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Raghu Dayal

Consumption, Globalisation And Development By Jeffrey Jones Publishers: Mcmillan Press Ltd., London Price: Not mentioned

A professor of Development Economics at the Dutch University of Tilburg, the author, Jeffrey James, deals with some of the most important and controversial aspects of the relationship between consumption and globalisation in developing countries.

Part I assesses the welfare effects of globalisation on different groups of consumers, using an analytical framework, which departs substantially from the assumption of traditional consumption theory. Part II enlightens the reader about the effect of globalisation on local products and cultures in developing countries and the potential afforded by the growth of the mass media to alleviate a number of social problems in these countries, "because of globalisation of the mass-media and huge increases in advertising expenditures, products from developed countries are penetrating increasingly into parts of the Third World".

Chapter II titled, Globalisation, Preference Change and Consumer Welfare in Developing Countries, provides an alternative framework for assessing the welfare effects on consumers of the type of preference change that is associated with globalisation, "especially among low-income consumers living in urban areas of developing countries, preferences for modern, western, products are known to be indulged on occasion at the expense of other household budgetary expenditures that are more promotive of human development indicators such as health and nutrition".

Professor James specifically alludes to the outstanding success of `Nirma' in India, as low-income product adaptations emanating from local firms seeking to undercut the products made by multinational corporations.

Chapter IV demonstrates how consumption behaviour in poor countries is influenced by the consumption standards prevailing in the richer, more industrialised societies. Globalisation has vested the notion of an international demonstration effect with more relevance than in any previous historical period.

With a telling title, Do Consumers in Developing Countries Gain or Lose from Globalization?, chapter V maintains that globalisation tends to intensify positional consumption in developing countries, because it is not merely a process that entails the import by those countries from the industrialised world.

Rather, globalisation is a much broader phenomenon that also encompasses the immensely rapid spread of the mass media, imported television programming, and advertising by multinationals in developing countries, "factors, which, together, help to ensure that consumption is undertaken not simply as an end in itself, but also, or alternatively, as a mean of promoting one's position in society". The author explains in Chapter V that the most obvious way in which traditional consumption theory eliminates possible discrepancies between expected and realised utilities is through the assumption of perfect knowledge. The preceding chapters show there are a variety of mechanisms through which globalisation affects the well-being of consumers in developing countries. "In some cases, the outcome is that consumers will tend to gain from these mechanisms while in other cases they will tend to suffer instead from frustration and disappointment".

Chapters VI and VII respectively present cases — of detergents in India and television programmes in Brazil — where products made by locally owned firms capture over time markets previously dominated by foreign goods.

The final chapter VIII represents a countervailing force that is exerted not principally by market actors, as by actors such as governments, NGOs and aid donors, that countervailing influence of this kind can best be exerted by using methods and techniques borrowed from commercial marketing.

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