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10 Cards in this Set
- Front
- Back
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What are the goals of economic development?
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Growth, Poverty reduction, equality, sustainability, human development
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What are the various models of political economy?
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Capitalist or Market Economy: Free-market capitalism and a minimal state.
Planned Economy: Socialism/ Communism and a dominant state Mixed Economies: Welfare States Dependency Theory/World System Theory: Unequal international division of labor Developmental state model: market economy with autonomous strong state. |
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Make sure you know the structural elements of the developmental state model.
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Elements of Developmental State Model:
• Bureaucratic autonomy from politics • Close collaboration of public and private sectors • Heavy and continuing investment in education and policies |
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Which countries are labeled as “high-performing Asian economies” (HPAEs)? What are the features of the East Asian miracle as exhibited in the performance of these economies?
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Japan, Korea, Hong Kong, Singapore and Taiwan
• High levels of savings and physical capital investment • Human capital investment • International Trade • Growth Incentives o Improving distribution of income and wealth and facilitating upward mobility o Increasing education o Insulating economic technocrats to minimize their susceptibility to interest-group or class pressure |
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What were the policies adopted by many HPAEs to achieve equality along with economic growth?
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Policies to Archive Equality in HPAEs
• Land Reform (Japan, Korea, and Taiwan) • Support for small and medium-sized industries (HK, Japan, Korea, and Taiwan) • Government provision of housing and public health services (HK, and Singapore) |
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China is an interesting case changing drastically from a planned economy to some sort of developmental state model. How would you evaluate the Maoist and post-reform policies in terms of economic growth?
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Maoist China (1949 – 1978)
• During this period, the Chinese Communist Party enforced a stringent communist system, eradicating private enterprises (less than seven employees) and stressing heavy industry. Assessing Maoist Policies: • Lack of incentives • Inefficiency in managing a planned economy • Disregard for objective conditions (like China’s comparative advantage – human resources: man power, not capital) Result: Economic Stagnation Post- Reform China (1978- ) • Launched economic reform by reintroducing market mechanism and fully utilizing China’s comparative advantage. • Change to large enterprises with many employees and light industry. Result: China’s economy boomed General Principles of New Policies: • Promotion of market mechanism • Decentralization of decision-making powers to localities and production units. • Material incentives • No more egalitarianism • Opening up to outside world |
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What was the Asian financial crisis of 1997-99? What were the causes leading to the crisis?
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Asian Financial Crisis of 97-99:
Resulting from uncontrollable capital inflow… • Rapid financial market liberalization and reforms in the banking sector without adequate regulation. (similar to 2008 global financial crisis) • Fixed exchange rate (pegged to US dollar) and overvaluation of local currency (exports become more expensive, less people buy; imports are cheaper) • Short-term rather than long term investments (long term like setting up a factory in China, short term like putting money towards whichever has highest interest rates) • Started in Thailand, and then spread to Malaysia, Singapore, etc. • Japan has been in recession for 20+ years, too conservative, aging population • Taiwan largely unaffected. • Reason it didn’t last long: depreciation of currencies helped out in the long run. • Result: Casting doubt on developmental state model |
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What has the U.S. role been in the economic development of East and Southeast Asia?
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U.S. Role in the Economic Development of Asia Pacific:
• Maintaining security in the region (Japanese and South Korean Naval base) • Providing economic aid and investments (US companies and banks) • Serving as the export market for the Asia Pacific countries (“Made in China”) |
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What are the Association of Southeast Asian Nations (ASEAN) and Asia-Pacific Economic Cooperation (APEC)? What is ASEAN’s contribution to the economic development of the region?
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Regional Association for Economic Cooperation:
• Assoc. of Southeast Asian Nations (ASEAN): model after EU, but not a institutionalized. Est in 1967. Five original member countries: Indo, Malaysia, Philippines, Singapore, & Thailand; later, Brunei, Vietnam, Laos, Myanmar, and Cambodia. Pop of 600 million, area of 4.5 million square kilometers, combined GDP of 2 trillion. Problems because countries involved are so diverse. Not including China, Japan, South Korea; no counterpart in NE Asia. • ASEAN Contributions: o Regional trade liberalization with the establishment of ASEAN free trade area in 1992; no tariffs between members o Facilitating economic development in region via stability as an institution and commitment of member nations to foster a climate of economic growth o Absorption of smaller SE Asian nations of Indochina outside the high-growth countries o Bringing new markets for goods and services for members of ASEAN. |
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What are the factors directly contributing to economic development?
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Factors Directly Contributing to Economic Development:
• Individual Values: o Achievement motivation o Secularization • Capital accumulation • Technological advancement |
