Economics of development / 5th ed.

Table Of Contents:
Preface xv
International Development Resources on the Internet xx
Part One: Theory and Patterns

Introduction 3(24)

Terminology: The Developing World 6(1)

Rich and Poor Countries 6(2)

Growth and Development 8(2)

A Development Continuum 10(5)

A Glance at History 15(3)

The Concept of Substitutes 18(6)

Approaches to Development 24(2)

Organization 26(1)

Economic Growth: Theory and Empirical Patterns 27(56)

Estimating Gross National Product 28(2)

What Is Included in GNP? 30(1)

Exchange-Rate Conversion Problems 30(3)

Other Index-Number Problems 33(2)

Income Levels and Economic Growth around the World: A Brief Overview 35(4)

The Progression of Growth Theory 39(1)

Production Functions: An Overview 39(1)

The Basic Growth Model 40(3)

The Harrod-Domar Growth Model 43(1)

The Fixed-Coefficient Production Function 43(2)

The Capital-Output Ratio and the Harrod-Domar Framework 45(2)

Strengths and Weaknesses of the Harrod-Domar Framework 47(5)

Economic Growth in Thailand 50(2)

The Solow (Neoclassical) Growth Model 52(1)

The Neoclassical Production Function 52(1)

The Basic Equations of the Solow Model 53(4)

The Solow Diagram 57(2)

Changes in the Saving Rate and Population Growth in the Solow Model 59(2)

Technological Change in the Solow Model 61(3)

Empirical Evidence on Economic Growth 64(1)

Convergence 64(3)

Characteristics of Rapidly Growing Economies 67(4)

Sources of Growth Analysis 71(7)

Explaining Differences in Growth Rates 72(6)

Beyond Solow: New Approaches to Growth 78(2)

Appendix: Deriving the Sources of Growth Equation 80(3)

Structural Change 83(32)

Two-Sector Models 88(1)

The Production Function 89(7)

Labor Surplus in China 95(1)

The Neoclassical Two-Sector Model 96(3)

Labor Surplus in Africa 98(1)

Industrial Patterns of Growth 99(1)

Empirical Approaches 99(1)

Theoretical Approaches 100(2)

Backward and Forward Linkages 102(2)

Quantitative Interindustry Models 104(5)

Social Accounting Matrix 109(3)

Computable General Equilibrium Models 112(3)

Development and Human Welfare 115(36)

Concepts and Measures 118(1)

Income Distribution 118(2)

Inequality Measures 120(3)

Poverty Measures 123(2)

Equality and Equity 125(1)

Basic Human Needs and Social Indicators 125(2)

Overall Indicators of Development 127(2)

Patterns of Inequality and Poverty 129(1)

Inequality and Economic Development 129(1)

Other Influences on Inequality 130(1)

How Growth Reduces Poverty 131(2)

Gender, Inequality, and Poverty 133(3)

South Korea 134(1)

Brazil 135(1)

Sri Lanka 136(1)

Theories of Inequality and Poverty 136(1)

Ricardo's Two-Sector Model 136(2)

India 137(1)

Marx's View 138(1)

Neoclassical Theory 138(1)

Labor-Surplus Model 138(3)

Strategies for Growth with Equity 141(1)

Redistribute First, Then Grow 141(2)

Redistribution with Growth 143(1)

Basic Human Needs 144(2)

Structural Adjustment and the Poor 146(1)

Growth and Equity: Key Policy Issues 147(4)
Part Two: Guiding Development

Guiding Development: Markets Versus Controls 151(44)

Managing Development 151(1)

Market Economics 152(4)

Socialist Economies 156(3)

The March Toward Markets 159(1)

The Appeal of Controls 159(2)

Resurgence of the Market 161(8)

The Declining Effectiveness of Industrial Policy: Korea from the 1960s to the 1990s 164(5)

Implementing Market Reforms 169(1)

Stabilization of Macroeconomy 170(7)

China Joins the WTO to Speed the Transition to the Market, 1999-2000 171(6)

Dismantling Controls 177(2)

Stabilization That Worked: Bolivia 1985-86 178(1)

Ensuring Competition 179(2)

Moving toward Scarcity Prices 181(2)

Responding to Market Signals 183(4)

The Transition to a Market System 187(8)

Stabilization and Deregulation, Indonesia 1986-90 192(3)

Sustainable Development 195(50)

Market Failures 197(1)

The Commons 198(1)

Externalities: A Closer Look 199(1)

Soil Erosion in Java, Indonesia 200(1)

Sustainable Harvests 200(4)

The Value of Time 204(3)

Policy Solutions 207(1)

Property Rights 208(2)

Communal Forest Management in India 209(1)

Government Regulation 210(4)

Taxation 214(3)

Reducing Water Pollution from Palm Oil Mills in Malaysia 216(1)

Marketable Permits 217(3)

Policy Failures 220(5)

Subsidized Deforestation of the Amazon 221(2)

Kerosene Subsidy in Indonesia 223(2)

Valuing a Recreational Facility in Bangkok, Thailand 225(1)

Measuring Sustainability 225(1)

Natural Capital 226(1)

A Concept of Sustainability 227(1)

Resources and National Income 228(4)

Sustainable Developments in Malaysia 230(2)

Global Sustainability 232(1)

Malthusian Views 232(1)

Neoclassical Views 233(4)

Environmental Degradation and Income Levels: Three Patterns 236(1)

Environmental Standards, International Competitiveness, and Trade 237(3)

Poverty and the Environment 240(2)

Rich Nations and Poor Nations 242(3)
Part Three: Human Resources

Population 245(36)

Demographic Measures 246(2)

A Brief History of Human Population 248(1)

The Preagricultural Era 248(1)

From Settled Agriculture to the Industrial Revolution 248(1)

From the Industrial Revolution to World War II 249(1)

The Post-World War II Period 249(3)

The Present Demographic Situation 252(6)

The Demographic Future 258(1)

The Causes of Population Growth 259(1)

Malthus and His World 259(2)

Mechanisms for Reducing Birthrates 261(1)

Modern Theories of Fertility 262(3)

Analyzing the Effects of Rapid Population Growth 265(1)

Optimum Population 265(2)

Dynamic Models of Population Growth 267(1)

Concern about the Effects of Population Growth on Development 268(1)

Doubters and Dissenters 269(1)

Conclusion 270(1)

Population Policy 271(2)

Population and Family Planning in Kenya 272(1)

Policy Alternatives 273(6)

Population and Family Planning in China 274(2)

Population and Family Planning in Indonesia 276(3)

Family Planning versus Development? 279(2)

Labor's Role 281(38)

Analyzing Employment Issues 282(1)

Growth of the Labor Supply 282(1)

Patterns of Employment 283(3)

Primary Education and Child Labor in India 286(1)

The Structure of Labor Markets 286(5)

The Urban Informal Sector in Indonesia 290(1)

Measuring the Labor Supply and Its Utilization 291(3)

Labor Reallocation 294(1)

Costs and Benefits of Reallocating Labor 295(3)

Internal Migration 298(2)

International Migration 300(2)

Employment Policy 302(1)

Labor Absorption through Industrialization 302(4)

Elements of Employment Promotion Policy 306(1)

Factor Price Distortions 307(1)

Correcting Factor Price Distortion 308(4)

The Role of Technology 312(1)

Technology Policies 313(2)

Other Employment Policies 315(3)

Employment Creation Strategies 318(1)

Education 319(26)

Trends and Patterns 320(3)

Education in Indonesia 322(1)

Types of Learning 323(2)

Characteristics of Developing-Country Education 325(4)

Education's Role in Development 329(1)

Manpower Planning 330(3)

Cost-Benefit Analysis 333(4)

Cost-Benefit Analysis in Educational Planning 337(5)

Educational Policy in Kenya and Tanzania and Its Results 340(2)

Alternative Viewpoints 342(3)

Health and Nutrition 345(32)

Health in the Developing Countries 346(1)

Patterns and Trends 346(6)

HIV/AIDS in Africa 350(2)

Causes of Sickness and Death 352(2)

Health in Sri Lanka 354(1)

Effects of Health on Development 354(4)

Environmental Health 358(1)

Malnutrition 359(2)

Food Consumption 361(3)

Nutritional Interventions 364(2)

Medical Services 366(5)

Supplying Medicines to Poor Countries 370(1)

Health Services and the Market 371(6)
Part Four: Capital Resources

Capital and Saving 377(43)

Saving and Investment: The Basic Data 379(3)

Investment Requirements for Growth 382(1)

Types of Investment 382(2)

Effective Use of Capital 384(1)

Capital-Intensive or Labor-Intensive Investment: A Hypothetical Case 385(2)

Sources of Saving 387(1)

A Taxonomy of Savings 388(2)

Government Saving 390(4)

Private Domestic Saving 394(1)

Determinants of Private Saving 395(1)

Household Saving Behavior 395(7)

Corporate Saving Behavior 402(2)

Foreign Saving 404(4)

Foreign Aid 408(1)

Historical Role 408(4)

Aid Institutions and Instruments 412(2)

Aid and Development 414(6)

Fiscal Policy 420(56)

The Government Budget: General Considerations 421(1)

Government Expenditures 422(1)

Current and Recurrent Expenditures 423(2)

Wages and Salaries 425(1)

Purchases of Goods and Services 426(2)

Interest Payments 428(1)

Subsidies 428(2)

State-Owned Enterprises 430(1)

Intergovernmental Transfers 431(1)

Project Appraisal and the Capital Account 432(1)

Present Value 432(3)

Opportunity Costs 435(2)

Shadow Prices 437(1)

Project Appraisal and National Goals 438(2)

Transforming Market Prices into Shadow Prices 440(2)

Tax Policy and Public Saving 442(2)

Taxes on International Trade 444(2)

Tax Rates and Smuggling: Columbia 445(1)

Personal and Corporate Income Taxes 446(1)

Sales and Excise Taxes 447(3)

New Sources of Tax Revenues 450(1)

Changes in Tax Administration 450(2)

Tax Administration in India and Bolivia in the 1980s 451(1)

Fundamental Tax Reform 452(5)

Lessons from Comprehensive Tax Reform: Colombia 453(4)

Taxes and Private Investment 457(1)

Taxes and Private Saving 457(3)

Taxes and Capital Mobility 460(1)

Income Distribution 461(1)

Taxation and Equity 462(1)

Personal Income Taxes 463(1)

Taxes in Luxury Consumption 464(2)

Corporate Income and Property Taxes: The Incidence Problem 466(2)

Limited Effects of Redistribution Policy 468(1)

Expenditures and Equity 469(3)

Irrigation and Equity 471(1)

Economic Efficiency and the Budget 472(1)

Sources of Inefficiency 472(1)

Neutrality and Efficiency: Lessons from Experience 473(3)

Financial Policy 476(45)

The Functions of a Financial System 477(1)

Money and the Money Supply 477(3)

Financial Intermediation 480(1)

Transformation and Distribution of Risk 481(1)

Stabilization 482(1)

Inflation and Savings Mobilization 482(1)

Inflation Episodes 483(5)

Hyperinflation in Peru: 1988-90 486(2)

Forced Mobilization of Savings 488(2)

Inflation as a Stimulus to Investment 490(3)

Inflation and Interest Rates 493(2)

Interest Rates and Savings Decisions 495(1)

Interest Rates and Liquid Assets 496(3)

Financial Development 499(1)

Shallow Finance and Deep Finance 499(1)

Shallow Financial Strategy 500(3)

Deep Financial Strategies 503(3)

Panic, Moral Hazard, and Financial Collapse 506(3)

Informal Credit Markets 509(3)

Small-Scale Savings and Credit Institutions: Bangladesh and Indonesia 511(1)

Monetary Policy and Price Stability 512(1)

Monetary Policy and Exchange-Rate Regimes 512(2)

Sources of Inflation 514(3)

Controlling Inflation through Monetary Policy 517(1)

Reserve Requirements 518(1)

Credit Ceilings 519(1)

Interest Rate Regulation and Moral Suasion 520(1)

Private Foreign Capital Flows, Debt, and Financial Crises 521(56)

Foreign Investment and the Multinationals 523(1)

Multinationals' Investment Patterns 524(1)

Characteristics of Multinationals 525(1)

Benefits of Foreign Direct Investment 526(7)

Policies toward Foreign Direct Investment 533(2)

Foreign Debt 535(1)

Commercial Borrowing 536(2)

Debt Dynamics 538(2)

The 1980s Debt Crisis 540(4)

Causes of the Crisis 544(2)

Escape from the Crisis 546(5)

The 1982 Mexican Debt Crisis 548(3)

The Highly Indebted Poor Countries 551(5)

Debt Relief in Uganda 554(2)

Emerging Market Financial Crises 556(3)

Domestic Economic Weaknesses 559(2)

Short-Term Capital Flows 561(3)

Creditor Panic 564(4)

Self-Fulfilling Creditor Panics 566(2)

Stopping Panics 568(4)

Lessons from the Crises 572(5)
Part Five: Production and Trade

Agriculture 577(42)

Agriculture's Role in Economic Development 578(2)

Self-Sufficiency and Dwindling World Food Supplies 580(2)

Food Supply and Famine 582(2)

Land Tenure and Reform 584(1)

Patterns of Land Tenure 584(2)

Tenure and Incentive 586(3)

Land Reform 589(1)

The Politics of Land Reform 589(2)

Land Reform and Productivity 591(1)

Land Reform and Income Distribution 592(1)

Technology of Agricultural Production 593(1)

Traditional Agriculture 593(1)

Slash-and-Burn Cultivation 594(1)

The Shortening of Fallow 595(1)

Farming within a Fixed Technology 595(1)

Modernizing Agricultural Technology 596(3)

The Mechanical Package 599(3)

The Biological Package and the Green Revolution 602(2)

Mobilization of Agricultural Inputs 604(1)

Rural Public Works Projects 605(1)

Rural Banks and Credit Cooperatives 606(3)

Labor Mobilization in Chinese Communes 607(2)

Extension Services 609(1)

The Development of Rural Markets 610(2)

Agricultural Price Policy 612(1)

The Multiple Role of Prices 613(2)

The Impact of Subsidies 615(2)

Overvalued Exchange Rates 617(2)

Primary Exports 619(33)

Export Characteristics of Developing Countries 619(3)

Comparative Advantage 622(4)

Primary Exports as an Engine of Growth 626(1)

Improved Factor Utilization 627(1)

Expanded Factor Endowments 628(1)

Linkage Effects 629(3)

Recent Empirical Evidence on Primary-Export-Led Growth 632(2)

Barriers to Primary-Export-Led Growth 634(1)

Sluggish Demand Growth 634(3)

Primary-Export-Led Growth in Malaysia 636(1)

Declining Terms of Trade 637(4)

Ghana: A Case of Arrested Development 640(1)

Fluctuating Export Earnings 641(1)

Ineffective Linkages 642(1)

Rent Seeking and Corruption 643(1)

Dutch Disease 643(9)

Nigeria: A Bad Case of Dutch Disease 649(1)

Indonesia: Finding A Cure 650(2)

Industry 652(25)

Industry as a Leading Sector 652(3)

Linkages 655(3)

Urbanization 658(3)

Investment Choices in Industry 661(1)

Choice of Technique 661(4)

Economies of Scale 665(4)

Small-Scale Industry 669(4)

Industry and Development Goals 673(4)

Township and Village Enterprises in China 674(3)

Trade and Development 677(57)

Import Substitution 680(3)

Protective Tariffs 683(3)

Import Quotas 686(1)

Subsidies 687(2)

Effective Rates of Protection 689(6)

Exchange-Rate Management 695(5)

Import Substitution in General Equilibrium 700(4)

Import Substitution in Kenya 702(2)

Outcomes of Import Substitution 704(1)

Outward-Looking Trade Strategy 705(5)

The Advantages of Manufactured-Export-Led Growth 710(3)

Policies Supporting Labor-Intensive Manufactured Exports 713(6)

Possible Risks 719(3)

Reconciling Import Substitution and Export Growth 722(1)

World Trading Arrangements 723(3)

Trade Reform in Mexico, 1985-89 724(2)

Multilateral Trade Reform 726(1)

Integration in the South 727(5)

Trading Blocs 732(2)

Managing an Open Economy 734(1)

Equilibrium in a Small, Open Economy 735(2)

Internal and External Balance 737(3)

The Phase Diagram 740(3)

Equilibrium and Disequilibrium 743(3)

Stabilization Policies 746(3)

Tales of Stabilization 749(1)

The Dutch Disease 750(2)

Debt Repayment Crisis 752(2)

Pioneering Stabilization: Chile, 1973-84 754(1)

Stabilization Package: Inflation and a Deficit 755(2)

Drought 757(1)

Recovering from Mismanagement: Ghana, 1983-91 758(2)

Accumulating Reserves: Taiwan, 1980-87 760
Bibliography and Additional Readings A1
Index A31