1. Rostow’s Stages of Development and Wallerstein’s World-Systems Theory
Models of Development

2. Development Rostow: Ladder of Development
What sectors of the economy do you see?
What are the economic and social characteristics of LDCs?
Where do we find MDCs and LDCs on the globe?

3. Rostow Model 5-stage model
Traditional society
Preconditions for take-off
Take-off
Drive to maturity
High Mass Consumption
Countries climb (the ladder) from one stage to another

4. Traditional Society 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!

5. Preconditions for Take-Off
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.

6. Take-off
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…

7. 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

8. 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?

9. Rostow Model Review Explain the 5-stages Traditional society
Preconditions for take-off
Take-off
Drive to maturity
High Mass Consumption

10. World Systems and Dependency Theory Wallerstein
Core, Semi-Periphery, Periphery
World Systems and Dependency Theory Wallerstein

11. Wallerstein Basics
The world is ONE economic market with a global division of labor
Three levels:
Core
Semi-Periphery
Periphery

12. World Systems Theory

13. Present Core/Periphery Relationships
Wallerstein
Present Core/Periphery Relationships
In Wallerstein’s theory, countries can move from one level to another.

14. CORE 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

15. PERIPHERY 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

16. SEMI-PERIPHERY 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

17. 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

18. What are the Barriers to and the Costs of Economic Development?
Key Question:

19. Barriers to Economic Development
Low Levels of Social Welfare
Foreign Debt
Political Instability
Widespread Disease

20. Foreign Debt Obligations
Total interest payments compared to the export of
goods and services.

21. Widespread Disease
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.

22. Global Distribution of
Malaria Transmission Risk

23. Export Dependence

24. Export Dependence

25. Why do Countries experience Uneven Development within the State?
Key Question:

26. “Development” variations in America

27. Development Variations

28. How Government Policies Affect Development
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

29. Governments and Corporations can create Islands of Development
Places within a region or country where foreign investment, jobs, and infrastructure are concentrated.

30. Corporate-created Island of Development
The global oil industry has created the entire city of Port Gentile, Gabon to extract Gabon’s oil resources.

31. Government-created Island of Development
Malaysian government built a new, ultramodern capital at Putrjaya to symbolize the country’s rapid economic growth.

32. Nongovernmental Organizations (NGOs) entities that operate independent of state and local governments, typically, NGOs are non-profit organizations. Each NGO has its own focus/set of goals.
Somalia Microcredit program:
loans given to poor people, particularly women, to encourage development of small businesses.

33. Wallerstein World Systems Review
The world is ONE economic market with a global division of labor
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?