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Many theories about how to begin economic development. However, countries generally choose among the following; Market planning or Central planning Agglomeration or Dispersion Import Substitution or Export Promotion Basic Needs or Megaproject As industrialization advances, countries may choose different strategies based on domestic and international conditions. Also, some countries will mix strategies in their development program. Market Planning and Central Planning One choice facing developing countries is whether to use a market system, a centrally planned system, or some combination of the two. Market Planning Manufacturers decide what to produce, how much to produce and where to sell it according to their views of market (consumer) demand. The cost of production, the demand for goods and consumers’ willingness and ability to pay for goods determine cost and production. Central Planning Manufacturers are told what and how much to produce and where to sell it according to a government planning board which allocates budget. These government decisions are based on the capabilities and needs of the national economy. Few countries remain committed to a wholly centrally planned economy. However, many countries use a combination of market and central planning. These countries use a mix to ensure the interests of the nation are considered in the running of the economy. http://logodesignconsultant.co m/blog/government-agencylogos/ http://www.wayoftherail.com/2009/03/19/viarail/via-rail-upgrades-track-station-near-ottawa/ http://logodesignconsultant.com/blog/government-agency-logos/ http://www.taktikadesign.com/blog/tag/energy/ http://logodesignconsultant.co m/blog/government-agencylogos/ Agglomeration and Dispersion Market economies tend to favour agglomeration early in industrial development. Dispersion often becomes favoured as development progresses. A centrally planned economy is able to favour either agglomeration or dispersion at any stage. http://www.cambridge.org/aus/c atalogue/catalogue.asp?isbn=978 0521805247 http://www.uwec.edu/geography/Ivogeler/w188/border/maquil.htm http://infranetlab.org/blog/2010/05/bordereconomies-the-maquiladora-exportlandscape/ Agglomeration Advantages are in the savings of the nearness of industries to one another. Transportation and infrastructure costs minimized, trained labour is gathered together, and investment is more easily attracted. Economies of scale, mean some newly industrialized economies have seen rapid growth, usually in capital cities or port areas. These grow rapidly and attract the rural poor. Growth may lead to overcrowding, pollution, high prices, and a declining quality of life. Eventually problems outweigh benefits and dispersion becomes favoured. Dispersion Spread industrial development throughout the non- core areas of the nation, called the periphery. Requires equal distribution of industrial support services, transportation, education and other infrastructural aspects. Reducing the advantages of the core so the periphery can compete providing jobs and raising living standards, which limits flow of migrants to cities. Import Substitution and Export Promotion http://ecosquared.wordpress.com/2011/01/30/the-war-on-work-part-2/ http://www.whatsonxiamen.com/news14782.html Import Substitution Local industries substitute domestic products for imported goods. Targets are low technology products, where labour and raw materials are inexpensive and product is of low cost. Textiles, clothing, footwear, processed foods, furniture and household goods. These are the basis for industrial growth as population learns labour and management skills, and entrepreneurship is encouraged. Trade barriers may protect from foreign competition. These make the local product more attractive to the consumer, but…to much protection discourages growth as there is no reason to improve product or manufacturing techniques. Export Promotion Encourages industries to produce goods for international sale. World Bank reports that export promotion generally fared better in industrial growth. Risks exist since exports are vulnerable to international markets. When US economy is growing it buys lots of goods from abroad. However, during recession it buys fewer goods. The economy of the exporting country is tied to the state of the American and other foreign economies. Basic Needs and Megaprojects http://www.britannica.com/EBchecked/media/106363/Itaipu-Dam-on-the-Parana-River-at-the-border-of Basic Needs Industries serve the local population by creating jobs, housing, clothing, and domestic products. Usually are part of mixed development strategies. Local population receives training basic to their existence. This approach creates a productive, independent, literate, and employed population, but requires long-term commitment to reach these goals Megaprojects Giant projects such as hydro-electricity dams, railway construction, international airports etc… Benefits are mostly in infrastructure since the project usually meets a national need. Successful projects typically require a large population base, and some smaller countries without the population base or the infrastructure now own idle or underused facilities. Furthermore, jobs are often provided for small group and income distribution becomes more unbalanced.