Various theories are put forth on why some countries are ric

Various theories are put forth on why some countries are rich and some countries are poor. Each theory tries to explain the issues of development and how a country can possibly achieve economic stability.

Please respond to all of the following prompts:

Using any of the theoretical approaches to development, explain why the US has achieved economic development while its neighbor, Mexico, has continued to struggle and has lagged behind.

Solution

There are many approaches or theories that try to explain that why some countries are rich or poor in comparison to others. One of these theories is “theory of structural change” . It identifies the pattern in structural change in a country over a period of time that shapes the concerned economy. It is the primary reason why USA has achieved a sustainable economic development but Mexico is still struggling.

After the World War II, Mexico also grew with a health average growth rate of 3% to 4% during the period of 1940 to 1970. But, after that, there came a flaw in policies adopted by their successive governments:

These were:

It stalled the growth and made Mexico to struggle after Late 70s. Though condition improved when NAFTA was signed in 1994. Comparatively, USA grew in stature as the world power and carefully planned policies led USA from strength to strength. After the meltdown of USSR, USA became the center of economic power and affected most of major economic decisions taken at world stage. It helped USA to achieve a sustained economic development. Though, recessionary effect later on have affected US economy but proper economic stimulants are helping them to revive the economy once again.

Source: http://www.thomaswhite.com/world-markets/mexico-striving-for-sustainable-growth/