IB Economics

1. IB Economics Development Economics Section 5

2. Overview of Development Economics 5.1 Sources of Economics Growth and/or Development 5.2 Consequences of Growth 5.3 Barriers to Economics Growth and/or development 5.4 Growth and Development Strategies 5.5 Evaluation of Growth the Development Strategies

3. Economic Growth and Economic Development

4. Commons Characteristics of Developing Economies

5. Common Characteristics of Developing Economies

6. Common Characteristics of Developing Economics

7. Common Characteristics of Developing Economics: Overpopulation

8. Common Characteristics of Developing Countries: Low Investment

9. Common Characteristics of Developing Economics

10. Development Economics Section 5.1 Sources of Economics Growth and/or development

11. Sources of Growth

12. Sources of Growth Institutional Framework

13. Development Economics Section 5.3 Consequences of Growth

14. Consequences of Growth

15. Types of Growth to Avoid

16. Development Economics Section 5.2 Barriers to Growth

17. Poverty Cycle

18. Barriers to Growth & Development

19. Political instability

20. Development Economics Section 5.4 Growth and Development Strategies

21. Growth Models & Growth and Development Strategies

22. Harrod-Domar Growth Model

23. Challenges for Developing Economies Harrod-Domar Growth Model • Very low propensity to save • High levels of consumption • Capital flight

24. Challenges for Developing Economies Increasing output may be hampered by: • poorly skilled workforce and a brain drain • poor management skills • Low levels of Research and Development Harrod-Domar Growth Model

25. Structural Change and Dual Sector Model

26. Challenges for Developing Economies Structural Change and the Two Sector Model • Technology replaces labor and spare capacity in the agricultural sector not utilized • Capital flight instead of investment • Model assumes steady labor costs but wages may rise lowering profits and further investment

27. Export-led Outward-looking Growth Strategies

28. Necessary Conditions for Export-led Growth Strategies • Liberalized trade and capital flows • Floating exchange rate • Investment in • infrastructure • Deregulation Export-led Growth Strategies

29. Import Substitution Growth Strategies

32. Growth Strategies

34. Development Strategies

35. Development Economics Section 5.5 Evaluation of Growth and Development Strategies

36. Aid

37. Aid

38. Bilateral and Multilateral Classifying Aid

40. Market-led Versus Interventionist Growth Strategies

41. A New Consensus about Growth and Development

42. Resources Gapminder is an excellent resource that present statistics in an attention grabbing way. A provocative article by New Internationalist. John McMurty argues that free markets are often presented as the sole solution to poverty and human development when the global market is inefficient and life-destructive. Mailer, M. H. & Nelson, J. A., (2007) Introducing Economics: A Critical Guide for Teaching, M.E. Sharp Armonk. Jeffry Sachs author of The End of Poverty: Economic Possibilities for Our Timepresents his views in a lecture at Columbia University.

43. Resources The Girl Effect explain how the quantity and quality of labor can be improved by focusing on girls. • PBS also provided a lesson plan based on “Global Women and Poverty”. • This video exposes Nike to criticisms of exploitation.

44. Suggested Activities • Students undertake in-depth research of an undeveloped economy of their choice. They present information to the class using the section headings as a way of organizing their information. • Student convince others of the worth of a microcredit loans which is extended through the Kiva organization. See details here.

45. Assessment As a major section of the course and one that so well fits IB Learner Profile, Section 5 is a popular choice for examiners devising questions to test your understanding of the course. Only Section 1 and 5 are identical for both SL and HL students. Development Economics can be asked in conjunction with questions about Macroeconomics and International Trade. It is also a popular topic of data response questions.

46. Typical Questions Questions that ask you to explore the relationship between growth and development: • Evaluate the view that economic growth will lead to economic development and associated improvements in welfare. • Explain the differences between economic growth and economic development. • Explain what is meant by sustainable development.

47. Typical Questions Questions that focus on barriers to growth and development: • Explain the main barriers to development. • Explain how overdependence on primary products may act as a barrier to economic development.

48. Typical Questions Questions that ask you to evaluate developmental strategies. • Evaluate the view that interventionist strategies are more effective than market orientated strategies. • Evaluate the effectiveness of aid in achieving economic growth and development • Evaluate the role of MNCs and FDI in achieving economic growth and development.

49. Typical Questions • Explain the difference between inward looking growth strategies and outward looking growth strategies. • Evaluate the strategies that can be used to achieve economic development • Explain how an increase in the quantity and quality of a nation's factors of production can promote economic development.

50. Typical Questions • Explain the role of fair trade organizations and micro-credit schemes in promoting economic development. • Evaluate the role of MNCs in economic growth and development. • Evaluate trade and aid as means of achieving economic growth and development.