4 Models of development

Transcription

1 4 Models of development

2 1. The Modernization Model 1940s to 60s: Rostow stages of economic development build the economy 2. Dependency Model (1970s). Immanuel Wallerstein, a leading advocate of the approach characterizes the world system as a set of mechanisms which redistributes resources from the periphery to the core. 3. Neoliberal or Counterrevolution Model: (1980s) Foreign Direct Investment with Multinational Corporations 4. Sustainable Development Model(1990s): Development providing for the needs of the present without diminishing future generations.

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4 1. The Modernization Model 1940s to 60s

5 Modernization it was believed was made possible by building: (a) the physical infrastructure (transportation, energy and water systems)

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13 (b) the social institutions needed for capitalism, such as: taxes banks insurance

14 a legal system.

15 currency

16 private property

17 Modernization Real World Strategies : Stages of economic growth Emphasis on economic production Technology transfer (from MDCs) Large-scale industrialization projects (government and foreign investment) Trickle Down Economics (money works it way down to the masses)

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19 The World Bank, the International Monetary Fund (IMF), and other agencies were created to facilitate investment and technology transfer from rich to poor countries.

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21 All countries would pass through a set of stages of economic development if given enough time. The pathway to development was seen as the route followed by Western Europe and North America during the Industrial Revolution.

22 Following a model proposed by the US economist Walter Rostow, it was argued that countries would progress through five stages

23 Progressive stages of economic growth. Rostow Model

24 Progressive stages of economic growth. 1. Traditional Societies During the first stage, the country s economy is dominated by primary activitiesproductivity, technological innovation, and per capita incomes remain low.

25 2. Preconditions to take-off In the second stage, preconditions for economic development arise, including the commercialization of agriculture and increased exploitation of raw materials

26 3. Take-off In the third stage, foreign investment pours in, jumpstarting an economy that was already prepped for growth. An important aspect of the third stage is that a large proportion of foreign investment goes to infrastructure improvements, such as building roads and canals In discussing the take-off, Rostow's is a noted early adopter of the term transition, which is to describe the passage of a traditional to a modern economy.

27 4. Drive to Maturity The drive to maturity refers to the need for the economy itself to diversify. The sectors of the economy which lead initially begin to level off, while other sectors begin to take off. This diversity leads to greatly reduced rates of poverty and rising standards of living, as the society no longer needs to sacrifice its comfort in order to strengthen certain sectors.

28 5. Age of High Mass Consumption High per capita incomes and high levels of mass consumption.

29 Strength of the Modernization model: Over the long term, all countries are capable of development. It has proved to works for some countries: Singapore, Hong Kong, South Korea, Taiwan (Asian Dragons) the American South, Czech Republic, Ireland

30 Weaknesses in the Modernization model (Rostow s Assumptions): Rostow s model has also been criticized for assuming that economies will naturally pass through each of the four stages consecutively. Rostow s model did not explicitly account for factors such as: global politics, colonialism,

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32 war, culture, and ethnic conflict, which may cause countries to follow quite different economic trajectories.

33 Environmentalists and others have criticized Rostow s description of the relationship between development and consumption, claiming that development does not necessarily equal high consumption. The Chinese save more

34 For some of these critics, development may mean other things like increased social welfare or ecological sustainability. Increased education or national parks

35 Finally, the Rostow s stages of development model does not account for deindustrialization.

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37 Many of the first development projects were huge FAILURES! Examples oil-fired power plants create pollution automated factories cause a loss of jobs combine harvesters need fuel

38 chain saws creates deforestation and erosion

39 infant formula replacement for breast milk harmed children (using unsafe water)

40 Emphasis on economic production over human welfare can lead to: environmental degradation

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43 unlivable cities

44 traffic a poorly educated work force.

45 the creation of a permanent underclass crime many other social problems.

46 These problems affect everyone in the society and can undermine the economic strength of the country.

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49 Why do some teachers switch from teaching at private schools to public schools? Why do some teachers stay at private schools?

50 Why is it good that the government runs the schools?

51 What is the problem with a country s electricity (water, natural gas etc.) being privately owned by a corporation?

52 What is the problem with the government running the country s airlines (gas stations, telephone, etc)?

53 2. Dependency Model (1970s). Sees low development levels as being a result of the LDCs economic dependency on the MDCs.

54 Developed by Immanuel Wallerstein

55 The world is connected by a "worldeconomy" or world system with a coreand a periphery.

56 The core is the developed, industrialized, democratic part of the world: Wealthy Powerful U.S., Europe, Japan, Australia

57 and the periphery is the underdeveloped raw materialsexporting, poor part of the world. Dependent upon Core countries for: Military Equipment Technology Investment News and Entertainment Education

58 Resources are extracted from the periphery and flow towards the states at the center in order to sustain their economic growth and wealth.

59 A central concept is that the poverty of the countries in the periphery is the result of the manner of their integration of the "world system", a view to be contrasted with that of free market economists, who argue that such states are progressing on a path to full integration.

60 This theory is based on the Marxist analysis of inequalities within the world system, dependency argues that underdevelopment of the Global South is a direct result of the development in the Global North.

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63 Is Taiwan in the core? Why or why not

64 It is claimed that this situation of dependence began when many of the LEDCs were colonized, and continues today because the MEDCs (through transnational corporations) force them to produce unprofitable primary products.

65 Single product primary exports: Cuba (74% of whose exports are sugar), Zambia (85% copper), Iraq (98% oil), bananas in Central America, coffee in Brazil, and Kenya, copper in Chile, cocoa in Ghana and the Ivory Coast, palm oil in West Africa, rubber in Malaysia and Sumatra; sugar in the Caribbean islands, tea in Sri Lanka

66 palm oil in West Africa rubber in Malaysia and Sumatra; sugar in the Caribbean islands tea in Sri Lanka tin in Bolivia bauxite in Guyana and Surinam. Don t need to study these for the test

67 The Dependency school believes this system has created Neocolonialism: When a previously colonized country has become politically independent but remains economically dependent on exporting the same commodities (raw materials and foodstuffs)

68 According to Dependency theorist one of the biggest culprits to the current system is the Multinational corporation (MNC) or transnational corporation (TNC): a corporation or enterprise that manages production or delivers services in more than one country.

69 Criticisms of multinational corporations: Their goal is profit not development

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71 undermine the world s environment perpetuate world poverty through low wages export jobs from MDCs

72 Dependency real world strategies. Invest and improve human welfare (education, health, food, water, and shelter needs). redistribute capital in more even manner (socialism) a bottom-up strategy

73 import substitution: an LDC tries to develop its own industries instead of importing manufactured goods from the MDCs

74 nationalization: To convert from private to governmental ownership and control (natural resources)

75 high import tariffs (to protect infant homegrown industries) Self sufficiency (economic independence)

76 Strength of the Dependency school of thought does not assume that socioeconomic change will occur in the same way in all places. acknowledges change in the less developed world is linked to the economic activities of the developed world. shows that the world functions as a single entity.

77 Weaknesses of the Dependency school of thought has very little hope for economic prosperity in regions and countries that have traditionally been dominated by external powers.

78 The long-term ramifications of investing heavily in human welfare at the expense of economic production are an inability to pay for the human welfare benefits the country desires to provide.

79 Without a strong economic engine, the country could fall behind in infrastructure development. The country will lag in technology (health and manufacturing).

80 Remaining a highly agricultural society increases the likelihood of higher population growth.