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Development Theories (Structuralist Development Theories: Dependency…

- - - - resources owned by other countries TNCs, e.g. shell and BP manage oil in Nigeria
  - - - • Although, Asian Tigers were aided by US.
- - - - Industrialisation follows: creating jobs trade and
        consumers.
      - Rostrow reckoned democracy, free trade and capitalism
        were required.
      - Countries take-off and develop when pre-conditions are
        met, such as transport and infrastructure.
      - Five Stages
        
        Traditional society
        
        The size of the capital stock is limited and of low quality resulting in very low labour productivity and little surplus output left to sell in domestic and overseas markets
        
        This is an agricultural economy of mainly subsistence farming, little of which is traded.
        
        e.g. Mali
        
        Pre-conditions for take-off.
        
        Agriculture becomes more mechanised and more output is traded.
        
        Savings and investment grow although they are still a small percentage of national income (GDP).
        
        Some external funding is required - for example in the form of overseas aid or perhaps remittance incomes from migrant workers living overseas
        
        e.g. Tunisia
        
        Take-off
        
        Manufacturing industry assumes greater importance, although the number of industries remains small.
        
        Political and social institutions start to develop - external finance may still be required.
        
        Savings and investment grow, perhaps to 15% of GDP. Agriculture assumes lesser importance in relative terms although the majority of people may remain employed in the farming sector.
        
        There is often a dual economy apparent with rising productivity and wealth in manufacturing and other industries contrasted with stubbornly low productivity and real incomes in rural agriculture.
        
        e.g. Thailand
        
        Drive to maturity
        
        Industry becomes more diverse. Growth should spread to different parts of the country as the state of technology improves - the economy moves from being dependent on factor inputs for growth towards making better use of innovation to bring about increases in real per capita incomes
        
        e.g. South Korea
        
        Age of mass consumption
        
        e.g. the UK
        
        Output levels grow, enabling increased consumer expenditure. There is a shift towards tertiary sector activity and the growth is sustained by the expansion of a middle class of consumers.
      - Economic development is linear, five-stages process.
    - - Explains the dominance of the USA and British Empire
    - - Believes there is only one pathway to development.
      - Suggested that communist countries couldn’t develop
        without adopting his model.
      - Many countries borrowed heavily and invested in the
        preconditions Rostrow outlined, but yet failed to develop
        
        e.g. African Nations
  - - - ! Believed because they have opened up to free trade and
        foreign investment. Aimed for export-driven development.
        
        Rather than raised tariffs, and tried to get own
        industry to strengthen by protecting it.
      - ! The state has invested in education and skills.
      - Countries like China, South Korea and Taiwan have
        developed rapidly since 1970.
    - - Often uses for the Four Asian Tigers
        
        South Korea, Taiwan, Hong Kong and Singapore
    - - In the early years, many Asian Tiger economies had
        protectionist not free-trade policies.
      - ! The model fails to take into full account the support and aid provided to some Asian countries, by the USA, during the cold war.
- - - - Rejects Developmentalism.