1. A Developing World: Comparing Countries and Economies
Part II

2. Rostow’s Model A theory on the stages of economic development
Describes
a country’s position within their economic development
how they progress socially and economically towards a higher stage

3. Rostow’s Model

4. Stage 1: Traditional Society
Dominated by subsistence agriculture
Limited potential for economic and population growth
Outbreaks of disease, and natural controls such as droughts, cause limited economic and social progress
Government structures are inflexible (monarchies and dictatorships)

5. Stage 2: Preconditions for Takeoff
Country advances to a more complex economy, beginning their economic development
Generally requires a surplus of wealth, which can be reinvested
Transportation, communications, and natural resource exploitation
More effective and responsive government control

6. Stage 3: Takeoff
Introduction of technological innovations create dramatic changes in the country’s economy
Agriculture progresses away from subsistence toward primarily commercial
Manufacturing becomes a more important part of the economy
Growth of cities and the numbers of paid workers as economy expands

7. Stage 4: Drive to Maturity
Extended period of growth is sustained after a country’s economy reaches take off
Per capita wealth increases as economic gain outpaces population growth
Economy becomes more diversified
Modern production methods come into use
Increased percentage of the nation’s wealth is invested into developing its economy

8. Stage 5: High Mass Consumption
Individual incomes are greater than necessary for buying essentials
Due to the high incomes, there is a growing demand for additional consumer goods and services
Improved health care systems and educational opportunities result from the wealth of the society

9. Rostow’s Model As a country progresses through the stages…
Incomes rise
A lower % of the population is involved in agriculture and a greater % is involved in industry
Urban populations increase
Health (infant mortality, life expectancy) increase, as does education (literacy rates, school enrollment, post-secondary education)

10. Criticisms of Rostow’s Model
Western-centric
Too vague, too much variation among countries
Doesn’t account for the variety of ways that a country can develop
Key is to keep in mind that it’s a model of economic development, not overall development
Just because a country has a more developed economy, doesn’t mean it’s “better” or more developed overall

11. Core-Periphery Model
The countries of the world can be divided into two major world regions
Core = major world powers + the countries that contain much of the wealth of the planet
Periphery = countries that are not reaping the benefits of global wealth and globalization

12. Core-Periphery Model
Basic principle is that as general prosperity grows worldwide, the majority of that growth is enjoyed by a 'core' region of wealthy countries
Severely outnumbered in population by the 'periphery'
15% of the global population enjoys 75% of the world's annual income

13. Core-Periphery Model

14. The Core Traditionally, Europe
Also the United States, Canada, Australia, New Zealand, Japan, South Korea, and Israel
Within this region is where most of the positive characteristics of globalization typically occur:
Higher wages, access to healthcare, adequate food/water/shelter
Scientific innovation
Increasing economic prosperity
High industrialization

15. The Core
High on the HDI
Top 20 all in the core
However, most core countries also have stagnant or even declining population growth

16. The Periphery
Africa, South America, most of Asia (excluding Japan and South Korea), and Russia and many of its neighbors
Some parts of this area exhibit positive development, but generally characterized by extreme poverty and a low standard of living
Non-existent health care
Less access to potable water
Poor infrastructure and slum conditions
Skyrocketing population

17. How did this happen? Dependency Theory
Capitalist countries have exploited the periphery through colonialism and imperialism
Raw materials extracted from the periphery through slave labor, sold to core countries where they would be consumed, or manufactured and sold back to the periphery
Advocates of this theory believe that the damage done by centuries of exploitation have left these countries so far behind that it is impossible for them to compete in the global market

18. How did this happen?
Core nations also played a key role in establishing political regimes during post-war reconstruction
European languages remain the state languages for many non-European countries long after their foreign colonists have left
Makes it difficult for anyone brought up speaking a local language to assert themselves in a Eurocentric world
Public policy formed by Western ideas may not provide the best solutions for non-Western countries and their problems