One of the most notorious thinkers in the twentieth century in regards to Economic Growth and Development was W.W. Rostow. He was an American economist and public figure in the government. Before Rostow’s theory, people attitudes toward economic development were based on the theory that modernization was portrayed by the Western world. The Western World had the wealthier and more powerful countries in that day and age. These countries and nations were able 1to advance from the initial stages of underdevelopment. Therefore, other countries should model themselves after the West World and seek to have a liberal democracy and a more modern state of capitalism.
With that thought, Rostow wrote his classic “Stages of Economic Growth” in 1960. He explained five steps which all countries must pass to become developed. These steps include: 1) a traditional society, 2) preconditions to take-off, 3) take-off, 4) drive to maturity, and 5) age of high mass consumption. Rostow’s model stated that all countries exist somewhere on this linear scale, and climb upward through each stage in the development process:
1. The Traditional Society:
In the Traditional Society Rostow explains that the economic system is stationary and dominated by agriculture with traditional cultivating forms. In this stage productivity by man-hour labor is lower, compared to the growth stages that follow. The traditional society describes a hierarchical structure where there is very little to no movement vertically nor social mobility. A historical example of Rostow’s “Traditional Society” can be found during the time of Newton. This stage is described as an agricultural based economy, with intensive labor and low levels of trading. The people in this society do not ha...
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...ption, not even thinking that different nations have different priorities. For example, while Singapore is one of the most economically prosperous countries, it also has one of the highest income disparities in the world.
Finally, Rostow disregards one of the most important geographical principals: where a country is located. Rostow assumes that all countries have an equal chance to develop, without regard to population size, natural resources, or location. Singapore, for instance, has one of the world's busiest trading ports, but this would not be possible without it being an island between Indonesia and Malaysia.
Besides the many criticisms of Rostow's model, it is still one of the most widely used development theories. It is a great explanation of how geography, economics and politics are all intertwined.
8) Theories of Development : Classical vs. Neoclassical
...conomically beneficial trade and technology development. In this regard the Epilogue uses sound logic to plausibly answer the wealth question. On the other hand, Mr. Diamond uses the same "national competition" thesis to purport that Asia's large, centralized governments were conspicuously growth-inhibitive. This argument would not seem to pass muster given what we have learned about the role of governments. Professor Wright's slides state that "Centralization may limit predation and even allow for growth" as "centralized predation = incentives to maximize the haul " This clearly refutes Mr. Diamond's argument that centralized, monopolistic Asian governments impaired societal advances. Thus, Guns, Germs, and Steel can scantly explain why China and the Middle East remain emerging markets while Western and Northern Europe enjoy significantly larger national wealth.
At one point in time poverty was the general fact of the world. Man was always expected to live on the line of poverty, majority of the economic thinkers couldn’t see the world moving away from this standard but we did and have gained great affluence. As society has grown from this poverty stricken state it once was in, into an affluent one, the ideas used to run it have yet to change in some ways. In The Affluent Society, John Kenneth Galbraith explains how with great economic growth there should be growth in economic ideas as well.
Though it is very convincing, I do not fully agree with this concept. I agree that being located in a good geographical location enables a civilization to gain the upper hand early on, but I disagree that without good geography, a civilization will not be able to reach prosperity. My argument parallels James A. Robinson and Daron Acemoğlu’s argument made in Why Nations Fail: The Origins of Power, Prosperity, and Poverty. They used the example of Nogales, a city that is divided into two, with the northern half in the United States that enjoys a flourishing and safe life, while the southern half in Mexico and struggles to maintain a good living standard. This city has the exact same geographical conditions, and yet, the welfare varies drastically. The authors explain since the northern part of the city is in the United States, it has the access to the economic institutions, technology, and the government of the United States. In contrast, the southern part of the city suffers due to the corruption, disorder, and poor government system that is of Mexico. The point Robinson and Acemoğlu try to make with the example of Nogales, which I am in concurrence with, is that since it was technological development that gave North America the step up in the modern era, it doesn’t fully explain why Latin America, who
All of our history can be dated down to some place anywhere in the world and the time, now just imagine if that history could still be affecting you to this day. In Jared Diamonds Guns, Gems, and Steel he explores the idea, the theory that geographic could determine the differences between societies and social development. The book is framed upon a question that Yali, a New Guinean politician, asked him as they were chatting the question being “Why is it that you white people developed so much cargo and brought it to New Guinea, but we black people had little cargo of our own?” Diamond concludes that geography has ultimately affected the differences between peoples of the world.
According to the Neoclassical Solow Model, economic growth arises due to influences outside economy. As an exogenous growth model it focus on four variables: output (Y), capital accumulation (K), Technology (A) and labor or population growth (L) in order to explain economic growth.
...lated with the food production to make other produce, like pottery, leather goods and cloth. (Bairoch, p14) Economic specialization due to emergence of advanced technologies led to the creation of influential classes of leaders and social stratification. Regional fiscal specialization frequently centered on possessions indigenous to the area in which the group of people was situated. Trade was enhanced among areas having different goods and services so as to provide an equitable and reasonable distribution of products. Social stratification was limited in ancient agricultural communities. Property may have been owned communally by all members of the society which provided cheap labor. The role of women in agricultural sectors had declined and men took over the necessary responsibilities of agriculture and started to control the application of the new tools.
Blij, H.J. de , Peter O. Muller, Jan Nijman, and Antoinette M.G.A WinklerPrins. The World Today Concepts and Regions in Geography. Fifth Edition ed. United States of America: John Wiley & Sons, Inc., 2011. Print.
Silva, Julie A. and Robin M. Leichenko. Economic Geography. Vol. 80, No. 3 (Jul., 2004), pp. 261-
Firstly, there is a need to understand what is meant by development. It is defined as “the continuous and positive change in the economic, social, political and cultural dimensions of the human condition, guided by the principle of freedom of choice and the limited capacity of the environment to sustain such change.” (Sharpley, 2003: 8-7). Sharpley (2000) explains how theories of development have progressed; Firstly the ‘Modernisation Theory’ (1950s- 1960s), in which societies are seen to switch from traditional to modern only through economic growth. Next is the ‘Dependency Theory’ (late 1960s), this takes into account the historical and economic structures of developing countries, distribution of benefits, social players such as local elites, state interests and private companies, and situations in which an economy and development of a country can be conditioned by a more dominant country (Santos, 1970). The ‘Neo Classical Counter Revolution theory’ (1980s) was made to fit in with global events such as the economic depression, and development policies that build upon dependence on free market. Finally, ‘Sustainable development’ (late 1980s) is the theory that creates the encouragement for development of many developing countries. This theory aided by government policies of backings, tax breaks, and incentives. These theories have developed through growing knowledge of evolving processes, and dismissal of past theories (Sharpley, 2000).
India and China however, were landlocked and were by far the greatest industrial powers in the world till the Industrial revolution. Technology, not geography, helped temperate agriculture and industry to zoom ahead. One way a country overcomes geographical isolation is to improve its transportation infrastructure. Better roads, ports, paths, and other modes of transport provide access to world markets. But a country can only derive full benefits from these investments against a backdrop of good trade and macroeconomic policies. Consequently this leads to the belief that people again control the thought of their own geography.
As Escobar points out in The Problematization of Poverty, one of the many changes in the post-WW2 era was the "discovery" of mass poverty throughout the world. This "discovery" had massive implications for development discourse. Prior to WW2, development discourse was limited to the colonial experience. But with the end of colonial rule lurking on the horizon, western academics began to formulate theories of economic growth and "modernization." As a result, an entire genre of academic research emerged: the development discourse. The aim of development discourse was to chart out patterns of growth (which were based on the historical successes of the West) that newly independent countries could use, primarily to escape vicious cycles of poverty, famine, etc.
In order for any country to survive in comparison to another developed country they must be able to grow and sustain a healthy and flourishing economy. This paper is designed to give a detailed insight of economic growth and the sectors that influence economic growth. Economic growth in a country is essential to the reduction of poverty, without such reduction; poverty would continue to increase therefore economic growth is inevitable. Through economic growth, it is also an aid in the reduction of the unemployment rate and it also helps to reduce the budget deficit of the government. Economic growth can also encourage better living standards for all it is citizens because with economic growth there are improvements in the public sectors, educational and healthcare facilities. Through economic growth social spending can also be increased without an increase of taxes.
Throughout the chapter the text exerts more emphasis on the economical evaluation of a country's development rather than the alternative method. It begins to branch off quickly into the classification of countries deriving new topics all relating back to the economical approach. Beginning this discussion is the topic of underdevelopment.
Rostow's five stages of economic growth begin with the traditional society. As described by Rostow, the underdevelopment is naturalised in this structure with the evidence of constrained production means such as technology. In this part, the society applies subsistence economy that technically results in small margins of productivity such as hunter-gatherer society (Sahlins 1972:1) Undesired to do nature exploitation, Rostow viewed society at this stage as restrained from progress. The second phase following the previous stage is preconditions of take-off. Economic growth starting to take place and is essential to justify the means within good definition. The society begins to implement the manufacturing of products while at the same time foreign intervention by advanced societies such as through colonialism is needed to bring about change in one's society. The next step towards moder...
Economic development is a term that economists, politicians, and others have used frequently since the 20th Century. The concept, however, has been in existence in the West for centuries. The term refers to economic growth accompanied by changes in output distribution and economic structure. It is concerned with quality improvements, the introduction of new goods and services, risk mitigation and the dynamics of innovation and entrepreneurship.