ECONOMIC

DEVELOPMENT
Goals report and presentation: 10%

Country Comparison Report: 20%

Exams: 17.5% per exam >> 70%.

>> Essay format: MCQ + Essays

 Economic growth: monetary growth (GDP, income,…)

 Economic development: an improvement in the quality of life and
living standards

GDP: market value of final goods and services >> income of labour, households,
…

Shortcomings:

 Does not account for geographical difference, eco activities

 Holistic number >> divide by population, even that does not tell the
disparity in the country. Exists extremes, outliers
 Does not express Sustainability: pollution,…
 Impact on environment affects all community, rich community can
deal with it.
 Does not include care economy: parental care,… >> women’s labour
is not captured in gdp >> does not enter into discussion. >> NO
AGENCY.

 Development: More holistic. Broader measure of achieving

development goals. Remind that income is vital but not the whole of
development. How much income is filtered through edu, health, social
security,… and spent on expenditures for growth,
VD: Amazon wants to open new franchises. Some don’t want to >> may
impact housing costs.

Development as freedom >> agency: have a say in what we say, no

dictatorship.

VD: Lean In book >> arguments do not hold for different types of women

Caste system: hierarchy >> if has agency >> GDP ignores them.

QUESTIONS: What is economic growth, development? Is economic

development possible w/o economic growth?

Economic Growth refers to the increment in amount of goods and

services produced by an economy. GDP growth, literacy, healthcare,
gender disparity.

Economic development refers to the reduction and elimination of

poverty, unemployment and inequality with the context of growing
economy.

Even for investing in education and healthcare, which are needed

for human development, governments need more and more
resources. It would be difficult to have such resources in a
stagnant economy.

Is economic development possible w/o economic growth?

+ More resources to allocate to economic development.

+ GDP is not correlated with happiness.

Growth: increase in resources

Development: allocation of resources.

How to implement policies to economic development?

Colonization impacts on economic development: history?

+ More resources to allocate to economic development sectors.

DEVELOPMENT AS FREEDOM:
Growth of GNP or of individual incomes can, of course, be very
important as means to expanding the freedoms enjoyed by the members
of the society.

But freedoms depend also on other determinants, such as social and

economic arrangements (for example, facilities for education and
health care) as well as political and civil rights (for example, the
liberty to participate in public discussion and scrutiny). Similarly,
industrialization or technological progress or social modernization can
substantially contribute

Sometimes the lack of substantive freedoms relates directly to economic

poverty, which robs people of the freedom to satisfy hunger or to achieve
sufficient nutrition,

In still other cases, the violation of freedom results directly from a denial
of political and civil liberties by authoritarian regimes and from
imposed restrictions on the freedom to participate in the social,
political and economic life of the community.

EFFECTIVENESS AND INTERCONNECTIONS

Freedom is central to the process of development for two distinct

reasons.
1) The evaluative reason: assessment of progress has to be done
primarily in terms of whether the
freedoms that people have are enhanced;
2-) The effectiveness reason: achievement of development is thoroughly
dependent on the free agency of people.

Free and sustainable agency emerges as a major engine of

development. Not only is free agency itself a "constitutive" part of
development, it also contributes to the strengthening of free agencies of
other kinds. The empirical connections that are extensively explored in
this study link the two aspects of the idea of "development as freedom."

SOME ILLUSTRATIONS: POLITICAL FREEDOM AND QUALITY

OF LIFE

First, in the context of the narrower views of development in terms of

GNP growth or industrialization, it is often asked whether certain
political or social freedoms, such as the liberty of political
participation and dissent, or opportunities to receive basic education,
are or are not "conducive to development."

>> Nma chúng nó là component to development

Dissonance between income per head (even after correction for price
variations) and the freedom of individuals to live long and live well.
>> Life expectancy may be negatively corrolated with GNP per head

To take a different type of example, the point is often made that African
Americans in the United States are relatively poor compared with
American whites, though much richer than people in the third
world. It is, however, important to recognize that African Americans
have an absolutely lower chance of reaching mature ages than do
people of many third world societies, such as China, or Sri Lanka, or
parts of India (with different arrangements of health care, education, and
community relations).

(chưa hieur lắm)

TRANSACTIONS, MARKETS AND ECONOMIC UNFREEDOM

The ability of the market mechanism to contribute to high economic

growth and to overall economic progress has been widely - and rightly -
acknowledged in the contemporary development literature.

The contribution of the market mechanism to economic growth is, of

course, important, but this comes only after the direct significance of
the freedom to interchange - words, goods, gifts - has been
acknowledged.

the rejection of the freedom to participate in the labor market is one of

the ways of keeping people in bondage and captivity, and the battle
against the unfreedom of bound labor is important in many
third world countries today for some of the same reasons the American
Civil War was momentous

the crucial challenges of development in many developing countries

today include the need for the freeing of labor from explicit or implicit
bondage that denies access to the open labor market.

the persistence of deprivations among segments of the community that

happen to remain excluded from the benefits of the market-oriented
society, and the general judgments, including criticisms, that people may
have of life-styles and values associated with the culture of markets

But more immediately, it also pointed to the remarkable fact that

economic unfreedom, in the form of extreme poverty, can make a person
a helpless prey in the violation of other kinds of freedom.

>>> Economic unfreedom can breed social unfreedom, just as social

or political unfreedom can also foster economic unfreedom

ORGANIZATIONS AND VALUES

A broad approach of this kind permits simultaneous appreciation of the
vital roles, in the process of, development, of many different institutions,
including markets and market-related organizations, governments and
local authorities, political parties and other civic institutions, educational
arrangements and opportunities of open dialogue and debate

Shared norms can influence social features such as gender equity,

the nature of child care, family size and fertility patterns, the
treatment of the environment and many other arrangements and
outcomes.

The fact that the freedom of economic transactions tends to be typically

great engine of economic growth has been widely acknowledged,

fertility rates would come down with "the progress of reason," so that
greater security, more education and more freedom of reflected
decisions
would restrain population growth

INSTITUTIONS AND INSTRUMENTAL FREEDOMS

(1) political freedoms, (2) economic facilities, (3) social

opportunities, (4) transparency guarantees and (5) protective security

economic facilities: serve to support the private sectors, individuals to

participate ,…
transparency guarantees: is political freedom

Barrriers of developing countries:

+ As will be discussed, the crucial challenges of development in many

developing countries today include the need for the freeing of labor
from explicit or implicit bondage that denies access to the open labor
market.

+ the persistence of deprivations among segments of the community that

happen to remain excluded from the benefits of the market-oriented
society, and the general judgments, including criticisms, that people may
have of life-styles and values associated with the culture of markets.

SUMMARY:
+ freedom as the principal ends of development can be illustrated with a
few simple examples: the liberty of political participation and dissent,
or opportunities to receive basic education
+ the role of markets as part of the process of development. The ability
of the market mechanism to contribute to high economic growth and
to overall economic progress.

+ The freedom to participate in economic interchange has a basic role in

social living

+ freedom of economic transactions tends to be typically great engine of

economic growth

+ These include (1) political freedoms, (2) economic facilities, (3) social
opportunities, (4) transparency guarantees and (5) protective security

Freedom in economic, trade, to make your own choices, >> agency

SOURCES OF UNFREEDOM: poverty as well as tyranny, poor

economic opportunities as well as systematic social deprivation, neglect
of public facilities as well as intolerance or overactivity of repressive
states
+ Political process participation, market participation.

What people can positively achieve is influenced by economic

opportunities, political liberties, social powers, and the enabling
conditions of good health, basic education, and the encouragement
and cultivation of initiatives. The institutional arrangements for these
opportunities are also influenced by the exercise of people's freedoms,
through the liberty to participate in social choice and in the making of
public decisions that impel the progress of these opportunities. These
interconnections are also investigated here.

>>> Economic freedom cannot come without political and social

unfreedom.

Disparity in income is not taken into account:

Why does smaller countries develop faster than bigger countries?

>> higher levels of capital resources, diminishing returns

Barriers:
+ India, China: inequality problem (unfreedom), climate changes,
diminishing returns to capital >> slower growth rate eventually.
+ Western countries: saturated captial market, only way is to innovate

CHAP 3:
Primary product export:
+ Raw materials: colonies are being exploited for natural resources >>
face a lot of competition (perfect competition) from many developing
economies.
 Easier for large countries to switch into other economies.
+ Use earnings to buy manufactured gooods >> pay much higher price
for imports.

COLONIALISM AND PATH DEPENDECY:

Spanish in Mexico and Peru

British Dutch French Portuguese, Spanish in Africa

VD1: Spain’s on India:

 Foced labour system > disrupt traditional village system of
production, kill ppl.
 Legacy: weak commitment to public goods, especially education
and the lack of mechanism of transition to facilitate
coherence in production system.

VD2: Slave trade in Africa: kills ppl

 New economic roles for African chieftains created, facilitator
and regional beneficiary of slave trade
 Authoritarianism strengthened, hard to defy status quo
 Impede th emergency of trade patterns
Path dependence: historical events, institutions >> determine future
of a nation.

FORMS OF COLONIALISM:

SPAIN CASE:

Extract gold and silver from colonies >> Inflation which undermine
domestic industry,…
Conspicuous consumption reach new height.
 The economic surplus ended up having no impact on productive
capacities of Spain.

MERCHANT CAPITALISM: FROM FEUDALISM TO

CAPITALISM
VD: Spain economy >. Fueled by semi-feudal intersts (emphasis on war,
plunder, slavery, short term gain)

 Halfway transition from feudalism to capitalism

VD2: Dutch system: established sugar plantation system > maximize agri
yield from a given amount of land.
 Goal of production was profit.
 Exploit labour severely.
 Combine capitalist behavior (expanded production, profit
motive) and quasi-feudal attitudes towards labour
 Primary aims: Short term gain of trade and finance > Speculative
gains.
 Economic rationality (technical change): limited to maintain basis
of wealth for colonizers.
 Extensive investments and training for workers X > cost returns.

Underlaying principle: welath of nation depend on control over trade

>< Classical economists.
INDUSTRIAL CAPITAL:

VD1: Britain in India /

Britain expand sphere of control

 Rationalise system of production > eliminate complex customs
of landed property.
 One-owner rule. Small peasant farmers subject to land revenue
tax.
 Reconstructed agriculture, forcing specialization in indigo dye,
cotton, wheat.
 Impose heavy tax on agri > farmers move to indigo and cotton.
LEADS TO higher grain exports.
 Opening of Suez Canal > open up transportation.
 Build railways, roads

Industrial system: set up industries in colonies >> set infrastructure to

facilitate process
Ex; France – VN, Britain – India: set up railroads, roads, schools,..

FUNCTION OF COLONIALISM:

+ Helps in the process of industrialization

Ex: British Industrial Revolution. Enter British banking system, decrease
interest rates, release investment funds tapped in industrialization.
+ add to aggregate demand wo increasing wage rates.

EMERGENCE OF NEW CLASS OF ELITES: tay sai

DEINDUSTRIALIZATION:

VD: Britain – India. India has a thriving textile industry that sold cotton.
>> Tariff 70% 80% on all imported textile >> price them out of British
market.
 Force open textile market to Bristish exports
 Accept import of raw cotton wo tariff
Eventually: switch from textile exporting to exporting of raw cotton to
Britain.

COLONIAL INDUSTRIALIZATION?

Britain railway > Industrialization?

MEASURING IMPACT OF COLONIALISM:

THE TERMS OF TRADE AND COMPARATIVE ADVANTAGE:

 Price of manu giảm còn price of primary goods tăng. (competition

in manu nhiều, tech: giảm cost of production, primary goods a lot
of demand, nma production capacity thấp) > terms of trade tăng
 False hope that exporting raw materials is good
 Over time, EXPORT PESSIMISM (supply conditions) > giảm,
với trajectory mạnh hơn.

(Why the terms of trade go the opposite way?)

PROGRESSIVE COLONIALISM

Japanese colonialization
 “rationalized currency system”
 Bankss and institutions
 Long short term eco plans
 New technology
 Subsidies
 Skills transfer
 GDP growth
ECONOMIC DUALISM:

2 clearly different sectors:

+ One confined mainly to peasant agri and handicrafts, small
industry
+ One have plantations, mines, …

2 sector model:
+ Pre capitalist transitional frm of production
+ Modern capitalist sector.

 Precapitalist provide labour to the modern capitalist sector.

(DOES LEWIS’S MODEL APPLY HERE?)
URBAN BÍA: taxes spent close to capital city, on highest cadre of public
servant,…

IN rural: little posibilities for development

In urban: social elites are self reproducing and isolated, lack of
middle class.
 Both: disdain for physical elabour.

Even capitalist societies may continue to maintain characteristics of

overlapping capital and precapitalistic ideas.

(đọc lại)
economic dualism A way of conceptualizing
the existence of two (sometimes more)
separate but symbiotic sets of economic
processes or markets within the same
political or national social framework. 

Pre-capitalist economic system + Colonized economic system

DEBATE: Should Britain pay reparations to India.

Unnecessary: moved on, changing fast, 22 countries britain has not

invated. What are they for? Who get it?
Nhiều hậu quả từ colonials (sacrifices from both sides)> >> how to
give a balance sheet of compensation.
>> Britain set back development of colonials? Don’t know. Still do
a lot for them.

British rule:Democracy >> everyone is equal

Who pay to? Quite tricky >> independent colonials pose more
damage than English > What we do with countries that retain
connection? Chắc ý là khó phân chia compensation cho mn. Who
Reparation should be made when there are things needed
remedized.

UK phát triện >> helping the poorer (India), BUT superiority

complexity.

>> Wealthiest people of UK are from former colonies. Top richest

ppl are former colonies.

The economic situation was worsened >> India 23% >> 4%.
Deindustrialization of India spawned British Industrial revolution.
Ex: weavers (finished cloth)

Great Bengal famine: winstom churches moved food to greeks.

Violence and racism.

Can quantify WW1, WW2 via deaths and casualties, contribution

to England.
 8 billion pounds in WW1

Railways and roads >> serve British, tốn tiền hơn các chỗ khác.
Aid: 0.4% of GDP.
Religious tension should be paid.

Britain has reparated to New Zealand, other countries still make

reparations,…

Democracy after years of colonization?

Reparation wont help the right people?>> not as a tool to empower

anybody but to atone for wrongdoings.

Cannot put a monetary form? We should care about the principle

of owing reparations.

Sacrifice on both sides?

SOLUTION: Narrow economic sectors by opening agencies >>

help in public administration, improve governance,...
India >> moral hazards. Other ppl are suppressed. Industrial
classes gain power due to wealth.

Colonial legacy: Japan’s success stories on Taiwan and Korea >>

But Korea is already in great progress before Japan,…

LESSON 3:
INDUSTRIAL REVOLUTION

ADAM SMITH: COMPETITIVE CAPITALISM AND

GROWTH

Invisible hands: supple and demand to attain equilibrium.

 Individualistic dessire + self interest >> tend towards
deterministic levels of output and services.
 Equilibrium
 Harrmony of interests amoing consumers a producers.
 Competition iss a counterweight and brake on possible
excess tat self-interst behavior may have.

 Eco development;: Division of labour and capital accumulaton

>> WEALTH OF NATION
 Industrialization and use of machineries > Dviding of tasks
> increase in productivity of labour > increase in income +
standard of living.
 Capital accumulation: owners of firms introduce latest,
newest machines, ways > increasing effficiency.
VD: capitalist
MALTHUS’S POPULATION AND ECONOMIC GROWTH:

 Population will grow when average income rise above level

necessary for subsistence.
 WHY? Animl nature of human beings, labouring poor who ae
morally inferior to rich.
 More foood and necessities >> more ppl can survive.
 Unquenchable sexual desires of the poor.
 Limit: inability of land to produce food to sustain population
surge.
 Eventually, economic growth will fall if population rises.
Equilibrium: population grow same as food production
increase,
 VICIOUS CYCLE OF POVERTY: equi lvel of income is
subsistence,…

 SOLUTION: preventive checks (late marriage, sexual

abstinencnce), positive checks (deaths, war, diseases),…

Better healthcare, hygiene only delay the inevitable poverty >

subsistence.

LIMITATION: Technology > increase productivity even from

relative fixed inputs.
RICARDO OF DIMINISHING RETURNS AND
COMPARATIVE ADVANTAGE:

 Eco growth >> land of increasingly lower productivity is used,

(theo thuws tuwj)
 Windfall gain.

“Economic profits”: same productivity, but lower costs.

Profits about economic profits are unproductive.

NEOCLASSICAL:

AGGREGATE PRODUCTION FUNCTION:

Y = A. f (K, L, H, N)
Y/L = GDP/capita

The production function:

+ Dimishing Marginal product of capital

The Solow model:

Câu hỏi: how to narrow down the economic disparity between poor
and rich countries?
 Developing countries focus on physical capital, add more
physical capital will not help

+ If improve technology the productiong function will shift up.

CAPITAL DEEPENING: Capital is the way to grow.

Graph thầy vẽ: có trục hoành k, trục tung Y, đường f(k),
depreciation rate + n (growth rate of labour) + y (tech)

+ Depreciation

+ Growth rate of labour: capital to labour ratio falls, have to drop

down labour or increase investments.

+ Technology investments.

Production function: how much output exists.

Savings: new function sf(k)
>> Close economies: savings = investments. If savings higher than
leakage >> k will move until:

k*: leakage = investments. Close economies will stay at this place.

Output at Y*
return to capital flls as stock of capital rises (diminishing returns)
 Steady state of economy. Might stay here forever. Means
that new investments iss suffficient to replace old capital
worn out.
 Steady state income/worker

If ppl consume more >> saving rate drops. New function => k*
reduces, Y* reduces.

TO reduce gap >> increase capital. Countries do not invest in

capital sees drop in output.

If tech improves > f(k) shifts up.

ASSUMPTIONS: k (capital/labour) >> property rights,

division of capital exists.
>> Insitutions are well set up.
In reality: conditions are different, not efficient.

EXPLANATIONS: how different rate of savings and population

growth rate > affects income per person.
 Countries are poor because they are not saving enough of
their income
 SOLUTION: increasing rate of savings and investments >
capital accumulation.

HARROD- DOMAR MODEL

Assumptions:
What are the main contributions of:

By manipulating relationship of variables, rate of growth in economy will

be: delta Q = s/v (savings rate/capital output)

 Growth of eco determined by both savings ratio and capital output

ratio.
Capital/output ratio higher > lower growth
Savings higher > higher growth
 Economy grow = investment rate has to be increased

Warranted rate of growth gw: rate of growth of output consistent with

equi in input and output market.

Knife edhed equi:

 Rosenstein-Rodan
 Nurkse
 Hirschman
 Lewis
 Rostow

 What common ideas amongst them led them to be referred as

“the Developmentalists”? 

Which of their ideas continue to have relevance for development?

Are there any ideas that have been rejected?

Are their ideas complementary to SDG goals related to climate change

issues or do they hinder the efforts highlighted by the UN?

CHƯƠNG V:

VID THAY CO XEM:

Tradinal economic
Industrialization
Compound interests >> economic
High-mass conssumption (Rostow)

PPl addictied to growth: consumer propaganda,

>> GDP = 10 times but divisive , returns to wealth 1%.
>> More growth wont change ecology.

ou see, 20th century economics assured us that if growth creates

inequality, don't try to redistribute, because more growth will even
things up again. If growth creates pollution, don't try to regulate,
because more growth will clean things up again. Except, it turns
out, it doesn't, and it won't. We need to create economies that
tackle this shortfall and overshoot together, by design.

Well, for some it still carries the hope of endless green growth,
the idea that thanks to dematerialization,
exponential GDP growth can go on forever while resource use
keeps falling.

SACH:

I. ROSENSTEIN-RODAN: BIG PUSH THEORY

 Hidden potentioal for economic development in less

developed countries >> BIG PUSH of concurrent industries
can launch a chain reaction of virtuous circles and
complementary investments.

>> synergy between the branches.

 Comes from a governmental PUSH >> Spillover effects

 Areas: Social overhead capital: duy trì hoạt động cơ bản

>> CANNOT be realized within a purely market frame of

reference. Cannot be private entities: pursue self interest,
social marginal cost, benefits (positive externalities). With
profit-loss analysis, their frame of reference is limited.

 SOCIAL BACNKGROUND: Resurgence of EU after

WW2, amarican plan of EU reconstruction is success (italy,
germany france). American “big push” may work for
developing countries.

 Assumptions: Countries already have well-established

institutions. Europeans were already having strong
institutions before WW2. Trust in govs is already low in
developing countries.

!st; disguised unemployment: workers with low and no pay >

tapped to create vast public works of social overhead capital.
2nd: Economic planning is necessary to achieve positive
externalities.

3rd: emphasis on social overhead capital

4th: big push > technolofical external economies.
II. BALANCED GROWTH -R AGNAR NURSKE

+ technological push in multiple sectors, wide range of industries.

A massive injection of new technology, new machines, new
production processed in multiple sectors.

+ Export pessimism: explain why countries exporting raw

materials is not good.
>< Comparative advantage: Ricardo (supply need to be strong)

+ supply => demand: avoid bottlenecks.

+ governmental policies is needed, not so much intervention
+ influenced

Export pessimism:
+ Elastic export market: dropping terms of trade.
 World demand for primary products: slow hard to expand.
Increase in suppl >> decrease in market price. Total revenue
after increasein supply < export income
+ Richer countries want to import conspicuous foreign products
import money are taken back to the country faster.
+ Low productivity per worker because savings were low >
investments low > low capital/head,

 SOLUTION: balanced growth. Large scale increase in

supply í met by increase in demand created by same
expansion. (Ex: Demand from industries growing for raw
materials, intermediate or semi final products.
WEAKNESSES: Forcing the state to pick winners and lose. If
institutions are not well established, allocation will be biased,
groups that have power.

DIFFERENCE FROM ROSENSTEIN:

 Does not avocate planning
 Does not advocate statist, dependence on the dominance of
public sector (social overhead)
 Dynamic fisscal policies can help w/o large scale gov
involvement in production decisions or planning projects.
 FORCED SAVINGS > increase in taxes on upper income >
Increase savings.
III. UNBALANCED GROWTH: HIRSCHMAN

SIMILARITY FROM 2 OTHER THEORIES:

 Support industrialization first strategy
 Key to rapic industrialization is in large scale
capital formation
 Hidden reserves of talent, externalities for
periphery

UNBALANCED GROWTH: Big push for all limited range

of industries (Key sectors) because RESOURCES ARE FINITE.
Overcapacity in key sectors >> supplying bottleneck increase
production difficulties elsewhere for other sectors (lack of supply)

>> Generating bottlenecks on purpose to create pressure for new

investments to resolve supply inadequacy.Investment flows into
underdeveloped sectors, price and profit were rising.

 Subsequent reactions that will speed the development of

others.
 Overcapacity: lowẻr price (economies of scale). Stimulate
upstream investments.
 Can be Upstream or Downstream sectors
BACKWARD AND FORWARD LINKAGES:
 Industrial linkages
 Backward: when a country expands, it requires input from
other countries to produce.
 Forward: induced effect of output of industry A > final
consumer.
 Should pick industries with multiple linkages with other
sectors (maximization of stimulus)
 NO LINK in extractive or agricultural products (little
forward linkages)
CHANGING SOCIAL ORGANIZATION OF LABOUR
PROCESS
 Others: against the lax standards in wrkplace, slack
management.
 Hirschman: no isse, introduction of more advanced, paced
techniques >> easier to calculate reasonable work norms
ad evaluate task completion
 Want to move quickly to macino-factor stage of
industrialization.

ANTAGONISTIC GROWTH;
 
Growth in key secotrs may make other sectors worse
off (less input and investments it needs
 Both efficient allocation and reallocatio must be
considered.
SHORTCOMINGS:

1, Inflation threat:
+ Force bottlenecks >> Scarcity of resources
+ Price increases >> entrepreneurs focus on that sector. If countries
cannot handle burden of inflation

* SIMILARITIES between the 3 theories:

investment in capital. Capital is center.With capital deepening,
capital dimishing growth will occurs.
>> The 3 theories state that its okay, if that is beneficial.

IV. GROWTH WTH UNLIMITED SUPPLY OF LABOUR

SIMILARITIES: hidden reserves of strengths can be tapped in
develiping nations. Industrialization.

DIFFERENCE:

Not an export pesimist

 Argue that eccport of raw materials are not subjectto falling
international prices resulting from limited use to these
products.
 Rising income and level of products >> stronger demand for
materials. Higher export income in future.

Wage levels of less developed nations were moving atslow pace.

Because of the difference in productive structures bêween 2 areas.
Proportion between agri and industrial areas.

Hidden potential in manufacturing other than export:If can

restrucutre economy towards manufacturing >> create comparative
advantage based on lower wage cost.

“Export optimist”: small net addition to global manu export can

easily be absorbed by growing world market Export of manu will
not be met with defensive reaction of developed nations. No
developed nations will feel threat from manu exports from less
developed nations.
  Shift labour away from agri and into manufacturing.
But there are problems: rising food cost > rising labour
cost.

SOLUTION: SURPLUS LABOUR MODEL

Migation of labour taking place because higher wage in

industrial areas.
 L (rural areas) <-> K (urban sector)
In rural areas: when a person’s MPL = 0 >> Influx to the
urban areas
 Cheap labour to the industrial areas.

As the nation starts to move forward >> cheaper labour (infinite

supply of labour) >> capitalists can optimize and increase profit >>
invests back to capital.
Needs more capital formation in manu > Higher savings level.
Capitalists may invest in conspicuos consumption >> NEED to
increase share of national income accrued to industrial capitalists.

National savings increase > GD/capita will pour down (trickle

down economy) >> pour down to lower classes. If enough growth
increases >> inequality will eventually end. Inequality may be
inevitable in the process.
 Evidence suggests otherwies: US. According to Lewis
theory, we should have been a mature societies. Yet there
are still inequalities, stratifications.
 VN is also taking off but if follow Lewis’s theories, it will
miss its opportunities.

CRITICISM:
1, export pessimism >> some of the money can be used for
conspicuous consumption.
2, labour is just a factor of production >> no concern to the well
being of labour.The rise of slumps.
3, Worse distribution of income over time to develop economy.
Share of income goes to capitalist rises over time.
4, Agricultural sector suffers.
5, Institutional determinants of wages: government minimum
wage, unions are absent.
STAGES OF GROWTH THEORY- ROSTOW

+ Stage 1: Traditional society

Pre scientific. No systematic mechanism which led

scientifc introcction
‘Long term fatalism” > agricultural, land owners
determine power.

+ Stage 2: precondition for takeoffs

  Destruction of traditional society:
 Gathering of societal forces > propel it forward to take-off
stage.
 Appearance of new types of entrepreneur and modern
business.
 Does not mention colonialism: it brings growth to colonies
but setbacks for colonization
 ‘Reactive nationalism” > modernization.

+ Traditional societies: communal, feudalistic system,…

 Broader term:
DO TRADITIONAL SOCIETIES NEED TO BREAK
DOWN?
Currency, money, ownership belongs to certain individuals >>
entrepreneur can gain access to resources
VD: India’s feudalism caste system: still happens in modern India.
Does not help in growth, no mobility amongst castes, in human
resources.

Have to draw the lines: Traditional cultures

STAGE 3: The take off into sustained growth:
Growing GDP:
Rise in rate of investment
Developent of one or more substantial manufacturing sectors with
high rates of growth
Existence of political, social, institutional framework

STAGE 4,5: maturity and high mass conssumption

higher income, utopian type of setup. Just consume no need for
production.

 Too good to be true.

 If Finland,… finds new ways to measure economic development
>> emphasizes development in these sectors, quality of life
improves.
Depends on countries, China and India may find it more difficult
but not impossible.

VIDEO: MIGRATION OF PPL TO EUROPE, US >> New focus

on globalization, movement is easier.
Qatar World Cup hosting >> Qatar lacks labour + migration of
labour.
Cannot exit Qatar without exit Visa
Sanitation poor,

Shammed provision.

CHƯƠNG 6: HETERODOX THEORIES

Briefly outline the main contributions from each of the three groups in
the “heterodox” school of development thought:

 The Structuralists,
 Institutionalists and 
 Dependency Theorists. 

How do each of these subgroups incorporate the role of technology in

economic growth and development?

What is the Center-Periphery dimension that is discussed in this

chapter? How does each group address the issues raised in such a
set up? 

What is Import Substitution Industrialization? 

Explain what the "equilibrium trap of underdevelopment" is. Does it

still apply to the Global South? 

STRUCTURALISM
>> Tập trung vào harmony of interests, interaction of all parts
rather than in isolation.

STRUCTURALISM OF RAUL PREBISCH:

+ Argentina until early 1920s was the context.

He noted that during Great Depression, export price of agri fell

more than manufactured:
EXPLANATION: (LINK TO EXPORT PESSIMISM)
+ Manu: supply of output was price elastic, demand decrease,
quantity supplied decreases >> equi price fall but more limited
manner.
+ In agri, supply conditions was price inalastic, when demand
decreases, quantity supply fall little but price dramatically
decrease.

Nurkse’s Exxport Pessimism

Vague understanding: industrial producers of manu goods could
control supply, where in agri, producers fail to organize production
and control output.

TERMS OF TRADE:

Theory: Division of labour: developed center countries produced

manu goods for export to the periphery and vice versa of agi goods
>> benefits of trade accrue to center.

>> Deterioration of the terms of trade for primary exporting

countries. The periphery has to produce more agricultural or raw
material products to obtain the same quantity of imported manu.
IMPORT SUBSTITUTION INDUSTRIALIZATION: begins to
manufacture simple, consumer nondurable goods that are
imported.Simple production, do not require large physical or
financial capital outlays or sophisticated technology.
 Industrialize the economy so that it becomes more like
center

* Promoted closed economy: no imports?

 Will in a few products from primary inputs with
comparative advantage. For products w/o primary products,
may still import.
 Power dynamics: centre, periphery.

HANS SINGER TERMS OF TRADE DEBATE:

Presbirse – Snger hypothesis

 Relationship between center and periphery are antagonistic
and detrimental; Advanced center countries tend to reap
gains from international trade and investment at the
expense of less developed counties.
 Free trade can be harmful to the periphery.

 In the cneter: oligopoly who are price takers. Labour have

higher income with technological changes to high
productivity
 In the peri: agri products face competition in trade >>
supply price is competitive, price takers. Labour is surplus,
put downward pressure on wages.
Over time, export price of peri will rise, while import price stay
constant.
* POLICY RECOMMENDATIONS:
Industrialization for the periphery (LINK TO
DEVELOPMENTALIST)

INSTITUTIONALISTS:

THE AYRESIAN VIEW OF DEVELOPMENT

“mega theory” of development for both deve and dev countries.

1. Technology:

Most emphasis on techonology and tools. Tools and tool users

(technology and human capital)

Difference:
+ Tech is non-rival: Everyone can learn, no rivalry, doesn’t mean
anyone else can learn it.
+ Tools and human is rivaled: owned by 1 cannot be owned by
others.
 2. Ceremonialism
 Past binding behavior.
Restlessness can be curbed or limited by ceremonialism >>
opposite of technological dynamism
VD: class societies, caste societies

>> LINK TO ROSLOW’S STAGES OF DEVELOPMENT

 Stands in the way of tech progress. Dichotomous opposites
 If you move forward scientific >> further away from
ceremonialism.

SOME COUNTRIES still can coexist with religion and science.

 3. Education
 To diminish the effect of ceremonialism on technology >>
EDUCATION: diffusion of knowledge and skills.]
 Capital accumulation

Example thầy cho: Nepal went from absolute monarchy >> king
is still head of state but ppl can now vote
>> Revolution: tens of thousands of ppl died >> peace treaty
established
2001: royal asacre:the crowned prince
>> International community saw the chance to change
ceremonialism.

Have to write constitution to dismantle ceremonialism >> caste

system eliminated, women running parliarment.
>> EU helps draft constitution.

When Countries have newfound wealth >> inequalities,

stratification between countries.

LIMITATIONS AND POTENTIAL:

GUNNAR MYRDAL:

CUMULATIVE CAUSATION AND BACKWASH EFFECTS

 Cumulative causation: dynamic ecoeffecs which move

society away from equi.
 Backwash effects: Cumulative movement in one direction
that exarcerbate economic development
Examples:
(1) Poor rural areas suffer from lack of labour
(2) Artisan produces put out of work by
manufacturers with economiees of scale.

 Spread effect: positive externalities.

WEAKNESS OF EFFECTS:

STATE:

 Strong state:
 Weak state: biased in distribution of wealth to society >>
weaken the spread effect,

 Economic dualism >> post independent: are left with

groups with more powers >> Not provide agency to all
citizens of countries
+ Massive institutional failures
+ Rent seeking behaviors: Bureaucracy,
+ Everything more transational, not about bigger patriotic
movement to future.
What I am doing is important is VN, I claim a big role:
good environment. >< Quan tâm đến lợi ích cá nhân..

EX:
(1) Weak state allow for backlash effects of migration of
manufacture.
Jamaican experience: powder mild coming in from the US wiped
out Jamaica dairy farm

>< Strong state: will study situation and devise policies to mitigate
the impacts.

(2) Migration problems of rural areas: fertility rates rises >>

standards of living.

Brain drain: educated ppl move to better locations.

Quay lại Nepal: Nepal re-election, ppl from same family becomes
prime minister.
 Ceremonialism

Mayor of the capital of Nepal: rapper

MYRDAL’S INSTITUTIONALISM:
 Need in enlarge study from orthodox economics >>
“attitudes and institutions”.
 Advocate for radical institutional reforms would allow for
development.
DEPENDENCY ANALYSIS
Cneter: cause
Periphery: effect

Less developed natuons are part of global process >> to provide

inputs to advanced nations and receive manufacturing process.
 Cause of development are external. Negative influence of
transnational corporations, multilateral insstitutions (WB,
IMF), foreign governments.
+ Role of periphery: they are so dependent on the centers > centers
also play a role.
Import pessimism.
BTVN: Take a break from book, think back to
developmentalists, structuralists, heterodox,…

EXAMS: what makes them different, similar, what are their

ideas.

MAI: học về women and role of gender.

ÔN TẬP:
CHAP 5: DEVELOPMENTALISTS:

THE BIG PUSH – Rosenstein-Rodan.

REVISION

Developmentalism:
Driven by reconstruction of the world after
+ Main points, purpose,

Heterodox: Institutionalism, Structuralism

 Idea of center vs periphery (power dynamics in geopolitics
that impact growths)
 Importance of institutions: Traditional systems and
ceremonialism, Technology

Developmentalism: Heterodox:

Talk about capital investments. Look at institutions inside

+ Big push: social overhead (reflection of sef) that hinder
+ Balanced growth: development
+ Unbalanced growth + Weak state
+ Lewis: industrialization in
urban center > labour supply
+ 5 stages of growth
Similar to Solow: put capital at
center.
WOMEN UNPAID WORK:
+ Ceremonialism.
Look outside: Not all issues
stem from global south > also
due to the center.
Terms of trade: break down
in the favour of center, away
from periphery.
 Similar to Nurshke’s
import pessimism.
SOLUTION: Import
Substitution Industrialization >
Create industries connected
with primary products.
IDE: focuses on entrepreneurship and
EQUAL PARTNERING
CONCLUSION:
GDP valued too much >> work by women are not carried out
 Political, economic, urrban designs >.women ideas may
increase efficiency, change gender roles (water machines >
men’s job)

Gender bias: is accepted norm unconscious, a little push may help.

Not all discriminations and bias are subsconscious >> some people
are discriminatory.

Sometimes ppl may not know and ppl might change

discrimination.
 Importance of education to liberate ignorance.
During Covid: work-life balance emphasis.

EQUAL PARTNERSHIP:

+ Bill Gates divorced.

+ Relationship matter (romance or head?)
>> Conflicts in a relationship: if a person does not have agency?
Cannot voice opinions and share ideas.

Monotary >> Who’s working?

Last video: a man is > unpaid labour so women cannot earn. A
woman has a claim on that income. A man can enjoy the welfare
after their family care.
>> Ppl are not comfortable with change in culture.
Wealth should be distributed before the relationship gets to that
point >> finance and agency.

Cuoc doi thay: both worsks and have one joint account. In US;
separate account is more prevalent.Should have one conversation
to solve the monetary problem.
 Are there proportions?... Too personal.
Men and women still receive inequal pay with the same matrix
 Bonuses and raises: biases. Man boss women subordinate
 Time off to take care of children
 Not concerned about unem and em but the period of unem
>> when maternity leave and come back…

Paytime off for maternity and paternity leave.

Intersectionality?
 Income disparity between races > add in gender differences
> Impact is worse (Ex: black women)
 Context based (colonial, dualism may be a cause).

WHAT CAN BE DONE TO ADD TO WOMEN’S

EMPOWERMENT:
1, Encourage female Entrepreneurship and owned business
encouragement
2, Women leadership, role in government
3, Women’s claim on family property ownership, land ownership
4, Enact, revamp laws against female discrimination and crime
against
5, Increase sexual education, reproduction,…
IDEAS:
 Providing clean water to households: reduce gender
disparity in gender
 Increase self-worth: Education about Self-efficacy >>
advocate for themselves.
 Highlight women’s accomplishment and leadership.
 Communal space for sharing economics.
 Women entrepreneurship:
Angel investors:

ARTICLES OF thay:
Attendance in school of female?
 1 reason: restrooms: lack of privacy, menstrual pain,
 Thay built a new separate restroom

CONCLUSION:
 One time decision: not important >< Attendance is more
important.
 Factors affecting female attendance?
Schools: equal enrolment of genders but female lower
attendance > because of lack of facilities that do not meet
the difference in nhu cau of boys and girls.

DIRECTLY CONNECTS TO PARLIARMENT

Knowledge transfer to the children to the parents?

READ MY ARTICLE >> CO TRONG KIEM TRA

 Not concern economics >> on discussions and conclusion.

Menstrual do not correlate with attendance? Not true. Attendance

data from school at the very first class, do not count midclass
leave. Avoid fines of schools.

VIDEO: ECONOMICS OF CARE:

How well has private sector gone through
 Care: work concerned for well being for those who receive.
PPl paid to provide care are attached to ppl they are taking
care of.
  Additional framework backfires >> market structure
(teacher increase students’ score)

How well we do?

 Family work, market work >> make it difficults
 Shortcoming: big family, lack control of work hours, early
children edu to reduce burden,..
 Western countries do better in care services, better wges and
wokring conditions.

How to measure value of unpaid work?

 Data for how ppl use their time, measure time carefully
 Understand why women are burdened in care sector.

1900s:
 Value of non market work. Perfect substitute between free
and market care.
 Ignore value of market work
Gender equality >> non market work is important.

Income same > assume that standard of living. But one has 1
worker, one has 2 worker. > Have to purchase substitutes for child
care. Market income is not a sufficient indicator.

Legal system: wife should have legal claim on husband’s earnings?

>> marriage is not seen as econoic transaction.

Worry that the logic of market contaminates of family. Self interest

vs Care. But family has elements of market and vice verse. Women
provide care both ways are
 Market and cfamily sector division do not matter
 Care needs for its owwn sector

Feminist economies >> tension betwenn 2 resistence between care

work.

How to teach economics how to solve this problem.

 Ppl who provide care for others in a weak marketing
position
 Process of caring, feeling attached includes bargaining
logic.
 Social norms, work family policies that recognizes work.
Cannot just use capitalism to unpack…

Another aspect of feminist: traditional analalysis is

 Embededness and
  Patriarchical institutions that are pervasive: Women have no
choice but to care
>< Capitlism: Personal choice, zero obligations.
Neither sides are not very good. 2 polar opposites.

How to share the burden of

VID 1:
Controversy;
+ About sex – uncomfortable
+ Abortion?
+ Real goal is control population

>> Disappeared from global health agenda

Sub saharan and south asia suffer

Germany, El salvador: above 60%

>< Uttar Pradash india 29% Nigeria 10%, Chad 2%

>> Contraceptives are not available.

Women in Africa inject to hide from husbands. Injection stocked

out 150 days out of the year.

100000 women don’t want to be pregnant/ year

>> AGENDA: give women agency to save their, children life and
give families best future.

global health community, help small farmers >> Simpler method: give everybody
access to birth control methods

IS birth control really a sin? > if we separate sex from reproduction, we're going to
promote promiscuity.
 what is its impact on sexual morality?
 Women actually just have plans for futur

Nairobi > I want to bring every good thing to this child

before I have another.
  Universal

Recently: couples can exercise conscious control over how many children they
have.

 Stabilize family sizes: France, Germany. Asia, Latin

America

PAST:S ome family planning programs

resorted to unfortunate incentives and coercive policies.

 India: paid women to accept having an IUD placed in their bodies.
 US: African-American women were sterilized without their consent. >
Mississippi appendectomy

 These coercive policies weren't even needed > They

were carried out in
places where parents already wanted to lower their family
size

Question: will we invest in helping all women get what they want now? O ur
desire to bring every good thing to our children

is a force for good throughout the world.

Twenty years later, following those villages,

what we learned is that they had a better quality of life than
their neighbors.
The families were healthier.
The women were less likely to die in childbirth.
Their children were less likely to die in the first thirty days of
life.
The children were better nourished.
The families were also wealthier.
The adult women's wages were higher.
Households had more assets -- things like livestock or land or savings.

Finally, their sons and daughters had more schooling.

"We don't need to worry about the population issue anymore.

Family sizes are coming down naturally all over the world.
We're going to peak at nine or 10 billion. And that's it."
 If you look at the statistics across Africa, they are
wrong.

Look at top down: want to accept at a level of population the choices have to be
made at the family level.

Sex is sacred > does not make sex less sacred. Children’s lives are sacred.

 How to find that middle ground

Neoclassical function: labour is very important.

How to solve it?

 Contraceptives: lower income countries, not for the entire

countries. PPl trapped in poverty cycle. Better things is to
stop population
 Malthus reference
 Limited amount of resources used for the kids + Women
can choose when to have kids.

Bigger macro problem:

US: immigration: allow ppl to come in. Other countries also

realized that. Transfer of knowledge.

 Australia, England is more open.

Labour and demographic problems: only focus on growth, but

quality of life.

Is the concept of “contraceptive rights” a

VID 2:
the Maasais.

I found out that I was engaged to be married as soon as I

reached puberty.

And everything I had to do from that moment

was to prepare me to be a perfect woman at age 12.

milking the cows, sweeping the house,

cooking for my siblings, collecting water, firewood

I went to school not because the Maasais'

women or girls were going to school.

She never wanted us to live the life she was living.

My father worked as a policeman in the city.

He came home once a year.
We didn't see him for sometimes even two years.

But when my father came, he would sell the cows,

he would sell the products we had,
and he went and drank with his friends in the bars.

 Because my mother was a woman,

she was not allowed to own any property,

When I went to school, I had a dream.

I wanted to become a teacher.

In our tradition, there is a ceremony

that girls have to undergo to become women,
and it's a rite of passage to womanhood.
 Once I go through this tradition, I was going to become a wife.
PLAN: I talked to my father. I did something that most girls
have never done.

I told my father, "I will only go through this ceremony

if you let me go back to school."

And as she carried the knife, she walked toward me

and she held the clitoris, and she cut it off.
 It's practiced, it's no anesthesia, it's a rusty old knife,

I met a young gentleman from our village

who had been to the University of Oregon.
 I told him, "Well, I want to go to where you are,"

But the problem is, my father is not the only father I have.
Everybody who is my dad's age, male in the community,
is my father by default --
my uncles, all of them -- and they dictate what my future is.

  I was accepted to Randolph-Macon Woman's College in Lynchburg,

Virginia,

 "What a lost opportunity.

This should have been given to a boy. We can't do this."

CHIEF:
The first thing he sees when he opens his door is, it's me.
"My child, what are you doing here?"
"Well, Dad, I need help. Can you support me to go to
America?"

 The village, the women, the men, everybody came

together
to support me to come to get an educatio,

I learned that that ceremony that I went through

when I was 13 years old, it was called female genital
mutilation.
 And as we speak right now, three million girls
in Africa are at risk of going through this mutilation.
As I went back, every time I went,
I found that my neighbors' girls were getting married.
 As I went back, I started talking to the men,
to the village, and mothers, and I said,
"I want to give back the way I had promised you
that I would come back and help you. What do you need?"
 "We wanted to put our girls in a safe place."

And the reason they wanted the school for girls

is because when a girl is raped when she's walking to school,
>> the mother is blamed for that.
If she got pregnant before she got married,
the mother is blamed for that, and she's punished.

And I said, "Well, there are a couple of men from my village

who have been out and they have gotten an education.
Why can't they build a school for boys,
and I'll build a school for girls?"
 That made sense. And they agreed.

As we speak right now, 125 girls will never be mutilated.

One hundred twenty-five girls will not be married when
they're 12 years old.

I want to challenge you today that to be the first,

because people will follow you.
VIDEO 3:
My mother was a philanthropist.
 She carried out her philanthropy in our community
through a practice we call, "isirika."

She supported the education of scores of children

and invited many to live with us in our home to go to school/

she was endeared by the community for her organizing

skills,
because she organized the community,
and specifically women,
to find solutions
to anything that was needed.

So, isirika is a pragmatic way of life

that embraces charity, services
and philanthropy all together.

 The essence of isirika

Is: Mutual responsibility for caring for one another.
equal generosity,
but the deep philosophical meaning
is caring, together, for one another.

HOW ISIRIKA HAPPENED?

I remember vividly the many times

that neighbors would go to a neighbor's home --
a sick neighbor's home --
and harvest their crop for them

I tagged alongside with my mother to community events

and to women's events,
and had the conversation about vaccinations in school,
building the health center
and really big things --
renewing seeds for the next planting season.

 And often, the community would come together

to contribute money to send a neighbor's child to school --
not only in the country but to universities abroad as well.

 The first surgeon in my country came from that rural village.

Be inclusive:
We as children would stand alongside the adults
and give our contributions of money,
and our names were inscripted in the community book
just like every adult.

And very soon, isirika began to become small.

Communities such as my childhood community

became referred to as "poor, vulnerable populations."
 they become the targets for poverty eradication programs.

Now, I'm really interested

that we find solutions to poverty
and to the world's other many big problems
because they do exist.
 I however think that we could do a better job, by isirika

+ Affirms common humanity.

For whatever that you do,
you begin from the premise that you're human together.
When you begin that you're human together,
you see each other differently.
 And when you do that,
you value their ideas,
you value their contribution --
small or big.

RECLAIMING ISIRIKA:

+ First, you have to have faith

that we are one humanity,
we have one planet
and we don't have two choices about that.

+ in isirika, every idea counts.

Bridges have big posters

and they have nails.
Every idea counts --
small or big counts.

+ isirika affirms

that those who have more really enjoy the privilege of giving
more.
It is a privilege to give more.

 And this is the time for women to give more for

women.

My parents made it clear that we should understand

that their prosperity was not our entitlement,
and I think that's good wisdom from isirika.

* What gives me really the passion today

to embrace isirika
is the work that I do with women all over the world
through the Global Fund for Women,
though women's funds
and through women's movements globally.

 If you work with women,

you change every day
because you experience them living isirika together in
what they do. In the work that I do,
we trust women leaders and their ideas.

A woman in 1990 came to the Global Fund with a big idea --

Lucero González.
She wanted to begin a fund that would support a movement
that would be rooted in the communities in Mexico.
And she received a grant of 7,500 US dollars.
Today, 25 years later,
Semillas, has raised and spent,
within the community,
17.8 million dollars.
The idea of: When we are able to support the ideas of
communities
that are rooted within their own setting.
 Today we celebrate 168 women's funds
all over the world,
100 of which are in this country.
 grassroots women's organizations –

The challenge begins today

because we see women everywhere organizing as isirika,
including women organizing as isirika in TED.
 the evergreen wisdom that lives in communities.

SOLUTION:
One: if you want to solve the world's biggest problems,
invest in women and girls.
Not only do they expand the investment,
but they care for everyone in the community.
Not only their needs but the needs of their children,
the needs of the rest of the community,
the needs of the elderly,
and most important,
they protect themselves –

And the second reason that I'm asking you to invest in

women and girls is because this is the smartest thing you
could ever do
at this particular time.
And if we are going to have over 350 trillion dollars
by 2030, those dollars need to be in the hands of women.

CHAP 7,8,9

Here are some questions to think about as you read through the
chapters (7, 8 and 9) for this week:

What are the goals of the easy ISI strategy? 

What factors are thought to contribute to the success of that strategy?

Why is a necessary but not sufficient strategy for industrialization?

Why is the switching of strategies to easy ESI seen as optimal as the

next step in the industrialization process?

Why has agricultural development not received the same attention as

industrial development in most developing countries?  

What types of infrastructure investments in rural areas are considered

most important for increasing agricultural productivity?

Are government purchasing boards an example of urban bias? Do

they tend to contribute to food insecurity and BOP problems in
developing countries?

Which UN SDG (s) addresses the issues highlighted in this chapter?

How?  

+ Neoclassical: Solow, Harod

Limited role of government: Minimal roles, except for market failures

(negative externalities, monopoly)

>> Positive externalities: Government may subsidize, ppl spend more

money or incentive. Provision of public goods. Marginal cost of
individual do not have incentives.

Free-rider problem: hưởng ké. >> Gov subsidize.

>> Comfortable with the growth of capital. (>< big push). But giving
incentives of private enterprises to grow capital.

States picking the winners to help growth, support free trade ><
neoclassical against.

CRITIQUE OF DEVELOPMENTALISTS: Hershmen, Rostentein-

Rodan.
  MONETARISTS: minimal role of state > Neoliberalism

 Laisse-faire

NEO-LIBERALISM

West Africa context.

+ Right size: government has become too big.

Developmentalist ideas: State have to pick the winners, causing all

kinds of distortions. Some by design (unbalanced growth),…

 Neoclassical: Ppl make decisions based on: Relative pricing

>> Maximize utility. Does not approve because they are
intervening the market function.
Ghana and Nigeria: mature colonialism

Native paramuntcy: preserve indigenous cultural patterns and

structures of production.

Lugard’s principle of colonial rules:

 African colonies should be supervised by British but

actual administration must be native.
]
Growth = free market + intangible characteristics ntural to ethnic
groups.

 Against:
+ Negative role of government:

First statement: not proven

Second: little initial capital investment to foster rapid development

+ Modest role of capital formation: not well supported, but real life
evidence
OLD THEORIES: Governmental size determined by degree of
market failure

>> BECAUSE OF market failures, there is a legitimate role for

govs to improve the operation of economy.

NEOLIBERALS: no government role. Should not pick the

winners.
>> Cornerstone: the market is presumed to be the repository of
efficiency. >< Gov: inefficiency. Autonomousn sectors.

ASSUMPTIONS: competitive market system.

Virtual free trade:

>> Should promote exports but only as long as the domestic

economy is open to the world market
Anne Krueger

Economic waste and social distrust and instability << state has
capacility to redistribute income and select elemtns of society.

>> FACTIONAL STATE: State activities lose economy of

dynamism. Groups of interests exert pressure on the state to
maintain the policies. Maximize rent-seeking
>> FACTIONAL STATE. Advocate the shrinking of state.
Maximize economic rents.
Not productive >> incentives do not align. Disrupt market to
benefit small fraction
Economic dualism continues to stay.

State should not be treated as exogenous >> endogenous to the

ecoomic system.
>> SAME AS HETERODOX.

Rents may not just arise in state sector but private sector also.
SOCIAL EXPERIMENTS of neolieralism fails:
Peter Evans;
Intermediate and developmental states: Structures and capacities
serve as agents of social transformation and growth.

The type of form of colonalism >> determines the nature of the

state forms.

EVOLUTION from factional state: Predatory state, bureaucratic.

>> operate via rent-seeking. Rent-seeking becomes endemic and

structural. Gov use authority to maximize accumulate of wealth.
Not focusing on the benefits of citizens, providing public goods.
 Bribing,
 CorruptionHigher transaction cost for economic activities
(doing business)
Look at Transparency International.
Traditionalism + Arbirariness of precapitalistic societies
>> Patrimonial tradition of an absolutist ruler.
Lack of trained bureaucrats
Presidential brotherhood.

Inconsistencies reign, but they are able to mount and sustain a

development process
>> Not utterly futile but unable to transform society.

BRAZIL AND INDIA

>>> Need state to coordinate a selected set of economic agents

+ Visionary leaders
+ Need friction: regulation to prevent asymetric information, to
prevent citizen safety (Ex: health inspection check)
>< Unnecessary friction: bureaucracy
+ Think about collective benefits of state. Put rule and regulation
to protect citizens.

Structuralists: Look at the outside

 Power dynamics between center and periphery.
 Developed countries use their soft power (foreign aid) to
developing countries
 Center: OECD, US, Australia, News Zealand.
 Development process exist among the networks of states.

Japan, Korea: 1960 change in industrialization process. Attract

more and more foreign FDI >> gov control and set standards to
foreign investors w/o let them harm the domestic sector.

>> VN can learn: in an open economy bring advantages and dis:

attract FDI but have to suffer from FDI investors

VN:
The rapid economic growth was to a large extent a result of the
country’s integration into the regional productive system. During the
2000s Vietnam assumed the shape of a manufacturing hub: importing
capital, technology, and intermediate goods from more advanced Asian
economies and exporting finished products (footwear,
garments, .aquatic products, etc.) to the United States and the
European Union

>> Public goods, interfere at market failure

The producer role:

VN: good mobile network.
><
Nepal: good infrastructure in urban, bad in rural.
3. Midwife role: Subsidy, import tariffs.
VD: US subsidize Tesla. US subsidize households who buy EV
(supply + demand side)

Entrepreneurs are sucessful because of state’s infrastructure.

>> Social overhead capital

4. The role of husbandry:

Ensure protection of old and new industries >> implement new
rules.
Colorado and Washington allowed marijuana.
Marijuana entrepreneurs have to have another form of holding
money (banks are not legal)
One issue: you cannot put money in the banks >> go buy house.

>> Well functioning bureaucratic institutions. Emphasze role of

institutions. Very strong institutions

US: are faltering in some areas.

QUESTION: A developmental state a combination of socialism

and capitalism?

>> Minimalistic: capitalistic.

>> Having a well-functioning state in performance.
>> Providing public goods can be socialist or bureaucratic.
How societies view public goods (US: healthcare not considered)
different >> lean systems towards a socialist side.

Adam Smith:
Clearly defind property rights
Clear rules, effective enforcement
>> Then: provide public goods and deal with public goods

Tibo:
>< cannot just move to another place.

Externalities: once gv has set the rules of games, ex can dissolve

by private market interactions.
Ex: polluting firm >> property rights enforced: pay money or stop
polluting.
>< Power dynamics is very different between different parties.

Elon Musk 2018: want to send submarines to Thailand cave

trapped kids.
  Another guy sue Elon for defamation and lost.
 Power dynamics.

CHAP 11:
Go to; cia.gov

EMBEDDED AUTONOMY

Embedded:
>> Possess a lot of institutionalized channels where state and
private interact in a constructive manner via “Joint project” or
fostering development

>> Endogenous, embedded with a network.

Autonomy:

>> Integrity and cotrol. Can stand apart from vested interests.
Draw vision of economic transformation.
3 key variables: power, purpose and capacity.
>> READ CHAPTER 11

ARTICLE: Factors Affecting School Attendance and

Implications for Student Achievement by Gender in
Nepal

The educational system in Nepal is poorly developed and is not accessible to

all, even though the country spends around 4 per cent of its GDP on
education (Dahal 2016).

Although the high enrollment rate is promising, Nepal’s ‘school system

remains plagued by high dropout rates with girls still being more likely to
leave school earlier than boys’ (WES 2018, p. 6).

Acharya (2007, p. 28) pointed out that ‘although incidents of exclusion have
decreased in schools’ and progress has been observed in education from an
equity perspective ‘Dalit students still feel inhibition.’
  For example, if a student is enrolled in a school, this is counted as
access. However, subsequent absenteeism due to various factors
affecting marginalized groups is ignored. Due to strong gender roles
in Nepal, daily decisions could have a disproportionate impact on
girls’ school attendance.

Thapa (2013) also finds that providing ‘help to the family’ with housework
was another reason students drop out of school.

3 different groups: schools, characteristics of students, households.

+ Gender, age, ethnicity,…
+ Facilities (restrooms), classroom width, number of teachers (ratio of male
to female), quality of teachers….
+ Income (does house have cars, motorbikes, storeys,… - Principal
Component Analysis), time spent on household activities,….
+ Rural and Urban.

RESULT SUMMARY:
+ Rural areas < urban areas.
+ Rural: men > women
 Urban- rural divide.
 More cows, have to travel to school farther, have to hike, walk.
Research: give girls bike to travel to school.

+ Southern Nepal: wanted to solve attendance and target menstrual pain

 Randomized control trials: 1 group give instruments, 1 group do not.
 Give girls menstrual cups. Not culturally appropriate – invasive.
Reusable but have to clean it. Time consuming, needs hot water,
cleaned thoroughly.
 Results: No impact on the attendance rate of girls.

DISCUSSIONS:

The format of the focus group was of a free flow nature, following some
question prompts pertaining to the results of the empirical study.

+ Answers ranged from being ‘concerned about getting beaten up’ to more
generic responses such as ‘catching the cold.’
+ Boys reported having to take care of their families, especially in a medical
emergency in the family, or if the patriarch was not available,
as was the case with one of the students whose father had traveled overseas
for better labor opportunities.
+ Students also identified celebrations, festivals, and social functions as
the main reasons why they missed school. Local students would miss some
part of the day or the entire day at a time for these celebrations. Other
students responded that they go back to their village for ethnic festivals,
missing multiple days of school.
+ Social functions such as marriages were conducted in ancestral villages,
where extended family lives. This caused some
students to miss school for an extended amount of time, as the schools in
Kathmandu Valley do not cater to the cultures or traditions of the ethnic
groups other than thebmajor privileged ones.

+ Students also reported that they were pulled from school to entertain
and cater to the needs of their relatives, who would visit from time to time.
Boys, particularly, were pulled from school to show visiting relatives around
town.

ECONOMETRIC ANALYSIS:

+ Students with mothers who work outside the

home have better attendance than those whose mothers are homemakers.

>< Common belief: increase in the pull on a student’s

time for household activities (cleaning, cooking) would decrease school
attendance especially for girls, given the patriarchal society in Nepal.

 Focus group students provided the insight that mothers who

participated in the labor market viewed staying home with
children and not going to work as having a high opportunity
cost. Since the school provided the cheapest ‘day care’ for the
student, she would send the student to school for any minor
health issues (such as common cold, slight headache, and low
fever). The students whose mothers had paid jobs outside the home
said that their mothers would ask them to go to school, and in some
cases, give them medicine and send them to school.
 students mentioned that they themselves did not want to stay home
because being alone at home was boring, and they would rather
be at school with their friends even if they did not feel well.

Mothers at home: They reported that their mothers also asked them to go to
school. However, if they stayed at home, their mothers would take good care
of them, and feed them. Also, they did not find it boring to be at home, as
their mothers would be there. In addition, if their siblings stayed home sick,
they often stayed home as well.

+ Having younger siblings actually had a positive effect on girls’ attendance.

>< Belief: girls may miss school in order to care for younger siblings

 Connected to whether mothers at home: children would be

encouraged to attend school even if they were not feeling well, and
for those who were at home, older girls would not necessarily need
to miss school if younger siblings stayed home from school when
they were ill.

Over 40 per cent of the girls had reported menstrual pain as the main reason
why they would miss school
>< exploratory analysis found no significant difference in attendance
between girls who pointed to menstrual pain as the main reason for
absenteeism and others who picked other reasons.

 They had gotten used to menstruation as they grew older and

planned for it by bringing pads or homemade sanitary napkins.
Students reported that they did come to school with the pain, even
the ones who typically have severely painful periods.
 if they told their teachers about the pain then their teachers would
allow them to rest in the nursery room, where there was bedding
on the floor for kindergarten children. If the pain were unbearable,
they would let the teachers know and they would be sent home.

Conclusion: Attendance data does not capture the full impact of

menstrual pain on girls’ attendance because they would be counted as
being present, even if they rested at the school or left for the day, as long as
they were present during roll call in the first class period.

Oster and Thornton: same results (distriution of menstrual cups,…)

+ the mother’s menstrual cycle could potentially impact student

attendance, as in Nepali society women are not allowed to cook, clean, or
participate in any household activity during their periods.

 Hypothise: daughters would be expected to fill in when

mothers are ‘untouchable.’
 Focus group: Girls pointed out that not all families were strict
about this, especially in some ethnic groups. Even in households
where this tradition was followed, students reported that it did not
cause a disruption in their attendance because they planned for the
expected increase in household activities, which according to
them, was not a lot, as they performed these tasks regularly anyway.

+ a lack of facilities for safe and effective menstrual hygiene management.

 Girls pointed to the lack of changing rooms, as facilities were the

typical Nepali squat toilets with no room or space for anything else.
This, as the girls explained, made it challenging for them to change
their pads among other things, as there was no clean space in these
restrooms for them to set their belongings, including pads. In some
cases, trash cans to throw away used pads were not available.

SUMMARY AND CONCLUSION:

+ For boys, having younger or older siblings negatively impacts attendance.

One possible reason for this is that having older siblings increases the
employment of boys via network effects. Fines also have a positive
association with attendance for boys, suggestive of an incentives story.
+ Travel time to school and mother not having a job both have a negative
association with school attendance for girls

+ The number of motorcycles in the family is negatively associated

with attendance by boys, whereas time spent studying at home, having an
educated mother, and father not having a job, have positive and significant
impacts on boys’ attendance.

+ Boys’ attendance is positively and significantly associated with one of the

wealth proxies, number of cars in the family.

SAME: for girls a proxy for status (being a member of a privileged caste)
has a positive and significant impact on school attendance.

+ Status does not appear to affect the school attendance of boys.

+ Age has a negative association with school attendance of girls but no

significant impact on the attendance of boys.
 as girls get older the family emphasizes marriage and skills related to
household activities such as cooking, while school is ignored. This
also may
be related to the physical development of girls, and the onset of
menstruation, which
may be difficult to deal with at school.

Rewards, fines, and having younger siblings all have positive and significant
impacts on
girls’ attendance.

POLICY IMPLICATIONS:

+ Experimental designs could feasibly alter reward and fine structures

(and their timing) away from the current all-or-nothing approaches and
toward graduated structures providing continued incentives to attend school.
+ examining attendance reporting policies during different times
throughout the day could provide more information about true school
attendance

+ In terms of UN Sustainable Development Goal 4, providing all children

with access to a quality education, improving secondary school attendance
rates in Nepal will involve bridging the urban/rural gap, reducing wealth
inequality, disincentivizing absence from school, and increasing school
resources (computers in particular) that students value and identify as a
major reason to come to school.

+ For girls bridging the status gap (in terms of caste) and overcoming
obstacles that reduce attendance with age will be important.
For boys, addressing family responsibilities (having siblings and father
working, motorcycles) and increasing women’s education (having an
educated mother) will be important.

+ School attendance rates decrease with age for girls raises the possibility
that menstruation may be a contributing factor.

 the rural Nepali practice of banishment from family homes during

menstruation
 bleeding and lack of access to sanitary and water for washing
 adolescent girls in India benefitted significantly from sex-specific
latrines.

Policies related to menstruation—access to sanitary pads, bins for disposing

of pads, running water for washing in sex-specific restrooms, access to pain
medication—should be explored as part of on-going research to improve the
educational attainment of girls
in developing countries

Factors that impact quality of education:

+ Teachers
+ Student’s IQ
+ Performance of students
>> Students IQ, support at home,
ARTICLE: ELECTRICITY

This study examines the effect of reliability of electricity on gender differences in socio-
economic status using a comprehensive set of labor and non-labor market outcomes in
India. Using the temporal variation in household electricity hours from a large gender-
disaggregated data set, we examine the effects of electricity reliability with individual
fixed effects and instrumental variable regressions. Our analysis reveals contrasting
trends with significant progress at the extensive margin of electricity access, but little
progress at the intensive margin of reliability, hours of electricity. We find that reliable
electrification im- proves the status of women relative to men through increased
employment opportunities and reduced time allocation to home production. For
instance, 10 more hours of electric- ity increases the likelihood of employment in the
‘usual status’ by 2.8 percentage points (pp) for men, and 4.2 pp for women. The analysis
is robust to the use of piece-wise lin- ear regression approaches, as well as alternate
specifications of the outcome variables. The study recommends considering electricity
as a right, and as part of the broader strategy for reducing gender disparities in India.

 First, we move beyond quantifying electrified households as a policy objective and look at
the effects of electricity reliability (hours of elec- tricity supplied) on gender differences in
the labor and non-labor outcomes. Second, we tackle the endogeneity between
employment and electrification, and arrive at robust point estimates. Third, instead of
focusing either on labor market out- comes or empowerment, we seek to provide a
holistic picture of the effect of electrification on ‘access, agency and achieve- ments’ for
women following the framework of empowerment by Winther et al. (2017) and Kabeer
(1999) . Fourth, unlike previous studies which have looked at the effect of reliable
electrification on women’s outcomes only ( Sedai et al., 2020b; Samad and Zhang,
2019 ), we analyze the gender differences in labor market and fuel collection activities,
which allows us to highlight a significant channel through which electrification helps in
reducing gender differences. Through these analy- ses, we posit that the gender
differences in the labor market and in the household reduce with reliable electrification
by reducing the time-burden of labor intensive activities like fuel and water collection.

CHAP 11: AGRICULTURE AND

DEVELOPMENT

>> Past studies: Agriculture is redundant, a privider of labor to the

industry and gov sector.
>> 3 pressures:

+ Pressure to transform the sector to higher value-added non traditional

crops for export and urban.

+ Pressures to address concerns for social justice >> confront food

insecurity, land reform >> not from market driven strategies.

+ Introduce mỏe environmental sustainable form of farm management.

Africa: increasing global temp, less rain >> drop in agri output
Middle income: lower growth rate

Higher income: increasing growth rate

 Middle income countries: rate of growth > pop growth.

 Food security prevails despite economic growth.

 Higher productivity form of cultivation. Global agri input grow

lower than output, except low income.
 TFP is a gauge of efficiency. Lower income countries have
impressive increase in efficiency. Higher level of output growth
in a declining rate of input growth.
 Because they have substituted productivity for natural resources.
Urban bias: (Michael Lipton): agri is neglected in most developmental
strategies, bec of complex of social forces and processes.
 Leading economic strategists and policy makers live in capital city,
little contact with and little knowledge of rural area.
 Trained in Western academic paradigm, little concern of backward
agri region.

Development is equated with industrialization >> urban

Landlord biaass: Smale elite of landlords in countryside >> higher degree of
power
 stall land reform intitiatives
 influence local labour market >> drive down farm wages.
 Irrigation and flood control >> help farmland
 Lion’s share of benefits

Cultural divide in poor nations.

 Small cultivators are: peasants, tribal ppl, lower level caste
India’s caste system: ascending scale of hatred and contempt. Other
examples: Malaysia, Thailand.

Inadequate provision of infrastructure and social overhead capital.

 Road and water: fundamental resources
+ All or none nature: the state must finance large-scale investment programs
if productivity is raised.
 Not many successful agri programs.
 Have to take place over a long time
 Govs are insecure and lack resources > Can only allocate to short
term and limited – urban, industry.

Colonies >> focus of colonization shifts from extracting resources and trade
routes to agri commodities.
 Trade in tropical commodities > massive structural change in rural
landholdings.
 Turn over land to a new planter aristocracy. Slaves work in
planatation while natives are relegated to low quality and distant
land.
 Dichotomy where few planters control vast expenses of productive
land, large mass of cultivators have small land.
Consequences: Overgrazing and overuse. Inadequacy of fallowing (idle
land to gain nutrients).
 Vicious cycle of excessive land use > greater degradation of soil,
mineral, water loss, decline in productivity,…
 Pollution poverty.
Average global temp are on the rise. Global warming.

Asymetric nature of climate change: CO2 emission from Global North

but the Global soth has to suffer more.
Climate- smart agriculture: sustainable agri with food security

Peasants: principal category of cultivators who operate in traditional

agriculture.
 Not tied to particular landowner. Largee landholders do not have
reciprocal obligations.
 Self-suficient. Do notproduce solely for family consumption, selling
surplus >> Non market and market production. Maintain animals and
gargen for their own.
  Very poor because small, do not need to spend all time
cultiatingcrops.
 Can work elsewhere as day labourers,…
 Low degree of specialization.


Traditional culture: Combination of marketing of modest sized cash crop +

Self consumption of production, all organized around family labor.
 Small, labor and land intensive
 Lack capital
 Land in use is marginal
  Low productivity, value added
 STILL can have innovation and capital, learning and change.

Uneveness of production techniques: advanced methods + old techniques.

 Resistance to change more in les- developed nations
 Not because of preserving traditions.
3 reasons for slow change:
+ Cultural resistance: Ayresian ceremonialism
+ Poor > risk averse. Rational, evaluate risks involced in changing
production.
+ Little or no access to cash and credit > finance more advanced tech. Or
Pause of demand for the technology
Developmentalists: 3 approach

+ Lack of efficieny in agri >> reflect another are aof hidden potential.
+ Peasants are true maximizers in neoclassical sense > behave similar to
market ppl.
+ Peasants endure even though ineffficient >> special logic to peasant
cultivation

Hidden potential because of inefficiency of peasants (often assumed)

Myrdal: inefficient production in small scale agri >>structural changes that

leads to rapid increase in output w/o input
> recitfy blockages and bottlenecks to efficiency

Lewis: MPL = 0 >> shift labor to industrial sector

Theodore Schultz: small farmers were efficient, given their knowledge and
acccess to info, income level, stock of tools,…
 Cannot recombine inputs to increase output.
 Cannot reduce input and maintain outpit
 If prices increase, peasants will increase input to production for the
goods.

Peasants are poor because of gov policies that inhiit free market in agri, and
neglect of agri extension and research
Rostow: agri sector should move rapidly forward with the dissolution and
consolidation of traditional agri >> phase out inefficient farming with
structural transformation.
>> Move to the industrial sector.
>> Not true in global south.

Alexander Schejtman: define “peasant economy” >> consist of “family type

unites engaged in process of production”
 Seek to attain survival and to sustain.
 Not only profit maximizer, OC of farming, leaving farming.
 Family size farms are part of peasant economy
>> Cultivators: either subsistent or semi subsistence producers.
 Semi: only agri surpluses are sold in market
 Sub: A very high quotient of total production will be marketed, not
merely some residual >> at peak harvest time where price lowest.
  Poorer cultivator >> family labor management is weak, povertu and
duress > seek outside labour.

De-agrarianization:
 Populace delinked from farm and land ownership >> non-farm
activities.
 Occupational “multiplicity” > drive to maintain peasantry status.

Green Revolution:
Cash crop cultivators (midsized farming operations):
 Produce almost entirely for the market.
 Important for successful development strategies > significant
proportion of land, provide proportion of food.
Wage goods >> form the bulk of diet for working ppl.
 Gov form a purchasing board to set the price of wafe good crops.
 Urban bias; price at low level. Favor urban, keep wages low and
proft high
 Disincentivize cash crop farmers (monopsonist) > policy of
importing cerals and legumes for shortages of production
 They are driven from the market > Vicious circle: cheap food
imports, reduction in production and mkt >> balance of payments.
Fruit, vegetables, meat, dairy products >> avoid urban bias of staple food.
 Luxury goods are available and cheap by international standards
while staple goods are short and met by imports.

Switch to export crops >> diminution of land for staple, extend import.
 Difficulty of obtaining foreign exchange
 ….
 Colonial history >> export of tropical products.
+ technology
+ labour supply
+ credit market

2 forms of land usgae: renting and sharecropping

+ Classical AS and DR: criticize unproductive landlord class >>

sharecropping and land rental is inefficient.

>< Current research: relatively efficient land tenure arrangement,…

Keith Griffin: land and income distribution.

Not from land tenure arrangements > > agri retardation BUT how the
benefits are shared between renters and landlords.

Radwan Ali Shaban: compare sharecropping reults with land owned by

small farmers in India
Contract farrming: Agri business

Wide variety ò change in land ownership.

 Colonization programs:
 Programs to partition large landholings to smaller parcels.
Negotiated land reform: attempt to create responsive market for large
landholdings >> give grants and loans to smallholders to buy land at fair
market value.
Market-led agrarian reform (MLAR)

Voluntary land reform >> landlord bias: large share of new owners under the
voluntary scheme being fictional or unqualified.
Large landholders transform reformed land back to their possession via their
children and relatives.
Advocate to a return to stateled agrarian reforms.
Keith Griffin: Large landlords have reaped the ad of controlled labour
markets>> lower farm workers’ income.