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Midterm

Midterm Notes - Reading.docx


Department
Sociology (Arts)
Course Code
SOCI 254
Professor
Uli Rocher
Study Guide
Midterm

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READING NOTES
Chapter 9: The Colonial Origins of Comparative Development:
-Two different kinds of colonies established by European powers
1. Extractive state
Main goal to transfer as much wealth as possible back home to the imperial power
Ex. Belgian colonization of the Congo
2. Neo-European colonies
Emphasis on local development, protection of private property, and strong checks
and balances on the power of authorities, replicating European institutions
Ex. Australia, US, Canada
-Inducing large difference in income per capita across countries in the long run, the level of
institutions and property rights and state policies determine the level of investment in physical and
human capital, and will use these factors more efficiently to achieve greater level of income
Mortality and Settlements
-Settlements affected early institutions, which persisted and formed the basis for current
institutions
-Colonization strategy in part determined by the feasibility of European settlement
-Ex. Australia
oSettlers fought against the wishes of the home country; wanted institutions and political
rights like those in England
Contrary to colonial experience in Latin America or Africa
Main object of Spanish and Portuguese was to obtain gold and other
valuables.
Spanish granted rights to land and labour after conquest, and set up a
complex mercantilist system of monopolies and trade regulations to extract
resources.
“government attuned to the interests of business and willing to divert
resources to ends that the business community would have found
profitable”
oIn European colonial experience, the theories of representative democracy prevailed over
theories of absolutism

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Institutional Persistence
oExtractive policies persisted most prominently; ex. Latin America had forced labour
policies and slavery.
1. Setting up institutions that place restrictions on government power and that enforce
property rights is costly; local elites after independence doesn’t necessarily have to pay
to switch to extractive institutions. By contrast, those who inherit extractive
institutions are inclined to maintain it to avoid the costs of introducing better
institutions
2. Smaller elites have greater incentive to favour extraction with greater respective share
of revenues.
Chapter 2: Characteristics of Income Gap b/w Countries
Rates of Economic Growth
-Despite global trend of rapid economic growth, gap b/w the rich and the poor widened
-Modern era of economic growth catapulted Western Europe, the US, and other countries into a
position of global economic dominance by 1950s, triggered by Industrial Revolution.
-“Modified Matthew effect” meant that both the high- and middle-income countries were growing
richer at the expense of further impoverishment of the poor.
-Lower-middle-income groups at the end of 20th C experienced a dramatic increase in population
at the same time the poor countries population diminished. This signals the economic expansion
of China.
Absolute Gap vs. Relative Gap
-AG: difference b/w the mean GDP/pc of a set of high-income countries and that of poor-income
countries
oContinuing to grow faster for as long as it takes: explains why the gap is not closing
despite unanimous development of all countries  Algebra of the Absolute Gap
-RG: GDP/pc of the poor or middle-income groups as a percentage of that of the developed
countries.
Chapter 3: The Rising Inequality of World Income Distribution
-Income inequality shows that the gap is worsening; consequences of ignoring a worsening gap are
tied to domestic political violence
-The sheer magnitude of inequality, poverty, distribution of world income by population quintiles
is shocking itself

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-Neoliberal paradigm, with prescription of Washington Consensus, have dominated international
public policy and generates a strong expectation that as national economies become more densely
interconnected to international trade and investment, world income distribution will be equalized.
Causes of Increasing Inequality
1. Differential population growth b/w poor and rich
2. Fall in non-oil commodity prices, the poorest hardest hit
3. Debt trap
ofast-growing and middle-income countries seeking to invest and consume more than can
be covered by domestic incomes by borrowing abroad
4. Technology
oreinforcing the tendency for high-value-added activities (innovation) to cluster in western
economies rather than disperse to lower-cost developing countries
continuing economic value of tacit knowledge and handshake relationships in
high-value-added activities
Conclusion
-Income divergence is another kind of polarization in world system: zone of peace and zone of
turmoil
oWealthy pole with strengthening republican order of economic growth and liberal
tolerance, with tech. innovation able to substitute for depleting natural capital.
oPoor pole have states whose capacity is stagnant or eroding
-The result is large mass of unemployed and angry young people, to whom the new IT have given
the means to threaten the stability of the societies.
-Political instabilities and flows of migration in turn can harm the lives of the citizens of the rich
world and its democratic character.
Chapter 7: Difference in Human History on Different Continents
-Peoples of different continents already differed greatly in technology and political organization.
oEx. Invading Europeans had steel swords, guns, and horses, while Native Americans had
only stone and wooden weapons with no animals to be ridden.
-Infectious diseases favourable to Europeans by virtue of domesticated animals
-European ships backed by centralized political organization
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