class 9

Question 1

what are the regional variants to trade policy?

Answer 1

• economic populism in Latin America
• marketing boards in Africa

NB. No different from the Global North (how to protect the citizen, the market, protects their market)

Question 2

why the state-led development failed?

Answer 2

• Inefficiency and Indebtedness
• Soft budget constraints
• Shortcomings of populism (didn’t deliver what they promised)
• Shortcomings of Marketing Boards

Question 3

what are the exceptions to state-led development failure?

Answer 3

Hong Kong, Singapore, South Korea, Taiwan

Question 4

what is the rule of law

Answer 4

impartial and neutrality enforced legal codes. not be influenced by public officials, law must not be effective

Question 5

Explain socialism in theory and in practice

Answer 5

theory: marx
practice: agricultural communes, comprehensive social safety nets, and firms weren’t allowed to fire employees. applied socialism

Question 6

explain the failure of socialism

Answer 6

• Deviation of resources
• Shared problems with SOEs (state-owned enterprises)
• Authoritarian Models
• Collectivization through coercion

Question 7

what are the exceptions of socialist failure?

Answer 7

China’s manufacturing industry
and the Cuban Health System

Question 8

in what year did latin american countries reverse their policies?

Answer 8

late 1980s and 1990s

Question 9

what is the reversion of policies in Latin American Countries?

Answer 9

• Privatizing SOEs
• Reverse collective farming
  lower the international trade barriers

Question 10

name labels for a market-oriented strategy.

Answer 10

Economic Orthodoxy, Neoclassical economics, neo-liberalism, and he Washington Consensus model

Question 11

name 4 theorists on neo-liberalism

Answer 11

• Adam Smith and David Ricardi
• Mises & Hayek
• Friedman
• Krueger and Lal

Question 12

name ten elements of this new orthodoxy (neo-liberalism)

Answer 12

1. Fiscal discipline (responsible and accountable)
2. Reorientation of public expenditure (cut your losses)
3. Tax reform (lower taxes)
4. Market-determined interest rates
5. Competitive exchange rates
6. Trade Liberalization
7. Privatization of SOEs
8. Openness to foreign investments
9. Deregulation of markets
10. Secure Property Rights

Question 13

in practice, name elements of neo-liberalism.

Answer 13

• reforming the state
• opening the world
• increase in multinational - corporations (MNCs) direct investments
• Increase foreigners’ loans