Top Down Approaches to Development

Top Down Approaches to Development

1. Modernisation

   • Post WW2
     • Wealthy nations recognised responsibility to undeveloped nations to reduce global inequalities
     • Encourage improvements of LEDCs through investment and industrialisation
   • Rostow's
     • 1. traditional society. 2. preconditions for take of 3. take off 4. drive to maturity 5. high mass consumption
     • Take of stage leads to FDI
     • BUT- cant be applied to all countries as some are developing in different points in the worlds economy
     • BUT- can lead to explotation
   • Taiwan
     • was an LEDC agricultural economy
       • Land Reforms, given to Taiwanese farmers
     • FDI From USA
       • 50s/60s 30% from USA
     • manufacturing boom e.g. Barbie boom for US company Mantel
     • consumer electrical goods
     • MEDC
     • Benifits
       • more education
       • multiplier effect
       • poverty rate cut by 50% in 10 years from 1960
         • near 0%
       • FDI lead to wealth and democracy
       • development of own TNCs
     • Negatives
       • one of the most populated places on earth
       • 1 factory per KM squared
   • Dams
     • Konya Dam
       • 1963
       • 100,000 people displaced
       • more than 40% of people displaced from tribal groups
     • Mekong Rover
       • 82% of Cambodia's protein intake from fisheries
         • 25% of Cambodia's economy reliant on fish
       • 65 million reliant on river for income
       • destroy eco-tourism
       • 42 species likely to became extinct
     • Negatives
       • average cost overrun of 90%
       • debt in developing countries
       • take 8.6 years to build
   • Positives
     • government not community experts
     • to political
     • deterministic
     • ignores social and economic problems in the societies
     • Assumes all barriers to development are internal
     • creates inequalities

2. Neoliberalism

   • What is it...?
     • Free Trade
     • no governmental interference, the removal of trade barriers
     • The market delivers development
     • associated with the privatisation of services
     • competition will provide the best services
   • Water Privatisation Dar-es-salaam
     • fewer than 100,000 households have access to cities water supply
     • Water availability gong up, prices going down
     • Bi water said that the DFID had done a report but they said they hadnt
     • WB says its a contractual failure not a practical one
     • WB made it a condition of debt relief and then of a loan
     • outcome
       • 2005 contract cancelled
       • Bi-water ordered to pay $8 million in damages
   • Telecoms India
     • Before privatisation, government run BSNL
       • incapable infrastructure
     • privatised 1991
     • Why?
       • Fosters competition
       • forces firms to invest in technology
       • Can broaden distribution of wealth
       • FDI
     • Benifits
       • service sector contributed 59% to the Indian GDP in 2010
       • economic growth makes it more affordable over time
       • Teledensity: 18.3% 2007, 67% 2011
         • FDI
         • modernise technology and infrastructure
         • Access to information and services
     • Costs
       • corruption 1996
       • Indias costumers expected to pay nearly $20 billion
     • M-Pesa
       • withdraw and deposit money without a bank
       • encourage business start ups
   • Hindustan Lever Limited Lifebuoy Soap
     • E.g. how private firms can sometimes do better than aid agiencies