Post on 25-Dec-2015
Development Case Study: Jamaica
Development Case Study: Bangladesh
What is development?
development: The extent to which a society is making effective use of its human and natural resources.
developing: progress is being made in technology, production, and socioeconomic welfare
Continuum with huge global disparities.
MDCs and LDCs
MDC = More Developed Country (“developed”)has progressed further along continuumeconomic challenge: maintain high level of development at the new global scale of economy
LDC = Less Developed Country (“developing”)economic challenge: find connections to the global economy by taking advantage of local diversity in skills and resources
What is development?
Manufacturing gravel in Trivandrum, India
Measuring Development
Economic Indicators:
GNP = Gross National Product
● created by economists to compare countries
● total value of officially recorded goods and services produced in a year (inside and outside state territory)
Measuring Development
Economic Indicators:
GDP = Gross Domestic Product● goods and services produced within a
country during a given year● GDP per capita = GDP divided by
population number● Can mask variation / distribution of
wealth
Measuring DevelopmentEconomic Indicators:
GNI = Gross National Income● monetary worth of what is produced
within a country plus income received from investments outside the country
● GNI per capita = GNI divided by population
● limitations:○ What about informal economy?○ Masks uneven distribution of wealth○ Does not account for production costs
Measuring DevelopmentEconomic Indicators:
GNI clearly shows contrast between rich and poor countries:
2008Japan $31,410USA $41,950Luxembourg $65,340Nigeria $ 1,040Indonesia $ 3,720
Measuring Development
Economic Indicators: technology and production
● types of jobs (primary, secondary, tertiary)
● productivity per worker (level of mechanization)
● transportation and communication services per person
Measuring Development
Demographic Indicators
● life expectancy at birth (60+ in LDC, 70+ in MDC)
■result for MDC??● infant mortality rate (94% LDC, 99.5%
MDC)● natural increase rate (1.5% LDC, 0.1%
MDC)■result for LDC??
● crude birth rate (24/1,000 LDC, 11/1,000 MDC)
Measuring Development
Social Indicators● dependency ratio - number of dependents
(young and old) that each 100 employed people must support)
Measuring Development
Social Indicators● education and literacy
○ avg. # of school years attended (10 MDC, 2 LDC)
○ student/teacher ratio (twice as high in LDC)
○ literacy rate (98%+ in MDC, <60% LDC)
Measuring Development
Social Indicators● health and welfare
○ expenditures on health care○ influenced by diet (calories, protein)○ health care as government service
Measuring Development
United Nations Human Development Index (HDI)
Combination of factors:1.per capita GDP (economic)2. literacy rates (social)3. school enrollment rates (social)4. life expectancy at birth (demographic)
Range: 0 - 1Average: .65
Measuring Development
United Nations Human Development Index (HDI)
Measuring Development
United Nations Human Development Index (HDI)2000 United Nations Millenium Declaration
Goals by 2015:● eradicate extreme poverty and hunger● achieve universal primary education● promote gender equality and empower women● reduce child mortality● improve maternal health● combat HIV/AIDS● ensure environmental sustainability● develop a global partnership for development
How can LDCs develop? Models of DevelopmentWhat is the developed world?
● 40 years ago - places populated with people of European ancestry; Japan
● Today - Distinctions between MDC and LDC is blurred:○ oil-rich Middle East○ collapse of Soviet Union○ newly industrializing East Asia
● General North/South pattern still exists
How can LDCs develop? Models of DevelopmentHistory of ideas:
Modernization (Rostow)
Dependency (includes World Systems Theory)
Neoliberal Counter-revolution
Sustainable Development
How can LDCs develop? Models of DevelopmentRostow’s Modernization Model / Stages of Development● 1940s-1960s (post WWII, decolonization)
● classic “developed - developing - underdeveloped” ladder of development
● assumes that all countries follow a similar path (European) and learn from each other
● Identified 5 stages
Models of DevelopmentRostow’s Modernization Model / Stages of Development
Stage 1: Traditional
Village in Lesotho. 86% of the resident workforce in Lesotho is engaged in subsistence agriculture.
Models of DevelopmentRostow’s Modernization Model / Stages of DevelopmentStage 1: Traditional
Economy subsistence:● output not traded or recorded● barter system● limited production● >75% in primary sector
Society hierarchical
Political Power
regionally based in the hands of landowners
Values resistant to change; focus on old traditions
(U.S. before independence)
Models of DevelopmentRostow’s Modernization Model / Stages of DevelopmentStage 2 - Preconditions for Takeoff
The use of some capital equipment can help increase productivity and generate small surpluses which can be traded.
Models of DevelopmentRostow’s Modernization Model / Stages of DevelopmentStage 2: Preconditions of takeoff
Economy -- surplus of agriculture and capital-- expansion of trade and manufacturing-- necessity of external funding-- some growth in savings and investment
Society beginnings of a commercial class with some urbanization
Political Power
centralized national government
Values rising spirit of progress and openness
(U.S. - early 1800s)
Models of DevelopmentRostow’s Modernization Model / Stages of DevelopmentStage 3: Takeoff
At this stage, industrial growth may be linked to primary industries. The level of technology required will be low. (image: diamond mine in Lesotho)
Models of DevelopmentRostow’s Modernization Model / Stages of DevelopmentStage 3: Takeoff
Economy -- rapid expansion of industry--surge of technology--commercial agriculture--number employed in agriculture declines
Society --increasingly dominant entrepreneurial class--some regional growth
Political Power
powerful groups encourage modernization
Values increased investment of capital for profit
(U.S. - 1850s)
Models of DevelopmentRostow’s Modernization Model / Stages of DevelopmentStage 4: Drive to maturity
As the economy matures, technology plays an increasing role in developing high value added products.(Image: Automotive plant using industrial robotics technology.)
Models of DevelopmentRostow’s Modernization Model / Stages of DevelopmentStage 4: Drive to
maturityEconomy -- 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 DevelopmentRostow’s Modernization Model / Stages of DevelopmentStage 5: Age of Mass Consumption
Service industry dominates the economy -- banking, insurance, finance, marketing, entertainment, leisure and so on.
Models of DevelopmentRostow’s Modernization Model / Stages of Development
Stage 5: Age of Mass ConsumptionEconomy --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 DevelopmentRostow’s Modernization Model / Stages of Developmentbased on economic structural change:
● 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 DevelopmentRostow’s Modernization Model / Stages of DevelopmentExample: 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 DevelopmentRostow’s Modernization Model / Stages of DevelopmentExample: Petroleum-rich Arabian peninsula(Saudi Arabia, Kuwait, Bahrain, Oman, UAE)● 1970s - petroleum prices high● overnight transformation
Models of DevelopmentRostow’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 DevelopmentDependency 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 DevelopmentDependency 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 DevelopmentDependency School of Thought
Strategies to achieve development:
● small-scale and rural enterprises● import substitution (manufacture own
products)● nationalization
Models of DevelopmentDependency School of Thought
colonial origins
Models of DevelopmentDependency School of Thought
colonial origins
Models of DevelopmentDependency School of ThoughtCore-Periphery / World Systems Theory (Wallerstein)
coreperipherysemi-periphery
Models of DevelopmentDependency School of ThoughtCore-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 DevelopmentDependency School of ThoughtCore-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 DevelopmentDependency School of ThoughtCore-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 DevelopmentDependency School of ThoughtCore-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 DevelopmentDependency School of ThoughtNeocolonialism
● Economy of LDCs controlled by MDCs.
● Global economy - this is difficult to overcome○ unequal distribution of resources○ unequal relations between places
Models of DevelopmentDependency School of ThoughtCore-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 DevelopmentDependency 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 DevelopmentNeoliberalism
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
Models of DevelopmentNeoliberalism
Theory● Government intervention into markets
is inefficient and undesirable.
● Protectionism* and state-owned industries perpetuate dependency.
*protectionismimposing high tariffs on foreign goods to protect home grown industries
Models of DevelopmentNeoliberalismStrategies 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.
Models of DevelopmentNeoliberalismStrategies 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 DevelopmentNeoliberalism 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 DevelopmentNeoliberalism
Results -● Private ownership of services and
businesses● Economic globalization● Corporations control regions and states
Models of DevelopmentNeoliberalism
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
Models of DevelopmentNeoliberalism
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 DevelopmentNeoliberalism
Criticisms:● Infrastructure projects that are expensive
failures.● Large debts that can’t be repaid.
Models of DevelopmentSustainable Development
Theory: Progress should not come at the expense of future generations.Concerned with:
●climate●biodiversity●forests●pollution●resources
Models of DevelopmentSustainable Development
Requires New Indicators??
Ideas?
Models of DevelopmentSustainable DevelopmentStrategies to achieve development
Appropriate Technology
● looms● efficient stoves● clay-pot water
filters● composting
systems● bicycle rickshaws● paper strips for
disease testing
Not Appropriate
● oil-fired power plants
● infant formula● chain saws● combine
harvesters
Models of DevelopmentSustainable DevelopmentStrategies 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