity
iii. Unstable political parties
iv. Lack of credible opposition
v. Weak civil society organization
vi. Frequent violation of human rights
vii. Lack of respect for rule of law
viii. Incredible elections or lack of free and fair elections
ix. Lack of independence of judiciary
x. Corruption and abuse of office

MILITARY INTERVENTION IN POLITICS

Meaning of Military

29
 Military means the armed or security forces created by the state to maintain law and
order both internally and externally through the employment of physical force. Military means
armed forces of a country charged with the responsibility to ensure defence and security in a
state. It can also be defined as a force or security forces authorized to use weapon and lethal
force to protect lives and properties of citizens in the state against any external aggressions.
The military means the state organization or group of organizations permanently
established by the constitution/law which enjoy monopoly of categories of weapons and
equipment and responsible for the constrained use of violence or coercive force to deter or fight
against any internal or external aggression that threaten the existence of the state. Generally,
military include armed forces like Army, Navy, Air force, while in some countries it includes
Marine, Coast Guard, etc.
Features of military
a. Professionalism
b. Hierarchy of Authority
c. Unity of Command
d. Discipline
e. Espirit de corps
f. Bureaucratic organization
g. Forceful and aggressive behaviour
h. Monopoly of state’s deadly weapons
i. Division of Labour and Specialization

Military Intervention
Military intervention in politics simply means the involvement or interference of military
in the politics of the state. This involvement may be in form of taking over governmental powers
or settlement or handling of crisis or issue of insecurity.
Military intervention in politics also means the exertion of influence by the military on
the political system either through direct or indirect participation on political issues. It is a
situation whereby the military forcefully takes over the governmental powers of the state which
is normally done through coup d’tat.
Most of the African states after gaining independence from the colonial masters later
experienced several coups or direct military intervention. Starting with Egypt in 1952, African
has experience about 175 attempted coups over the last six decades while 75 of which were
successful. And 35% of African countries have therefore experienced at least one coup attempt
in recent history. These military coup or regimes are more frequent in West Africa and actually
absent in Southern Africa. The following are cases of military rule in selected African states.

Causes of Military Intervention in Politics

1. Systemic Corruption: Corruption in the political system serves as the main factors that
contribute to most military coup. Military intervenes in politics in order to end or reduce
corruption like bribery, nepotism, mismanagement and misappropriation of public funds. This
was the major reasons for the first military coup in Nigeria (The January, 1966).

30
2. Economic Crisis/Underdevelopment: Economic problems like high rate of inflation,
recession, unemployment, poverty, cost of living etc can make the army to intervene in order to
revamp or transform the economy.
3. Regionalism or Ethnicity: Military intervenes in politics in order to favour one ethnic
group at the expense of others. Whenever a political leadership in the hands of one ethnic group,
other ethnic groups if they are backed by military can utilize military intervention to reverse the
situation. Example is the counter coup that overthrew Major General Ironsi in July 1966 because
the northern military leaders felt that unification decree by Ironsi’s government was to promote
Igbo interest.
4. Insecurity: Military also intervenes in politics of a state when there is widespread break
down of law and order or crises in a state. Military are normally invited to intervene in order to
restore law and order in the state.
5. Politicization of the Military: The more military personnel are allowed to participate in
governance or politics of a state, the more they show interest to take over powers. High
politicking in the military contributes to military intervention in politics. The politicization of
recruitment and promotion in the military is a factor to the first military coup in Nigeria (Ndoh,
2010).
6. Electoral Malpractice: Military can decide to intervene in politics when there is
widespread electoral fraud in a particular election that ushered in unpopular leader. For instance
the 1964 federal election of Nigeria and the 1965 Western Nigerian elections resulted in gross
electoral malpractices that led to political conflicts and violence which in turn gave rise to first
military coup in Nigeria.
7. Sit-down-tight in Power Syndrome: The refusal of some civilian or military leaders to
hand over powers to a new people necessitates military intervention in politics.
8. Personal Interest of Military Officials: Military intervention in politics can be as a
result of the desire of some military leaders to satisfy their selfish interest which is not the
interest of the society.
9. Bad Governance: This is one of the greatest attractions of the military to intervene in
politics. The failure of government to govern well, the failure to be responsive, accountable,
effective and efficient in service delivery etc contributes to the desire for military to take over
powers of the state.
10. Ideological inclination of military officers
11. Protection of interest of foreign powers and countries
12. Contagion from seizures of control by the military in other countries.
Characteristics of Military Rule
The military rule or administration in Africa possesses the following characteristics:
i. Suspension of the Constitution: When the military assumed political power, the first thing it
does is to suspend some sections of the constitutions that will make its regime illegal. Based on
this the military ruled by decree or edict at the national or state level as the case may be.
ii. Dissolution or Non-Existence of Elected or Civilian Government: The military rule is also
characterized by absence of civilian government. They normally dissolve elected personnel in
political office.
iii. There is dissolution of political structures or institutions like political parties, parliament,
electoral commissions etc. After all these, they now establish new political structure.
31
iv. There is absence of political parties
v. There is centralized Administration: The military rule in Africa centralized powers whether
the country is a unitary or federal states. Powers are centralized at the centre because the military
rely on hierarchy and giving of command and obedience.
vi. Dictatorship or Authoritarian: The military rule in Africa does not work in accordance with
democratic principles. There is absence of elected persons, respect to rule of law,
discouragement of freedom of expression, majority rule.
vii. Increase in Bureaucratic Powers: In military rule in Africa, there is increase in powers of
the bureaucrats in some states.
viii. It is mainly characterized with ineffective political leadership.
ix. There is also fusion of power under military rule in Africa. That is, there is no separation
of powers among various arms of government. The members of the executive and legislature are
the same.
x. Military regimes or rule in Africa is characterized with corruption and non-accountability in
governance.
xi. Inculcation of disciplinary measures
xii. In military rule in Africa, there is always issue of fast and quick decisions or policies than in
civilian regimes. Through decrees, the military can take bold decisions or policies because it
does not required rigorous procedures for making laws.

32