Theories of development in Economics

September 9, 2016
Psychology and Economics,Fall

Modernization theory is used to explain the process of modernization within societies. Modernization refers to a model of a progressive transition from a 'pre-modern' or 'traditional' to a 'modern' society. The theory looks at the internal factors of a country while assuming that, with assistance, "traditional" countries can be brought to development in the same manner more developed countries have. Modernization theory attempts to identify the social variables that contribute to social progress and development of societies, and seeks to explain the process of social evolution. Modernization theory is subject to criticism originating among socialist and free-market ideologies, world-systems theorists, globalization theorists and dependency theorists among others. Modernization theory not only stresses the process of change, but also the responses to that change. It also looks at internal dynamics while referring to social and cultural structures and the adaptation of new technologies.

Modernization theory maintains that traditional societies will develop as they adopt more modern practices. Proponents of modernization theory claim that modern states are wealthier and more powerful, and that their citizens are freer to enjoy a higher standard of living. Developments such as new data technology and the need to update traditional methods in transport, communication and production, it is argued, make modernization necessary or at least preferable to the status quo. This view makes critique of modernization difficult, since it implies that such developments control the limits of human interaction, and not vice versa. It also implies that human agency controls the speed and severity of modernization. Supposedly, instead of being dominated by tradition, societies undergoing the process of modernization typically arrive at forms of governance dictated by abstract principles. Traditional religious beliefs and cultural traits, according to the theory, usually become less important as modernization takes hold.

Historians link modernization to the processes of urbanisation and industrialisation, as well as to the spread of education. As Kendall (2007) notes, "Urbanization accompanied modernization and the rapid process of industrialization." In sociological critical theory, modernization is linked to an overarching process of rationalisation. When modernization increases within a society, the individual becomes increasingly important, eventually replacing the family or community as the fundamental unit of society.

Globalization and modernization[edit]

Globalization can be defined as the integration of economic, political and social cultures and, it is argued, is related to the spreading of modernisation across borders.

Global trade has grown continuously since the European discovery of new continents in the Early Modern period; it increased particularly as a result of the Industrial Revolution and the mid-20th century adoption of the shipping container.

Annual trans-border tourist arrivals rose to 456 million by 1990 and are expected to double again, to 937 million per annum, by 2010. Communication is another major area that has grown due to modernisation. Communication industries have enabled capitalism to spread throughout the world. Telephony, television broadcasts, news services and online service providers have played a crucial part in globalization.

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