Society, community, and development: a tale of two regions

Abstract

Contemporary social science remains quite divided about the type of coordination that allows some groups of agents to carry out successful economic development and which distinguishes them from cases of failure. In some cases, it is said to be traditional or non-market forms of coordination, such family, networks, or shared traditions: these are “communitarian” sources of organization. In most mainstream economics, however, the opposite is said to be necessary: anonymous and transparent rules of the market, property rights, and contracts. These are “societal” forces. For example, for some analysts, Silicon Valley is a case of community, while for others it is due to appropriate societal forces. The same cleavage can be found in rival interpretations of the success of the Asian Tigers, the industrial clusters of the Third Italy, or any of a host of other cases. A more robust explanation shows how both communitarian and societal forces act as checks and balances on one another, all the while each creating specific but different sources of efficiency in the economy. This view is illustrated via a study in contrasts, between a failed case of low-technology economic development in the Brazilian Northeast, and a success story in the state of Jalisco, Mexico