1. The Developing World

2. Presentation Outline • Characteristics of developing states • Economic comparisons between developing and developed states • Newly industrialized states • Economic Policies of developing states • Democratization in the developing world

3. Most of the world’s states which are part of the developing world (yellow). Mexico Iran Nigeria

4. 1) Characteristics of developing states • Lower economic development and less industrialized • Large income gap between rich and poor • Lower educated population with lower literacy rates • Higher birth rates and high death rates • Traditional societies where women tend to have an inferior status to men • Poor governance and high levels of corruption

5. Many developing states were once part of European empires. Colonialism is a major legacy in the developing world Mexico

6. Iran was never colonized Nigeria

7. Shanty town in South Africa

8. Agricultural workers in Nigeria

9. U.N. Human Development Index (Measures literacy rates, life expectancy, and GDP per capita) Iran Mexico Nigeria

11. Gini Index (Measures income inequality) Much higher income gap in the developing world with the exception of the USA Russia China U.K. Iran Mexico Nigeria

12. Transparency International (Measures Corruption levels) Iran Mexico Nigeria

13. 2) Economic Comparisons Comparative PPP (purchasing power parity in per capita GDP) What conclusions can you draw from this table?

14. Comparative Economic Sectors What conclusions can you draw from this table?

15. 3) Newly industrialized states • Political Scientists agree that developing state is too broad and general, since among developing countries there is a wide range of economic development • New industrialized refers to states which are still developing their economies but which are moving towards full industrialization; some may eventually become developed states

16. The Newly Industrialized States Mexico

17. 4) Economic policies of developing states • Dependency Theory • Westernization Model

18. Dependency Theory • Economic theory which states that the economic problems which developing countries face were caused by colonialism and economic exploitation by more developed states • According to this theory, globalization and trade are not the solution rather the problem because developed states will always take advantage of developing states

19. How does this cartoon illustrate the dependency theory?

20. Import Substitution • Developing states which follow the dependency theory believed that the best way to grow their economies is to protect local industries from international competition • This is done by setting quotas on production, imposing high tariffs (taxes) on imported goods, and providing huge subsidies to local manufacturers- Iran still follows this model; Mexico and Nigeria used to follow this model

21. Drawbacks of import substitution • Policies in Mexico created industries which were not internationally competitive • High employment resulted in high inflation and government debt • Exports to other countries were low • Mexico had to borrow money from the International Monetary Fund (IMF) and the USA

22. Westernization Model • According to this theory, the only way for developing states to grow their economies is to adopt the model Western countries have followed for decades: • create a market-based economy • encourage foreign investment and trade • develop a successful export industry

23. Export- oriented • If you can’t beat them, join them! • Newly industrialized states such as South Korea, India, Brazil, Mexico, and Malaysia have liberalized their economies and focused on trade and export • South Korea exports many high tech products • Brazil exports resources such as timber, copper, and other metals • India exports cheap clothing, and outsources services • Mexico exports cheap clothing, and food

24. Drawbacks of Westernization model • States such as Mexico and Nigeria have given up sovereignty in exchange for more economic development • World prices of oil, metals, food etc. are constantly fluctuating (going up and down) and states following the Western model have little influence over these prices and a more vulnerable to economic crashes and global recessions

25. 5) Democratization in the developing world • Nearly all developing states had an authoritarian regime at one point or another • Mexico, Nigeria, and Iran all share this common history • Today, Mexico and Nigeria are considered democracies • Nearly all democracies in the developing world are emerging, struggling, or illiberal democarcies

26. Russia U.K. China Mexico Nigeria