Transcript Chapter 21 Concepts of Development

Models of Development
• There are two broad models of
economic development;
– Liberal Models based on
the assumption that all
countries pass through the
same stages of economic
development and
disparity is the result of
short term inefficiencies
– The Liberal Model
assumes that all nations
are capable of the same
level of economic
development
Development Models
Modernization Model
Walt Rostow’s model assumes all countries follow a
similar path to development or modernization,
advancing through five stages of development,
climbing a ladder of development.
- traditional
- preconditions of takeoff
- takeoff
- drive to maturity
- high mass consumption
Models of Development
Walt Rostow created this liberal model of development in
the 1960s
1. First Stage-Traditional
1. Subsistence farms-limited technology
2. Rigid social structure
3. Resistance to change-transition triggered by external influence
2. Second Stage-Preconditions for Take-Off
1. Progressive Leadership-commercial exploitation of agriculture
& extractive industries
2. Greater flexibility-installation of infrastructure-roads, railways,
etc.
3. Greater openness to new technology
4. Greater Diversity of products produced
Models of Development
3. Third Stage-Take Off
1.
2.
3.
Experiences industrial growth
Urbanization
Industrialization, technology & mass production
4. Drive to Maturity
1.
2.
3.
4.
5.
Diffusion of technology
Industrial specialization
International trade
Modernization at the core
Population growth is reduced
5. Fifth Stage-Final Stage
1.
2.
3.
Mass consumption-widespread production of goods & services
High incomes
Majority of workforce in service sector
Rostow’s Ladder of Development
Models of Development
• Structuralist Model this is
the alternate to the Liberal
Model that states
disparities are inevitable
due to structural features of
the global economy.
• These disparities can not be
easily changed-it is
misleading to assume that
all areas will go through
the same economic process
of development
Models of Development
• Dependency Theory is
another Structuralist Model
• Political & economic
relationships between
countries & regions limit
the development of the less
well off areas
• Colonial dependencies are
still in place from long ago.
• Dependency theory sees
little hope for economic
prosperity in some
traditional parts of the
world
Dependency Theory
The political and economic relationships between
countries and regions of the world control and limit
the economic development possibilities of poorer
areas.
-- Economic structures make poorer countries
dependent on wealthier countries.
-- Little hope for economic prosperity in
poorer countries.
A Changing World
• Until 1980s there were 3
Blocs
– First World-The Capitalist
West-the most advanced
states-democratic & capitalist
– Second World-The
Communist East of the
Soviet Union & its Eastern
European Satellites, Red
China, N. Korea & Vietnam
– Third World-non aligned
states with mixed economies
and state control-now an
obsolete term
Three Tier Structure
Core
Periphery
Processes that incorporate
higher levels of education,
higher salaries, and more
technology
* Generate more wealth in the
world economy
Processes that incorporate lower
levels of education, lower
salaries, and less technology
* Generate less wealth in the
world economy
Semi-periphery
Places where core and periphery processes
are both occurring. Places that are
exploited by the core but then exploit
the periphery.
* Serves as a buffer between core and
periphery
• Atlantic bumper fish are a
crucial food source in
Senegal and elsewhere in
Africa where 200 million
people depend on the sea
for food.
• World Wide 1 billion
people depend on fish for
protein-many are poor
• By 2015 Developing
countries share of world
fish production is projected
to be 81%-problem-balance
the need for revenue and
food.
Commodity Chain
Series of links
connecting the
many places of
production and
distribution and
resulting in a
commodity that
is then
exchanged on
the world
market.
Dolomite stone from Jerusalem covers a fireplace in
Beacon Hill, Boston, Massachusetts.
Barriers to Economic Development
• Low Levels of Social Welfare
– Trafficking-bullied into poor working conditions
– High birth rates, Low life expectancy, large number of
dependents
– Lack of proper health care
– Poor water supply & sanitation
– Widespread Disease vectored diseases-spread by a host
– Malaria-kills 150,000 children each month
• Political Instability-military dictatorships, corruption,
revolution
• Foreign Debt
– World Bank or International Monetary Fund
– Structural adjustment loans-economic reform required
Foreign Debt Obligations
Total interest payments compared to the export of
goods and services.
How Government Policies
Affect Development
• Governments
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–
–
–
–
–
–
get involved in world markets
price commodities
affect whether core processes produce wealth
shape laws to affect production
enter international organizations that affect trade
focus foreign investment in certain places
support large-scale projects
Governments &
Corporations
can create
Islands of
Development
Places within a
region or
country where
foreign
investment,
jobs, and
infrastructure
are
concentrated.
• Dubai has mushroomed
from a near-empty desert
to eight lanes of traffic
between a mile of
skyscrapers on Dubai’s
Sheikh Zayed Road.
• Dubai boasts more tourists
than all of India
Corporate-created Island of Development
The global oil industry has created the entire city of Port
Gentile, Gabon to extract Gabon’s oil resources.
Nongovernmental
Organizations (NGOs)
entities that operate independent of state and local
governments, typically, NGOs are non-profit organizations.
Each NGO has its own focus/set of goals.
Microcredit
program:
loans given to
poor people,
particularly
women, to
encourage
development of
small businesses.
The End