PSCI 2106 Lecture Notes - Lecture 3: Motivation, Washington Consensus, Market System
Document Summary
Causes of growth and foreign aid lecture 2. Growth theory: gdp as output, investment of different types of capital and increased quantity of hours worked (could include health for less sick (missed) days, improve quality of hours worked (education/training/health)-innovation/technical change. Resources do not necessarily equal wealth, in fact the majority of the time they don"t. Resources" prices go up and down and if price drops you can"t increase the price. Resource rich countries have low taxes, people don"t have leverage over gov, therefore they are more corrupt *important point. The washington consensus = package of liberalization and privatization policies supposed to be good for growth that were imposed on developing countries - these policies were popular at the time. Just take a look at the middle east. Mixed results, some really believe an economy needs to trade to grow, some say rich are taking advantage of poor countries. Option 1) property and contracting: property rights = investment.
