Pol 313

POL 313 homework assignment 3 (chapters 4 and 5)

Due July 24, 2015

Name: ___ _________________

INSTRUCTIONS: Put your name and write ALL answers on this sheet after reading the assigned chapters (10 points each).

CHAPTER 4: DEVELOPMENT AND POLITICAL ECONOMY

1. What does the Gini coefficient measure? The Gini coefficient measures the inequality among values of a frequency distribution (for example, levels of income)

2. What is the difference between GDP per capita and GDP per capita “at PPP”? Identify the acronyms GDP and PPP in your answer. As for gross domestic product (GDP), it is referring to how much earning is counted toward each individual for that particular country and purchasing power parity (PPP) is the adjustment made to income measures to account for differences in cost of living. A good example of this would be such as a low income country like Africa where the GDP is about $400 where that doesn’t seem like much but when you refer to the PPP of that country is goes up to about $1000. On the flip side, where country with high GDP it works vice versa where the GDP is high but the PPP is low.

3. Identify the key arguments of the market-led approach to development. A leading argument in development is that free markets are the basis for creating wealth. As stated by Adam Smith, 1776, Self-interested economic decisions of individuals (division of labor) would lead to the enlargement of society’s welfare mediated by self-regulating nature of the market place (the invisible hand). Nowadays, this approach is called neoliberalism. Privatization where transfer of control from public to private and keep government small is another approach.

4. What is the argument behind the idea that the state can promote development better than the market? It is a theory that high-quality states can spur development, while low-quality states harm it. It is argued that is pushes investment, coordinates among actors, protects domestic...