Critically Compare and Contrast Modernisation Theory and...

CrCritically Compare and Contrast Modernisation Theory and Neo-Liberalism Introduction The two theories which shall be compared are the modernisation theory and Neo Liberalism. The modernisation theory is a market oriented development theory which states that low income countries can develop economically if they give up their traditional ways which often can be dated back centuries and take on more modern economic principles, technologies and cultural values which comprise of an emphasis on productive investment and savings. Neo-liberalism is the economic belief that free market forces achieved by minimising government limitations on business provide the lone route towards economic growth shifting control from the public sector into the†¦show more content†¦The second stage called preconditions for takeoff is distinguished largely by the development of technology requiring innovation. This would then allow production to become more efficient producing higher yields of produce opening the gates of trade as surplus produce can be sold for a profit. This will encourage manufacturing to take place attracting attention from an international level allowing the society to open up to different markets instead of being restricted to only their domestic one which forces the society to broaden their outlook and not only focus on the limited regional markets and communities. The third stage called takeoff is described by Rostow as a period of short and intensive growth in which industrialisation begins to thrive which creates new industries allowing institutions and workers to diverse into these new areas with many of them shifting from agriculture into manufacturing. A key aspect of this stage would be the surfacing of entrepreneurs who would reinvest earned profits into infrastructure and new technologies increasing the influence reinvestment has on the total GDP and once it has reached 10% of total GDP then reinvestment can be considered an important contributor. The fourth stage called drive to maturity is a longer stage which occurs over an extended period of time. This stage sees a steady rise of the use of technology, standards of living and an improving economy which isShow MoreRelatedPolitical Risk Management and Insurance: A Contextual Comparison12751 Words   |  51 Pagesand Insurance: A Contextual Comparison [Authors Name] [Institutions Name] Abstract This dissertations presents concept of political risk in the context of Efficient Market Theory (Hypothesis) and State capitalism. The paper explores the link between the three ways of insuring political risk to economic theories. Using case study of a multinational firm the political regime and its effect has been explored on business situations and how it can be managed. Political risks are the threats arising