2. • Differences in per capita incomes among countries have
enormous consequences for people’s lives.
• Being born in Sweden versus in the Democratic Republic of
Congo.
• These differences raise one of the biggest questions in the
social sciences:
• Why are some countries much more developed than
others?
Development &
Underdevelopment
Pearson Publishing 2011
3. Economic Development
• The process of increasing a
country’s wealth by diversifying the
goods and services it produces and
making production more efficient.
• As countries develop economically,
agriculture begins to make up a
smaller part of the economy and
manufactured goods become more
important.
• Simple manufacturing to more
sophisticated manufacturing.
• Then manufacturing decreases
losing ground to service,
professional and managerial
activities.
•
• Most developed countries began this
process in the mid to late 1800s.
•
•
Independent versus colonial
Exception, Latin America
• By 1980s several newly
industrialized countries (NICs)
emerged.
•
South Korea, Taiwan and Brazil
• Second and third categories of less
developed countries that have not
had equivalent success
•
•
Botswana, Mexico, Thailand
Negligible development: Sub-Saharan
African area, Haiti, Laos, Cambodia,
Burma (Myanmar)
Post-industrial economies.
Economic Development & Human Development
Pearson Publishing 2011
4. The Good Society in Depth:
S. Korea- From Least Likely to Succeed to Most
Successful in its Class
Pearson Publishing 2011
5. • S. Korea in 1950s: depressing place, privation and degradation
• Infrastructure had been destroyed during the Korean War.
• By 2005, the country had become one of the World Bank’s high
income countries & one of the U.N.’s high human development
countries.
• No other country has done that so quickly.
• Military regime assumed power in 1961: set out to make S. Korea an
industrialized country rapidly & succeeded.
• They funded the development of privately-owned industrial
conglomerates and helped them become competitive.
• Puzzle: little inefficiency or theft of state funds; how did they manage to
succeed?
The Good Society in Depth:
S. Korea- From Least Likely to Succeed to Most
Successful in its Class
Pearson Publishing 2011
6. • Several factors came into play:
1. Threatened by two hostile neighbors, North Korea and China – question of
survival.
2. The military needed capitalist support to achieve its goal.
3. The government inherited a relatively competent state bureaucracy and a good
infrastructure of roads and electricity from South Korea’s years as a Japanese
colony.
4. It received considerable economic aid from the United States.
• Success developing both industrialization and capabilities.
•
Expansion of education and health care, although there was also repression by the
military regime of civil and political rights and workers’ rights.
• Regime fell in 1987 and democracy emerged and these rights expanded.
• In 2008 South Korea had lower infant mortality rates, longer life
expectancies, and higher graduation rates than the U.S.
The Good Society in Depth:
S. Korea- From Least Likely to Succeed to Most
Successful in its Class
Pearson Publishing 2011
7. Human Development
• Defined as “the process of
expanding the choices people
have to lead lives that they
value.”
• Being well fed and healthy, safe
from violence, literate and
numerate, enjoying political
participation.
• Human Development Index
(HDI)- three components:
1. How healthy people are in a
country as measured by life
expectancy at birth;
2. How knowledgeable they are, as
measured by adult literacy rates
and school enrollments;
3. Whether they have a decent
standard of living, as measured
by their purchasing power.
• Norway highest; Niger lowest;
U.S. ranks thirteenth (.956)
Economic Development & Human Development
Pearson Publishing 2011
8. • Economic and human development generally
reinforce each other:
• Economic development generates more choices for
people; resources for public goods. In turn, better
educated, healthier people can perform better, which
promotes more economic development.
• Positive correlation, but not always perfect
• India, for example, has division between urban and rural.
Economic Development & Human Development
Pearson Publishing 2011
10. • Economic development is the process of increasing a
country’s wealth by diversifying the goods and services it
produces and increasing the efficiency with which it
produces them.
• The progress of economic development is measured in
two ways:
1. Changes in the predominant economic structure, from
agricultural to manufacturing to the service sector and
2. Increasing per capita income
In Brief: Economic Development
and Human Development
Pearson Publishing 2011
11. • Human development is the process of expanding the
choices people have to lead lives that they value.
• These choices depend on whether the society in which
they live gives them the opportunity to be well fed and
healthy, safe from violence, literate and numerate, and
able to participate in politics.
In Brief: Economic Development
and Human Development
Pearson Publishing 2011
12. Categories of development:
• How do
developed and
1. Highly developed
less developed
2. Developed
countries differ?
3. Moderately developed
• How do you
determine
4. Least developed
which is which?
Lower and Less Secure Capabilities
Pearson Publishing 2011
14. • Difference in capabilities is stark between the most and
least developed countries.
• Most of the least developed countries are located in subSaharan Africa.
• Niger: 176 of every 1,000 children died before their fifth
birthday in 2007; the adult literacy rate was 29%.
• Has the highest percentages of citizens with the lowest
capability.
• The region with the largest numbers of persons with low
capability is South Asia, which includes India, Pakistan,
and Bangladesh.
Citizen’s Capabilities
Pearson Publishing 2011
16. • Low capability is directly linked to absolute poverty (that
individuals and families have a difficult time buying food to keep
them nourished or medicine to fight disease).
• Compared to relative poverty – not so severe to threaten life. Poor in
relation to other people.
• World Bank: people suffer from absolute poverty when their income
is less than $1.25 a day, adjusted for purchasing power.
• Number of people living in absolute poverty has been declining
since the 1980s
• But there are substantial regional differences.
Poorer & More Vulnerable Economies
Pearson Publishing 2011
17. • Less developed countries: lower incomes per capita than wealthier
countries, they also tend to be more vulnerable to sudden shocks
created by changes in the world economy.
• Rapid changes in prices for crops and minerals in the world market
are another source of economic woes for less developed countries.
• Most recent crisis was the deep recession of 2007-2009.
• Meltdown of financial sector in the U.S.
• Many developed and moderately developed countries rode out the
recession better than the U.S.
• China and Brazil
• Those countries that depend heavily on exports to the U.S. did less
well.
Poorer & More Vulnerable Economies
Pearson Publishing 2011
18. • Typically states in the least developed
countries are weak.
• Unable to translate that power into
action and implement policies
effectively.
• Clean drinking water
• Often they cannot do the bare
minimum of what defines a state: law
and order.
• Limited control beyond capital
• Weak bureaucracy; highest bidder
– corruption
• Corruption Perceptions Index
•
•
New Zealand – least
Somalia – most
• Economic development can
coexist with corruption
•
South Korea- key was keeping
corruption out of government
agencies responsible for managing
the economy.
• When corruption is pervasive in
weak states, achieving sustained
economic development is very
difficult.
• So weak, extremely corrupt states
cannot effectively promote either
economic development or
citizens’ capability.
• Trend toward democratization in
less developed countries
•
Mostly a façade
Weaker & Less Democratic States
Pearson Publishing 2011
20. Many countries
started off at the
same point, but
some developed
while others did
not.
Mexico and Haiti
compared to the
U.S. in the
1790s….
Imperialism
Geography
Culture
Institutions
Leadership
What explains
this?
Why did some countries become more
developed than others?
Pearson Publishing 2011
21. Imperialism
Geography
• Economic or political domination
of one region or country by
another.
• Geography is an important factor.
•
Related to a less inclusive concept
– colonialism (more formal rule of
one country over another)
• Some argue that these allowed
European powers to fund their
own economic development while
stripping others of their wealth
and blocking their potential.
• Intense debate over this theory.
•
•
It explains a great deal in terms of
advantages and disadvantages.
Obstacles to development
•
•
•
•
Lack of natural resources
Desert
Bad neighbors
Disease due to climate
• But geography alone cannot work
as an all purpose explanation.
Why did some countries become
more developed than others?
Pearson Publishing 2011
22. Culture
Institutions
• Argue that the progress of
different societies is determined
by what is in people’s heads –
character traits.
• Weber on Protestant work ethic
helps explain economic
development in Europe.
• Landes: new man – rational,
ordered, diligent, productive
• Economic institutions:
•
Japanese version of the work ethic
• Social capital and trust
• Not an all-purpose explanation
•
•
•
market creating,
market stabilizing, and
market legitimizing
• Puzzle: why do some countries
manage to establish these
institutions while others do
not?
•
•
Answer: distribution of political
power
Geography matters, too.
Why did some countries become
more developed than others?
Pearson Publishing 2011
23. Leadership
• Important: Leaders’ will and skill in choosing
successful policies, constructing coalitions of
supporters for these policies, and establishing
effective and political institutions.
Why did some countries become
more developed than others?
Pearson Publishing 2011
24. • Imperialism
• increased the wealth of
European countries and
impoverished their colonies.
• created numerous obstacles for
newly independent countries
including dependence on a
single crop for export earnings,
extreme ethnic diversity, and
racial cleavages.
• Geography
• favored countries in Eurasia
over countries in Africa &
Latin America by providing
native plant and animal species
that were suitable for
domestication and adaptable to
different environments.
• Still inhibits trade and
development in poor
landlocked countries with bad
neighbors.
In Brief: Five Explanations for Different
Levels of Development among Countries
Pearson Publishing 2011
25. • Cultures
• that emphasized disciplined
work and investment over
self-gratification contribute to
economic development.
• Social capital and trust matter,
too.
• Institutions matter
because:
•
They can either create incentives
for productive investment or
destroy them.
• Western European countries first
to establish economic institutions
that support sustained growth and
political institutions that
complemented them.
• Leadership matters:
•
Because of the policies leaders
choose, the kinds of coalitions of
supporters they create.
In Brief: Five Explanations for Different
Levels of Development among Countries
Pearson Publishing 2011
26. Problem
Hypothesis and Method
• Why are some countries
rich while others are poor?
• Acemoglu & Johnson and
Robinson believe the
answer lies in differences in
economic and political
institutions.
• Authors hypothesize that
economic institutions
protecting property rights
and relying on market
economics are most likely
to sustain economic growth.
• Use comparative case
studies method. – compare
the development of North
and South Korea.
Comparative Political Analysis:
Institutions as the Main Cause of Development & Underdevelopment
Pearson Publishing 2011
27. Operationalizing Concepts
Results
•
• Results confirm the
hypothesis.
• There is only one plausible
explanation for the radically
different economic
experiences on the two
Koreas after 1950: their
very different institutions
led to divergent economic
outcomes.
•
The independent variable
is the presence or absence
of private property rights
and market incentives.
The dependent variable is
economic growth defined
as GDP growth per capita.
Comparative Political Analysis:
Does Globalization Help or Hurt Workers in the Developing World?
Pearson Publishing 2011
28. • Is higher income per capita associated with higher
capabilities?
• Physical well-being
• Higher income countries do tend to have lower infant mortality
rates than low income countries.
• But it is possible to achieve low levels of infant mortality even
in the absence of extremely high per capita incomes.
• Informed Decision-making
• Higher income countries do have higher adult literacy rates.
• But countries at very different levels of income can achieve
nearly 100 percent literacy.
Development, Underdevelopment, & the
Good Society
Pearson Publishing 2011
32. • Is higher income per capita associated with higher
capabilities?
• Safety
• Homicide rates are lower in higher income countries, but there
are discrepancies from the overall pattern.
• Poor countries vary widely in outcomes.
• Democracy
• Strong relationship between higher levels of per capita income
in a country and democracy, but not a perfect one.
• Other variables: internal conditions such as high government
revenues and regional factors.
Development, Underdevelopment, & the
Good Society
Pearson Publishing 2011
33. • Some countries have much more success in promoting
human development than might be expected from their
level of economic development, while in others, human
development lags well behind.
• Three main ways they differ.
• Five explanations for differences in development among
countries.
Conclusion
Pearson Publishing 2011
34. • What is the difference between economic
development and human development?
• Why are there sometimes discrepancies between
a country’s level of economic development and
its level of human development?
• Why do differences in state strength between
developed and less developed countries make a
difference for citizen’s capabilities?
Critical Thinking Questions
Pearson Publishing 2011
35. • How would supporters of imperialist, geography,
cultural, and institutional explanations,
respectively, explain why Haiti changed from
being one of the richest societies in the world in
1790 to one of the poorest today?
• What variables might account for the big
differences in infant mortality rates among very
poor countries in Figure 8.1?
Critical Thinking Questions
Pearson Publishing 2011
