A Developing World: A Developing World: Comparing Countries and Comparing Countries and

EconomiesEconomies

Part IIPart II

Rostow’s ModelRostow’s Model A theory on the stages of economic A theory on the stages of economic

developmentdevelopment DescribesDescribes

• a country’s position within their a country’s position within their economic developmenteconomic development

• how they progress socially and how they progress socially and economically towards a higher stageeconomically towards a higher stage

Rostow’s ModelRostow’s Model

Stage 1: Traditional SocietyStage 1: Traditional Society Dominated by subsistence Dominated by subsistence

agricultureagriculture Limited potential for economic and Limited potential for economic and

population growthpopulation growth Outbreaks of disease, and natural Outbreaks of disease, and natural

controls such as droughts, cause controls such as droughts, cause limited economic and social progresslimited economic and social progress

Government structures are inflexible Government structures are inflexible (monarchies and dictatorships)(monarchies and dictatorships)

Stage 2: Preconditions for TakeoffStage 2: Preconditions for Takeoff

Country advances to a more complex Country advances to a more complex economy, beginning their economic economy, beginning their economic developmentdevelopment

Generally requires a surplus of Generally requires a surplus of wealth, which can be reinvestedwealth, which can be reinvested• Transportation, communications, and Transportation, communications, and

natural resource exploitationnatural resource exploitation More effective and responsive More effective and responsive

government controlgovernment control

Stage 3: TakeoffStage 3: Takeoff Introduction of technological innovations Introduction of technological innovations

create dramatic changes in the country’s create dramatic changes in the country’s economyeconomy

Agriculture progresses away from Agriculture progresses away from subsistence toward primarily commercialsubsistence toward primarily commercial

Manufacturing becomes a more important Manufacturing becomes a more important part of the economypart of the economy

Growth of cities and the numbers of paid Growth of cities and the numbers of paid workers as economy expandsworkers as economy expands

Stage 4: Drive to MaturityStage 4: Drive to Maturity Extended period of growth is sustained Extended period of growth is sustained

after a country’s economy reaches take off after a country’s economy reaches take off Per capita wealth increases as economic Per capita wealth increases as economic

gain outpaces population growthgain outpaces population growth Economy becomes more diversifiedEconomy becomes more diversified Modern production methods come into useModern production methods come into use Increased percentage of the nation’s Increased percentage of the nation’s

wealth is invested into developing its wealth is invested into developing its economyeconomy

Stage 5: High Mass ConsumptionStage 5: High Mass Consumption

Individual incomes are greater than Individual incomes are greater than necessary for buying essentialsnecessary for buying essentials

Due to the high incomes, there is a Due to the high incomes, there is a growing demand for additional growing demand for additional consumer goods and servicesconsumer goods and services

Improved health care systems and Improved health care systems and educational opportunities result from educational opportunities result from the wealth of the societythe wealth of the society

Rostow’s ModelRostow’s Model As a country progresses through the As a country progresses through the

stages…stages…• Incomes riseIncomes rise• A lower % of the population is involved in A lower % of the population is involved in

agriculture and a greater % is involved in agriculture and a greater % is involved in industryindustry

• Urban populations increaseUrban populations increase• Health (infant mortality, life expectancy) Health (infant mortality, life expectancy)

increase, as does education (literacy rates, increase, as does education (literacy rates, school enrollment, post-secondary education)school enrollment, post-secondary education)

Criticisms of Rostow’s ModelCriticisms of Rostow’s Model Western-centricWestern-centric Too vague, too much variation among Too vague, too much variation among

countriescountries Doesn’t account for the variety of ways Doesn’t account for the variety of ways

that a country can developthat a country can develop Key is to keep in mind that it’s a model of Key is to keep in mind that it’s a model of

economic development, not overall economic development, not overall developmentdevelopment• Just because a country has a more developed Just because a country has a more developed

economy, doesn’t mean it’s “better” or more economy, doesn’t mean it’s “better” or more developed overall developed overall

Core-Periphery ModelCore-Periphery Model The countries of the world can be The countries of the world can be

divided into two major world regionsdivided into two major world regions Core = major world powers + the Core = major world powers + the

countries that contain much of the countries that contain much of the wealth of the planetwealth of the planet

Periphery = countries that are not Periphery = countries that are not reaping the benefits of global wealth reaping the benefits of global wealth and globalizationand globalization

Core-Periphery ModelCore-Periphery Model Basic principle is that as general Basic principle is that as general

prosperity grows worldwide, the prosperity grows worldwide, the majority of that growth is enjoyed by majority of that growth is enjoyed by a 'core' region of wealthy countriesa 'core' region of wealthy countries• Severely outnumbered in population by Severely outnumbered in population by

the 'periphery'the 'periphery' 15% of the global population enjoys 75% of 15% of the global population enjoys 75% of

the world's annual incomethe world's annual income

Core-Periphery ModelCore-Periphery Model

The CoreThe Core Traditionally, EuropeTraditionally, Europe

• Also the United States, Canada, Australia, New Also the United States, Canada, Australia, New Zealand, Japan, South Korea, and IsraelZealand, Japan, South Korea, and Israel

Within this region is where most of the Within this region is where most of the positive characteristics of globalization positive characteristics of globalization typically occur:typically occur:• Higher wages, access to healthcare, adequate Higher wages, access to healthcare, adequate

food/water/shelterfood/water/shelter• Scientific innovationScientific innovation• Increasing economic prosperityIncreasing economic prosperity• High industrializationHigh industrialization

The CoreThe Core High on the HDIHigh on the HDI

• Top 20 all in the coreTop 20 all in the core However, most core countries also However, most core countries also

have stagnant or even declining have stagnant or even declining population growthpopulation growth

The PeripheryThe Periphery Africa, South America, most of Asia Africa, South America, most of Asia

(excluding Japan and South Korea), and (excluding Japan and South Korea), and Russia and many of its neighborsRussia and many of its neighbors

Some parts of this area exhibit positive Some parts of this area exhibit positive development, but generally characterized development, but generally characterized by extreme poverty and a low standard of by extreme poverty and a low standard of livingliving• Non-existent health careNon-existent health care• Less access to potable waterLess access to potable water• Poor infrastructure and slum conditionsPoor infrastructure and slum conditions• Skyrocketing populationSkyrocketing population

How did this happen?How did this happen? Dependency TheoryDependency Theory

• Capitalist countries have exploited the Capitalist countries have exploited the periphery through colonialism and imperialismperiphery through colonialism and imperialism

• Raw materials extracted from the periphery Raw materials extracted from the periphery through slave labor, sold to core countries through slave labor, sold to core countries where they would be consumed, or where they would be consumed, or manufactured and sold back to the peripherymanufactured and sold back to the periphery

• Advocates of this theory believe that the Advocates of this theory believe that the damage done by centuries of exploitation have damage done by centuries of exploitation have left these countries so far behind that it is left these countries so far behind that it is impossible for them to compete in the global impossible for them to compete in the global marketmarket

How did this happen?How did this happen? Core nations also played a key role in establishing Core nations also played a key role in establishing

political regimes during post-war reconstructionpolitical regimes during post-war reconstruction European languages remain the state languages European languages remain the state languages

for many non-European countries long after their for many non-European countries long after their foreign colonists have leftforeign colonists have left• Makes it difficult for anyone brought up speaking a local Makes it difficult for anyone brought up speaking a local

language to assert themselves in a Eurocentric worldlanguage to assert themselves in a Eurocentric world Public policy formed by Western ideas may not Public policy formed by Western ideas may not

provide the best solutions for non-Western provide the best solutions for non-Western countries and their problemscountries and their problems