The Vietnam War afforded rich opportunities for the application of theory, and association with the pacification effort accelerated the splintering of the Rostovian consensus. Pacification proceeded under a succession of modernization buzzwords—"rural construction," "revolutionary development," "civic action," "three-machine revolution," "Operation Takeoff"—and repeated failures sapped the enthusiasm of the modernizers. After Saigon and the modernizing regime of the shah of Iran fell in rapid succession, policy-makers ceased to regard development as a counterinsurgency weapon. It had once been believed, according to Henry Kissinger, "that there was a sort of automatic stabilizing factor in economic development. That has turned out to be clearly wrong." But events in the industrialized world had already undermined the modernization paradigm. The rising tempo of urban riots following the Watts uprising in Los Angeles in the summer of 1965 disturbed the idealized image of the United States as the end point in the develop-mental process. In 1967 ghettoes in forty cities erupted. The Eighty-second Airborne had to be diverted from deployment to Vietnam to quell violence in Detroit. As the riots called American economic and political maturity into question, the belt of smog settling over the eastern seaboard and Los Angeles aroused fears that the United States had become dangerously overdeveloped. A growing environmental movement questioned the desirability of economic growth. Meanwhile, the student movement opened an attack on the "action intellectuals" whose theories sustained the Vietnam War.
Rostovian theory also came under intellectual attack from abroad. In 1968 the French sociologist Claude Lévi-Strauss was in Vogue, as well as on the pages of the New Yorker and New York Times, proclaiming that there were no superior and no inferior societies, and that supposedly apathetic primitives "possess a genius for invention or action that leaves the achievements of civilized people far behind." In an NBC television interview, the newscaster Edwin Newman pressed J. George Harrar, president of the Rockefeller Foundation, on whether "the Western nations, the richer nations" should impose their standards on the poorer countries if "we are simply presenting them with a different set of problems." Harrar replied that he could offer no justification for modernization "in terms of what we have done to ourselves" but that he was "afraid" that there was no turning back. This standoff characterizes discussions of modernization in the post-Rostovian age. In the early 1970s, social scientists on the left and the right toppled premises and tautologies at the heart of the theory, leaving an unsupported shell of prescriptions that policymakers continued to use. The academic study of development migrated outward from the pure social science disciplines to schools and institutes of applied policy studies. Policymaking bodies no longer relied on universities but on in-house experts and think tanks to supply justifications and strategies for the use of aid.
The trauma of the 1960s split the discourse of modernization into two conversations, one academic, the other oriented toward policy. Occasionally, sounds from one conversation reached the other, but so indistinctly as to distort their meaning. "Civil society" became a fashionable term in both academic and policy circles in the 1990s, but while social scientists described it as a set of rituals for identifying and mobilizing the public, policymakers referred to support for nongovernmental organizations (NGOs) and religious and private institutions. More often, the two conversations were simply separate. Within the university, Rostovian theory was replaced by a new structuralism in the form of dependency theory. In the 1960s, Latin American scholars had deepened and widened Prebisch's critique of the "unequal exchange" between North and South. Whereas Prebisch, Myrdal, and other early structuralists saw meliorist solutions within capitalism (redistribution, planning, and import substitution), dependentistas identified the instigators of those solutions, the state and the national bourgeoisie, as the core of the problem. Drawing on the Marxist tradition in Latin American thought, they argued that economic dependency created class alliances between elites at the center and the periphery, reproducing culture, social relations, and systems of exchange under the guise of development. The only way out of dependency was a mass movement of "popular forces" that would rupture connections to multinational corporations and international exchange and organize a socialist future.
Dependency theory reversed the optics of Rostovian theory, viewing development inward from the periphery rather than outward from the core. It adopted, with modifications, the reified concepts used by Marx and development economics, but it focused on the processes of under-development rather than the dynamics of development. It recognized, as Rostovian theory did not, that local conditions are influenced primarily by a nation's subordinate position in the global economic hierarchy. To American scholars it offered the familiar typologies and analytic power of Rostovian theory but with a very different set of values. American consumers of dependency enlisted on the side of the Latin American popular forces. The principal texts, Andre Gunder Frank's Capitalism and Underdevelopment in Latin America (1967) and Fernando Cardoso and Enzo Faletto's Dependencia y Desarrollo en América Latina (1969), dominated the teaching and study of underdevelopment (especially of Latin America) at American universities in the 1970s and 1980s. Its influence extended to the history of U.S. foreign relations, both in its original form and as world systems theory, which has been described as dependency without the nation.
As an orthodoxy, dependency theory was open to attack, and in the 1980s and early 1990s scholars took it to task for reproducing many of the illusions of development theory. Socialist regimes displayed many of the patterns of cultural reproduction, class relations, and distorted development that dependentistas ascribed to capitalist nations. The hope that isolation and socialism would open a "way out" of dependency (the Myanmar model?) dimmed as scholars recognized the irresistible spread of global networks of culture and influence. The apparent movement of Japan, Taiwan, and South Korea from semiperiphery to core within a capitalist framework forced modifications in dependency theory, while some of the leading theorists (Cardoso became president of Brazil on a neo-liberal platform) abandoned the approach altogether. Finally, new approaches—postcolonial and subaltern studies and postmodernism—moved the study of power relations in Asia, Africa, and Latin America toward issues of culture and knowledge-creation and away from economic development. The newer approaches appealed to a narrower, almost exclusively academic audience. By the 1990s, social scientists had completed their withdrawal from the heights of influence over policy and public opinion they had occupied in the early 1960s.
Within the Agency for International Development, the World Bank, and UN agencies, development doctrine continued to evolve in response to institutional constraints and political currents in the developed world. In 1968, under a new president, former Secretary of Defense Robert S. McNamara, the World Bank "discovered" poverty much as the Johnson administration had four years earlier. Declaring poverty a security threat to the rich nations, McNamara targeted enlarged aid funds at poverty within countries, encouraging programs that ignored issues of national investment and growth. Breaking the customary link between development and the nation that had prevailed since List, he freed the World Bank of concerns about absorptive capacity and state planning and enlarged its mandate. It invested heavily in the green revolution, already under way in South and Southeast Asia, which promised (convincingly at the time) to eliminate hunger and alleviate rural poverty.
Development agencies were increasingly sensitive to concerns raised by the new environmental movement. Rachel Carson's Silent Spring (1962), Paul Ehrlich's The Population Bomb (1968), and Donella Meadows's The Limits to Growth (1972) grimly predicted that slow poisoning lay along the path of accelerating industrial growth and the chemical-dependent agriculture of the green revolution. E. F. Schumacher, a British economist and author of Small Is Beautiful (1973), another bible of the ecology movement, encouraged an "economics of permanence" that recognized that "there cannot be unlimited, generalized growth" on a planet with limited capacity. By questioning the very possibility of progress, environmentalism undercut the rationale and methods of development. In 1983 the United Nations assigned a commission on environment and development under Norwegian Prime Minister Gro Harlem Brundtland to reconcile the objectives of environmental health and economic growth. The Brundtland Report, issued in April 1987, popularized the term "sustainable development" to describe a strategy based on careful husbanding of resources, population control, and reduction of toxic wastes. Sustainable development (ecotourism, microenterprise, rain-fed agriculture) opened space for the collaboration of environmentalists and development experts. With some effort, dissent was once again funneled into the framework.
At the policy level, development doctrine continued to accept an idealized vision of the North Atlantic nations as normative, allowing theory to adapt to the political and economic sea change of the 1970s and 1980s. Reagan administration reforms supplanted the New Deal model, and when the collapse of the Soviet bloc opened a vast new field for development experts, they applied a set of prescriptions almost the reverse of the Rostovian formula. "Structural adjustment" called for the withdrawal of the state from the economy: privatization, the lifting of import and exchange controls, the "importation" of legal codes and standards, and the subjection of all sectors to "market discipline." Jeffrey Sachs of Harvard's Kennedy School of Government urged the Russian government to step aside and allow universal rules of the market to surface. Boris Yeltsin's administration in Russia issued vouchers giving the public a share in worthless state enterprises, while profitable natural resource monopolies were quietly grabbed up by party officials. With a seat in the legislature an "entrepreneur" could amass a fortune in windfalls from privatization and development aid. When the market failed to impose discipline, the Yeltsin administration followed a U.S.-prescribed course of "shock therapy," putting the ruble into free fall against the dollar and wiping out the savings of millions. As evidenced by poverty and suicide rates, Russia's barter economy ("Zaire with permafrost," according to one journalist) was in worse shape ten years after the Soviet breakup than it was under communism.
As ever, development doctrine dispensed advice but not apologies. Sachs admitted that he felt like a surgeon who had cut open a patient to find that nothing was where it was supposed to be, but apparently this was the patient's fault. Development experts accused a lingering "peasant" mentality and Russia's stubborn bureaucracy of undermining a theoretically sound plan. Structural adjustment schemes supported by the Clinton administration opened stock markets in Southeast Asian economies that until the early 1990s were clocking respectable growth figures. Portfolio investments poured in, inflating bubble economies in real estate and construction, then poured out, leaving a sticky residue of debt and unemployment. In a number of nations—Indonesia, Democratic Republic of Congo (Zaire), Sierra Leone, Mexico—the decline of state control, followed by collapse of the market, created criminalized or "narco-economies." In 2001, President George W. Bush added minor modifications to the structural adjustment formula, advocating more grants for education and health initiatives to allow poor nations to increase productivity and pull themselves out of debt. This was thought to represent a small step forward even if the links between education and productivity, and productivity and debt reduction, remained unproven.
Historians are of two minds on the legacy of modernization theory. On the one hand, it has mobilized humanitarianism on a global scale and given the poor an entitlement to progress. On the other, it has licensed self-interested and sometimes brutal forms of intervention while peddling illusions as scientific certainties. Development aid has become a fixture in international relations. Nations and international agencies will continue to use it and to need principles and standards to guide its use and measure its effectiveness. A careful study of past theories and the practices they inspired may enable them to approach these problems with self-awareness and a healthy skepticism.