Contact Information

• Lecturer: Chris Parsons
• Email: christopher.parsons@uwa.edu.au
• Phone: 6488 5639
• Twitter: @ParsonsEcon
• Office Hours: By appointment

Module Outline

• Introduction to Development Economics
• Theories of Economic Growth and Development
• Geography, Institutions, Climate, Genetics and Development
• Poverty, Inequality, and Development
• Fertility, Population, and Development
• Trade and Development
• Aid and Development
• Migration and Development

Mid-Semester Exam

• Date: Next week during lecture time
• Duration: 1 hour (16:15 – 17:15)
• Format: Face-to-Face
• Content: Based on material from the first five lectures and answers from the first two tutorials
• Structure: 10 Multiple Choice Questions (MCQs) and 20 marks worth of Short Answer Questions (SAQs)
• Weighting: Worth 20% of your final mark

Sample Questions

Mid-sem: Practice Questions

PMCQ1: Kaldor’s Growth Facts (Identify the Incorrect Statement)

• a) K/L falls over time
• b) The rate of return on capital r is roughly constant over time
• c) K/Y is roughly constant
• d) Per capita income growth rates vary significantly across countries
• e) The shares of capital and labour are approximately constant

PMCQ2: Rostow’s Stages of Growth (Order the Following Stages)

• a) Pre-conditions for take-off, traditional society, take-off, drive to maturity, age of mass consumption
• b) Pre-conditions for take-off, traditional society, take-off, age of mass consumption, drive to maturity
• c) Traditional society, Pre-conditions for take-off, take-off, age of mass consumption, drive to maturity
• d) Traditional society, Pre-conditions for take-off, take-off, drive to maturity, age of mass consumption
• e) None of the above

Short Answer Questions

PSAQ1: Lewis Turning Point

• Detail in your own words what the Lewis Turning point is. [3 marks]

PSAQ2: Technology Leapfrogging

• How can ‘technology leapfrogging’ benefit developing countries? [1 mark]

PSAQ3: Co-ordination Problem

• Explain in your own words the co-ordination problem in relation to the Big Push model. [3 marks]

Theories of Comparative Development

• Physical Geography & Climate:

  • Influence on economic opportunities and development
  • Impact on labor, production structures, and potential comparative advantages
  • Types of colonial regime and their effects on development

• Human Capital:

  • Influence of human capital on economic prosperity and inequality
  • Role of institutions in shaping educational outcomes

• Income and Human Development:

  • Well-functioning markets and effective civil society as determinants of growth

Fundamental Causes of Growth

• Traditional growth theories emphasize exogenous factors but question what determines these factors.
• Key Factors Influence:
  • Geography and Climate
  • Culture
  • Economic Institutions

The Role of Geography

• Geography, climate, and ecology play a substantial role in cross-country growth differences.
• Key Mechanisms:
  • Work effort and productivity
  • Available technology in agriculture
  • Disease burden impacts economic productivity

The Role of Genetics

• Genetic Diversity:

  • Influences economic development patterns.
  • The Serial Founder Effect can lead to lower diversity affecting development.

• Heterozygosity Index:

  • Discusses genetic diversity across populations and links to socio-economic outcomes

Institutions

• Role of Institutions:

  • Shape economic growth by structuring incentives in human exchange
  • Institutions can enhance or hinder economic performance

• The Argument

  • Political and economic institutions are endogenous, shaped by society's choices and interests.

Empirical Evidence

• Correlations between institutional quality and GDP per capita are significant. Studies suggest better economic institutions lead to higher incomes.
• Natural Experiments:
  • Analyze differences arising from institutional structures in Korea and colonial impacts on development.

Conclusion

• Economic institutions, shaped by history and geography, critically determine economic performance.
• Geography and culture have impacts, but a deeper influence lies in historical and current institutional frameworks.