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WHY DO SOME COUNTRIES DEVELOP? WHY DON’T OTHERS?

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?

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WHY DO SOME COUNTRIES DEVELOP? WHY DON’T OTHERS?

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  1. WHY DO SOME COUNTRIES DEVELOP? WHY DON’T OTHERS?

  2. 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? Is development linera

  3. And why should we care anyway?

  4. HOW DO WE MEASURE DEVELOPMENT? Measurement issues: Growing rich/poor gaps within countries (GINI measures) Population and development PPP vs. GNP vs. GDP

  5. THE OLD DEVELOPMENT PROBLEM GNP per capita (1980 dollars) Low income countries 1950: $164 1980: $245 1990: $353 Developed countries 1950: $3,841 1980: $9,648 1990: $19,820 Since 1990? The south has split…

  6. SOME DATA ON HOW THINGS ARE CHANGING

  7. ROBERT WADE’S TAKE:

  8. 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.

  9. WHO IS GROWING? (AND WHAT THAT CAN TELL US) The titans: Brazil, Russia, China, & India (mostly just the last two). Let’s look at some data…

  10. SOME MORE DATA…

  11. SOME MORE DATA…

  12. SOME MORE DATA…

  13. SOME MORE DATA

  14. SOME MORE DATA

  15. WHAT DO COUNTRIES NEED TO CHANGE TO DEVELOP? 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)

  16. Why might culture explain underdevelopment? Max Weber’s argument The Protestant work ethic Scientific rationalism Individualism Meritocracy Modern concerns Clientelism/patron-client networks Lootable assets, rent seeking, and “Kleptocracies” How do we “modernize” “traditional” cultures for growth?: Democratization and globalization; Cultural exchange programs; investment in “soft power”

  17. 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

  18. ` 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

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