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Comparative Political Economy 1 Exam Paper

Comparative Political Economy 1 Exam Paper

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Published by Nenad Krstevski

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Published by: Nenad Krstevski on May 12, 2011
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CPE I Copenhagen Business School Nenad KrstevskiRegular exam Int. Business & Politics CPR: 131082-2945June 2008 2
nd
semester1
Question 1:
In the anthology
States, Markets, and Just Growth
Atul Kohli (2003, 2) defines “justgrowth” as “growth with distribution and democracy”. Discuss whether, how and why the
goal of just growth is partly or fully attainable by developing countries or emergingmarket economies in an era of economic globalization? Please, illustrate your argumentswith examples from Sub-Saharan Africa, The Middle-East, Asia, Latin America and/orEastern European and CIS countries.
Answer:
As the question that I need to answer already states that
“just growth” as “growth withdistribution and democracy”, it is leading me
to think in this way. Is developmentbringing democracy? Higher growth of the economy, better conditions for the peoplelining in the country, higher level of education, openness to the extern world, can leadeventually to installment of democracy in the political system. Sometimes the growth isattained if first the country democratizes itself and towards its own citizens, allocatessome power to its citizen and not only to a small leading class in the society and open upto the rest of the world.My short answer is that I agree. I have my own reasons and I will show later withexamples from some countries but this is not everywhere the case.Bu
t first, let’s start with why I agree with Atul Kohli and his “just growth” as “growthwith distribution and democracy”.
 Let
s take the former Yugoslav republics, Slovenia, Croatia, Macedonia, Bosna. All of these countries were industrialized countries an
d before 1980’s (especially former 
 
CPE I Copenhagen Business School Nenad KrstevskiRegular exam Int. Business & Politics CPR: 131082-2945June 2008 2
nd
semester2Yugoslav countries) were ranked very high on HDI and GDP per person. After some
domestic changes in the country (Tito’s death) there was a decade of extremely volatile
period with high inflation, political instability, loosing of the primate in the Third Worldas the leading country, fights for power between the rival groups in the Communist Party,bad management of the domestic economy. All in all, the country has became fromexporter of knowledge, economic development and stability to a place where wasdangerous to live, was difficult to provide for you and your family and a place where thecompetition between the political elites in the Communist Party was bringing adestruction of everything that was previous made with generations.Those countries
in the 1990’s started
very fast to democratize and separate from eachother.Great example where the democratization helped for the country to have growth in GDPis Slovenia, now No. 7
th
in EU by GDP. Slovenia had a very fast transitional period fromcommunism to democracy and very efficient privatization. But still the government ishaving the biggest companies in Slovenia, and the profit from them is returned to thebudget from where is invested in infrastructure of the country. I just want to mention hereone thing, and that is that in Slovenia 95% of the population is Slovenians and they areCatholics.Similar examples like Slovenia are the ex Warsaw pact countries, Poland, CzechRepublic, Slovakia..Those examples can explain that growth comes together with democratization of thecountries and that is why I agree with Atul Kohli and his theory.In this countries the democracy was strengthen with the growth of the economy, of thehigher HDI of the people.Contrary of Slovenia, I want to show how a country in Europe, similar on developingstage before democratization, did not manage to have same growth as Slovenia, Poland,Czech Republic, Slovakia.. Even they are ex-Yugoslav republics, Macedonia and
 
CPE I Copenhagen Business School Nenad KrstevskiRegular exam Int. Business & Politics CPR: 131082-2945June 2008 2
nd
semester3especially Bosnia did not manage to have growth enough to level up with the rest of theregion. Why?Bosnia had been less developed than Slovenia, but the difference was not so big. Theproblems that Bosnia had were its own population. It is divided in three ethnic groups,which all of them have between 25% and 45% of total population. And the handicap tobe even greater, they were all different religion too. As everybody knows Bosnia had a 5years devastating ethnic war, and still 15 years after the war people are divided betweenthemselves with strict borders init the country. The economy looks like some NorthAfrican country with no developed inner market in the whole country, but only in theethnic parts. The rules are different for everybody. The transition is still in the beginningand the privatization is only on the first phase, 20 years after official start. By allstandards it is already for 15 years counted as democratic country, but development is notseen in near future, not as in the case of Slovenia at least.Similar is the situation of Macedonia, even they are having some better results in the last5-6 year. They ended the 15 years of transition just couple of years ago, fully open up themarket for the last 20 years, but again the have very low FDI and if we d
on’t count the
last 2 years extremely low GDP growth. In both of the countries the lack of stability andthe wars that they have has postponed the development even they had democracies andhad liberalized their markets according to the WTO standards.In those two cases I wanted to present how the different religions between the populationdirectly effect the growth in some European counties, but also the managing of the peoplein the country is very crucial. With managing I mean the leading elites and politicianshould have authority to lead the country, something that was having ex-Yugoslavia
when Tito was alive before 1980’s, something that Slovenia, Poland and Czech Republichad again from 1990’s, but thing that is missing in countries like Bosnia or now
I can saywas missing in Macedonia. Leadership is very important for the development.Now I want to answer the question of the exam directly through some contradictorilyexamples from around the World.

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