Mexico, Iran & Nigeria

NEWLY INDUSTRIALIZING & LESS DEVELOPED

COUNTRIES

Mexico & Iran

Both countries have experienced rapid economic and political change that has transformed each country into a stable nation with democratizing political institutions, a

growing economy, and an expanding web of nongovernment institutions. Compressed Modernity Expanded Civil Society Economic Liberalization

NEWLY INDUSTIALIZING

Economic Liberalization: expanding private ownership of property & allowing free-market principles to govern the

economy.

Gross National Product (GNP) : the total market value of all goods and services produced in the county.

Per Capita Gross National Product: divides the total market value of all goods and services produced by the population

of the country.

Purchasing Power Parity (PPP): statistical tool to estimate the buying power of income across different countries by

using prices in the U.S. as a benchmark. (generally a better indicator than GNP)

ECONOMIC DEVELOPMENT

UK

Mexico

Russia

China

$0 $10,000 $20,000 $30,000 $40,000

Column1Column2Series 1

PPP COUNTRY COMPARISONS

The Primary Sector (agriculture, raising animals, fishing forestry, mining):

The part of the economy that draws raw materials out of the natural environment. The primary sector is largest in

low-income, pre-industrialized countries.

The Secondary Sector (Industry, refining petroleum, turning metals into tools & cars, etc.): This part of the economy transforms raw materials into manufactured goods. As a

country’s secondary sector grows, its population migrates from rural to urban area to take advantage of jobs created

by industrialization.

The Tertiary Sector (Service, construction, trade, finance, real estate, private services, government, transportation):

This sector grows with industrialization, and comes to dominate post-industrial societes.

ECONOMIC SECTORS

Country Primary Sector

Secondary Sector

Tertiary Sector

China 34.8% 29.5% 35.7%

Iran 25% 31% 45%

Mexico 13.7% 23.4% 62.9%

Nigeria 70% 10% 20%

Russia 7.9% 27.4% 64.7%

UK 1.4% 18.2% 80.4%

COMPARATIVE ECONOMIC SECTORS

Nigeria represents the Less Developed Country category of this class. Most of the world’s counties fall into this category.

Their lack of economic development is explained by their condition of neocolonialism.

Neocolonialism describes and unequal relationship in a world in which new indirect forms of imperialism are at play.

Two conflicting political theories try to answer the question:

Why do LDCs fail to economically develop at a sustainable rate?

• Westernization (modernization) Model• Dependency Theory

• Most political scientists today don’t adhere to one theory or the other, put take a pluralistic approach, combining aspects

of both.

LESS DEVELOPED COUNTRIES

(LDC)

Britain was the first country to develop its industry Industrial Revolution spurred prosperity, trade, inventions, and the development of natural resources

This British model to spread to other European nations and the US., and they too prospered.

Westernization Model theory suggests that countries should study the paths taken by industrialized countries

and “westernize” in order to become economically prosperous

According to this model, LDCs are held back because they hold on to old traditions, values, and beliefs that

hinder progress.

WESTERNIZATION MODEL

In contrast to the Western Model, the Dependency Theory suggests that LDCs don’t develop economically

because they are exploited by the industrialized countries.

A handful of prosperous countries control many of the natural and human resources of LDCs.

Outgrowth of Marxism, which emphasizes exploitation of one social class by the other.

Problems can be solved by westernization, but LDCs must gain independence first.

Many LDCs, in response to this theory, experiment with different forms of socialism, in hopes that by

nationalizing industry, they might reduce the gap between rich and poor.

DEPENDENCY THEORY

Two economic policies have been applied throughout the less developed world, in hopes of jump starting their

economies:

Import substitution: LDCs must develop local industries first, and restrict imports by setting quotas or

imposing heavy import taxes. If people have to buy locally, demand will stimulate domestic growth in the

business sector. Eventually, these businesses will be able to compete in the international market because they will have developed the capital and infrastructure necessary for success. Beginning in the 1930s, import substitution was used widely in Latin American and later in parts of

Africa and Asia.

ECONOMIC POLICIES OF THE LESS DEVELOPED WORLD: IMPORT

SUBSTITUTION

Export-Oriented Industrialization seeks to directly integrate the country’s economy into the global economy

by concentrating on economic production for international markets.

“Asian Tigers” (Hong Kong, South Korea, Taiwan, and Singapore) embraced this strategy in the 1960s and saw

economic success. “Product Life Cycle” -innovator produces something new

-next, the country moves to other innovations- finally, another country produces the first product cheaper and

sells it back to the first innovator. Asian countries have particularly benefited from this

strategy.

EXPORT-ORIENTED INDUSTRIALIZATION

Democratization: the process of developing a political system in which power is exercised either directly or indirectly by the people.

Political liberalization: when a state progresses from a procedural democracy to a substantive democracy through democratic

consolidation.

“Hybrid Regimes”: states that have some characteristics of democracy, but in many ways are still authoritarian regimes.

Failed State: A situation in which the very structure of the state may become so weak that it collapses, resulting in anarchy and violence,

with a complete breakdown of order.

Somalia is a clear example of a failed state.

Nigeria is the weakest state of the countries we will cover, although they are not a failed state. The do, however, suffer from economic

stagnation, regional rebellions, and government corruption.

POLITICAL DEVELOPMENT