Reference no: EM131131135

The Role of Agriculture in Economic Development

1. What are the principal contributions that agriculture would make to the development process?

2. Suppose that a government that is the sole buyer of a crop offers farmers $2.00 per ton of maize (corn), while the market price across the border is $2.50 per ton. What will be the impact on the production of maize? Will it affect the production of other crops? Will the government likely be able to buy all the output?

3. What was the Green Revolution? What were some of the benefits that it brought to a country like Bangladesh? What problems came with it?

4. Why should any analysis of development problems place heavy emphasis on the study of agricultural systems, especially peasant agriculture, and the rural sector?

5. What were the principal reasons for the relative stagnation of developing country agriculture during the so-called development decades of the 1960s and 1970s? How can the disappointing performance be improved on in the near future/ Explain your answer.

6. What is the role played by women in agricultural development in LDCs?

The Role of Human Capital in Economic Development

1. "Education, health and nutrition expenditures should be viewed as just as essential for economic growth as expenditures in steel plants or hydroelectric projects" Discuss.

2. How does the AIDS epidemic illustrate the threat of poor health to development success in Africa?

3. Describe and comment on each of the following education-development relationships:

(i) Education and economic growth: Does education promote economic growth? How?

(ii) Education, inequality and poverty: Do educational systems typical of most LDCs tend to reduce, exacerbate, or have no effect on inequality and poverty? Explain with specific reference to a country with which you are familiar.

(iii) Education and migration: Does education stimulate rural-urban migration? Why?

(iv) Education and fertility: Does education of women tend to reduce their fertility? Why?

(v) Education and rural development: Do most LDC formal educational systems contribute substantially to promotion of rural development?

(f) Education and the brain drain: What factors cause the international migration of high-level educated workers from LDCs to developed countries? What do we mean by the internal brain drain? Explain giving answers.

4. What is the human capital approach to health and education? What do you think are its most important strengths and weaknesses?

The Role of Population in Economic Development

1. Explain the distinction between population growth and population shifts
2. In what ways can high rates of population growth impede economic development?
3. In what ways are high rates of population growth beneficial to economic development?
4. What is the relationship between the age-structure of the population and the dependency burden?
5. List and briefly discuss the principal causes of high population growth rates in LDCs and the major consequences.
6. Outline and comment briefly on some of the arguments against the idea that population growth is a serious problem in developing nations.
7. Outline and comment briefly on some of the arguments in support of the idea that population growth is a serious problem in developing nations.
8. Outline and comment briefly on the various policy options available to LDC governments in their attempt to modify or limit the rate of population growth.
9. Why might the problem of rapid urbanization be a more significant population policy issue than curtailing LDC population growth rates over the next two decades? Explain your answer
10. The brain drain from LDCs to MDCs is a bad thing. Discuss.

Balanced vs. Unbalanced Growth

1. "To write in praise of lack of balance is evidently a provocation for which a price must be paid." (A.O. Hirschman) Discuss.

2. What was the rationale for proposals such as the big push and balanced growth? What were the problems associated with them?

3. Define the concept of forward linkage and backward linkage and explain their relationship to the idea of unbalanced growth.

4. A Development Strategy for Poveria

(Read the following problem carefully and answer the question that follows).

Poveria is a small developing country which is an island state in the South Pacific. It is basically a mono-economy highly dependent on one principal export crop, sugar, accounting for 70% of employment on the island. It also has one principal city, Palu, which is a service center for the rest of the island.

All of Poveria's manufactured goods is imported, except for certain minor items such as small handicrafts/utensils , bread etc. All of its capital goods requirements (machines, etc.) are also imported, with some minor exceptions, (e.g. some small farm implements/tools).

The sugar industry has generated no significant linkages, apart from a milling industry which gets the sugar cane ready for export. Proposals have been made for setting up molasses manufacture and a distilled alcohol industry. To date none of these proposals have been deemed feasible. Poveria's coastline is extremely rocky, so that despite its potential for tourism given its climate and otherwise scenic location, that potential has never materialized. Moreover, Poveria has no international airport.

Income per head in Poveria is US$300. Population has been growing at 3% annually. Given the nature of the international sugar market and Poveria's dependence on sugar exports, the growth in income per head has been no higher than 2% per annum for the last ten years. In several years, it has actually fallen.

As a Development Advisor to the government of Poveria, you are asked to write a memorandum for the President of Poveria outlining the considerations that must be looked at if a viable development strategy for Poveria is to be developed. You should not attempt to develop the strategy yourself, rather your task is to identify those factors which need to be addressed if a development strategy is to be created and acted upon. Remember, your definition of development will determine the issues you consider important.

The environmental effects of economic development

1. Explain the concept of sustainable development. What kind of trade-off might face a country with marketable natural resources in an attempt to grow sustainably?

2. Refer to the handout on integrating environment and development in Taiwan. How has the government of Taiwan reversed its previous indifference to the environmental consequences of growth?

3. Why is international action essential to deal effectively with environmental issues such as ozone layer and global warming? Is environmental protection too expensive for poor countries?

4. Discuss at least five broad factors that have contributed to large scale environmental degradation in LDCs, and suggest how these can be corrected. Do developed countries have a role to play in this area? Why?

5. In what ways does poverty lead to environmental degradation? What types of environmental problems do the rural and urban poor share? What are some differences in the conditions they face?

Domestic savings/foreign aid

Domestic savings

(a) What is the 2-gap model?
(b) What are the possible explanations for low domestic savings ratios in LDCs?

Foreign aid

(a) What are the elements of aid that make it different from normal commercial lending?
(b) What criteria ought to be considered in deciding how much aid is appropriate for a given country in a given year?
(c) Why are NGOs important players in the development process? Why are NGOs preferred to other bilateral or multilateral agencies?
(d) For some, foreign aid is viewed as the engine of growth; for others it is seen as the engine of twisted national priorities and undesirable dependency. Discuss
(e) How effective is food aid from MDCs been in promoting development in LDCs?
(f) What is the significance of the debt-service ratio? Can indebted countries do anything to lower this ratio?
(g) What do you understand by the debt crisis? What are the origins of the debt crisis in the late 1970s and early 1980s? Discuss the proposed solutions to the debt crisis?
(h) What do you understand by the HIPC initiatives?
(i) Explain the meaning of the following concepts: tied aid, foreign aid, NGOs, and New International Economic Order (NIEO)

Direct Foreign Investment

(a) Define direct foreign investment and multinational corporation
(b) What are the benefits that economic theory would claim for direct foreign investment?
(c) What are the chief concerns of host countries about the activities of multinational corporations
(d) Explain the meaning of the following concepts: multinational corporation, direct foreign investment, and transfer pricing

The Role of Foreign Trade in Economic Development

1. In what sense do exports constitute the "engine of growth"
2. Explain the meaning of terms of trade? How does this concept relate to the Prebish-Singer thesis? Has the terms of trade been declining in LDCs?
3. Import substitution is more desirable for LDCs than export promotion. Do you agree or disagree? Explain
4. Explain the following concepts: (i)New International Economic Order (ii) Generalized System of Preferences (iii)the Principle of Comparative Advantage (iv)the vent-for-surplus gains from trade.
5. What problems does the instability of commodity prices pose for a country and for the world economy?
6. One widely held view holds that developing countries gain from trade with developed countries. Do you agree with this view?