Approaches To Development

1. Approaches to development
We are thinking in general terms here but it is
worth remembering key geographical concepts of
scale and place.

2. “Top down” “trickle down” Approach
Proponents of the “trickle down” approach would argue that richer
individuals and larger companies are the driving force behind economic
growth. The wealth created by the more successful parts of the economy
and more successful people will naturally trickle down and benefit
everyone.
Therefore the country should focus on ensuring the right environment for
the rich and the larger companies to thrive. Low taxation and lack of
regulation.
“Top down” approach tends to centralise decision making and is often
linked to development through large scale “prestige” projects.

4. Growth Pole Approach
Development of a core region or growth pole.
Leading to spread effects benefiting the country as a whole.
Growth Pole – Could be planned or unplanned. Development of a specific
location through agglomeration. (Special Enterprise Zones in China)
Propulsive Industry – Industries which
can stimulate growth. Ship building,
Automobile, Hi tech.

5. “Bottom up” “Grass roots” development
The aim is to lift people out of poverty by helping them directly. Helping them
to help themselves.
Local involvement in the decision making process. Identifying their needs and
deciding on the most effective solution. Use of appropriate technology.
Generally long term aims of sustainability.
Sanitation and water supply, improved farming through use of appropriate
technology, education, health care improvements and family planning,
development of local industries and businesses through micro loans and the
reduction in bureaucracy, improved marketing and access to markets, land
and property rights, access to enabling technologies such as the Internet and
mobile phones.
Countless examples of this approach throughout the world. Watch the
Millennium village documentary on Sauri in Kenya

7. Fair Trade
An approach which joins consumers in richer countries with producers in
poorer countries and creates a fair trading relationship. Started in the late
1980s Max Havelaar.
The basic component is producers are paid a “fair price” for what they
produce. But also there is a long term trading agreement and rules relating to
worker conditions and environmental impact.
Coffee and cocoa have been the main products with fair trade options
available to consumers but now there are a wide variety of fair trade products
with increasing market share.
The overall share of fair trade compared to traditional trade is tiny.

9. Regional development
Focus on developing the peripheral regions of the country. Attempting
to reduce the regional disparities which develop from an uneven
development of the core and periphery.
Linked to attempting to reduce rural to urban migration, particularly to
the primate city of the core.
Often investment in improving infrastructure particularly transport and
communications to link the region more with the core.
This approach has been very popular in Europe and is a major part of
the EU budget. Particularly in regions which have suffered from
industrial decline or countries such as Ireland, Portugal and Greece.

10. Export led growth
Economic growth through the production and export of products which the
country has a comparative advantage at producing.
Approach adopted by many East and South-East Asian countries particularly
successful in Taiwan where most of the enterprises were Taiwanese not
foreign owned.
There can be significant state involvement in the form of investment, subsidies
and protectionist measures.
Potential problem of dependency on key products and problems if export
markets drop.
Ivory Coast – Cocoa
China - GDP growth slow down because of USA recession
http://www.guardian.co.uk/business/2009/feb/02/china-unemployment-unrest

12. Import substitution
Production of products domestically instead of import of products. Subsidies
and protection of domestic industries from foreign competition and tariffs and
non-tariff barriers reducing imports.
This approach was adopted by many Latin American countries. Also USSR
and Warsaw Pact countries had to adopt this approach because of isolation
from the Global Economy.
Proponents of free trade argue that by following this approach the benefits of
free trade are lost and the country is wasting resources trying to produce
what it would be better off importing. The country should focus resources on
what it has a comparative advantage at producing.

13. Foreign Direct Investment
Encourage foreign companies to locate in the country to stimulate
economic growth. The foreign companies would provide the investment
the economy needs. Policy encouraged by the World Bank.
Particularly significant in extractive industries such as mining and oil
where the initial costs are very high. Eg Nigeria oil, Bolivia silver
Some protection of domestic industries needed. Just opening economy
to foreign competition will mean even profitable and sustainable
industries will be unable to survive in the initial periods.
High levels of FDI in China’s Special Enterprise Zones.

15. Keynesian economics v neo liberalism
Keynesian Economics – Use government spending on
the public sector and infrastructure to boost the economy
and provide jobs.
Neo-liberalism – Reduce government spending and
public sector of the economy. Increase the role of the
private sector and market forces.

16. Free Market v Interventionist
Free market viewpoint
Spread effects will eventually benefit peripheral regions.
Interventionist
Development in depressed regions needs to be stimulated by
government investment.

17. UN Millennium Development Goals
“The Millennium Project was commissioned by the United Nations Secretary-
General in 2002 to develop a concrete action plan for the world to achieve the
Millennium Development Goals by 2015 and to reverse the grinding poverty,
hunger and disease affecting billions of people.”

Goal 1: Eradicate Extreme Hunger and Poverty
Goal 2: Achieve Universal Primary Education
Goal 3: Promote Gender Equality and Empower Women
Goal 4: Reduce Child Mortality
Goal 5: Improve Maternal Health
Goal 6: Combat HIV/AIDS, Malaria and other diseases
Goal 7: Ensure Environmental Sustainability
Goal 8: Develop a Global Partnership for Development
http://www.unmillenniumproject.org/index.htm