Lecture 17: Development problems

Question 1

Changing division of labour

Answer 1

Colin Clark (1940) outlined phases of economic progress:
* Agriculture → Industry (Engel’s Law: as income rises, share of spending on food falls)
* Industry → Services (productivity gains in industry shift employment to services)
Development “triangle” peak: ~25% agriculture, 25% industry, 50% services (“tertiarisation”)

Rostow’s Stages of Economic Growth
1. Traditional Society: Subsistence agriculture, limited technology
2. Preconditions for Take-off: Investment ≈5% GDP, infrastructure build-out, export cash-crops
3. Take-off: Investment >10% GDP, manufacturing emerges
4. Drive to Maturity: Broad-based growth across sectors, declining inequality
5. High Mass Consumption: Welfare capitalism, mature consumer and service industries
Post-1970s additions: Neoliberal restructuring, Globalisation, Financialisation

Critiques of Clark & Rostow:
* Overly national-centric
* Ignores colonial histories and unequal core–periphery ties
* World Bank’s structural reforms mask ongoing dependence

Question 2

World-System Analysis

Answer 2

Wallerstein (1977): analyse the world-system, not individual states
* Core: high-tech, high-wages
* Periphery: low-tech, low-wages
* Semi-periphery: mixed roles
BRICS as emerging semi-periphery actors

Unequal Exchange
* Wage differentials shown via labour-time to purchase a car
* Root causes: productivity gaps, scale economies, education/health differences
* Outcomes: consumer expectations, social imperialism vs. repression

Imperialism in the World-System: core–periphery relations:
* Elite collaboration vs. popular repression
* Social imperialism (welfare to maintain order) shifting toward repression

Question 3

Problems with classical analysis of development

Answer 3

Problems with Clark and Rostow’s analyses:
US (UK) as a model for the rest of the world
* Wealth and growth are concentrating at the top of the social pyramid
* Successive crises of over-accumulation
* Unequal exchange and global imbalance
* Destruction of ecological systems

Question 4

Industrialisation and Urbanisation

Answer 4

• Import-Substitution Industrialisation (ISI) (closed-market; state-led; socialist leanings).
• Export-Oriented Industrialisation (EOI) (open-market; global integration; capitalist model).
• Classical EOI view: Leverage comparative advantage: export low-wage, resource-based goods → import light industry goods → move up to heavy industry.
• Ricardian comparative advantage: specialise in highest relative productivity; import other goods.
• Political-economic critique: capitalist investors deepen worker exploitation and extend markets across social classes.