... countries have tended to be countries that were created by the great colonial powers of the capitalist world including Great Britain, the USA, France, Spain and Portugal. Colonialism exploited and changed the nature and economy of these countries leading to underdevelopment. The term the 'Third World' is a pejorative label, so for the purpose of this essay I will refer to 'Third World' countries as 'less developed' or 'developing' countries. Walt Whitman Rostow an American Economic Historian produced a booklet in the 1960s entitled "Stages of Economic Development". Rostow's modernisation theory suggested that countries needed to pass through five stages of economic development: 1, Traditional Society - Traditional methods are used in the main form of production - agriculture, and the economy is mainly subsistence. Any surplus goods produced tend to be bartered in exchange for other goods. 2, Transitional Stage - Traditional methods are abandoned and specialisation is encouraged to produce ...

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