FOREIGN TRADE UNIVERSITY

Faculty of International Economics

DEVELOPMENT ECONOMICS

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HOANG Bao Tram baotramesce@gmail.com

Syllabus
CHAPTER 1: Introduction to the developing world CHAPTER 2: Introduction to development economics CHAPTER 3: Theories of Economic growth CHAPTER 4: Structural change CHAPTER 5: Human welfare and development

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Textbooks

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Grading and Assignments

Class Participation (10%)

Mid - Term (30%) including - Exam or Assignments (20%) - Presentation (80%)

Final exam (60%) .and EXTRA.

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Chapter 1 INTRODUCTION TO THE DEVELOPING WORLD 1. World development : A comparison 2. Countries/ economies classification 3. A piece of history 4. Characteristics of the Developing World

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1. World development : A comparison

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1. World development : A comparison

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1. World development : A comparison

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2. Countries classification

2.1. World Banks classification by income group

criteria: GNI per capita Be careful! higher per capita income in a country does not always mean that its people are better off than those in a country with lower income

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2. Countries/ economies classification

World Banks classification of countries by income group (USD, World Bank AtlasMethod)

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2. Countries classification
2.2. UNDPs classification

Criteria:

HDI (Human Development Index)

Income (PPP method) Life expectancy Education Before 2009: 3 groups (based on HDI value) Since 2009: 4 groups

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2. Countries classification
Human Development Index and its components (HDR 2013)

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2. Countries classification

GNI per capita Kuwait Bahamas 55719 25201

GNI rank 5 34

HDI 0, 771 0,784

HDI rank 47 43

(Human Development Report 2010)

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2. Countries classification The First, the Second and the Third World Backward and Advanced economies Less or under-developed and more or developed countries Developing and Developed countries The South and the North

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What do we mean by Third World ?

Alfred Sauvy (1952) Historical perspective: Cold War

Third world = countries that perceive themselves as

neither the Communist Soviet (Second World) nor the Capitalist NATO (First World)

former colonies (not all) lower level of development

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3. A piece of history
Low-income countries today and developed countries in their earlier stage?
(Todaro, Smith (2011). Economic Development, 11th ed., Part one, p.71-77)

Physical and human resource endowments Per capita incomes and levels of GDP Climate Population size, distribution, and growth Historic role of international migration International trade benefits Scientific/technological research Efficacy of domestic institutions

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4. Characteristics of the Developing World

4.1. Common Characteristics of developing

countries 4.2. Diversity or Disparities

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4.1. Common Characteristics of developing countries

Lower levels of living and productivity Lower levels of human capital Higher levels of inequality and absolute poverty Higher population growth rates Greater social fractionalization Larger rural population- rapid migration to cities Lower levels of industrialization and manufactured exports Adverse geography Underdeveloped financial and other markets Colonial legacies- poor institutions etc.

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4.1. Common Characteristics of developing countries

GNI per capita 2009 (PPP,international $) Low income Middle income Lower middle income Upper middle income Low & middle income East Asia & Pacific Europe & Central Asia Latin America & Caribbean Middle East & North Africa South Asia Sub-Saharan Africa High income Euro area 1,199 6,357 4,758 12,479 5,586 5,989 12,628 10,342 7,927 2,972 1,996 36,473 33,829

(Source: World Development Indicators database, World Bank, 27 September 2010)

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4.1. Common Characteristics of developing countries

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4.1. Common Characteristics of developing countries

2009 HIGH INCOME Euro area 35.84954 23.066 13.09066 7.758871 4.613703 3.406593 France 23.8 15.1 10.2 7.3 4.3 3.2 Germany 35 22.4 12.9 7 4.4 3.5 Australia 20.3 17.6 10.9 7.6 5.1 4.3 Canada 28 18.5 10.3 6.8 5.3 5.3 Japan 31.5 13.2 7.4 4.5 3.2 2.4 Monaco 6.7 3.9 3.4 United Kingdom 22.6 17.9 12.2 8 5.6 4.6 United States 25.9 20 12.5 9.3 7.1 6.8 MIDDLE INCOME Europe & Central Asia (developing only) 68.64309 55.42677 43.14339 32.44426 18.97707 Argentina 59.9 58.2 37.7 25 18.8 13 Bangladesh 162.5 158 136.7 102.3 65.6 41.2 China 82.8 46.1 36.8 29.8 16.6 India 160.4 126.2 103.2 83.8 67.6 50.3 Lao PDR 141.1 127.2 108.3 63.5 45.8 Thailand 102.2 71 46.4 26.5 17.3 12 Vietnam 44.6 39.1 23.6 19.5 Jamaica 56.5 47.6 36.7 27.7 26.8 25.9 Sub-Saharan Africa (all income levels) 133.1498 116.1388 109.4806 97.98216 80.77413 1960 Infant mortality rate per 1,000 live births 1970 1980 1990 2000

(Source: World Development Indicators database, World Bank, 27 September 2010)

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4.1. Common Characteristics of developing countries

Virtuous and vicious cycle of poverty/ poverty trap

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4.2. Diversity or Disparities

Share of global income (2005)

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4.2. Diversity or Disparities

People Living in Poverty, 1981-2002

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4.2. Diversity or Disparities

Share of the Population Employed in the Industrial Sector in Selected Countries, 2000-2005 (%)

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4.2. Diversity or Disparities

Per Capita GDP Growth in 125 Developing Countries, 1995-2005

(Source: Todaro, Smith, 2009)

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