Models of Development

Models of Development

1. MODERNIZATION THEORY

   • 5 step linear and oversimplified process
   • only one way/path of development
   • supports neo-liberal and capitalist policies
   • prioritizes investment and industrial output
   • favours economic trade and communication
   • believes benefits/ideas will filter down to less developed
   • started in 1960s
   • E.g) Japan's modern way of life exists in a non-Western society

2. DEPENDENCY THEORY

   • neo-marxist critique of modernization and capitalism
   • considers other factors, not just about economics
   • divides states into "core" and "periphery"
   • class distinctions promote dominance and exploitation
   • explains that underdeveloped countries couldn't copy Western nations since they were being exploited by them
   • started in 1970s-80s
   • E.g) When East India company was established in 1600, UK's GDP accounted for 1.8%, while India's accounted for 23%. By 1947, India's share decreased to 3% and UK's was around 9-10%. ​

3. WASHINGTON CONSENSUS

   • prioritizes economy over social and environmental wellbeing
   • standard set of policies
   • focus on free markets/trade
   • privatization of state enterprises
   • competitive exchange rates
   • redirect public expenditure and reform taxes
   • financial liberalization, non-intervention
   • E.g) Argentine economic crisis of 1999–2002 proved that the consensus didn't guarantee productive employment or the generation of real wealth

4. STATE CAPITALISM

   • state dominates markets for political gain
     • owns major corporations that compete internationally
   • sees market as a tool for serving national interests
   • uses market to extent political power
   • provides stable economic growth
   • can mobilize work force and huges resources quickly
   • E.g) China has trade links with 45 African countries

5. HUMAN DEVELOPMENT

   • E.g) The lowest quintile in a sample of the fifty-four countries in the 2005 Human Development Report had infant mortality rates twice as high as those found in the richest quintile
   • enlarging people's choices in a way that allows them to live longer and healthier
   • gain knowledge and a comfortable standard of living
   • prioritize people, power, choice, and freedom
   • achieved by either directly enhancing human abilities or creating conditions for developmment
     • argues that economic growth doesn't necessarily correlate to an improvement in standard of living
   • provides "social safety nets" for underprivileged parts of society

6. SUSTAINABLE DEVELOPMENT

   • E.g) Yemen's power grid project provides jobs for women and leads to new opportunities, but also cuts fossil fuel emissions
   • manage resources and protect environment while reducing poverty
   • meets needs of present without compromising future generations
   • states maintain themselves by reducing factors that threaten well-being
   • balance between social, economic, and environmental factors
   • challenged by poor governance and no respect for rule of law, financing, and instability