Catch Up (Late Development)

Question 1

Starting Point

Answer 1

It’s important to know where the Starting Point is

Question 2

Factor Endowments / Contingency

Answer 2

Resources
Outcome of 20th Century Wars
Colonization

Question 3

Advantaged or Disadvantaged Place in the World System

Answer 3

Colonial Legacy

Question 4

Patronage, or not, of powerful states

Answer 4

Position in Cold War

Question 5

Five Policy Choices

Answer 5

Foreign ( FDI = Foreign Direct Investment ) or Domestic capital

Import substitution versus export led growth ( perhaps both?)

Capital Allocation

Question 6

Foreign FDI

Answer 6

FDI can solve capital shortage but gives up control

Question 7

Import Substitution versus Export Led Growth

Answer 7

Autonomy versus integration in world markets

Balanced growth versus reliance on one or two sectors

How to protect local markets while still exporting?

Import Substitution: protect domestic trade with tariffs

Question 8

Capital Allocation directed by State versus Markets

Answer 8

Capital is limited so state determines priorities (socialism as extreme case)

States make mistakes and are corruptible

Question 9

Capital allocation through banks versus stock markets

Answer 9

US: market heavy economy

Banks: State direction easier, long term investment possible

Markets: better capital pricing (returned value expected), but short term expectations

Question 10

Technology Transfer

Answer 10

Legal versus Illegal

Hard to catch up because constantly evolving. (leap frogging)