Development Review - Short Answer / Long Essay (Please circle one) Number _7____
2005
Copy the Question here:
Question: What government policies can encourage rapid and sustainable economic development? Is development possible without
government intervention?
What are the 2-3 key words in the question to pay attention to? You should underline these in a real test situation.
List Verb(s): What? Is?
Nouns (concepts): economic development
- sustainable economic development
- government intervention
What are the concepts to provide definitions for?
Define them precisely here:
Economic development is not only economic growth, but also an increase in standard of living by the improve of unemployment
rates, poverty, population growth, education, health, etc.
Sustainable economic development is the economic development of a country such that the development of the present generation
does not hinder the needs of the future generation from being met.
Government intervention is when the government intervenes to control market failures (market power, externalities…) (This may be
true when we learned only Micro and Macro. But in a development context, government intervention may be argued to be necessary
to promote econ growth and sustainable econ development.)
Structure of your answer
What example can you
provide to illustrate your
point?
(Use numbered lists or bullet points: develop and explain your argument so that others can understand – no need to write
them out here as this is only for your review. Please insert more rows as necessary).
Remember to EVALUATE for Part B of Long Essays:
This answer is too limited!!!
Where are the graphs?
Where are the examples?
What are the pros and cons of each policy? List them! Evaluation is also
What graph should you
draw for this point?
missing!
-
Export promotion
Import promotion (it is not called import
promotion)!
Exchange rates policies
Microfinancing
These policies are concerned with international aspects only. What other
policies can the government do? These internal policies must be listed
and discussed!
However trickle down is necessary – income distribution (why is this
point here? Isn’t this more related to the other points below?)
Eg. China, Vietnam
Market is productively efficient
In the international sector it might create
- an incentive to innovate
- competition
- economies of scale
- imports of technology
Aren’t these simply benefits from the export promotion strategy? Why
are these points a separate section?
BUT!!!!
In this dual economy in an LDC there is not necessarily a trickle down
effect, so economic growth is not equal to economic development.
Market failures will exist and so government is needed to coordinate the
market. Draw externality graphs.
Trickle down by use of government policies - income tax, health care,
education (merit goods)
Huge uncertainty discourages investment, so government policies are
needed.
There is no organization in these points. How are they related? What is
more important?
Summary Conclusion (one sentence)
As there is not income equality, government is needed to implement income distribution.