7.5 HGAP KBAR

Economic Development

The concept that emerged after WWII focusing on improving standards of living and economic growth.

Rostow’s Stages of Economic Growth

A model by economist Walter W. Rostow, consisting of five distinct phases of economic development.

Stage 1: Traditional Society

Characterized by subsistence agriculture and barter systems.

Stage 2: Pre-conditions for Take-off

Involves specialization, infrastructure development, and agricultural surplus.

Stage 3: Take-off

Marked by political change, industrialization, regional growth, and investments.

Stage 4: Drive to Maturity

Characterized by diversification, innovation, and reduced reliance on imports.

Stage 5: Age of High Mass Consumption

Reflects high levels of consumption, service sector growth, and durable goods availability.

Rostow’s Model Comparison

Compared to an airplane taking off, where economies gain altitude with progress through stages.

Criticism of Rostow’s Model

Assumes all countries develop independently, disregarding factors like imperialism and colonialism.

World System Model

Created by sociologist Immanuel Wallerstein, categorizing countries into core, semi-periphery, and periphery.

Core Countries

Industrially advanced nations such as North America, Japan, and Western Europe with significant global influence.

Periphery Countries

Less developed nations typically marginalized politically and economically, focusing on agriculture.

Semi-periphery Countries

Countries like Mexico, India, and Brazil that are transitioning toward more development.

International Division of Labour

Concept in World Systems Theory emphasizing interconnectedness and exploitation between core and periphery.

Dependency Theory

Suggests the periphery's poverty is a result of exploitation through imperialism and colonialism.

Commodity Dependency

Economic reliance on one primary export, leading to vulnerability and potential instability.

Example of Commodity Dependency

Venezuela's economy heavily relies on crude petroleum as its main export.

Cycle of Dependency

Profits from exports often reinvested in core countries, hampering local development efforts.

Solutions to Underdevelopment

Theories suggest unlinking the exploitative relationship between core and periphery.

Criticism of Dependency Theory

Oversimplifies complex issues, overlooking social and cultural variations influencing development.

Challenges in Unlinking

The process is complex due to globalization and the intricacies of modern economies.

Connections between underdevelopment and commodity dependency.

Leads to underdevelopment because of market price fluctuations, inability to predict revenues, and the decreasing value of commodities over time.