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Development PPT
Part 2
Models of Development
Rostow’s Modernization Model / Stages of
Development Stage 4: Drive to maturity
Economy
-- technology extends to all sectors
--labor-saving devices are made
--growth becomes self-sustaining / wealth
generation enables further investment
Society
--urbanization
--increased in skilled and professional workers
Political
Power
industrial leaders are highly influential
Values
--emphasis on technology
--expectation of progress
(U.S. - late 1800s)
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 5: Age of Mass Consumption
Service industry dominates the economy -- banking, insurance, finance, marketing,
entertainment, leisure and so on.
Models of Development
Rostow’s Modernization Model / Stages of
Development
Stage 5: Age of Mass Consumption
Economy
--high output levels
--more use and production of durable goods
--service sector dominates (>50%)
Society
--new middle class
--shift to the suburbs
--population growth stabilizes
Political
Power
--social welfare
-more resources for military and security
Values
--increased acquisition of consumer goods
(U.S. early 1900s - present)
How can LDCs develop? Models of Development
Rostow’s Modernization Model / Stages of
Development
based on economic structural change:
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●
●
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investment
substitution of capital for labor
technology transfer
large-scale industrialization projects
(LDCs should follow model of economically
powerful countries / European countries in order to
develop.)
Models of Development
Rostow’s Modernization Model / Stages of
Development
Example: Four Asian Dragons
(South Korea, Singapore, Taiwan, Hong Kong)
● former colonies or occupied territories
● development by producing manufactured
goods with low labor costs
Models of Development
Rostow’s Modernization Model / Stages of
Development
○ Four Asian Dragons: South Korea, Singapore, Taiwan, Hong Kong
■ Singapore and Hong Kong
● British colonies (until 1965 and 1997)
● virtually no natural resources
● large cities surrounded by small amount of rural land
■ South Korea and Taiwan
● occupied by Japan until post -WWII
● influenced by Japan’s success with international trade approach
■ all promoted development by concentrating on producing a handful of
manufactured goods, esp. clothing and electronics / low labor costs made
possible to sell them inexpensively
Models of Development
Rostow’s Modernization Model / Stages of
Development
Example: Petroleum-rich Arabian peninsula
(Saudi Arabia, Kuwait, Bahrain, Oman, UAE)
● 1970s - petroleum prices high
● overnight transformation
Models of Development
Rostow’s Modernization Model / Stages of
Development
used to be least developed - escalating petroleum prices in 1970s - now are some of the
wealthiest
large scale project - housing, highways, etc. /
diffusion fo consumer goods
Islamic practices still dominate
images - Dubai - first pic is 1990, second is same street in 2007
○ Petroleum-Rich Arabian Peninsula States
■ Arabian Peninsula: Saudi Arabia, Kuwait, Bahrain, Oman, UAE
■ escalating petroleum prices in 1970s transformed “overnight”
■ large-scale projects
■ factories
■ diffusion of consumer goods
■ some Islamic religious principles conflict with business practices of MDCs
(exclusion of women, womens’ clothing, prayers)
http://www.condohotelsdubai.com/articles/dubai-incredible.html
Models of Development
Rostow’s Modernization Model / Stages of
Development
Criticisms:
● does not consider geographic differences
● Western bias / assumptions of “progress”
● requires infrastructure
● does not consider global scale / effects of other
countries (global market, competition for
resources)
● increased dependence on MDCs
Models of Development
Dependency School of Thought
EXPLANATION:
● 1970s:
○ reality - few LDC’s progressing linearly from
stage to stage as Rostow predicted
○ concerns with human welfare
● LDCs are limited by economic and political
relationships with MDCs.
● International “division of labor”
● inevitable result of capitalist drive?
Models of Development
Dependency School of Thought
EXPLANATION:
● global economy creates structural
circumstances difficult for poorer regions to
overcome
○ ex: concentration of wealth in certain areas,
unequal relations between places
Poor countries face different obstacles than
Western states of Rostow’s model, will not
“modernize” in same way
Models of Development
Dependency School of Thought
Strategies to achieve development:
● small-scale and rural enterprises
● import substitution (manufacture own products)
● nationalization
Models of Development
Dependency School of Thought
colonial origins
Models of Development
Dependency School of Thought
colonial origins
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
core
periphery
semi-periphery
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
Immanuel Wallerstein, a leading advocate of the approach, uses the same terminology. He
characterizes the world system as a set of mechanisms which redistributes resources from the
periphery to the core. In his terminology, the core is the developed, industrialized, democratic
part of the world, and the periphery is the underdeveloped, raw materials-exporting, poor part
of the world; the market being the means by which the core exploits the periphery.
The core nations primarily own and control the major means of production in the world and
perform the higher-level production tasks. The periphery nations own very little of the world’s
means of production (even when they are located in periphery nations) and provide less-skilled
labor. Like a class system with a nation, class positions in the world economy result in an
unequal distribution of rewards or resources. The core nations receive the greatest share of
surplus production, and periphery nations receive the least. Furthermore, core nations are
usually able to purchase raw materials and other goods from noncore nations at low prices,
while demanding higher prices for their exports to noncore nations.
1. World economy has one market and a global division of labor.
2. Almost everything takes place in context of world economy.
3. World economy has a three tier structure
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
core processes
● generate wealth in a place for people
within that place
○ require higher levels of education
○ sophisticated technology
○ higher wages, benefits
core regions
● high socioeconomic prosperity
● dominate world economy
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
peripheral processes
● generate little wealth for people within
that place
○ lower levels of education
○ lower salaries
○ less technology
peripheral regions
● poor
● dependent on core
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
role of the semiperiphery
● region which practices both
core and peripheral
processes
● buffer zone:
exploited by core, exploits
periphery
○ more power than
periphery
○ heavily influenced by
the core
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
Applicable at scales beyond the state (country)
● within a region
● within a state (country)
● in a local area
Models of Development
Dependency School of Thought
Neocolonialism
● Economy of LDCs controlled by MDCs.
● Global economy - this is difficult to overcome
○ unequal distribution of resources
○ unequal relations between places
Models of Development
Dependency School of Thought
Core-Periphery / World Systems Theory
(Wallerstein)
Major differences from Modernization Model:
● sensitive to geographic context; does not
assume that socioeconomic change will
occur the same way in all places
● equal wealth not possible in capitalist global
economy
● makes power relations between places
explicit
Models of Development
Dependency School of Thought
Criticisms:
● Offers causes but no solutions
● Little hope for prosperity in LDCs
● Little attention to geographic differences
REVIEW
What is development?
How is it measured?
How did Rostow explain development?
How do Dependency Theorists explain
development?
How did Wallerstein explain development?
What are the key differences between the
Modernization and Dependency schools of
thought?
Models of Development
Neoliberalism
Origin
post WWII - Decolonization wave →
● International bank loans to new countries
● Formation of International Monetary Fund (IMF) and World Bank
1980s - End of Cold War →
● international community used loans to discourage state-owned industries,
encourage free trade
Reaction to bottom up strategy of dependency theorists - major goal is to improve human
welfare by directing resources towards traditionally poor sectors of society to meet basic
needs
Goal - more even distribution of wealth, grow middle class to buy import substitution goods
Models of Development
Neoliberalism
Theory
● Government intervention into markets is inefficient and undesirable.
●
Protectionism* and state-owned industries perpetuate dependency.
*protectionism
imposing high tariffs on foreign goods to protect home grown industries
• protected, state-owned industries not forced by markets to be competitive
in price and quality - keeps states dependent on MDC’s
• Championed by free market capitalists with end of Cold War: Reagan,
Margaret Thatcher
Models of Development
Neoliberalism
• Strategies to achieve development
• Loans → better infrastructure → more businesses → more
taxes to repay loan
• Structural adjustment loans have conditions attached to guide
how the money should be used.
• Origin: 1980’s - end of Cold War?
• Reaction to bottom up strategy of dependency theorists - major
goal is to improve human welfare by directing resources towards
traditionally poor sectors of society to meet basic needs
• Goal - more even distribution of wealth, grow middle class to buy
import substitution goods
Models of Development
Neoliberalism
Strategies to achieve development
Two major lenders for international loans:
● International Monetary Fund (IMF)
● World Bank
○ International Bank for Reconstruction and
Development (IBRD)
○ International Development Association
(IDA)
Models of Development
Neoliberalism
Strategies to achieve development
Structural Adjustment Loan Examples:
(“strings” / conditions attached to loans)
● sell government-owned industries to the private
sector
● free trade
● allow own currency to devalue to make exports
attractive
● health and education investment
● government reforms
● require better fiscal management
● the type of projects allowed
Models of Development
Neoliberalism
Results ● Private ownership of services and
businesses
● Economic globalization
● Corporations control regions and states
Models of Development
Neoliberalism
Example: China
Mao Zedong
● leader of 1949
Communist Revolution
● “Great Leap Forward” (1958)
● agricultural communes
● state owned factories (“backyard” industry)
Result: 20 million starve by 1962
Result of Great Leap Forward:
9 million starve in 1959 alone - 20 million by 1962
poor quality industrial goods due to “backyard industry” - production of steel
and manufacturing farming equipment within communes
Models of Development
Neoliberalism
Example: China
● Mao’s successor:
Deng Xiaoping
Capitalist reforms:
● farmers can sell surplus
● encourages foreign investment
● competition between state-owned factories
Result: 2nd highest GDP in world after US,
GDP per capita = $5,400
Models of Development
Neoliberalism
Criticisms:
● Infrastructure projects that are expensive
failures.
● Large debts that can’t be repaid.
Models of Development
Sustainable Development
Theory: Progress should not come at the expense of future
generations.
Concerned with:
● climate
● biodiversity
● forests
● pollution
● resources
How to address these concerns / policies in
line with sustainable development?
efficient renewable fuels
ecotourism
drugs from rainforest plants
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Models of Development
Sustainable Development
Requires New
Indicators??
Ideas?
potential ideas:
air and water quality
percentage of land in
nature preserves
deforestation rate
energy efficiency
number of threatened
species
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Models of Development
Sustainable Development
Strategies to achieve development
Appropriate Technology Not Appropriate
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looms
efficient stoves
clay-pot water filters
composting systems
bicycle rickshaws
paper strips for
disease testing
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oil-fired power plants
infant formula
chain saws
combine harvesters
Models of Development
Sustainable Development
Strategies to achieve development
Fair Trade
● protect workers - rights, safety, wages
● protect producers - cooperatives for loans
● international standards
largest organization in
North America:
Ten Thousand Villages