Chapter 14, continued Theory Regarding Development Modernization Theory – rooted in work of Max Weber, Talcott Parsons, and Walter Rostow Dependency Theory.

Chapter 14, continuedTheory Regarding Development

• Modernization Theory – rooted in work of Max Weber, Talcott Parsons, and Walter Rostow

• Dependency Theory

• World-Systems Theories – Immanuel Wallerstein; core-periphery models: Gunnar Myrdal & John Friedmann

Every countrycan be positionedat one ofthese stages.

Rostow viewedcapitalismto be the proper type of productionsystem forthis developmentsequence.

Critics of modernizationtheory

Dependency Theory• Argues that the poor / periphery countries

remain this way due to colonialism, in which terms of trade were unequal, labor remained unskilled and low-paid, and profit was extracted from colonies

• Development of core countries is dependent on the underdevelopment of periphery countries

• Imports tend to be high-value goods from the core

• Policy to escape this “trap” has emphasized self-reliance, exclusion of TNC’s, promotion of import substitution, debt default

• Criticism of dependency theory – sweeping treatment of all peripheral territory

World Systems Theory: dynamic capitalist relations, hegemonic power

Better diagram than Fig. 14.33in current edition of textbook

Core-Periphery: Shifting ScalesGlobal: Nation State Level: Developed-Developing

Urban Perspective: Global Cities (New York, London, Tokyo) - peripheral cities - e.g. Seattle

National: The Industrial NE Vs. the agriculture &

resource dependent South and West

Regional: Seattle & Portland as central-place core cities, rural peripheries

Local: Seattle CBD Vs. lower order urban centers

The classic core-periphery model: Myrdal & Friedmann

Center Periphery

ScarceLabor

AbundantCapital

AbundantLabor

ScarceCapital

Supply of materials and products

Demands from center for goods/servicesyields payments to periphery

Shortage of labor in center createsstimulus for labor migration from periphery

Supply of labor from periphery will create laborshortage in periphery and raise wages and incomes

AdequateCapital

AdequateLabor

Capital flows to periphery

Core-periphery Model: Spread Effects

Demands by Center for goods & services; labor movements; capital flows to meet investment needs: ? “Trickle-Down” leading to equilibrium?

BUT:

(1) Distance attenuating effects - related to transportation & communications

(2) Hierarchical impacts with stronger access to resources in higher order places

Core-Periphery Model: Backwash/ Polarizing Effects Overtake Spread

Effects1. Goods/Service purchase in periphery

(a) inelastic demand for peripheral goods

(historically owned by core industrialists)

(b) Offset by peripheral demand for goods and services produced in the core

2. Migration: historically selective

3. Capital: net flows often favor the core

Result: Convergence, Divergence, Persistent Imbalance

Backwash Circuits

Capital attracted to center

Capital Investment

Young workersmigrate to center

Migration and Employment

Lack ofinvestment in periphery

Retarded growth inperiphery

WiderGapC-P

Aging labor force

in periphery

Decreasedattraction for new activity

Wider GapC-P

Services and InfrastructureReduced Investment

and new jobsin periphery

Smaller localmarket, pur-

chasing powerDecline inlocal services

Widened gapbetween C-P

Development Strategies

• Are based on the concept that developed countries can take actions that will help countries in the periphery

• Expansion of trade with less developed countries

• Private capital flows

• Foreign aid from advanced nations (Figure 14.34)

Industrialization in the Developing World

EastAsia?

Industrialization in the Developing World

• Very uneven – text notes 40 countries account for 70% of mfg. exports from developing countries. So, most countries have not shared deeply in this industrialization process

• Fastest growth in countries shifting from an import substitution to an export-led strategy

• Import substitution as a way of getting internal development – but markets are often too small & control often rests with foreign capitalists

• Export led development, fueled by low tariffs on imports of inputs & duty-free exports, subsidized infrastructure and physical space, tax holidays, and abundant low-wage labor

ManufacturingCenters inEast Asia

East Asian export processingAnd special economic Zones.

Also located in other countries

Much industrial capacity by Multinational corporationsWith operating systemsBetween locally owned firmsAnd foreign owned companies,Doing international subcontracting,Or outsourcing: Nike

Export-led Industrialization, cont.• Strong reliance on female labor in many of these

export platforms, especially in electronics• Sweatshops – often controlled by U.S.

corporations such as Wal-Mart—push suppliers to push down costs & keep wages low and work days long (Some companies impose work standards)

• East Asian Economic Miracle : education, high national savings, government support, land reform, export-focus, unique corporate institutions, U.S. development policy

Uneven Development in China

Not Per capita income

$8,300

$1240

$37,000

U.S. $37,691 IN 2011

India – Development Centers

Sustainable Development (1)

• The need for a new path• The Malthusian Dragon rears its head IF the

developing world “develops”• How to carve a sustainable development

trajectory?• What adjustments to the capitalist model are

needed?• Can the planet manage these adjustments?

Sustainable Development (2)• The process will involve “a shift away from

understandings of nature as a free good and a sink for wastes and toward the understanding that it is a public good and resource and toward anticipatory techniques of environmental policy making, new roles for science in policy, and new legislative and regulatory frameworks emphasizing risk and uncertainty.” p. 406

• This is a tall order: can the planet do it?