Olivier Truong

Theory of Development

  • Modernization theory
    • all societies progress through similar stages of development
  • Dependency theory
    • resources flow from a periphery of poor and underdeveloped states to a core of wealthy states, enriching the later at the expense of the former
    • rejects modernization theory
    • contends that today's underdeveloped states are not primitive versions of developed countries but are unique in their own right
    • underdeveloped countries are not "behind" or "catching up", they are poor because they were integrated into the Western economic system as producers of raw materials and cheap labor and were denied the opportunity to compete with dominant states.
    • emphasize social indicators (life expectancy, education) over economic indicators (GDP)
  • Infant industry argument
    • economic rational for trade protectionism
    • nascent industries at home do not have the economics of scale of mature competitors in other countries
    • Pros
      • many countries have successfully industrialized behind tariff barriers, including the USA.
    • Cons
      • Can be abused by rent seeking interests
        • Rent seeking: increasing one's share of existing wealth without creating new wealth
      • Draws retaliatory barriers on exports from other countries, in turn, hurting that industry instead of helping it
  • Post-development theory
    • Critique that questions concept of underdeveloped vs developed nations
    • Western lifestyle may not be the desirable end state for the world's population
    • Concern around loss of culture and