(Social, Political, and Economic Stage Theory):
Irma Adelman and Morris presented their theory of stages of economic growth in their book “Society, Politics and Economic Development” in 1967. They share with Rostow and others that the process of economic development can best be analyzed in terms of stages. They use different techniques in distinguishing these stages. Again, they explain growth within each stage and they identify the factors that determine the transition from one stage to another. These two economists deal with political, social, cultural and economic factors by focusing on the experience of LDCs. Thus, they provide empirical results regarding the stages of economic growth relating to contemporary countries.
Adelman and Morris use a variety of statistical techniques, including factor analysis, discriminate analysis, canonical correlation and analysis of hierarchical interactions. These techniques present different forms of multivariate analysis. However, we use Factor Analysis Approach.
Like Regression Analysis, factor analysis is basically the ‘Analysis of Variance Technique’. It decomposes the variance of a variable into several components based on its association with other variables. Factor analysis is primarily helpful to organize and simplify complex statistical data. Factor analysis is close to regression analysis. However, it is clarified that regression analysis may make it possible to identify causality and dependence, while factor analysis may be thought of as identifying only interdependence.
Application of Factor analysis to the Identification of Stages:
The first step in stage theory is to classify or define the characteristics of a stage and to identify countries with respect to particular stages. With reference to a sample of 74 LDCs, Adelman and Morris obtain quantitative or semi-quantitative data for each of 40 different social, political and economic indicators of development. Some of these development indicators are traditional like per capita GNP, but some which are social and political ones are non-traditional like character of agri. organization, extent of leadership, commitment to economic development, degree of modernization of outlook, extent of social mobility and character of basic social organization.
The list of 40 indicators consisting of socio-cultural, political and economic groups is given in table 1.
According to Adelman and Morris, some of the below-mentioned indicators, in turn, based upon two or more sub-indicators. For example, indicator 6, “Extent of Social Mobility” is measured by:
(i) The ratio of the population five to nineteen years of age that is enrolled in primary and secondary schools.
(ii) The importance of the indigenous middle class.
(iii) The presence or absence of prohibitive cultural or ethnic barriers to upward social mobility.
Indicators of Social, Political, and Economic structure utilized by Adelman and Morris:
After determining the indicators and sub-indicators, Adelman and Morris assign each of the 74 LDCs a letter grade with respect to each indicator. Finally, the letter grade scales for these indicators, many of which are only qualitative, are converted to a numerical scale. The resulting “ordinal” scores are the basic data for their application of factor analysis and for their subsequent extensions of that analysis with other tools of multivariate analysis.
Rotated Factor Matrix for Per Capita Gross National Product together with 24 Social and Political Variables.
The first application of the technique is the interaction of social and political indicators in the process of development. For this purpose, all the economic indicators given in the above Table 1, except per capita GNP, are omitted and even this indicator is kept separate from the for factors into which the social and political indicators are clustered. The results appear in Table 2.
Factor 1 (F1 in the table) refers broadly to the extent of social differentiation and integration, i.e., “processes of change in attitudes and institutions associated with the breakdown of traditional social organization”.
Factor 2 (F2) is associated with political systems indicating the transition from “centralized authoritarian political forms to specialized political mechanisms capable of representing the varied group interests of a society and of aggregating these interests through participant national political organs”.
Factor 3 (F3) relates to leadership, “the strength of industrializing elites relative to traditional elites”.
Factor 4 (F4) refers to social and political stability.
Criticism or Demerits:
(i) Data Collection is a Complex Phenomenon: The experts have an objection regarding data collection. As it is said that driving such indicators as “character of basic social organization” or “importance of indigenous
middle class” may be futile exercise as the case with defining Rostow’s “Pre-Newtonian Science and Technology”. Again, attaching economic development with social and political variables operationally is imaginative.
(ii) Indicators and their Relationships: The critics are of the view that some indicators are based, at least partially, on the same sub-indicators and thus may have introduced some spurious correlation among the variables. This is specially true with regard to 12 social indicators associated with factor 1 whose results have been given in Table 2.
(iii) Ordinal Measurement of Indicators: According to Brookins, a set of problems arises as a result of the ordinal measurement of the indicators included in the analysis. He is of the view that ordinal variables are inappropriate for deriving’ elasticities and ‘multipliers’.
(iv) Assumptions are Arbitrary: It is objected that many of the assumptions made at various points in the analysis are arbitrary, and some are quite unjustified. This also looks quite strange when Adelman and Morris did not include any economic indicator (except GNP per capita) in their first formulation of the stage theory. However, in their next formulation (short run analysis) these indicators were included. It also means that the theorists are well authorized to include or exclude the indicators in the analysis.
(v) Beauty of Analysis: Despite certain shortcomings the beauty of the analysis lies in the fact that they have classified complex data and by reading the correlations they have formulated specific hypotheses. On such hypotheses would be that the four factors (the extent of social differentiation and integration, the political transformation from authoritarian regimes to representative govts., the quality of leadership, and the extent of social and political stability) account for the variance observed in a number of socio-cultural and political indicators from a large sample of LDCs. Another hypothesis would be that the relative importance of the factors varies from stage to stage, with social factors being more important in the early stages, political and economic factors in the later stage.