Download The causes of the `development gap`

What is the message of the
carton?
The
‘development gap’
Enquiry Question 1:
What is the nature of the development gap?
How has it arisen?
Causes of the development gap
Development - Introduction
What is Development?
Development means the ways in which a country
seeks to develop economically and to improve
the standard of living for its inhabitants.
What is the development gap?
The development gap describes the widening
difference in the level of development between
the world’s richest and poorest countries. It
can also occur within countries, for example
between regions or between rural and urban
areas.
How can the development gap be
measured?
How is development measured?
Traditionally economic indicators e.g. GDP or GNI
Development Indicators e.g. Life expectancy or Birth rate
Or an index of development e.g. HDI or PQLI
How do we measure development?
1)
Economic Wealth
Measured as Gross Domestic Product (GDP) per capita = dividing the
monetary value of all the goods and services provided in a country by its
total population.
Gross National Income (GNI) – includes income from overseas investments
GDP – preferred by the EU
GNP by the UN and USA
X
X
Only useful in countries which have many economic transactions i.e. ‘market
economies’
Hides extremes and uneven distribution of income between regions or socioeconomic groupings
2) Purchasing Power Parity (PPP)
Shows what per capita income will purchase when the cost of living is taken
into account. E.g. In China the cost of living is low so $100 will buy far
more there than in the USA
Why might this be more useful than just
looking at economic measures?
North South Divide
Brandt Commission in 1981
How can the development gap be
measured?
Positives and Negatives of
development indicators
MDG – What are they?
Example of questions:
4a. Suggest reasons for
the variable
progress towards
reaching the
Millennium
Development Goals
shown in Figure 4.
(10 marks)
4b. Using examples,
evaluate the role
trade plays in the
development gap.
(15 marks)
Theories of
development
In groups of 5 you are going to teach each other about
the different theories of development. Some of them
should be familiar.
You can use the textbook to help you. You have 4 minutes
to teach your group.
Once you have taught the rest of your group about the
model we will explore the strengths and weaknesses of
each theory as a class.
Theories on development
The Rostow Model
This model
suggests that
a country
passes
through 5
stages to
become
developed.
 Stage 1 – Traditional Society
Subsistence economy based on farming with
limited technology or capital to develop
 Stage 2 – Preconditions to take-off
Often an injection of external help – industries
develop and growth of infrastructure. Often
single industry will dominate
 Stage 3 – Take off
Manu industries grow, airports and roads are
built. Political and social changes. Farming
will decline. Investment or borrowing
increases
 Stage 4 – Drive to maturity
Growth should be self-sustaining. Often
multiplier effects in similar industry types.
Rapid urbanisation
2
3
4
5
UK
1750
1820
1850
1940
USA
1800
1850
1920
1930
Japan
1880
1900
1930
1950
India
1950
1980
-
-
Ethiopia
-
-
-
-
 Stage 5 – High mass consumption
Rapid expansion of tertiary services, employment
in service industries grow but decline in
manufacturing
Is this model valid?
• Model assumes that all countries start off
at the same level
• Although capital is needed to advance from
a traditional society it often brings debt
repayments which stop a country
developing
• Underestimates the extent and impact of
colonialism
• Predicts too short a timescale between the
beginning of growth and becoming selfsustaining
Theories on development
Friedmann’s Core and Periphery Model
Shows how some areas
become more
economically developed
than others and why
some regions are
wealthier than others.
Friedman argued that
beneficial effects can
spread from developed
core regions or
countries to less
developed, peripheral
regions.
Stages
 Stage 1 (Pre-industrial). The agricultural society, with
localized economies and a small scale settlement structure.
Fairly isolated, dispersed and low mobility.
 Stage 2 (Transitional). The concentration of the economy
in the core begins due to capital and industrial growth.
Trade and mobility increase
 Stage 3 (Industrial). Due to economic growth other
growth centres appear. The main reasons for this are
increasing production costs (mainly labour and land) in the
core area.
 Stage 4 (Post-industrial). The urban system becomes
fully integrated and inequalities are reduced significantly.
Theories on Development
The Development Cable
• Development is like an
electric cable – the
power to drive
countries from
primitive to more
advanced states.
• Core is economic
growth, technology
and enterprise.
• The Outer is many
different aspects of
development growth.
• This shows that
development factors
can interact.
Theories on Development
The Development Pathway
• Development can
also be seen as a
pathway.
• Countries develop
at different
speeds and may
cluster at
different places
Theories on Development
The Poverty Cycle
• Focus on
underdevelopment
using poverty and
social deprivation
to explain the
inequality between
countries.
• Less developed
countries are
trapped, unless the
cycle is broken.