Models of Development. What ’ s a model ??? A model is the “ standard ” Serves as a basis for...

Models of

Development

What’s a model ???• A model is the “standard”

• Serves as a basis for comparison

Models We’ve Studied…

• Demographic Transition Model

• Von Thunen’s• Epidemiological

Transition Model• Ravenstein’s laws of

migration

International Trade Model

orRostow’s

Development Model

Stage 1: Traditional Society

Stage 1: Traditional Society

Mostly SUBSISTENCE agriculture basedHigh investment in “NON PRODUCTIVE” activities like military and religion

Stage 2: Pre-Conditions for take-

off: Initial Investment

Stage 3: Take-Off: Initial Success

Stage 3: Take-Off: Initial Success

LIMITED # of industries become successful and competitive globally. Generally TEXTILES and FOOD production.Remainder of economy is still TRADITIONAL.

Stage 4: Drive to Maturity: Technology

Diffuses

Stage 4: Drive to Maturity: Technology

DiffusesTechnology expands to many other businessesRAPID growthLabor becomes more SKILLED and EDUCATED.

Stage 5: Age of Mass Production: Shift to

Consumer Good Production

Stage 5: Age of Mass Production: Shift to

Consumer Good Production

Economy shifts from heavy industry in STEEL, ENERGY, to consumer goods (CARS, REFRIGERATORS)

The Four Asian Dragons

• Followed the historical example of JAPAN.


• South Korea

• Singapore

• Hong Kong

• Taiwan


• South Korea

• Singapore

• Hong Kong

• TaiwanHave focused on inexpensive clothing, toys, and electronics.Moving to other HIGH TECH products

Problems with Rostow?

Problems with Rostow?Difficult when RESOURCES are absentMarkets are not endless: COMPETITION is highBased on continual growth: not necessarily SUSTAINABLEGoods and services often reproduced; wasted when competition losesHistorical theory based on WESTERN Europe’s experiences.UNEVEN resource distribution – not all countries have a wealth of natural resources.Market STAGNATION- world markets are slowing particularly in MDCs b/c population is increasing SLOWLY. Requires LDCs to MARKET SHARE from other companies.

Self-Sufficiency Model

Self-Sufficiency ModelPromote growth in ALL sectors, not just competitive ones.Encourage production for DOMESTIC sale.Growth should be SLOWRESTRICT competitive importsReducing POVERTY is more important than getting richHIGH taxesRESTRICT total number of imports and sometimes exports.Regulate IMPORTERS (licenses, rules, tariffs)

IndiaLARGE bureaucracy to administer rulesActually MOVED AWAY from this recently

Self-Sufficiency Problems

Self-Sufficiency Problems

Inefficient; small markets must be SUBSIDIZEDWho can tell me what subsidized means?Unwieldy bureaucracy; often ABUSED

Financing Development


Promotes ECONOMIC GROWTH


Supposed to make money to repay loans but, countries have DIFFICULTY repaying loans.Further loans refused if default happens; or restrictions placed on society…Remember Greece and the EU?

Neocolonialism• The economic control of LDCs by MDCs• IMF/World Bank are criticized for this as

well as corporations owned by MDCs

Parallels between Rostow and the

DTM...

Parallels between Rostow and the

DTM...• Both show a country’s stages of development

• More traditional/subsistence in first stage

• Both follow stages and move consecutively

• Both deal with affects of industrialization

• Influenced by type of economic activity

2001 AP Test …• Explain Rostow’s usefulness in

understanding contemporary social and economic change.

a.A country’s role in the world economyb.Colonial transportation networksc.Cultural differencesd.Local social and class structuresUse examples from the following regionsLatin America, Sub-Saharan Africa and South

Asia

AP Test…ROLE IN WORLD ECONOMY•Rostow stage equates role to shift from resource export (early stages) to rise of industrial economy and mass consumption.•Core-periphery vs Rostow•Membership in supranational organization (OPEC, NAFTA)•Labor exporting regions (Mexico)

AP Test…COLONIAL TRANSPORT NETWORKS

•External organization to colonizer Transportation focused on ports with links to centers of resource exploitation – most important function is to link resource exploitation area to world market of local labor supply to world market.•Limits the internal growth of transportation system related to settlement pattern (urbanization) to nature of colonial transport network – no reason for colonial power to develop complete transportation network or modernize it hence neither economic diversity nor growth is encouraged.

AP Test …CULTURAL DIFFERENCES•Religion – Hindus may hinder development of middle class because of caste system preventing upward mobility•Language – Different languages may provide barriers to information flow and full participation in economic process

AP Test …CULTURAL DIFFERENCES•Political Beliefs – governments may wish to isolate their population from westernization to exert greater control over their subjects and territory•Profit motive – some populations may not move through stages because of a lack of interest in cash profit.

AP Test …CULTURAL DIFFERENCES•Colonial Legacy – departed colonial rulers left behind a social and economic system (neo-colonial) that concentrated the majority of wealth in the hands of a few and / or did not create a social infrastructure capable of allowing the population to engage in new forms of economic activity.

AP Test…CULTURAL DIFFERENCES•Gender – gender roles in cultures limit participation of entire population in economy thereby limiting growth potential.•Instability and violence / war – direct destruction of necessary population, infrastructure, wasting local wealth and discouraging investment from outside.

AP Test…LOCAL SOCIAL AND CLASS STRUCTURES•Class divisions – small elite group may control vast majority of wealth and have no incentive to invest in the new forms of economic activity or may prevent training of majority of population.•Lack of emergence of middle class – in countries with no middle class it is hard to have skilled labor and business people emerge who carry the economy to later stages or limited national market for locally produced products.

AP Test…LOCAL SOCIAL AND CLASS STRUCTURES•Gender - gender roles within a state may create regional variations in economic participation or result in population growth that retards economic development.•Ethnicity – intergroup hostility may create situations where infrastructure is destroyed, population lost, or some groups prevented economic participation thereby preventing the country from moving from one stage to another, OR a groups may refuses to participate and the may hinder the rest of the country’s population from achieving the conditions necessary for advancement.

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