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SECURITY, POPULATION AND
IW91-1 October 1991
INTERNATIONAL WORKING PAPER SERIES
FOOD AND RESOURCE ECONOMICS DEPARTMENT
Institute of Food and Agricultural Sciences
University of Florida
Gainesville, Florida 32611
SECURITY, POPULATION AND DEVELOPMENT'
Dramatic developments in the Soviet Union and the Communist block countries and the precipitous end
of the cold war provide a historic opportunity to address the twin problems of economic development and
population growth. Arms production, size of the military forces, and employment of public resources are already
on the decline in industrial and Eastern block countries. In constant 1991-92 dollars, U.S. defense spending
declined from $360 billion in 1985 to $320 billion in 1990 and is expected to drop further to $240 billion by
1996.3 Cuts in the Eastern block countries are still larger. Economic crisis has similarly reduced arms
expenditures in Latin America and Africa (Hewitt). Conclusion of the START treaty between the U.S. and the
Soviet Union and Yeltsin's recent statements about a nuclear-free world reflect the Soviet desire to focus on
End of the superpower conflict is not the only good news. Striking progress in other directions has
occurred in the last four decades. Democratic movements have sprung up throughout the developing world.
Economic crisis in Latin America and Africa and the collapse of communism have resulted in a major
reassessment of the traditional authoritarian role of the nation state. People's power has increased vis-a-vis their
The extraordinary progress of countries in East Asia has shown that rapid economic progress is possible
in the third world. Moreover, despite low per capital incomes, health and educational standards have improved
in many developing countries, e.g. in China and Sri Lanka, often matching the levels of life expectancy and other
social indicators attained in the developed world.
Technological progress has been deployed for the benefit of human kind in various ways. For instance,
the Green Revolution technology has wiped out the notorious famine related deaths in the Indian subcontinent.
Spread of immunization has caused a sharp drop in infant and child mortality. Satellites and fiber optic
i Theme Paper prepared for the 41st Pugwash Conference Beijing, China, September, 1991.
2 Director of International Studies and Programs, and Graduate Research Professor, Food & Resource
Economics Department, University of Florida, USA.
3 U.S. Department of Defense as quoted in The Economist August 24-30, p.24
technology have made communications instantaneous even though governments have resisted the free flow of
information to their populations.
Notwithstanding these many
positive developments, nearly 5% of the
World's GNP or nearly $1 trillion have
been spent annually on military
expenditures in the last two decades.
(See Table 1) A massive arms build-up
means a constant threat of nuclear and
chemical warfare and environmental
damage. Industrial countries incur over
half the world's arms expenditure. But
Eastern block and developing countries
have spent larger shares of their GNPs
on arms. Developing country share of
military expenditures in world military
Table 1 Average Military Spending around the World: Adjusted
SIPRI data, 1972-88.
In percent of
Word militay Centrl government
ODP peandilure expendlturr
iutrnal countne 3 5s2.7 143
Estern Europ 9.2 2A 207
Develapm countria 59 22.0 0.0
Amn devlopian 63 81 7.2
Middk Ea 11.6 a8 23.1
Nonth Afnc 9.6 1. 17.1
Sub-Sahatn Ar. 3.7 1.5 128
Lain Amenca & Carriean 2.3 23 8.6
Toul 49 100.0 16.
Developin country roupmp:
Net creditor 9A SA 25.0
Heavily indted 22 3.5 10.9
SmUa low-icome 3.6 0.6 12.2
Souce: Hewrtt, Danel P. 'Mutary Ependiturem i the Developm World.' Financ
Dewtloomnt, Sep. 1991. p. 23
expenditure increased from 5% in the
1960s to 22% in the 1980s. Countries in Asia and the Middle East are larger spenders still, with nearly a quarter
of their government expenditures going into the arms build-up.
With the pressing balance of payments and social problems developing countries face, further
reallocation of expenditure from military to development activities is urgently needed. More than a billion people
in the world still live on less than $1 a day, a standard of living worse than that encountered in Western Europe
and the United States two hundred years ago. They suffer from oppressive poverty: lack of adequate food,
housing, water or access to primary education and health care. Levels of poverty have been on the rise in Africa
and Latin America. Both these continents have experienced severe decline in the growth rates of per capital GNP
in each successive decade since the 1960s. (See Table 2)
Economic reforms adopted in countries as diverse as Mexico and Ghana offer a glimmer of optimism.
Yet, informed forecasts by the World Bank do not offer much hope for significant improvement in the economic
prospects of developing countries in the 1990s. (See Table 3) They project continued slow growth in OECD
countries, depressed international commodity prices, continued budget deficits in the U.S., high real interest
rates, slow resolution of the debt crisis, negative real transfers of capital to developing countries, and continued
protectionism in industrial countries.
Table 2 Growth of Real GDP Per Capita, 1965-2000
(average annual percentage change)
Population 19 Projmtion for
Group millionr) 1965-73 1973-0 1901 1990
Indutrnl Countres 773 3.7 23 2.3 1.-2.5
Dewlopmg Countries 4053 39 25 1A 2.22.9
SuSSahaan Afra 480 2.1 0A -12 03-05
Eat A 1552 53 49 6.2 42-53
South Asu 1131 1.2 1.7 3.0 2.1-2.6
Europe, Middle East, and Nonh Aria 433 5. 19 0A 1A-1.
Latm Amencs and Ctbean 421 3. 25 -04 13-2.0
Devwiopmg countnes weghlted by 4053 3.0 2. 29 2.7-32
Source: World Bank World Development Report 1991: The Chllenge of Development. Oxford: Oxford Uni. Pres.
Table 1, p.3
Table 3 The International Economic Climate in the 1990s: a Comparison of Recent and Projected
Indicators (average annual percentage change).
Trend Recent cerina ce
Protection for the 199O
Indicator 1965- 198- 19 9 1990 1990-00 19902000 1991-96 1991-5 1991.95 1991-95
Htgb-noome OECD members
Real GDP 3.1 3.1 2.6 29 2.2 3.1 2 3.2 3.1
Inflation 6.6 3 3.7 3. 3 43 3A 3A 4.4 33
Interest rue (percent)
Nornmml .6 102 9A 7A 9. 7.7 &6 79
Rel 3.1 .8 43 3A 5.1 39 4.0 43 49
World Trade 4.1 4.1 5.0 58 43 5.6 43
Real pne of oil 93 -10.1 22.2 A.6 09 .3.0 0.9 08 .2.0
Source: World Bnk. World Development Rport 1991: The Challenge of Development. Oxford: Oxford Unr. Press Table 1.4, p.7.
Growth has been more robust in South Asia and China relative to Latin America or Africa, but together
South Asia and China include well over half a billion poor. By the year 2000, the number of poor (365 million)
in South Asia is expected to drop, but will still comprise the largest single block of poor in world. The number
of poor in Africa while smaller (165 million in 1990) is expected to increase (to 265 million) due to continued
slow income growth and rapid population growth (World Development Report, 1990).
Success in improving living standards in the developing world will determine the size and quality of the
world's labor force in the 21st century and will depend on declines in female fertility, infant mortality, increased
access to primary education, health, and village water supply for the poor. The importance of investment in
human capital, and especially in women, as a determinant of the size and quality of the population is by now well
recognized. Developing countries also need to resume investment in critically important physical infrastructure.
Such investments are also urgently needed in Eastern block countries, but there are several reasons why the
peace dividend may not materialize on the scale necessary. First, conversion of military capacity for civilian
purposes may be costlier and slower than present enthusiasm warrants. Factories, equipment and people may
simply be less fungible in the short and medium run than we would like, as the recent evidence from the Soviet
Union indicates. Second, political reality and public opinion in the U.S. still strongly supports continued high
military expenditures to preempt the possible nuclear threat from an irrational third world state, and to control
the nuclear arsenal which may escape detection in the best of circumstances. According to this view, the end
of the cold war and the US military victory in Iraq have unequivocally proven the need for a strong nuclear
deterrent, the irrelevance of the conclusion of the START treaty and the need to push on with the Strategic
Defense Initiative (SDI). Despite the USSR owning thousands more nuclear warheads than it did ten years ago,
the public in the industrial countries feels more secure than ever before because it views military security as
dependent on intentions to use nuclear capability rather than on numbers of warheads. Third, industrial
countries may well perceive developing countries as the only significant market for their underemployed
armament industry. Fourth, regional and ethnic conflict ranging from Yugoslavia, the Middle East, South Asia
to Central America may well offer a large market for the world's armament industry. The U.S. Secretary of
Defense predicts, for instance, that within less than a decade fifteen more countries will acquire ballistic missiles,
half with nuclear warheads. The U.S. considers such nuclear proliferation to be the real danger and the
justification for its own continued build-up. Certainly without rapid and more regionally balanced economic
growth, ethnic and religious strife will continue to fuel political instability. That, in turn, will hinder rapid and
broad-based economic growth, leading to regional conflicts. This vicious cycle needs breaking.
To explore the prospects for increased security, economic development and alleviation of the population
problem, the mischievous ambiguity of the word security first needs a more precise definition. Second, the
objectives and policies to achieve security and development, including the areas of consensus and debate around
the goals and means need clarification. Finally, the steps necessary for the peace dividend to materialize for the
purposes of economic well-being need to be identified. This paper undertakes such a difficult task.
The ConceDt of Security
Robert MacNamara once observed that the concept of security had become "dangerously oversimplified."
There was a universal tendency to think of it exclusively as a military problem focused on weapons systems and
hardware (Ghosh). Much progress has been made since MacNamara's speech to articulate security in broader
terms. Economists and social scientists too have spent greater time and effort articulating the broader
constituents and determinants of human welfare. The broader concept encompasses three distinct forms of
Economic: Fulfillment of basic human needs as reflected in reduced infant mortality, improved food energy
intake, access to education, clean water, and health.
Political: Freedom of expression including of the press, civil and religious liberties including particularly
the protection of the rights of minorities.
Physical: Assurance of environmental quality, ranging from nuclear and chemical disarmament, protection
of biodiversity to freedom from crime and violence.
Individuals and nations value these different forms of security differently, and the very process of
economic development changes the importance attached to them. For example, developing countries eager to
improve their economic living standards give less importance to the protection of the environment than do
industrialized nations. But this situation too has changed radically since the publication of the influential
Bruntland report (World Commission on Environment and Development). Furthermore, the direction of
causality between different forms of security is not always clear. Contemporary thinking in industrial countries
spurns rapid economic growth if it is seen to come at the cost of environmental security. However, much of lcal
environmental degradation (to distinguish it from the adverse global environmental effects of industrialization
or militarization) is often the direct result of poverty and the associated demands on natural resources. Rapid
population growth results in reduced fallow, deforestation and soil degradation by bringing marginal lands under
cultivation. Low input-low output production systems followed by traditional societies are now being revived by
the environmentally conscious. The jury is still out on their physical or economic sustainability under conditions
of rapid population growth and poverty.
The contrasting examples of the EC and the Eastern block countries show that sacrifice of economic
growth may not always be associated with a healthy environment, especially where absence of political freedom
limits organization and activity on the part of the potential victims of environmental damage, as highlighted by
Chernobyl. It can only be asserted that democracy offers the best hope of reducing adverse environmental
consequences of rapid economic growth and high living standards, and that economic growth enables countries
to afford the cost of the cleanup and protection which failure in economic development cannot. Given the global
effects of many forms of environmental damage, industrial countries will have to bear the burden of damage
control, unless economic growth accelerates in the rest of the world.
Problems of measurement also abound in attempts to reflect overall well-being. For example, how to
measure and value the environmental degradation and other associated depletion of natural resources occurring
in the course of rapid economic growth?
Poor knowledge of the interaction between different forms of security extends to the relationship of
political freedom to the process of economic development. China's radical political revolution was more
successful than India's democratic means in abolishing chronic poverty, through a single massive redistribution
of assets. But, India's freer press has been more successful in abolishing frequent famine-related deaths (Dr6ze
and Sen). The recent dramatic collapse of socialistic states has understandably enshrined the importance of
democratic values. But broad-based distribution of assets so crucial for the ability of any nation's population to
exercise continued political, economic, or religious freedom is being overlooked. The U.S. occupation of Japan
played a crucial role in accelerating the process of land reform there and Japan's occupation of Taiwan achieved
the same in the latter.
Without an equitable asset distribution, very rapid economic growth is needed over a sustained period
to expand employment, and ensure economic security of the poor. But it is still not dear how effective are
"politically responsive" governments in undertaking the reforms necessary on a sustained basis to achieve rapid
growth, if the reforms affect powerful vested interests. Experience of the structural adjustment decade is far too
short and far too undocumented to offer guidance on this important issue. Some have argued that the successful
East Asian countries have all had authoritarian governments and a relatively equal distribution of assets. Recent
evidence, however, suggests that political and civil rights may not come in the way of economic growth (Grier
and Tullock) and still other evidence indicated a strong positive relationship between rights and per capital real
income level and its growth, as well as improvements in social indicators (Dasgupta and Weal 1990). While there
are continued problems of valuation, causality and interactions among different forms of security, the importance
of attaining them all is widely shared. Our focus should then be on how and why to increase the state of security
for those currently insecure.
Continuing Threats to Security in All its Forms
It hardly needs stressing that increasing integration of the world makes ensuring the security of a few
difficult while a vast majority remain insecure. The globalization of the AIDs epidemic, the Chernobyl incident,
the growth of drug trade, the Iraq war, and the BCCI debacle illustrate the global health, environmental, and
financial consequences of local and regional mismanagement.
With growing population pressure and sharply widened income disparities between industrialized and
developing nations, migration of populations to the industrial world is already significant. Although unlike in
the 19th century it is not a significant option for the vast majority of populations living in the developing world,
prospects of mass international migration create a fear of economic insecurity in the first world and with
justification. Recent censuses in the industrial countries already show their increased ethnic, linguistic and
religious diversity caused by rapid migration. Moreover, continued political instability and economic insecurity
in Eastern Europe, the Soviet Union, and the third world threatens to increase international migration.
Typically, it is the skilled and the well-off that tend to migrate, regardless of whether migration is
internal to the developing countries, or external to industrial countries. Migration has alleviated emerging labor
shortages in the first world, and remittances of emigrants have helped labor-exporting countries to offset some
of the severe adverse effects of skill loss and technological stagnation (illustrated in Table 4). Remittances have
helped alleviate the balance of payments difficulties of developing countries. But it is only the improved
economic and political prospects which will abate international migration of the skilled and help developing
countries to catch up with the industrial world.
Population pressure and economic insecurity are, however, not the only areas in which disarmament and
development intersect. According to Amnesty International, tens of thousands of people are killed every year
Table 4 The Growth of GDP, Inputs, and Total Factor Productivity (TFP) (percent).
Repon. GDP Capitl Labor TFP
economy 1960-73 1973-87 196047 1960.73 1973-87 1987 1960-73 1973-87 1960-87 196073 1973-87 1960-
Afrcs 4.0 2.6 33 63 63 63 2.1 23 2.2 0.7 .07 0.0
Emt Ari 75 6.5 68 9. 10.7 102 2. 26 26 2.6 1.3 19
Europe, Md 5.8 4.2 50 7.7 7.5 7.6 14 19 1.7 22 0.6 14
Laum 5.1 23 3.6 74 5.6 63 25 2 2.6 13 *1.1 0.0
South ANt 3.8 5.0 4A &O 7.2 7.7 18 23 2.1 0. 1.2 0.6
Suxly-cgbt 5.1 3.5 42 7A. 7.1 72 2.2 2. 23 13 .0.2 OA
France 5.5 2.1 39 5.7 3.8 4.8 0A .1.0 0.2 23 0.9 1.7
Germtny 43 1.8 3.1 53 3.0 4.2 -03 0.9 -0.6 1.9 0.9 14
United 33 13 2.4 3.6 2.6 3.1 0.1 0.5 0.2 1.7 0.6 12
United States 3,7 2.2 3.0 38 2 3.4 1.8 19 1.8 1.0 -0. 05
Source: World Bank World Development Report 1991: The Challenge of Development. Oxford: O:xord Un.v. Pres. Table 2.2 pA3.
throughout the world, including a large number by their own governments (Amnesty International). The killed
are the victims of human rights violations. Viewed as opponents of the governments of the day, they are targeted
for their religious or political beliefs, ethnic origin and linguistic differences. Military expenditures of many
developing countries are directed internally rather than towards any realistic external enemy (MacNamara,
Finance & Development p.25). An estimated 10 million people are classified as refugees annually. Superpower
interests and hegemonic aspirations of regional powers have reinforced the flow of refugees stretching from
Angola to Honduras and Afghanistan to Sri Lanka.
Internal social and political instability has resulted in increased incidence of violent crime in developing
countries as the supply of war and drug related arms has become rampant through civic society in countries as
different as Pakistan, Kenya, Cote d'lvoire and of course in countries of Central America. It is hoped that the
type of cooperation the U.S. and the Soviet Union are developing in bringing about a Middle East peace
conference will be extended to regional conflicts in other parts of the world. Furthermore, it is hoped that they
will obtain the legitimacy and co-operation of the regional powers and involve the United Nations and other
industrial countries to achieve a political and moral consensus as occurred temporarily in the case of Iraq. The
Iraq war, however, involved important economic interests of a large part of the world dependent on oil. Many
other regional conflicts do not involve such valuable minerals. They simply entail the historical grievances of
warring parties without much geoeconomic or geopolitical significance. Can international or regional consensus
be brought to bear on such conflicts? The arms expenditures of developing countries must be viewed in such
a broader context of regional conflicts in the face of pressing needs for investment and social expenditures, and
of the macroeconomic problems.
To solve these interacting problems, a strong consensus is needed on their diagnosis and solutions with
willingness to address the problem at several levels. This audience is more familiar than I with the problems
related to nuclear disarmament and nonproliferation created by the lack of a consensus. Large differences of
view also exist in the case of other important global issues, differences which are currently being masked by the
dramatic developments in the Soviet Union.
Genesis and resolution of the debt crisis amounting to $1.3 trillion in 1990 is a case in point (Sachs).
Industrial creditor nations blame the policy mistakes of debtor countries, such as misallocation of capital, the
growth of inefficient public enterprises and price distortions that discriminate against exports. Creditors argue
that debtor governments must honor their debts so as not to threaten the international financial system and to
continue to maintain credit worthiness. It hardly needs stressing that collapse of the Soviet empire has lent
added credibility and strength to the arguments of the industrial countries.
Debtors, on the other hand, have argued that the crisis in the 1980s arose due to the rise in the
international price of oil, increase in interest rates, the fall in the commodity prices and the collapse of the world
trading system. Debtors are skeptical about the extent to which free market remedies promoted as part of
adjustment will solve their problem of resuming growth. They call for additional investment and the opening
of markets for their primary products in industrial countries. They also argue that some amount of debt
forgiveness is essential in order to permit increased investment in the debtor countries. Finally, they express the
fear that increased promotion of exports by all developing countries simultaneously would reinforce the already
entrenched protectionist tendencies in the creditor countries, reducing terms of trade for their products further.
Some steps have of course been taken to redress the debt problem (including a shift from debt rescheduling to
the reduction of debt and debt service, debt buybacks, reduced interest rates and rescheduling of the official
debt). But according to the World Bank the debt problem will continue to dampen prospects for most of the
46 severely indebted countries (World Development Report 1991). Progress on trade and aid has also been slow
and not all effects of pumping rapid structural adjustment loans may be positive.
The truth of the evidence on the genesis of the debt crisis and steps taken to alleviate it of course lies
somewhere in the middle. In recently completed studies of development strategy and aid effectiveness spanning
three continents over the post-World War II period, my colleagues and I have documented the onus of local and
global responsibility for the economic crisis in the third world. The studies show that export pessimism did not
simply afflict developing countries. It importantly determined the policy advice and allocation of development
assistance given by all major bilateral and multilateral financial institutions in the 1960s and 70s. Through the
prestige that their advice and assistance lent to the import substituting strategies, aid agencies underwrote the
twin strategies of import substitution and poverty alleviation pursued by developing countries throughout the 60s
and 70s (Lele, Lele and Nabi). Military/strategic interests of the two superpowers and popular public opinion
in the industrial countries played an important role in the level and nature of official development assistance and
commercial credit different developing countries received. Soviet actions in Cuba, Vietnam, the Middle East and
Afghanistan resulted in greater U.S. largesse to developing countries since the mid 1960s than the original
intentions of promotion of democratic values and poverty alleviation. Those original intentions had resulted in
large amounts of effective long-term U.S. development assistance to India prior to 1965 as a way of containing
Chinese communism. That development assistance made the Indian Green Revolution possible, eliminating
famine-related hunger from the Indian subcontinent. Since the Vietnam war, however, strategic considerations
shifted. U.S. assistance was focused on the areas of military conflicts with the Soviet Union, e.g. Egypt, Israel,
Pakistan and the Philippines. The "security" content of assistance also increased at the cost of developmental
needs. Rapidly changing strategic interests of the two superpowers caused instability and unpredictability of
external capital. Unpredictability of aid flows made planning its uses for the much needed long-term investment
in human and physical capital difficult for recipients. Whereas capacity to repay debt did not increase, debt
repayment obligations ballooned.
Commercial banks behaved differently but not always more effectively than official development
assistance agencies from the viewpoint of economic development. Lending pressures undermined the interests
of both the stockholders and the borrowing countries.
On the part of the developing countries, their inadequate know-how in economic development policy
together with learning the wrong lessons from economic history of the industrialized world led them to:
1. rely excessively on external policy advice and external finance for internal economic development;
2. overlook the importance of fluctuating primary commodity prices for their likely continued ability to
service large external debt;
3. anticipate the likely gross misallocation of external capital in situations of little absorptive capacity, and
4. allow vested interests to grow both of the rent-seeking elite and the urban laboring classes.
These same vested interests have tended to scuttle the much needed policy reform in most developing
countries. International agencies, e.g. Brettonwoods Institutions, established originally to solve precisely these
types of problems have been reactive rather than proactive in addressing many crucial international economic
No less an individual than MacNamara has recently observed that:
"...general balance of payments or budgetary financing from abroad enables a
government to spend more on the military than would other-wise be possible. It is
therefore bad economics and bad policy on the part of the donor nations and
international financial institutions to continue to behave as if the funding of
stabilization, adjustment and development programs can be separated from the
financing of military expenditures." (MacNamara, Finance & Development, p. 27)
Similar external expression of concern about the extent to which balance of payments support is
alleviating poverty has led international financing agencies to rethink their approaches to poverty alleviation, e.g.
whether the mix of general purpose balance of payments and project or sector level assistance is satisfactory.
Thus many well-intentioned actions of international financing institutions have had inadvertent consequences that
they have been too slow to recognize and too reticent to correct.
The often-used description of GATT (the General Agreement on Trade and Tariffs), an influential
agency that once helped achieve a major reduction in the world trade barriers, as the General Agreement to
"Talk and Talk", captures another part of the problem international agencies face. Industrial countries have been
reluctant to reduce their own protective barriers towards agriculture.
The UN agencies have similarly been reactive in many territorial disputes, thereby de facto delegating
the power to police the world to a handful of industrial nations. Given the inequality in economic power, and
its further recent reinforcement through developments in the Soviet Union, such imbalance seems inevitable.
Only the powerful industrial countries can take the necessary corrective actions to restore the leadership of the
various international agencies to perform the numerous global conflict resolution functions that only they can
Stens Towards Enhancing World Security
First, the experience of the so-called "East Asian tigers", China and South Asia, show that regardless
of the size of the economies it is possible to pursue economic policies that will allow growth to occur while
improving the lot of the poor.
Second, responsible macroeconomic management is essential in developing countries in which decisions
to manage the balance of payments and the government budget must be guided by know-how of the complex
and rapidly changing international forces.
Third, public investment in infrastructure is as important to rapid export-oriented growth as
Fourth, investment in human capital through public expenditures on health, education, access to water
supply, etc., are as important as macroeconomic policy to achieve equitable growth, reduce the size of the
population and increase its quality.
Fifth, public investment requires reduction of the large debt burden.
Sixth, both debtor and creditors must share in the responsibility for the debt burden.
Seventh, an open trade regime and not simply the general economic growth in industrial countries is
critical for developing countries to expand their exports.
Eighth, restoration of external aid to countries pursuing economic development and democratic values
(as observed in the immediate post-World War II period by the U.S.) is both necessary and appropriate in the
Ninth, a system of collective security, a guarantee by the Security Council, the United Nations, and the
various regional organizations of the territorial integrity and internal political security of member states would
go a long way in reducing regional conflicts and releasing resources from arms to development.
Finally, and not the least important, active diplomacy on the economic front to address the complex and
interrelated problems of disarmament, trade, aid, economic policy reform and the environment needs strong
international organizations with considerable leadership.
With these steps, disarmament and economic development can be a reality for a smaller and more
secure world population.
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