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  1. 1. Concepts of Development Chapter 26
  2. 2. What are some of the terms used to describe levels of development? <ul><li>Developed/developing/underdeveloped </li></ul><ul><li>LDC/MDC/NIC </li></ul><ul><li>North/South (vs. East/West) </li></ul><ul><li>First/Second/Third/Fourth World </li></ul><ul><li>Transition economies </li></ul><ul><li>Emerging economies </li></ul>
  3. 3. What is the distribution of MDCs and LDCs in the world? (The Brandt Line)
  4. 4. How is development measured? <ul><li>Economic indicators of development--GNP/GDP, Per capita income, value added, employment structure etc. </li></ul><ul><li>Social indicators of development--education, literacy, health, welfare (PQLI) </li></ul><ul><li>Demographic indicators of development--life expectancy, infant mortality, rate of natural increase, birth rate, doubling time </li></ul>
  5. 5. Positive correlation: <ul><li>Example: countries with higher literacy rates also have higher percentage of employment in tertiary economic activities </li></ul>
  6. 6. Negative correlation <ul><li>Example: Countries with high GDPs have low infant mortality rates. </li></ul>
  7. 7. Characteristics of Developing Countries <ul><li>Lower levels of living and productivity </li></ul>
  8. 8. Per capita GDP
  9. 9. Purchasing Power Parity
  10. 11. Cycle of Poverty Reversing the Cycle Of Poverty
  11. 12. Characteristics of Developing Countries <ul><li>Lower levels of human capital </li></ul>
  12. 13. % of population considered literate
  13. 14. Student-Teacher ratio (primary level)
  14. 15. Literacy rate of women
  15. 16. Health Indicators: Caloric Intake as a percent of daily requirements
  16. 17. Health Indicators: Persons per Physician
  17. 18. Life expectancy at birth – not just correlated with per capita income
  18. 19. Human Development Index = ( life expectancy at birth, GDP per capita, indices of schooling & literacy)
  19. 20. Characteristics of developing countries <ul><li>Higher levels of inequality and absolute poverty </li></ul>Gini coefficient % below the poverty line
  20. 21. Characteristics of developing countries <ul><li>Higher population growth rates </li></ul>Fertility Rate
  21. 22. Characteristics of developing countries <ul><li>Larger rural populations… </li></ul>
  22. 23. … but rapid rural-to-urban migration
  23. 24. Characteristics of developing countries <ul><li>Lower levels of industrialization and manufactured exports </li></ul>China factory World exports per capita
  24. 25. % of labor force in agriculture
  25. 27. Characteristics of developing countries <ul><li>Adverse geography </li></ul>
  26. 28. Characteristics of developing countries <ul><li>Underdeveloped financial and other markets </li></ul><ul><li>--banks </li></ul><ul><li>--stock markets </li></ul><ul><li>--domestic markets </li></ul>
  27. 29. Characteristics of developing countries <ul><li>Lingering colonial impacts </li></ul><ul><li>--economies based on resource extraction </li></ul><ul><li>--monoculture </li></ul><ul><li>--continued economic dependence </li></ul><ul><li>--weak governmental institutions </li></ul><ul><li>--continued ethnic strife </li></ul>
  28. 30. Theories Regarding Development <ul><li>Liberal Models (Modernization Theory /Stages of Growth) </li></ul><ul><li>Structuralist Models (Dependency Theory) </li></ul><ul><li>World-Systems Theory –Wallerstein </li></ul><ul><ul><li>Cores/peripheries/semi-peripheries </li></ul></ul>
  29. 31. Modernization Theory “Liberal” model <ul><li>Holds that LDCs can develop economically if they follow a Western path. </li></ul>
  30. 32. <ul><li>Liberal school of economics-- </li></ul><ul><li>Adam Smith in 1776 published Wealth of Nations in which he advocated the abolition of government intervention in economic matters. </li></ul><ul><li>This was “liberal” in the sense of no controls. </li></ul>
  31. 33. Every country can be positioned at one of these stages. Rostow viewed capitalism to be the proper type of production system for this development sequence. This theory has its critics.
  32. 34. What assumptions lie behind liberal models of development? <ul><li>… that all countries will go through the same steps in developing. </li></ul><ul><li>… that economic disparities are the result of short-term inefficiencies. </li></ul>
  33. 35. Economic liberalism prevailed in the 1800s and early 1900s. <ul><li>Main points of neoliberalism today: </li></ul><ul><ul><li>1. The rule of the market </li></ul></ul><ul><ul><li>2. Cutting public expenditures for social services </li></ul></ul><ul><ul><li>3. Deregulation </li></ul></ul><ul><ul><li>4. Privatization </li></ul></ul><ul><ul><li>5. Individual responsibility for well-being within society </li></ul></ul>
  34. 36. Dependency Theory (Structuralist model) <ul><li>Argues that the poor / periphery countries remain this way due to colonialism, in which terms of trade were unequal, labor remained unskilled and low-paid, and profit was extracted from colonies (Circular and cumulative causation.) </li></ul><ul><li>Development of core countries is dependent on the underdevelopment of periphery countries </li></ul><ul><li>Imports tend to be high-value goods from the core </li></ul><ul><li>Criticism of dependency theory – sweeping treatment of all peripheral territory </li></ul>
  35. 37. World Systems Theory: dynamic capitalist relations, hegemonic power
  36. 38. How does the core-periphery model and World Systems Theory apply to development issues? <ul><li>The world has core, semi periphery, and periphery areas. </li></ul><ul><li>Individual countries need to be viewed in the context of their place within the world economic system. </li></ul>
  37. 40. What is sustainable development? <ul><li>Partnerships </li></ul><ul><li>Conservation </li></ul><ul><li>Renewable resources </li></ul><ul><li>Loans to women and microcredit (such as the Grameen Village Bank in Bangladesh). </li></ul>