1. Warm-up: Tuesday Write down 3 observations from the data.

3. Road to Development

4. The Rostow Model of Development The Rostow Model of Development was created in 1960 by an American, W.W.Rostow. He based the Model, which represents economic development, on 15 countries - most of which were European - and suggested that it was possible for all countries to break the viscious cycle of poverty and develop through the 5 linear stages that construct his model.

5. Rostow’s Development (Modernization)Model through International trade A country can develop economically by concentrating scarce resources on expansion of its distinctive local resources Developed by W.W. Rostow (1950s)

6. Rostow - Stages of Growth 1.Traditional Society Characterised by –subsistence economy – output not traded or recorded –high levels of agriculture and labor intensive agriculture –Wealth allocated to nonproductive activities (religious, military Village in Lesotho. 86% of the resident workforce in Lesotho is engaged in subsistence agriculture. Copyright: Tracy Wade, http://www.sxc.hu/

7. Rostow - Stages of Growth 2. Pre-conditions: –An elite group initiates development –Investments in technology and infrastructure –Commercialization of agriculture The use of some capital equipment can help increase productivity and generate small surpluses which can be traded. Copyright: Tim & Annette, http://www.sxc.hu

8. Rostow - Stages of Growth 3. Take off: –Increasing industrialization in limited areas (food or textiles) –Foreign investment increases –Infrastructure improvements –Some regional growth –Economy still dominated by traditional practices At this stage, industrial growth may be linked to primary industries. The level of technology required will be low. Copyright: Ramon Venne, http://www.sxc.hu

9. Rostow - Stages of Growth 4. Drive to Maturity: –Develops broad manufacturing and commercial base –Industry more diversified –Increase in levels of technology utilized As the economy matures, technology plays an increasing role in developing high value added products. Copyright: Joao de Freitas, http://www.sxc.hu

10. Rostow - Stages of Growth 5. High mass consumption –High output levels –Mass consumption of consumer durables –High proportion of employment in service sector Service industry dominates the economy – banking, insurance, finance, marketing, entertainment, leisure and so on. Copyright: Elliott Tompkins, http://www.sxc.hu

11. USA Path to Development Stage 5: early 20 th century Stage 4: late 19 th century Stage 3: middle of 19 th century Stage 2: first half of 19 th century Stage 1: prior to independence

14. Criticisms Assumes LDCs will achieve each level of development before advancing Uneven resource distribution (Zambia’s one commodity market of copper developed trouble when world copper price fell) Market Stagnation – MDCs market are saturated, need to increase sales in LDCs Increased dependence on MDCs – when concentrating resources in a “takeoff” industry, then buy necessities from MDCs

15. Criticisms Does not account for –Global politics –Colonialism –Physical geography –War –Culture –Ethnic conflict –Deindustrialization Cannot compare Nepal (stage 1) to Denmark (stage 5) to Saudi Arabia Development does not necessarily lead to high consumption, can mean social welfare

16. Possible 6 th stage – Postindustrial –Service replaces industry –Information replaces energy as key resource

17. World-Systems Theory Immanuel Wallerstein Divide world into –Core –Semi-periphery –Periphery

18. Three Tier Structure Core Processes that incorporate higher levels of education, higher salaries, and more technology * Generate more wealth in the world economy Semi-periphery Places where core and periphery processes are both occurring. Places that are exploited by the core but then exploit the periphery. * Serves as a buffer between core and periphery Periphery Processes that incorporate lower levels of education, lower salaries, and less technology * Generate less wealth in the world economy

19. Core Periphery Model Core Regions –High levels of socioeconomic prosperity –Dominant players in global economic game  Anglo America HDI.94  Japan and the South Pacific HDI.93  Western Europe HDI.92

20. Core Periphery Model Periphery –Poor regions –Dependent on the core –Do not have much control over their own affairs

22. Periphery Regions  Latin America HDI.78  East Asia HDI.72  Southeast Asia HDI.71  Middle East HDI.66  South Asia HDI.58  Sub Saharan Africa HDI.47

23. Core Periphery Model Semi Periphery –Regions that exert more power than periphery regions but are dominated to some degree by the core