Theories of Development

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A number of theories have been put forward to explain the widening development gap between developed and developing countries. They all focus on the ways in which disparities in wealth can occur in different social, economic and political systems.

Rostow

Some theories are based on the economic development experienced by western Europe and North America. One of the first was Rostow's model of economic development which argued that a country passes from underdevelopment to development through a series of stages of economic growth, similar to an aircraft taking off. In the 1960s Rostov believed that capital should be transferred from developing countries to assist development. However this does not take into account several important non-economic factors of development, such as high rates of population growth and political changes.

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Poverty cycle

Other theories have focused on underdevelopment, using poverty and social deprivation to explain the inequality between countries.

Less developed countries are trapped in a continuing cycle of poverty because of a lack of capital (money) and low incomes. However, this theory cannot account for the rapid economic emergence of countries such as China, India and South Korea. It also assumes that development takes place in isolation from other countries, and is free of global interactions. Furthermore, it does not take account of foreign aid or loans from international banks.

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Politics

Political models examine the impact of different philosophies on equality and development.

For example, Karl Marx believed that the capitalist free market economy caused exploitation and social inequality while communism, in which the state runs all key sectors of the economy, made the effects of development more suitable.

Rostow's model of development also has a political aspect. It is a model of capitalist society developing a high level of material wealth alongside economic growth.

Dependency

Guandar Frank's dependency theory of development suggested that developed countries, such as the USA, control and exploit less developed areas of the world. This produces a relationship of dominance and dependency possibly leading to poverty and underdevelopment in the less developed countries. One example is colonialism and its legacy.

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Core-periphery

The relationship between regions or countries is a key focus of the core-periphery theories. Friedman argued that beneficial effects can spread from developed core regions or countries to less developed, peripheral regions.

Myrdals model is similar except that spread effects are outweighed by backwash effects which favour the core regions. This widens the development gap. Many governments attempt to neutralise backwash effects with international aid or trade agreements.

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Globalisation

All these models illustrate that geographical disparities in wealth and development arise from different social, economic and political systems. More recent debates have focused on the effects of economic globalisation on development. Countries are becoming increasingly connected and interdependent at a global scale, in complex ways that are cheaper, faster and more efficient than previously. The main types of global flow that connect places around the world involve the movement of people, capital, technology, ideas and information.

Debt

One other factor needs to be identified in this search for explanation of the development gap: the debt crisis.

In the last 50 years, many poor countries have accepted loans from rich countries. Interest payments on the loans affect development as they put pressure on the already stretched financial situation of a country. Loans have to be repaid, plus interest, and some have strings attached.

For example, developed countries give trade loans to enable poorer countries to buy their products or services.

The debt crisis largely concerns the poorest countries, causing even more hardship to their people and preventing the development gap closinf