Theories of National Development

RePEc: Research Papers in Economics, 2005

A development and underdevelopment is presented using a Schumpeterian model for an open global economy with technology transfer and trade. When in the context of free commerce there exist strong enough mechanisms allowing technological asymmetries between countries to generate higher innovation incentives for the leaders, persistent inequality and divergence will result. Identical countries will reach different steady states. Such mechanisms include labor-and market-seeking foreign direct investment (FDI), which originated at the end of the 19th Century and has increased rapidly since the 1980's. They also include the typical "colonial diktat" imposed by Great Britain in the 19th and early 20th Centuries. In the presence of labor-seeking FDI, the advantage a leading country's innovators obtains by producing with the follower's wages results in higher incentives to innovation for which FDI spillovers may not compensate the follower. It also crowds out the follower's innovation. In the case of a small following country all of whose labor is demanded by leading country innovators, all innovation will be crowded out (the banana republic). Market-seeking FDI, providing goods that can only be sold where they are produced, also results in unequal incentives to innovation. Finally, when colonies' markets and transportation options are limited by their colonial masters, or competitive industries are directly outruled, as in the typical colonial diktat of the 19th Century, persistent inequality and divergence arise. In contrast, in the case of autarchy, or in the case of free commerce without any asymmetric mechanisms, multiple steady states will only arise when country parameters differ. In all cases considered, marginal changes in the steady state determinants, such as population size, productivity fixed effects and institutions (represented by the degree of financial development and by the efficiency of a public input for producing innovated goods) result in growth effects for diverging countries and level effects for countries following the leader in parallel trajectories.

Assignment, 2019

1. Why do think the study of economics is so central to an understanding of the problems of development? Give some examples of its role and usefulness. There are as many definitions of development as there are scholars that have written on the subject of development. Some scholars have defined development as a state or condition static; development as a process or course of change dynamic. According to Todaro (2003) et.al development has traditionally meant achieving sustained rates of growth of income per capita to enable a nation to expand its output at a rate faster than the growth rate of its population. The term development may mean different things to different people. Without such a perspective and some agreed measurement criteria, we would be unable to determine which country was actually developing and which was not. Economic development in the past has also been typically seen in terms of the planned alteration of the structure of production and employment so that agriculture's share of both declines and that of the manufacturing and service industries increases. Development strategies have therefore usually focused on rapid industrialization, often at the expense of agriculture and rural development. Todaro (2003) et.al goes on to state that development is not purely an economic phenomenon but rather a multi-dimensional process involving reorganisation and reorientation of entire economic and social system. Development is the process of improving the quality of all human lives with three quality aspects identified as rising of living standards, creating conducive conditions to grow peoples' self-esteem through the establishment of social, political and economic systems and institutions which promote human dignity and respect. The third aspect is that of increasing the peoples' freedom to choice by enlarging the range of their choice variable of goods and services. For one to fully comprehend the intricate problems of development, a thorough knowledge of economics as a subject becomes relevant so as to be able to interpret and analyse the various changes that should take place before a country is said to be developing as well as being able to understand various interpretations of development through the many theories on development like the Marxist view of development, the neoclassical dependence models of development, the classical theory of economic stagnation, Rostow's stages of economic growth, the vicious circle theory, balanced versus unbalanced growth, the O-ring theory of economic development, the Lewis-Fei-Ranis model, the new (endogenous) growth theory,

The Evolution of Development Thinking, 2016

Orbis, 1995

Essays their lives. Indeed, the essence of the Soviet tragedy, as Malia puts it, was that "there is no such thing as socialism, and the Soviet Union built it" (p. 496) through the sheer power of a bad idea. Let us hope, at the least, that we do not have to go through ail this twice. How Do Countries Become Rich?

This chapter reviews some of the most prominent theories of economic development. These theories describe tools and strategies for making development goals achievable. The chapter starts with early views about the nature of economic prosperity. The chapter then reviews classical theories with four main clusters: linear stages of growth models; structural change models; international dependence models; and neoclassical counter-revolution models. Subsequently, contemporary theories of economic development, including new growth theory and theory of coordination failure, are reviewed. Finally, implications of the changes in the development thoughts and their importance in studying development problems in the developing countries conclude the chapter. The problems of economic development, which are complex and multidimensional, have resulted in the development of a number of theories, explanations, arguments and assertions (World Bank 2000). The purpose of this chapter is to review some of the most prominent theories of economic development. These theories describe tools and strategies for making development goals achievable. The chapter starts with early views about the nature of economic prosperity. The chapter then reviews classical theories with four main clusters: linear stages of growth models; structural change models; international dependence models; and neoclassical counter-revolution models. Subsequently, contemporary theories of economic development, including new growth theory and theory of coordination failure, are reviewed. Finally, implications of the changes in the development thoughts and their importance in studying development problems in the developing countries conclude the chapter.

El videojuego como recurso pedagógico, 2022