1. Initial Efforts 1945 - 1960

Efforts towards developing the ,,underdeveloped countries", as was then said, were initiated during the period following the Second World War. For the first time, humanity thought on a worldwilde scale. After the turmoils of World War II, the people were seized by a desire for harmony. They wanted to improve the world. The rich in ,,the one world" should help the poor so that these could also live happily. It was the time of decolonization, and feelings of guilt about the conditions in which the countries were released into independence may have played a role. In the United Nations, the young states were given a platform for expressing their wishes and soon a rapid economic development became the declared objective of these countries' governments.

A few years later there was an additional motive: during the period of cold war it was thought that these people's misery would conduct them to communism, and help for combatting poverty would retain them for the free world. At that time the general opinion was that the problem of development could be solved rapidly. Economists and politicians considered development synonymous with growth of national income. The cause of underdevelopment was seen in the lack of necessary factors of production, especially capital and training. Consequently, capital and technical aid became the instruments of development policy. According to the example set by industrial countries a rapid industrialization — which did not seem to be connected with specific socio-cultural systems — was considered to be the promising way to development. The scarcity of capital for this industrialization and possibilites of overcoming it were the main subjects discussed by the development theoreticians of that time.

According to Harrod (9) and Domar (6) the growth rate depends upon the savings rate and, since the latter is insignificant in poor countries, capital aid should cover the shortage of funds — as the Marshall Plan did for Europe. In 1956 Lewis (21) saw that a rapid expansion of industry would lead to a greater accumulation of capital and, thus, to a further industrialization that would withdraw surplus labour from the traditional agrarian sector. In the initial phase the task of agriculture in these two-sector-models was to release labour together with a marketable surplus in order to keep the wage level low and allow high profit rates. This would result in high growth rates for industry. Aid in small doses would not be sufficient. Due to the indivisibility of investments, Rosenstein-Rodan (31) was of the opinion that a ,,big push" is necessary to achieve effects. In 1956, Rostow (32) put forward his theory of growth stages which met with great resonance. According to this theory, the transition from underdevelopment to development can be described as a series of stages through which all countries must proceed. One of the principal necessities for any take-off is seen in the mobilization of savings in order to generate sufficient investment to accelerate economic growth. At each stage a particular 'leading sector' has to play the decisive functions.

At a time when rapid industrialization was considered to be the appropriate way leading to development, great importance was not attached to agriculture. In the industrial countries the experience had been made that, as development increases, the share of agriculture in the overall economy decreases. This results from the fact that, as income increases, the share spent on food becomes less and less significant and, as labour productivity goes up, fewer and fewer people can assure the necessary agrarian production. According to Boeke's (3) dualism theory, development policy ought to support the necessary structural change, repress the traditional agrarian sector and transfer the surplus labour from traditional agriculture to industry — the motor of growth. The thesis, advanced by Prebish (28) in 1949, that the terms of trade between industrial and agrarian countries had deteriorated, allowed few opportunities to be assumed for growth on the basis of agrarian products. Due to the price decline for their products, the poor countries had to constantly increase their exports to be able to pay for an unchanged amount of imports. According to Bhagwati (2) instead of growth a real immiserizing growth is achieved. In 1958 Hirschman (11) argued that agriculture did not provide many incentives to suppliers and processors to take up new activities and that, as a result, investments into industry were more appropriate to achieve a rapid growth.

Within the framework of these concepts which did not attach great importance to agriculture, agrarian policy, including that of FAO, had two main objectives: to increase food supply to the production level achieved in the pre-war period and to raise farm income. At the time, both were, to aconsiderable extent, successful. Under the methodological aspect, emphasis was laid on transferring production methods, which were common in industrial countries, by means of extension and model farms as examples of modern agriculture. However, the farmers' reaction to extension was often insignificant, not least because it offered innovations that were not very profitable. Therefore, theory characterized the farmers as being tradition-minded.

During the whole of that growth-oriented period, discussions as to who draws the benefits from this growth were scarce, and the poor people were mostly neglected. Indeed, the opinions differed: Nurkse (27) believed, as early as 1953, that the limited demand in the poor countries was a more serious cause of the few incentives to invest than was the lack of capital. In 1957 Myrdal (26) turned, for the first time, against explaining underdevelopment merely under the economic aspect and demanded a comprehensive analysis of all social relations at the national and international level. However, the greatest deviations from the growth-oriented development strategy occurred on grounds of political considerations. During the time of the 'cold war' a non-revolutionary way of changing the rural areas was sought in the concept of community development, which made use of the experiences of social sciences. The mere transfer of western concepts caused the success to be limited, and, as the divergences between East and West were mitigated, the importance of these programmes declined. Around 1960 there was no theory competing with a growth concept based on rapid industrialization which agriculture should support by supplying capital and labour.