ALCAZAR, Mark Daniel C.

ECON40163 – Economic
Development

BSA 2-2 Dr. Abraham C. Camba

Questions for Discussion 8

1. What reasons would you give for the rather sizable school dropout rates in developing
countries? What might be done to lower these rates?

Most of the developing nations are poor. The reasons for sizable school dropout
rates in developing countries can be outlined as:

1. The children in the poor family are sent to work at an early age to support the
family income rather than sending them for studies.
2. The families are poor and thus, cannot bear school expenses.
3. The poor children also fall sick and cannot bear the cost of medical. Thus, it
leads to long absenteeism. The other reason attached to long absenteeism is
early marriage of girl child.
4. The children are slow learners and many a times not patiently handled by
their teachers. This type of treatment demotivates them to attend the school
and thus, we experience dropouts.

The governments of the developing nations have to take necessary steps so as to

prevent dropouts. Some of the suggestions are:

1. Introduction of free and compulsory education for children up to the age of

fourteen years. After this age, attractive scholarship schemes can be
introduced for further studies.
2. The schools to introduce free mid-day meals, books and school uniform for
the children so that they do not have bear any expenses.
3. The schools should organize regular and free medical checkups for the school
children so that necessary medication can be given to the unhealthy children
at the right time. In order to ensure good attendance in the school, the parents
of such children should be given monetary or non-monetary incentives so
that they are motivated to send their children to the school. This step would
also prevent the problem of child labor.
3. It is often asserted that educational systems in developing countries, especially in rural areas,
are unsuited to the real social and economic needs of development. Do you agree or disagree with
this statement? Explain your reasoning.

The formal system of education in the developing nations, especially the rural
areas, does not cater to their social and economic needs. I do agree with this statement.
We know that rural areas are mainly composed of farm and non-farm poor population.
Such families like to send their children to work to support the economic activities
rather than sending them to school. Thus, the result is chronic early dropout rate.
The need of the hour is to provide education in rural areas that caters to their
needs. Such objective can be achieved through Non-formal education system. This
system of education does not require a specific school and is imparted after the school
hours. It is short term and specific. For example, providing training on music and art,
tying and dying, press printing, dance classes, basic nursing and so on. They also
impart education such that the students are able to get job in factories or can start on
their own. This way the economic objective to support the family is also resolved.
The social education involves making the students aware of the status of women
in urban areas, small family norms, basic health care, and AIDS disease. These issues
can be well explained informally

5. What is the supposed rationale for subsidizing higher education in many developing
countries? Do you think that it is a legitimate rationale from an economic viewpoint? Explain
your answer.

In the developing countries, the cost of education is very high due to which the
deserving talents belonging to lower middle-income families or poor families are not
able have an access to these facilities. One of the objectives of the developing nations
has been achieving a hundred percent literacy due to certain reasons:

1. A literate nation is able to develop faster as the ability to understand the

changes taking place around the world is more amongst its population and
they easily adapt to these changes.
2. If there are more numbers of educated working class, the number of working
populations grows due to which the government is able to generate more
revenues from them in the form of taxes. The revenue so generated is used for
infrastructural development of the nation and making investments elsewhere.
3. The educated labor force brings in more technological advancements due to
which the development takes place at a higher rate than usual.
 4. The educated nation bring the social benefits as well like equal status between
males and females, female contribution to the workforce, educated
generation, better care of health, and so on.
5. The educated population is able to make right choice of the government and
utilize their voting power efficiently. The reasons so discussed attract the
government to financially help the students in the form of subsidized loans,
scholarships for the talented ones, more subsidies to economically weaker
section of the population and so on.

We notice from the reasons to subsidize education that the social benefits derived
from education far exceed the private benefits. Thus, the government should decide the
amount of subsidy that is worthwhile for the economic development.

7. What do we mean by the economics of education? To what extent do you think educational
planning and policy decisions ought to be guided by economic considerations? Explain, giving
hypothetical or actual examples.

The term economics of education means the study of economic issues related to
demand, financing and provision of education in the economy. The major stakeholders
in the education system are the society, the institutions providing educational services
and the individual households that demand for it. The economic issue related to
pursuing education is the development of the economy. The government of any country
is interested in making educational investments in the country as it would bring
technological advancements necessary for the development of nation. The human
capital base would also contribute to the GDP of the country and also generate revenue
income on the form of taxes for the government. Keeping the economic benefits in view,
the economic planning and policy decisions are taken accordingly so that the nation is
able to reap the benefits of educated human capital base in the economy. For example,
the government in any nation has the basic policy of subsidizing primary education so
that literacy rate can be improved; policy of provision of subsidized loans for the
outstanding students and so on.

9. What are the links among educational systems, labor markets, and employment determination
in many developing countries? Describe the process of educational job displacement.

There is a very close relationship between educational system, labor markets and
employment determination in developing nations. The educational system that is able
to make it accessible to all and is need based education; it will be producing productive
labor force in the market. However, the more the labor force, the developing nations
will have to create job opportunities to absorb the productive skilled labor force and
that too at deserving wage rates. The productive labor force can help in the
development of the nations by bringing about technological changes happening around
the world into their nation and develop faster.

The term job displacement implies a situation of job loss by an individual. This
occurs due to firms downsizing, relocation of plant or any other reason. This happens
mostly in developing nations. Due to this factor, the labor that loses job has less chances
of job anywhere else. Even if they get a job, they are hired at very low wages.

11. Describe and comment on each of the following education development relationships:
a. Education and economic growth: Does education promote growth? How?

Education and economic growth: Education builds human capital, an

essential component required in the process of economic growth and
development. It raises the productive capacity of individuals thus allowing them
to raise overall production. Hence education promote economic growth.

b. Education, inequality, and poverty: Do educational systems typical of most developing

countries tend to reduce, exacerbate, or have no effect on inequality and poverty?
Explain with specific reference to a country with which you are familiar or investigate.

Education, inequality and poverty: Depending on the design and financial

funding, a nation's educational system can improve or worsen income inequality.
It is argued that educational inequality tends to fall with rise in average years of
education as the population rises. Developing countries like India tend to have a
very low mean years of education which foster income inequality and thus
poverty.

c. Education and migration: Does education stimulate rural-urban migration? Why?

Education and migration: Education necessarily stimulates rural-urban

migration. Rural areas have underdeveloped institutions for education and the
rural families are now increasingly migrating to cities where formal education
system is robust and employment-generating.

d. Education and fertility: Does the education of women tend to reduce their fertility?
Why?
 Education and fertility: To an extent, increasing women's education
increases their productivity in workplace and their participation in labor force.
This causes later marriage, lower fertility and greater child health. Educated
women believe in career building and hence are satisfied with one or two
siblings.

e. Education and rural development: Do most formal educational systems in developing

countries contribute substantially to the promotion of rural development? Explain.

Education and rural development: Educational system in developing

countries contribute more in urban development than rural development.
Educated youth is concentrated more in the cities and towns and not in the
countryside. The educational system in these nations captivates them to work in
companies and industries. Yet in recent years, more attention has been paid
towards rural education and employment.

13. What explains the large gains in health and education in recent decades?

The large gains in health and education in the recent decades have due to the
government policies on these aspects of human capital in the developing nations.
Investments in both health and education are found to bring more of private and social
benefits to the individuals, as well as nation at large in its developmental path as
compared to the costs incurred.

15. What are the most pressing health and education challenges today? What makes them so
difficult to solve?

The most pressing education challenges today can be listed as:

1. Long absenteeism and early school dropouts from the side of poor families
2. Child labor
3. High cost of education at primary level for poor families and low rate of
returns for them
4. Gender bias in education (the ratio of female participation in the education
field is less in developing nations)
5. Inappropriate government Policies for the education system.

The most pressing health challenges today can be listed as:

1. Absolute Poverty
 2. Malnutrition due to extreme poverty condition. It weakens the immune
system and raises the death rate of developing nations.
3. AIDS disease amongst the working population leading to rise in death rates
of working population.
4. Malaria and acute respiratory infections
5. Tuberculosis (TB)
6. Parasitic worms and other neglected diseases.

Both education and health challenges those developing nations face today are
tough to solve because of the strong inequitable access to these facilities. The education
and health care facilities are more enjoyed by the high earning people than the low
earning people. Moreover, these facilities have developed more in some regions within
a country and less in another. Thus, the need of the hour is the equal distribution of
these services in the nations and their fair pricing in the government policies so that the
population at large is able to access them.

17. What are the consequences of gender bias in health and education? Can a large gap between
male and female literacy affect development? Why?

In most of the developing nations such as North Africa, China, India, Pakistan,
West Asia and other developing nations, it has been found that poor families in these
nations do not like to spend on education and health of the girls. They consider it
wastage of money. This is so because a male child is the long-life economic support for
the family. He would also bring in dowry on getting married. On the other hand, the
girl child will have to carry dowry along with her upon marriage. There are many cases
discovered of female feticide and infanticide as well on account of these reasons only.

However, the poor population does not understand the benefits of education
girls. Since most of the female population is supposed to take care of the family and
raise children, if she is going to be educated then the children would be educated as
well as healthy. This means the cost of education on girl child will give back more
benefits to family as well society. She can also become an earning hand for the family.
However due to the gender bias, the consequence is “Missing Women." It has been
estimated that worldwide more than 100 million women are missing. This means there
is less female population for male population. This large gap between male and female
population will definitely affect development because of the increased social instability.
19. What are the strategies being discussed to address the problem of child labor? What are the
strengths and weaknesses of these approaches?

The strategies used for child labor can be listed as:

• There is a need to alleviate poverty from the developing nations and all forms
of child labor will automatically end. (As suggested by World Bank)
• The number of children coming to schools can be increased through
introduction of conditional cash transfers as an incentive to motivate parents
to send their children for study rather than work at such an early age.
• Introduction of strict laws against illegal child trafficking (UNICEF)
• There should be provision of time off schooling at their workplace so that
they can earn as well learn.
• There should be a ban on all forms of slavery like debt bondage, prostitution,
or pornography. ILO has recommended increasing the schooling age to 14
years.
• There can be trade restriction with the countries that permit child labor or
banning the goods made by children.

The steps that have discussed to correct the situation of child labor are good but
their implementation in real terms have not been successful so far because of the undue
political influence on all the laws in the country.

21. What can government do to make health systems more equitable?

The health system of developing nations is often found to be inequitable. This

means more and better facilities are easily available to the rich class and less to the poor
section of the society. This situation needs to be improved. The steps that the
Government of a developing nation can take to make health system equitable are:

• Allocation of more budgets to the rural health development programs.

• Opening of public health centers in the rural areas so as the medical services
is easily available to the poor section.
• Organizing free camps like cancer detection camp, dental checkup, full body
analysis in the remote areas periodically to detect the deadly diseases at an
early stage to take necessary steps in time.
• Special vaccination camps for the newly born children and children up to the
age of five years so that they also lead a healthy life.
• Camps for the women of rural areas and making them aware of the personal
hygiene and the ill effects of conception several times
ALCAZAR, Mark Daniel C. ECON40163 – Economic
Development

BSA 2-2 Dr. Abraham C. Camba

Questions for Discussion 9

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

In almost all developing countries major proportion (between 60% - 65%) of total
population resides in rural areas. Their main occupation is agriculture that is
subsistence or peasant agriculture. Most of these rural dwellers grind out a meager and
often inadequate existence in agricultural pursuits. This stagnant and often regressive
economic life in rural areas breeds the main problems such as poverty, inequality, and
high population growth rate in developing countries and is acting as an important road
block in the path of these countries to achieve economic growth in real meaningful
sense. With large proportion of population confined to rural areas and engaged in
agriculture related pursuits, developing counties if want real development and also on
self – sustaining basis then they have to include the rural areas in general and
agricultural sector in particular in their development plans and formulate specific
policies that address the issues of these two avenues. So, in view of sheer number of
people being located in rural areas and dwelling in absolute poverty and primarily
engaged in subsistence agriculture any analysis of development problems should place
heavy emphasis on the study of agricultural systems, especially peasant agriculture,
and the rural sector because then only the fruits of development could reach the
majority of population around the world.

3. Discuss three main systems of agriculture found in the developing world. To what extent are
these systems concentrated in three major developing regions?

Three main systems of agriculture found in the developing world are as follows
–

1. First system of agriculture pertains to those countries where agriculture

contributes the largest share of GDP. These countries are generally termed as
agriculture – based countries. In these countries almost two-third population
resides in rural areas and is engaged in agriculture primarily subsistence
agriculture.
 2. Second system of agriculture pertains to those countries where majority of
population resides in rural areas but agriculture contributes only a small
share of GDP. These countries are termed as transforming countries.
3. Third system of agriculture pertains to those countries where majority of
population resides in urban areas. In fact, majority of poor population itself
resides in urban areas. In these countries agriculture contribution to GDP is
very small. These countries are termed as urbanized countries.

African region is mainly characterized by the first system of agriculture. Most of

the countries in Africa are agriculture-based countries. Asian region is mainly
characterized by the second system of agriculture. Most of the countries in Asia are
transforming countries. Latin American region is mainly characterized by the third
system of agriculture. Most of the countries in Latin America are urbanized countries.

5. Explain the meaning of Gunnar Myrdal’s quote at the beginning of this chapter: “It is in the
agricultural sector that the battle for long-term economic development will be won or lost.”

It is stated in the chapter that in most of the developing countries large

proportion of people generally resides in rural areas and is dependent on the
agriculture for their livelihood. Agricultural practices undertaken by these people are of
subsistence nature. Their basic concern is survival. If we go by the data then data itself
indicates that over 3.1 billion people are living in rural areas in developing countries
and are dependent on agriculture for their survival. The core problems such as wide
spread poverty, growing inequality, and rapid population growth all have their roots in
the regressive economic life in rural areas which is result of stagnant agriculture. Thus,
if economic development in real sense has to take place and that also in self-sustaining
mode then agriculture sector has to be revived. With large portion of population around
the world dependent on agriculture, revival agriculture is necessary in augmenting the
income capacity of these people. In fact, development of agriculture not only directly
benefits the rural poor but will also fuel the industrial growth by providing required
inputs, cheap food, and surplus labor. Profits reaped in agriculture could be invested in
industrial and services sector and thus speed up the process of industrialization as well.
Solution of many problems in developing country such as poverty, inequality etc. lies in
development of agriculture. Elimination of these problems and enhanced level of
income reflect the long-term economic development. Therefore, Gunnar Myrdal's has
quoted that it is in the agriculture sector that the battle for long term economic
development will be won or lost.
7. We described three stages in the transition from subsistence to specialized agriculture. What
are the principal characteristics of each of these stages?

Three stages in the transition from subsistence to specialized agriculture is as

follows:
1. In first stage, agricultural production is undertaken on the subsistence level.
Productivity in this stage is generally very low. Agriculture practiced in
Africa resembles this stage.
2. In second stage, agricultural production get diversified or mixed family
pattern of agriculture is practiced. In this stage, farming family consumes
only a small part of the produce and significant part of production is left for
the commercial sector that is sale in market. Agriculture practiced in Asia
resembles this stage.
3. In third stage, agriculture production gets fully commercialized. Farmers are
engaged in high - productivity specialized agriculture with exclusive focus on
commercial market. Modern technology and equipment are used on large
scale in this stage. Agriculture practiced in Latin America resembles this
stage.

The first stage is characterized by the low productivity where agricultural

production is mainly done for own consumption by the farming family or peasant's
family. The second stage is characterized by the shift in agricultural operations. From
being totally of subsistence level, in this stage considerable part of produce is kept for
market. Thus, this stage is characterized by initiation of commercialization in
agriculture. The third stage is characterized by the total commercialization of
agriculture. This stage also involves use of agricultural technology on large scale with
mechanization of agricultural operations ruling the roost. Dependence on machines
exceeds the dependence on human labor in this stage.

9. What is meant by comprehensive or integrated rural development? What criteria would you
use to decide whether or not such integrated rural development was or was not taking place?

Comprehensive or integrated rural development implies the range of activities

pertaining to overall development of rural areas. These activities include:

1. Efforts undertaken to increase agricultural productivity in rural areas

especially of small farmers.
 2. Efforts undertaken to augment rural incomes especially non-farm income
through job creation by creating non-farm working opportunities and rural
industrialization.
3. Efforts undertaken to increase the provision of various social and welfare
services such as education, health, and housing etc.
4. Efforts to bring in a reduction in inequality pertaining to distribution of
income in rural areas and correcting the disequilibrium in rural-urban areas
with respect to income and economic opportunities.
5. Efforts pertaining to prevention of the use of harmful chemicals and fertilizers
in agricultural operation by farmers and sustaining and accelerating the pace
of the improvements achieved in rural areas over time.

We would use following criteria:

1. Does the output growth in rural areas have accelerated? More specifically,
does productivity of small farmers have increased?
2. Is there increase in terms of provision of welfare and social services like
health, education etc. have been witnessed in rural areas?
3. Realistic and adequate non-farm income opportunities have been created in
the rural areas or not.
4. Steps pertaining to environmental sustainability such as conservation of
forests and fragile areas, prevention of the use of harmful chemical have been
taken or not. If favorable outcome in terms of above-mentioned criteria is
achieved then it can be stated that integrated rural development has taken
place otherwise not.

11. If land reform is efficient, why do you think it is not more commonly implemented?

Land reform implies redistribution of ownership rights or usage rights with

respect to land from large landowners to cultivators or peasants with limited or no land
holding. Land reforms can take following shape
1. Transfer of ownership to tenants already cultivating the land.
2. Transfer of ownership from large estate to small farm or rural cooperatives.
3. Large estates being appropriated to establish new settlement. The central idea to all
frameworks of land reforms is the transfer of land to those who actually cultivate it.

Land reforms by redistributing the land in favor of landless and marginal

farmers lead to reduction in income inequalities prevailing in rural areas. They also give
boost to rural employment and result in greater agricultural production and more
efficient utilization of resources. It has been seen that land reforms even in limited
capacity has also resulted in substantial gains for the country concerned. Even though
land reforms have many positive impacts and create many positive externalities they do
not get commonly implemented because ownership of land not only provides income
from farming activities but also considerable political influence as well. This
disproportionate political influence as wielded by powerful and small group of
landowners creates hurdles in path of any initiative takes by the government to
implement land reform policy. Thus, it is due to this political pressure put up by the
existing landowners that prevent the government of the day to implement land reforms
despite of their enormous efficiency.

13. Explain the argument that effective agricultural policies center around the role of women.

Analyzing of the agrarian system in the developing world put forward an

important but often overlooked fact that it is the women that play most important role
in agricultural production. As per the various studies, women undertake most of the
agricultural work. In most cases they perform 60 percent of work and in some cases up
to 80 percent of work as well. Women are typically responsible for almost all
agricultural operations such as sowing or planting, weeding, harvesting, and preparing
crop for storage or consumption. In production of cash crops also women play
important role. All strenuous jobs such as weeding and transplanting as associated with
cultivation of cash crops are performed by the women. Apart from this, women
cultivate small vegetable gardens for family consumption as well. Not only in terms of
work done in agricultural operations, women also play important role with regards to
ensuring food security of the family. This they do by supplementing the household
income by generating additional income through cottage industries and raising
livestock to augment the assets of the household.

As stated above, women produce a large share of agricultural output and also
supply larger share of labor in agricultural operations. These two factors sufficiently
demonstrate the importance of women in agriculture and any strategy with regards to
agricultural reforms must take into account the role played by women and must
concentrate on raising the women's productivity. Increase in women's productivity due
to their larger contribution indirectly implies increase in overall productivity and
income in rural areas. Therefore, any agricultural policy to be effective must center
around the role of women.

15. What basic problems does the case study evoke on agricultural extension for women in
Kenya? What special strategies may be used to address them?
 The agricultural extension program in Kenya remains contentious for a number
of reasons and one among them is its treatment with women. In sub-Saharan Africa,
women are responsible for well over sixty percent of staple food production. Yet the
design of program has reflected a clear bias against women. The basic issues involved
with their appalling status are:
• Education: The extension programs appear to be biased to train the more
educated spouse and since women in Kenya are less educated than men, on
average, their condition has been exacerbated.
• Technology: Most of the technological development has been focused on
activities of men. And these men in turn have not trickled across such
training to their wives.
• Credit: Agricultural extension programs usually consider men to be the
primary beneficiary and hence credit facilities to women are limited.
• Diversification: A move towards growing more cash crops and less
subsistence crops has not gone well within the structural adjustment
programs.

All of these concerns should be addressed keeping in mind that women are
believed to have a customary role in traditional societies like Kenya as the guardian of
natural resources. The agricultural extension programs can seek their active
participation by:

• Enabling the extension specialists to prepare the male farmers in training

their wives.
• Targeting funds to women's organizations and clubs.
• Involving women in public agricultural initiatives.
• Prohibiting cost recovery from impoverished women farmers.
• Emphasizing the role of women in movements like Green Belt Movement.