Chapter 11 - Dilemmas of Development Flashcards
What is a developing country?
A country with lower standards of living than wealthy nations
Is CHI a developing country? (3)
1) until recently a developing country
2) now largest national economy
3) however aver. living standard still a below traditional developed countries
What are 2 measures of development?
1) GDP per capita
2) Human Development Index (life expextancy, literacy, education, per capita income)
What are 2 Challenges to Economic Development?
1) Colonial Legacy
2) Division of Labour
What is the Dependency School of Underdevelopment? (3)
1) Cardoso
2) former colonies oirented to serving dominant states at cost of own econ wellbeing
3) only elites in developing countries gain
What is a failure of the Dependency School of Underdevelopment?
Fails to explain econ rise of CHI, INDI, S.KOR, TAI, MEX, and BRA as they embraced econ liberalization
–> Cardoso change mind
What factor is significant in assessing colonialism’s impact? (3)
1) Acemoglu
2) Where many colonisers settled –> laws and pol institutions facilitating growth (US and AUSTRL)
3) Where few colonisers settled –> legal arrangements maximizing short term profit and exploitation (S.AMER, CAR, AFR)
Indicators that colonial legacy is not the full answer to lack of econ development? (3)
1) Iran: never colonized but still suffer development issues
2) S.AMER: independent in 1820-30’s but still development issues
3) USA, CAN, S.KOR: colonized but still econ growth
How does division of labour stunt development? (3)
1) developed countries protect domestic agriculture industry
2) Technological innovations improving productivity are more prevalent in manufacturing
3) Resource Curse
Why is the resource curse bad? (3)
1) Wealth Shock (other goods less competitive) (Sachs)
2) Dutch Disease (exports increase XR –> less comp.)
3) Political aspect (rev goes to suppression (Ross) and more likely to initiate MID) (Colgan)
What are 3 Market-Controlling Trade Strategies?
1) Import-Subsituting Industrialization (tariffs + subsidies)
2) International Commodity Cartals
3) International Commodity Agreements
What are 2 Market-Accepting Trade Strategies?
1) Export-Led Growth
2) Beijing Consensus (authoritarianism and regulate pace of econ integration)
2 Forms of Financial Flows?
1) Private
2) Official
5 Types of Private Financial Flows
1) Foreign Direct Investment
2) International Bank Loans
3) International Portfolio Investment
4) International Bonds
5) Remittances
Is FDI good for development? (2)
1) Yes: but only in developed countries which are better at absorbing tech brough (Li and Liu)
2) No: problems with child labour and regulation shopping
2 Types of Official FInancial Flows
1) Official Development Assistance
2) Financial Flows from Official Creditors
What are 3 problems with ODA?
1) Conditionalities attached
2) Tied aid (undignifying)
3) Budget Support (untied aid scares donors)
Who sees ODA as useful and why? (2)
1) Sachs
2) ODA provides extra capital to escape proverty trap wherein no money for investment/growth
Who argues ODA could be improved and how? (2)
1) Easterly
2) tailored programs ensuring feedback and accountability on effectiveness of national/international officials
Problems with Financial flows from official creditors (like IMF)? (2)
1) IMF stabilization programs will lead to govt spending cuts stunting growth
2) Moral Hazard (sense of security leads to reckless spending) (Meltzer)
What is an example of Kindleberger’s theory and what is it? (2)
1) Hegemonic Stability Theory (stability and sustain power)
2) US creating Bretton Woods system, Dollar as world’s trade currency, and Washington Consensus
What are 2 challenges to Kindleberger’s theory?
1) US Hegemony led to 2008 financial crisis
2) Marxists argue US should no longer make rules since no longer absolute hegemon
What are indications of a post-western world? (3)
1) BRICS
2) Asian Infrastructure Development Bank (AIIB)
3) G-20
How does Realism project BRICS’ success? (2)
1) No common threat (INDI-US has good relations)
2) Conflict of interests between MS (INDI-CHI border)
–> Negative
