UNIT 2TOPIC 1: LINEAR MODEL
Rostow's model
At the end of the Second World War (1939-45) there was
a renewal of interest in the subject of development
economics and the stages of growth once again
preoccupied many scholars.
As anon-communist manifesto, W. W. Rostow’s stages of
economic growth (1960, 1971) is a foray into positioning
the sweep of modern economic history under capitalism
into neat and hopeful epochs. He argues that within a
society sequential economic step of modernization can be
identified.
These steps are linear and towards an evolutionary higher
development. Rostow’s model is a part of the Liberal
School of Economics, laying emphasis on the efficacy of
modern concepts of free trade and the ideas of Adam
Smith Rostow’s model summarizes economic growth of
countries into five different stages:
1. Traditional society
A traditional society is one of the simplest and primitive
forms of social organization. it is a society based on
primitive technology and primitive attitude towards the
physical World.
(a) Per Capita: there is limit to attainable output per head.
This limit arises due to the absence of access to modern
science and technology. there is a low ceiling per capita
output.
(b) Employment in Agriculture: A high proportion of
workforce (75% or more) are devoted in the production of
agricultural goods. High proportion of resources are also
devoted in the agricultural section.
(c) Social Mobility: A hierarchical, hereditary, statusoriented social structure in which there is little possibility
for vertical mobility.
d) Political Power: The center of gravity of political power
was localistic, region-bound and primarily based on land
ownership. The value system that prevails in such a
society is what Rostow calls a long-run fatalism. People of
these societies think that not much economic progress is
possible for them and for their future generations.
2. Preconditions for take off
★The covers a long period of a century or more during
which the preconditions for take-off are established. These
conditions mainly comprise fundamental changes in the
social, political and economic fields; for example, :
(a) A change in society’s attitudes towards science, risktaking and profit-earning
(b) The adaptability of the labor force
(c) Political sovereignty
(d) Development of a centralized tax system and financial
institutions
(e) The construction of certain economic and social
infrastructure like railways, ports, power generation and
educational institutions. India did some of these things in
the First Five Year plan period (1951-56).
★It is evident from above that in this second stage of
growth foundations for economic transformation are laid.
The people start using modern science and technology for
increasing productivity in both agriculture and industry and
start producing not just for consumption but for sale.
★Further, there is a change in the attitude of the people
who start viewing the world where there are possibilities of
future growth. A new class of entrepreneurs emerges in
the society homilies savings and undertake investment in
new enterprises and bear risks and uncertainty.
★The main focus of this stage is to ensure that investment
levels are above 5% of the national income depending on
various sectors of the economy.
★The pre-conditions of take-off closely track the historic
stages of the (initially) British Industrial Revolution.
3. Take Off
★The take-off stage marks the transition of the society
from a backward one to one that is on the verge of freeing
itself from the elements that retard growth. This is the
crucial stage which covers a relatively brief period of two
to three decades in which the economy transforms itself in
such a way that economic growth subsequently takes
place more or less automatically.
★Thus, the term “take-off” implies three things:
1)first the proportion of investment to national income
must rise from 5% to 10%and more
2) secondly, the period must be relatively short so
that it should show the characteristics of an economic
revolution
3) thirdly, it must culminate in self-sustaining and
self-generating economic growth.
★Thus, during the take-off stage, the desire to achieve
economic growth to raise the living standards dominates
the society. Revolutionary changes occur in both
agriculture and industry and productivity levels sharply
increase.
★There is greater urbanization and urban labor force
increases. In a relatively short period of a decade or two,
both the basic structure of the economy and social and
political structure is changed So that a self-sustaining
growth rate can be maintained.
★It is worth noting that in the opinion of Rostow, the rise of
new elite (i.e., new entrepreneurial class) and
establishment of a nation state are crucial for economic
development.
★Development of One Leading Sector: Development of
export industries has led to takeoff in some countries.
Example grains in USA, Canada and Russia, Timber in
Sweden. Sector or the sectors that led to take off were
varied according to countries. However, Rostow has
concluded that any industry can play the role of leading
sector in the take offstage that to be met with
4. Drive to maturity
This stage of economic growth occurs when the economy
becomes mature and is capable of generating self-
sustained growth. Generally, the Drive to Maturity starts
about 60 years after “Take Off “The rates of saving and
investment are of such a magnitude that economic
development becomes automatic. Overall capital per head
increases as the economy matures. The structure of the
economy changes increasingly.
(1) Emergence of New Industries: The initial key industries
which sparked the take-off decelerate. The average rate of
growth is maintained by a succession of new rapidlygrowing sectors with a new set of leading sectors.
Industries like heavy engineering, iron and steel,
chemicals, machine tools, agricultural implements,
automobiles etc. take the driver’s seat.
(2) Shift in the Occupational Distribution: Work force
composition in agriculture shifts from 75% of the working
population to 20%. The workers acquire greater skill and
their wages increase in real terms. Example: As
during Industrial Revolution many industries established in
Britain and the countries of. Western Europe, the work
force was shifted from agricultural sector to the
manufacturing sector. The proportion of the working force
engaged in the agricultural sector went down to 20% or
less.
(3) More skilled workers
(4) The character of leadership changes significantly in the
industries and a high degree of professionalism is
introduced
(5) Environmental and health cost of industrialization is
recognized and policy changes are Thomasena prime
example of a country in the Drive to Maturity stage is
South Africa. It is developing a world-class infrastructureincluding a modern transport network, widely available
energy, and sophisticated telecommunications facilities.
Additionally, the commercial farm sector shed140,000
jobs, a decline of roughly 20%, in the eleven-year period
from 1988 to 1998.
5. Age of high mass consumption
●In this stage of development per capita income of country
rises to such a high level that consumption basket of the
people increases beyond food, clothing and shelters to
articles of comforts and luxuries on a mass scale. Further,
with progressive industrialization antiurbanization of the
economy values of people change in favor of more
consumption of luxuries and high styles of living.
●New types of industries producing durable consumer
goods come into existence which satisfies the wants for
more consumption. These new industries producing
durable consumer goods become the new leading sectors
of economic growth.
●increase in employment in the service sectors and high
incomes
●
In this age of high mass consumption, the society is able
to choose between concentrating on military and security
issues, on equality and welfare issues or developing
luxuries for its upper-class.
Historically, the United States is said to have reached this
stage first, followed by other western European nations,
and then Japan in the 1950s.
Criticism of the model
1. Rostow is historical in the sense that the end result is
known at the outset and is derived from the historical
geography of a developed, bureaucratic society.2. Rostow
is mechanical in the sense that the underlying motor of
change is not disclosed and therefore the stages become
little more than a classificatory system based on data from
developed countries.3. His model is based on American
and European history and defines the American norm of
high mass consumption as integral to the economic
development process of all industrializedsocieties.4. His
model assumes the inevitable adoption of Neoliberal trade
policies which allow the manufacturing base of a given
advanced polity to be relocated to lower-wage regions.5.
Rostow's model does not apply to the Asian and the
African countries as events in these countries are not
justified in any stage of his model. The stages are not
identifiable properly as the conditions of the take-off and
pre-take-off stage are very similar and also overlap.6.
According to Rostow growth becomes automatic by the
time it reaches the maturity stage but Kuznets asserts that
no growth can be automatic there is need for push always.
TOPIC 2: Non-Linear: World System Theory, Neo-Marxist
Theory
WORLD SYSTEMS THEORY
Modernization theory claimed that once developing
societies came into contact with western European and
North American societies, they would be impelled toward
modernization and, eventually, would achieve the
economic, political, and social features characteristic of
the nations of western Europe and the United States.
However, by the 1960s it was apparent that the Third
World was not passing through a stage of
underdevelopment, as envisioned by modernization
theory, but remaining underdeveloped. Thus, a
counterclaim was advanced—that developing countries
today are structurally different from the advanced
countries and so will have to develop along different lines.
This perspective formed the basis of what came to be
known as dependency theory. Dependency theory rejects
the limited national focus of modernization theory and
emphasizes the importance of understanding the
complexity of imperialism and its role in shaping
postcolonial states. World systems theory is a response to
the criticisms of Dependency Theory. World Systems
Theory was developed by Immanuel Wallerstein (1979).
Wallerstein accepts the fact ex-colonies are not doomed to
be forever trapped in a state of dependency; it is possible
for them to climb the economic ladder of development, as
many of them have done. However, he also believes that
the global capitalism system still requires some countries,
or at least regions within countries to be poor so they can
be exploited by the wealthy at the top. One must look at
the world system as a whole, rather than just at individual
countries. Dependency Theory tended to argue that
countries are poor because they used to be exploited by
other countries. However, focusing on countries (or
governments/ nation states) is the wrong level of analysis
– government today have declined in power, whereas
Corporations are more powerful than ever. Global
Corporations, and global capital, transcend national
boundaries, and nation states (even wealthy ones) are
relatively powerless to control them, thus in order to
understand why countries are rich or poor, we should be
looking at global economic institutions and corporations
rather than countries. Global Economic Institutions form
what Wallerstein calls a Modern World System, and all
countries, rich and poor alike are caught up in it.
According to the world’s system theory, the entire world at
least since the 16th century, not merely a collection of
independent countries but as a
single capitalist world economy
based on an international division of labor among a core
that developed originally in northwestern Europe (England,
France, Holland), a periphery, and a semi periphery
consisting of core regions in decline (e.g., Portugal and
Spain) or peripheries attempting to improve their relative
position in the world economy (e.g., Italy, southern
Germany, and southern France).The division of labor
among these regions determined their relationship to each
other as well as their type of labor conditions and political
system. According to the world systems theory, the world
is divided into three types of countries or areas: core,
periphery, and semi-periphery.
Core Countries
Core countries are dominant capitalist countries that
exploit peripheral countries for labor and raw materials.
They are strong in military power and not dependent on
any one state or country. They serve the interests of the
economically powerful. They are focused on higher skill
and capital-intensive production. Core countries are
powerful, and this power allows them to pay lower prices
for raw goods and exploit cheap labor, which constantly
reinforces the unequal status between core and peripheral
countries. The first core region was located in
northwestern Europe and made up of England, France,
and Holland. Today, the United States is an example of a
core country. The U.S. has large amounts of capital, and
its labor forces are relatively well paid.
Periphery Countries
Periphery countries fall on the other end of the economic
scale. These countries lack a strong central government
and may be controlled by other states. These countries
export raw materials to the core countries, and they are
dependent on core countries for capital and have
underdeveloped industry. These countries also have lowskill, labor-intensive production, or, another words, cheap
labor. Periphery countries are commonly also referred to
as third-world countries. Eastern Europe and Latin
America were the first peripheral zones. An example from
today is Cape Verde, a chain of islands off the west coast
of Africa. Foreign investors promote the extraction of raw
materials and the production of cash crops, which are all
exported to core countries.
Semi-Periphery Countries
Semi-periphery countries fall in the middle of the economic
spectrum. These countries share characteristics of both
core and periphery countries. These are core regions in
decline or periphery regions attempting to improve their
economic position. These countries are sometimes
exploited by core countries, but they also may exploit
periphery countries themselves. For example, India is
largely dependent on core countries for capital, but India
has a growing technology industry and an emerging
consumer market. Dependency and world systems
theories share a common emphasis on global analysis
and similar assumptions about the nature of the
international system and its impact on national
development in different parts of the world, but they tend
to emphasize different political dynamics. Dependency
theorists tend to focus on the power of transnational
classes and class
structures in sustaining the global economy, whereas
world systems analysts tended to focus on the role of
powerful states and the interstate system
TOPIC 3: Changing Paradigms of Development
An important change that happens when the usual way of
thinking or doing something is replaced by a new and
different way. This discovery will bring about a paradigm
shift in our understanding. Paradigm: the way
you see something, your point of view, frame of reference
or belief. The western model for development
predominated in 1950s and 1960s. The modernization
paradigm arose soon after World War II, in 1949. It
envisioned development as a challenge to bring the
"underdeveloped countries" out of their conditions of
poverty by modernizing them and by free-market
approaches. In this context, the modernization paradigm
promoted by political scientists and scholars of Western
countries became so strong and so pervasive in every
dimension of social life that it became also known as the
"dominant paradigm. “Modernization theory claimed that
once developing societies came into contact with western
European and North American societies, they would be
impelled toward modernization and, eventually, would
achieve the economic, political, and social features
characteristic of the nations of western Europe and the
United States. However, by the 1960s it was apparent that
the Third World was not passing through a stage of
underdevelopment, as envisioned by modernization
theory, but remaining underdeveloped. Thus, a
counterclaim was advanced—that developing countries
today are structurally different from the advanced
countries and so will have to develop along different lines.
Modernization paradigm failed to materialize, approach
focusing on people’s participation began to emerge. This
participatory model is less oriented to the politicaleconomic dimension and more rooted in the cultural
realities of development. The development focus has
shifted from economic growth to include other social
dimensions needed to ensure meaningful results in the
long run The alternative paradigm emphasizes not only
material development but also the development of values
and cultures, grassroots participation reinforces the
chances that communities will adopt activities appropriate
for them.
TOPIC 4: Alternative Paradigms: Participatory, Think
local/Act global -Think global/Act local
This approach adopted in the 1990s by the United Nations
and other development organizations as key challenges to
be addressed successfully. It is often presented as an
alternative to mainstream “top-down” development.
Participatory approach is a strategy that incorporates
themes or content area that are of interest to the
stakeholders. • The Participatory Approach is used as a
tool to provide solutions to social problems that impact
concerned in their daily life’s development programs had
failed to motivate people. •Since, they were interested in
persuading them about the benefits of adopting certain
innovations. Development programs tried to bring foreign
concepts, to feed information, to force local populations to
accept Western ideas and practices without considering
whether these practices fit existing cultures. This
suggested a human-centered approach that valued the
importance of interpersonal channels of communication in
decision-making processes at the community
level. •PARTICIPATORY COMMUNICATION approach
capable of facilitating people's involvement indecision
making about issues impacting their lives. The basic
Common features of this perspective are the emphasis on
people, the endogenous vision of development, and the
attention to power and rights issues. Participatory
approaches require a shift in the way individuals are
considered, from passive recipients to active agents of
development efforts. idea of such programs was an
authoritarian concept. In addition to poverty reduction,
they include objectives in education, gender equality, and
health issues. Most development priorities are outlined
within political frameworks based on the adherence to
good governance and democratic principles (for example,
freedom and human rights. The participation is not an
absolute concept, and that it can be applied in different
degrees, is part of the problem. A typology that includes
seven different types of participation as interpreted and
applied by various development organizations, The full
categorization, the least participatory,1)
passive participation,2)
participation in information giving,3) participation by
consultation,4) participation for material incentives,
5)functional participation,6)interactive
participation, and7 ) s e l f - m o b i l i z a t i o n . (1) passive
participation, when stakeholders attend meetings to be
informed;(2) participation by consultation, when
stakeholders are consulted but the decision making rests
in the hands of the experts;(3) functional participation,
when stakeholders are allowed to have some input,
although not necessarily from the beginning of the process
and not in equal partnership; and(4) empowered
participation, when relevant stakeholders take part
throughout the whole cycle of the development initiative
and have an equal influence on the decision-making
process. Information sharing and consultation are
considered low-level forms of participation, while the other
two are considered high-level forms. These types are
consistent with others, such as declassification particular,
participatory research methods allowed a growing role for
local stakeholders and indigenous knowledge in the
problem-analysis and problem-solving processes of
development initiatives. The process of raising questions
and engaging in dialogue stimulates(inspires) “critical
consciousness,” which enables the shift to action (Freire,
1970). This is a bottom-up approach, that involves
extensive discussions, conversations, and decisionmaking with the target community. This process
is facilitated with information and communication
technology (ICT) with the goal of strengthening individual
& social development• This participatory content creation
is an important tool for resolving problems and creating a
digitally advanced knowledge society • Public should
be involved fully in the policy process in that authorities
seek public views and participation, instead of treating the
public as simply passive recipients of policy decisions.
Research conducted by several debt. agencies (World
Bank, CIDA (Community & Individual Development
Association), USAID (US Agency for International
development.), IRDP-Institute of Rural development
Planning) suggests that there are many benefits of PD. •
Studies suggest --PD projects may have high startup
costs, but they will be less expensive & more sustainable
in the long run • PD projects are effective at addressing
local needs & generally more relevant to local populations
than traditional development projects