Development Economics

Semester 1, 2020-2021
 What we study in our last lecture?

• Harrod-Domar Growth Model

• Lewis Development Model

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Quiz
• What is Harrod-Domar Growth Model?
• The Lewis Development Model

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 What we will learn?

b. The Chenery model (patterns of development analysis)

The international dependence revolution theories
a. Neocolonial dependence model
b. The false paradigm model
c. The dualistic development thesis
The neoclassical free market counterrevolution theories
a. (challenging the statist model)
b. Free market approach
c. Public choice approach
d. Market friendly approach

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The Chenery model (patterns of development analysis)

Hollis B. Chenery

Suggest the pattern of development

• shift in production form
agriculture to industry and
services
• Accumulation of physical and
human capital
• shift to nonfood consumption and
investment, urbanization, and the
growth of trade as a share of GNP

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The Chenery model (patterns of development analysis)

Hollis B. Chenery

• Structural change focuses

on the sequential process
• Increased savings and
investment-necessary but
not sufficient condition
• Transition form a traditional
economic system to a
modern one
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The Chenery model (patterns of development analysis)

The empirical studies identified Hollis B. Chenery

several characteristics features of
economic development:
• Shift from agriculture to industrial
production
• Steady accumulation to physical
and human capital
• Change in consumer demands
• Increased urbanization
• Decline in family size
• Demographic transition

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To summarize, structural change analysis believe
that the "correct mis" of economic policies will
generate beneficial patterns of self-sustaining
growth

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The international dependence revolution
theories

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The international dependence revolution theories

The principal idea:

Third world countries are caught up in a
dependence and dominance relationship with
rich countries, and the rich countries either
intentionally or unintentionally contributes so
that this relationship perpetuates and the status
quo is maintained
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The international dependence revolution theories

Views development in terms

• International and domestic power relationship
• Institutional and structural economic rigidities and the resulting
creation of dual economic and dual societies both within and
among the nations of the world
• Focuses on the external and internal institutional and political
constraints on development
• The IDR model reject the exclusive emphasis on GNP growth rate as
the principal index of development.
• Emphasis on international power balance. And on fundamental
reform world-wide.
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The ideas that developed under the broad heading
of international-dependence revolution (more
commonly known as the dependency theories) can
be further classified in to the following 3 sub groups
a. Neocolonial dependence model
b. The false paradigm model
c. The dualistic development thesis
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The neocolonial dependence model

• Unequal power relationships

• Power Inequality

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The False-Paradigm Model
• Inappropriate advice provided by well-meaning but often
uninformed, biased, and ethnocentric international “expert”
advisers from developed-country assistance agencies and
multinational donor organizations.
• International experts are often uniformed., biased
• misleading models of development that often lead to inappropriate
or incorrect policies.
• Too much emphasis on quantitative measures while neglecting
institutional and structural factors that are though determinant for
the applicability of models

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The Dualistic-development thesis
• Existence and persistence of substantial and even increasing divergence
between rich and poor nations and rich and poor peoples on various levels
4 key arguments
• Elements of dualism are present between modern and traditional sector,
between rich and poor nations etc.
• This existence is chronic and not transitional.
• The degree of superiority have an inherent tendency to increase -> fail to
show any sign of diminishing
• The existence of superior elements does little or nothing to pull up the
inferior elements-> no trickle down effects

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The neoclassical counterrevolution

• A reaction was emerging in the late 1970s and early 1980s in the
form of a neoclassical free market counterrevolution.
• Favored supply side macroeconomics policies, rational expectations
theories, and the privatization of public corporations.
Divided into three component
• Free-market approach
• The public-choice approach
• Market-friendly approach

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Linear stages or growth theories
a. The Harrod Domar model
b. Rostow's. Stages of growth model
The structural change theories
a. The Lewis model (2 sector surplus labor model)
b. The Chenery model (patterns of development analysis)
The international dependence revolution theories
a. Neocolonial dependence model
b. The false paradigm model
c. The dualistic development thesis
The neoclassical free market counterrevolution theories
a. (challenging the statist model)
b. Free market approach
c. Public choice approach
d. Market friendly approach

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 Email: mjaved@wiut.uz
rachidjaved@gmail.com
@rachidjaved

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