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Economic Development (Midterm) > ECONOMIC GROWTH AND DEVELOPMENT THEORIES > Flashcards

ECONOMIC GROWTH AND DEVELOPMENT THEORIES Flashcards

1
Q

Linear stages of growth

A

Rostow’s Stage of Growth

Harrod-Domar Growth Model

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2
Q

Structural-Change Models

A

Lewis Theory of Development (Two-Sector Surplus)

Patterns of Development Analysis

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3
Q

International-Dependence Revolution

A

Neocolonial Dependence Model

The False-Paradigm Model

Dualistic –Development Thesis

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4
Q

Neoclassical Counterrevolution

A

Market Fundamentalism

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5
Q

Society is based on primitive technology

The society can develop when they discover and cultivate new lands; and Society’s progress is limited due to technology.

A

Traditional Society

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6
Q

Changes in the social, political, and economic fields:

Changes in attitude
Economic Plans
Political independence

A

Preconditions for take-off

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7
Q

This drage Achieved self-sustaining and self-generating economy

A

The drive to maturity

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7
Q

This stage does Increase in investment and national income; Period must be short; self-sustaining and self-generating economic growth

A

Take off period

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8
Q

People can afford luxury and high level of life style

A

Stage of mass consumption

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9
Q

The economic growth of a country is determined by the level of savings and the capital-output ratio.

Rate of growth= savings ratio/ capital-output ratio

A

HARROD-DOMAR GROWTH MODEL

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9
Q

Failure of income leads to high consumption

A

Saving ratio

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10
Q

Poor financial systems (banking)
Misused funds and inefficient investments

A

Investment

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11
Q

Two sectors exist in the economy: Agriculture and manufacturing sectors.

A

THE LEWIS THEORY OF DEVELOPMENT (TWO-SECTOR MODEL)

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12
Q

Less savings means less capital and less investment means less income

A

Capital stock

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13
Q

Raising capital accumulation by uplifting the labor sector

A

THE LEWIS THEORY OF DEVELOPMENT (TWO-SECTOR MODEL)

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14
Q

Excess labor from agriculture

Transferred to urban-manufacturing and are paid the same high wages

Profits are reinvested in growth, then investment increases, production increases and unemployment reduces

A

THE LEWIS THEORY OF DEVELOPMENT (TWO-SECTOR MODEL)

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15
Q

Focus on the process by which the economic industrial and institutional structure of an underdeveloped society transformed over time to permit the rise of new industries, to replace traditional agriculture as the engine of economic growth.

A

PATTERNS-OF-DEVELOPMENT ANALYSIS

16
Q

Ideally, all countries develop at the same time. However, underdeveloped countries are hindered based on internal and external factors.

A

PATTERNS-OF-DEVELOPMENT ANALYSIS

16
Q

Underdevelopment is a result of power gap between the center (developed countries) and the periphery (developing countries) and unfair international capitalist system.

A

NEO-COLONIAL DEPENDENCE THEORY

17
Q

Elites, MNCs, power groups, organizations benefit from the capitalist system while the poor nations are exploited.

A

NEO-COLONIAL DEPENDENCE THEORY

18
Q

Developing countries are victims of ill advice policies coming from international “experts”.

A

FALSE PARADIGM APPROACH

19
Q

Educated elites absorbed western models of development and most of the time these models are not suitable for the developing world.

A

FALSE PARADIGM APPROACH

20
Q

Represents the divergence between rich countries and poor countries.

A

DUALISTIC DEVELOPMENT THESIS

21
Q

Time will not fix the inequality in the struggle
Throughout time, the levels of inequality increases

A

Not a temporary phenomenon

21
Q

This divergence is not merely a result of history but it can also be attributed to the unfair international balance of power, and policies.

A

DUALISTIC DEVELOPMENT THESIS

22
Q

Elite vs. poor
Educated vs. illiterate
Highly Industrialized vs. Rural Areas

A

Superiority vs. Inferiority

23
Q

This elementdo not cut down the levels of inequalities but has the tendency to increase these levels

A

Superior element

24
Q

The countries which pursued economic nationalization or state led development miserably failed and faced difficulties in lifting its economy.

A

DUALISTIC DEVELOPMENT THESIS

25
Q

The theories offered explanations why countries remain poor but it does not offer solutions on sustainability.

A

DUALISTIC DEVELOPMENT THESIS

26
Q

Underdevelopment is a result of poor resource allocation due to incorrect pricing policies and too much state intervention by overly active developing nations-governments.

A

MARKET FUNDAMENTALISM

27
Q

This approach recognizes that market failure is widespread in developing countries.
The government has a key role in the economy by non-selective interventions

A

Market-Friendly Approach

27
Q

New Political Economy Approach
Politicians, Bureaucrats, Citizens, and States act based on self-interest.
Rent-seeking behavior

A

Public Choice Theory

27
Q

The Third World countries are underdeveloped because of corruption, inefficiency, lack of economic incentives.
Solution: Free Trade and Laissez-Faire approach

A

MARKET FUNDAMENTALISM

28
Q

Markets are efficient (product markets and labor markets)
Competition is effective, technology is available and information is nearly costless.
Government intervention is counterproductive.

A

Free-market Analysis

29
Q

investment in land, physical equipment, and human resources
- Results when some proportion of present income is saved and invested in order to augment future output and income.

A

Capital accumulation

30
Q

Information is limited, markets are fragmented, and much of the economy in low-income countries remain non-monetized.

A

MARKET FUNDAMENTALISM

30
Q

The government has a key role in the economy by ?

A

non-selective interventions

31
Q

Competitive markets do not exist especially given the historical, cultural, and social experiences of developing countries.

A

MARKET FUNDAMENTALISM

32
Q

Higher output levels are achieved with the same quantity and combinations of factor inputs

A

Neutral technological progress

32
Q

results from new and improved ways of accomplishing traditional tasks such as growing crops, making clothing, or building a house.

A

Technological progress

33
Q

Labor-saving technological progress

A

Modern machinery

Economic Development (Midterm) (4 decks)

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