Development Case Study: Jamaica. Development Case Study: Bangladesh.

Development Case Study: Jamaica

Development Case Study: Bangladesh

What is development?

development: The extent to which a society is making effective use of its human and natural resources.

developing: progress is being made in technology, production, and socioeconomic welfare

Continuum with huge global disparities.

MDCs and LDCs

MDC = More Developed Country (“developed”)has progressed further along continuumeconomic challenge: maintain high level of development at the new global scale of economy

LDC = Less Developed Country (“developing”)economic challenge: find connections to the global economy by taking advantage of local diversity in skills and resources

What is development?

Manufacturing gravel in Trivandrum, India

Measuring Development

Economic Indicators:

GNP = Gross National Product

● created by economists to compare countries

● total value of officially recorded goods and services produced in a year (inside and outside state territory)


Economic Indicators:

GDP = Gross Domestic Product● goods and services produced within a

country during a given year● GDP per capita = GDP divided by

population number● Can mask variation / distribution of

wealth

Measuring DevelopmentEconomic Indicators:

GNI = Gross National Income● monetary worth of what is produced

within a country plus income received from investments outside the country

● GNI per capita = GNI divided by population

● limitations:○ What about informal economy?○ Masks uneven distribution of wealth○ Does not account for production costs

Measuring DevelopmentEconomic Indicators:

GNI clearly shows contrast between rich and poor countries:

2008Japan $31,410USA $41,950Luxembourg $65,340Nigeria $ 1,040Indonesia $ 3,720


Economic Indicators: technology and production

● types of jobs (primary, secondary, tertiary)

● productivity per worker (level of mechanization)

● transportation and communication services per person


Demographic Indicators

● life expectancy at birth (60+ in LDC, 70+ in MDC)

■result for MDC??● infant mortality rate (94% LDC, 99.5%

MDC)● natural increase rate (1.5% LDC, 0.1%

MDC)■result for LDC??

● crude birth rate (24/1,000 LDC, 11/1,000 MDC)


Social Indicators● dependency ratio - number of dependents

(young and old) that each 100 employed people must support)


Social Indicators● education and literacy

○ avg. # of school years attended (10 MDC, 2 LDC)

○ student/teacher ratio (twice as high in LDC)

○ literacy rate (98%+ in MDC, <60% LDC)


Social Indicators● health and welfare

○ expenditures on health care○ influenced by diet (calories, protein)○ health care as government service


United Nations Human Development Index (HDI)

Combination of factors:1.per capita GDP (economic)2. literacy rates (social)3. school enrollment rates (social)4. life expectancy at birth (demographic)

Range: 0 - 1Average: .65


United Nations Human Development Index (HDI)


United Nations Human Development Index (HDI)2000 United Nations Millenium Declaration

Goals by 2015:● eradicate extreme poverty and hunger● achieve universal primary education● promote gender equality and empower women● reduce child mortality● improve maternal health● combat HIV/AIDS● ensure environmental sustainability● develop a global partnership for development

How can LDCs develop? Models of DevelopmentWhat is the developed world?

● 40 years ago - places populated with people of European ancestry; Japan

● Today - Distinctions between MDC and LDC is blurred:○ oil-rich Middle East○ collapse of Soviet Union○ newly industrializing East Asia

● General North/South pattern still exists

How can LDCs develop? Models of DevelopmentHistory of ideas:

Modernization (Rostow)

Dependency (includes World Systems Theory)

Neoliberal Counter-revolution

Sustainable Development

How can LDCs develop? Models of DevelopmentRostow’s Modernization Model / Stages of Development● 1940s-1960s (post WWII, decolonization)

● classic “developed - developing - underdeveloped” ladder of development

● assumes that all countries follow a similar path (European) and learn from each other

● Identified 5 stages

Models of DevelopmentRostow’s Modernization Model / Stages of Development

Stage 1: Traditional

Village in Lesotho. 86% of the resident workforce in Lesotho is engaged in subsistence agriculture.

Models of DevelopmentRostow’s Modernization Model / Stages of DevelopmentStage 1: Traditional

Economy subsistence:● output not traded or recorded● barter system● limited production● >75% in primary sector

Society hierarchical

Political Power

regionally based in the hands of landowners

Values resistant to change; focus on old traditions

(U.S. before independence)

Models of DevelopmentRostow’s Modernization Model / Stages of DevelopmentStage 2 - Preconditions for Takeoff

The use of some capital equipment can help increase productivity and generate small surpluses which can be traded.

Models of DevelopmentRostow’s Modernization Model / Stages of DevelopmentStage 2: Preconditions of takeoff

Economy -- surplus of agriculture and capital-- expansion of trade and manufacturing-- necessity of external funding-- some growth in savings and investment

Society beginnings of a commercial class with some urbanization

Political Power

centralized national government

Values rising spirit of progress and openness

(U.S. - early 1800s)

Models of DevelopmentRostow’s Modernization Model / Stages of DevelopmentStage 3: Takeoff

At this stage, industrial growth may be linked to primary industries. The level of technology required will be low. (image: diamond mine in Lesotho)

Models of DevelopmentRostow’s Modernization Model / Stages of DevelopmentStage 3: Takeoff

Economy -- rapid expansion of industry--surge of technology--commercial agriculture--number employed in agriculture declines

Society --increasingly dominant entrepreneurial class--some regional growth

Political Power

powerful groups encourage modernization

Values increased investment of capital for profit

(U.S. - 1850s)

Models of DevelopmentRostow’s Modernization Model / Stages of DevelopmentStage 4: Drive to maturity

As the economy matures, technology plays an increasing role in developing high value added products.(Image: Automotive plant using industrial robotics technology.)

Models of DevelopmentRostow’s Modernization Model / Stages of DevelopmentStage 4: Drive to

maturityEconomy -- technology extends to all sectors--labor-saving devices are made--growth becomes self-sustaining / wealth generation enables further investment

Society --urbanization--increased in skilled and professional workers

Political Power

industrial leaders are highly influential

Values --emphasis on technology--expectation of progress

(U.S. - late 1800s)

Models of DevelopmentRostow’s Modernization Model / Stages of DevelopmentStage 5: Age of Mass Consumption

Service industry dominates the economy -- banking, insurance, finance, marketing, entertainment, leisure and so on.


Stage 5: Age of Mass ConsumptionEconomy --high output levels

--more use and production of durable goods--service sector dominates (>50%)

Society --new middle class--shift to the suburbs--population growth stabilizes

Political Power

--social welfare-more resources for military and security

Values --increased acquisition of consumer goods

(U.S. early 1900s - present)

How can LDCs develop? Models of DevelopmentRostow’s Modernization Model / Stages of Developmentbased on economic structural change:

● investment● substitution of capital for labor● technology transfer● large-scale industrialization projects

(LDCs should follow model of economically powerful countries / European countries in order to develop.)

Models of DevelopmentRostow’s Modernization Model / Stages of DevelopmentExample: Four Asian Dragons(South Korea, Singapore, Taiwan, Hong Kong)

● former colonies or occupied territories● development by producing

manufactured goods with low labor costs

Models of DevelopmentRostow’s Modernization Model / Stages of DevelopmentExample: Petroleum-rich Arabian peninsula(Saudi Arabia, Kuwait, Bahrain, Oman, UAE)● 1970s - petroleum prices high● overnight transformation


Criticisms:● does not consider geographic differences● Western bias / assumptions of “progress”● requires infrastructure● does not consider global scale / effects of

other countries (global market, competition for resources)

● increased dependence on MDCs

Models of DevelopmentDependency School of Thought

EXPLANATION:● 1970s:

○ reality - few LDC’s progressing linearly from stage to stage as Rostow predicted

○ concerns with human welfare

● LDCs are limited by economic and political relationships with MDCs.

● International “division of labor”● inevitable result of capitalist drive?


EXPLANATION:● global economy creates structural

circumstances difficult for poorer regions to overcome○ ex: concentration of wealth in certain

areas, unequal relations between places

Poor countries face different obstacles than Western states of Rostow’s model, will not “modernize” in same way


Strategies to achieve development:

● small-scale and rural enterprises● import substitution (manufacture own

products)● nationalization


colonial origins

Models of DevelopmentDependency School of ThoughtCore-Periphery / World Systems Theory (Wallerstein)

coreperipherysemi-periphery


core processes● generate wealth in a place for

people within that place○ require higher levels of

education○ sophisticated technology○ higher wages, benefits

core regions● high socioeconomic prosperity● dominate world economy


peripheral processes● generate little wealth for people

within that place ○ lower levels of education○ lower salaries○ less technology

peripheral regions● poor● dependent on core


role of the semiperiphery ● region which practices

both core and peripheral processes

● buffer zone:exploited by core, exploits periphery○ more power than

periphery○ heavily influenced by

the core


Applicable at scales beyond the state (country)● within a region● within a state (country)● in a local area

Models of DevelopmentDependency School of ThoughtNeocolonialism

● Economy of LDCs controlled by MDCs.

● Global economy - this is difficult to overcome○ unequal distribution of resources○ unequal relations between places


Major differences from Modernization Model:

● sensitive to geographic context; does not assume that socioeconomic change will occur the same way in all places

● equal wealth not possible in capitalist global economy

● makes power relations between places explicit


Criticisms:● Offers causes but no solutions● Little hope for prosperity in LDCs● Little attention to geographic

differences

REVIEW

What is development?How is it measured?How did Rostow explain development?How do Dependency Theorists explain development?How did Wallerstein explain development?

What are the key differences between the Modernization and Dependency schools of thought?

Models of DevelopmentNeoliberalism

Origin post WWII - Decolonization wave → ● International bank loans to new countries● Formation of International Monetary Fund

(IMF) and World Bank

1980s - End of Cold War → ● international community used loans to

discourage state-owned industries, encourage free trade


Theory● Government intervention into markets

is inefficient and undesirable.

● Protectionism* and state-owned industries perpetuate dependency.

*protectionismimposing high tariffs on foreign goods to protect home grown industries

Models of DevelopmentNeoliberalismStrategies to achieve development

Loans → better infrastructure → more businesses → more taxes to repay loan

Structural adjustment loans have conditions attached to guide how the money should be used.

Models of DevelopmentNeoliberalismStrategies to achieve development

Two major lenders for international loans:● International Monetary Fund (IMF)● World Bank

○ International Bank for Reconstruction and Development (IBRD)

○ International Development Association (IDA)

Models of DevelopmentNeoliberalism Strategies to achieve development

Structural Adjustment Loan Examples: (“strings” / conditions attached to loans)● sell government-owned industries to the

private sector● free trade● allow own currency to devalue to make

exports attractive● health and education investment● government reforms● require better fiscal management● the type of projects allowed


Results -● Private ownership of services and

businesses● Economic globalization● Corporations control regions and states


Example: China

Mao Zedong●leader of 1949 Communist Revolution●“Great Leap Forward” (1958)

●agricultural communes●state owned factories

(“backyard” industry)Result: 20 million starve by 1962


Example: China● Mao’s successor: Deng Xiaoping

Capitalist reforms:● farmers can sell surplus ● encourages foreign investment● competition between state-owned

factories

Result: 2nd highest GDP in world after US,

GDP per capita = $5,400


Criticisms:● Infrastructure projects that are expensive

failures.● Large debts that can’t be repaid.

Models of DevelopmentSustainable Development

Theory: Progress should not come at the expense of future generations.Concerned with:

●climate●biodiversity●forests●pollution●resources

Models of DevelopmentSustainable Development

Requires New Indicators??

Ideas?

Models of DevelopmentSustainable DevelopmentStrategies to achieve development

Appropriate Technology

● looms● efficient stoves● clay-pot water

filters● composting

systems● bicycle rickshaws● paper strips for

disease testing

Not Appropriate

● oil-fired power plants

● infant formula● chain saws● combine

harvesters

Models of DevelopmentSustainable DevelopmentStrategies to achieve development

Fair Trade● protect workers - rights, safety, wages● protect producers - cooperatives for

loans● international standards

largest organization in North America:Ten Thousand Villages

Development Case Study: Jamaica. Development Case Study: Bangladesh.

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