Development revision - the basics

Hello everyone - this is the first, of many to come, revision posts over the next few weeks, so enjoy!
Development Mindmap
Development Continuum
The development continuum is the contemporary way of viewing development; percieving it as a contiual process and recognising that it can occur in a number of different ways, not necessarily in the way the UK did, as outlined by the Rostow Model of Development. Ranking countries using HDI, a composite indicator, essentially the development continuum is a sliding scale from most to least developed with lots of intermediates such as RICs and NICs; meaning it illustrates the complexities that the Brandt Line fails to display. Therefore it also indicates the importance of the changing roles of countries such as the Asian Tigers, orginally LDCs who attracted TNCs and consequential cumulative causation accelerated development. Now they are mature NICs and their role in the global economy has changed and will change again as they continue to develop and the global shift moves. This idea has replaced older classification (like first, second, third world and MEDC/LEDC) as the use of LEDC and MEDC as discrete groups implied that all countries within that group are of the same development level, which is not the case, and subsequently the development continuum is more reflective of reality.

Gross National Product (GNP) = total value of goods and services for a country's companies at home and abroad
Gross National Income (GNI) = GDP plus or minus the interest and repayments on debt
Purchasing Power Parity (PPP) = measure of the value of the local currency
Gross Domestic Product (GDP) = total value of goods and services within a country (including foreign companies)
Issues with using GDP as a measure of development:
- Inequalities = in many LDCs wealth remains with a few and does not filter down through population
- Informal employment = in LDCs many work in informal employment, such as street vending, so money is exchaged without record
- Subsistence lifestyles = many farmers lead a subsistence lifestyle, so it is impossible to accurately measure income and population

Composite indicators vs Single Indicators
Development is the process of social and economic advancements that leads to improvements in peoples quality of life and general wellbeing, as such when trying to measure it, it is important to not only consider the economic indicators. This realisation, was one of the main driving forces behind moving away from first, second, third world classification and the Brandt Line, to the development continuum. HDI, for example, takes into account GDP using PPP, life expectancy at birth and educational attainment, thus considers several aspects of development. Therefore just because a country is rich, i.e Qatar which has a really high GDP, does not mean it scores highly on HDI, and vice versa as seen with Kerala which has a low GDP but would rank high on HDI. However, there is clearly often a positive correlation between GDP and HDI as countries with a high HDI can distribute funds to health care and education, subsequently raising life expectancy and educational attainment. Despite this, composite indicators make global comparisions a lot easier but some composites, like HPI, are subjective, meaning that it is a less accurate measure of development than solely using GDP. There are some advantages of using single indicators as they do not shroud individual measures and so, with regards to pinpointing what social and economic improvements are required for a country to develop, should also be taken into consideration when determining level of development.

Rostow Model of Development


Produced in 1960, this model can be used as a rough guide to development and, in conjunction with the Demographic Transition Model can be used to formulate population policies. Transitions between both models are very similar, illustrating the intrinsic link between population and development. Rostow suggeseted that all countries could break the viscious cycle of poverty and develop between this 5 stages. However, it is very eurocentric and underestimates the role of colonialism in early development of the 15 countries it is based on.

The Rostow Model of Development

The Rostow Model of Development was created in 1960 by an American, W.W.Rostow. He based the Model, which represents economic development, on 15 countries - most of which were European - and suggested that it was possible for all countries to break  the viscious cycle of poverty and develop through the 5 linear stages that construct his model.

Stage 1: TRADITIONAL SOCIETY
- A subsistence economy based on basic agriculture. The outputs are consumed by the producers instead of being exchanged and the only trade that exists is the barter/exchange of items required for living (not done for profit). Agriculture is crucial to daily life and the only industry that exists. The work is very labour intensive as there is very limited technology. Other than the land for food production there is very limited exploitation of raw materials and so the development of other industries and services is also restricted.
Stage 2: PRE-CONDITIONS FOR TAKE-OFF
- Agriculture starts to become more commercialised as mechanization occurs. Other industries start to emerge, although one will take dominance (this is usually textiles), and resources start to be exploited.  TNC's start to invest and this further provokes the development of industries. This investment is known as FDI = Foreign Direct Investment.
Stage 3: TAKE-OFF
- This stage is characterised by the dominating presence of the multiplier effect - also known as the Model of Cumulative Causation. Industrialisation increases and workers switch from working the land to working in factories thereby kick-starting the process of urbanisation. Political and social reforms and improvements occur in conjunction with the industrialization. Infrastructure continues to be developed but growth often remains only in a few regions in the country = growth poles.
Stage 4: DRIVE TO MATURITY
- Growth becomes self-sustaining as it is now supported by technological innovation. The population continues to grow and rapid urbanisation starts to occur. Earlier industries start to decline as manufacturing takes dominance and a wider range of industries develop. Economic growth becomes more evenly distributed throughout the country due to a process of filter through - this occurs via Cumulative Causation .
Stage 5: AGE OF HIGH MASS CONSUMPTION
- The initially exploitative industries move elsewhere and any remaining industries shift production to durable consumer goods. A rapid expansion of tertiary industry occurs.

One of the main shifts that occur as a country moves through the 5 stages of the Rostow Model of Development is within the employment sector and the changes that occur here reflect those that happen within industry.

Criticisms:
- The model is quite old (created in 1960) and, perhaps, oversimplified. Its age prevents it from taking into account new technologic and scientific advances that have accelerated developement.
- It is very Eurocentric and so perhaps reflects Westernisation more than it does development as all countries development differently and at different rates.
- The model makes the presumption that all countries start with the same foundations i.e have the same climate, amount of natural resources and same population size/structure and this is not in fact that case.
- Money is clearly needed for a country to move beyond stage 1 and often, knowadys, this money is provided via international aid. However, debt repayments often restrict further advancements - something which is not taken into account in the model.
- This model is based on the development of countries like the UK. Our development was, agruably, at the expense of others, through colonialism. This model underestimates the importance of colonialism in the early development of many of the nations it is based on.

Strengths:
- It provides a general path for development and splits this path into 5 stages. This enables countries to use it as a rough guide to development.
- To some extent all countries can be compared to it.
- It is easy to understand.
- In conjunction with the Demographic Transition Model, it can be used to generate population policies.