Lesson 3

North America offered no known gold or silver for the taking. There were no spices to trade.
Eventually, however, the colonies were able to prosper.
Why?

 Some nations of the world have become wealthy, while others have not.
 What do you think are the most important reasons this has been so?

 Country A Wealth Score
= ___
Give wealthiest 4, next wealthiest 3 next wealthiest 2 and poorest 1
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Under European colonial rule from early 1500s until
1816
Benefits from rich natural resources including fertile plains, lead, zinc, iron ore, petroleum and uranium
Population of nearly 40 million people in 2004 (small for a nation of this size)
Land size about three-tenths the size of the United States
 Country B Wealth Score
= ___
Give wealthiest 4, next wealthiest 3 next wealthiest 2 and poorest 1

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Under European colonial rule from early 1500s until
1822
Benefits from rich natural resources including bauxite, gold, iron ore, nickel, phosphates, tin, uranium, petroleum, hydropower and timber
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Population of over 184 million
Land area slightly smaller than the United States

 Country C Wealth Score
= ___
Give wealthiest 4, next wealthiest 3 next wealthiest 2 and poorest 1

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Under European rule from the nineteenth century until
1947
Benefits from rich natural resources including large coal reserves, iron ore, manganese, mica, titanium ore, chromite, natural gas, petroleum, limestone and agricultural land
Population of more than 1 billion
Land area slightly more than one-third of the United
States
 Country D Wealth Score
= ___
Give wealthiest 4, next wealthiest 3 next wealthiest 2 and poorest 1

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Under European rule from
1841 to 1997
Good harbor but no natural resources
Population of nearly 7 million
Land area six times larger than Washington D.C.

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Argentina
Population
 39,921,833 (July 2006 est.)
GDP per capita
 13,700 (2005 est)
Life Expectancy
 76.12
Literacy Rate
 97.1%
Infant Mortality
 12.78 deaths/1,000 live births

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Brazil
Population
 188,078,227 (July 2006 est.)
GDP per capita
 8,400 (2005 est)
Life expectancy
 71.97
Literacy rate
 86.4%
Infant mortality
 28.6 deaths/1,000 live births

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India
Population
 1,095,351,995 (July 2006 est.)
GDP per capita
 3,400 (2005 est)
Life Expectancy
 64.71
Literacy Rate
 59.5%
Infant Mortality
 54.63 deaths/1,000 live births

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Hong Kong
Population
 6,940,432 (July 2006 est.)
GDP per capita
 $37,400 (2005 est.)
Life Expectancy
 81.59
Literacy Rate
 93.5%
Infant Mortality
 2.95 deaths/1,000 live births

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United States
Population
 298,444,215 (July 2006 est.)
GDP per capita
 $42,000 (2005 est.)
Life Expectancy
 77.85
Literacy Rate
 99%
Infant Mortality
 6.43 deaths/1,000 live births

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Saudi Arabia
Population
 27,019,731 (July 2006 est.)
GDP per capita
 $12,900 (2005 est.)
Life Expectancy
 75.67
Literacy Rate
 78.8%
Infant Mortality
 12.81 deaths/1,000 live births

 Natural resources have contributed to the economic success of some nations.
 Yet, many nations with vast stocks of natural resources are poor.

Lesson 3 Activity 3.1

Activity 3.1
Factors Associated with Economic Growth
 Private Property
Rights
Question A: Would you keep a savings account or want to own a farm in a nation that expropriated savings and farmland every few years?
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 Physical Capital
Question B: What incentives might encourage the development of physical capital?
Human Capital
Question C: What incentives could a nation provide to encourage the development of human capital?

Activity 3.1
Factors Associated with Economic Growth
 Investment
Question D: What incentives might encourage people to save and invest?
 Infrastructure
Question E: How is infrastructure similar to investment?

Lesson 3 Activity 3.2

 The Spanish and the
English had much in common. Both were powerful European colonial powers. But the results of colonial development led to different outcomes in
North and South
America. Why?

 You have just been appointed by Dr. Julie Verne to the United
Nations Intergalactic Development Administration (UNIDA)
Task Force for Planet Z93.
 Your job is to advise Dr. Verne on Z93 development plans by applying two rules:
1. People respond to incentives in predictable ways.
Rewarding people for their work, for example, encourages them to be productive.
2. People create economic systems that influence individual choices and incentives. In order for an economy to grow, its rules must include a system of incentives that encourages people to produce.

 England by the 17 th century had transferred some power from the king to the parliament. Individual property rights were better defined and enforced.
• The Pilgrims experimented with common land ownership but nearly starved.
• In 1623, they replaced group land ownership with individual ownership.
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“This had very good success for it made all hands very industrious, so as much more corn was planted than otherwise would have been by any means the Governor or any other could use.”
 William Bradford
 Of Plymouth Plantation,
1620-1647

 Spain in the 16 th century was an absolute monarchy. Individual property rights were not well defined and enforced.
 The plan for development was to seek gold and riches - - a transfer of wealth, not expansion.

Questions for Discussion
 How did the political institutions differ between
Spain and England?
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Describe ways in which Spain influenced the economic development of South and Central
America?
Describe ways in which the English developed the eastern coast of North America?
Policy Recommendations
 Who should be allowed to own property in Z93?
Individuals? Government? Why?