M.Abdulrehman
4 min readMay 5, 2022

Topic: Schools of Thought in context: South Korea and Argentina”

In recent years, South Korea’s investment in national income persistently among highest in the world, which is also a significant reason for South Korea’s rapid rise in growth. To understand how fast this growth is, consider that the country did not even mention the book during the economic growth phase of Rostow in 1960, when it was issued and the “prerequisites for take-off” were hardly in place. Nevertheless, South Korea does seem to represent the idea that Rostow’s economy is mature, moving towards understanding the range of currently available technologies, and seems to be entering in the “age of mass consumption”.

Although the fact that India, rather than South Korea was chosen by Rostow for takeoff shows the limits of the logical impacts of the stages theory, the circumstance of South Korea though offers some confirmation of their value. Specifically, South Korea’s rise over the past generation has been considered due to have a quick growth in agricultural efficiency, shifts of labor from agriculture to industry, the constant growth of the capital stock and of education and services, and the demographic change from high to low fertility. Even in the period of 1990 to 2002, as a more mature economy and in the face of the Asian financial crisis of 1997 and 1998, the economy developed at a 5 percent rate.

In the late 1940 an 1950, South Korea a self-proclaimed to carrying out structured land reforms and therefore did not unrestraint agriculture, but other than that it gets innovative through the rapid development of the industrial work force, mostly following the Lewis development model. Of course, relying theorists claim that South Korea is an exception because it has received a lot of aid, while the self-interest of advanced countries is because it serves as a safeguard against communism, so it has seen its overall successful development. But this does not explain how South Korea got rid of dependence through such a policy.

In contrast, Argentina’s phase theory and model theory have comparatively little information on economic history, relying on the combination of revolution and neoclassical counter-revolutionary theories to provide important understandings. Stages of Growth explained that the history of Argentina has posed a strong challenge to the linear stage method. In 1870, Argentina’s per capita income has 11th rank in the world leading Germany, and if we look at it now, it is not even in list of 50. Although Rostow said that when determining the stage of a country, if the country is said to be weaker and weaker in terms of technological progress, he set the precondition for Argentina to take off as an extended period before 1914 and concluded that, the takeoff in a sense began in World War I, but in the 1930s mid.

However, South Korea is a heavy external borrower. Argentina certainly fits the principles Rostow has laid out for a growing manufacturing industry. According to World Bank data, Argentina was in negative growth from 1965 to 1990. In late 1980, domestic investment deteriorated at a rate of -8.3 percent, well below Rostow’s investment threshold level. Although Argentina grew 3.6 percent from 1990 to 2001, it failed to pay its debts in 2002 and the economy shrank by 11 percent, followed by an uncertain recovery. From 2000 to 2007, investment in Argentina was 17 percentage of GDP, well below half of South Korea’s. Like many other Latin American and African countries in the 1970 and 1980, Argentina proved that development progress is not irreversible and that sustained growth can end.

Moreover, Structural Modeling with increasing agricultural productivity, industrial employment growth (albeit slowly), urbanization and declining fertility, Argentina does construct many common structural models of development. Though, even as the country’s standard of living declined, many structural patterns of development witnessed. This fact suggests that being deprived of a guiding theory about how the pieces fit together, there are various flaws in data when it comes to selection.

Dependency Revolution Contrary to South Korea, Argentina’s case delivers some evidence for the dependency theory, as the country relies heavily on exports of primary commodities, whose real prices have fallen comparative to imports. Offshore corporations played an important role. Argentina was unable to build its own viable manufacturing export industry and ultimately had to accept restrictions such as strict structural adjustment programs and the sale of public-sector industries to foreign companies.

Lastly, neoclassical counterrevolution, Argentina also provides some evidence for neoclassical counterrevolutionary theory as incorrect interventionist restrictions, inefficient public enterprises, bias against export production, and unnecessary red tape eventually damage industry and entrepreneurship. Government policies continually seem to support fortunate interests rather than broad development goals, and government failures are often more severe than the country’s market failures. In the mid-1990s, an enormous liberalization and privatization program appeared to begin to recover Argentina’s economic growth.

M.Abdulrehman
M.Abdulrehman

Written by M.Abdulrehman

Hi, I am a marketing enthusiast and content writer from Pakistan. I love to write on trending topics such as Artificial Intelligence, Finance, Economics etc.

No responses yet