Download Characteristics of developing states

The Developing World
Presentation Outline
1) Characteristics of developing states
2) Economic comparisons between developing
and developed states
3) Newly industrialized states
4) Economic Policies of developing states
5) Democratization in the developing world
Most of the world’s states which are part of
the developing world (yellow).
Mexico
Iran
Nigeria
1) Characteristics of developing states
• Lower economic development and less
industrialized
• Large income gap between rich and poor
• Lower educated population with lower literacy
rates
• Higher birth rates and high death rates
• Traditional societies where women tend to
have an inferior status to men
• Poor governance and high levels of corruption
Many developing states were once part of European
empires. Colonialism is a major legacy in the developing
world
Mexico
Nigeria
Iran was
never
colonized
Shanty town in South Africa
Agricultural workers in Nigeria
U.N. Human Development Index (Measures literacy
rates, life expectancy, and GDP per capita)
Iran
Mexico
Nigeria
Gini Index (Measures income inequality) Much
higher income gap in the developing world with
the exception of the USA
Russia
China
U.K.
Iran
Mexico
Nigeria
Transparency International (Measures Corruption levels)
Iran
Mexico
Nigeria
2) Economic Comparisons
Comparative PPP (purchasing power parity in
per capita GDP)
Country
United Kingdom
Russia
PPP (in USD$)
$34,800
$15,900
Mexico
Iran
China
$13,900
$10, 600
$7,600
Nigeria
$2,500
What conclusions can you draw from this table?
Comparative Economic Sectors
Country
Primary
(Agriculture)
Secondary
(Industry)
Tertiary
(Services)
Mexico
Iran
Nigeria
13.7%
25%
70%
23.4%
31%
10%
62.9%
45%
20%
China
Russia
United
Kingdom
38%
10%
1.4%
46.9%
31.9%
18.2%
43%
58.1%
80.4%
What conclusions can you draw from this table?
3) Newly industrialized states
• Political Scientists agree that developing state
is too broad and general, since among
developing countries there is a wide range of
economic development
• New industrialized refers to states which are
still developing their economies but which are
moving towards full industrialization; some
may eventually become developed states
The Newly Industrialized States
Mexico
4) Economic policies of developing states
A) Dependency Theory
B) Westernization Model
Dependency Theory
• Economic theory which states that the
economic problems which developing
countries face were caused by colonialism and
economic exploitation by more developed
states
• According to this theory, globalization and
trade are not the solution rather the problem
because developed states will always take
advantage of developing states
How does this cartoon illustrate the
dependency theory?
Import Substitution
• Developing states which follow the
dependency theory believed that the best way
to grow their economies is to protect local
industries from international competition
• This is done by setting quotas on production,
imposing high tariffs (taxes) on imported
goods, and providing huge subsidies to local
manufacturers- Iran still follows this model;
Mexico and Nigeria used to follow this model
Drawbacks of import substitution
• Policies in Mexico created industries which
were not internationally competitive
• High employment resulted in high inflation
and government debt
• Exports to other countries were low
• Mexico had to borrow money from the
International Monetary Fund (IMF) and the
USA
Westernization Model
• According to this theory, the only way for
developing states to grow their economies is
to adopt the model Western countries have
followed for decades:

create a market-based economy

encourage foreign investment and trade

develop a successful export industry
Export- oriented
• If you can’t beat them, join them!
• Newly industrialized states such as South Korea,
India, Brazil, Mexico, and Malaysia have liberalized
their economies and focused on trade and export
• South Korea exports many high tech products
• Brazil exports resources such as timber, copper, and
other metals
• India exports cheap clothing, and outsources services
• Mexico exports cheap clothing, and food
Drawbacks of Westernization model
• States such as Mexico and Nigeria have given
up sovereignty in exchange for more
economic development
• World prices of oil, metals, food etc. are
constantly fluctuating (going up and down)
and states following the Western model have
little influence over these prices and a more
vulnerable to economic crashes and global
recessions
5) Democratization in the developing world
• Nearly all developing states had an
authoritarian regime at one point or another
• Mexico, Nigeria, and Iran all share this
common history
• Today, Mexico and Nigeria are considered
democracies
• Nearly all democracies in the developing
world are emerging, struggling, or illiberal
democarcies
Russia
U.K.
Mexico
Nigeria
China