Tetsunori Koizumi, Director

It is almost taken for granted that, when economists talk about development, it is about the development of a country, or a nation-state. Of course, there is nothing wrong to treat a country as the unit of development as long as it is a well-defined unit of social life for individuals. But is a country the proper level at which development is best discussed, especially in the world of global interdependence today? There are at least two reasons why it is important to raise this question today.

First, no country, large or small, serves as a stable and cohesive unit of social life in the world of global interdependence today. This is so because the forces of social change and transformation unleashed by globalization do not honor national boundaries. To be sure, a country is still important in political life as the unit of defining nationality for individuals as well as the unit of representing a social group in negotiating and signing international treaties. But a country is no longer a stable unit of economic life as its sovereignty is constantly undermined by activities of transnational corporations and interventions by international organizations.

Second, no country, large or small, can be an exclusive unit in which individuals find their identity today. To be sure, a country is still one source of identity for individuals in that it confers nationality to them and makes conscious effort to foster patriotism among them in times of foreign policy crisis, or at international sport events. However, there is another important source of identity for individuals. Whether it be a village, a town, a city, or a region, a much smaller unit than a country often serves as a stronger source of identity for a group of individuals as their home, as a place where they find comfort and security, as a place where they share the cultural heritage with others like them. A country is no longer a cohesive unit of cultural life, as every country is finding it increasingly difficult to maintain its national culture with globalization bringing about diffusion and diversification of ideas and values.

If a country does not serve as a stable and coherent unit of social life in the world of global interdependence today, what will? Unfortunately, there is no simple answer to this question. In a way, the choice of a social group is arbitrary in that every social group is subject to the same forces of globalization. In fact, any local unit—whether it be a village, a town, a city, or a region—can engage in direct transactions with other social groups in other regions of the world, thanks to the propagation of communication and information technologies. Given such realities of global interdependence, we may restore the role of “a local community” as the proper unit of development. To be specific, we define “a local community” as “a relatively stable and cohesive unit of social life in a particular geographical region.”

The qualification about “a particular geographical region” is added in the above definition of “a local community” because how a social group defines its relationship to the natural environment around it is an important aspect of development: sustainability. The adjective “local” is added to the word “community” because the type of natural environment that defines the living space for a social group shows wide variations even in a country, let alone in a continent. Indeed, different social groups respond to global changes in the environment such as global warming differently, depending on the differences in geographical regions they are located. Further, concrete measures to safeguard the health of the environment may be most easily taken by the people living in a particular geographical region, for they are the ones who are directly affected by the degradation of their living space.

As a country loses its relevance as a stable and cohesive unit of social life and, therefore, as the unit of development, we can expect to see an increasing role played by a local community as the unit of development in the world of global interdependence. Indeed, it would be a local community in which coordination and cooperation among polity, economy and culture, which are the subsystems of a social system, can be best accomplished, to the extent that it is “a relatively stable and cohesive unit of social life in a particular region.” Today, in the world of global interdependence, any local community can take initiatives in mapping out strategies for development by exchanging information and know-how necessary for development with other social groups—international organizations, NGOs as well as civil society organizations (CSOs).

It was Ernst F. Schumacher who reminded us of the importance of humanistic orientation in economics when he used the subtitle of “economics as if people mattered” to his 1973 book, Small Is Beautiful. Given the realities of global interdependence today, it is a local community that can best deal with the challenge of managing social change and transformation that accompany development for the benefits of its residents. In other words, in the globalized world of the twenty-first century, it is a local community that is small and beautiful.