Transcript Models of Development

Rostow’s Stages of Development and Wallerstein’s World-Systems Theory
Development
1.
What sectors of
the economy do
you see?
2.
What are the
economic and
social
characteristics of
LDCs?
3.
Where do we find
MDCs and LDCs
on the globe?
Rostow: Ladder of Development
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5-stage model
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Traditional society
Preconditions for take-off
Take-off
Drive to maturity
High Mass Consumption
Countries climb (the ladder) from one stage
to another
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Little technology
No social changes
Moves to next stage when
other countries invest in
resources or new
markets appear.
(Role of IMF, World Bank,
WTO???)
Ex: OIL! GOLD! Minerals!
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Commercial companies invest
 Plantation agriculture
 Garment industry
 Mining

WHY THESE??
Moves to next stage when roads/railroads
(infrastructure improves) and social and
political leaders emerge.

Development of
manufacturing (a
country’s own
companies for export)

Moves to next stage with
even more investment in
this sector and the
creation of modern
social, economic, and
political institutions…
Drive to Maturity
Development of
economy beyond
manufacturing
(widening base of
industry and
business)
Moves to last stage
when it can take
advantage of its
abilities to produce
for both the export
and domestic
markets.
Assumes a middle
(consumer) class
High Mass Consumption
Top of the ladder
People buy a lot of stuff….
WE HAVE ARRIVED!!
Key Question: How would Rostow view the IMF, World Bank and WTO?
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Explain the 5-stages
 Traditional society
 Preconditions for take-off
 Take-off
 Drive to maturity
 High Mass Consumption
Core, Semi-Periphery, Periphery

The world is ONE economic market with a
global division of labor
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Three levels:
 Core
 Semi-Periphery
 Periphery
Wallerstein
Present
Core/Periphery
Relationships
In Wallerstein’s theory,
countries can move from one
level to another.
The world’s richer countries
Wide range of products and services
High wages
Import raw materials and export manufactured
goods/services
 Have favorable trade balances with poor
countries
 Build up capital which is invested largely at
home
 Invest in other core country economies
 Valuable trade with other core countries
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Poorer countries
Limited products
Limited technology
Lower wages
Dependent on core countries to purchase
goods, provide capital, etc.
This dependency is the root of many global
problems/conflicts
Supply raw materials
Generally exploited by core
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Transition between core and periphery
Lower value-added manufactured goods for
export
Still have dependent relationships with cores
Have peripheral countries dependent on
them
South Korea, Mexico, Argentina, Thailand,
Malaysia are examples of Semi-Periphery
countries moving up
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.
Colonialism initiated dependency
Little hope for economic prosperity in poorer
countries.
Neo-colonialism
Key Question:
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Low Levels of Social Welfare
Foreign Debt
Political Instability
Widespread Disease
Foreign Debt Obligations
Total interest payments compared to the export of
goods and services.
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Malaria kills 150,000 children in the global periphery
each month.
Tamolo, India
This baby sleeps
under a mosquito
net distributed to
villagers by
UNICEF workers.
Global Distribution of
Malaria Transmission Risk
Key Question:
“Development” variations in America
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Governments
 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 and
Corporations can
create Islands of
Development
Places within a
region or country
where foreign
investment, jobs, and
infrastructure are
concentrated.
The global oil industry has created the entire city of
Port Gentile, Gabon to extract Gabon’s oil resources.
Malaysian government built a new, ultramodern capital at
Putrjaya to symbolize the country’s rapid economic growth.
Somalia Microcredit
program:
loans given to poor
people, particularly
women, to
encourage
development of
small businesses.
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The world is ONE economic market with a global
division of labor
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Explain the relationship:
 Core
 Semi-Periphery
 Periphery
Key Question: What happens when the majority of
countries move from periphery to core?..
Can they/will they?