1. Classic Theories of Economic Development
Chapter 3
Classic Theories of Economic Development

2. Development as Growth and the Linear-Stages Theories
Rostow’s stages of growth
The Harrod-Domar growth model
Obstacles and constraints
Some criticisms of the stages model

3. The Harrod-Domar Model
(3.1)
(3.2)
(3.3)
(3.4)

4. The Harrod-Domar Model
(3.5)
(3.6)
(3.7)

5. Structural-Change Models
The Lewis theory

6. Figure 3.1

7. Figure 3.2

8. Structural-Change Models
The Lewis theory
Structural change and patterns of development
Conclusions and implications

9. The International-Dependence Revolution
The neoclassical dependence model
The false-paradigm model
The dualistic-development thesis
Conclusions and implications

10. The Neoclassical Counterrevolution
Challenging the statist model
Free market approach
Public choice approach
Market-friendly approach
Traditional neoclassical growth theory
Conclusions and implications

11. Theories of Development: Reconciling the Differences
Development economics has no universally accepted paradigm
Insights and understandings are continually evolving
Each theory has some strengths and some weaknesses

12. Concepts for Review Dependence Dominance Dualism Endogenous growth
Autarky
Average product
Capital-labor ratio
Capital-output ratio
Capital stock
Center
Closed economy
Comprador groups
Dependence
Dominance
Dualism
Endogenous growth
False-paradigm model
Free market
Free-market analysis

13. Concepts for Review (cont’d)
Harrod-Domar growth model
Lewis two-sector model
Marginal product
Market-friendly approach
Necessary condition
Neoclassical counterrevolution
Neocolonial dependence model
New institutionalism
New political economy approach
Open economy

14. Concepts for Review (cont’d)
Patterns-of-development analysis
Periphery
Production function
Public choice theory
Savings ratio
Self-sustaining growth
Solow neoclassical growth model
Stages-of-growth model of development
Structural-change theory
Structural transformation
Sufficient condition

15. Concepts for Review (cont’d)
Surplus labor
Traditional neoclassical growth theory
Underdevelopment

16. Figure A3.1

17. Figure A3.2