Contemporary Models of Development & Underdevelopment Flashcards
These are actions taken by agents such as a firm, worker, or organization that increases the motivation for other agents to take similar actions.
Complementaries
What will arise if the agents cannot coordinate their behavior or choices to economic choices that lead to a progressive outcome?
Coordination Failure
What are the different kinds of economic models?
(DUMBOCP)
Deep Intervention
Underdevelopment Trap
Middle-income Trap
Big Push
O-ring Model
It is the concerted, economy-wide, and typically public policy-led effort to initiate or accelerate economic development across a broad spectrum of new industries and skills.
Big Push
It’s an economic model in which production functions exhibit strong complementarities among inputs.
O-ring Model
It is the condition in which an economy begins development to reach middle-income status but is chronically unable to progress to high-income status.
Middle-income Trap
It’s a poverty trap at the regional or national level in which impoverishment tends to perpetuate itself over time.
Underdevelopment Trap
It is a government policy that can move the economy to a preferred equilibrium or even a higher permanent rate of growth, which can then be self-sustaining.
Deep Intervention
It is an action taken by one agent that decreases the incentives for other agents to take similar actions.
Congestion
It is a situation in which all parties would be better off cooperating than competing; but once cooperation has been achieved, one party would gain the most by cheating, provided that others stick to cooperative agreements, thus causing any agreement to unravel.
Prisoners’ Dilemma
This model suggests that since organizational decisions of firms depend on the decisions/initiatives reinforced by other firms, public policy must pave the way for decisions that lead to development.
Big Push
This model suggests that even the smallest components of a complex production process must be performed properly if the end product of the process is to have any useful value.
O-ring Model
This model means a mistake that creeps into even the smallest tasks can cause the final product to possess absolutely no value to users.
O-ring Model
This model suggests that developing countries must focus on increasing capacity to innovate and mandating economic reforms in order to reach high-income status.
Middle-income Trap
It is often related to low capacity for original innovation or absorption of advanced technology and may be compounded by high inequality.
Middle-income Trap
This is influenced by several factors such as high population growth, low education levels, few domestic resources, and unstable political systems.
Underdevelopment Trap
This model suggests that governments must facilitate equal distribution of wealth and act towards eliminating inequalities in terms of social ranks.
Underdevelopment Trap
It pertains to the social balance in the opposing aspects within a nation.
Equilibrium
