WHY DO SOME COUNTRIES DEVELOP? WHY DON’T OTHERS?. WHAT IS DEVELOPMENT?. One definition: “The increasing capacity to make rational use of natural and human resources for social ends.” Is development an absolute or relative concept? Is development about economics or something bigger?
One definition: “The increasing capacity to make rational use of natural and human resources for social ends.”
Is development an absolute or relative concept?
Is development about economics or something bigger?
Is development linera
Growing rich/poor gaps within countries (GINI measures)
Population and development
PPP vs. GNP vs. GDP
GNP per capita (1980 dollars)
Low income countries
Since 1990? The south has split…
HOW BAD IS IT? Chart shows the distribution of the world’s population by average income of each country (using compatible data from 1993, the most recent year available). Income is measured in terms of purchasing power over comparable bundles of goods and services, or purchasing-power parity (PPP), rather than in terms of actual exchange rates.
The titans: Brazil, Russia, China, & India (mostly just the last two).
Let’s look at some data…
Is under-development just do to a lack of capital and different timelines?
W.W. Rostow’s proposed this as a “a non-Communist Manifesto”
What are the stages of development? And why is growth exponential instead of linear?
Why will poor countries with access to capital easily catch up?
The bottom line: higher rich-poor gaps are natural, temporary, and show that things are improving
Two approaches to fixing these kind of problems:
Increasing international development aid and knowledge transfer (e.g., World Bank Programs)
State capitalism (a type of “mercantilism)
Max Weber’s argument
The Protestant work ethic
Lootable assets, rent seeking, and “Kleptocracies”
How do we “modernize” “traditional” cultures for growth?: Democratization and globalization; Cultural exchange programs; investment in “soft power”
Is underdevelopment mostly the product of weak/interventionist states and bad government?
Structural adjustment programs: Economic freedom, trade, & comparative adv.
State building programs: Dealing with weak, multi-national, & undemocratic states
How do we address these problems?
The IMF and the Washington Consensus
Institution building initiatives
By-passing the state with micro-finance and globalization
Is underdevelopment is caused by the First World and can’t be solved by developing states?
The legacies of colonialism
The world system: the core and the periphery
Purposeful underdevelopment: enclave economies, and domestic elites, and international debt
IMF, World Bank, and WTO as capitalist agents
Can states break out of the system?
What was ISI (import-substitution industrialization) and why did it fail?
Did ISI have any positive long-term consequences? Brazil and India as examples