SUMMARY: CLASSIC THEORIES OF ECONOMIC GROWTH & DEVELOPMENT

CLASSIC THEORIES, VARIABLES/COMPONENTS OF ECONOMIC GROWTH

4 APPROACHES MODELS AND AND DEVELOPMENT
APPROACHES (or vice-versa)
Rostow’s Linear Stages 5 stages: Traditional, Pre-conditions for Take-off, Take-off,
Model Drive to Maturity, Age of High Mass Consumption
Linear Stages of Growth Model
Harrod-Domar Growth Domestic and foreign savings, capital and output
Model
Lewis Theory of Investment in urban areas increases demand for rural labor
Development
Characterized by shift from agricultural to industrial
Patterns of Structural Change
Chenery Patterns of production, accumulation of physical and human capital,
Development change in consumer demands, growth of cities, decline in
family size and general population
Neo-classical Unequal power relationship
Dependence Model
International-Dependence Capitalistic austerity measures
False Paradigm
Revolution Reliance on WB, IMF and other international donors
Dualistic Development Dualistic pattern of development
Model
Reliance on the role of markets and limited government
Free Market Approach
involvement in economic activities
Neoclassical, Free Market
Public Choice Approach Democratic system
Counterrevolution
Government has key role in facilitating market operations
Market-friendly Approach
through non-selective interventions