The Path Of Unbalanced Growth

Development and underdevelopment are linked and “condition each other mutually” resulting in a divided world that consists of industrial “central” countries and underdeveloped “peripheral” countries (Valenzuela and Valenzuela, 1978, p.544), with the periphery often being constrained by its role in the global capitalist system (Valenzuela and Valenzuela, 1978, p.544).

Whilst raising money for African charities at school I developed an interest in global inequality and alternative policies that can help low-income nations escape the poverty trap. Reading ’23 Things’ by Ha-Joon Chang, I was intrigued by his view on blaming free-market policies like SAPs that exposed sub-Saharan Africa to international competition, slowing economic growth. Hence, this extended my research to the other side of the

The first key insight that I will be going over is from chapter 14 of How an Economy Grows. In this chapter we see how Peter and Andrew Schiff talk about a housing market on one of the islands often referred to. Everyone in the business of building, maintaining, and loaning money for a new hut wants to continue making money through their business. Nobody cares about the glut that is going on through hut building. Everyone just wants their money. They are being lied to by the media and hut builders and lenders that everything is fine. The key insight I took away from this is not to let the media fool you. Discernment in every aspect of life is important. Discernment is how you will be able to ignore false media news to ensure proper understanding of any given subject.

First, I will explain the role of empowered institutions and countries in limiting the economic activities of developing countries, impeding on their ability to survive. Afterwards I will explain the obligation people in privileged positions have to improve the lives of those in compromised positions, at a certain degree of self-sacrifices. Finally, I will critically analyze and disprove the counter argument, which attempts to relieve us of the aforementioned duties, by discrediting the roles of institutions and developed countries in the prolongation of impoverishment.

Review of: Olson, Matthew S., Van Bever, Derek ,Verry, Seth. 2008. When Growth Stalls. Harvard Business Review, 51-62.

Although, as discussed below, the Labour government also utilised the notion of economic rebalancing after 2008, the argument that New Labour had allowed the UK economy to become unbalanced formed one of the key critiques, alongside that of profligacy, of their predecessors in office by leading coalition figures. Rebalancing therefore exposes one of the discursive anomalies, or ironies, of the post-crisis era in the UK; in short, rebalancing renews the longstanding discourse around economic ‘decline’ often indulged by elite actors in the UK since the Second World War. Moreover, the emphasis on promoting manufacturing and Northern England, ahead of finance and the City of London, lends weight to some of the most critical declinist accounts of

Taking a look at the history of the Brazilian government can help readers to understand the how development affects low-income countries.“Most recently, Brazil seems once again to be benefiting from globalization while simultaneously being challenged by it. The country has seen a commodity boom and rising incomes from exports but is also facing increasing competition from China, for example, in a variety of areas. Connections to the global economy must be seen as partly (but not wholly) responsible for many of Brazil’s booms and busts alike, and responsible for many opportunities as well as inequalities”. As the reader finishes chapter five they should establish a deeper knowledge in the social indicators that influence development. Not all causes of development lead to social are economic

Yet for these countries, world trade in reality plays a major role. In many Sub-Saharan countries, foreign trade (measured in terms of imports and exports) represents more than fifty percent of their GDPs. This is due to a lack of infrastructure and machinery to process the available raw materials which leaves countries overdependent on imports, not adequately balanced by corresponding exports. This dependence on finished imports would be curtailed if these nations had enough capital to purchase machinery to process their raw-materials and sell the finished product locally or export them. However, in order to obtain enough capital to fulfill such drastic projects, they need outside help in the form of private investors.

Outline: This article discusses the economic growth within the australian economy and its effects. It is stated that the Australian economy’s economic growth is driven mostly by immigrants rather than natural increase. The business bible shows a growth of average of 1.42 per cent being the weakest in the past 15 years. Slower growth in the economy leads to slower growth in GDP, lower standard of living, harder to reduce budget deficit and reduced productivity of labour. The drive for smaller government spending doesn’t rapidly increase standard of living. The federal budget will be hard to surplus back into.

He explains that export discipline and import protectionism were the only ways for the developing countries to advance. He touches on the fact that there will be a loss to the average citizen in that they will be paying an “invisible tax” in order to help industrial advancement via industrial policy. This invisible tax is what led to a financial surplus that could be invested into industrial advancement via industrial policy making. My argument is that he is arguing for the unremitting transfer of capital from the common household to exporting corporations, or in layman’s terms, essentially asking for the poorer citizens to release more of the small amount of money they have to finance the industrial sector in promises for better growth tomorrow. Thus this increases the level of poverty in the country. His argument also indicates that in order for this industrial advancement, there has to be a sacrifice of domestic competition, which would be a very large factor in the worlds most dynamic region. This domestic competition is what provides profit for countries and thus providing money to the population. This protectionism and export-focused approach o politics doubly attacks the domestic market and almost ensure a detrimental loss for the common population. Studwell’s argument on the financial situation lacks to provide any attention to the relationship of the capital surplus to the already-wealthy elite. With the excess capital found from the “invisible taxation” can be traced to the pockets of those involved in big business. Being that more capital is brought to benefit the corporations who export product, this also provides a benefit to owners of corporations and for a close relationship between policy makers (and thus policy) and big business owners. The fact that policies benefit big business so well, it also causes the problem of killing small businesses, especially without the benefits of

Ha-Joon Chang is a distinguished economist from Seoul, South Korea specializing in developmental economics. He attended the University of Cambridge in 1986 as a graduate student and earned his PhD for his thesis the political economy of industrial policy - reflections on the role of state intervention in 1992 and has taught as a professor of the Political Economy of Development at the University of Cambridge since 1990. He has served as a consultant to the World Bank, the Asian Development Bank, the European Investment Bank, as well as to Oxfam and various United Nations agencies. He is also employed at the Center for Economic and Policy Research in Washington, D.C. and is on the advisory board of Academics Stand Against Poverty (ASAP). His approach to economics is so inspiring and continues to influence those in high power such as Rafael Correa, the president of Ecuador. His insight on economic policy has been spread worldwide through his numerous books that are still widely discussed today. It has earned him his many achievements, including his ranking as one of the top 20 World Thinkers in 2013 in Prospect Magazine.

In his first chapter he starts off about why growth even matters. Economic growth frees the poor from hunger and diseases. Economy wide growth in GDP per capita translates into rise in incomes for the poorest of the poor lifting them out of poverty. Taking the example of Pakistan, the author describes how 31% of the country lives in extreme poverty with

Indeed, the coercion of capital to exploit natural resources is possible only because it is supported by the conglomeration of powerful social actors behind it. According to Growth Machine Theories, syndication of vested interests (government, land owners, developers, real estate companies), which often claim themselves as “pro-growth” coalition, encourages local development through real estate business activities, while excluding the interest local population who previously occupy the sites for years (Rudel et al., 2011). Huge commercial farming scheme for the sake of development in rural areas is other typical of the oppression from outside of the local community which tries to stick the capital into certain local areas (). Since local community usually has no systematic organization to balance

According to the report of the Commission on Growth and Development, persistent, determined focus on inclusive long-term growth by governments is one of the ingredients of a successful growth strategy. Yet, there is limited analytic work integrating the literature on growth and productive employment. 5 The term ‘shared growth’ can be misunderstood as implying a focus on income distribution schemes, which is why inclusive growth is preferred. 6 Source: Growing Unequal? Income Distribution and Poverty in OECD Countries, OECD (2008).

He pointed out that different economic levels have their own requirements and they may not follow the same process of industrialization. Moreover, he raised the most influential theory related to late industrialization that the economically backward states may have rapider growth rate as they are late comers, and the national development process relied on the degree of economic backwardness. That is to say the more backward a country, the faster it will advance (ibid).