Summary Final Exam International Development PDF

Poverty worldwide: 1. Over [700 million individuals] (9.2% of the global population) live on less than [\$1.90--\$2.15 per day] (approximately €64 per month). 2. Extreme poverty is heavily concentrated in developing countries, with about [90% of this population] located in [sub-S...

Poverty worldwide: 1. Over [700 million individuals] (9.2% of the global population) live on less than [\$1.90--\$2.15 per day] (approximately €64 per month). 2. Extreme poverty is heavily concentrated in developing countries, with about [90% of this population] located in [sub-Saharan Africa and South Asia.] A close-up of a note Description automatically generated **[What can explain differences in development?]** **[Geographical factors]** **Jared Diamond (...):** Geographical factors that explain the differences in development: 1. **Hunter-gatherers** 2. **Food production** = food surpluses + domestic animals (milk production and transportation) 3. **Farming society** time for non-food producers, non-food activities and therefore for technological development, intellectuals and technocrats size of the population increase (with HG one baby every four 4, and now no constraints) 4. **Change social organisation** = large and dense stratified societies. [Food surpluses] in few places **Fertile crescent**: Modern-day Syria, Iraq, Lebanon, Israel, and Palestine: - **Dwindling Wild Resources**: A declining supply of wild animals (e.g., gazelles and fowl) necessitated alternative food sources. - **Abundance of Domesticable Animals**: The region was home to [four key domesticable mammals]: goat, sheep, cow, and pig. - **Richness in Domestication-Friendly Plants**: A high percentage of plants such as wheat, barley, and peas were suitable for domestication because: - They [had big seeds rich in protein]. - They were [edible], easy to grow, and could be harvested within months. - These plants were [self-pollinating], ensuring the inheritance of favorable traits. - They were [easy to store], supporting surplus production. Geographical advantages of **Eurasia** = horizontal axis The [East-West axis] of a continent significantly influenced the speed of agricultural spread: - Locations along the same latitude share similar day lengths and seasonal variations. - Plants' genetic programming (e.g., germination and growth) is tailored to these specific climatic features. - Earlier in history, the [Black Death] (bubonic plague) killed approximately [one-quarter of Europe's population] during the 14th century. - **Crowd Diseases**: Such diseases cannot sustain themselves in small, scattered hunter-gatherer groups because outbreaks tend to wipe out entire populations. These diseases emerged with the growth of [large, dense populations,] characteristic of sedentary farming societies. - **Farming played a critical role**: Farmers lived [close to their waste], sewage, and domestic animals, creating ideal conditions for diseases to spread and evolve. Contact with animals introduced zoonotic diseases that would later become major epidemics **[Birth of State]** Societies evolved through distinct stages: - **Bands**: Small groups of a few dozen individuals. - **Tribes**: Communities of a few hundred people. - **Chiefdoms**: Larger groups of a few thousand or more. - **States**: Complex societies with centralized governance, emerging around [8,000 years ago] and generally involving populations of over 50,000. **Defining Characteristics of a State**: A state is a [centralized organization] that: Imposes rules over a defined territory and population. Exercises a [monopoly on legitimate force] (e.g., policing and military power). Important: States should not be confused with [nations], which are often cultural or ethnic entities. **[Institutional Factors]** **Douglas North**: role of the institution to shape economic outcome: - **Extractive institution** (limited access order): Characterized by elite control of political and economic systems. - The elites extract rents (economic benefits) through monopolies and privileges. - While these institutions limit violence by maintaining law and order to protect elite interests, they stifle economic growth by preventing broader participation - Personal relationships and patronage play a central role, often replacing formal mechanisms. - **Inclusive institution** (open access order): These institutions allow broad access to political and economic opportunities: - Anyone meeting specific criteria can form organizations or participate in governance. - Power is subject to competition, which fosters innovation, creative destruction, and economic growth. - Historically, this transition marked a second stage of institutional development, extending elite privileges to the wider population. **Amartya Sen (...)** : He emphasizes the importance of individual capability and freedom akin to open access order. Freedom is the core focus of development, as it serves both as a means to achieve development and as its ultimate goal. True development means addressing the root causes of \"**unfreedom**,\" including: - Poverty and hunger - Lack of healthcare, clean water, and sanitation - Poor economic opportunities and social deprivation - Neglect of public services (education, health, electricity) - Repressive or authoritarian governance. 1. **Political freedom**: against « the Lee thesis » (PM of Singapore Lee Kuan Yew). Some have championed harsher political systems, with denial of basic civil and political rights, for their alleged advantage in promoting economic development. Little evidence according to Sen. 2. **Economic facilities**: no arbitrary controls and denials of opportunities of transactions, freedom of employment. Individuals can utilize economic resources for consumption, production or exchange. Access to finance. 3. **Social opportunities:** arrangements that society makes for education and health care 4. **Transparency guarantees:** to prevent corruption, financial irresponsability and underhand dealings 5. **Protective security:** social safety net against abject misery, famine relief and emergency public employment to generate income for destitutes - State and society must help to get freedom to get development as freedom is linked to development. **Example of England:** - **1215 Magna Carta**: established the idea that the king was subject to the law, not above it, challenging the divine right of kings. It also placed restrictions on the king\'s powers marking a more limited form of government (had to consult barons in order to raise taxes). - **1265 first elected parliament** - not only elites allied to the king but also a broader set of interests - **War of the Roses** - increased political centralisation and the early inception of a bureaucratic state - **1642 Civil War** - between Charles I and parliament, reflecting the struggle between the crown\'s wish to strengthen monarchy & establish absolutist institutions on the one hand and parliaments wish to set up economic and political institutions on the other - **Glorious Revolution of 1688** - parliament victory over James II\'s army brought about instrumental changes, ultimately yielding all decision-making powers to Parliament - Constitution - Declaration of Rights   - **Consequences of the Glorious Revolution:** - Parliament control over state policy - Policy agenda: enforcing property rights, strengthening of the navy to protect overseas mercantile interest - More access to policy by the people as MP\'s elected, Although, only 2% of the population could vote - Anyone could petition parliament - Abolishment of all domestic monopolies i.e. the heart of extractive economic institutions   - **Foundation of the Bank of England in 1694:** Private bank acting as a banker to the government Essentially paved the way for the financial revolution with the expansions financial markets and banking 2/3 borrowers not from the privileged social classes Expansion of the tax base to 10% of GNP **[The Meiji Revolution]** - Meiji Restoration, in Japanese history, the political revolution in 1868 that brought about the final demise of the Tokugawa shogunate (military government)---thus ending the Edo (Tokugawa) period (1603--1867)---and, at least nominally, returned control of the country to direct imperial rule under Mutsuhito (the emperor \...16 sept. 2024 - The Japanese people moved from being an isolated feudal society at risk of being colonized by Western powers to a new paradigm of modern, industrialized nation, influenced by Western scientific, technological, legal political ideas. The Meiji leaders supported a program « Five Charter Oath » consisting of: 1. Deliberative assembly and all matters decided by public discussion 2. All classes, high and low, shall unite in carrying out the administration of the affairs of the state 3. The common people shall each be allowed to pursue his own calling 4. Evil customs of the past will be broken 5. Knowledge shall be sought so as to strengthen the foundation of imperial rule The government inaugurated a new Western-based education system for all young people, sent thousands of students to the U.S. and Europe, and hired more than 3,000 Westerners to teach modern science, mathematics, technology, and foreign languages. - In 1871, a group of Japanese politicians (the Iwakura mission) toured Europe and the US to learn Western ways. The result was a deliberate state-led industrialization policy to enable Japan to quickly catch up. - Modern industry first appeared in textiles - Rail system was developped - The process of modernization was heavily subsidized [**Theories Explaining the Rise of States** **Social Contract Theory**:] Individuals create a state to protect themselves from internal and external threats. They use the same social contract methodology but provide very different versions of an idea state much of difference around the **issue of human nature**. 1. **Thomas Hobbes** (1651): strong state to prevent **chaos** and anarchy. Pact between state and civilian less liberty against more **security**. human nature as [egotistical and competitive] without government, life is very insecure and therefore political system is necessary to impose [order and ensure security] the ideal political system for him is an **[all-powerful sovereign] which he describes as the [Leviathan ]** EXTRACTIVE INSTITUTIONS 2. **John Locke (1690):** peaceful social relation without the state but state for property rights and liberty. less pessimistic than Hobbes. for him individuals have natural rights, given by God, and these natural rights ought to be protected by the state. 3. **Jean-Jaques Rousseau:** legitimate power comes from the "General will" (populist movement) INCLUSIVE INSTITUTIONS **[The invisible institutions (Rosanvallon)]** - Visible or formal institutions are not sufficient, even with common cultural values, underlines Pierre Rosanvallon - Three invisible institutions are necessary: trust, authority, and legitimacy. - **Trust**: means the ability to predict a leader\'s, a civil servant\'s, or a citizen\'s good behavior. It protects institutions and agreements. - **Authority**: means, for the gvt, acting without resorting to coercition, not even to explanation - **Legitimacy**: a more complex subject : 3 categories of legitimacy : procedural (election, or admission of to the civil service according to personnal merits), substantial (based on the status of the function), and behavioral **[The west and the rest]** **Nial Fergusson**: - In the beginning of the 15th century, Europe was a miserable backwater (Black death, wars...) while the Orient was home to dazzling civilizations. Chinese technology, Indian and Persian mathematics, Arab algebra had been far ahead for centuries. - Then, beginning in late 15th century, the little states of Western Europe, with their religion derived from a Jew of the Near East, with their bastardised languages and their intellectual debt to Oriental sciences, produced a civilization capable of conquering the great Oriental empires, colonize the Americas, Australasia and Africa and even of converting peoples all over the world to western way of life, for more than the previous 500 years. - The key answer lies with institutions, which are the products of geography, history and culture. But Niall Ferguson elaborates ont that and deepens the analysis **5 elements which explain why Western Europe took the lead:** **[Competition]** - A good example is the comparison between China and Western Europe: in the plains of Eastern Eurasia, a monolithic empire stifled innovation, while in Europe, with its mountainous terrain, river divides, and jagged coastline, multiple monarchies and city-states engaged in creative competition and communication. - The political fragmentation that characterised Europe impelled Europeans to seek opportunities. For Europeans, sailing around Africa or to the Americas was about getting ahead of their rivals, both economically and politically. The multi-level competition between and within states explains the rapid spread and advances in technology, trade, and colonization. - In Japan, the Meiji revolution put an end to the strict seclusion. **[Science]** Niall Ferguson says that this is similar to apps. If you load six apps, you begin to develop and industrialize countries. It is necessary to explain why science shifted from east to west. Until the 15th century, the Muslim and Chinese worlds were ahead. Taking the case of the Islamic empire, its success cannot only be explained by religious fervor; the main reason for their success is science, technical knowledge, weaponry, etc. All scientific discoveries and innovations were made in the Arabic world. After the collapse of the Roman Empire, there were several centuries of decline in innovation. During this period, the west began to be more \"innovative.\" - The establishment of a caliphate in the 8th century by the successors of Prophet Muhammad was driven not only by religious fervor but also by territorial expansion from the Arabian Peninsula, reaching from Spain across North Africa to the Near East (Syria) and further east into Persia and Afghanistan. - The Abbasid Caliphate was at the forefront of science and philosophy. Greek texts were translated into Arabic, and algebra was established. The first true experimental scientist was the Muslim Ibn al-Haytham (965-1039), who wrote a seven-volume work titled "Book of Optics." - The Ottoman Empire, also known as the Turkish Empire, was founded in the 13th century in Anatolia. It conquered the Byzantine Empire in 1453 and prospered until the 17th and 18th centuries. The empire collapsed in 1924, despite the Young Turk Revolution of 1908 aimed at modernizing it. Its peak occurred in the 15th and 16th centuries, extending to North Africa, the Near East, and Southeast Europe. - However, scientific progress was nonexistent in the Ottoman Empire from the 16th to the 17th century, during the scientific revolution in Western Europe. Islamic clerics began to argue that the study of Science and Greek philosophy was not compatible with the teachings of the Koran. They considered it blasphemous to suggest that man might be able to discern the divine mode of operation. In 1515, Sultan Selim\'s decree threatened anyone using a printing press with death. This failure to reconcile Islam with scientific progress proved disastrous. **Why did the scientific revolution and the enlightenment took place in Europe and not elsewhere?** - The religious and institutional factors provide and explanation - According to Ferguson, the differences in religious tenets between Islam and Christianity play an important role. The Christian tenet states that church and state should be separate: "Render to Caesar the things that are Caesar\'s and unto God the things that are God\'s." This principle, although often not properly implemented, contrasts with the Koran, which insists on the indivisibility of God\'s laws as revealed to the Prophet and the unity of any power structure based on Islam, even if this is not actually realized in most Muslim-populated states. - The reluctance to reconcile science and religion is stronger in Islam than in the divided Christian states. - Two decisive breakthroughs occurred in Europe, weakening the power of the Church: the Renaissance and the advent of the Reformation (Luther). The invention of the printing press diffused new ideas, making it impossible to crush new heresies and control new ideas. **[Property rights ]** - Latin America has lagged behind Anglo-America due to differing views on self-governance. In Anglo-America (similar to the Netherlands and the UK in the 17th century), the foundation was based on the rule of law, the sanctity of individual freedom, and the protection of private property rights, supported by representative constitutional government after the American Revolution. This was combined with the sale of small plots of land, which differed from practices in Latin America. Initially, there was also a lack of means to exploit the Indigenous peoples, unlike the Incas, which was influenced by the institutional framework the settlers introduced. - Since the 1980s, Latin America has achieved higher growth through a combination of privatization, foreign investment, and export orientation. **[Medicine ]** - Thanks to Western medicine, the average global life expectancy more than doubled: from about 28.5 years in 1800 to 66.6 years in 2001. - In nearly all Asian and African countries, life expectancy improved during the colonial period because colonization in tropical areas required means to control diseases. Colonial empires inspired a generation of European medical innovators to combat cholera, yellow fever, malaria, and other tropical diseases. In 1905, a free healthcare service for the indigenous population was established in French West Africa, something that did not exist in France. Anti-smallpox vaccines were compulsory, and the population size increased dramatically. - The scramble for Africa, which refers to the ruthless partitioning of an entire continent by greedy Europeans, was also a race for scientific knowledge **[Consumption]** - Marx argued that the specialization of the labor force, coupled with a growing population, pushes wages down. He thought labor was a mere commodity that could earn only subsistence wages within the capitalist system. He said that the ruling class exploited workers' hard work, generating profit by selling their products at a higher price but paying staff less than the value of their labor. - The essence of Marxism was the belief that the industrial economy was doomed to produce an intolerably unequal society divided between the bourgeoisie, the owners of capital, and a propertyless proletariat. - However, instead of becoming an impoverished mass that triggered a revolution, the workers favored strikes and collective bargaining. Capitalists understood what Marx missed: that workers were also consumers. Therefore, it made no sense to drive their wages down to subsistence level. As a result, wages in industrialized countries became much higher than in non-industrialized countries. **[Cultural Factors]** **[Risk of traditions]** **Achille Mbembe**: tradition often implies a refusal of responsability, a search for an external culprit. There is a tendancy to accuse external opression, to believe that external forces are responsible **Moussa Konate**: Africans are the result of trauma, and psychological injuries from colonialism. Resentment of the West leads to mistrust of modernity. - Features of African traditions: - Strong social pressure - Women victims of men's oppression - Forced conviviality - Priority to the family - Relation to time **Axelle Kabou**: discusses the rejection of development by urban elites, emphasizing that it reflects a perceived admission of cultural and racial inferiority. **[Tradition and modernity]** **Max Weber**: theory on protestant ethics and Calvinist protestant branch. More protestant = a more developed capitalist economy because of trade and wealth accumulation. Foster hard work, discipline, and frugality. Success = self-confidence = sign of damnation. - Calvin taught a doctrine of double predestination, in which, from the beginning God chose some people for salvation and others for damnation **Hofstede**: 6 dimensions power distance, uncertainty avoidance, individualism, masculinity/feminity, long-term orientation, indulgence. **[Demographic Factors]** **Malthus**: if population growth is higher than resources, it leads to unsustainable growth. - Economic development = stock + flow + economic structures: - **Stock**: the issue of overpopulation. According to Malthus, "the power of population is indefinitely greater than the power of the earth to produce subsistence for man." He is wrong because he did not consider the progress in productivity. His reasoning is only correct in a few cases. In several regions, there is a lack of progress (illiteracy, traditional agriculture no advancement in productivity). Malthus is correct regarding a few areas of the earth. - Desertification exacerbates the issue. Climate change in the Sahel region of Africa leads to increased rainfall, making the Sahara greener by the end of the century. However, the Sahel is experiencing more rain, resulting in floods that destroy everything and cause many casualties. Meanwhile, desertification continues due to population growth. The population clears forests to produce food, which happens faster than climate change. As a result, the desert continues to advance to the south, shrinking cultivable land. Cattle must migrate south during the dry season and north during the wet season in search of food. During their migration, they encounter farmers, leading to numerous conflicts between farmers and herders. - **Structure**: A population is divided into age groups. One group consists of individuals aged 18 to 65 who are able to work. The elderly are less able to work, and children cannot work at all. When there is strong population growth, the structure changes. If the proportion of dependent individuals in the population is high, there will be fewer workers, greater social demands, and less savings. - The majority of the population is very young, with a low average age. - A portion of the population works while others, including the younger generation, do not. This situation leads to numerous consequences. Those who work must provide for their children, leaving little room for savings or investment, which depends solely on foreign loans. Although young people continue to consume, much of this consumption is met through imports rather than local production. Consequently, this impacts the trade balance, resulting in a deficit. Overall, the situation creates a vicious cycle of economic degradation. - **The Flow**: the rate of population growth. Rapid growth may outstrip schools and job creation, leading to negative consequences. If economic growth is not more than 3-4%, it means the population is becoming increasingly poor. A high growth rate of the economy is necessary to cope with population growth. Regarding job creation, to create jobs, you must find a comparative advantage. If a country lacks one, it will be difficult to balance its trade. - Rapid growth may outstrip schools, job creations, increases in food production leading to negative consequences on economy and stability. a larger share of children who will not be able to go to school. The case of the Sahel region. Presently, according to the UN statistics, only 55% of the children are able to go to school. The level of quality of the school tend to deteriorate. Among the 55% of the children, about 40% are not literate when they go out of school. They drop out at a early stage. The issue of the language: the school are in the official language of the colonialize (French and English) and it is not the maternal language of their family. It is an obstacle for them and it is difficult to overcome them as there is plenty of different language in the communities. There are not the means to have teachers in all languages. Those languages are not often written. The result is a bad efficiency also of the schooling system. The elites that have the means private good school succeed. It will have a consequence of reproducing the elite who are able to find a solution for their children. The bulf of the population will suffer of the degradation of the public service. As the population does not pay taxes, the government does not have the mean to pay for all of that. - **Demographic window**: specific periods in a country's demographic transition when its age structure favours economic growth. Working age population is superior to dependent population (children and old) = window for potential demographic dividend. - **Demographic dividend**: refers to the economic growth potential that arises when a country\'s working-age population (typically defined as people between 15 and 64 years old) is larger than the dependent population (children and elderly). This demographic shift can create opportunities for increased productivity, savings, and economic development, provided that the country effectively invests in education, healthcare, and employment. = demographic window + education + job creation - **5 stages of demographic transitions**: -  - Stage 1---High birth and death rates lead to slow [population growth](http://www.ck12.org/biology/Population-Growth). - Stage 2---The death rate falls but the birth rate remains high, leading to faster [population growth](http://www.ck12.org/biology/Population-Growth). - Stage 3---The birth rate starts to fall, so population growth starts to slow. - Stage 4---The birth rate reaches the same low level as the death rate, so population growth slows to zero. **[Official Development Assistance]** ODA is a government aid that targets the economic development and welfare of developing countries. There two types of ODA: 1. Bilateral (two countries) 2. Multilateral institutions (world bank, IMF) It can take several forms: Grants (direct funding project) and soft loans Does it works: World Bank says it depends on the policy regime of recipient countries. **Jeffrey Sachs** says that some countries are in a poverty trap. Being landlocked is a huge economic handicap to trade and development. Even with taxes and resorting to private investors, they cannot have a normal education and health system, cannot build roads and public services such as electricity. Sachs says that foreign aid is the key to solving their problems ODA essential to overcome poverty trap. **W. Easterley** is an economist in New York who is in the opposite camp. Peter Bauer supports the idea that foreign aid is noxious, as does Zambian economist Dambisa Moyo. Both sides have valid points. The teacher might say it depends and that it is a case-by-case issue, regarding the type of ODA and the countries involved. Making generalizations of this kind is probably wrong foreign aid is noxious (nocif). **Esther Duflo** says that the debate cannot be solved, but she adds that something should be done anyway and recommends acting at the microeconomic level to alleviate poverty. When the conditionalities focus on the sensitive issues of the sovereign state, the foreign state prefers to give up on the ODE. They prefer to maintain the status quo. The conditionalities are ineffective unless the state agrees with all the conditions. Esther Duflo states that we cannot do anything about the macro level, as we cannot change the mindset against foreign investment and corruption. There are poor people, and we should deal with them directly, study their problems, and find a local solution adapted to the community. It is important not to have prejudices or preconceived ideas and to start by studying the local situation with sociologists and economists to understand what they suffer from the most. It is a microeconomic approach act at micro economic level to alleviate poverty, case-by-case by looking at economic structure to propose suitable aid. **[The Main proven defect of ODA:]** The head of the ODE agencies would agree on the slides: - **It weakens the receiving countries**: it should be the main goal of their policy. If it is treated properly by the donor country, it deprives the government of its role. Normally, the UNDP or the World Bank organizes meetings every month in the receiving countries with donors to understand what they are doing. This is to coordinate action. It is hard to coordinate decisions because they are made in the capitals of each country, not in the local country in question. Receiving countries are usually not in those meetings, so the World Bank or UNDP have requested to include them in those meetings for a better idea of what is being done. - **The competent civil servants are recruited by foreign aid agencies**: At least the major agencies need to recruit local people, specifically the most competent civil servants. The civil servants leave local administration to join foreign agencies. As a result, the government no longer has enough civil servants to manage government aid or programs. This issue is prevalent everywhere and no one has found a solution. In countries with insecurity, having a foreign person is dangerous; they could be taken hostage. Therefore, it is necessary to base these activities on local people, who must not be recognizable. - **It saturates the management capacity of the receiving country**: The ODA goes to the country to avoid embezzlement, capacity problems, and the risk of corruption. This is why the poorest countries receive the smallest share of ODA. These countries are too poorly organized and lack the management capacity to receive ODE. - **It prevents reforms and local taxation** - **No coordination of donors (**More especially the hundreds of NGOs) - **No predicted consequences on the ground**: Jean-Pierre Olivier de Sarrdan lives in Niger and has both French and Nigerian nationalities. He has written the book "La revanche des contexts." His book is about the unpredictable consequences of ODE: he explains that if you deal with projects (ODE part 2: cash money, budget aid, or project), they do not take into account sociological matters. When you create a new investment (irrigation program), you have to manage it and run it. The donor says that you must form managing committees. They state that these committees must be 50% men and women. However, the village doesn't agree on that. The committees also assert that there must be no corruption. But how can we combat corruption in these countries? We do not respect local hierarchy and therefore create something new in the village. Normally, there are negative consequences in the village. The best remedy for that would be to conduct anthropological studies and involve local people much more. But it is not the habit of donor countries. Geopolitical motivations should include caring for the Sahel. Currently, the majority of children in the Sahel do not attend school. Education is ineffective, as we have made little effort to address this issue. France has left them without much assistance. Another motivation is the public good, which is a new focus. Climate change and the decline of biodiversity are legitimate purposes of ODE. A new goal that has emerged is the control of migration, which aims to keep migrants in their home countries. For instance, the EU provides funding to Turkey to keep Syrian migrants there. We offer them ODE in exchange for better control of migration migration. **Contradictory motivation of the donors**: compassion, geopolitical, economical, public goods, control of migrations and finally independence of self-promoting donor agencies. - **Lobbys and fashions**. - **22.5%** of ODE go to least developed countries but not to failed state (Somalia, Soudan) - **Total amount of ODE:** 224 billion of dollars **ECF** = extended credit facility loans if the country has structural adjustment programs (decrease the fiscal deficit and increase institutions)