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Globalization and the Challenge of Development.docx

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Wilfrid Laurier University
Global Studies
Timothy Clark

Globalization and the Challenge of Development Progress and Poverty in Historical Perspective From Decolonization to Development  long decolonization (1947-1980): colonial reticence; cold war; and strength of independence movements o capitalist powers were worried many countries would become communist  Residual Colonialism: in 2012, the United Nations considered 16 territories territories with approximately 2 million inhabitants to be under colonial rule (doesn't include "commonwealths" like Puerto Rico) The Cold War and the "Discovery" of Development  Truman's 4 point speech in 1948: 1) Support UN; 2) Reconstruct Europe; 3) protect allies against Soviet agression; and...  “Fourth, we must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas. More than half the people of the world are living in conditions approaching misery. Their food is inadequate, they are victims of disease. Their economic life is primitive and stagnant. Their poverty is a handicap and a threat both to them and to more prosperous areas.” o most important o worried about them because of the cold war Competing Doctrines of Development  Modernization Theory (US/Britain) o economic modernization o savings, investment, and industry o problem with countries is they do not have equality  Latin American Structuralism (Raul Prebisch) o primary commodity dependence/terms-of-trade o problem is they are in a world division of labour which forces them into selling natural resources and they get trapped and overtime can't make manufactured goods o argues they should use the natural resources to make manufactured goods and sell those  Boom-Bust and income effects  boom-bust = as price of main export decreases, it worsens the economy  income effects = as world becomes richer, the prices of things such as coffees don't increase much but manufactured goods do o cost of things that underdeveloped countries buy from rich countries increase, but what they are selling don't  import-substitution industrialization (ISI) o need to produce the things they are importing  tariffs, quotas, and exchange rates, subsidies, and export promotion  idea was to make foreign goods so expensive that local goods become cheaper  ex: subsidies to help local businesses, and tariffs to make foreign goods more expensive Rostow's "Stages of Growth" Kuznets Curve (Simon Kuznets)  in preindustrial societies, inequality is low but economic development is also low, then as inequality increases economic development increases and then after a certain point inequality declines and economic development increases Modernization Theory vs. Latin American Structuralism  Simil
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