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1. The Modernization Model 1940s to 60s:Rostow stages of economic developmentbuild the economy2. Dependency Model (1970s). Immanuel Wallerstein, a leading advocate of the approach characterizes the world system as a set of mechanisms which redistributes resources from the periphery to the core. 3. Neoliberal or Counterrevolution Model: (1980s)Foreign Direct Investment with Multinational Corporations4. Sustainable Development Model(1990s): Development providing for the needs of the present without diminishing future generations.
Modernization it was believed was made possible by building: (a) the physical infrastructure (transportation, energy and water systems)
(b) the social institutions needed for capitalism, such as: • taxes • banks • insurance
Modernization Real World Strategies : • Stages of economic growth • Emphasis on economic production • Technology transfer (from MDCs) • Large-scale industrialization projects (government and foreign investment) • Trickle Down Economics (money works it way down to the masses)
The World Bank, the International Monetary Fund (IMF), and other agencies were created to facilitate investment and technology transfer from rich to poor countries.
All countries would pass through a set of stages of economic development if given enough time. The pathway to development was seen as the route followed by Western Europe and North America during the Industrial Revolution.
Following a model proposed by the US economist Walter Rostow, it was argued that countries would progress through five stages
Progressive stages of economic growth. Rostow Model
Progressive stages of economic growth. • Traditional Societies During the first stage, the country’s economy is dominated by primary activities-productivity, technological innovation, and per capita incomes remain low.
2. Preconditions to take-off In the second stage, preconditions for economic development arise, including the commercialization of agriculture and increased exploitation of raw materials
3. Take-off In the third stage, foreign investment pours in, jumpstarting an economy that was already prepped for growth. An important aspect of the third stage is that a large proportion of foreign investment goes to infrastructure improvements, such as building roads and canals In discussing the take-off, Rostow's is a noted early adopter of the term “transition”, which is to describe the passage of a traditional to a modern economy.
4. Drive to MaturityThe drive to maturity refers to the need for the economy itself to diversify. The sectors of the economy which lead initially begin to level off, while other sectors begin to take off. This diversity leads to greatly reduced rates of poverty and rising standards of living, as the society no longer needs to sacrifice its comfort in order to strengthen certain sectors.
5. Age of High Mass ConsumptionHigh per capita incomes and high levels of mass consumption.
Strength of the Modernization model: • Over the long term, all countries are capable of development. • It has proved to works for some countries: Singapore, Hong Kong, South Korea, Taiwan (Asian Dragons) the American South, Czech Republic, Ireland
Weaknesses in the Modernization model (Rostow’s Assumptions): Rostow’s model has also been criticized for assuming that economies will naturally pass through each of the four stages consecutively. Rostow’s model did not explicitly account for factors such as: • global politics, colonialism,
war, culture, and ethnic conflict, which may cause countries to follow quite different economic trajectories.
The Chinese save more Environmentalists and others have criticized Rostow’s description of the relationship between development and consumption, claiming that development does not necessarily equal high consumption.
Increased education or national parks For some of these critics, development may mean other things like increased social welfare or ecological sustainability.
Finally, the Rostow’s stages of development model does not account for deindustrialization.
Many of the first development projects were huge FAILURES! Examples oil-fired power plants create pollution automated factories cause a loss of jobs combine harvesters need fuel
infant formula replacement for breast milk harmed children (using unsafe water)
Emphasis on economic production over human welfare can lead to: • environmental degradation
traffic a poorly educated work force.
the creation of a permanent underclass crime many other social problems.
These problems affect everyone in the society and can undermine the economic strength of the country.
Why do some teachers switch from teaching at private schools to public schools? Why do some teachers stay at private schools?
