Topic 3 - Todaro, Economic Development - Ch.3 (Wiscana AP)
Topic 3 - Todaro, Economic Development - Ch.3 (Wiscana AP)
References
Todaro, Michael P. and Stephen C. Smith. 2009. Economic Development (11th Edition). Boston: Pearson
Addison Wesley.
CHAPTER 3:
CLASSIC THEORIES OF ECONOMIC GROWTH AND DEVELOPMENT
This chapter explores the historical and intellectual evolution in scholarly thinking about how and why
development does or does not take place.
CLASSIC THEORIES OF ECONOMIC DEVELOPMENT : FOUR APPROACHES
The classic post-World War II literature on economic development has been dominated by four major strands
of thought:
1. The Linear Stages of Growth Model
Theorist of the 1950s and 1960s viewed the process of development as a series of successive stages of
economic growth which all countries must pass. Development became synonymous with rapid, aggregate
economic growth.
2. Theories and Patterns of Structural Change
Replacing the linear stages approach in 1970s, this strands of thought used modern economic theories and
statistical analysis to portray the internal process of structural change that a developing country must
undergo.
3. The International-Dependence Revolution
Dependence theories tended to emphasize external and internal institutional and political constraints on
economic development.
4. The Neoclassical, Free Market Counterrevolution
This thought, sometimes called as neoliberal, emphasized the beneficial role of free markets, open
economies, and the privatization of inefficient public enterprises.