Summary

1
Summary Synthesis

• Themes, Tensions
• And
• Emerging Arguments

2
Course Objective Perspective

• Student main point from week 1 lecture
• Important to recognize tendency of commentators
  to take extreme positions
• Understanding caveats and how various models and
  disciplines are related can lead to less extreme
  (more constructive?) positions
• Strategy Use Multiple Commentators/Sources
• Increases perspective
• If you understand and account for biases
• Challenge
• A little harder to synthesize

3
Summary and Synthesis

• Themes
• Growth
• Capital
• Savings
• Government Debt
• Foreign Investment
• Trade
• Competitive Advantage
• Human Resources
• Natural Resources
• Productivity
• Technology
• Innovation
• Incentives
• Free riding
• Productivity
• Shift Per Capita Production Solow
• Self Interest
• Universal Science-Monoeconomics

• Tensions Governance
• Status Quo vs. Change
• Growth vs. Social Justice
• Distribution of Benefits
• Incentives
• IPR
• Tax relief
• Redistribution
• Govt Programs
• Tax
• Benefits vs. Externalities
• Growth vs. Stability
• Harrod-Domar model
• Liberalized Financial markets - volatility
• Growth vs. Sustainability (new)
• Increasing Consumption
• Population Growth
• Economic Growth
• Finite Resources

4
Bhala Growth vs. Social Justice

• Professor Raj Bhala, http//www.law.ku.edu/faculty
  /bhala.shtml
• Talking Past One Another
• Moderation is forced to the sidelines
• Bhala seeks middle ground through
  interdisciplinary approach
• Law, development economics, theology
• Development is about more than trade
• Dont ignore the classic development economists
• Even Marx, as a critic of capitalism
• Theological tradition as a framework for
  analyzing developing country trade preferences
• Uses a moral framework familiar to much of the
  developed world to encourage
• Encourage Generosity, Charity, Virtue
• Make 3rd World problems developed world
  problems

5
Why Development Economics?

• Development Economics
• Dualistic Development
• Mobilizing Domestic Resources
• Mobilizing Foreign Resources
• Industrialization Strategy
• Agricultural Strategy
• Trade Strategy
• Human Resource Development
• Project Appraisal
• Development Planning and Policymaking
• Autonomy

• Washington Consensus
• Fiscal Discipline
• Public Expenditure Priorities
• Tax Reform
• Financial Liberalization
• Exchange rates (Mkt Driven)
• Trade Liberalization
• Foreign Direct Investment
• Privatization
• Deregulation
• Property Rights

6
Bhala, continued

• Tradition refuses to submit to the small and
  arrogant oligarchy of those who merely happen to
  be walking about. Chesterton
• Bhala focuses on tradition to take into account
  the perspective of our ancestors
• But what about our the perspective of our
  descendants?

7
GrayUniformity vs. AutonomyGrowth vs.
Sustainability

• Professor John N. Gray
• Professor of European Thought, London School of
  Economics http//en.wikipedia.org/wiki/John_N._Gra
  y
• Bias anti humanist
• Professor Gray reviews three recent books on
  Globalization, focusing on
• Factors that have contributed to the failure of
  economics as a universal science
• Scarce natural resources as a source of conflict
• Climate change as the other side of
  Globalization
• Autonomy as an essential component of innovation

8
Essential Points

• Attempts to identify one universally effective
  social organization have failed
• China shifting away from central planning
• Some countries shifting toward market reform,
  some and away from market reform
• Europe attempting to strike a balance
• US exploiting hegemony (temporary?)
• Globalization has been occurring in waves for
  centuries
• But this time, something has changed
• Globalization is constrained by finite natural
  resources
• Extending rich world lifestyle to the rest of
  the world may not be feasible
• Reversion to a pre-industrial way of life is
  untenable
• Given projected growth in population, it would
  devour what remains of wilderness in the world
  and destabilize global climate systems

9
Growth vs. Sustainability

• Exponential human growth vs. available arable
  land
• Remember Malthus?
• Current natural resource strategy creates a
  compounding problem
• Competition for scarce resources
• Conflict resource wars
• rivalry among states for control of natural
  resources
• Pollution from growth race threatens ongoing
  viability
• 19th and 20th century sociologists believed
  industrialization would eliminate the scarcity
  problem
• Technical innovation overcomes scarcity to
  provide the basic requirements of life to all
• Remember Godwin?

10
The End of the Line?

• Grays argument
• The other side of globalization requires
• Intelligent use of technology
• Combined with significant changes in the way we
  live
• Still, we are likely to encounter large scale
  disruption and conflict, because
• the defining feature of the industrial
  civilization that is spreading everywhere is
  exponential growth but such growth is eventually
  self limiting.
• Remember the yeast example?

11
The Stewardship Problem

• Globalization transcends national boundaries
• Nobody looks for risk in the systemnobody
  accepts any liability for risk in the system.
• Remember externalities?
• Current global economy was created by the
  American State
• Absent an effort to manage the system in a way
  amenable to the global community, it will slowly
  fall to pieces.

12
Universal Science vs. Autonomy

• Grays argument
• Innovation is essential to addressing an
  unsolvable problem
• Autonomy is essential to innovation
• Governments have a major role in
• determining what form capitalism should take
• in light of cultural traditions and political
  systems
• Liberal market economies
• US, UK
• Coordinated market economies
• Germany, Japan, (China?)
• Cross-fertilization not evolution toward a
  single model
• No single set of policies or institutions can
  yield prosperity for all societies
• Stewardship over global organization of
  production
• Queries
• Are governments up to the task? Consider the
  increasing roles of NGOs.
• Is there an alternative consensus on the
  horizon?

13
Beijing Consensus

• Professor Arif Dirlik http//www.uoregon.edu/hist
  ory/faculty/dirlik.html
• Essential Points
• Prospects for a Beijing Consensus
• As a third way alternative to
• Washington Consensus
• Marxism (marginalized)
• Global South vs. Third World
• Comparison provides historical context for
  evaluating the consensus building prospects of
  the Chinese development model

14
Global South vs. Third World

• Third World (round one)
• Forced to choose between dominant ideologies?
• Or a Third Path to modernity?
• Avoiding the pitfalls of capitalism and Marxism
• The South as a savior
• Brant Commission repositioned the South
• In need of saving
• Brant Commission steamrolled by the Washington
  Consensus
• North/South distinction breaking down
• Similar inequities, but South lacks institutional
  checks

15
Forging a Global South

• A new paradigm for development
• Letting the South take control of its own future
• South/South cooperation
• Decentralized, open
• Must offer economic alternatives to Neoliberalism
• Self help requires autonomy
• Exploit affinities
• May be a struggle to establish leadership

16
Prospects for Beijing Consensus

• Critique of Ramos investment banker perspective
• New Physics of Power
• Innovation vs. trailing edge
• Skeptical
• Capacity
• Innovation as fetish with a life of its own
• But what about social innovation?
• Sustainability and equality first
• Skeptical
• Self determination
• Compelling message to developing countries
• Multilateral global relationships that
  accommodate political and cultural differences

17
Implications for Governance

• Themes
• Growth
• Capital
• Savings
• Government Debt
• Foreign Investment
• Trade
• Competitive Advantage
• Human Resources
• Natural Resources
• Productivity
• Technology
• Innovation
• Incentives
• Free riding
• Shift Per Capita Production - Solow
• Productivity
• Self Interest
• Universal Science-Monoeconomics

• Status Quo vs. Change
• Uniformity vs. Autonomy
• Markets vs. Planning/Regulation?
• Efficiency vs. Equity
• Social Justice
• Distribution of Benefits
• Incentives
• IPR
• Tax relief
• Redistribution
• Govt Programs
• Tax
• Benefits vs. Externalities
• Cooperation vs. Competition
• Research/Standards/IPR
• Public vs. Private Funding
• Growth vs. Stability
• Harrod-Domar model
• Growth vs. Sustainability