Lectures-Wk5.docx

5 Pages
121 Views

Department
International Development Studies
Course Code
INTL DV 130
Professor
Lofchie

This preview shows pages 1 and half of page 2. Sign up to view the full 5 pages of the document.
Description
(W) 9/11/2013 12:00:00 AM No lecture on Monday because of Labor Day. Study Questions:  1. What was Hollis Chenery’s distinction between growth theory and trade theory (?) How does it fit into development economics? o Clue: What did he mean by no spillover benefits?  2. What were mandatory sectoral allocations and how did they fit into ISI model?  3.What were guaranteed letters of credit and why were they necessary in the ISI model?  4. How did public choice theory affect the way in which developing governments taxed the agricultural sector? ISI (Import-Substitution Industrialization)  3 ways that people sought to finance these policies o 1. Local taxes o 2. Foreign Aid – for infrastructure (railroad, road, sewage disposal, etc.) o 3. Foreign Direct Investment – Failed because of the underestimation of those investors seeking other means to make money in the same area.  Began taxing agricultural sector (exports) because of this failing since it was the most stable and profitable. o According to public choice theory taxing food producers would be much too complicated. o Taxing the agricultural sector causes rural resistance to taxation. Ex. Argentina o The more visible the taxes the more the rural class realized that they were the economic losers. o Political resistance caused other changes in the way you went about extracting that capital from the agricultural sector  Implicit Taxes o Most of the world today is on a floating-exchange rate system.  Until the 1970s, most countries were on the fixed-rate exchange system and gold standard.  Meant that countries had the ability to change the exchange rate independent on market forces.  Overvaluation of an exchange rate – too few units of local currency per dollar as measured against some shadow equilibrium.  If currency is undervalued – too many units of local currency per dollar. Taxes on Agriculture  1. Explicit Duties o A. Export Duties o B. Local (country) Taxes. o C. “Development” Taxes. – Ex. 10% surcharge on exports o D. Marketing and Processing Charges.  2. Implicit Taxes –Exchange rate is an implicit tax that is an ideal inst
More Less
Unlock Document

Only pages 1 and half of page 2 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit