1. Development PPT Part 2

2. Models of Development Rostow’s Modernization Model / Stages of Development Stage 4: Drive to maturity Economy-- 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)

3. Models of Development Rostow’s Modernization Model / Stages of Development Stage 5: Age of Mass Consumption Service industry dominates the economy -- banking, insurance, finance, marketing, entertainment, leisure and so on.

4. Models of Development Rostow’s Modernization Model / Stages of Development Stage 5: Age of Mass Consumption Economy--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)

5. How can LDCs develop? Models of Development Rostow’s Modernization Model / Stages of Development based 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.)

6. Models of Development Rostow’s Modernization Model / Stages of Development Example: Four Asian Dragons (South Korea, Singapore, Taiwan, Hong Kong) ●former colonies or occupied territories ●development by producing manufactured goods with low labor costs

7. Models of Development Rostow’s Modernization Model / Stages of Development ○ Four Asian Dragons: South Korea, Singapore, Taiwan, Hong Kong ■ Singapore and Hong Kong ● British colonies (until 1965 and 1997) ● virtually no natural resources ● large cities surrounded by small amount of rural land ■ South Korea and Taiwan ● occupied by Japan until post -WWII ● influenced by Japan’s success with international trade approach ■ all promoted development by concentrating on producing a handful of manufactured goods, esp. clothing and electronics / low labor costs made possible to sell them inexpensively

8. Models of Development Rostow’s Modernization Model / Stages of Development Example: Petroleum-rich Arabian peninsula (Saudi Arabia, Kuwait, Bahrain, Oman, UAE) ●1970s - petroleum prices high ●overnight transformation

9. Models of Development Rostow’s Modernization Model / Stages of Development used to be least developed - escalating petroleum prices in 1970s - now are some of the wealthiest large scale project - housing, highways, etc. / diffusion fo consumer goods Islamic practices still dominate images - Dubai - first pic is 1990, second is same street in 2007 ○ Petroleum-Rich Arabian Peninsula States ■ Arabian Peninsula: Saudi Arabia, Kuwait, Bahrain, Oman, UAE ■ escalating petroleum prices in 1970s transformed “overnight” ■ large-scale projects ■ factories ■ diffusion of consumer goods ■ some Islamic religious principles conflict with business practices of MDCs (exclusion of women, womens’ clothing, prayers) http://www.condohotelsdubai.com/articles/dubai-incredible.html

10. Models of Development Rostow’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

11. Models of Development Dependency 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?

12. Models of Development Dependency 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

13. Models of Development Dependency School of Thought Strategies to achieve development: ●small-scale and rural enterprises ●import substitution (manufacture own products) ●nationalization

14. Models of Development Dependency School of Thought colonial origins

15. Models of Development Dependency School of Thought colonial origins

16. Models of Development Dependency School of Thought Core-Periphery / World Systems Theory (Wallerstein) core periphery semi-periphery

17. Models of Development Dependency School of Thought Core-Periphery / World Systems Theory (Wallerstein) Immanuel Wallerstein, a leading advocate of the approach, uses the same terminology. He characterizes the world system as a set of mechanisms which redistributes resources from the periphery to the core. In his terminology, the core is the developed, industrialized, democratic part of the world, and the periphery is the underdeveloped, raw materials-exporting, poor part of the world; the market being the means by which the core exploits the periphery. The core nations primarily own and control the major means of production in the world and perform the higher-level production tasks. The periphery nations own very little of the world’s means of production (even when they are located in periphery nations) and provide less-skilled labor. Like a class system with a nation, class positions in the world economy result in an unequal distribution of rewards or resources. The core nations receive the greatest share of surplus production, and periphery nations receive the least. Furthermore, core nations are usually able to purchase raw materials and other goods from noncore nations at low prices, while demanding higher prices for their exports to noncore nations. 1. World economy has one market and a global division of labor. 2. Almost everything takes place in context of world economy. 3. World economy has a three tier structure three-tier structure - explains interconnections between places in the global economy; spatial framework for how economies develop over time and space core and periphery describe both processes and regions semi-periphery - places where core and periphery processes are both occurring

18. Models of Development Dependency School of Thought Core-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

19. Models of Development Dependency School of Thought Core-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

20. Models of Development Dependency School of Thought Core-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

21. Models of Development Dependency School of Thought Core-Periphery / World Systems Theory (Wallerstein) Applicable at scales beyond the state (country) ●within a region ●within a state (country) ●in a local area

22. Models of Development Dependency School of Thought Neocolonialism ●Economy of LDCs controlled by MDCs. ●Global economy - this is difficult to overcome ○unequal distribution of resources ○unequal relations between places

23. Models of Development Dependency School of Thought Core-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

24. Models of Development Dependency School of Thought Criticisms: ●Offers causes but no solutions ●Little hope for prosperity in LDCs ●Little attention to geographic differences

25. 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?

26. Models of Development Neoliberalism 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 Reaction to bottom up strategy of dependency theorists - major goal is to improve human welfare by directing resources towards traditionally poor sectors of society to meet basic needs Goal - more even distribution of wealth, grow middle class to buy import substitution goods

27. Models of Development Neoliberalism Theory ●Government intervention into markets is inefficient and undesirable. ●Protectionism* and state-owned industries perpetuate dependency. *protectionism imposing high tariffs on foreign goods to protect home grown industries protected, state-owned industries not forced by markets to be competitive in price and quality - keeps states dependent on MDC’s Championed by free market capitalists with end of Cold War: Reagan, Margaret Thatcher

28. Models of Development Neoliberalism Strategies 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. Origin: 1980’s - end of Cold War? Reaction to bottom up strategy of dependency theorists - major goal is to improve human welfare by directing resources towards traditionally poor sectors of society to meet basic needs Goal - more even distribution of wealth, grow middle class to buy import substitution goods

29. Models of Development Neoliberalism Strategies 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)

32. Models of Development Neoliberalism 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

33. Models of Development Neoliberalism Results - ●Private ownership of services and businesses ●Economic globalization ●Corporations control regions and states

34. Models of Development Neoliberalism 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 Result of Great Leap Forward: 9 million starve in 1959 alone - 20 million by 1962 poor quality industrial goods due to “backyard industry” - production of steel and manufacturing farming equipment within communes

35. Models of Development Neoliberalism 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

36. Models of Development Neoliberalism Criticisms: ●Infrastructure projects that are expensive failures. ●Large debts that can’t be repaid.

37. Models of Development Sustainable Development Theory: Progress should not come at the expense of future generations. Concerned with: ●climate ●biodiversity ●forests ●pollution ●resources How to address these concerns / policies in line with sustainable development? efficient renewable fuels ecotourism drugs from rainforest plants China - economic development at cost of environmental pollution

38. Models of Development Sustainable Development Requires New Indicators?? Ideas? potential ideas: air and water quality percentage of land in nature preserves deforestation rate energy efficiency number of threatened species

39. Models of Development Sustainable Development Strategies 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

40. Models of Development Sustainable Development Strategies 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