7.5

The Rostow Stages of Economic Growth Model

  • Tradtional Society: limited tech, stati scoiety

  • Preconditions for Take-off:Commerical exploitation of agriculture and extractive industry

  • Take-off: Development of a manufacturing sector

  • Drive to maturity: Development of wider industrial and commercial base

  • High-mass consumption: Exploitation fo comparative advantages


Rostow Model Conditions:

  • Traditional societies are not necessarily the “starting pooint” (USA, Canada, Australia dn new Zealand were all beyond the “traditional stage” when they were officially created)

  • Stages tend to overlap/blend together (not very clear breaks between stages)

  • Countries can indeed go “backwards” (Russia slipping from mass consumption to a more transitory role in late 1990’s early 2000’s)

    • Model assumes linear/forward progress

  • Based on Western ideals and historical influence (assumes all countries WANT modenr, estern values/institutions)

  • Assumes that all countries will eventually adopt neoliberal (Wester-oriented capitalism) policies

  • Globalization has led to increased interdependence- some countries rely heavily on others for loans, investment, markets (commodity-dependent/export-oriented eocnomies); MODC’s rely on exploit LDC’s for raw materials


Wallerstein’s World Systems theory

*Reminder from Unit 4: the world is comprised of


Difference Wallterstein to Rostow

a) Change is not inevitable (some countries may stay LDC’s forever)

b) Core countries exploit periphery )dependent on cheap labor)

c)


Criticisms Wallterstein

  • In recent yearsm equite a few countries have made major “jumps” in advancement (China 1980-present; India=largest middle class int the world, etc.)

    • Did not account for globalization

    • NGO’s


Dependency theory (1960’s 1970’s)

  • resources flow from peripherla to core countries; these countries “depend” on the core as a market for their raw materials


Commodity Dependency Theory

  • Commodities=any economic (valuable) good that is seen as uniform

  • Cmmodity-dependent countries=any country whos total exports are at least 60% commodities

    • Typically at LDC’s (coffee, tea, oil/gas, etc.)

    • Most economic benefit goes to multinational coorporations (some producers earn only 1-5% of final makrket price)

  • Man concern=the over-reliance on simple commodities often leaves thes ecountries vulnerable to market condiitions (price changes)…”putting all of your eggs in one basket”

  • Drops in commodity proices can affect nealry all aspects of a simplified, non-diversified economic system