Development Economics From the Poverty to the Wealth of Nations

by Hayami, Yujiro; Godo, Yoshihisa

• ISBN13: 9780199272716
• ISBN10: 0199272719
• Edition: 3rd
• Format: Paperback
• Copyright: 2005-04-14
• Publisher: Oxford University Press

Summary

This book provides a comprehensive, systematic treatise on development economics, combining classical political economy, modern institutional theory, and current development issues. It addresses one basic question: Why has a small set of countries achieved a high level of affluence while the majority remains poor and stagnant? This fully revised and updated third edition also incorporates analyses of several recent changes and newly emerged problems relevant to the global economy.

Author Biography

Yujiro Hayami is Chairman of the Graduate Faculty at the Foundation for Advanced Studies on International Development and Professor at the National Graduate Institute of Policy Studies, Tokyo. Yoshihisa Godo is Associate Professor of Economics at Meijigakuin University and Visiting Associate Professor at the National Graduate Institute for Policy Studies, Tokyo.

Table of Contents

List of Figures	xv
List of Tables	xvii
Introduction	1	(1)
Scope of development economics	2	(3)
Organization of the book	5	(4)
A Theoretical Framework for Economic Development	9	(22)
Development of the Social System	9	(7)
A model of dialectic social development	9	(3)
A historical example	12	(2)
Marx and new institutionalism	14	(2)
The Theory of Induced Innovation	16	(11)
Induced technological innovation	16	(4)
Induced institutional innovation	20	(1)
Logic of political market	21	(4)
Historical path dependency	25	(2)
Developing Economies in the Light of the Theoretical Framework	27	(4)
A Comparative Perspective on Developing Economies	31	(32)
Economic Growth and Structural Change	32	(10)
Per capita GDP and its growth	32	(5)
Changes in industrial structure	37	(5)
Sructure of Capital Accumulation	42	(7)
Capital formation and savings in economic growth	43	(2)
External debt and inflation	45	(4)
Accumulation of Human Capital	49	(5)
Measurement of human capital	50	(1)
Human capital investment and economic growth	51	(3)
Population, Natural Resources, and Foods	54	(9)
Population pressure on natural resources	54	(2)
Population growth vs. food supply	56	(7)
Population Growth and the Constraint of Natural Resources	63	(29)
Population Growth in Economic Development	63	(10)
Historical changes in world population	64	(3)
Demographic transition	67	(3)
The case of India	70	(3)
Economic Theories of Population Growth	73	(5)
The Malthus model	73	(1)
The household utility maximization model	74	(4)
Theories of Resource Constraint on Economic Growth	78	(14)
From Malthus to the Club of Rome	78	(2)
The Ricardo model	80	(5)
The dual economy model	85	(7)
Breaking the Natural Resource Constraint	92	(30)
Potential of Science-Based Agriculture	92	(4)
A Perspective on the Green Revolution	96	(11)
Development and diffusion of modern varieties	97	(2)
Conditions of technology transfer	99	(5)
External and internal land augmentation	104	(3)
Barriers to Induced Innovation	107	(8)
Problems in Africa	109	(2)
Whither the Green Revolution?	111	(4)
Development via Natural Resource Slack	115	(7)
Colonialism and the vent-for-surplus theory	116	(1)
The staple theory	117	(2)
The Dutch disease	119	(3)
Capital Accumulation in Economic Development	122	(39)
From Adam Smith to Marx	123	(10)
Capital in Adam Smith	123	(2)
Ricardo revisited	125	(1)
The Marx model of capitalist development	126	(5)
The Marx model and the efficiency wage theory	131	(2)
Development Theories and Policies after World War II	133	(6)
The theory of balanced growth	134	(1)
Application of the Harrod--Domar model	135	(1)
The model of low-equilibrium trap	136	(2)
Development theories and policy choice	138	(1)
Neoclassical Production Function and Growth Model	139	(6)
Different assumptions of the production function	139	(2)
The Solow--Swan model	141	(4)
Growth Accounting Test	145	(6)
The growth-accounting equation	145	(3)
Sources of modern economic growth	148	(3)
Changes in the Pattern of Economic Growth	151	(10)
A historical extension of growth-accounting	152	(3)
A trap in the Marx-type growth	155	(6)
Patterns and Sources of Technological Progress	161	(30)
The Marx vs. the Kuznets Pattern of Economic Growth	161	(7)
Stylization of the two patterns	162	(2)
Trends in the rates of saving, interest, and wages	164	(4)
Technological Conditions of the Two Growth Patterns	168	(5)
The shift in the industrial technology regime	168	(1)
The shift in the demand structure	169	(2)
Borrowed technology and the Marx-type growth	171	(2)
Searching for the Sources of Technological Progress	173	(18)
Accounting for TFP growth	173	(3)
Schooling and economic growth	176	(5)
Increasing returns and the endogenous growth model	181	(3)
Schumpeter and centrally planned economies	184	(4)
Institutional conditions of borrowing technology	188	(3)
Income Distribution, Poverty, and Environmental Problems	191	(51)
Inequality and Poverty	191	(18)
Concepts and measurement of income distribution	191	(4)
Concepts and measurement of poverty	195	(3)
Patterns of changes in inequality and poverty	198	(11)
Causes of Inequality	209	(7)
Changes in factor shares	209	(1)
The dual economic structure	210	(1)
Agriculture--non-agriculture income differential	211	(2)
On the redistribution of incomes and assets	213	(3)
Economic Stagnation and Poverty	216	(7)
Income distribution effects of the Green Revolution	217	(3)
A comparison of two villages in Indonesia	220	(3)
Environmental Problems in Economic Development	223	(19)
The core of environmental problems	224	(2)
Rural poverty and environmental destruction	226	(2)
Industrialization and environmental pollution	228	(4)
Lowering the peak of the inverted-U-shape curve	232	(3)
Towards global coordination	235	(7)
Market and State	242	(68)
The Economic Functions of the Market and the State	242	(8)
Efficiency of the competitive market	244	(1)
Market failure	245	(2)
Government failure	247	(2)
On the choice of economic system	249	(1)
Around the Infant Industry Protection Argument	250	(7)
Market failure in dynamic economy	251	(1)
Ricardo vs. List	252	(1)
The Listian trap	253	(1)
The import-substitution industrialization policy	254	(3)
The Rise and Fall of Developmentalist Models	257	(11)
The limit of information and the role of ideology	258	(1)
Defeat of the old developmental market economies	259	(4)
Collapse of the centrally planned economies	263	(2)
Trap of populism	265	(3)
Success and Failure of the New Developmental Market Economies	268	(12)
The system of new developmental market economies	268	(2)
The source of success	270	(7)
Beyond achieving the catch-up goal	277	(3)
Resurgence of Market Liberalism and its Consequences	280	(15)
The structural adjustment policy of the IMF and the World Bank	280	(2)
Recurrent crises in Latin America	282	(6)
Financial crisis in East Asia	288	(7)
From the Washington Consensus to the Post-Washington Consensus	295	(15)
Criticisms of the Washington Consensus	295	(3)
Poverty reduction as an immediate objective	298	(5)
The post-Washington Consensus prospect	303	(7)
The Role of Community in Economic Development	310	(39)
The Economic Functions of Community	311	(6)
Prisoner's dilemma	312	(1)
Trust as a social capital	313	(3)
Supply of local public goods	316	(1)
Rural Organization in Developing Economies	317	(11)
Dominance of peasants	317	(4)
Management of common-property resources	321	(3)
Landlord--tenant relations	324	(4)
Economic Rationality in Community: A Perspective from Philippine Villages	328	(11)
Labour hiring by peasants	329	(2)
Income and work-sharing	331	(1)
Changes in the sharing system	332	(3)
The role of community norm	335	(3)
Egoism and altruism	338	(1)
The Community in Market Development	339	(7)
Ethnic networks and guilds	340	(1)
From the putting-out to the modern, subcontracting system	341	(2)
Overcoming the community failure	343	(3)
Towards an Optimal Combination of the Community, the Market, and the State	346	(3)
Tradition and Modernization: A Concluding Remark	349	(13)
Institutional Innovation for Technology Borrowing	349	(2)
The Experience of Japan	351	(4)
Multiple Paths to Economic Modernization	355	(7)
Appendix A: Theoretical Supplements to Technological Progress	362	(12)
Increases in the capital--labour ratio and shifts in production function	362	(1)
The classification of technological change	363	(4)
Changes in the trends of factor prices and factor shares	367	(1)
Possibilities for induced innovation	368	(2)
Interpretation by the meta-production function	370	(2)
Mathematical analysis of changes in factor shares	372	(2)
Appendix B: The Pigou Theorem on Equivalence between Tax and Subsidy in Removing Externality	374	(4)
Appendix C: Theories on the Choice of Land Tenure System	378	(5)
Bibliography	383	(32)
Index of Names	415	(6)
Index of Subjects	421