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ECON304: Economic Development

Unit 4: Conclusion   This final unit (the conclusion to the course) will ask you to compare development theories once more, considering them in light of the experience of developing countries. The first reading will present a number of case studies of development success stories in Africa. An online documentary provides a second opportunity to try to identify development theories in action.

Unit 4 Time Advisory
Completing this unit should take you approximately 5.5 hours.

☐    Subunit 4.1: 1 hour

☐    Subunit 4.2: 1 hour

☐    Subunit 4.3: 3.5 hours

Unit4 Learning Outcomes
Upon successful completion of this unit, you will be able to: - explain the extent to which the theories explain the development process in any country; - analyze success and failure stories to isolate critical factors; and - critique development theories and policies.

4.1 Explaining Development   So far, we have been discussing various theories that try to explain the development process. Economics, unlike physics or chemistry, does not easily lend itself to experimentation; identifying the factors responsible for success or failure ex post is not easy. When the development process succeeds or fails, it is often the result of several factors and not the result of a single factor. Nonetheless, there are times when we can point to the factors that caused success or caused failure. A good way to understand the issues is to actually read cases and try to isolate common factors. That is the reason why the collection of cases below is important. The full document is 34 pages long and lists the experiences of several African countries.

  • Reading: World Bank: Shanta Devarajan’s Africa Can End Poverty Blog: “African Successes – Listing the Success Stories” Link: World Bank: Shanta Devarajan’s Africa Can End Poverty Blog: “African Successes – Listing the Success Stories” (PDF)

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    Instructions: Read the following case studies from Devarajan’s blog: “Achieving Shared Growth in Post-Stabilization Mozambique,” “Rebuilding Local Governments in Post-Conflict Sierra Leone,” “Leveraging Regional Markets to Build a Domestic Manufacturing Sector in Africa,” and “Rural Electrification in Mali.” Pay close attention to the information in the case studies as the exercise which follows will attempt to connect these case studies to a number of the theories we have studied throughout the course.
     
    Reading these case studies should take approximately 1 hour.
     
    Terms of Use: This material has been reposted by the kind permission of the World Bank, and the original version can be found here. Please note that this material is under copyright and cannot be reproduced in any capacity without explicit permission from the copyright holder.

4.2 Analyzing Success and Failure   Many of the cases highlight successes, yet with some of the successes, we read about the need to overcome difficulties and risks that could derail the achievements. As you read through the cases, think of the dangers and how they can be mitigated. It is important to be able to relate the successes and failures to one or more theories that we have studied. If no theory can explain the successes, then it might be worthwhile to note that too.

  • Reading: World Bank: Shanta Devarajan’s Africa Can End Poverty Blog: “African Successes – Listing the Success Stories” Link: World Bank: Shanta Devarajan’s Africa Can End Poverty Blog: “African Successes – Listing the Success Stories” (PDF)

    Instructions: Click on the link above to download the PDF, and read the following case studies from Devarajan’s blog: “Tanzania’s Transformation to a Market Economy,” “Rebuilding Local Governments in Post-Conflict Sierra Leone,” and “Rwanda: Growing Coffee Sector.” Pay close attention to the information in the case studies as the exercise in subunit 4.3 will attempt to connect these case studies to a number of the theories we have studied throughout the course.

    Reading these case studies should take approximately 1 hour.
     
    Terms of Use: This material has been reposted by the kind permission of the World Bank, and the original version can be found here. Please note that this material is under copyright and cannot be reproduced in any capacity without explicit permission from the copyright holder.

4.3 Formulate/Critique a Simple Development Plan Based on the Theories   In reading through the case studies, sometimes it is not obvious whether the success or failure was due to any one particular theory/policy or another, and whether or not there are any lessons to be learned. For example, the piece by Ahmad (link below) takes aim at the failure of secular theories to explain development in general and Islamic societies in particular. You may not agree with some of his contentions, but culture and institutions seem to matter and these are things some societies take for granted, because it has always been the way of life. This story is not very different from Hernando De Soto’s contention in The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else that the most important factor in the development of western economies is how western societies have succeeded in making the capital tied to land fungible, while in many developing countries it is not so. In De Soto’s view, neo-classical economists hardly talk about this, because in the western world, private ownership of property goes without saying. Yet, private property ownership of land and the ability to sell or take equity in it encourages entrepreneurship. Economic growth and economic development thus appear to be inextricably linked to institutions and culture.

  • Reading: New York Times: Hernando De Soto’s “The Mystery of Capital, Chapter One” Link: New York Times: Hernando De Soto’s “The Mystery of Capital, Chapter One” (HTML)
     
    Instructions: Read this chapter.
     
    Reading this chapter should take approximately 15 minutes.
      
    Terms of Use: Please respect the copyright and terms of use displayed on the webpages above.

  • Reading: Cato Unbound: Lawrence E. Harrison’s “Culture and Economic Development” Link: Cato Unbound: Lawrence E. Harrison’s “Culture and Economic Development” (HTML)
     
    Instructions: Read this chapter.
     
    Reading this chapter should take approximately 15 minutes.

    Terms of Use: Please respect the copyright and terms of use displayed on the webpages above.

  • Assessment: The Saylor Foundation’s ECON304 Case Study Exercise: “Matching Development Theory and Development Success Stories” Link: The Saylor Foundation’s ECON304 Case Study Exercise: “Matching Development Theory and Development Success Stories” (PDF)

    Instructions: Please click on the link above to download the PDF, and follow the instructions to complete this assessment.

    This assessment should take approximately 3 hours.