Modernization Theory, proposed by economist Walt Whitman Rostow in the 1950s, argues that economic development is a linear process that all countries go through on their way to modernity. According to Rostow, there are five stages of development that a country must go through: traditional society, preconditions for takeoff, takeoff, drive to maturity, and high mass consumption. Rostow believed that economic development could be achieved through a combination of foreign aid, investment, and technology transfer.

Rostow based his assumptions on the idea that basically every state would follow the same steps as the United States; Modernization basically puts forward that there is one path towards development, and the end-stage is for a state to become a high-mass-consumption society. This is a flawed idea because it does not account for variety in economic ideas, or in economic systems. It presumes a market economy and embrace of capitalist ideals. Many modern-day states have blended economies, where socialist ideas (or social-democratic ideas) are blended with more typical market-oriented capitalism. We still do think about development as happening in "stages," but no longer refer to Rostow's model as one that accurately represents how states will develop. 

Dependency Theory argued that the underdevelopment of many countries in the Global South was a result of their historical and ongoing dependence on more developed countries in the Global North. This dependence took many forms -- economic, political, and cultural -- and had its roots in the colonial and post-colonial period (up to the early 1970s.) According to Dependency Theory, the economies of the Global South have been structured in a way that benefits the Global North, with resources and labor flowing from the South to the North, and finished goods flowing in the opposite direction. This perpetuates a cycle of underdevelopment, poverty, and dependency (hence the name.)

States that embraced Dependency Theory sought to create a pathway to development that emphasized self-sufficiency and autonomy. This included efforts at "import substitution," which encouraged the growth of domestic industries and the purchasing of locally-made products, rather than relying on imports. It also promoted heavy government intervention in a state's economy. States that embraced this approach had some limited success, but ultimately had to move on because the global marketplace was changing thanks to early globalization. Self-sufficiency was good for kickstarting industries and helping some local businesses mature, but it was not enough to keep these states competitive. 

While Modernization Theory emphasizes the importance of economic growth and development through industrialization, Dependency Theory highlights the negative effects of the unequal distribution of power and resources in the global economy. Both theories have been subject to criticism and revision over time, and scholars continue to debate their applicability to the contemporary global context.

A country's natural resources, or lack thereof, have a big part to play in the way an economy develops. A resource-rich state may seek to exploit those resources (oil, gas, minerals) either for export or for use in a country's domestic industries. A state lacking natural resources may instead try to develop its human resources. Cases include...

Singapore: Singapore has no natural resources, unless you consider "deep water" to be a natural resource. Over the last 50 years, Singapore developed into a regional (and global) hub for business and finance in part by building up one of the world's most highly skilled workforces. The bar is set HIGH in Singapore schools (no MDID-guaranteed-graduation there) and their high schools and universities are some of the best-performing in the world. Companies are keen to open in Singapore due to the strength of the work force that is already there, and that hum of activity further attracts talent from other countries in the region and beyond.

Norway: Norway is not well-known for being a "oil and gas" country... but it is an oil and gas country. Norway has been strategic in its exploitation of these precious resources, and have used many of the funds it gained to develop a world-class education system and fund social welfare programs. In this way, Norway has developed its economy and society. (They also put limits on the use of its oil and gas reserves, with an eye towards sustainability.) 

This strategy involves fostering a culture of innovation and entrepreneurship to create new businesses and industries. This can be done through policies that support small and medium-sized enterprises (SMEs), such as tax incentives, access to financing, and support for research and development.

Many more developed countries put a great deal of importance on the establishing (and survival) of SMEs, including the United States. During the pandemic, the U.S. government issued loans to SMEs in an initiative called "paycheck protection program" (PPP) to help small and medium-sized business stay open at the height of the crisis. Many of these loans were ultimately forgiven, meaning that those SMEs did not need to pay them back -- essentially serving as an economic stimulus!

In less-developed countries, something like a microfinance program can help poorer people become more financially literate and, in some cases, these programs can help in starting small business in local communities. 

As an economy matures, developing a larger primary industrial sector (natural resources, agriculture products, etc.) and/or secondary industrial sector (manufacturing, etc.) the question becomes: who is this stuff for? Are we going to use it ourselves, or is most of what we do oriented for people and businesses beyond our borders? 

An export-oriented strategy involves focusing on producing goods and services for export rather than for the domestic market. The aim is to increase foreign exchange earnings and boost economic growth. Export-oriented economies typically have a strong manufacturing sector, with products that are competitive in international markets. China's tremendous economic growth over the last 30 years is largely due to an export-oriented approach (with hundreds of millions of people in that workforce.) 

A commodity-led approach involves developing a country's economy by focusing on the production and export of natural resources or commodities. Examples include oil-producing countries like Saudi Arabia and Venezuela or countries with abundant mineral resources like Australia and Chile.

This is most applicable to highly-developed countries, but it can set up as a goal for countries still in the process of development. 

A knowledge economy is an economic system in which knowledge, ideas, and intellectual capital are the primary drivers of economic growth, rather than traditional factors such as natural resources, physical capital, or low-cost labor. In a knowledge economy, the creation, dissemination, and application of knowledge are key factors that drive innovation, productivity, and competitiveness.

In a knowledge economy, the production and distribution of goods and services are increasingly based on knowledge-intensive activities, such as research and development, design, education, and the creation of new intellectual property. This can include a wide range of industries, such as information technology, biotechnology, healthcare, education, and creative industries.

The United States: The USA is one of the "knowledge economy" leaders. Many of the country's top universities are equal parts schools and research / innovation labs. Even things like the Jet Propulsion Laboratory (JPL) which creates new engines for rockets are connected to large universities. 

Japan: For a long time, the pioneers in robotics. Japan is still pushing the boundaries now, though they have also moved past Honda's weird little ASIMO robot. 

South Korea: South Korea is a great example of a state whose knowledge economy is closely connected with the government's efforts. There is a tight link between Korea's top companies and the leaders of government. 

Tourism can be a great money maker, and a country doesn't even need to have a fantastic climate to make it work! 

Beyond bringing in revenue (money spent by tourists), a healthy tourism industry encourages development in a number of ways. Good infrastructure is necessary to help people get around, and citizens benefit from this infrastructure as much as tourists do. Cultural heritage gains some protection here, as what makes the country unique is part of what attracts people to come and visit. This can help to stave off some of the more undesirable effects of cultural globalization. 

Tourism is, in many cases, a reliable source of income. Some places have a tourist "season," where more visitors arrive, as well as an "off-season" which allows for other types of economic activities. 

COVID has shown that relying on tourism is a risky venture -- many businesses around the world that relied on tourist dollars had to shut down in 2020 and early 2021, and the employees who had worked in those places generally moved on and found other jobs. 

Tourism on its own is not likely to drive a country's economic development, but it can make a significant contribution. 

Some kind of educational initiative is a mainstay of nearly every developing country. Even more developed countries have big initiatives regarding education (improving access, reducing costs, encouraging more students to move into areas like STEM, etc.) Common educational goals include...

Access: Making education more accessible to more people. This can involve building new schools, implementing policies that increase the proportion of girls in schools, and creating ways to pay for higher education (grants, scholarships, affordable loans, lowering tuition, etc.) 

Quality: Investing in teacher training, curriculum development, and aligning the work of schools with 21st century skills that will be useful in university or the workforce. Some countries dramatically increase the funding that their schools and teachers receive, like Finland, while others really dig in and emphasize the importance of a curriculum, like in Singapore.

Promoting Lifelong Learning: Education shouldn't just last for the years that a person is in school; rather, it should instill habits that last a lifetime. Promoting lifelong learning can also include the creation of training (and re-training) programs for people seeking to change jobs or start a new career. 

Build development goals into schools: For efforts that involve sustainability, educating young people about how to live a more sustainable lifestyle is a critical step in ensuring that those goals are met. This is why you see SDG programs in schools, regional and international student sustainability conferences, and international clubs like Roots and Shoots. 

A social safety net basically exists to provide support for everyone in society. Typically, assistance is offered based on need, rather than applying to everyone equally, but there are times (e.g. Taiwan's NHI) where a social safety net extends to everyone.

Health and Nutrition: Some social services relate to providing food for needy people, typically those below the poverty line. This aid can come in the form of vouchers, which can be used to purchase groceries, or some other form of coupon or currency. In some instances, the food is straight-up provided to people. In recent decades, food assistance programs have worked to ensure that the food people get access to is nutritous, rather than relying on junk food or an excessive amount of processed food. Government policies that encourage supermarkets to open in working class areas also help in this area. 

Social Inclusion: Caring for the elderly and the sick is becoming increasingly important as many countries face a rapidly aging population. Having elder care be a part of the social safety net helps ensure that younger generations are more able to focus on their own work and goals, rather than needing to put their lives on pause to care for their elders (though they should definitely be spending time with these folks.) This can also extend to people with disabilities; improving access to buildings and transportation for disabled people goes a long way in helping them live more normal lives, or at least a life with fewer unnecessary obstacles. 

Poverty reduction: Overlapping with both economic goals and helping people build capabilities, reducing poverty is typically one of the top goals a country has. This can be done through financial welfare programs like social security, extension of medical benfits to people living in poverty (like the Medicaid program in the USA), and the creation and nurturing of retirement accounts for older people, to ensure they do not fall into poverty as they age out of the work force. 

A lot of social development efforts focused on women and minorities are tied to empowerment. Basically, not just helping these groups live a better life, but actively trying to increase the role they play in a country's economic, social, and political efforts. Programs that support women and minority entrepreneurs can help to break down barriers and increase the share of women and minorities in the workforce, hopefully working up to positions in leadership. Similar efforts are often made in the political realm, as well. Recruiting women and minorities to run for public office, hiring them in key staff roles for officeholders, and seeking ways to gather more diverse perspectives in a decision-making process can all help social development. 

Ironically, social development programs for indigenous people are often not geared towards helping them integrate into society. While integration IS a common goal, and many states want to see indigenous peoples play a larger role in business and politics, they also want to see indigenous culture be protected. Many social development policies encourage the preservation and use of local languages, and re-affirm indigenous rights to the use of their traditional land (or include indigenous voices in the decision-making process over what happens on that land.) 

In many countries, indigenous peoples are an underserved community, so some social development efforts also focus on access to education, healthcare, and social welfare programs.