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ECONOMIC DEVELOPMENT Fourth Edition In this fourth edition of his textbook, E Wayne Nafziger analyzes the economic development of Asia, Africa, Latin America, and EastCentral Europe The treatment is suitable for students who have taken a basic college course in the principles of economics This comprehensive and clearly written text explains the growth in real income per person and income disparities within and among developing countries The author explains the reasons for the fast growth of Pacific Rim countries, Brazil, Poland, and (recently) India, and the increasing economic misery and degradation of large parts of sub-Saharan Africa The book also examines China and other postsocialist economies as low- and middle-income countries, without, however, overshadowing the primary emphasis on the third world The text, written by a scholar active in economic research in developing countries, is replete with realworld examples The exposition emphasizes the themes of poverty, inequality, unemployment, the environment, and deficiencies of people in less-developed countries, rather than esoteric models of aggregate economic growth The guide to the readings, through bibliography as well as Web sites with links to development resources, makes this book useful for students writing research papers E Wayne Nafziger is University Distinguished Professor of Economics at Kansas State University He is the author and editor of sixteen books and numerous journal articles on development economics, income distribution, development theory, the economics of conflict, the Japanese economy, and entrepreneurship His book, Inequality in Africa: Political Elites, Proletariat, Peasants, and the Poor (Cambridge University Press), was cited by Choice as an Outstanding Academic Book for 1989–1990 Professor Nafziger is also the author of The Debt Crisis in Africa (1993) and the editor (with Frances Stewart and Raimo Vayrynen) of the two-volume War, Hunger, and Displacement: The Origins of Humanitarian Emergencies (2000) He has held research positions at the U.N University’s World Institute for Development Economics Research, the Carter Center, the East–West Center, and in Nigeria, India, Japan, and Britain Economic Development FOURTH EDITION E Wayne Nafziger Kansas State University cambridge university press Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo Cambridge University Press The Edinburgh Building, Cambridge cb2 2ru, UK Published in the United States of America by Cambridge University Press, New York www.cambridge.org Information on this title: www.cambridge.org/9780521829663 © E Wayne Nafziger 2006 This publication is in copyright Subject to statutory exception and to the provision of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press First published in print format 2005 isbn-13 isbn-10 978-0-511-14048-8 eBook (NetLibrary) 0-511-14048-7 eBook (NetLibrary) isbn-13 isbn-10 978-0-521-82966-3 hardback 0-521-82966-6 hardback Cambridge University Press has no responsibility for the persistence or accuracy of urls for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate To H M A Onitiri, Aaron Gana, B Sarveswara Rao, M Jagadeswara Rao, R Sudarsana Rao, and Hiroshi Kitamura Contents List of Figures and Tables page xiii Abbreviations and Measures xvii Preface to the Fourth Edition xix PART I PRINCIPLES AND CONCEPTS OF DEVELOPMENT Introduction Nature and Scope of the Text, / Organization of the Text, / How the Other Two-Thirds Live, / Globalization, Outsourcing, and Information Technology, / India’s and Asia’s Golden Age of Development, / Critical Questions in Development Economics, 10 / Limitations of Standard Economic Approaches, 11 / Guide to Readings, 12 The Meaning and Measurement of Economic Development 15 Scope of the Chapter, 15 / Growth and Development, 15 / Classification of Countries, 20 / Problems with Using GNP to Make Comparisons over Time, 25 / Problems in Comparing Developed and Developing Countries’ GNP, 27 / Comparison-Resistant Services, 30 / Purchasing-Power Parity (PPP), 30 / Measurement Errors for GNP or GDP Adjusted for Purchasing Power, 33 / A Better Measure of Economic Development?, 34 / Weighted Indices for GNP Growth, 39 / “Basic-Needs” Attainment, 42 / Development as Freedom and Liberation, 44 / Small Is Beautiful, 46 / Are Economic Growth and Development Worthwhile?, 46 / Conclusion, 48 / Guide to Readings, 51 Economic Development in Historical Perspective 53 Scope of the Chapter, 53 / An Evolutionary Biological Approach to Development, 53 / Ancient and Medieval Economic Growth, 54 / World Leaders in GDP per Capita, 1500 to the Present, 55 / Beginnings of Sustained Economic Growth, 56 / The West and Afro-Asia: The 19th Century and Today, 57 / Capitalism and Modern Western Economic Development, 57 / Economic Modernization in the Non-Western World, 61 / Growth in the Last 100 to 150 Years, 74 / The Power of Exponential Growth – The United States and Canada: The Late 19th and 20th Centuries, 77 / Economic Growth in Europe and Japan after World War II, 81 / vii viii Contents Recent Economic Growth in Developing Countries, 81 / The Convergence Controversy, 88 / Conclusion, 91 / Guide to Readings, 93 Characteristics and Institutions of Developing Countries 95 Scope of the Chapter, 95 / Varying Income Inequality, 95 / Political Framework, 95 / An Extended Family, 97 / Peasant Agricultural Societies, 97 / A High Proportion of the Labor Force in Agriculture, 97 / A High Proportion of Output in Agriculture, 97 / Inadequate Technology and Capital, 102 / Low Saving Rates, 102 / A Dual Economy, 103 / Varying Dependence on International Trade, 104 / Rapid Population Growth, 105 / Low Literacy and School Enrollment Rates, 106 / An Unskilled Labor Force, 107 / Poorly Developed Economic and Political Institutions, 107 / Conclusion, 119 / Guide to Readings, 120 Theories of Economic Development 123 Scope of the Chapter, 123 / The Classical Theory of Economic Stagnation, 124 / Marx’s Historical Materialism, 126 / Rostow’s Stages of Economic Growth, 128 / Vicious Circle Theory, 131 / Balanced Versus Unbalanced Growth, 132 / Coordination Failure: The O-Ring Theory of Economic Development, 137 / The Lewis–Fei–Ranis Model, 138 / Baran’s NeoMarxist Thesis, 142 / Dependency Theory, 144 / The Neoclassical Counterrevolution, 149 / The Neoclassical Growth Theory, 153 / The New (Endogenous) Growth Theory, 155 / Conclusion, 157 / Guide to Readings, 161 / Appendix to Chapter 5: The Harrod–Domar Model, 162 PART II POVERTY ALLEVIATION AND INCOME DISTRIBUTION Poverty, Malnutrition, and Income Inequality 165 Information Sparsity, 165 / Scope of the Chapter, 167 / Poverty as Multidimensional, 167 / $1/day and $2/day Poverty, 171 / Global and Regional Poverty, 173 / Concepts and Measures of Poverty: Amartya Sen’s Approach, 176 / The Lorenz Curve and Gini Index (G): Measures of the Distribution of Income, 179 / The World Bank, Institute for International Economics, and Sala-i-Martin: Three Views of Poverty and Inequality, 181 / Early and Late Stages of Development, 186 / Low-, Middle-, and High-Income Countries, 188 / Slow and Fast Growers, 191 / Women, Poverty, Inequality, and Male Dominance, 191 / Accompaniments of Absolute Poverty, 194 / Identifying Poverty Groups, 195 / Case Studies of Countries, 196 / Policies to Reduce Poverty and Income Inequality, 202 / Income Equality Versus Growth, 210 / Poverty, Inequality, and War, 212 / Conclusion, 214 / Guide to Readings, 217 Rural Poverty and Agricultural Transformation 220 Scope of the Chapter, 221 / Agriculture’s Role in Transforming the Economy, 221 / Major Rural Groups in Poverty, 222 / Rural Poverty by Contents ix World Region, 223 / Rural and Agricultural Development, 223 / Rural–Urban Differentials in 19th-Century Europe and Present-Day LDCs, 224 / Agricultural Productivity in DCs and LDCs, 224 / The Evolution of LDC Agriculture, 226 / Multinational Corporations and Contract Farming, 228 / Growth of Average Food Production in Sub-Saharan Africa, Other LDCs, and DCs, 229 / Food in India and China, 232 / LDC Food Deficits, 235 / Food Output and Demand Growth, 237 / Fish, Meat, and Grains, 238 / Factors Contributing to Low Income and Poverty in Rural Areas, 239 / Policies to Increase Rural Income and Reduce Poverty, 245 / Agricultural Biotechnology, 264 / Conclusion, 266 / Guide to Readings, 268 PART III FACTORS OF GROWTH Population and Development 271 Scope of the Chapter, 271 / World Population Throughout History, 271 / Population Growth in Developed and Developing Countries, 272 / World Population: Rapid but Decelerating Growth, 273 / The Demographic Transition, 277 / Is Population Growth an Obstacle to Economic Development?, 284 / Strategies for Reducing Fertility, 297 / Conclusion, 304 / Guide to Readings, 306 Employment, Migration, and Urbanization 308 The Production Function, 308 / Employment Problems in LDCs, 309 / Scope of the Chapter, 310 / Dimensions of Unemployment and Underemployment, 310 / Underutilized Labor, 311 / Labor Force Growth, Urbanization, and Industrial Expansion, 311 / Disguised Unemployment, 314 / Rural–Urban Migration, 316 / Western Approaches to Unemployment, 319 / Causes of Unemployment in Developing Countries, 321 / Policies for Reducing Unemployment, 325 / Conclusion, 330 / Guide to Readings, 332 10 Education, Health, and Human Capital 334 Scope of the Chapter, 334 / Investment in Human Capital, 335 / Economic Returns to Education, 335 / Noneconomic Benefits of Education, 337 / Education as Screening, 338 / Education and Equality, 339 / Education and Political Discontent, 342 / Secondary and Higher Education, 342 / Education via Electronic Media, 344 / Planning for Specialized Education and Training, 345 / Achieving Consistency in Planning Educated People, 346 / Vocational and Technical Skills, 347 / Reducing the Brain Drain, 348 / Socialization and Motivation, 350 / Health and Physical Condition, 352 / Mortality and Disability, 354 / AIDS, 355 / Conclusion, 357 / Guide to Readings, 359 11 Capital Formation, Investment Choice, Information Technology, and Technical Progress 361 Scope of the Chapter, 362 / Capital Formation and Technical Progress as Sources of Growth, 362 / Components of the Residual, 364 / Learning by 832 Index environment, 102, 288 defined, 414 degradation of, 716 market imperfections and, 422 natural resources and, 413, 414 policy failures, 422 pollution, 67, 420, 426, 438 population and, 582 trade and, 607 ERDF See European Regional Development Fund Essay on the Principle of Population (Malthus), 284 Ethiopia, 192 Eurasian societies, 54 euro currency, 541, 546–547, 638, 645 European Bank for Reconstruction and Development (EBRD), 700 European Economic and Monetary Union, 546–547 European Regional Development Fund (ERDF), 77 European Union, 111, 700, 743 evolutionary approach, 53, 203 exchange rate, 65, 263, 633 Bretton Woods system, 86 crawling peg, 485 currency mismatch, 642 devaluation, 482 dollar See dollar, U.S dual, 637 exchange controls, 558, 634 exchange costs, 321–322 exports and, 150 flexibilty and, 572 GNP and, 29 hedging and, 567 inflation targeting, 641 managed floating, 554, 641 poverty and, 257 present system, 633 prices and, 257, 594, 638 rate change, 258–259 reforms and, 689 stability and, 638 trade and, 689, 730 See also specific currencies, topics expenditure policy, 477, 681 exponential growth, 77 exports agriculture and, 237 bias against, 635 exchange rates and, 150 export expansion, 612 export purchasing power, 610 external balance and, 680 LDCs and, 104 liberalization and, 601 primary export earnings, 626 tariffs and, 614 terms of trade, 198 See also trade balances; specific topics, countries extension services, 254, 328, 347–348 external debt, 64, 551, 552 external economies, 133, 383, 598 external equilibrium, 686 external shocks, 64 external stabilization, 485 factor endowment, 600 factor intensity, of commodities, 604–605 factor price distortions, 321, 328, 386 factor proportions theory, 594 failed states, 116, 117 families, 191 as entrepreneurs, 398 extended, 97 family-planning programs, 282, 298, 299, 304 farm families, in United States, famine, 234, 237 farming, 78, 97 collective, 259, 260, 261 communes, 260 contract, 228 cooperative, 259 cotton gin, 125–126 credit markets and, 251 domesticated animals and, 53–54 economies of scale and, 259 extension services, 254 farm households, 222, 223 farm prices, 66 fertilizer and, 256 green revolution and, 230–231 See green revolution household responsibility system, 261–262 insecticides, 281, 289 marketing and, 256 mechanization of, 250–251, 252 multinational corporations and, 228 peasant farms, 226 See peasant society poverty See poverty prices and, 629 private entities research, 255 productivity, 246, 248 property rights and, 249–250 rural services, 259 specialized, 227 state and, 259 storage and, 256 See also agriculture FDI See foreign direct investment Fei–Ranis model, 140 Fel’dman model, 69, 665 Fertile Crescent, 54 fertility rates, 282, 297, 305 feudal economy, 58, 91, 126 Index financial crises, 494, 551, 566, 639 See also specific countries Fisher index, 27 fishing, 238 food, 42 agriculture, 237 See agriculture aid and, 520 average production, 229 China and, 232 deficits and, 230 distribution of, 290 entitlements and, 290 FAO and, 245, 246 fish, 238 food-for-work program, 208 FSI and, 230 grains, 238 hunger and, 245 income and, 194 India and, 232 meat and, 238 nutrition and, 290, 353 output and, 237 population and, 284, 285 research and, 287 technology and, 287 total world production, 237, 266 Food and Agriculture Organization (FAO), 245, 246 food security index (FSI), 230 foreign aid, 501, 508, 511, 515, 517 foreign direct investment (FDI), 150, 501, 508, 528, 529, 530, 731 forward linkages, 136 Frank dependency approach, 145, 158 Franko, L G., 62 free-market liberalism, 598 free riding, 448 free trade, 91, 502, 603, 643 Free Trade Area of the Americas (FTAA), 645 Friedman, M., 149 FSI See food security index fundamentalists, 569 fungible aid, 522, 744 Furtado theory, 144, 158 G-7 See Group of Seven G-8 See Group of Eight G-10 See Group of Ten Gandhi, Mahatma, 46 GATS See General Agreements on Trade in Services GATT See General Agreements on Tariffs and Trade GDI See gender-related development index GDP See gross domestic product gender effects, 38–39, 192, 195, 296, 341, 407, 744–745 833 General Agreements on Tariffs and Trade (GATT), 21, 622, 744–745 General Agreements on Trade in Services (GATS), 631 generalized system of tariff preferences (GSP), 21, 625 genetic use restriction technologies (GURTs), 265 genetically modified organisms (GMOs), 264 genomics, 264 Genovese, E D., 44 genuine progress indicator (GPI), 455, 745 geographic targeting, 208 Gini index, 19, 179, 181, 184, 745 global distance learning network, 344 global production networks (GPNs), 745 global public goods, 287, 515, 745 global warming, 437 globalization, 6, 185–186, 266, 501, 745 anti-globalization, 10, 502–503 capitalism and, 502 See capitalism climate and, 437 competition and, 2, 615 defined, 501 environment and See environment free trade and, 502 GPNs, 745 labor costs, 606 middle classes and, 10 MNCs and, 228 See multinational corporations polarization and, 503 production sharing, 615 public goods, 287, 515, 745 self-reliance and, 45 trade in services, 29 See also specific topics GMOs See genetically modified organisms GNI See gross national income GNP See gross domestic product golden age, of growth, 79 Gorbachev, M., 71 GPNs See global production networks grains, 238 See also farming Grameen Bank, 204 Great Depression, 369 Greece, 84 green markets, 745 green revolution, 66, 198, 206, 222, 230–231, 239, 256, 287, 288 green taxes, 444 greenhouse effect, 437, 438, 443 gross domestic product (GDP), 30 deflator, 478 growth in, 564 information technology and, measurement errors, 33 purchasing power and, 33 world leaders in, 55 gross national income (GNI), 15 834 Index gross national produce (GNP), 745 catastrophe and, 30 developed countries and, 28–29 developing countries and, 29 exchange rate and, 29 GNI and, 15, 16 growth and, 75 household, 28 measurement errors, 33 modern growth and, 56 national-income data, 25 per capita, 467 PQLI indicators, 34 price level of, 25–26, 30 problems with, 25, 27, 33 production costs and, 28–29 purchasing power and, 30, 33 weighted indices for, 39 welfare and, 29, 30 Group of Eight (G-8), 746 Group of Seven (G-7), 80, 584, 746 Group of Ten (G-10), 746 growth, 123 Adelman–Morris theory, 737 ancient, 54 annual rates, 75 basic needs and, 43 capital formation and, 362 See capital computing rates, 16 defined, 15 development and, 15 drive to maturity, 129 econometric studies of, 363 employment and See employment endogenous, 155 expectations and, 48 exponential, 77 external trade and, 507, 591 GNP and, 75 income and, 210, 737 See income increase in inputs, 366 industry and See industrialization inflation and, 488 See inflation knowledge and, 364 liberalization and, 591–592 See liberalization limits to, 448 medieval, 54 modern, 56 neoclassical theory, 153 as normal condition, 128 poverty and, 165, 184, 185, 202, 212 R&D and, 157 rate of, 191 rationalism and, 47 redistribution and, 211 Rostow on, 128 saving and, 158 scientific method and, 47 sources of, 362 stages in, 128 staple theory, 626 takeoff stage, 128 technical progress and, 362, 364 trade and, 591 trickle-down theory, 211 See also specific topics, countries GSP See generalized system of tariff preferences GURTs See genetic use restriction technologies Hagen theory, 132, 400 Hamilton, A., 597, 600 Handbook of Economic Growth (Aghion/Durlauf), 13 Hardin, G., 423, 427, 458 Harrigan, J., 151 Harris–Todaro model, 317, 318, 746 Harrod–Domar model, 153, 162, 163 hawala system, 526 Hayami–Ruttan model, 252 HDI See human development index health, 42 education and, 334 investment and, 324 nutrition and, 205, 353 pandemics and, physical condition, 323 Heckscher–Ohlin theory, 594, 604 hedging, 567 Henry, J., 334 herding, 569 Heston, A., 72 Hicks, J R., 363 highly indebted poor countries (HIPCs), 515–516, 585, 746 HIPCs See highly indebted poor countries Hirschman model, 135, 158 historical methods, 53, 126 HIV/AIDS epidemic, 280, 324, 354, 355 Hong Kong, 63 households, 191 developing countries and, 28 family and See families farms See farming GNP and, 28 modeling of, 360 peasants See peasant society responsibility system, 118, 261–262 survey data, 217–218 units of, 181 women and, 222 housing, 42 human capital, 154, 157, 334, 335, 360 human development index (HDI), 35, 38–39, 52, 91, 169, 746 human freedom index (HFI), 96 human poverty index (HPI), 76, 168 human rights, 43 Human Rights Watch, 116 Index humanism, 59 hunger, 245 Huntington, S., 96 IBRD See World Bank ICCC See International Convention on Climate Change ICT See information and communications technology ICU See International Clearing Union IDA See International Development Association IFPRI See International Food Policy Research Institute IIE See Institute for International Economics illegal cities, 117 ILO See International Labor Organization Imagine There’s No Country (Bhalla), 183 IMF See International Monetary Fund immigration, 605 immunization, 194 imperialism, 60, 123–124 imports, 258–259, 482 DC policies, 622 external balance and, 680 industrialization and, 613 protecting, 65 substitution, 258–259, 482, 612, 613, 678 terms of trade and, 198 impossibility theorem, 450 impossible trinity, 638 incentives, 473, 704 income capital and, 367 consumption and, 295 demand and, 600 distribution of, 2, 179, 302, 472, 604 EAEH income, 28–29 earning ability, 338 education and, 339 employment and, 320 equality, 41, 210 See also income inequality expected, 318 food and, 194 income-gap approach, 178 income tax, 469, 472, 477 inequality in See income inequality inflation and, 487 labor-intensive goods and, 326 life expectancy and, 280 national income model, 504 non-cash income, 167 policies on, 465, 485 poverty See poverty rural, 190, 245 stability of, 471 taxes and, 474, 477 terms of trade, 610 urban jobs, 318 U.S and, 28, 190 835 wages See wages See also specific groups, countries income inequality, 4, 165, 212 assessment of, 207–208 between-country, 165 data on, 165 developed countries and, 190 economic policies and, 202 Gini index, 181 income categories and, 188 income levels and, 202 inverted U-shaped curve, 95, 202 personal income distribution, 180 policies to reduce, 202 poverty, 171, 202 See poverty rural, 239 variances in, 95 increasing returns to scale, 597 index of sustainable economic welfare (ISEW), 455 India, 57, 201, 372 affluence in, Barga operation, 247 call centers, capital cost in, 323 China and, 232 deindustrialization of, 145 democracy in, 201–202 entrepreneurs and, 406 farming in, 4, 6, 224 five-year plans, 70 food, 232 golden ages of, ICT production, individual firms and, 491 land reform, 247, 249 liberalization and, 202 Mahalanobis model, 69–70 monopoly rents, 491 Nehru and, 69–70 new industrial policy, 202 planning and, 659 poverty, 6, 173, 202 real incomes, 10 redistribution in, 249 software sector, Soviet model and, 69 transportation costs, 5–7 indicative plans, 22, 665, 689 indirect taxes, 469 individualism, 59 indivisibilities, 133, 385 Indonesia, 67 agriculture in, 197 economic growth, 196 financial crisis, 197 Nigeria and, 196 nutritional levels, 197 poverty in, 197 rural credit program, 198 836 Index induced innovation model, 252 industrialization, 58, 65, 100, 134, 185–186 advanced industrial society, 47 agriculture and, 99–100 China and, 723 consumer goods and, 71 developing countries and, 98 employment and, 314 high-tech, 156 import substitution and, 613 industrial concentration ratios, 727 Industrial Revolution, 128, 186, 371, 401, 405 infant industries, 597 informal sector and, 328 investments in, 70 manufacturing employment, 313 migration and See migration poverty and, 60 reforms and, 723 rural areas and, 262 small-scale, 328 stages in, 128 takeoff and, 140 turning point in, 140 urbanization and, 311, 317 See also specific topics, countries infant mortality, 34, 42, 194 inflation, 60, 64, 380, 465, 478, 481, 637 accelerated, 478 benefits of, 486 cost–push inflation, 481 costs of, 486 demand–pull inflation, 480, 741 distortions from, 712 dynamics of, 488 exchange rates and, 641 growth and, 488 income distribution and, 487 inflationary expectations, 483 interest rates and, 553 international balance and, 487 monetary inflation, 484 political inflation, 484 prices and, 471 ratchet inflation, 482 since 1970, 478 structural, 482 taxes and, 487 informal sector, 118 formal sectors and, 318 industry and, 328 labor force and, 322 manufacturing and, 102 information cost of, 368 distorted, 709 sparsity of, 165 technical knowledge, 368 information and communications technology (ICT), 2, 6, 7, 77, 370, 604, 748 computers and, 370 electronics and, 370 expenditures and, 375 GDP and, globalization and, 373 India and, investment and, 361, 371 liberalization and, productivity and, 369–371 infrastructure, 61, 133, 135 innovations, 156 agriculture and, 54 defined, 393 entrepreneurship and, 392 invention and, 368 research and, 368 sharing of, 54 stages in, 395 input–output analysis, 346, 367, 694, 695, 697, 703 insecticides, 281 Institute for International Economics (IIE), 181, 183, 569 Institutional Revolutionary Party (PRI), 116 institutional wage, 140 institutions, 108 basic services, 111 democratization, 717 developing countries, 95 institutional failure, 106, 116 lack of, 714 provision of basic services, 111 rule of law and, 113–114 See also specific institutions, topics integrated approach, 45 integrated pest management (IPT), 289 intellectural property rights (IPRs), 265, 632, 748 Inter-American Development Bank, 578 interest rates, 80, 321–322, 380 capital and, 323 inflation rate and, 553 negative real, 553, 712 intermediate goods, 29 intermediate technology, 46, 378 internal balances, 680, 686 internal instability, 601 International Bank for Reconstruction and Development See World Bank International Clearing Union (ICU), 571 International Convention on Climate Change (ICCC), 447 International Development Association (IDA), 210, 520, 542, 564, 581, 748–749 International Financial Architecture, 571 International Financial Institution Advisory Commission, 572 Index International Food Policy Research Institute (IFPRI), 289, 522 International Fund for Agricultural Development, 34, 230 International Fund for Agricultural Development (IFAD), 222 International Labor Organization (ILO), 165, 186 International Monetary Fund (IMF), 149, 152, 542, 571, 678, 749 adjustment programs and, 568, 681 Baker plan, 578 Brandt report, 679 conditionality, 678 debt restructuring, 576 ECA and, 683 financial crises, 573 liberalization and, 544 policy cartel and, 10 Stiglitz on, 570 World Bank, 679 international trade, 104, 503, 591, 730 See specific topics, countries Internet, 3, 372 intraindustry trade, 599–600 invention, 368 inverted U-shaped curve, 95 investment, 110, 501, 505 accelerator effect, 737 capital formation and, 361 closed economy and, 154 criteria for, 378, 455 factor price distortions, 386 fiscal incentives, 473 foreign investment and, 508 indivisibilities and, 385 information technology and, 361 investment rates and, 130 uncertainty and, 383 invisible hand doctrine, 124, 749 IPR See intellectual property rights IPT See integrated pest management Ireland, 76 iron, 321 iron law of wages, 125–126, 749 irrational exuberance, 569 irreversibility, 424 irrigation, 255 ISEW See index of sustainable economic welfare Islamic banking, 495 Japan, 45, 131, 567 borderless economy, 621, 737 capitalism in, 61 cartels and, 63 economic miracle, 63, 94 foreign aid, 515, 620 foreign trade policy, 62 golden age, 80 growth of, 74–76, 81 837 infrastructure in, 61 Iron Triangle, 110 Japanese model, 61 keiretsu system, 61–62, 567 Korea and, 66 labor productivity, 141 land reform, 247 late nineteenth century, 91 Lewis-Fei-Ranis model, 141 Meiji era, 61–62 Pakistan and, 593 rapid growth of, 221 Taiwan and, 66 World War I and, 141 yen, 65 zaibatsu, 61–62 Kalahari region, 145 keiretsu system, 61–62, 567 Keynes, J M., 320, 571 Keynesian theory, 320, 570, 749 Khrushchev, Nikita, 70–71 kleptocracy, 749 knowledge as capital, 334, 364, 368 Kohli, A., 113 Korea chaebol system, 67 competitiveness of, 65 educational investments, 66 government investment, 64 interest rates, 65 Japan and, 66 literacy index, 66 pollution and, 67 private conglomerates, 64 SOEs in, 64 takeoff and, 137 Korean–Taiwanese model, 63, 91–92 Kremer, M., 137 Kremer O-ring theory, 158 Krueger proposal, 573 Krugman, P., 76, 94 kulaks, 749 Kuznets curve, 187, 218, 749 Kuznets, Simon, 57, 186–187, 334 Kyoto Protocol, 287, 437, 443, 446, 448 labor force agricultural, 97, 262 appropriate technology and, 328 brain drain, 348 dependency ratios, 294 education and, 330, 345 elasticities in, 141 factor price distortions, 321–322 formal sector, 322 globalization and, 606 growth of, 292, 311, 313 informal sector, 322 838 Index labor force (cont.) job rationing, 330 labor aristocracy, 322 labor participation rates, 71 labor standards, 43 learning curve, 366 manual work, 351 marginal workers, 315 maximum labor absorption, 378 middle class, 23–27, 187 monopsonistic markets, 350 population and, 294 productivity and, 314–315, 334, 366 skill level, 242, 605, 606 supply curve, 139, 141, 351 training of, 345 underutilized, 311 unemployment See unemployment unskilled, 107 urbanization and, 311 wages, 321–322, 328 women in, 312 labor-intensive methods, 321–322, 326, 378 laissez-faire policies, 64–65, 124, 286, 597 land capital and, 239 Latin America abd, 239–242 natural resources, 414 poverty and, 246 property rights, 249 reform, 246, 247 sharecropping, 248 tenure system, 246 usufruct rights, 249 Laspeyres index, 26, 27 latifundios system, 146, 239–242 Latin America, 176, 239–242, 482 LDCs See less developed countries least developed countries (LLDCs), 23, 24, 749–750 Leninism, 69, 123–124, 142 Lenski study, 403 Leontief paradox, 594 less developed countries (LDCs), defined, 123, 529, 750 Lewis–Fei–Ranis model, 123–124, 138, 141, 158, 161, 750 Lewis model, 103, 138, 140, 158, 221, 317 Lewis, W A., 15–16, 138 liberalization, 59, 151, 689, 717 adjustment and, 700 defined, 591, 750 democracy and, 149 exports, 601 financial, 324, 489 foreign exchange and, 601 growth and, 591–592 IMF and, 544 individual firms and, 491 information technology and, international trade, 152, 591, 592 neoclassical theory and, 151–152 policy and, 733 programs for, 80 Soviet Union and, 717 World Bank and, 544 liberation, 44 LIBOR See London Interbank Offered Rate life expectancy, 34, 177–178, 244, 278–279, 280, 296, 324 lifeboat ethic, 458 limited wants theory, 351 limits-to-growth literature, 156, 286, 448 Lincoln, Abraham, 334 linkages, economic, 136 Lipset hypothesis, 114 Lipton, Michael, 243 literacy, 106, 195, 338 education and See education literacy index, 36, 48 unemployment and, 329 UPE and, 106 Little–Mirrlees model, 381, 387 LLDCs See least developed countries Lom´e conventions, 625 London Club, 565 London Interbank Offered Rate (LIBOR), 559–560 Lorenz curve, 179 low income countries (LICs), 239, 518, 519, 523, 531 luxury consumption, 603 Maastricht Treaty, 638 MAC See marginal abatement cost macroeconomic cycles, 524 Maddison, A., 54 Mahalanobis model, 69–70 malaria, 281, 353 Malaysia, 67, 199, 621 male dominance, 191 Malthusian theory, 124, 271, 284, 305, 448 management responsibility system, 723 Mankiw debate, 632 manufacturing sector, 102, 129 Mao Zedong, 44, 69, 71–72, 127, 254, 719 Marcuse, H., 47 marginal damage function, 429 marginal individuals, 403 marginal product model, 349 marginal units, 315 marginal workers, 315 market, 718 market socialism, 71, 663 Marxism, 22, 44, 123, 127, 157, 243 dependency theory and, 158 historical materialism and, 126 neo-Marxist theory, 2, 60, 142 Index reserve army of the unemployed, 127 Rostow on, 130 unemployment and, 127 mass consumption, 129 materialism, 126 matriculas consulares cards, 526 maturity, drive to, 129 Mauritius, 85, 344 meat, 238 media, 112, 344, 370, 374 medieval period, 54 Meltzer Commission, 572 Mexico, 38, 116, 506, 698 microeconomic studies, 137 microenterprises, 203 middle class, 23–27, 187 Middle East, 176 middle-income countries, 35, 189 MIGA See Multilateral Investment Guarantee Agency migration, 206, 308 Harris–Todaro model, 317 Lewis model, 317 macroeconomic cycles and, 524 neoclassical theory and, 155 policies to reduce, 325 remittances and, 523 rural–urban, 243, 316, 331 village reclassification, 316 world rates, 523 military-industrial complex, 716 military spending, 29, 114 Mill, J S., 112, 124 millennium development goals (MDGs), 16, 237, 622 mineral exports, 116 mixed economies, 405 mobile phones, 374 mobility, 404 modernization, 61, 96, 130, 186, 278–279, 301 monetary policy, 465, 466, 638 monopolies, 171, 368, 385, 599 communism and, 705 enterprise and, 405, 709 India and, 491 MNCs and See multinational corporations natural, 385–386 profits of, 602 public, 385–386 state and, 705 monopsonistic markets, 66, 350 monotonicity axiom, 179 Montreal Protocol, 287, 447 monuments, 132 Moore’s law, 373 moral hazard, 494 mortality rates, 34, 42, 194, 277, 712 decline in, 278 DRF and, 581 839 external, 565 modernization and, 278–279 natural resources and, 582, 741 restructuring, 576 service of, 552, 563 Mosley, P., 151 motivation, economic, 350, 399 multi-party systems, 114 multilateral aid, 446, 520, 542 Multilateral Investment Guarantee Agency (MIGA), 531 multinational corporations (MNCs), 147–148, 527, 535, 699 benefits of, 533, 537 costs of, 538 farming and, 228 foreign investment from, 534 globalization and, 228 LDC interests and, 539 technology transfer, 539 Mundell model, 486, 488 Murphy–Shleifer–Vishny model, 134 Myint, H., 132 Myrdal, G., 351 Mystery of Capital (de Soto), 117 NAFTA See North American Free Trade Association nation-states, 59, 91 national income model, 452, 504 natural disasters, 214 natural resources, 423 as capital, 450–451 common property, 423 deterioration of, 452 environment and, 413, 414 importance of, 413 land and, 414 pollution and, 426 resource curse, 419–420 negative externalities, 299 Nehru, J., 69–70, 143 neo-Marxism, 2, 60, 142 neoclassical theory, 13, 124, 149, 153, 155, 156–157, 158 critique of, 151 defined, 751 liberalization and, 151–152 Washington consensus, 151 neopatrimonial rulers, 109 net investment, 129 net material product (NMP), 704 net national product (NNP), 129 net primary productivity (NPP), 451, 751–752 net transfers, 564 new growth theory, 155, 156, 161, 171 newly industrializing countries (NICs), 24, 25, 63, 65, 67, 600, 752 Newtonian theory, 124, 128, 130 840 Index NGOs See nongovernmental organizations Nigeria, 19, 50, 147–148, 196, 197, 224 nineteenth century, 57 Nkrumah, K., 263 NMP See net material product NNP See net national product nomenklatura system, 706, 708, 717, 752 non-cash income, 167 nonconcessional loans, 540 nongovernmental organizations (NGOs), 110, 287, 752 nonrenewable resources, 308–309 nontariff barriers (NTBs), 624 Nordhaus–Boyer model, 445 normal distribution, 182 North Africa, 176 North American family, North American Free Trade Agreement (NAFTA), 645 North, D C., 108, 152 North Korea, 109 North–South interdependence, 503 Novartis/ADM, 228 NPP See net primary productivity NTBs See nontariff barriers nuclear families, 97 numeracy, 338 Nurkse, R., 133 nutrition, 165, 205, 290, 353 Nyerere, J K., 23 O-ring theory, 137, 752 ODA See official development assistance OECD See Organization of Petroleum Exporting Countries official development assistance (ODA), 510, 511, 516 oil, 64, 116, 196, 198, 414, 415, 417, 449, 503 oligopolies, 385, 534 on-the-job training, 347 one-party systems, 114 OPEC See Organization of Petroleum Exporting Countries Organization for Economic and Cooperation and Development (OECD), 149, 295–296, 374–376, 381, 416, 510, 522, 541, 543–544, 574, 752 Organization of Petroleum Exporting Countries (OPEC), 23, 416, 627, 646, 752 outsourcing, 6, 7, 10, 632 overflow theory, 349, 350 ozone, 438 Paasche index, 26, 27 Pakistan, 85, 199, 593 PAMSCAD See Program of Action to Mitigate the Social Costs of Adjustment pandemics, Papua New Guinea, 703 parasitic diseases, 360 parastatal enterprises, 752 Paris Club, 565, 752 partimonialism, 116 Patel, S J., 79 patent protection, 633 patrimonialism, 19, 113 patron–client systems, 204 Pearson, L., 88 peasant society, 97, 226, 245, 266, 301 See also farming; poverty Penn model, 31, 33 perestroika, 71, 752 perfect competition, 124 pesticides, 281, 288, 289 petroleum See oil pharmaceuticals, 633 Philippines, 85, 154 physical quality of life index (PQLI), 34, 752 piquetero movement, 309–316 planning centralized, 661 duration of plans, 691 Fel’dman model, 665 goals of, 690 India and, 659 instruments of, 690 planning models, 692 Soviet model and, 658 Poland, 84, 718, 732 polarization, 503 policy cartel, 10, 586 policymaking state, 655 polio vaccine, 353 political systems, 95, 96, 107, 263 See specific topics, countries pollution, 67, 420, 426, 438 polygyny, 222 population age structure, 292, 305 congestion and, 6, 291 births See birth rate deaths See mortality rates development and, 271, 284 environmental problems and, 582 food and, 284, 285 iron law of wages, 125 labor force and, 294 mortality rates See mortality rates policies and, 325 population momentum, 284 population programs, 205 productivity and, 105 rapid growth of, 105 stationary, 284 wages and, 125 world, 271, 273 portfolio investment, 527 Porto Alegre conferences, 10, 753 Index potato-is-a-potato rule, 31 poverty, 3–4, 11–12, 165, 245 absolute, 171, 179, 194, 195, 737 adjustment programs and, 218 agricultural research and, 254 antipoverty programs, 206 capitalism and, 60 children and, 196 China and, 729 concepts of, 176 cultural relativity of, 171 data on, 166–167 defined, 171, 172, 178 education, 339 education and, 168–169 elasticity of, 17–18, 184 environmental stress and, 420 exchange rate and, 257 Gini index, 19 growth and, 60, 165, 184, 185, 202, 212 headcount approach, 178 income and See income inequality India and, 6, 173 industrialization and, 60 integrated war on, 208 land distribution and, 246 measures of, 176, 217–218 monotonicity axiom, 179 multidimensional, 167 $1/day poverty, 194, 195, 220 overstating, 16 policies to reduce, 202, 543 poverty index, 179 poverty-weighted index, 40 PRGF and, 543 regional rates, 174, 175 rich/poor gap, 3, 20–21 rural areas, 220, 222, 239, 245 seasonal, 245 target groups, 206–207 technology and, 252 $2/day poverty, 195 vicious circle theory, 131 war, 212 weak transfer axiom, 179 women and, 191 power loom, 125–126 power sources, 143–144, 252 PPP adjustments, 33 PQLI See physical quality of life index Prebisch–Singer thesis, 608, 609, 753 predatory regimes, 109 preferential trade arrangement, 642 PRI See Institutional Revolutionary Party prices comparative advantage and, 593 decontrol, 150 elasticities, 133 exchange rate and, 257 841 farms and, 629 GNP deflator, 25–26 inflation and, 471 Laspeyres index, 26 Paasche index, 26 policies and, 257 price signals, 704 scarcity and, 710 stability of, 471 steel and, 593 textiles and, 593 trigger mechanisms, 625 unemployment and, 471 primary-product export, 104, 611, 626 Principles of Political Economy and Taxation (Ricardo), 124 privatization, 150, 151, 677, 697, 707–708 benefit–cost calculations, 383 nomenklatura, 707–708 pitfalls of, 698 private sector and, 692, 699, 700 shadow prices and, 387 product cycle model, 595 product differentiation, 599 productivity agricultural, 224 differences in, 334 ICT and, 369–370, 371 importance of, 361 labor and, 334, 366 population, 105 production function, 153, 308 productivity paradox, 370 technical progress and, 362 professional training, 345 Program of Action to Mitigate the Social Costs of Adjustment (PAMSCAD), 210 progressive income tax structure, 469 progressive tax, 473 proletariat, 127 promarket arguments, 661 property rights, 117, 121, 150–151 farm and, 249–250 IPR and, 632 land distribution and, 249 long-term, 409 secure, 249 protective tariffs, 65, 136, 244, 598–599 Protestant ethic, 58–59, 93–94, 402, 403 protesters, 309–316 public enterprises, 553, 690, 692, 695, 699 public expenditures, 150, 469, 700 public goods, 424, 434, 690 Public Law 480 (U.S.), 521 public monopolies, 386 public works projects, 262 purchasing power, 2, 30, 33, 753 QWERTY keyboard, 603 842 Index ratchet inflation, 482 rationalism, 47, 59 real appreciation, 636 real economic growth, 16 real exchange rate (RER), 258–259, 636 recession, 465 reforms, 677, 707–708 adjustment and, 714 agricultural, 720 capital market and, 689 China and, 723, 727 exchange rate and, 689 industrial, 723 shock therapy, 703–704 SOEs and, 728 Soviet Union and, 704 trade and, 689 regional integration, 642 regional trade organizations (RTOs), 644, 645 Reichel model, 37 reinvestment, 386 relative deprivation, 213 religion, 47, 303 remittances, 508, 523 renewable resources, 414 rent seeking, 113, 115, 121, 122 replacement rate, 284 RER See real exchange rate rescheduling debt, 585 R&D programs, 369, 604 basic research, 368 development and, 368 growth and, 157 innovation and, 368 See innovation investment in, 157 technology and, 157, 206 See also technology resource allocation theory, 360, 472 returns to scale, 597 revolutions, political, 60 Ricardian model, 124–125, 157, 182 rights, 233 rigid factor proportions, 315 Rio summit, 443, 445 risk, 382, 559 Rodrik, D., 64 Roemer model, 418 rolling plan, 691 Romer, P., 89 Rosenstein-Rodan, P N., 133 Rostow model, 68, 123, 128, 130, 157, 161, 756 RTOs See regional trade organization rules of origin, 643 ruling elites, 213 rural areas, 78 agriculture See agriculture development, 223 electrification, 85 farms See farming formal sectors, 318 income in, 190, 239, 245 industry and, 262 informal sector, 318 migration from, 243, 316, 325, 331 peasants See peasant society population, 220 See population poverty and, 220, 222, 239, 245 See poverty Rural Credit Program, 198, 223 rural cultivators, 97 rural society, 222 rural–urban differentials, 224 schooling, 242 services in, 259 unemployment and, 325 vulnerability of, 245 women and, 192 See also specific countries, topics Sachs proposal, 573 Sachs–Warner approach, 591 SADC See Southern African Development Community Salam, A., 349 sales tax, 472 San-speaking peoples, 145 sanitation, 42 SARS See severe acute respiratory syndrome Saudi Arabia, 85 savings, 131, 150, 295, 386, 694 adjusted net, 737 closed economy and, 154, 158, 195 Lewis on, 138–139 neoclassical theory and, 158 personal saving, 132 rates of, 102 sustainability and, 453 scale, returns to, 597 scarcity, and prices, 710 scarcity of resources, 43 schooling See education Schultz, T W., 154, 367 Schumacher, E F., 46, 378 Schumpeter models, 13, 161, 393, 394 scientific method, 47 SDA See Social Dimensions of Adjustment Projects SDRs See special drawing rights second world, 22 sectoral adjustment loans (SECALs), 568 Seers, D., 11, 16 seigniorage, 490 self-assessment, 399 self-reliance, 45, 323 self-sustained growth, 140 self-targeting, 208 Sen, A K., 45, 176, 233 services sector, 100, 715 severe acute respiratory syndrome (SARS), 72 shadow prices, 387 Index shantytowns, 117 sharecropping, 248 Shleifer, Andrei, 134 shock therapy, 702, 703 shocks, external, 64 Sierra Leone, 204, 212 Silicon Valley, 7–8, 156 Simon, J., 286 Singapore, 63 skill levels, 242, 605 slavery, 44 small markets, 132 Small-Scale Enterprise Credit Program, 203 Smith, A., 124, 149, 597 social benefit–cost analysis, 379, 383, 387 social capital, 112, 121 social democracy, 22 Social Dimensions of Adjustment Projects (SDA), 210 social goods, 467–468 social origins, 404 social profitability, 136, 366 social security, 329 socialism, 68, 127, 143, 192, 260 Afro-Asia and, 657 China and, 720 market socialism, 71, 663 motivation socialization, 350 ODA countries, 510 Poland and, 718 second world and, 22 socialist economies, 22, 405, 407 socialist governments, 22, 127, 704 worker-managed, 664 socio-cultural dualism, 351 socioeconomic development, 301 SOEs See state-owned enterprises soft budget constraint, 657, 712–713 soil degradation, 421, 433 Solow model, 153, 154, 155, 370 South Africa, 37, 192 South Commission, 23, 44 South Korea, 63, 183, 247 Southern African Development Community (SADC), 533 Soviet Investment Model, 70 Soviet Union/Russia, 22, 144, 700 China and, 70–71, 260, 704 collapse of trade, 716 communism and, 716 controlling plan, 658–659 decollectivized, 733 decontrol and, 708 development model, 68, 70 Fel’dman–Stalin plan, 69 GDP, real, 702 Gorbachev and, 71 inflation in, 703 Khrushchev and, 70–71 843 liberalization and, 717 nomenklatura and, 717 perestroika and, 71 planning and, 658 reform, 704 Russian revolution, 144 Soviet collapse, 71 Stalinist model, 68, 69, 755 transitions to the market, 732 Yeltsin and, 71 special drawing rights (SDRs), 633–634, 755 specialization, 128, 603, 632 spinning jenny, 125–126 sports, 368 squatters, 117 Sri Lanka, 201 stabilization, 677, 683 Stages of Economic Growth (Rostow), 128 stagflation, 465 stagnation, 124 Stalinist model, 68, 69, 755 standard deviation, 182, 739 staple theory, 626 Starbucks, 31 state-owned enterprises (SOEs), 742, 756 China and, 720, 728 definition of, 691 importance of, 691 public enterprises and, 691, 699 reform and, 728 stationary economy, 394 statistics, 11–12 steam engine, 125–126 steel, 321 sterilization, 298 Stiglitz, J., 112, 152, 366 Stiglitz–Sachs school, 569 Stolper–Samuelson theorem, 604 structural adjustment, 543, 568, 737 structural economists, 483, 682, 756 sub-Saharan Africa, 171, 195, 204, 211, 686 AIDS and, 280, 355 average food production, 229 effectiveness of aid, 516 food deficits, 230 food output, 266–267 income growth, 355 India and, 230–231 institutional failures, 231 leading debtors from, 566 net transfers, 564 rural poor, 223 urban areas, 356 subjective well-being, 46 subsidies, 206 subsistence farming, 226–227, 266 subsistence levels, 284–285 substitution, 315, 612 suburbanization, 129 844 Index Summers, R., 72 superior–subordinate system, 204 supply side theory, 131 surplus, 60, 125 sustainability, 102, 413, 453, 455 Swedish International Development Agency, 685 Taiwan, 63 interest rates, 65 investment and, 64 Japan and, 66 land reform, 247 pollution and, 67 takeoff and, 137 takeoff, 128, 130, 137, 140, 756 Tanzania, 260 targeting, 207, 208, 691 tariffs, 244, 472, 596, 597, 614 taxes, 713 administrative feasibility, 474 cascade tax, 475 collection of, 475 direct taxes, 469 elastic, 469 goals of, 468 incentives, 244 income and, 469, 472, 477 indirect, 469 inflation and, 487 political constraints, 476 ratios, 467 revenue and, 468 sales tax, 472 value-added tax, 472, 475 Taylor, C., 109 technology, 2, 347, 367 appropriate technology, 737 borrowed, 65, 372, 598 capital investment and, 102, 239 creativity and, 400 Cultural Revolution, 327 endogenous, 156, 751–752 entrepreneurs and, 407 food and, 287 growth and, 171, 362, 364, 751–752 ICT and, 361 inadequate, 102 innovation and, 252 Malthus on, 284–285 natural resources and, 309 poverty and, 252 price weights for, 27 productivity and, 362 progress and, 715 R&D and, 157, 206 skills and, 347 technical knowledge, 309, 367 unsuitability of, 321 See also specific topics, technologies telecommunications, 2, 7, 372, 376 teleconferencing, 344 terms of trade, 198, 608, 610, 611 TFP See total factor productivity Thailand, 67, 85–86 theory, defined, 123 Theory of Social Change (Hagen), 400 third world, defined, 22, 756 time lapse, in estimates, 699 total factor productivity (TFP), 71, 361, 370, 757 township and village enterprises (TVEs), 720, 722, 757 Toye, J., 151 tractorization, of farming, 252 trade balances, 415, 689, 738 comparative advantage, 592 deficits and, 415, 508, 554, 619, 738 environment and, 607 exchange rate and, 689 growth and, 591 intra-industry, 599 trade barriers, 25 trade creation, 644 trade diversion, 644 trade in services, 630 trade-related intellectual property (TRIPS), 633 traditional societies, 102, 130 tragedy of the commons, 423, 427, 458 training, 204, 345 See also education transaction costs, 425 transfers, 206 transformation, in agriculture, 220 transitional economies, 23, 407 transparency, 112 Transparency International, 122 transport costs, 256 trigger price mechanisms, 625 Trinidad terms, 584 TRIPs See trade-related intellectual property tropical climates, 433, 446 See specific countries Trotsky, L., 659 Turnkey projects, 540 TVEs See township and village enterprises ujamaa socialism, 260 UN Conference on Trade and Development (UNCTAD), 22, 516–517, 626–627, 686, 757 UN Development Program (UNDP), 35, 39, 52, 96, 149, 168 unbalanced growth, 132–133, 135, 136 uncertainty, 382, 383 unconditional convergence, 91 underdeveloped countries, 145 underutilized labor, 311 unemployment, 205 causes of, 321 disguised, 314, 331 education and, 324, 329 labor force and, 292, 314, 321, 325 Index policies for reducing, 325 prices and, 471 rural–urban migration and, 325 underemployment, 310 western approaches to, 319 UNICEF, 194 United Kingdom, 55 United States Bush administration, 299 capital inflows to, 546 China and, 25 Declaration of Independence, 43 dollar, 64, 65, 635, 645, 646 See also specific topics dollar See dollar, U.S electrification and, 371 extension services, 255 foreign aid and, 65, 511 gender and, 407 GNP of, 49 HPI and, 76 IMF and, 544 income differences, 28 incomes in, 90–91, 190 living conditions in, 77–78 as a model, 76 ninteenth century and, 77 North American family, ODA and, 511 OPEC and, 646 Public Law 480, 521 recipients of aid, 514 social mobility, 404 trade agreements, 645 trade deficits, 619 trigger price mechanisms, 625 twentieth century and, 77 See also specific topics, organizations urbanization, 58, 308 congestion and, 291 defined, 243 formal sectors and, 318 forms of, 243 income and, 318 industrialization and, 311, 317 informal sector, 318 labor force and, 138–139, 311 living conditions, 79 policies of, 243 rural areas and, 318 schooling and, 242 Uruguay Round, 624 user rights, 424 Usher model, 32–33 usufruct rights, 249 UV radiation, 438 value-added tax (VAT), 111, 469, 472, 475 variance, 182 845 variation, coefficient of, 739 Venice, 55 vertical integration, 534 vicious circle theory, 123, 131, 158, 161 villages, 316 Vishny, R., 134 vocational education, 347 von Hayek, L., 149 wages, 606 efficiency wage, 379 income and, 379 See income iron law of, 125 labor and, 321–322, 328 population and, 125 prices and, 322 skill level and, 605 Wagner’s law, 468 Wallerstein, I., 161 war, 117, 132, 212 Washington consensus, 151, 152, 161 water, 42, 194, 255, 420, 428, 429 Watt, J., 370 weak transfer axiom, 179 wealth-sharing, 66 Weber, Max, 59, 93–94, 116, 402, 403 welfare programs, 29 Western economic thought, WHO See World Health Organization Williamson, J., 31 Wilson, E O., 436 women, 39 commercialization and, 227 eudcation of, 341 female-headed households, 195 female to male ratio, 192, 193 GDI and, 38–39, 744–745 gender differences, 38–39, 192, 195, 296, 341, 407, 744–745 household, 222 income of, 192, 195 labor force and, 192, 312 life expectancy, 296 “missing” women, 192 poverty and, 191 role of, 303 rural economy and, 192 worker-managed socialism, 664 World Bank, 1, 51, 94, 149, 152, 173, 178, 181, 183, 542, 758–759 adjustment programs, 568, 681 Annan proposal, 586 basic needs and, 42 classification of development, 21 consumption inequality, 183 debt reduction facility, 741 ECA and, 683 educational resources, 344 green national accounts system, 102 846 Index World Bank (cont.) growth rate used by, 16 HIPCs and, 586, 746 IMF and, 679 interest subsidies, 677 laissez-faire theory and, 64 liberalization and, 544 policy cartel, 10 programs of, 51 world development indicators, 51 World Economic Forum (Davos), 10, 741, 758–759 World Food Program, 290 World Health Organization (WHO), 194, 324 World Links, 344 World Social Forum, 10, 753 World Trade Organization (WTO), 21, 25, 111, 622, 759 World War I, 56–57, 141, 142 World War II, 81, 92 Yamamura, K., 63 Yeltsin, B., 71 yen, 65 Yew thesis, 18 Yugoslavia, 664 zaibatsu system, 61–62 Zaire, 557 Zapatista army, 38 zero marginal productivity, 314–315 .. .ECONOMIC DEVELOPMENT Fourth Edition In this fourth edition of his textbook, E Wayne Nafziger analyzes the economic development of Asia, Africa, Latin America, and EastCentral Europe The treatment... themes of poverty, inequality, unemployment, the environment, and deficiencies of people in less-developed countries, rather than esoteric models of aggregate economic growth The guide to the readings,... Humanitarian Emergencies (2000) He has held research positions at the U.N University’s World Institute for Development Economics Research, the Carter Center, the East–West Center, and in Nigeria, India,