What Roberts sees with the switch to export-oriented development and the institution of“Washington Consensus” is the emergence of a new world order that perpetuates inequality and divides the world not into rich and poor classes, but rich and poor countries. His basic belief is that the operation of the world market economy as it stands is detrimental to the interests of the less developed countries. Roberts is saying that world capitalism, in terms of world economic integration caused Third World urbanization. This new integration created centrifugal forces such as regionalism, and new emerging urban working and middle classes. It was Import Substitution Industrialization (ISI) that spurred the massive rural-urban migration starting in the 1930s in Latin America. It was however, to some extent, able to shield the poor population from the negative consequences through the control of the economy by a centralized government. The problem Roberts now sees is that with the new world economic order, countries are unable to deal with the problems of over-urbanization due to their dependent status within the system. After touching briefly on the elements of ISI and the new order, he examines this issue of urbanization under the two systems in terms of urban diversification, migration, labor markets, and social organization in particular reference to Latin America.
ISI has a stronger urban bias than the world system we see now (Roberts 1989: 672). It too, however, created economic dependency because noncore countries relied on foreign investment and imported technology. But there is a difference between this kind of dependency, which allowed for internal and fragmented markets, and the new world order that dissolves these markets and replaces them with one world market. ISI created a large number of state employees in the urban sector, which drew people out of the rural areas. The state was then able to provide welfare benefits and other forms of support, which eased the problems of over-urbanization. The new order is characterized by a shrinking public sector in an effort to create a more efficient economy brought about through neo-liberal reforms. The private sector then grows in size and political importance, but decision-making power and so on is still in the hands of the core, which controls the capital and the MNC’s. The state, in this system, loses power and is more likely to come into conflict with its citizens. It can no longer ensure the welfare of its citizens in the same way.
The system of ISI, with its strong urban bias, led to the growth of primate cities across the Third World. The new order, however, has brought about more urbanization in the form of growing intermediate cities and urban diversification. This is due to the fact that this new development by MNC’s is not intended to serve the internal market, and therefore seeks the best locations for producing and exporting goods to foreign markets. These newly enlarged cities can then specialize in certain products or services and diversify the export economy. But very often, there is not the same urban renewal as one finds in core countries, and certain sections of cities are left impoverished and marginalized as they are abandoned. Urban inhabitants are left primarily to subsistence income earning, as the export-oriented sector employs only a small fraction of the urban population due to trade barriers and so on in the core. Those cities not deemed suitable for export-oriented industry will be completely neglected. There is also no guarantee that the internal market will be adequately supplied for.
There is also a similar effect taking place between countries. ISI promoted convergence, meaning that although some cities developed later than others, all countries were moving towards more development. In the new order, those countries that are not suitable for such industry due to comparative advantage and so on, will be left to languish. In this instance, divergence occurs, as not all countries appear to be welcome in the new world order. In the case of Mexico, 28.5% of the work force is concentrated in the informal sector, with 14.5% in manufacturing, which is export-oriented. This is compared to Peru, where 35.9% is concentrated in the informal sector, with 10.4% in blue-collar manufacturing (Roberts 1989: 676).
The growth of industrialization in the LDCs, starting with ISI, has been the main catalyst for migration in these countries. This migration has important consequences in terms of social stability and volatility. ISI first prompted the pattern of rural-urban migration, due to the growth of employment opportunities in the new urban industries, and distorting agricultural policies in the rural areas. The new order is characterized by two new migration patterns. First there is the pattern of urban to urban migration, as workers move from the old ISI industrial centers, to the new export-oriented industrial centers, which results in volatility as a result of the dramatically changing social structure. Certainly, by this point, most rural-urban migration had mostly taken place already. Urban-rural migration can also take place, with growth of export-oriented agricultural sectors. This movement has serious implications for social organization and communal solidarity, which is likely to weaken or break down under such volatile conditions. Under ISI, this would not have been the case, as migration was centered on one city, and the state had the power to foster community development.
Beyond the issue of migration, the new world order has brought about changes in the labor markets and also in the quality of life of urban dwellers. Along with all other components of deregulation associated with this order, labor has also been deregulated. ISI saw the expansion of the service sector, as well as the integration of the informal sector with the rest of the economy and a rise in aspirations. Although wages were low during ISI, the state was able to provide for a decent standard of living, while also allowing workers more ability to organize and extract demands from the government who controlled their jobs. The new order has seen an end to government welfare programs and the resulting detachment of the informal sector. The informal sector is no longer a viable alternative employment option as it was during ISI and austerity has lowered local consumption. By taking power away from the noncore governments and placing it in the hands of MNC’s and the core, capitalism has not been able to provide sufficiently for the Third World poor, who depended on the government to sustain their meager standard of living. The result is higher unemployment, inequality and social polarization.
Familial and societal roles have also changed significantly. During ISI, increasing proletarianization led to the growth of a family wage, in which the husband is paid enough for him to provide for the whole family. With the withdrawal of state benefits and increasing competition, women and even children are now expected to work just to maintain subsistence living standards. This increasingly inward focus of the family in the new order brings new family tensions and in turn weakens communal bonds and organization. This is also a result of increased social mobility and migration. Less time is devoted to community affairs, and a more diverse economy means that neighbors are no longer form the same bonds as they are not even working together in the same jobs. And so work ceases to be a source of identity, and is replaced by things such as gender. This can limit the ability for class-based movements and trade unions to form and demand relief from their impoverished situation. This can make urban society more unstable in that movements are shaped around pressing social issues as they emerge, without having an institutionalized channel through which to express discontent. States are no longer able to intervene to defuse “neighborhood militancy” (Roberts 1989: 685). With the new order, families have become a vehicle for simply providing enough to live for each member, while society has become increasing disenfranchised and fragmented.
So with the new world order has come the present period of “extended crisis” (Roberts 1989: 686). We see a rise in the detrimental effects of dependency and dependent growth, which LDC’s were previously insulated against during the ISI period. Roberts suggests that further study on this issue, in reference to other areas of the world, is necessary. He also recommends longitudinal research to look at other time periods. Even still, there appears to be little hope for relieving these concerns. This new world order has brought about increasing urban-urban migration that has resulted in volatility and instability on a number of levels. This includes labor markets and has limited the ability of the central government to provide for the welfare of its citizens. Social organizations and trade unions cannot establish themselves in this climate of change, particularly when the power resides in a foreign MNC. There have also been effects on the families, identity and surrounding communities. There is an inherent inequality to this new world order that has marginalized regions, cities, countries and people that is unacceptable when combined with its tendency towards urbanization.
Bryan R. Roberts, "Urbanization, Migration and Development", Sociological Forum, Vol. 4, No. 4, Dec. 1989, pp. 665-691.