Theories of Development

1. Theories of Development AP Human Geography Spring 2014

2. Development Theories Is the path to development a direct line? • Many began to consider the question in the 1930s • There are two leading schools of thought: i) Rostow’s stages of economic growth theory ii) Dependency theory

3. W.W. Rostow • A Cold War warrior • Celebrated capitalist • Economic historian • Taught at MIT & the University of Texas at Austin • Became adviser to Presidents John F. Kennedy & Lyndon B. Johnson in the 1960s

4. Rostow’s stages of growth • Wrote The Stages of Economic Growth: A Non-Communist Manifesto, 1960 • Political Purpose? • Much of the U.S. early development programs for the LDCs was based on Rostow’s book • A blueprint for economists seeking to “help” the LDCs reach their potentials

5. Rostow’s stages of growth • The process of development was seen as a series of successive stages through which all countries must pass • It required the right quantity and mixture of saving, investment, and foreign aid • Development became synonymous with rapid economic growth

6. Rostow’s Stages of Economic Growth

7. Two crucial factors underlying the model • Development in Southern & Eastern Europe and Japan had been modeled on Anglo-America & Western Europe. If they could develop, why not other countries? • Many countries in the LDCs have an abundance of raw materials needed in the West

8. Assumptions • Assumes all countries start at the same level • Assumes that LDCs will achieve development by moving along from an earlier to a later start • Assumes the availability of natural resources in many countries in the LDCs • Assumes countries in the LDCs were expected to follow the same path taken by Anglo-America and Western Europe

9. Limitations • Outdated • Oversimplified • Economic theories and rules from the MDCs cannot be applied to places with different histories, cultures, and starting conditions • Perpetuates the myth of “developmentalism,” the idea that every country will eventually make progress toward high mass consumption. • It is unreasonable to compare the prospects of early starters with late starters

10. Limitations • Capital- Rostow suggests that capital is needed for a country to move from its traditional society (stage 1) to the further stages of development. However, there have been large injections of cash in many countries in Africa and Asia, yet poverty still persists. • Led to huge debts for many countries in the LDCs

11. Dependency Theory • Emerged during the 1970s • Argued that the dynamic between the developed and developing world kept the LDCs poor and economically “dependent” • Global economic inequality is rooted in European colonialism • Puts primary responsibility for global poverty on rich nations

12. Dependency Theory • Dependency theory was an outgrowth of Marxism, which emphasizes an exploitation of one social class of the other • Many developing countries experimented with socialism, with the intent of nationalizing industries and narrowing the gap between the rich and poor • Wallerstein’s Core-periphery theory is central to dependency theory

13. Potential fallacies of development theories • The developing world is homogeneous, so growth will occur at the same rate everywhere • Growth equals development • Development performance can be measured using one or a few indicators • Development policies should be modeled on the West • “one size fits all”

14. Questions to think about • Is the idea of development inherently Western? If the West were not encouraging the “developing world” to “develop”, how would people in the LDCs think about their own economies? • Given the diversity of developing countries, do you think that there could ever be a simple, unified theory of development? • Is Rostow’s still relevant today? Explain • What are the advantages and disadvantages of Rostow’s and Dependency theory?