Development Economics Overview
74 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is a significant factor contributing to disparities in living conditions across countries?

  • Access to advanced technology
  • Historical colonial impacts (correct)
  • Geographical location and natural resources (correct)
  • Cultural attitudes towards poverty

    • Which of the following best represents the multidimensional nature of poverty?

  • Lack of money
  • Government corruption
  • Unemployment rates
  • Illness and lack of education (correct)

    • Why might some nations have successful public services while others do not?

  • Presence of wealthier citizens
  • Better international relations
  • Higher population density
  • Civic involvement in governance (correct)

    • What potential solutions can help reduce child illness and death rates in underserved areas?

    <p>Enhancing healthcare access and education</p> Signup and view all the answers

    Which Millennium Development Goal focuses on ensuring every child has access to education?

    <p>Achieve Universal Primary Education</p> Signup and view all the answers

    What key issue does population momentum illustrate regarding economic development?

    <p>Falling birth rates cannot be achieved rapidly.</p> Signup and view all the answers

    What institutional factor may hinder economic development in poorer countries?

    <p>Political instability and corruption</p> Signup and view all the answers

    How can economic disparity between nations be measured?

    <p>Through income distribution</p> Signup and view all the answers

    Which Sustainable Development Goal aims to ensure environmental sustainability?

    <p>Responsible consumption and production</p> Signup and view all the answers

    Why are comprehensive strategies needed in economic development?

    <p>To ensure multiple social needs are addressed simultaneously</p> Signup and view all the answers

    What is a consequence of high population growth in less developed countries?

    <p>Difficulty in resource allocation</p> Signup and view all the answers

    Which region is mentioned as having a smaller population but greater control over economic assets?

    <p>Europe and North America</p> Signup and view all the answers

    Which approach is most likely to yield sustainable economic development?

    <p>Incorporating environmental considerations and community input</p> Signup and view all the answers

    Which of the following is NOT one of the Millennium Development Goals?

    <p>Reduce Carbon Emissions</p> Signup and view all the answers

    What does stabilizing population growth indicate about a country's development?

    <p>It signals an improved quality of life.</p> Signup and view all the answers

    Which Sustainable Development Goal directly addresses gender issues?

    <p>Gender Equality</p> Signup and view all the answers

    What does the headcount index measure in terms of poverty?

    <p>The fraction of the population that is poor</p> Signup and view all the answers

    Which of the following is NOT considered an ideal property for poverty measures?

    <p>Comprehensive data coverage</p> Signup and view all the answers

    What might be a consequence of agencies focusing on headcount measures for poverty reduction?

    <p>Incentive to report improvements based on headcount</p> Signup and view all the answers

    How does the Gini coefficient behave as income is redistributed within an economy?

    <p>It decreases as income becomes more equal</p> Signup and view all the answers

    Which of the following is an implication of government policy exhibiting 'urban bias' in relation to poverty measurement?

    <p>Underrepresentation of rural poverty levels</p> Signup and view all the answers

    What is the primary focus of exploitation institutions in colonization?

    <p>Maximizing economic value through resource extraction</p> Signup and view all the answers

    What was often a consequence of the large-scale agricultural production during colonization?

    <p>Deep racial social divisions and slavery</p> Signup and view all the answers

    Which approach posits multiple stages of economic growth according to classic theories?

    <p>Rostow’s Stages of Growth</p> Signup and view all the answers

    How did the elite colonizers view the colonized regions?

    <p>As extensions of their homeland</p> Signup and view all the answers

    Which of the following cash crops were typically cultivated during colonization?

    <p>Sugar and tobacco</p> Signup and view all the answers

    What characterizes the instrument method used in economic development?

    <p>There is no independent effect of the instrument on the outcome variable</p> Signup and view all the answers

    What was a typical characteristic of the social structure established in colonized regions?

    <p>High inequality between colonizers and indigenous people</p> Signup and view all the answers

    In the context of economic development, which statement about sacrifice is true?

    <p>Investing in production may require sacrificing current consumption</p> Signup and view all the answers

    What is indicated when a constraint is binding in economic diagnostics?

    <p>Agents in the economy are likely to attempt to overcome the constraint.</p> Signup and view all the answers

    In the context of shipbuilding and economic diagnostics, what could be a potential consequence of environmental degradation?

    <p>Lower productivity and potential for unlivable major cities.</p> Signup and view all the answers

    How can effective analysis of poverty and inequality be conducted according to the critical questions posed?

    <p>By careful research measuring inequality and poverty.</p> Signup and view all the answers

    Which question addresses the nature of beneficiaries in economic growth?

    <p>What determines the nature of who benefits from economic growth?</p> Signup and view all the answers

    What might indicate a constraint of excessive taxation in an economy?

    <p>A trend of increased movement into the informal sector.</p> Signup and view all the answers

    What is NOT a dimension suggested for consideration when discussing constraints in economic growth?

    <p>Economic ties with international entities.</p> Signup and view all the answers

    Which statement best describes the relationship between social capital and economic agents?

    <p>Agents with less intensive constraints are likely to thrive.</p> Signup and view all the answers

    What critical question addresses the extent of absolute poverty in developing nations?

    <p>What is the extent of relative inequality and its relation to absolute poverty?</p> Signup and view all the answers

    What is the primary objective in delaying pregnancies to address population momentum?

    <p>Enhancing women's career opportunities and participation in the workforce</p> Signup and view all the answers

    In the context of the Malthusian Population Trap, what is the likely outcome if population growth exceeds resources?

    <p>A significant decline in quality of life</p> Signup and view all the answers

    What does the demographic transition model primarily describe?

    <p>The shift from high birth and death rates to lower rates with societal advancement</p> Signup and view all the answers

    Which factor is essential to prevent diminishing returns in production according to the given content?

    <p>Shifting technology and education levels</p> Signup and view all the answers

    What is the primary effect of high-quality education on family size, as suggested in the content?

    <p>It leads to parents having fewer children due to different priorities</p> Signup and view all the answers

    What does the concept of population stability relate to in the context of economic development?

    <p>Finding a point where the population growth rate matches available resources</p> Signup and view all the answers

    How might women’s presence in the workforce alter population demographics in a country?

    <p>It can result in lower birth rates and delayed pregnancies</p> Signup and view all the answers

    Which situation exemplifies the potential consequences of the price effect in education?

    <p>Families opting for fewer children because of high education costs</p> Signup and view all the answers

    What does the Solow Equilibrium equation sf(k*) = (δ + n) k* represent in economic terms?

    <p>The savings needed per worker to maintain capital</p> Signup and view all the answers

    How is technology characterized in the context of economic growth according to the content?

    <p>It represents what cannot be explained by other factors.</p> Signup and view all the answers

    What does the term 'path dependency' in development economics imply?

    <p>Past decisions and existing structures shape current economic conditions.</p> Signup and view all the answers

    What role do governments play in the context of market fundamentalism in developing countries?

    <p>They can facilitate constructive interventions despite market failures.</p> Signup and view all the answers

    What is required to achieve higher social welfare according to the economic principles outlined?

    <p>Coordination and cooperation among economic agents.</p> Signup and view all the answers

    What does the concept of 'returns to scale' indicate in economic growth?

    <p>Doubling inputs leads to a doubling of outputs.</p> Signup and view all the answers

    What constraint may impact the pattern of development according to dependency theory?

    <p>Historical international relations and trade barriers.</p> Signup and view all the answers

    What does the dependency on existing capital and labor imply for a country's economic growth?

    <p>Both capital depreciation and workforce growth must be accounted for in planning.</p> Signup and view all the answers

    Which of the following factors is NOT associated with lower fertility rates?

    <p>Higher rates of agricultural employment</p> Signup and view all the answers

    What is a primary reason for the concept of coordination failures in fertility decisions?

    <p>Fear that others will not spend, leading to overall reduced spending</p> Signup and view all the answers

    Which of the following best describes the impact of women's education on family planning?

    <p>Higher likelihood of engaging in non-agricultural employment</p> Signup and view all the answers

    What relationship is suggested between childhood health care and fertility rates?

    <p>Lower infant mortality rates lead to smaller family sizes.</p> Signup and view all the answers

    In the context of population policy, what is a significant factor linked to market failures?

    <p>Financial market failures create barriers for families to invest in education.</p> Signup and view all the answers

    What role does increased family income play in relation to child quality versus quantity?

    <p>It encourages families to have fewer children with a focus on their needs.</p> Signup and view all the answers

    How does imperfect information influence decisions around family size?

    <p>It can create misconceptions regarding child health and survival rates.</p> Signup and view all the answers

    Which statement best represents the relationship between child quality and spending behaviors in families?

    <p>Increased spending on fewer children generally promotes better education and health.</p> Signup and view all the answers

    What does the headcount index represent in the context of measuring absolute poverty?

    <p>The ratio of the poor population to the total population</p> Signup and view all the answers

    Which of the following is NOT considered a desirable property for poverty measures?

    <p>Visibility of data</p> Signup and view all the answers

    What issue can arise from agencies focusing on headcount measures for poverty reduction?

    <p>They could overlook broader socio-economic conditions</p> Signup and view all the answers

    What is one implication of government policy showing 'urban bias'?

    <p>It may exacerbate poverty in rural communities</p> Signup and view all the answers

    What is a primary reason for the inefficiency in changing operational methods despite possessing knowledge?

    <p>Lack of capital resources</p> Signup and view all the answers

    How does the Gini coefficient behave when income is redistributed in the economy?

    <p>It decreases as income becomes more evenly distributed</p> Signup and view all the answers

    Which model discusses the challenges of using foreign advisors in development?

    <p>False-Paradigm Model</p> Signup and view all the answers

    What assumption is called into question regarding labor in rural areas?

    <p>There is always full employment in urban areas</p> Signup and view all the answers

    What empirical pattern is referred to as 'stylized facts' in development processes?

    <p>Typical but not universal processes</p> Signup and view all the answers

    What role do institutional factors have in the discussed development approach?

    <p>Minimal or insignificant role</p> Signup and view all the answers

    What critiques are associated with the dualistic-development thesis?

    <p>Tendency to overlook coexistence of social elements</p> Signup and view all the answers

    Which aspect of economic development does the neoclassical 'counterrevolution' challenge?

    <p>The effectiveness of state interventions</p> Signup and view all the answers

    What is a limitation of the neoclassical framework in demonstrating development success?

    <p>It lacks guidance for achieving positive outcomes</p> Signup and view all the answers

    Study Notes

    Development Economics

    • The text discusses development economics, including its core concepts and challenges.
    • It delves into the disparities in living conditions across countries, exploring factors like income, health, education, and freedom.
    • The text highlights the importance of addressing multidimensional poverty, recognizing it extends beyond financial limitations

    Four Stylized Living Standards Strata

    • The document outlines four strata of living standards:
      • Poorest: Lack essential needs, experience vulnerability and precarity.
      • Second poorest: Experience hardship, lack basic amenities, but may possess some agency.
      • Middle strata: Satisfy basic needs, experience moderate agency, but face economic limitations.
      • High-income strata: Stable employment, comfortable living standards, possess significant agency.

    Population Growth and Development

    • An inverse relationship exists between development and population growth.
    • Lesser development leads to higher population growth due to limited resource allocation for individual children.
    • Increased population growth contributes to heightened pressure on existing resources and infrastructure.

    Institutions and Development

    • The document highlights the role of institutions in economic life, including:
      • Property rights
      • Contract enforcement

    Plantation Economies

    • Plantation economies represent a specific type of economic structure characterized by large-scale agriculture for colonial markets.
    • These economies often rely heavily on forced labor, leading to social divisions and inequality.
    • Examples of plantation economies include the Southern United States and the Caribbean.

    Exploitation

    • Exploitation occurs when colonial powers focus on extracting resources, strategic locations, and cheap labor for their benefit.
    • It often leads to a lack of investment in enduring social infrastructure for colonized regions.
    • Exploitation contributes to economic inequality and limited development within colonized areas.

    Classic Theories of Economic Growth and Development

    • Four approaches to economic development are discussed:
      • Linear-stages-of-growth model: Posits multiple stages of growth, prioritizing production over consumption.
      • Structural-change model: Focuses on transforming economic structures through industrialization.
      • Dependence theory: Emphasizes the dynamics of power and exploitation between developed and developing nations.
      • Neoclassical counter-revolution: Advocates for market liberalization and reduction government intervention in the economy.

    Constraints to Development

    • The text explores constraints impeding development, including:
      • Physical capital: Insufficient investment in infrastructure and productive assets.
      • Human capital: Lack of education, skills, and health.
      • Natural resources: Scarcity or overuse of natural resources limiting economic opportunities.
      • Technology: Barriers to acquiring and applying new technologies.
      • Institutions: Weak governance, corruption, and lack of property rights.
      • Geography: Geographic location impacting trade costs and economic opportunities.
      • Demand constraints: Limited domestic and international markets for goods and services.
      • Policy constraints: Government policies hampering economic growth and development.

    Poverty and Inequality

    • The text emphasizes the multidimensional nature of poverty, acknowledging both income and social factors.
    • It discusses challenges in measuring poverty and inequality, highlighting the limitations of traditional measures.
    • The Foster-Greer-Thorbecke (FGT) Index is introduced as an alternative poverty measure addressing some limitations of the headcount index.
    • The text emphasizes that poverty measurement methods can influence policy decisions and impact incentive structures.

    Solow Model

    • The most important factor in economic growth is technology.
    • However, technology is difficult to define and measure.
    • The Solow equilibrium equation is: sf(k*) = (δ + n ) k*
      • Where sf(k*) is savings per worker
      • δk* is the amount of capital needed to replace depreciating capital
      • nk* is the amount of capital needed to account for population growth

    Dependency Theory

    • Existing relationships in international trade and investment can limit a country's development.
    • However, there are many examples of countries with strong global integration that have performed well economically.

    Market Fundamentalism

    • Governments often fail to promote economic development.
    • But markets also fail in developing countries.
    • East Asia shows that government intervention can be constructive.

    Coordination and Development

    • Economic agents need to coordinate to achieve higher social welfare.
    • This requires cooperation.

    Population Momentum

    • Even if birth rates decline, population growth can continue for several decades due to population momentum.
    • This occurs because a large proportion of the population is in the working-age group.
    • To reduce population momentum, women need to delay family planning and focus on education and employment opportunities.
    • Having more women in the workforce decreases the population pyramid, and thus the number of births.

    Malthusian Population Trap

    • Rising population and diminishing returns to fixed factors can lead to low levels of living.
    • This occurs when population growth outstrips available resources.
    • This can lead to a decline in the standard of living.

    Population Demographic Transition

    • Nations shift from high birth and death rates to low birth and death rates as societies achieve more technology, education, and development.

    Rationale For Population Policy

    • Higher female education and employment opportunities correlate with lower fertility rates.
    • Improved child survival rates also reduce family size.

    Demand Function For Children

    • There is a price associated with having children.
    • Parents need to ensure that they have the resources to provide for their children's needs.
    • Higher-quality children are more expensive.
    • Increased spending on children can contribute to economic optimism.

    Coordination Failure

    • Can occur when individuals overspend on consumption based on optimistic views of future incomes.
    • Conversely, it can also occur when individuals save too much because of fear.
    • This can lead to a decline in overall spending.
    • This also applies to situations like climate change, where individuals act in a way that is efficient, but not effective.

    Basic Indicators of Development

    • Real Income: Gross National Income (GNI), Gross Domestic Product (GDP), and Purchasing Power Parity (PPP).
    • Health: Infant mortality, life expectancy.
    • Education: Literacy rates, school enrolment rates.

    Institutional Factors

    • Institutional factors are essential for development, but they often play a small role in neoclassical economic approaches.

    Empirical Patterns of Development

    • There are common but not universal patterns of development.
    • These include a shift from agriculture to industry, and a rise in income inequality followed by redistribution.

    Poverty Measures

    • Headcount index: the fraction of the population that lives in poverty.
    • Foster-Greer-Thorbecke (FGT) Index: a more comprehensive measure that considers the depth and severity of poverty.
    • Poverty measures are often distorted by political incentives to report improvements, and by a bias towards urban development.

    The International-Dependence Revolution

    • Explores the power dynamics at play in the global economy.
    • False-Paradigm Model
      • Pitfalls of using developed-country models in developing countries.
    • Dualistic-development thesis
      • Superior and inferior elements can coexist.
    • Criticisms and limitations
      • Frameworks offer little guidance for achieving development.

    Neoclassical, free market “counterrevolution”

    • Challenges the Statist Model.
    • Emphasizes free markets, public choice, and market-friendly approaches.
    • Measuring Absolute poverty with headcount index results in unintended policy incentives for using headcounts.

    Stylized Facts

    • Some processes are typical but not universal. These are often referred to as "stylized facts."
    • Switch from agriculture to industry.
    • After a period of time, the Gini coefficient will go back down as income is redistributed within the economy.
    • This will happen after the period of rapid industrialization.

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Related Documents

    Econ 121 Notes (PDF)

    Description

    Explore the fundamentals of development economics and the challenges associated with living standards worldwide. This quiz covers key concepts like multidimensional poverty and the relationship between development and population growth. Delve into the four strata of living standards to understand global disparities.

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser