ECON 390 ISSUES AND PROBLEMS IN DEVELOPING ECONOMIES

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ECON 390 ISSUES AND PROBLEMS IN DEVELOPING
ECONOMIES

• Lecture 1 Introduction

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Goals for today

• Syllabus
• Course description
• Grading
• Schedule
• Differences between developed and developing
  economies
• Millenium development goals

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Office hours etc.

• Email lsteiger_at_uoregon.edu
• Phone [phone]
• Office PLC 419
• Office hours
• Tues. 3-5 PM,
• Thurs. 10-11 AM

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Grading

• Homework (4 problem sets) 35
• Biweekly problem sets
• Balance of problems on theory, comparison between
  countries, and some analysis of a particular
  country
• In-class participation/exercises 10
• Simple illustrations/discussion of concepts from
  lecture
• Graded on a 3-point scale 0 not present, 1
  adequate, 2good, 3 excellent.
• Midterm (Mon., Feb. 12) 25
• Final (Mon., Mar. 19, 315 PM) 30

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Course outline

• Theories of economic growth
• Poverty and Inequality
• The human factor population growth, human
  capital.
• Rural/urban income gap
• Other topics as time permits

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Why should we care about development?

• Importance of understanding following questions
• What is the source of large gap in
  incomes/standards of living between rich and poor
  countries?
• What lessons can be learned from the history of
  economic development of the United States?
• Interactions between developed and developing
  economies

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How do developed and developing countries differ?

• What are the differences in the material world of
  the people living in different parts of the
  world?
• http//www.pbs.org/wgbh/nova/worldbalance/material
  .html

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Typical conditions in less developed countries
(LDCs)

• Highly imperfect commodity and resource markets
• Thin markets (limited demand few suppliers)
• Widespread externalities
• Numerous common property resources (fisheries,
  grazing lands, waterholes)
• Limited information available to consumers and
  producers
• Major structural changes in both society and
  economy
• Natural progression of societies
• Traditional subsistence agriculture
• Industrial economy / Urbanization
• Modern, industrially diverse manufacturing and
  service economy
• Potential for poverty trap
• Example coordination failure
• Disequilibrium situations may prevail (Supply ?
  Demand at market prices)

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Thin markets the market for corn in Southern
Africa

• Corn produced largely by subsistence farmers on
  small plots
• Little/no irrigation of plots
• Land grabs crippled commercial agriculture and
  irrigation systems
• Bad roads, unreliable transport, fuel shortages
• Possible solution Chitsukwa irrigation scheme
  in southern Malawi

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Externalities interaction between farm and
non-farm sectors in China

• Growth in income from farming seems to improve
  incomes from forestry, animal husbandry, fishing
• Interaction between forestry, fishing, etc. and
  other types of non-farm activity

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Common Property Resources in Rajasthan

• Arid zone of this province accounts for 62 of
  the tropical arid area of India
• Agriculture characterized by crop- and
  livestock-based farming.
• Village-level common property resources
  including
• Community grazing lands
• Migration routes and facilities
• Village forests and woodlands

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Limited information available to producers and
consumers credit markets

• In the past, limited credit available to many
  people in developing countries, and also limited
  credit information.
• Now, competition among micro-credit lenders

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Classifying countries as developed and developing