Monday, December 02, 2013
- IPE continued
- Exam Review
- Course Wrap up
Key Concepts – Development
- Under development
- Development strategies
- Structural adjustment
The challenge of development
- 98% of the population control 50% of the wealth, 2% of the wealthy population controls the other 50% of
Common concerns vs. sovereignty
- Common concern: poverty
o Self-interest and common concern
Underdevelopment can lead to bad things that take place outside the state. Economic decline can
lead to political instability, migration, terrorism, etc. Someway, lack of development can be seen
as global concern because of the effects of poverty does not stay within particular state.
Development addressing underdevelopment can lead to good thing. 80% population is in the GS.
Solving the problem promises huge benefit for the world as a whole
o Morality and common concern
Benefitted from the production of cheap goods, extraction of natural resources, exploited (M),
benefitted from the disparity of the GS (L)
o Extent of the problem
15% of the population is malnourished. The tension with the common concern,
Two different reasons for the tension
• Can we tell people what to do? (Can international community tell states what to do?)
• Who is responsible? (International community can decide what to do, who is responsible
for providing the resources to do anything about it?)
o Sovereignty: you have to provide the resources.
- Sovereignty: responsibility to help
Key concept: underdevelopment
- Diagnosing the cause of underdevelopment
Bad governance, government failing. Poor capacity, too penetrated by MNC.
What governments in GS do and what they failed to do. No capacity to invest in
Monday, December 02, 2013
Rational decision of the poor in developing countries, why poverty alleviation is difficult. Self-
perpetuating dynamic, poor people are the situation that essentially leads them to make decision
that continues the cycle of poverty.
Slash and burn agriculture: living in marginal land next to forest, to prepare it for agriculture, you
got a field to plant in. Unsustainable: working on marginal land, can only get productive use for a
couple of years before it becomes useless.
High birth rate, low income, high infant mortality rate, little or no social security. Have more
children because of high infant mortality rate, no social safety net, children ensure that you’ll be
taken care of when you’re old.
Capitol mobile labour is not, money and investments go across border easily, financial
transactions are happening every day. People do not move across border very quick.
• Sovereignty, movement of people labour is very restricted. Wages go up at particular
place, capitol can move. Countries tend to stay low wages, people can’t move to where
the pay is better but companies can move to where wages are low. (persistent reason for
Protectionism in Global North (putting on restriction on monetary or non-monetary goods.)
Countries in the GN do not advocate free trade in everything. Tend to promote free trade in a way
that’ll benefit them. GS tend ot have comparative advantage in terms of labour and land cost.
Free trade and agriculture is one of the biggest conflicts in the trade regime.
Decrease in aid
• Huge drop off of aid since the cold war. During the cold war US and Soviet Union
competed in the GS, one of the competition was giving aid.After, competition wasn’t
happening, therefore aid decreased.
• African nations pay 4 times as much in interest charges than education and health care
combines. (Interest charges.)
- General strategies
o ISI vs. Export Led Strategies
Import Substitution Industrialization
• Problem with underdevelopment is not enough value adding, only extracting natural
resources and sending to the GN. In order to development, must make things and have
home-grown industries. Develop industries within the GS to produce for own domestic
markets. Use mechanism of protectionism to protect it.
• Ran in to problems: size of markets within countries was too small to support the
industries, very expensive/no