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Slide 1

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Economic development
Models and theories.…read more

Slide 2

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Vicious cycle of poverty (Nurkse 1957)
This model describes the problems that lack of capital pose,
but it doesn't offer any explanations or suggestions of how
to break the cycle.…read more

Slide 3

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Virtuous cycle of investment This cycle breaks the cycle of
Market development
Increasing productivity
Capital using
Increasing investment
Increasing real income
Increasing demand
Increased savings…read more

Slide 4

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Rostow's Model (1960)
Rostow's model is one
of the first to account
for economic growth and
it is probably the
simplest. It suggested
that country's had the
potential to break the
vicious cycle of
poverty and develop
through five linear
stages. His model is a
useful starting point
in describing and
development.…read more

Slide 5

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Criticisms of Rostow's model
It assumes (incorrectly) that all countries start at the
same `level'
Capital is needed to advance a country is normally in the
form of aid, meaning a country is dwarfed by debt which
delays countries reaching the take off phase
It is anglo-centric, based on the experience of North
America and Western Europe
It is aspatial and doesn't look at variations within a
country e.g N/S divide.…read more

Slide 6

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All developed countries
Clark's sector model
have moved on from
agricultural societies to
industrial and service
Clark's model shows this
transition, then form the
service sector to research
and innovation.
The change occurs as
success in one sector
creates surplus of capital
which is invested into new
industry and technology
for development.
However, the model is
purely descriptive and not
explanatory or evaluative
nor does it allow for
variation.…read more

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Slide 9

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Slide 10

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