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20ECC119 - Development Economics > Topic 1 - Intro and Theories of Development > Flashcards

Topic 1 - Intro and Theories of Development Flashcards

1
Q

What was the Post WW2 idea of international development?

A

->Application of certain policies in ‘underdeveloped’ countries to bring them up to standards of ‘developed’ countries

-> Changing paradigms of ‘Development’ and debates
if there was a Central role/agreement of poverty reduction

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2
Q

What was the Modernization Theory (1950s/60s)?

A

Process of change towards those types of social, econ and political systems that have developed in Western Europe and North America (Liberal Ideas of Society)

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3
Q

What are the tenets of Modernization theory?

A
  1. Societies develop through a series of evolutionary stages;
  2. Stages based on diff degrees and patterns of social differentiation and reintegration of structural and cultural components that are compatible for maintenance of society
  3. Developing societies at a premodern stage of evolution and eventually achieve economic growth and take on the social, political, and economic features of western European and North American societies
  4. Modernization will result as Western tech imported and traditional structural and cultural features incompatible with such development are overcome.
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4
Q

What is Walt Rostow’s Linear Stages Theory? (1960) (Modernization Theory)

A

From Agricultural Economy (with rigid and subsistence

structures) towards a ‘modern’ industrialized consumer (capitalist) society

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5
Q

What were the 5 stages in Rostow’s model?

A
  1. Traditional Society Agriculture and bartering, science and tech not used
  2. Pre take-off stage
    Development of education and some understanding of science and tech, simple banking system some entrepreneurs.
  3. Take-Off
    Positive growth rate in industries, Organised system of production and reward replace traditional norms
  4. Drive to Maturity
    More growth, movement to more diverse economy
  5. Stage of Mass Consumption
    Citizens enjoy high and rising consumption per head and rewards spread more evenly
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6
Q

What are the critiques to the 5 stages of development?

A
  • > Prescriptive
  • > One-Size-fits all approach taken
  • > Ignores all other factors like geopolitics, resources, competitive and comparative adv
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7
Q

What was the Dependency theory to development (60s/70s)?

A

Resources flow from a ‘periphery’ of poor and underdeveloped nations to a ‘core’ of wealthy nations.

-> Leading to poor countries ‘depending’ on the rich countries for trade, aid etc.

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8
Q

What is the neo-liberal view to Development?

A
  • Free mkts as solution to development
  • liberal trading policies, small state, privatisation, decrease govt funding to increase private entrepreneurship
  • Promoted by Washington Consensus
  • Championed by Friedman,Hayek
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9
Q

What is the Human Development Theory? (Post 70s but also 90s)

A
  • Development should be about enlarging people’s freedoms (who to be, what to do and how to live) and opportunities and well being
  • Policies should revolve around this (Similar to Sen’s capabilities approach)
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10
Q

Why was the Human Development Theory created?

A
  • Created on view by Founder of theory, Mahbub ul Haq, under view that other theories of development ignore that development is supposed to be for the people not just for the economy
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11
Q

What is Sustainable Development (since 1987)

A

Development that meets the needs of the present without compromising the ability of future
generations to meet their own needs (Brundtland Commission, 1987)

  • Not just environmental but also social, political and cultural aspects
  • Nepal being best example
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12
Q

What are the 8 goals of the MDGs (Adopted by UN in 2000)?

A
  1. Eradicate extreme poverty and hunger
  2. Achieve universal primary education
  3. Promote gender equality and empower women
  4. Reduce child mortality
  5. Improve maternal health
  6. Combat HIV/Aids, Malaria and other diseases
  7. Ensure environmental sustainability
  8. Develop global partnership for development
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13
Q

What are some targets for the MDG’s?

A

CHECK SLIDES

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14
Q

What are the Sustainable Development Goals?

A

List of 17 goals including the 8 from the MDGs established in 2015 by the UN.

Some new ones include:

  • Clean water
  • Affordable and clean energy
  • Industry, Innovation and Infrastructure
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15
Q

What are the 7 dimensions/indicators we can use to measure development? (To view if a state if under/over developed)

A
  1. Income and Income growth
  2. Poverty and Hunger
  3. Inequality and Equity
  4. Vulnerability
  5. Basic needs in Health and Education
  6. Environmental Sustainability
  7. Quality of Life i.e Empowerment, Opportunities, Capabilities, Functionings
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16
Q

How important is Income generally for development?

A
  • Provides household monetary capacity to consume, invest, or save.
  • Income growth is key for wellbeing (Nobel Prize winner, Robert Lucas)
  • Taxation and Redistribution
  • Income growth among easiest options for govt to follow
17
Q

What are the ways we can evaluate econ growth?

A
  • Gross Domestic Product (GDP)
  • Gross National Income (GNI) = GDP + Net factor Incomes from abroad (remittances, repatriated profits)
  • GNI per capita (GNIpc) being used more often
18
Q

How does the World Bank classify Low,Middle and High Incomes per country?

A

Low Income (LIC) GNI per capita ≤ $1,035 in 2019 (29 countries)

Middle Income (Upper and Lower) GNI pc between $1,036 - $4,045 (50 countries) and $4,046-$12,535 (56
countries)

High Income (HIC) GNI per capita > $12,536 (83 countries)

19
Q

What are some statistics around hunger and poverty?

Why is hunger a cause of poverty?

A
  • Roughly 151 million children under 5 years are stunted
  • 66 million primary school-age children attend classes hungry across the developing world, with 23 million in Africa
    alone ($3.2bn a year needed to feed all kids)

Hunger causes poverty -> Poor health, low energy, No think -> Meaning can’t educate or work = Even more poverty

20
Q

What is one way we can measure the global hunger?

A

Global Hunger Index

21
Q

What are measures to poverty and hunger?

A

Countries’ Poverty Reduction Strategy Papers (PRSP):

  • Poverty assessment (national and comprehensive)
  • Poverty reduction strategy (specific and comprehensive)
22
Q

What are the requirements to measure poverty?

A
  1. Choosing an indicator of wellbeing e.g. Income or Consumption (usually household) per capita
  2. Comparison with a threshold level (i.e. a Poverty line) .
    Crucial to be specific on this for correct measure of poverty
23
Q

What is the Development Triangle?

A

Inequality: Has positive growth from early GDP growth, It increases poverty

GDP growth:
Decreased from inequality (Believed)
Decreases poverty and is decreased from poverty

SEE FULL TRIANGLE IN NOTES

24
Q

What are Health Indicators to Development?

A

Global Disease Burden
- Measures gap between current health status and the ideal situation (where everyone lives to a disease-free,
disability-free and to an old age).
- Measured in Disability-Adjusted life years (DALY)

Malnutrition
-The prevalence of hunger i.e., % of population below the Nutrition poverty line of 2,800 (adult men) and 2000
(adult women)calories/person/day;
- Depth of hunger – the distance from the line.

25
Q

What are the differing types of shocks that could lead to Poverty?

A
  • Risk aversion and Safety first
  • Types of Risk (Covariate vs Idiosyncratic risks),
  • Irreversibility of risks
26
Q

Using the UN approach what are the basic needs of humanity?

A

Health – Life expectancy, Infant and Maternal mortality rates, Health care access, HIV/AIDS, Quality of
health care, Access to safe water and Sanitation

Education – Net enrolment ratio (primary and secondary level), drop-out rate, School attainment: Completed years of schooling, Literacy rate, Grades of standardized tests, Availability of schools distance, cost, quality, Quality of education.

Nutrition – Prevalence of malnutrition and hunger, Stunting, Wasting, Existence of School feeding
programs, etc

27
Q

How do we evaluate human development?

A

Via HDI (Human Development Index)

28
Q

How do you calculate the traditional HDI (Pre-2010 vers)?

A

1/3 (Income Index) + 1/3 (Life Expectancy Index) + 1/3 (Education Index)

SEE ALL CALCULATIONS IN NOTES

29
Q

How do you calculate the New Human Development Index?

A

NHDI = (H health x H education x H income) (1/3)

30
Q

How does the New HDI differ from the old HDI?

A
  1. Shift from an arithmetic mean to a geometric mean
    Means no longer perfect substitute for each stat.
  2. Use of Natural Log
  3. Shift to observed max per capita income lvl, previously assigned with a cap
31
Q

What are the limitations of the HDI measures?

A
  1. the lack of indicators of quality;
  2. stock, flow, inputs and outputs
  3. the substitutability assumptions
  4. does not, for example, capture many aspects of life that people value:
    - economic, social and political freedom,
    - protection against violence,
    - insecurity and discrimination
32
Q

What are the 3 core values of development?

A
  • Sustenance: To Be Able to meet Basic Needs
  • Self-Esteem: To Be a Person
  • Freedom from Servitude: To Be Able to Choose.
33
Q

What are the 3 objectives of development?

A
  • To increase availability of life-sustaining goods/services
  • To raise levels of living
  • To expand range of economic and social choices.
34
Q

What is Sen’s capabilities approach?

A
  • Prioritizes ‘the actual freedom of choice a person has over alternative lives that he or she can live
  • Provides means of eval min requirements for Q of life, calls for govt policy to meet these min requirements

Capabilities are the processes that allow freedom of action and decisions.

20ECC119 - Development Economics (12 decks)

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