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

2. Self-Sufficiency Approach
Spread $ and business in all sectors
Avoid competition with efficient (cheaper) foreign companies (through tariffs)
India was a good example from your textbook

3. Problems with “self-sufficiency”
Two major problems associated with nations working on developing through the Rostow model of self-sufficiency
Protection (by government) of inefficient businesses
Need for large bureaucracy (expensive and abused)

4. Rostow Model (International Trade Approach)
5-stage model
Traditional society
Preconditions for take-off
Take-off
Drive to maturity
High Mass Consumption
Each stage has reasons the country moves from one stage to another

5. Traditional Society Little technology No social changes
Moves to next stage when other countries invest in resources or new markets appear.
Ex: OIL! GOLD! Minerals!

6. Preconditions for Take-Off
Commercial companies invest
Plantation agriculture
Garment industry
Mining
Moves to next stage when roads/railroads (infrastructure improves) and social and political leaders emerge.

7. 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

8. 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.

9. People buy a lot of stuff.
High Mass Consumption
People buy a lot of stuff.

10. Examples of International Trade
Arabian Peninsula States
Focused on Oil
4 Asian Dragons/Tigers
South Korea, Singapore, Taiwan, Hong Kong
Focused on manufacturing a few goods to develop economy

11. Problems with International Trade
Two major problems associated with nations working on developing through Rostow’s International Trade Approach
Uneven resource distribution
Arabian States to dependent on oil
Increased dependence on MDCs
at expense of developing their economies
Market decline
Less demand for those goods they focused on

12. Core, Semi-Periphery, Periphery
World Systems Theory

13. Basics
The world is ONE economic market with a global division on labor (what each place does)
Three levels:
Core
Semi-Periphery
Periphery

14. World Systems Theory

15. 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

16. 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

17. SEMI-PERIPHERY Transition between core and periphery
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
Russia and neighbors moving down the scale

18. Notice the low levels of trade from Eastern Europe (including Russia)
In Wallerstein’s theory, countries can move from one level to another.