1. Theories of Economic Development
Environmental Determinism and Possibilism
Modernization Theory – W.W. Rostow
World Systems Theory – Immanuel Wallerstein
Theoretical attempts to explain disparities in development

2. Resource Endowment and Environmental Determinism
Resource endowment suggests that development is dependent on the resources (natural and human) the country has to exploit.
European development was helped by reserves of coal, iron ore, fertile soil, temperate climate, and low frequency and low intensity of natural hazards
Jared Diamond’s Guns, Germs, and Steel narrative

5. Possibilism A response to environmental determinism
Natural environment simply limits the amount of choices available to people
The choices society makes depend on what members need and availability of technology
Ideas, ingenuity, and advances in technology can push the boundaries of what is “environmentally possible”
Human will is too powerful to be determined by environment, especially in the highly interconnected 21st century

7. W.W. Rostow – Modernization Theory

8. Modernization Theory Other Characteristics of Theory:
Linear progression
Happened first in Britain
Suggests that all countries that want their economies to grow should study the same stages
Favors individualism; wealth as personal virtue; traditional culture can hold you back
Similar to Demographic Transition Model – focus is on Western Europe and North America
Closed system

9. Modernization Model Applied
Could have strong argument for these countries going through Rostow’s stages of model:
Western European countries and the United States
Japan, Hong Kong, Taiwan, South Korea, Singapore
Brazil, urban pockets of India
China

10. Criticism of Modernization Theory
Criticism of theory and model: - model is simply a justification for capitalist systems to exploit non-capitalist ones
Modernization simply has not occurred in many poor countries.
Rich nations can block the path to development for poor countries.
Poor countries developing from a point of weakness.
Model suggests that causes of poverty lie entirely in the poor societies themselves.
Industrialization = Development?
At what price? Environmental destruction, cultural destruction

11. Immanuel Wallerstein – World Systems Theory
Open system
One global market with a global division of labor
Although the world has countries, almost everything takes place within the context of the world economy. In other words, every country fits into the global economy somehow, to their benefit or to their detriment
World economy has a three tier structure: Core, Semi-periphery, and Periphery

12. World Systems Theory
“Core” countries – rich nations that fuel world economy by taking raw materials from around the world and channeling wealth to North America, Europe, Australia, and Japan through multinational corporations that operate worldwide
“Peripheral” countries – poor nations drawn into the world economy by colonial exploitation, and they continue to support rich ones today by providing inexpensive labor and a large market for industrial products
“Semiperipheral” countries – remaining countries that are somewhere in between. They exert more power than peripheral countries, but are dominated to some degree by the core countries.

14. World Systems Theory
Core and Periphery – not just places but sites where particular processes take place
Core processes – higher levels of education, higher salaries, more technology; core processes that generate more wealth in the world economy
Peripheral processes – lower levels of education, lower salaries, less sophisticated technology; peripheral processes associated with a more marginal position in the world economy
The development of the core is a result of its exploitation of the periphery

16. World Systems Theory and Colonialism
European Colonialism – lasted from 1500s – 1970s CE
500 years of exploitation of the human and natural resources of Africa, Asia, and the Americas. (Accompanied with slavery in many cases and racism in all cases)
Even though colonization ended, economic arrangements are still in place
Historic direct domination of rich over poor via colonialism
Current direct or indirect domination of rich over poor, sometimes called neo-colonialism
Colonialism created the economic structures that caused colonies to become dependent on the rich

17. Territorial divisions

18. © 2012 John Wiley & Sons, Inc. All rights reserved.
Figure 8.8
Dominant Colonial Infl uences, 1550–1950. The map shows the dominant European or
Japanese colonial infl uence in each country over the four centuries. © H. J. de Blij , John W i ley & Sons.
© 2012 John Wiley & Sons, Inc. All rights reserved.

22. World Systems Theory Applied
Could have strong argument for applying WST to these situations:
Previous colonies still using same currency as colonizers – French Franc, then the Euro for 14 countries in West Africa
“Dollarization” in Latin America
Capitalist production and moving production quickly from one place to another around the globe to enhance profits – textile industry is a classic good example
Areas of raw material extraction with infrastructure solely meant for extracting the raw material and little else: Cocoa in West African countries, Timber in Gabon, Oil in Angola, Diamonds and rare ores in the DRC, natural gas in Papua New Guinea, Farmland leasing in Ethiopia by China

23. Criticism of World Systems Theory
Theory treats wealth as a zero-sum game. No one gets richer without others getting poorer
No developed country “blocks” another from success
Does not acknowledge the long history of rich countries supporting poorer ones
Ignores cultural factors that discourage economic growth
Wealth can be squandered by country’s leaders, i.e. corruption and/or lack of rule of law