ECON-2220 Chapter Notes - Chapter 1: Joseph Stiglitz, Improved Sanitation, Progressive Tax
15 May 2018
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Study Guide 1: Introduction
Franko:
1. How does Franko define development?
This text looks at development as a process of meeting the basic human needs of a
population and enhancing options for the allocation of economic resources both today and
in the future to increase the choices citizens have in their daily lives. It pays particular
attention to how much is produced and for whom, and it addresses the environmental
sustainability of production for future generations.
2. What quote from Box 1.1 best fits your definition of development? Why?
Joseph—Stiglitz—”1998):—It—used—to be that development was seen as simply increasing GDP.
Today we have a broader set of objectives, including democratic development, egalitarian
development,—sustainable—development,—and—higher—living—standards.
● I—prefer—Stiglitz’—definition—because—it—acknowledges that development is not simply
the increasing of GDP. Development requires framework, such as democracy,
equality, and sustainability.
3. What is dualism? How does dualism complicate development policy?
Dualism is the simultaneous existence of modern and traditional economies. , if an
economy magnetized by growth neglects the plight of the poor, people without assets are
marginalized by the growth process and made even worse off. Those without land, capital,
or education, like the poor peasant in feudal times who lost access to the agricultural
commons, can be pushed into the margins of society. Without access to resources, the
poor can become poorer. Their attempts to scrape together a subsistence existence often
pressure the environment as desperation drives people to use up land or forests or dump
open sewage or waste today without thought of tomorrowfor tomorrow holds little
promise when they struggle with hunger or sickness.
● Rather than generating the predicted theoretical results that growth would trickle
down to the poor or that governments would extend benefits through progressive
taxation or social services, Streeten argues that growth has been accompanied by
increasing dualism. That is, when countries grow as measured by annual GDP
growth rates, the rich often become richer and the poor more destitute in the
process of change. We see the expansion of the modern, capitalist sector alongside
a traditional, backward sectortwo distinctly different worlds growing side by side.
4. What factors might impact a country’s path to development?
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● Social factors: equality
● Political factors: democracy
5. Compare two Latin American countries from Tables 1.1 and 1.2. Which is more
developed? Why?
Indicator
Argentina
Bolivia
Child malnutrition rate
2
8
Under age of 5 mortality
rate
22
83
Female life expectancy
77
64
Access to improved
sanitation
89
82
Household consumption
spending
3.3
3.6
Television sets
293
118
Daily newspapers
123
55
Telephone mainlines
201
62
Mobile phones
121
52
Personal computers
49.2
12.3
Internet hosts
47.34
1.73
red= quality of life indicators (table 1.1)
blue= communications indicators (table 1.2)
Based on quality of life indicators in table 1.1, Bolivia is much less developed. They have
higher child malnutrition, higher child mortality, lower female life expectancy, worse access
to improved sanitation. They do have higher household consumption spending, but only by
.3%. Based on communications indicators in table 1.2, Bolivia is also less developed. They
have fewer television sets, daily newspapers, telephone mainlines, mobile phones,
personal computers, and Internet hosts.
6. What are the three schools of thought on the role of the state in policy?
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