ECO330 Albany SP’19 USA Economic Developmental Experience You may choose a developmental issue or an aspect of a country’s developmental experience. First

ECO330 Albany SP’19 USA Economic Developmental Experience You may choose a developmental issue or an aspect of a country’s developmental experience. First you write a proposal, giving a short description of your research plan. 3000 words and give me the proposal in 1 days. Spring 2019
ECO 330W-0001 (9262) and 330W-0002 (9799)
Prerequisites: Eco 110 and Eco 111
ECONOMICS OF DEVELOPMENT
AECO 330W-0001(9262): MWF 9.20 am -10.15 am at BB217
AECO 330W-0002 (9799): MWF 1.40 pm – 2.35pm at BB217
Office hours: Mondays, 11 am – 12.30 pm and by appointment.
Office: Building 25, Room 257B
Instructor: Sandwip Das
SD612629@Albany.edu
Office: Building 25, Room 257B
Office Hours: Mondays, 11 am – 12.30 pm and by
appointment.
• Textbook: Economics Development by Micahel P. Todaro
and Stephen C. Smith (12th edition) Prentice Hall.
• Also eText ISBN-10: 0-321-55096-X or eText ISBN-13:
978-0-321-55096-5
• Supplementary resources: Annual Editions: Developing
World 2009/10, McGraw Hills Inc. and Internet Resources.
Attendance is mandatory. Economic development is only partly an application of
microeconomics, but it is a separate discipline. Dropping classes may result in a complete loss of
perspective.
All course materials such as syllabus; extra materials and announcement can be accessed through
the Blackboard Learning System (BLS).
Grading: The final grade (A to E) will be determined on the basis of the total points scored out
of midterm, final examination and quizzes.
Midterm (date not fixed yet)
Final:
9.20 am Class: Wednesday, May 15 :10:30 am
– 12.30 pm
1.40 pm class: Tuesday May 14: 10.30 am pm
– 12.30 pm
Term Paper
30%
30%
40%
Permission Numbers
The current system is that you attend the first day
of class and write down the following info on a
piece of paper and hand it to me:
1. Name
2. Major
3. SUNY ID#
4. Email address.
I will then take it to the office of economics
department.
Term paper
This is a writing intensive course. You will have to write a
term paper. The length of the paper is less important
than its substance. You may choose a developmental
issue or an aspect of a country’s developmental
experience. First you write a proposal, giving a short
description of your research plan. I will make
comments on your proposal. Then you will start writing
your paper. The paper must be submitted after the
midterm exam
There will be no multiple choice questions in midterm
exam and final exam. All questions will be short
answer type. But I will upload sample questions on in
every chapter
Development vs. Underdevelopment
• 1. Comparison between a typical American family ($50,000
income per year) and the extended family in a poor country
(8 or more members, $250-$300 per year)
• 2. Poverty and inequality within a poor country where a
few are almost as well off as the American family: Contrasts
are found in all major cities in Latin America, Africa and
Asia
• 3. Subsistence economy : Where goods are produced
mostly for consumption by those who produce them. Very
little marketable surplus. Poor infrastructure is a
disincentive for production for the market which does not
exist
The voice of the poor
• A poor woman from Uganda: “When one is poor,
she has no say in public, she feels inferior. She has
no food, there is famine in her house; no
clothing, and no progress in her family”.
• A participant in a discussion group in rural
Ethiopia: “Life in this area is so precarious that
the youth and every able person have to migrate
to the towns and join the army at the war front in
front in order to escape the hazards of hunger
escalating over here”. (May remind you of
Somalia)
Malawi: “We have to line up for hours before it
is our turn to draw water”.
Poor man in Kenya: “Don’t ask me what poverty
is because you have met it outside my house.
Look at the house and count the number of
holes. Look at the utensils and the clothes I
am wearing. Look at everything and write
what you see. What you see is poverty.
Meaning of Development
• A new road that is built passes through a
village– causes immense economic and social
change
• A new source of water, closer to the village
• A school
• A hospital
Development Economists
• Arthur Lewis (Princeton)
• Theodore Schultz (Chicago)
• They were jointly awarded the Nobel prize in
1979
• Amartya Sen (1989), now in Harvard
• Joseph Stiglitz (2001), Columbia
Paradigms in Economics
• Traditional Economics
• What you learn in standard microeconomics
or macroeconomics
• Deals with a market economy— rational
decision making— profit maximization–utility maximization— perfect competition–Consumer sovereignty—markets allocate
resources and achieves efficiency
Political Economy
• Studies how social and political groups may
influence resource allocation for their own
benefits.
• Social and political groups put pressure on the
government to intervene in the market forces.
• Economic outcomes cannot be explained or
understood without looking at the political and
social structure of the nation.
• The role of power in economic decision making is
important.
Development Economics
• Development economics includes traditional
economics and political economy and goes
beyond both. The approach is eclectic.
• Eclecticism is a conceptual approach that does
not hold rigidly to a single paradigm or set of
assumptions, but instead draws upon multiple
theories, styles, or ideas to gain complementary
insights into a subject, or applies different
theories in particular cases.
• The purpose of development economics is to
study how social, economic, political and
institutional mechanisms can bring about rapid
changes in the living standards of the people in
Latin America, Africa and Asia.
• More Developed Economies (MDC): USA, Canada,
Australia, New Zealand, Japan, Western European
countries
• Less Developed Economies (LDC): Countries in
Latin and Central America, Africa, Asia, Eastern
European countries that were in the Soviet bloc.
Indicators of underdevelopment
• Goods and resource markets are imperfect.
Very often the market does not exist.
• Major structural changes are taking place both
in the society and in the economy.
• Consumers and producers have limited
information
• Disequilibrium: Often the supply does not
match the demand—Shortage of goods,
surplus of labor services.
• Economic calculations are dominated by social
priorities: unity of a nation, resolution of tribal
or racial conflicts
• Family, clan, tribal or religious considerations
may take precedence over profit maximization
or utility maximization calculations.
• The importance of the role of value in
development economics:
Values
•
•
•
•
•
•
•
1. Economic and social equality
2. Poverty elimination
3. Universal education
4. Higher living standard
5. National independence
6. Modernization of institutions
7. Grass root democracy
Values
• These values may be more important than
sanctity of private property, unlimited
personal wealth, preservation of hierarchical
institutions, rigid class structure or ‘natural’
right of some to lead and others to follow.
• Non-economic variables (often not
quantifiable) may be more important
economic variables
BRAZIL:
A FEW IMPORTANT
FACTS
Population: 17.4 million in 1900, 186.8 million in
2007.
Share of urban population: 30% in 1940, 85%
on 2006.
Share of agriculture in GDP: 28% in 1947, 8% in
2005.
Share of industry in GDP: 20% in 1947, 37.9% in
2005.
Sugar Cycle: 16 th Century
Gold Cycle: 1690- latter part of the 18 th century
The coffee cycle: 4th decade of the 18th century.
Independence in 1822.
The Great Depression– sharp decline in export earnings.
1964: Political Regime change—military rule.
The oil shock of 1973.
Import substitution strategy— high degree of indebtedness.
Debt service was 30% of export earnings in 1974, rose to 83% in 1982.
1985-94: period of high inflation
2003: Democracy returns. The president accepts IMF deciplines
Land Reform
• After 1985, Brazil adopted a constitution that
allowed for the expropriation of large land
holdings that did not fulfill a social function or
were considered unproductive
• This allowed many families that were previously
homeless or in poor conditions, to own farm land
and sustain their lives
• It also allowed smaller farmers to break the
monopoly large farming corporations had when
the land was not shared fairly.
Brazil’s Agriculture
• Brazil is the world’s largest producer of
sugarcane and coffee.
• It is also a large exporter of cocoa, soybeans,
orange juice, tobacco, forest products, and
other tropical fruits and nuts.
• It is the worlds second largest producer of
soybeans
Beef/Cattle exports
• Brazil slaughters 28 Million heads of cattle
each year.
• This leads to a production of over 8 million
tons of beef per year.
• Brazil became the world leader in beef exports
in 2003 after surpassing Australia
• Beef exports earned Brazil over 1.5 billion
dollars last year.
Agricultural Statisitics
• Agriculture accounts for 8% of Brazil’s GDP.
• The practice employs more than 25% of the
country’s labor force
• On a value basis, agricultural production is
60% field crop and 40% livestock. Brazil is a
net exporter of agricultural and food products,
which account for about 35% of the country’s
exports
How do we measure development?
• Traditional measures: Real GNI, GDP, Real GDP
per capita, real GDP growth rates etc.
• New View: In the 50’s and 60’s many LDCs
achieved growth targets, but the living
standards did not improve for the masses.
• During the 70s, economic development was
redefined in terms of reduction of poverty,
inequality and unemployment
Sen’s Capability Approach
• Poverty cannot be measured by income or by
what a person has. It has to measured by what a
person is capable of doing with what is available.
• Example: A book has little value to a person who
is illiterate except that it can be used as a fuel.
• “Functionings”: To understand human well-being,
we need to go beyond the availability of
commodities or resources and rather think of
their uses or “functionings”.
Five Sources of Disparity between real
incomes and actual advantage
• 1. Personal heterogeneity: disability, illness, illiteracy or ignorance,
age , gender etc.
• 2. Environmental diversity: heating or clothing requirements in cold
climate, infectious diseases in the tropics.
• 3. Variations in social climate: prevalence of crime and violence.
Social capital
• 4. Differences in relational perspective: Being poor in a relatively
rich community may prevent a person from achieving some
“functionings” such as participating in the life of the community,
because the person cannot afford expensive clothing.
• 5. Distribution within the family: girls get less medical attention or
education than boys.
Capabilities
• Freedom that a person has in terms of the choice of
functionings, given his/her command over
commodities.
• Implication: There may be instances of growth without
development.
• Development targets should include health, education,
social inclusion and empowerment.
• Real income is necessary but not sufficient to achieve
economic development.
• Sen’s work has resulted in the development and
frequent uses of the concept of ‘human development
index’.
Three Core Values of Development
• 1. Sustenence: The ability to meet basic needs: food, shelter, health
and protection.
• Implications: rising per capital incomes, reduction of absolute
poverty and income inequalities and greater employment
opportunities are necessary but not sufficient conditions for
development
• 2. Self-Esteem: To be a person– a sense of worth and self-respect,
of not being used as tool by others for their own objectives.
• 3. Freedom from servitude: freedom from servitude to nature,
other people, misery, oppressive institutions, and dogmatic belief (
like poverty is predestined).
• The central role of women: relevant in all these core values
Three Objectives of Development: Development is both a
physical reality and a state of mind
• 1. To increase the availability and widen the
distribution of basic life-sustaining goods: food,
shelter, health and protection.
• 2. To raise levels of living: higher incomes, more
jobs, better education and greater attention to
cultural and human values.
• 3. To expand the range of economic and social
choices: Freedom from servitude and
dependence on others or other nation-states and
from ignorance and human misery.
Millennium Development Goals(MDG)
• In September 2000, 189 member countries of the
United Nations adopted eight MDGs to be achieved by
2015. These goals are:
• 1. To eradicate extreme poverty and hunger.
• 2. Universal primary education.
• 3. Gender equality and empowerment of women.
• 4. Reduction of child mortality.
• 5. Improvement of maternal health.
• 6. Combating HIV/AIDS, malaria and other diseases.
• 7. Environmental sustainability.
• 8. A global partnership in development.

Purchase answer to see full
attachment