Classic Theories of Economic Development Chapter 3 Classic Theories of Economic Development

Development as Growth and the Linear-Stages Theories Rostow’s stages of growth The Harrod-Domar growth model Obstacles and constraints Some criticisms of the stages model

The Harrod-Domar Model (3.1) (3.2) (3.3) (3.4)

The Harrod-Domar Model (3.5) (3.6) (3.7)

Structural-Change Models The Lewis theory

Figure 3.1

Figure 3.2

Structural-Change Models The Lewis theory Structural change and patterns of development Conclusions and implications

The International-Dependence Revolution The neoclassical dependence model The false-paradigm model The dualistic-development thesis Conclusions and implications

The Neoclassical Counterrevolution Challenging the statist model Free market approach Public choice approach Market-friendly approach Traditional neoclassical growth theory Conclusions and implications

Theories of Development: Reconciling the Differences Development economics has no universally accepted paradigm Insights and understandings are continually evolving Each theory has some strengths and some weaknesses

Concepts for Review Dependence Dominance Dualism Endogenous growth Autarky Average product Capital-labor ratio Capital-output ratio Capital stock Center Closed economy Comprador groups Dependence Dominance Dualism Endogenous growth False-paradigm model Free market Free-market analysis

Concepts for Review (cont’d) Harrod-Domar growth model Lewis two-sector model Marginal product Market-friendly approach Necessary condition Neoclassical counterrevolution Neocolonial dependence model New institutionalism New political economy approach Open economy

Concepts for Review (cont’d) Patterns-of-development analysis Periphery Production function Public choice theory Savings ratio Self-sustaining growth Solow neoclassical growth model Stages-of-growth model of development Structural-change theory Structural transformation Sufficient condition

Concepts for Review (cont’d) Surplus labor Traditional neoclassical growth theory Underdevelopment

Figure A3.1

Figure A3.2