Development Theory Module Code: 7YYDN027 Term 1, 2021 1 Course Team Module Convenor: Dr Alice C. Evans [email protected] Office Hours: Email me to arrange, I am very flexible on times. Module Overview 1) What fosters economic development? How important is geography, land reform, trade liberalisation, industrial policy, and institutions? 2) Why are some states democratic while others are more authoritarian? 3) What are the causes of crises? (famines, climate breakdown, and debt). 4) What drives progress towards gender equality? Why are some societies more equal than others? Assessment - 1,000 word formative essay (0%) (to help you improve, not assessed) - 3,000 word written essay (100%) The marking criteria can be found here. Essay questions are on page 96 of this Tiny Textbook. Weekly Activities 1) Watch the online lecture. Already available. 2) Read at least two articles while listening to the audio guides. 3) Answer the KEATS Questions, & read other students’ answers 4) Read my weekly feedback 5) Participate in seminars. 2 How to Read Critically When reading papers, consider these four questions: 1) How would you summarise that paper, in a single sentence? 2) How does it differ from other perspectives on this topic? 3) What evidence is used to support the argument? 4) Do the data, methods, and argument justify the claims made? Why not? Asking these questions (synthesising papers, questioning methods, practising ‘active learning’) will help you understand, remember, and critically engage with the readings. Better yet, discuss these questions with other students. I will organise you into small groups. Please meet before the seminar, either virtually or in person. This will help you understand and analyse alternative perspectives. Learn from each other! You may enjoy this podcast, with my former student: ‘Top Tips for Students’. 3 Educational Aims To understand what shapes social, economic and political outcomes, in low- and middle-income countries. You should be able to critically assess different explanations of country growth trajectories, and provide a persuasive explanation of this data: Learning Outcomes Diligent students will: • Understand key debates in international development. What is contested? What evidence is marshalled to support differing theories? Why do experts differ? • Synthesise competing theories • Assess evidence and arguments. Does the data justify the claims made? Why not? Employability Skills • Comprehension • Forensic scrutiny • Interdisciplinary thinking • Persuasive writing 4 Course Outline What Drives Economic Development? 1. Land Reform 2. Trade Liberalisation 3. Industrial Policy 4. ‘Good Institutions’ Why Are Some States Democratic & Others Authoritarian? 5. What Enabled Democratisation? 6. How Do Authoritarians Maintain Control? What Causes Crises? How Can They Be Averted? 7. Famine 8. Climate Breakdown 9. Sovereign Debt Crises What Drives Progress towards Gender Equality? 10. The Great Gender Divergence 5 Books to Enjoy Over the Summer Reading these books will help you prepare for the course. Rather than skim in a busy semester, enjoy these in the sun!! Acemoglu, Daron and Robinson, James (2019) The Narrow Corridor (Penguin Random House) Amsden, Alice (1992) Asia’s Next Giant: South Korea and Late Industrialization (Oxford University Press). Ang, Yuen Yuen (2016) How China Escaped The Poverty Trap (Cornell). Evans, Alice (2021) How did East Asia overtake South Asia? Fukuyama, Francis (2011) The Origins of Political Order: From Prehuman Times to the French Revolution (Profile Books). Harris, Kevan (2016) The Making and Unmaking of the Greater Middle East, New Left Review Kohli, Atul (2004) State-directed Development: Political Power and Industrialization in the Global Periphery (Cambridge University Press). Rodrik, Dani. (2009) One Economics, Many Recipes: Globalization, Institutions, and Economic Growth (Princeton University Press). Qian, Yingyi (2017) How Reform Worked in China: The Transition from Plan to Market (MIT Press). Roy, Tirthankar (2020) The Economic History of India (Oxford University Press). Studwell, Joe (2013) How Asia Works: Success and Failure in the World’s Most Dynamic Region (Profile Books). 6 What Drives Economic Development? As countries have prospered, the share of people living in poverty has fallen. Over the next four weeks, we will consider how agriculture, economic liberalisation, industrial policy, technological innovation, institutions, human capital, and geography impact growth. 7 Week 1 – Is land reform necessary for industrialisation? East Asian governments initiated major land reform prior to industrialisation. Latin America did not. Does this explain why East Asia’s industrialisation was more successful? In ‘How Asia Works’, Studwell argues that land reform raised agricultural productivity and financed industrialisation in Northeast Asia (Japan, South Korea, Taiwan, and China). This enabled more rapid economic growth than South and Southeast Asia (Indonesia, Malaysia, the Philippines, Thailand, and India). At the beginning of the twentieth century Japan, South Korea and Taiwan, a small landlord class leased land to a large peasant class. Landlords received about 50% of crop yields as rent. Table 1 below shows that after land reform, farm households transitioned from being tenants to owners. Landowners were paid below market prices (Iscan, forthcoming). Studwell argues that feudal land relations enrich wealthy landowners, entrench their monopolies, trap farm labourers into poverty, and curb crop yields. Land reform contributed to economic development by turning tenants into small-holders, who then raised farm yields. This generated savings for industrialisation. Higher agricultural output also meant lower urban food prices. Factory workers could survive on lower wages. Cristóbal Kay emphasises the economic and political consequences of land reform. Kay suggests that Northeast Asian land reform enabled rapid industrialisation, by: (1) weakening the landlord class, thereby curbing their political influence as well as class conflict; and (2) raising agricultural productivity. This in turn (3) increased peasant incomes, raised internal demand for industrial products; (4) released surplus labour to factories; (5) enabled the state to extract an 8 agrarian surplus to finance industrialisation; and (6) reduced the price of food in cities, so factory workers could still survive on low wages. Compared to Northeast Asia, Latin American land reforms were more paltry. Agricultural productivity remained low, so food prices remained high and peasant incomes stayed low. This curbed internal demand for industrial goods, thwarting endogenous industrialisation. In the absence of land reform, landlords remained politically powerful, able to advance their interests (such as an overvalued exchange rate for capital goods imports, which created deficits in the absence of export growth). Successive governments remained unable to discipline agrarian and industrial capitalists. This curbed economic growth. For Kay therefore, major land reform was thus a cause (not consequence) of state discipline over capitalist elites, which enabled high economic growth in East Asia but not Latin America. Does land reform explain East Asia’s economic success? Reasons for scepticism: • Rapid industrialisation in South Korea and Taiwan was partly due to high human capital. Given their skilled and well-educated workforce, they could adopt improved technology. Importantly, South Korea and Taiwan had high human development relative to their income level in 1960 – in terms of school enrolment, literacy, life expectancy and fertility levels. Labour was well-educated and low paid. This enabled comparative advantage in the global economy. Land reform is improbable as the explanation of high human capital since it was relatively recent. • Did East Asian land reform really boost rural incomes? Kim suggests that when South Korean peasants became small farm owners they remained poor. Does this undermine Studwell’s claim that land reform led to wealthier farmers, fuelling domestic demand for manufactured goods? • Does paltry land reform in Latin America really tell us what would have happened in East Asia without land reform? Is that the only difference between the two world regions? • ‘Endogeneity’. Every time we read a paper arguing that X caused Y, we need to ask, ‘Yes, but why was X politically possible in that time and place?’. There may have been some underlying cause which enabled both X and Y. This would dampen the importance of X. Kay implies that the political strength of the agrarian elites was a consequence of the absence of land reform. But perhaps it was an underlying cause? Did Latin American landlords’ political strength thwart land reform? In Japan, technological and commercial agrarian development enhanced the political strength of the peasantry. It enabled peasant unrest. Through small-scale collective action, tenants were able to change the terms of their contracts with landlords, reducing rental rates. The landlord class had become weaker. Economic development reshaped political institutions, which in turn enabled post-war land reform. Land reform was thus a consequence of pre- existing political change – argues Grabowski 2002. East Asian land reform may also have been influenced by geopolitics: the threat of Communism and US support for land reform. Fearing a militarised North Korea, the looming threat of Communism, and peasant unrest, Japanese, Korean, and Taiwanese governments