1. ECO 102 Development Economics
Aisha Khan
Continuation of Summer 2009
Section G & I
REvision

2. Chapter One and Two Sen’s Capabilities approach
Diversity between countries due to many reasons
HDI
Gini Index
Common characteristics between developing countries

3. Structural diversity Consider the following: The size of the country
Its historical and colonial background
Its endowments of physical and human resources
Its ethnic and religious composition
The relative importance of public and private sectors
Nature of industrial structure
Degree of dependence on external forces
Distribution of power within a nations

4. HDI
= +

5. Gini coefficient

6. Common characteristics
Low levels of living
Low levels of productivity
High rates of population growth and dependency burdens
Substantial dependence on agricultural production
Prevalence of imperfect markets and limited information
Dominance, dependence and vulnerability in IR
IR= international relations

7. Historic growth and contemporary development
Chapter Three
Primary focus of many countries is increasing growth rates
Capital accumulation
Growth in population
Technological progress
Kuznets 6 characteristics of econ growth

8. 6 characteristics
High rates of growth of per capita output and population
High rates of increase in total factor productivity
High rates of structural transformation
High rates of social and ideological transformation
The propensity of economically developed countries to reach out to the rest of the world for markets and raw materials
Limited spread of this growth to a third fo the population

9. Chapter Four Classic theories of development
The linear stages of growth model
Rostow’s stages of growth
Harrod-domar model
Theories and patterns of structural change
Lewis model  “Two-sector surplus labor”
Patterns of development
The international dependence revolution
Neocolonial dependence model
The false-paradigm model
The dualistic-development thesis
Neo-classical, free market counter revolution

10. Rostow’s stages of Growth
Traditional society
Preconditions for take-off into self-sustaining economic growth
Take-off
The drive to maturity
The age of high mass consumption
Countries needed to follow the right steps to achieve the next stage

11. Neocolonial dependence model
Center  developed countries
Periphery  LDC’s
Organizations help reinforce this structure
Perpetuation of underdevelopment

12. False paradigm model States underdevelopment is due to
Faulty inappropriate advice
Provided by uninformed and biased international experts from developed countries
Offer sophisticated concepts leading to inappropriate policies
Leading university intellectuals get their education from developed nations

13. Dualistic-development thesis
World of dual societies  rich vs poor
Increasing divergences
Superior vs inferior takes place in the same space
Growing inequalities will never vanish
Inherent tendency to increase ( the discrepancies )
No “trickle down”  actually there is a “development of underdevelopment”

14. The Neoclassical Counterrevolution
Counterrevolution called for
Developed countries  supply-side macro, rational expectations, privatization
Developing nations  freer markets, dismantling public ownership, government regulation of economic activities
Underdevelopment is due to poor resource allocation due to incorrect pricing policies and too much state intervention

15. Contemporary Models of Development
Chapter Five
Romer model
Multiple equilibria and Big-Push

16. Romer model g-n = β/[1-α+β] g= output growth rate
n= population growth rate

17. Multiple Equilibria Individual investment level D1 D2 D3
Average investment level

18. Midterm Exam FRIDAY, September 11th During Class Session
Make sure to bring calculators
Content: chapters 1, 2, 3, 4, 5
Objective and Subjective
Included Case study analysis

19. Presentations Starting week of September 14 One presentation per class
Same groups and same Q&A
Requirements
Must research up-to-date statistics for the country in the case study
Must use the case study as a reference into the development of the country
Encouraged to research outside the case study and to link in class development theories
Must conclude with recommendations for the development process of each country

20. Marking Presentations
5% - Group Performance
5% - Individual Performance
5% - Presentation
Presentations
PowerPoint presentations (slides)
20-25 min presentations (each person MUST speak 5 mins)
Q&A: after the presentations
Another group will be assigned the task of asking questions after the presentation. Once this group is done asking questions  the rest of the class can pitch in.