TallisA2units - Home



Why are some countries less developed? Part 1

The Theory

The scale of global poverty is immense. The World Bank has estimated that 1.25 billion people live on less than US$1 per day (extreme poverty), and some 2.8 billion people live on less than US$2 per day (moderate poverty) (Smith, 2005). However, this poverty is not distributed equally and some parts of different countries have higher concentrations, at the same time as some countries and regions having higher levels of poverty than others: in 2001 48% of the population of the continent of Africa lived in extreme poverty – the highest incidence in the world.

There are many theories and frameworks to explain the gap in development and thus the causes of poverty. Two of the most significant are Modernisation Theory and Dependency Theory.

|Modernisation Theory |

|Modernisation theory is based around a model of economic development drawn up by WW Rostow |[pic] |

|in 1960. It was model that showed 5 stages that countries had to go through to reach a | |

|higher level of development. The model gave rise to an approach which saw investment in | |

|capital as an important part of moving from Stage 2 (preconditions) into Stages 3 (take-off)| |

|and 4 (drive to maturity). As such approaches to development based on this theory at the | |

|time, focussed on top-down large scale infrastructure projects which sought to put in place | |

|the missing elements of development from LEDCs and LLEDCs. | |

| | |

|Pros: | |

|A very simple model which places the growth of the economy at the centre of the development | |

|process. | |

| | |

|Cons: | |

|Based on European and North American economies and so does not apply to every country or | |

|context. Did not recognise inequalities in access to the means to develop, nor that fact | |

|that the relationships between countries might actually contribute to the level of | |

|development in different places. | |

|Does not consider the environmental and social implications of economic development. | |

|Dependency Theory |

|Dependency Theory was developed by academics such as the Marxist Theorist Andre Gunder |[pic] |

|Frank and the world systems theorist Wallerstein. They were troubled by the fact that | |

|economic growth in the advanced industrialized countries did not necessarily lead to growth| |

|in the poorer countries. Indeed, their studies suggested that economic activity in the | |

|richer countries often led to serious economic problems in the poorer countries. Such a | |

|possibility was not predicted by neoclassical theory, which had assumed that economic | |

|growth was beneficial to all even if the benefits were not always equally shared. | |

| | |

|Within Dependency theory the notion of the core and periphery is central as it sees | |

|relationships between them as being the source of underdevelopment in the less developed | |

|world. Historical relations created the dependency of poorer countries through processes | |

|such as colonialism. Today, the operation of ‘free trade’ re-creates this power | |

|relationship, as well as the ‘digital divide’ and inequalities in access to media and | |

|technology. Central premises of the theory include: | |

| | |

|Poor nations provide natural resources, cheap labour, a destination for obsolete | |

|technology, and markets to the wealthy nations, without which the latter could not have the| |

|standard of living they enjoy. | |

|Wealthy nations actively perpetuate a state of dependence by various means. This influence | |

|may be multifaceted, involving economics, media control, politics, banking and finance, | |

|education, culture and sport and all aspects of human resource development. | |

|Wealthy nations actively counter attempts by dependent nations to resist their influences | |

|by means of economic sanctions and/or the use of military force. | |

| | |

| |Pros: |

| |Recognises the development is not inevitable and that the |

| |relationships between countries help to create the development gap. |

| | |

| |Cons: |

| |Does not fully explain the rapid economic development of the NICs, |

| |RICs and BRICs. |

| |Does not consider the environmental implications of economic |

| |development. |

|This theory suggests that countries can climb the ladder to economic development |This theory suggests that it is the relationship between different countries over|

|by putting in place the infrastructure and by training and educating its |time that contribute to the level of development, and specifically the gap |

|workforce to prepare it for economic take-off. |between more and less wealthy nations. |

|History shows that through colonialism some less developed countries were used by|Some countries have recently demonstrated that the steps to higher economic |

|more developed nations as sources of raw materials and labour. This set in |development can be put in place and result in a high level of economic growth and|

|motion a series of economic and political relations that meant the less developed|rising levels of prosperity. |

|countries became dependent on the more developed ones. | |

|An important part of dependency theory is the concept of the International |These relationships create a situation where the development of MEDCS actively |

|Division of Labour based on countries specialising in particular economic |promotes the underdevelopment of LEDCs and LLEDCs. The value of products, goods |

|activities based on their comparative advantage. This is why tertiary and |and services is often added in MEDCs, resulting in less wealth and prosperity |

|secondary activities are concentrated in MEDCs, NICs and RICs. |flowing back to less developed countries. |

|Depending on a country’s resources, population and history it will have a |These unequal power relations create a situation where a more developed core |

|different comparative advantage over others. Countries can move to a higher |grows at the expense of less developed periphery. For every US$1 of Aid that |

|level of development by specialising in those economic activities and sectors in |more developed countries donate to less developed ones, US$9 flows back to more |

|which it has a comparative advantage. |developed countries through the repayment of debt (loans). |

|Since the 1970s India has undergone rapid economic growth with its economy |Under this International Division of Labour, the economies of less and least |

|growing at between 7-10% per annum. At the same time living standards have |developed countries are dominated by primary activities, and have a large |

|improved. For example in 1981 42.6% of the population earned less than US$1 a |proportion of people engaged in subsistence agriculture. |

|day, and this fell to 24.6% in 2005. | |

|This specialisation means that the value is added|[pic] |China’s recent economic development illustrates that by specialising in its major|

|to products in more developed countries. Take | |comparative advantage – a large pool of labour willing to work flexibly – that it|

|the banana trade which is a fruit grown in LEDCs | |can experience rapid rates of economic growth. Since 1980 the Chinese economy |

|but consumed in many MEDCs. Retailers get 40% of| |has grown at around 10% each year, with the average income in the country |

|the price paid at the till, while the plantation | |maintaining 8% growth per annum in the same period. |

|owner gets 10%, and the labourer 1.5%. This | | |

|inequality helps to recreate the development gap.| | |

|Since the 1990s the Indian government has invested large sums of money into |In response to the Debt Crisis where LEDCs and LLEDCs owe millions of dollars to |

|education (including Higher Education), producing a more skilled labour force. |banks in MEDCs, the IMF has imposed Structural Adjustment Programmes (SAPs) which|

|It has also reduced the rules and regulations governing companies, and made it |are designed to ensure debt is repaid. However, they involve cuts in public |

|easier for both Indian and Foreign investors to set up and run businesses. |spending, and have seen investment in health, education and infrastructure |

| |projects be cut in many LEDCs and LLEDCs. |

|The debt crisis is a serious barrier to the future economic development of LEDCs |There is considerable income inequality and poverty still in India – the benefits|

|and LLEDCs. The poorest 48 countries have debts totalling US$222 billion, whilst|of economic development have not been shared out equally. 78% of the population |

|the poorest 128 countries have debts of US$3.4 trillion. Repaying this debt and |still live on less than US$2.50 a day, and 41.6% live on less than US$1.25. WHO |

|the SAPs imposed by the IMF are both a drain and a barrier to the future economic|estimates indicate that 50% of Indian children are malnourished, and only 209 out|

|development of poorer nations; in 2007 the poorest 48 countries paid US$34 |3119 towns/cities have partial water treatment facilities. |

|million a day in debt services payments. | |

Thinking Challenge – Interpreting Images and Diagrams

Study the cartoon below really carefully.

1. What barriers does this cartoon indicate there are to some countries becoming more developed?

2. For two of the barriers you have listed explain how they could prevent some places from becoming more developed.

3. Draw up a table of the evidence that supports this message and any evidence you know of the contradicts it.

|There are barriers to some countries becoming more developed (supports the |These barriers can be overcome and countries can become more developed |

|cartoon’s message). |(contradicts the cartoon’s message). |

|Evidence |Evidence |

4. Write a structured and extended answer to assess the validity of the cartoon’s message.

5. What would you do to overcome some of the barriers to economic development? Explain 4 or 5 strategies that you would recommend, how they would work, and how they might work together to promote sustainable development.

-----------------------

[pic]

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download