Key Ideas in the Three Theories of Development: Structuralism, Neo-Marxism, and Neo-Liberalism
The structuralist theory of development has fallen down the pecking order as a theory explaining economic development. However, it is still used in economic development debates, and it has a long-lasting impact. The structuralist theory proposes five key ideas and uses them to explain economic development and how to go about the process. First, the theory claims that an internal expansion of the local economy will allow economic development (Contreras 4). Second, economic development in the nation is all about improving technological levels in some sectors of the economy that (Contreras 4). Another main idea held by the theory of structuralism is that developing economies that are already in the international market is a good way to explain the nature of underdeveloped economies (Contreras 4). On the other hand, government intervention plays a fundamental role in the structural transformation of economies (Contreras 4). Nevertheless, few economies have observed the theory, making it enjoy limited success.
The Neo-Marxism theory is a very controversial theory of economic development. In its use, the theory proposes key ideas that if observed, economies will rise to the desired levels. First, the theory presents the idea that historically, industrialized countries acquired raw products from developing countries at low prices, used them to produce finished goods, and later sold them to the developing countries at high prices (Contreras 10). As a result, developing countries experienced exploitation, and it resulted in poverty. Secondly, socialism is causing economic problems in developing countries, and such countries are finding it hard to explore capitalism (Contreras 11).
Neo-Liberalism is another theory of economic development that explains why some economies are stagnant while others are doing well. One of the ideas held by theory explains that poorly designed economic policies and constant government Interventions are causing harm to develop economies (Contreras 12). However, the economies can improve by eliminating restrictions on market policies and lowering the level of government intervention (Contreras 12). The theory also has another idea that privatization of economic enterprises will play a vital role in opening up the economies. The reforms suggested by the theory, “the Washington Consensus, came into being and their observation will make the developing economies rise to the same level as developed economies (Contreras 12).
Millennial Development Goals Focus on Increase in Social and Economic Well-Being
Human beings are a basic part of the world. As a result, all the activities are majorly in their direction as a way of improving their condition. Millennial Development Goals have a focus that needs achievement. However, different economists have different claims according to development goals. In the case of Dreze and Sen, they hold a belief that the main focus of Millennial Development Goals is to increase the social and economic well-being of human beings.
In an economy, people are poor if they lack real opportunities, and their lives marred by social constraints and the extremism of personal circumstances (Dreze & Sen 36). Hence, Millennial Development Goals need to meet the aims of the people through increasing real opportunities in their lives and curbing social constraints. If the goals do not meet the expectations of the people, the goals will be of less meaning. On the other hand, achieving the Millennial Development Goals is almost impossible without considering the health and education of the people (Dreze & Sen 38). Neglecting education and health in India is a common scenario. The two aspects form the core of human life and their well-being, and without them, the economic and social well-being of the people is unachievable.
Social intervention includes the provision of health and education to the people (Dreze & Sen 41). For example, a single educated person in the community can use education to influence other people and in the process, boost their social well-being. As a result, Millennial Development Goals will move closer to reality because the people subjected to them will understand them better. On the other hand, the development goals focus on improving business and making sure that economies successfully grow (Dreze & Sen 41). Dealing with market failures at this stage will develop a situation where the people can engage in business and improve their lives. An improved economy means that its people are living well, and their social and economic status is in a better position (Dreze & Sen 42). Meeting the development goals will reflect double benefits because apart from meeting the goals, the economic and social well-being of the people will have improved greatly.
Major Controversies in International Trade Policies
International trade deals with a lot of issues. Most of these issues have international agreements while others are major causes of controversies. One of the issues that are subject to contention in international trade is free trade. In developed countries, it has become a song that international trade protects the rights of capital but does not protect the rights of labor (Krugman 40). Trade organizations in developed countries explain that the lack of protection of labor rights is weakening their hard-won labor. On the other hand, firms from established economies are taking advantage of the lack of labor rights protection to move into economies with the least skilled labor to use them in maximizing profit.
Another notable issue that has caused controversy in international trade is government subsidies. The issue is controversial between established economies and establishing economies. According to developing countries, developed countries subsidize their products by offering them low prices for their products and using direct payment methods (Krugman 43). On the other hand, established countries subsidize the products through cheap access to credit and reduction of taxes in their countries (Krugman 43). Firms from developing countries find it hard to compete with firms from established countries because of the subsidization.
When it comes to patent and intellectual property rights, developing economies are not honoring them. With patent rights, a firm from an established economy produces goods and offers them to the market at high prices (Krugman 45). On the other hand, they offer exclusive monopoly for the companies to sell the products in large quantities as they own exclusive selling rights. However, most developing countries do not honor the patents and intellectual property rights, and they give birth to controversies between them and the patent owners. Among the developing countries known not honoring the patent rights are Brazil and India. If there is an international agreement to pay patents for intellectual property, international companies in international trade will receive rents and royalties from developing companies.
All the controversies present in international trade can however come to an end if the countries come together and decide on the best possible course of action. On the other hand, solving the controversies will bring about newer ones as some countries may not take the heat of the resolved controversies.
Contreras, Ricardo. “Competing Theories of Economic Development.” Transnat’l L. & Contemp. Probs. 9 (1999): 93. Print.
Dreze, Jean, and Amartya Sen. “India: Development and participation.” New Delhi, 2002. Print.
Krugman, Paul R. International economics: Theory and policy, 8/E. Pearson Education India, 2009. Print.