IF275B: Economic Development Strategies

IF275B: Economic Development Strategies Research Paper Proposals

1) David Lauer: Examine sustainable development as it relates to China’s recent economic development. An application and analysis of the Environmental Kuznets Curve and any evidence for or against it as far as Chinese development is concerned, along with possible future issues and problems. Finally, any policy recommendations that may be suggested by this analysis.

2) Ivan Gontchar: The subject of development has many dimensions one of which (sometimes considered essential by policymakers) is economic development. Among large number of factors and policies that determine successful economic development of any country especially in modern globalized word with increasing number of interconnections and interdependence between countries, I would like to single out and make the subject of my term paper the problem of choice and appropriate management of foreign exchange regimes by some developing countries. More specifically, I intend to look at foreign exchange management of Eastern Europeans countries, so called transitional economies, through the prism of the events of the last decade in global financial markets as well as taking into account current and future goals set by respective governments. Several important factors make this topic interesting for a research: - specified above countries faced very unusual economic conditions and thus unordinary problem related to transformation from command to market based economic environment. It is interesting to determine whether there exist an optimal foreign exchange regime for this kind of transition; - these countries managed to escape virtually unscathed a wave of financial crises of late 90’s. How their foreign exchange policies help to maintain stability and were there any changes implemented based on experience learned from those financial cataclysms; - most of the countries of the Eastern Europe are aspiring candidates to join the process of European economic integration. How thy structure their foreign exchange policies in order to facilitate future integration into SMU (Single Monetary Union); - what is the place of foreign exchange regimes in overall developmental policies of these countries and can their experience be used by policymakers elsewhere in the world.

3) Alexander Dyson: Topic: The effect of capital controls on a developing economy Question: 1. What effect does the open flow of capital have on a small developing economy? 2. What problems does this volatility cause? 3. What solutions could fix these problems? 4. How do these issues fit into overall worldwide opinion on liberalization of markets?

1 Why: 1. How to manage their foreign exchange is an issue every country must face. 2. Volatility in currency markets can cause an economy to collapse. 3. Much of trade in currencies is speculative, not productive. 4. Though it goes against the prevailing notion of free markets, currency controls can stabilize an economy. 5. Currency flows determine exchange rates, which can have huge impacts on the trade activities of developing nations. 6. Many developing nations don’t have the foreign reserves to stabilize their currency on their own. How: 1. A survey of the current literature 2. An examination of the case for and against capital controls, and a look at different options for how to implement. 3. A quantitative look at historical examples of currency collapse, and in general at patterns of currency flows.

4) Tony Deary: Does increased development in Brazil affect domestic child labor/slavery issues,? And if so, how to combat the problem? I am asking this question because I will be spending my semester abroad in Brazil, and I hope to observe both the good side and the ugly side of Brazil while I’m there. I think it is important as a westerner to understand some of the implications globalization is having on things like child labor, (Especially as it is so uncommon in the developed world) not just increased per capita GDP and more telephones per 100 people. I am not a pessimist, I just want to uncover some of the darker side of Brazil for my own awareness, and present some kind of policy suggestions to combat it.

-I will first identify the current situation and how and why it arose, discuss current policies (if any) to deal with the problem, and how effective they are.

-I wish to also find if there is a specific correlation between development and incidence of child labor. To do this I will run a simple regression (using child labor numbers from UNICEF, per capita GDP, and illiteracy rate). I will report and interpret the findings and determine if there is causality with development.

-and then suggest alternative solutions; If indeed globalization has increased the incidence of child labor in Brazil, then I will suggest that some of the burden of tackling this problem may lie with countries engaged in investing in Brazil.

I will also suggest to implement policies which we have here in the west to mitigate child labor in the wake of development. After all, part of development is educating and supporting the youth of society, for they will be the leaders of the country in the coming generations.

I have already found a wide source of information on child labor, and development

2 (I had originally wanted to use migration to the cities, but there isn’t enough info out there).

5) Roberta Barone: How did Charlotte's children project work? Charlotte's children association is located in Montego Bay, in Jamaica. Charlotte is a Jamaican woman married to a man from Milan, and since she was in a better situation than her conational, decided to give them a hand through the institution of a small association that takes care of about 12 underprivileged children. My paper wants to explore the difficulties that this project has to face, through an overview of Jamaica's socioeconomic situation.

6) Armando Avallone: -What? Working title: ”Could the money spent in Nicaragua in the last decade for environmental projects have been spent to finance other kind of projects?” (I know it’s the worst title ever) -Why? I choose Nicaragua because it is a nation I am interested in and I already know something having read the poverty reduction paper. Moreover I think that the topic is quite interesting and feasible. I also think that it can be developed well with the tools your course provided us. -How? I think I will provide a description of the major projects related to the environment undertaken in the last 10 years. Then I will analyze some project (of about the same economic size) not related to the environment that where proposed but not undertaken. I will conclude answering the question. About the projects I was thinking about taking under consideration mainly the World Bank projects (data and description are quite easily available). Up to now I could not find a lot about not undertaken projects, but I think I will be able to ask information about them to professor Leipziger ( whose class “international institutions” I am taking).

If this idea doesn’t fit I was thinking about another project that could look like “Is Sicily (artificially considered a sovereign nation) a developed country?” Basically the work would be evaluating Sicilian social and economic indicators, comparing them with the ones of developed and developing countries and finally draw a conclusion. I think this research should be very interesting (answering questions like “can a rich country like Italy help developing one of his underdeveloped regions” and then “why?” or “why not” and in both cases “how?”). Data can be found in the ISTAT site .I also think it would not be too difficult to find World Bank opinions on the projects they have undertaken there. The main problem with this topic is that it should be seen from both economic and historical perspective, so it is not so related with the course.

3 7) Ashwini Apte: Developing Nations and the Agricultural Sector

Objectives:  Examine Role of Agricultural Sector to a Developing Nation  Examine Role of Agricultural Sector as Development occurs  Specific Case Examples India and China  Effects on the agricultural industry

Topic: I would like to look at how development and a shift from the agricultural sector to the industrial sector has affected the agriculture industry in developing nations, by focusing on the effect of development and agricultural policies in India and in China. What are the policies? To what extent do they benefit development? To what extent do they benefit the agricultural sector?

Why: I am tackling this question because it is important to understand the rold of the agricultural sector in the development of a country. Usually under-developed countries rely heavily on this sector. In order to move away from it, into more of an industrialized setting, the policy reform has to have certain characteristics, I want to understand which ones are important to successful development.

How: I plan on answering my question by means of outside resources as well as the IMF and World Bank resources. By taking historical data, and policies into account and seeing the end result, I plan on ranking the importance of certain factors into allowing for an easier transition from agriculture to an industrialized setting. This will be done through subsequent analysis of the resources below along with others I will find.

Articles: 1) Gulati, A. Indian Agriculture in a Gloabalizing World, American Journal of Agricultural Economics, (August 2002), 754-61. 2) Kalirajan, K.P., & Sankar, U. Agriculture in India’s Economic Reform Program, Journal of Asian Economics, (Fall 2001), 383-99. 3) Bhat, K.S., & Nirmala, V. Instability of Agricultural Exports and Economic Growth in India, Indian Economic Journal, (Jan – March 2001), 87-91. 4) Storm, S. The Desirable Form of Openness for Indian Agriculture, Cambridge Journal of Economics, (March 2001), 185-207. 5) Johnson, D. G. Can Agricultural Labor Adjustment Occur Primarily Through Creation of Rural Non-farm Jobs in China?, Urban Studies, (November 2002), 2163-74. 6) de Brauw, A. The Evolution of China’s Rural Labor Markets during the Reforms, Journal of Comparative Economics, (June 2002), 329-53. 7) Martin, W. Implications of Reform and WTO Accession for China’s Agricultural Policies, Economics of Transition, (2001), 717-42. 8) Sun, Z. The Challenges that China Will Face with Regard to Its Agricultural Policies after Joining the WTO, Chinese Economy, (Mar-Apr 2000), 54-66.

4 8) Stella Biira Bwambale: What Role has education played in the Uganda’s development? The intention of this research is to find out if education plays any role in development and if it does what role it has played in Uganda’s development. In other words, I want to find out if it has had an impact on Uganda’s development.

Why this question? Many times, education has been named as one of the key factors that contribute to development. As a matter of fact, it has been given priority in some, if not most countries and has also been recommended by many institutions, researchers and economists as one of the policies that lead to development. This is why I have picked keen interest in researching on this topic and find out how much it has done in Uganda.

How to answer it? A lot of research has been carried out on education and related issues and this is going to be a starting point for me. Also I intend to formulate some models, for which I will collect data, analyze it and come up with the answer. The knowledge I have learnt in class is also going to come in handy in this research with this I do look forward to finding an answer to this.

9) Carolina Caviles: The informal sector in Peru: A transitional sector as a new way of development?

The informal sector (IS) describes economic activity that takes place outside the formal norms of economic transactions established by the state and formal business practices but which is not clearly illegal in itself.1 In general, this term is applied to individual or family-managed micro and small businesses.

The objective of the paper is to clearly define the role that the informal sector plays in the dynamics of Peruvian economy as a mechanism people have developed to fight poverty and lack of job opportunities. The framework of the analysis should be the need to fight poverty and create jobs as a priority for the country. The paper will also start defining the term informality that will be relevant for the analysis.

Clearly informality is the result of economic stagnation and underdevelopment that affected Latin American countries, in particularly Peru in the 1990s. The issue to investigate is whether the informal sector is an opportunity for development or is an obstacle to do so because of the different problems that it encompass such as low tax collections, poor institutions, etc.

Some data related to the impact of informality in the economic activity should be presented; however, different problems for informal sector measurement exist. Even if statistics are available for informal sector, the major problems are in terms of

1 Cross, John C. in Encyclopedia of Political Economy, Philip O’Hara Routledge, London & New York. 1998.

5 differentiating agricultural activities from the informal sector and because most of the surveys are conducted in major metropolitan areas or capital cities. The analysis of certain variables that seem related to the informality problem will be presented, as for example: growth rate in the period of 1990 to 2002 related to the growth of informality sector; formal employment trend in the same period, among others.

“ For countries in Latin America, informal employment has been growing since 1990 between 25 to 69.9 % of total employment. For Chile, the indicator remained almost constant, while for Brazil, Honduras, Paraguay, Peru and Venezuela it continued to increase during the whole decade. As for Bolivia, Ecuador, Honduras and Peru the informal sector already has a relatively greater importance for women's employment than for men's.2”

Finally, the paper would try to respond the following question: How to turn the transitional sector into a formal one? On doing so, the evaluation of the “cost of formality” and the factors that prevent development of these activities such as undercapitalization, lack of skills and lack of economies of scale, should be analyzed. Special emphasis will be given to the main problems of financing and education.

References (so far):

. Estache Antonio, Accounting for poverty in infrastructure reform: Learning from Latin America’s experience, WBI Development Studies. Washington, D.C.: World Bank, 2002 . http://www-ilmirror.cornell.edu/public/english/employment/skills/informal/fields.htm . http://www.cinterfor.org.uy/public/spanish/region/ampro/cinterfor/temas/worker/doc/ sind/xviii/ . De Soto, Hernando (1986) The Other Path: The Invisible Revolution in the Third World. New York, Harper & Row, 1989. . Portes, Alejandro, Castells, Manuel & Benton, Lauren A., (eds) (1989) The Informal Economy: Studies in Advanced and Less Developed Countries. Baltimore and London, John Hopkins University Press. . Itzigsohn, Jose Development poverty: the state, labor market deregulation, and the informal economy in Costa Rica and Dominican Republic, Pennsylvania State University Press 2000. . Iftikhar Ahmed and Jacobus A. Doeleman Beyond Rio : the environmental crisis and sustainable livelihoods in the Third World.

2 Based on The International Labor Organization’s Informal Sector Employment data.

6 10) Charles Njogu: WHAT ARE THE FACTORS THAT CONTRIBUTES TO THE BREAKDOWN OF ECONOMIC DEVELOPMENT COMMUNITY?

A CASE STUDY OF EAST AFRICAN ECONOMY (EAC).

Objectives:  To determine the factors that contributes to the formation and reformation of EAC.  To determine the factors that contributed to the breakup of EAC.  To determine the factors that could contribute to the success of EAC.  To recommend the best strategy to take.

Hypothesis My assumption is that EAC has been braking up due to poverty. This will be measured by GDP (capita per person). Some countries are better off in terms of resources than others and hence sharing of resources become a problem.

Control Variables: Growth rate Education/literacy rate Interest rate Exchange rate Resources Exports Imports Health political

WHAT? The question that I wish to address is the cause(s) that lead to the breakup and reformation of EAC. This topic is quite interesting because EAC has been breaking up and to my surprise they keep on re uniting again.

WHY?  The basic reason is to fulfill the requirement of the course.  To broaden my knowledge and to help me understand Economic Communities.  To gather information that I would organize and publish in form of an article.  To recommend cause of action to be taken.  To form a base for another research to be carried on.

HOW? To be able to understand in depth, then I need to analyze historical data both qualitative and quantities. Since EAC has broken up several times then they form a good measure for both success and failure. I will be analyzing the issues related to the time of break up or reformation as measure.