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Critical Transformations and Global

Development: An Agenda for Theoretical
Renewal
Working Paper June 2016

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PIPEline
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Paper number 1, June 2016

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CRITICAL TRANSFORMATIONS AND

GLOBAL DEVELOPMENT
An Agenda for Theoretical Renewal
Jeffrey Henderson and Nicholas Jepson

Draft, June 2016

Abstract: This paper addresses the disconnection between current

theorisations of global development and the developmental realities of the 21st
century. It argues for a re-working of the development sciences on the basis of
transformation analysis, attending, in particular, to those phases in longerterm social change that it characterises as periods of critical transformation.
Insisting on the need to take the global seriously as an analytic category, it
argues for an innovative development science capable of being applied in
both the developing and developed worlds; one that, inter alia,
incorporates the possibility of anticipatory methodologies for policy-practical
action. The paper briefly explores the empirical utility of transformation
analysis by attention to the recent development histories of Hungary and
Malaysia.

Jeffrey Henderson is Professor of International Development in the School of

Sociology, Politics and International Studies, University of Bristol and (in
2016-18) an International Fellow in the Graduate School of Social Sciences,
Vrije Universiteit Amsterdam.
Jeffrey.henderson@bristol.ac.uk
http://dbms.ilrt.bris.ac.uk/spais/people/person/jeffrey-w-henderson/
Nicholas Jepson is a Teaching Fellow in Development Politics in the School of
Politics and International Studies, University of Leeds.
N.jepson@leeds.ac.uk
http://www.polis.leeds.ac.uk/people/staff/jepson

Introduction
Development is in crisis. This is the case in both developing countries and in
many parts of the developed world. Increasing inequality, stagnating
poverty reduction, environmental despoliation and climate change,
widespread corruption, rising public and private debt, population
displacements and large scale migration coalesce with myriad other factors to
negatively impact global humanity. As a consequence, we stand at a hinge of
history (Appelbaum and Henderson 1995), one of those moments in human
evolution when the superimposition of multiple contradictions, unresolved
from the past, but inflicted with new and sometimes unanticipated elements,
is generating extraordinary economic, political and geo-political turbulence
and, with it, growing uncertainty for societies, communities and individuals
alike.
The global turbulence of our contemporary epoch is compounded by
explanatory uncertainties in the domain of development science. For a
considerable period of time we have lacked consensus on an intellectual
agenda capable of stimulating credible theorisations of our problems;
theorisations that could inform the development of policies and strategies
adequate to the enormity of the difficulties we confront. Today, for instance,
the intellectual spectrum that bears on the problems of global development
and its future ranges in the realm of political economy alone from
arguments that call merely for better market regulation, to analyses that
suggest we may be witnessing the beginning of the end of capitalism (cf.
French et al 2010, Streeck 2014a).
In this paper a possible route out of our scientific dilemmas is explored.
Taking seriously the global as an historically constitutive and thus analytic
category, the paper investigates the possibility (and viability) of reconfiguring the study of global development around the concept of
transformation, with an analytic focus on the dynamics that form, impact
and drive forward periods of critical transformation as these arise in
particular national and sub-national spaces.1 It begins with a critical review of
a variety of attempts to understand global development and, in so doing,
highlights three key problems that tend to work against the possibility of any
of them though to different degrees - being capable of delivering
theorisations adequate to the task at hand. Responding principally to the first
1

In principle, transformation analysis could be applied at world-regional and global levels also, but
this exercise is not attempted here.

5
two of these, the paper then advances transformation analysis (TA) as an
alternative basis for grasping the dynamics of global development.
Subsequently, by means of brief studies of two countries at different levels of
development (though, arguably, in periods of critical transformation) Hungary and Malaysia - the paper provides an assessment of the empirical
viability of transformation analysis.
Conceptions of global development: a necessarily brief exploration
This paper is concerned with the theory and practice of global development.
Its ultimate aim is to encourage the emergence of a development science
appropriate to both the developing and developed worlds. Given this and the
impossibility of doing justice, in the context of a short article, to the colossal
literatures that concentrate on one or the other worlds, the focus here will be
on work that at least implicitly claims a global remit for its analytic frame:
namely those that approach the dynamics of development in ways that, at
least in principle, are relevant to developing and developed countries alike.
Attending to development
At the risk of simplification, the analysis and policy-practice of global
development, at least since the decades of high Keynesianism (1950s and
1960s) and its Prebisch-Singer inspired corollaries (import substitution
industrialisation, for instance), has been dominated by the tensions between
the appropriate roles for private property and markets on the one hand and
state interventions both regulatory and in terms of the provision of goods
and services on the other. Since the 1980s those privileging the former
neoliberal approaches - have tended to dominate. More recently, and
particularly since the economic crises of the late 1990s/early 2000s (in East
Asia, Argentina etc.) and more widely after 2008, approaches that critically
engage with neoliberalism and reject many of its assumptions and policy
prescriptions, have been re-energised and gained credibility in some parts of
the world. While neoliberal development strategies were near-hegemonic at
the start of the millennium, across the majority of developed and developing
countries alike, evidence of their financial and, more widely, economic
failures, together with growing recognition of the environmental and socially
destructive elements associated with them, have led to a search for alternative
theories and projects; from neo-developmentalism in parts of Latin America
and Africa to anti-austerity movements in Greece, Spain, Scotland and
elsewhere in Europe. Many of these have brought the state back in while
emphasizing the democratic deficits that seem to be associated with many
neoliberal strategies.

6
Intellectually and as a policy-practical project, neoliberalism emerged in the
1970s by complementing neoclassical economic theory with attention to social
development and state administrative reform. Road-tested in its early
period in a financially bankrupt New York City and Pinochets Chile, it was
cemented into the institutional fabric of economies and societies subsequent
to the rise of the Reagan and Thatcher administrations in the US and Britain
in the 1980s (Harvey 2005) and began to be championed by economic and
political elites around the world. Inter alia, it became the basis for a new
phase of globalization, one in which free-market doctrines were applied to all
aspects of economic activity and to the operations of the state and welfare
provision. Markets began to play the dominant role in economic governance
and in decisions over the flows of goods, capital, labour and their prices.
Neoliberalism elevated the private sector and its values to the dominant role
in society and served to legitimate a politics designed to secure and maintain
those ends. As a result, the public provision of goods, the ethos of public
service and the importance of collective values and goals (a bedrock of human
social solidarities for millennia) was undermined and de-legitimated.
While neoliberalism has always been a hybridised phenomenon (Brenner et al
2010), leading to a continuum of political-economic forms (with Britain
perhaps now at one polarity and China at the other), growing evidence of its
socially damaging effects and inherent economic instabilities gave rise to
considerable intellectual and political criticism; the well-known work by
Wilkinson and Pickett (2009), Streeck (2014b) and Picketty (2014) being
indicative of the former and movements such as the World Social Forum and
Occupy of the latter. Even though the neoliberal Washington consensus
became for a while the paradigm for the work of most international
development agencies, one of them UNDP long stood out (since around
1990) 2, for its commitment to the idea that human development could not be
reduced to economic development and certainly not to market efficiencies
(cf. Nederveen Pieterse 2014).
The UNDPs position on development notwithstanding, global alternatives to
neoliberal political-economic theory have drawn on diverse intellectual
traditions, including those of Marx, Keynes, Schumpeter and Minsky (see, for
instance, Nesvetailova 2007). Creating space for the state and political action
in the development project, many of them have recognised that there are
other, more socially cohesive ways of developing successful capitalist
economies, than those advocated by neoliberal theory. Neoliberalism, as an
intellectual and policy-political project, has effectively sought to universalize
a particular understanding of the Anglo-American version of capitalism and
2

Thanks initially to Amartya Sens influence. See, for instance, Sen (1999).

7
modernity as the ultimate goal of development and as a series of routes for
achieving that goal. Arraigned against this as a rational project has been
growing evidence that other forms of capitalism arguably do better when it
comes to building dynamic economies with high productivity and low levels
of inequality (eg. Coates 2000, Dore 2000, Pontusson 2005). Appreciations that
development in the high performing economies of East Asia had been state
orchestrated rather than straight-forwardly free market (see, for example,
Wade 1990, Appelbaum and Henderson 1992, Kim 1997) were important in
this process, as was the recognition through studies of industrialization in
Western Europe (eg. Vartiainen 1995, Castells and Himanen 2004), postsocialist transformations in Central-Eastern Europe (eg Amsden et al 1995,
Henderson 1998) and late industrialisation in the developing world
(Amsden 2004), that all successful industrialization experiences have rested
on state intervention (Amsden et al 1995: 49). Chang (2002) underlined this
conclusion by showing that even in the USA, when it was a developing
country, infant industries benefitted from state protection.
More than anything, however, it was the perceived relation between
neoliberal financialisation and the East Asian economic crisis of the late
1990s (Wade and Veneroso 1998, Henderson 1999, Haggard 2000) as well as
the Argentinian crisis of 2001 that caused even some global governance
agency insiders to question the Washington consensus. Led by the World
Banks former chief economist, Joseph Stiglitz (eg 2003, 2007), there began to
be recognition that the radical forms of neoliberalism underpinning the policy
agenda of the Bank, the IMF and development policy more generally, was
counterproductive. The way forward, Stiglitz and others in effect argued, was
to re-create the intellectual and policy space for selective state intervention to
support the private and public sectors alike in an effort to secure growth with
reasonable social equity. The Post-Washington consensus as this re-think of
theory and practice came to be known, has sometimes been endorsed from
unexpected quarters as with Fukuyamas (2004) argument that neoliberal
policies were undermining the institutional fabric of states that were
themselves essential to the successful implementation of development
policies. The great recession subsequent to 2008 and the disruptions to the
social and political order that it has engendered (in Europe as elsewhere) have
served to underline the urgency of the search for development strategies
beyond neoliberalism (eg. on Britain, see Green and Hay 2015).
The idea that the state was, and should remain a significant development
actor took a major step forward with the growing economic and political
significance of the BICs (Brazil, India, China). With the rise of China in
particular, it became difficult to argue against the idea of a central role for the
state in economic and social progress. Additionally, with the global

8
externalization of the Chinese political economy, the developmental state
including in its authoritarian forms - was very much back on the agenda (cf.
Power et al 2012, Henderson et al 2013, Routley 2014). While far from being
development orthodoxy, the significance of the state as a development actor
in its own right is now recognised within at least one of the principal
development agencies, as the UNDPs 2013 Human Development Report
testifies (UNDP 2013).
Among the currently significant approaches to development that claim a
global remit, world-systems analysis is the most prominent.3 Subsequent to its
origins in Wallersteins work in the 1970s, the principal (and related) foci for
analysis arguably have become the rise and fall of economic and political
hegemonies on the one hand and long cycles of capital accumulation on the
other (Arrighi 1994, 2007; Chase-Dunn 1998, Babones 2015). Whatever the
intellectual advances made by world-systems analysis, however, it is yet to
fashion a credible policy agenda: to work as a guide to those seeking to
encourage social, economic and political change in the contemporary world.
What was originally one of its offshoots (in its former guise as global
commodity chains: Gereffi and Korzeniewicz 1994), however, has arguably
done better, at least in regard to economic change. Global Production
Networks and its cognate tradition of analysis, Global Value Chains
(Henderson et al 2002, Gereffi et al 2005, Coe and Yeung 2015) have emerged
to foreground the dialectic of global-local relations in the study of economic
and social development and their insights have influenced policy thinking in
the ILO and the World Bank, among others (eg. Palpacuer and Parisotto 2003,
Cattaneo et al 2010)
Debilitating inadequacies
Building on the problems identified with these traditions of development
science, as well as others not surveyed here, there are three general issues that
constrain their prospects of delivering analyses adequate to contemporary
conditions.
Development as a developing country problem: As indicated above, only worldsystems, GPN analysis and closely cognate traditions of work 4 conceptualise
the global as a level of analysis in its own right. Consequently, for the others,
economic, political and social change associated with development, is
perceived as being restricted to developing countries only. Change-as3

We are conscious that for the sake of simplicity we are here eliding world-systems analysis with
important theoretical traditions that pre-dated it, particularly dependency theory from Prebisch to
Frank, Cardoso and others and the related work on unequal exchange of Baran, Sweezy, Emmanuel,
Amin etc. These traditions, however, did not constitute the global as an analytic category; their
insights were framed within the discourses of the national and thus, the international.
4
Such as Leslie Sklairs on globalization and transnationalism (eg. Sklair 2001, 2002).

9
development is seen as an issue solely for the global South. The global North
is assumed to be developed, and the development process there is presumed
to have finished. In this way the notion of development and its attendant
discourses serve to fracture the unity of global change; the reality of the global
political economy and its constituent societies as a dialectical whole in
constant transformation, is effectively denied. With this intellectual
background it is no surprise that notional hierarchies of development have
emerged, in which the global North is at the top and the global South (in
varying levels of human degradation) at the bottom. From there it has been
but a short step to the assumption indeed the ontology that
development is a process of historical change in which the developed world
assists the developing world to develop; but crucially, to develop largely in
the formers self-image, and definitely not vice versa.
Euro/American-centrism: The conceptions of development reflected in these
traditions dominate contemporary discourses and policy agenda and are
imbued with European/American-centric notions of progress and
modernization.5 They emerged from the European Enlightenment of the 18th
century, were elaborated and deepened during the classical colonialisms of
the 19th and first half of the 20th centuries and have continued to inform
perceptions and thinking through to the present day (see, for instance,
Escobar 1995, Wallerstein 2001: Ch. 7, Rist 2008). The utility of much
Western foreign aid and advice behind which lie assumptions that their
routes to development are universally applicable is now being questioned
by even some of the key actors themselves, including the OECD Development
Assistance Committee (Humphrey 2010). On a wider plane, Changs (2007)
work shows how the conception of development reflected in orthodox
economic theory and notions of good governance has not merely been
inappropriate, but has created serious problems for the peoples of the global
south. Behind these arguments is a sense that the root of the problem is an
inappropriate intellectual and socio-political framing of the entire
development project and thus the tenor of the research and policy discourses
associated with it. The growing impact of China and other BICs as
development actors compounds this suspicion. On an intellectual plane, how
can China, for instance itself a developing country, but with a dramatically
different vision of modernity and progress relative to North America or
Western Europe (Jacques 2012) - be seen as assisting other parts of the
developing world to develop if we stick with the categories of traditional
development science? Clearly, this becomes a difficult task unless we
innovate on the categories we use to think about development and, in the
5

The work of Frank (1998), Bayly (2004) and Arrighi (2007) are important exceptions here, but they
hardly dominate contemporary discourses and policy agenda.

10
process, open ourselves up to a wider variety of conceptions of possible
futures than has been typical through to the present.
Theorizing after the fact and predicting the future: Almost all development
science (and social science more generally) suffers from one or both of the
following epistemological problems. They rely on the past (including present
history) for the empirical bases of their theoretical constructions and
additionally, some of them construct formal models on the basis of quantified
data regarded as plausibly representing the present and/or a series of
snapshots of reality at particular moments in time, past and present, and on
those bases sometimes attempt to predict the future. While these
epistemological orientations and their related methodologies can produce
perfectly credible routes to knowledge of the social world 6 they are, on their
own, inadequate to the task of identifying future trajectories of change that are
immanent in the present and have been conditioned by structures and
processes derived from the past. It is arguably the capacity to apprehend and
comprehend such trajectories, however, that is central to the possibilities of
building a development science fit for 21st century realities.
Towards transformation analysis
To move forward on this agenda we need to alter the constructs we use to
imagine and analyse historical change, its rhythms and trajectories, not
merely in the developing world, but globally. In particular we need a science
that can grasp the dynamics of change, and the actors involved, that are both
internal and external to the particular territorial spaces in question (subnational, national, cross-border, world-regional). In other words, we need an
appreciation of the dialectic between what Castells (2000) calls the space of
places (indigenous social, economic, cultural, physical and natural assets)
and the space of flows (investment, power, people, information, imagery
etc.), as well as the ways in which this dialectic works out under particular
historical circumstances.
A fruitful way forward might be to construct a new analytic scheme around
the dynamics of transformation.7 In particular, and as we argue below, what
may be needed is a re-orientation of research around tendencies towards
critical transformation as these emerge in particular periods and at a variety
of spatial levels. Among other things, such an analytic scheme (and associated
discourses) has the potential to advance an appreciation of development as a
globally integrated phenomenon, thus distinguishing it from its
6

For instance, see the research (relevant to our concerns in this paper) on the relation of governance
and growth by Evans and Rauch (Evans and Rauch 1999, Rauch and Evans 2000) and on governance
and poverty reduction by Henderson et al (2007).
7
This section builds on the ideas briefly sketched in Henderson et al (2013: 1235-1239).

11
conceptualisation in current theory and policy as something relevant only to
the global South. Unlike discourses of development, therefore, those of
transformation offer the prospect of global analyses of the dynamics and
consequences of change that, in principle, are relevant for developing and
developed countries alike.
The notion of transformation encourages a conception of economic, social and
political change that explicitly recognizes that change processes can
potentially deliver a wide range of possible outcomes. Implicit in this
conception and its attendant discourses is an appreciation that while a known
starting point for the change process is obviously assumed, unlike transition
discourses for instance, it does not presuppose that we know the end point;
rather, the end point of the change process is recognized to be unknown
(Henderson 1998: Ch.1). Consequently transformation discourses have the
capacity to avoid the a priori reasoning associated with much mainstream
social science, including development science. In helping to avoid analyses
that implicitly (and unconsciously) incorporate a pre-defined end point for
whatever change process is being studied (from the impacts of building a
trans-oceanic canal in Nicaragua, say, to anti-democratic impulses in Poland:
Watts 2015, Garton Ash 2016), transformation discourses allow for the
possibility of open-ended reflection on the dynamics and consequences of
change. This is important analytically as it encourages the avoidance of the
premature theoretical closure typical of many traditional development
discourses (be they informed, for instance, by neoclassical economic theory or
some forms of radical political economy) and thus some of the pitfalls of
earlier and current policy engagements with economic and social
development (the structural adjustment agenda of the World Bank and IMF
being cases in point). Additionally, transformation discourses are likely to
offer further advantages: (a) the prospect of learning and policy transfers
from the global South to the global North, and not merely vice versa 8; (b) the
ability to analyse the dynamics and consequences of change wherever they
arise (even in the worlds most developed countries) by applying essentially
the same conceptual apparatus; and (c) help open the field to alternative
perceptions of development and thus encourage analysts to transcend
Euro/American-centrism.
Definitional issues
Before turning to an application of transformation analysis to the cases of
Hungary and Malaysia, we first need to clarify the nature of the analytic
categories we seek to mobilise and discuss and, subsequently (in the
following section) some of the methodological issues that underlie our
8

See the case of New York Citys adoption of anti-poverty advice from Brazil (UNDP 2013: 85).

12
application of them to concrete experiences of development and change. For
heuristic purposes, transformations can be comprehended historically as four
distinct, but interrelated phases.
Evolutionary transformations: While change is at the core of all ecological
systems, including human societies, for much of recorded history through to
the first waves of European colonization from the end of the fifteenth century
and capitalist industrialization from the eighteenth century, it seems to have
been relatively slow and evolutionary. While evolutionary transformation
(ET) may be less of a feature of most human societies today (due to climate
change and the myriad processes collectively known as globalisation,
including revolutions in communications technologies), it can be seen as a
baseline for change that takes place within coordinates set by an interaction of
forces whose dynamics at least in given places (be the dynamics
endogenous and/or exogenous) are relatively well understood and unlikely
to change rapidly.
Critical transformations 9 : Transformations are inevitably uneven over space
and time. The dynamics of capital accumulation and the dialectic of places
and flows associated with it impacts particular cities, regions and other
territorial spaces at different times and in different sequences. In the process
new contradictions that might originate in environmental, social or
economic disruptions (for instance, desertification, large scale migrations, or
unemployment occasioned by shifts in the accumulation cycle and thus the
locations of creative destruction) become superimposed on one another and
on pre-existing ones such that the velocity of the change process begins to
increase. With it, the dynamics and consequences of change become more
volatile and their management by governments and other agencies more
difficult and less certain. The possibility of new, or alternative development
trajectories, sometimes begins to emerge. 10 In these contexts, societies enter
periods of critical transformation (CT).
Critical conjunctures: Should the volatility associated with CTs develop further
and deepen, rather than being effectively managed or resolved, critical
conjunctures (CCs) tend to emerge. For example, while Chinas development
project arguably has entered a CT phase (associated, in part, with contractions
in global demand and tendencies towards over-accumulation), the tensions
associated with the governments attempt to switch the countrys growth
9

Our thinking on critical transformations was initially stimulated by developments in ecological

theory, particularly Scheffers (2009) work on environmental change and the emergence of what he
calls critical transitions. We are grateful to Glenn Smith of the Centre Asie du Sud-Est, Paris, for
introducing us to Scheffers work.
10
The notion of developmental trajectory used here relates to pathways to the future (economic,
political, social, cultural) and thus to the possibility of different collective futures being imbricated in
the same starting point. As such, it is a structural idea. Consequently, recessions or booms, for instance,
do not necessarily imply changes in trajectory.

13
model from an export to a more domestically-driven one (cf. ten Brink 2013,
Hung 2015), could well result in the emergence of a CC. Similarly, but in a
very different development context, Britains badly asymmetrical and low
productivity economy, coupled with its dysfunctional, pre-modern state, has
arguably contributed to the countrys current phase of critical transformation
(cf. Henderson and Ho 2014) and, subsequent to the 2016 Referendum (should
the result mean Britains exit from the EU) 11, the possibility of an impending
CC. Importantly, a CC phase tends to lead to a shift in the developmental
trajectory, whether this is by way of a resolution of the compacted tensions
and conflicts typically associated with CCs, or by means of a transition to a
crisis phase. In other words, in the context of a CC, trajectories to the future
become indeterminate in the sense that there tend to be a variety of possible
resolutions to the particular problems that CCs generate.
Crises: Depending on their composition and the ever present possibility of
unanticipated contingencies being inserted into the historical mix (eg. political
assassinations or environmental catastrophes: volcanic eruptions, hurricanes
etc.) CCs can sometimes evolve into political-economic or more widely,
developmental crises. The East Asian crises of the late 1990s, which disrupted
three decades of robust economic development in parts of the region and
toppled the Suharto dictatorship in Indonesia, is an example of a key moment
in the history of neoliberalism and financialization - and the contradictions
associated with them (cf. Wade and Veneroso 1998, Henderson 1999, Haggard
2000) - that could be reinterpreted by mobilising CT/CC categories to analyse
the developmental trajectories of the various crisis countries in the preceding
period.
Methodological issues
Transformation analysis is concerned with identifying the trajectories of social
change as these arise in particular places and historical periods and are
realised, or deflected, or transmute in subsequent periods and in principle
other places. 12 As a consequence, two broad methodological questions
confront transformation analysis: the nature of the transition from one
transformation phase to another, and whether a reversal to an earlier phase
might be possible; and the analytic strategies and epistemological
groundings - that transformation analysis implies.
11

This paper was drafted in May 2016. The referendum on Britains continued membership of the EU
is scheduled for June 23rd, 2016.
12
In these senses, transformation analysis is consistent with a very long intellectual tradition going
back at least to Marx (for instance, in The Eighteen Brumaire of Louis Bonaparte: Carver 1996: 31127), but importantly supplemented by Lukacs work on dialectics (eg. Lukacs 1971: 1-26) and the
historical-sociological work of Moore (1967), Skocpol (1979) and Rueschemeyer, Stephens and
Stephens (1992), among others.

14
Transitions from phase to phase: There seem to be three issues of concern here:
how can we identify which phase (other than ET) a given political economy
and society is in at a given historical moment; what might constitute the
tipping point between one phase and another; and can the resolution of the
contradictions and problems in one phase result to a reversion to
developmental moments and trajectories evident in an earlier phase?
Moving from an ET to a CT can be identified by an acceleration of the
processes of change and the increasing social, economic and political
turbulence that tends to accompany it. Also the increase in the velocity of
change, and its social and political consequences, tends to challenge the
structure of the political economy, or significant parts of it. In a CT phase,
however, the predominant developmental trajectory tends to remain the same
(in broad terms), for some time, even while the contradictions inherent in the
trajectory tend to be amplified. Thus, for instance, while the contradictions in
the British, financialised version of capitalism, have been evident for some
time (short-termist managerial priorities, underinvestment in R&D, low
productivity, rising inequality etc.) and the British political economy can be
clearly seen to have entered a CT phase with the onset of the great recession
in 2008, its development trajectory has remained much the same. In terms of
the second question, and continuing with the British example, the global
shock to financialised neoliberalism that occurred in 2008, did not represent a
tipping point for the transition from a CT to a CC. As indicated above, such a
tipping point can be anticipated should Britain leave the European Union.
While transitions from ET to CT phases involve the working out and
deepening of existing contradictions and the insertion of new ones into the
mix, they do not necessarily involve particular events or unanticipated
contingencies that constitute tipping points for movement from an ET to a CT.
It is for this reason that resolutions of CTs can, in principle, involve reversions
to something close to (though never the same as 13 ) pre-existing
developmental trajectories. The transition from critical transformations to
critical conjunctures, however, always involve particular events that
crystalize the contradictory dynamics of the CT and tip them over into
periods characterised by CCs.14 To put this another way, while it is possible to
devise a series of policy interventions that would allow a society to step back
from a CT, or at least prevent a CT morphing into a CC (as was the case, for
13

At the beginning of The Eighteen Brumaire, Marx famously comments on history repeating itself
(the first time as high tragedy, the second time as low farce: Carver 1996: 31). While that may appear
to be possible in history-understood-as-events (the way, in fact, that Marx employs his comment), in
history-understood-as-process, it clearly is not
14
Our thinking on these issues is somewhat consistent with Sewells (2008) work on the temporalities
of capitalism. He shows how capitalist development can be understood as a combination of deep
structural (our term) regularities punctuated by events (contingencies) which have the capacity, for
particular periods, to alter the dynamics of historical change.

15
instance, in Malaysia in the late 1990s, via the introduction of currency
controls: Henderson 1999 15), a reversion from a CC phase to the earlier CT
phase is methodologically inconceivable, though a transition of a CC phase
into a new CT phase is distinctly possible.
Analytic strategies: Focusing on critical transformations foregrounds the need
to identify both the sources and the trajectories of change as well as their
possible consequences. To do this, an anticipatory development science is
necessary. At root an epistemological task, the ways forward are to be found
in critical realisms concerns to chart a path between the nomothetic and
idiographic sciences, thus avoiding the explanatory limitations of both; in
other words, a social science that is both sensitive to the structural parameters
within which human behavior is constituted, and at the same time is open to
the causal effects of contingency and the variability of social change by virtue
of its temporal, spatial and cultural contexts (Sayer 2000). They are also to be
found in the work on Southern epistemologies developed by Boaventura de
Souza Santos and his collaborators (eg. Santos 2008, 2014). Among other
things, this work remind us that there are a multiplicity of rationalities and
not merely the Euro-American one that underpins contemporary social
science. For transformation analysis, building a development science capable
of addressing the problems of global humanity more effectively, means,
among other things, opening up scientific discourse to alternative voices and
alternative rationalities (without displacing the sense of reason bequeathed by
the European Enlightenment). Importantly, the tradition of Southern
epistemologies highlights the fact, to paraphrase Santos (2014: p. viii), that
there is no better way of knowing the world and acting on it, than
anticipating its future. The identification of transformational trajectories
inherent in the present and constituted, in part, from the past, is the basis on
which to ground a sense of what the future might hold, and thus what might
be the most effective ways of circumventing its more negative consequences.16
Transformation analysis on the ground
In this penultimate section of the paper we ground transformation analysis
by presenting a provisional application of TA to the recent developmental
histories of two political economies and societies: Hungary and Malaysia.
Though still at different levels of development, they are both arguably in
periods of critical transformation. As such, they represent convenient cases
through which to explore the utility of the analytic categories sketched above.
15

Argentina in early 2001 during its financial crisis was another case in point, though there the policy
interventions were unsuccessful and by the end of that year the country had transitioned into a critical
conjuncture (see Jepson 2015: Ch. 6).
16
We do not pursue this task here, however, as it would take us well beyond the boundaries of the
current paper.

16
We proceed by providing brief overviews of the current political and social
condition of each country, before moving to applications of the
transformation categories.
Hungary 17
Officially recognised as an upper middle income economy with very high
levels of human development (World Bank 2015, UNDP 2015), since 2010
Hungary has been dominated by an increasingly authoritarian, ultraconservative nationalist party: Fidesz (nominally in coalition with the
Christian Democratic Party). In the 2014 elections, as in 2010, Fidesz gained
two-thirds of the Parliamentary seats (with around 45 percent of the vote).
Since their election victory in 2010, the Fidesz led governments have
legislated to significantly constrain democracy, the rule of law and human
rights (Tth, 2012). A new Constitution, which was subject to five substantial
anti-democratic amendments in its first year alone, has been accompanied by
serious limitations on the power of the Constitutional Court (especially in
economic affairs and the activities of opposition parties). The politicisation of
the judiciary, civil service and the public media via the appointment of Fidesz
supporters, has proceeded apace. Constituency boundaries have been redrawn (almost halving Parliamentary seats from 386 to 199), and the
regulations on electoral alliances have been altered. The consequence is that it
is now difficult for any Party other than Fidesz and its supporters to win seats
in the Hungarian Parliament (Bankuti et al 2012). Furthermore, there are
examples of laws being written in the interests of particular companies or
indeed, individuals (eg. the changes in the tobacco licensing and banking
laws in 2014) and politics seems essentially to have been reduced to the
activities of a section of the political-economic elite whose object seems to be
the privatisation of the remaining public assets in their own interests, most
notably with regard to leases on state owned land (Fridrich 2013). Corruption
within the central state bureaucracy is widely regarded to be increasing and
this may extend to the allocation EU funds (Fazekas et al 2013). Through all of
this the EU has stood idly by, unable or uninterested in applying Article 7 of
its Constitution which is designed to discipline member states enroute to
authoritarianism (Sedelmeier 2014).
During this period, the neoliberalisation of economic governance, which
began in the mid-1990s (Phillips et al 2006), has continued to negatively
17

We are grateful to Laszlo Czaban (University of Manchester) for sharing his reading of the
Hungarian and English scholarly and media literatures with us, as well as his views on the current state
of Hungarys political economy and politics. The interpretation developed here, however, is entirely
our own.

17
impact the welfare state to the point that it has been all but eliminated.
Unemployment benefit has been cut to the lowest level in the EU and the
intention is to abolish it by 2018. Social benefits are being made discretionary
and local governments now have the right to use subjective measures (eg.
cleanliness) to award or reject benefit claims (with particular consequences
for the Roma minority). The economy remains overwhelmingly low wage,
with labour costs the fifth lowest in the EU (Eurostat 2014a). Against this
background, a third of Hungarian families are under threat of poverty or
social exclusion (Eurostat, 2014b) and at least 35 percent of them are too poor
to buy sufficient food (Dugan and Wendt 2014).
Underlying Hungarys authoritarian politics and social fragmentation, is an
increasingly foreign-owned and slow-growing economy that has been
particularly badly hit by the great recession and which, in value-generating
terms, continues to lie towards the bottom end of the production chains (Sass
and Kalotay 2012). While foreign investment in low productivity, low valueadding activities has been true since the immediate post-socialist period,
when firms from the EU (largely Germany), the US and Japan acquired many
of the former state owned companies (Czaban and Henderson 2003), more
recently, Russian state-owned companies have become increasing evident
particularly in energy investments (electricity and gas) - as the Fidesz regime
has turned to the Russian government for support, and Chinese investment in
banking, real estate and manufacturing is growing (The Moscow Times 2014,
Szunomr et al 2014).
Sources of critical transformation: While contemporary Hungary seems to be
clearly in a CT phase whose historical roots can ultimately be traced back to
the centuries-old dynamics of uneven development there, as elsewhere in
Central-Eastern Europe (Berend 2003)18, the decisive period for understanding
current circumstances is arguably the last 30 years or so since the period of
late Kadarism19 immediately preceding the rupture with state socialism in
1989/90.
By the late 1960s, with the institution of the reform programme known as the
new economic mechanism (NEM), the Hungarian political economy can be
understood as having emerged into a new period of evolutionary
transformation following the trauma of the crisis that was the Soviet
repression of the Hungarian uprising in 1956. This period, however, was to
18

And, associated with it, the fact that Hungary, arguably, did not become a modern, urbanized,
industrial society until well into the second half of the 20th century (Janos 1982).
19
A term first coined, as far as we are aware, by Erzsebet Szalai. See, for instance, Szalai (1999).
Kadarism refers to the partially liberalized, partly marketised form of state socialism that developed
in Hungary during the political administration of Janos Kadar (General Secretary of the Hungarian
Socialist Workers Party, 1956-1988).

18
be relatively short-lived, as the economic contradictions associated with even
Hungarys progressive form of state socialism (rising foreign indebtedness,
intervention by the IMF which Hungary had joined in 1982 the imposition
of austerity budgets etc.) began to take a grip of the political economy and
society. By the mid-1980s, before the formal end of state socialism, Hungary
had arguably entered new phase of critical transformation.
Evident within this phase were arguably at least two possible trajectories to
the future. One of which, as Czaban (2008) has cogently argued, could have
involved a continuation of the economic and political liberalisations that had
begun with the NEM in 1968, including changes within the Hungarian
Socialist Workers Party, with the possibility of Hungary undergoing a
gradual transformation into a version of a social democratic political
economy. The other possibility would have been the implosion of the Party
resulting from its inability to manage the deepening contradictions afflicting
Hungarys political economy and society and with it, the onset of a critical
conjuncture. In the event, it was the latter trajectory on which Hungary
embarked, but one that, crucially, was triggered by an external contingency:
the political and geo-political shifts known collectively as the collapse of the
Berlin wall (in 1989).
The critical conjuncture that emerged in 1989-90 itself provided the
opportunity for alternative development trajectories, both of which were
advocated by external political actors. Intended as reconstruction strategies
for all the former state-socialist societies, and not just Hungary, one,
advocated by the French government operating through the European Union,
would have involved financial support for the various economies with
encouragement for a gradual transition to a more marketised and capitalist
future (Henderson 1998: Ch. 1). The other which rapidly won out due to US,
British, IMF and other pressure (and had strong support among key by
then, ideologically neoliberal - sections of the indigenous political-economic
elites, including Hungarys) involved various versions of shock therapy
(Amsden et al 1995). In the case of Hungary, however, the full force of the
shock was delayed for some years. Subsequent to the CC occasioned by the
collapse of Central-Eastern European state-socialism, Hungary entered
another CT phase characterised by path dependencies (derived from statesocialism) at the level of the business corporations (Henderson et al 1995,
Whitley et al 1996) articulated with a variety of neoliberal policy experiments
which together produced a hybrid, but essentially unstable political economy,
which at its heart was a system of recombinant property controlled by what
was, initially, a non-capitalist, cultural elite that had emerged from the
remnants of state-socialism (Stark 1996, Stark and Bruszt 1998, Eyal et al
2001).

19

Though under the aegis of a conservative coalition government, led by the

Hungarian Democratic Forum, the period 1990-95 can be seen as one
characterised by halting, incoherent attempts, to fashion some sort of social
democratic political economy. During this period, welfare expenditures, for
instance, were not significantly reduced and indeed, in some cases, were
increased. Whatever the possibilities of this trajectory emerging to underpin
a new normal in Hungary a new phase of evolutionary transformation
they were cut short by severe economic recession. In 1995 the new coalition
government (elected in 1994) led by the Socialist Party, instituted shock
therapy with a vengeance. With the policy programme known locally as the
Bokros package, Hungary for the second time in six years was tipped into a
critical conjuncture (see, Phillips et al 2006). The resolution of this second CC,
arguably involved yet another CT phase which ultimately, by the end of the
first Fidesz-led government (1998-2002) and Hungarys entry into the
European Union in 2004, had transmuted into a new period of evolutionary
transformation.
The various transformation phases that have characterised Hungarian history
from the late 1980s to around 2008, can be seen as the consequences of a series
of partly different, but partly related solutions to recurring problems
associated with the structural contradictions of the Hungarian political
economy.20 Since then, however, and for the reasons indicated in the first
section of this case study, Hungary is once again in a CT phase. This current
phase, however, whose predominant origins seem to lie in the inadequate
resolution of the CC of the mid-1990s, presages developmental trajectories
that, if anything, may be more problematic than those that have gone before.
This time, the reverberations of the CT are not only internal to the Hungarian
society itself, but impacted by new, external dynamics the flows of migrants
from the Middle East and South Asia in particular, and xenophobic resistance
to them threatens to spill out to adversely impact the EU more generally.
Malaysia
As another upper-middle income economy, but with an officially lower level
of human development than Hungary (World Bank 2015, UNDP 2015), the
results of Malaysias 2008 and 2013 federal elections highlighted the
increasing political tensions that have now become apparent. In 2008, after 56
years of political domination, the Barisan Nasional (BN) an alliance of three
racially distinct parties, the United Malays National Organisation (UMNO),
the Malaysian Chinese Association (MCA) and the Malaysian Indian
20

For a general, though somewhat cognate approach to our understanding of this switching of
transformation phases, see Haydus (2010) work on historical problem solving.

20
Congress (MIC) - for the first time lost its two-thirds majority in Parliament.
In 2013 its authority was further damaged when it came second in the
popular vote (47 to 51 percent) to the opposition alliance, the multi-cultural
Pakatan Rakyat (PR). However, due to the British-derived first past the post
electoral system coupled with direct and indirect vote buying (government
policies and investment favouring particular localities), the gerrymandering
of constituency boundaries and the manipulation of electoral rolls, the BN
retained the largest number of seats: 133 to 89 (Weiss 2009, Welsh 2013).
Support for PR seems to have come disproportionately from among the urban
and young middle classes, who are disillusioned with Malaysias racialised,
autocratic and corrupt political system (Weiss 2009, Chin 2014).
With a population currently composed of about 68 percent Bumiputra
(Malays and other indigenous peoples), 25 percent Chinese and 7 percent
Indian, Malaysia is the most multi-racial of all the Southeast Asian countries.
Driven by foreign investment and with a semi-developmental state engaged
in economic planning, it is also the only Muslim-majority country to have
industrialised. In the process, it has achieved dramatic social progress on all
the usual indices (health, housing, education etc.) including significant
poverty reduction (though with 2.3 percent - about 600,000 people still
living on < $2 a day in 2009). Importantly, however, income inequality is very
high - indeed, officially the third highest in East Asia after Hong Kong and
China 21 - and corruption within the ruling elites is extensive (Gomez and
Jomo 1999, Jomo and Wee 2014).22 With a GDP per capita of US$25,600 (World
Bank 2015), Malaysia continues to be a low wage society with persistently
rising prices for housing, food and other commodities and an economy that is
beginning to confront serious problems, in part related to its growing
structural asymmetries (Woodrow Wilson School 2014, Henderson and
Phillips 2007, Tan 2013, Jomo and Wee 2014).
Sources of critical transformation: While the current CT period in Malaysia can
be dated from the mid-2000s and highlighted, symptomatically, by the
declining electoral support for the BN coalition indicated above, its politicaleconomic origins probably lie in the changing configuration of external
economic dynamics in the mid to late 1980s to which, at that time, Malaysia
was particularly subject. Prior to that, and going back to the onset of
decolonization in 1957, a compromise around spheres of influence had
implicitly been established, with Chinese Malaysians effectively controlling
21

With gini-coefficients of 0.54 (2012) for Hong Kong, 0.47 (2012) for China and 0.46 (2009) for
Malaysia.
22
The most recent and internationally publicised - manifestation of which has been the disappearance
of nearly US$700 million from the sovereign wealth fund, 1 Malaysia Development Bhd, and the
appearance of a very similar amount in the personal bank account of the Prime Minister, Najib Razak
(Wall Street Journal 2015).

21
the economy and Malays, the state (Jesudason 1989). The asymmetric
distributions of power, wealth and poverty that this implied meant that the
post-colonial society and political economy was effectively born into a phase
of critical transformation. An early product of the contradictions that inflicted
the post-colonial CT was the ejection in 1965 of Singapore (ethnically a largely
Chinese enclave) from the Malaysian Federation that the former colonial
power (Britain) had helped steer into existence in 1963. The contradictions of
these asymmetries continued to coalesce and deepen, however, and
transitioned into a critical conjuncture triggered by race riots in 1969.
Implicit within the CC of the late 1960s/early 1970s were a number of possible
developmental trajectories, one of which was probably an authoritarian
continuation with the economic status quo, with the preservation of the
power of the post-colonial elites as they had been constituted both before and
after 1957. Another was to drive economic growth and poverty reduction
through industrialisation. In the event, and undoubtedly learning from the
experiences of Hong Kong, Taiwan and Singapore, it was the latter trajectory
that began to crystalise. Relative to the others, however, the industrialisation
trajectory was realised with Malaysian innovations in social development.
Fuelled by foreign investment from 1971 (particularly in electronics
industries), Malaysias industrialization project was coupled with a poverty
eradication programme for all ethnic groups, and an affirmative action
programme on behalf of the Bumiputra: the New Economic Policy (NEP).23
Though the NEP proved central to social stability and the creation of a Malay
middle class, when it came to wealth acquisition, most of the affirmative
action turned out to be in favour of the Malay political elite and their
business associates (irrespective of race), particularly during the 22 year
(1981-2003) Premiership of Mahathir Mohamad (Gomez and Jomo 1999). That
said, it is arguable that industrialisation and its principal spatial product
urbanisation coupled with the NEP and its successor social development
programmes, ushered in a relatively stable period of evolutionary
transformation (the dramatic social and cultural changes associated with
proletarianisation particularly among women and a burgeoning middle
class notwithstanding) at least through to Malaysias version of the East Asian
financial crisis of the late 1990s (Henderson 1999).
Within what was probably Malaysias first ET phase since decolonisation,
however, the groundwork for what has now become its second CT phase
began to be laid from the mid to late 1980s. From that period it is possible to
23

The NEP may have been the only example in any capitalist political economy of a redistribution
programme being consciously developed as a central element of an industrialization project.

22
trace the beginnings of shifting architectures in global production networks
particularly of electronics industries in ways that were likely to be
detrimental to Malaysias economic growth and employment (Phillips and
Henderson 2009). Additionally, at around that time, Malaysian researchers
closely linked to UMNO began to argue that the NEP was having negative
economic effects in the sense that it was deflecting entrepreneurship away
from the formation of companies capable of linking productively with the
TNC subsidiaries (Salih 1988). By the early 2000s, the consequence of this
particular dialectic of exogenous flows and endogenous places had become
the sort of economic-political lock-in, with an absence of innovation coupled
with slowing economic dynamism, that is sometimes known as the middle
income trap.
Central to Malaysian industrialization has been investment by US, Japanese
and, more recently, Taiwanese electronics companies and though
complemented by automotive engineering, steel, petroleum and petrochemicals as well as agricultural products (rubber, palm oil and timber),
electronics production has remained the principal basis of Malaysian
manufacturing. Partly associated with the governments predilection to
rentierism (rather than manufacturing entrepreneurship) as the key route to
Bumiputra capital accumulation, the economy more recently has begun to be
restructured around low value service industries and real estate speculation
(the latter of which was a key factor in the countrys financial problems of the
late 1990s: Henderson 1999). Worryingly from the point of view of building
an innovation-driven, high wage economy, by early 2014 manufacturing had
fallen to 24 percent of GDP while services had risen to 55 percent (Malaysian
Department of Statistics data), and some Malaysian researchers are now
arguing that their country has embarked on premature deindustrialisation
(eg. Tan 2013).
Deindustrialisation or not, it seems clear that the countrys industrialization
project is beginning to stall. Evidence of industrial upgrading is limited and,
in its absence, China has emerged as a major competitive threat, both for
inward investment and in terms of third markets (Phillips and Henderson
2009, Yusuf and Nabeshima 2009, Rasiah 2011 and more generally,
Nederveen Pieterse 2015). If current trends continue, Malaysias economic
structure is likely to become dangerously asymmetrical. In the context of a
corrupt, autocratic, racialised political economy experiencing the mobilization
of a politically assertive civil society, this could be a recipe for political
destabilisation. Add to this the growing possibility of external, geopolitical
contingencies associated with Chinas militarisation of the South China Sea
and the US response to it in which the Malaysian government is implicated
via its own maritime claims (Parameswaran 2015), and there seems a distinct

23
possibility that Malaysias current phase of critical transformation could
easily transition into its second critical conjuncture.
Conclusions
In this paper we have argued that most of the conceptualisations of
development that we have today, and the discourses associated with them
be they derived from relatively orthodox or radical theorisations are
fundamentally constrained in their capacities to deliver analyses adequate to
the realities of 21st century global development. As a route out of this
dilemma, we have advanced an understanding of development grounded on
the concept of transformation. We have suggested that the key historical
phases in the medium to long-term development of given territorial spaces
that especially need analytic (and by implication, policy-practical) attention
are those characterised by critical transformations. It is within such periods
that the contradictions that always underpin economic, social and political
change are impacted by newly emergent contradictions, be they associated
with pre-existing or new social forces. The velocity of change accelerates and
the processes involved become more difficult for the agencies of social order
to manage. Among other consequences, alternative developmental trajectories
sometimes emerge and begin to be articulated by development actors. Where
unanticipated contingencies become part of the unstable amalgam, critical
conjunctures can ensue. These almost always presage a shift in the
developmental trajectory.
In an effort to show the utility of this approach for development analysis, the
paper briefly re-conceptualised the recent political-economic histories of two
countries Malaysia and Hungary and pointed to possible trajectories for
their development over the next few years. Whether our endeavours hold
promise for theoretical innovation in the development sciences will depend
on the analytic utility derived from more detailed applications of
transformation analysis than we have been able to conduct here 24, and on
whether an anticipatory approach to development methodologies can be
forged as a guide to practical and policy intervention.

24

Drawing on Nicholas Jepsons (2015) work, we are currently crafting a detailed application of
transformation analysis to Zambian development.

24
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