OVERVIEW OF COURSE
REQUIRED TEXTS
REFERENCE MATERIAL ON ECONOMIC DEVELOPMENT
COURSE ORGANIZATION
ASSIGNMENTS
DETERMINATION OF COURSE GRADE
INSTRUCTOR'S POLICIES
PAPER ASSIGNMENT
STUDY GUIDE FOR THE MIDTERM EXAM
MIDTERM EXAM
FINAL EXAM
The focal countries are Hong Kong (a unitary economy if not a country), Indonesia, Korea, Malaysia, Singapore, Taiwan, and Thailand. The emphasis is on understanding the logic underpinning their strategies of economic development; the issues dealt with are the “big picture” issues relating to development strategy. None of these countries will be dealt with in any real depth; rather, the concern is with the “stylized details” of their development, both in terms of policy and performance. Dealt with hardly at all are the many Asian economies which have experienced disappointing economic performance over the entire past half century. The causes of their problematic development should be apparent in general terms once the lessons of success are understood.
Exploitation of the evolving forces of globalization has been fundamentally central to the development of the successful East Asian economies. Thus it is difficult to comprehend the sources of stellar growth in the East Asian economies – including China since the early 1980s and India far more recently – without having a well informed comprehension of globalization in its many salient dimensions. Accordingly, the course also covers – to a degree that might otherwise be considered disproportionate or excessive – the elements and ingredients of globalization.
K&W - N.D. Kristof & S. WuDunn, Thunder from the east: portrait of a rising Asia, 2000; 352 p.EAM - World Bank, The East Asian Miracle: economic growth and public policy, 1993; 389 p.
LEW – L.E. Westphal, “Technology Strategies for Economic Development in a Fast Changing Global Economy.” Economics of Innovation and New Technology, 11 (August/October 2002), 275-320.
REA - J.E. Stiglitz & S. Yusuf, eds., Rethinking the East Asian miracle, 2001, 526 p. (not all to be read).
Japan - E.J. Lincoln, Arthritic Japan: the slow pace of economic reform, 2001, 222 p.
Dicken – P.Dicken, Global shift: reshaping the global economic map in the 21st century, 4th ed., 2003, 601 p. (not all to be read by every student; reading to be divided among students).
Note: The total cost to purchase all of the texts will undoubtedly equal or surpass about $200. Pairs or triples of students might therefore want to coordinate their text purchases to share at least one text in common.
Class periods will be devoted to a mix of lecture and discussion. As may be inferred from the determination of one’s course grade, students are expected to be well prepared, having done the week’s reading by the Thursday session. Students are wholeheartedly encouraged to use these sessions to seek clarification of anything in the week’s reading.
There will be one paper assignment, toward the end of the semester, framed around the Dicken reading and it’s application to analyze China’s approach to taking advantage of the forces of globalization.
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Weeks 1 through 2: |
Read all of K&W. |
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Weeks 3 through 5: |
Read all of EAM, omit appendices except 3.1; ~293 pages;
also read all of LEW paper. |
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Week 6: |
Week 6: read REA, ch.s by Yusuf, Ito, &
Stiglitz; ~ 110 pages. |
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Week 7: |
Prepare for midterm. |
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Spring Break: |
"ENJOY!" |
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Week 8: |
Read REA, ch.s by Perkins, Okazaki, Woo-Cumings, Jomo;
~ 152 pages |
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Weeks 9 & 10: |
Read all of Japan book |
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Week 11: |
Peruse Dicken, parts I, II, and that chapter (if any) in part III
dealing with the sector being covered in paper; ~315 + ~40 pages |
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Week 12: |
Discussion of student research in progress.
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Weeks 13, 14: |
Presentations by students; class discussion of Dicken, part IV |
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Paper Assignment
Mid-term exam Final exam Class participation |
30 percent
20 30 20 |
Paper Assignments: Papers must be submitted in hardcopy form. In extreme circumstances, with the instructor’s explicit prior approval, they may be submitted electronically.
Late assignments: Assignments are due at the beginning of class or at the time stated, as the case may be. Assignments turned in after the deadline will be marked down one "notch" (e.g., from A- to B+) per hour that they are late; an exception will be made only in the case of a certified (by a Dean or Worth Health Center) emergency or medical excuse.
On cheating and plagiarism: See the Student Handbook's statement regarding Academic Honesty. Cases of suspected plagiarism and cheating on exams will be reported to the Dean's Office for judicial action. In addition, the instructor has the automatic policy that any student whom he considers, on the basis of evidence available to him, to have engaged in plagiarism or cheating in any individually assigned work (i.e., in this course, exams and written reports) will automatically receive No Credit for the course.
As indicated, the purpose of this segment of the course is to learn something in greater detail about globalization and about globalization’s impact on China's industrialization. What is globalization, considered as on-going process? How does it differ across industries: in the buyer- versus producer- driven industries; what about others? What are the issues: distributive impacts, enclave biases vis-a-vis widening & deepening, indigenous control (multinational subsidiaries versus indigenously owned firms), market access (and branding), technology transfer; should governments intervene to see that full advantage is taken of globalization; are there other issues of significance? How is China's industrialization affected in particular industries? Is full advantage being taken of globalization in these industries? How is China's government seeking to insure the full benefits from globalization? Is it succeeding?
A full account of China's industrial development would have also to pay
attention to other factors peculiarly relevant in China: the presence of SOEs
(state owned enterprises) as well as TVEs (local government spawned town and village
enterprises), and government policies toward them; the shifting balance among central
/ federal, provincial, and local governments; the peculiarities of Special Economic Zones
and the like; the role of Overseas Chinese family business networks; WTO accession and
associated constraints on government policies; and others that may be discovered. Student
presentations and papers should bring such factors into the account insofar as possible
and appropriate. (Dicken, p. 623, index entries for China are of some, limited use.)
Following are some of the questions pertinent to this assignment and of the kind on which
research should be focused. 1. What is the nature of globalization in the industry? Shallow or deep integration;
how being achieved, how demonstrated, still evolving in major ways? Etcetera. 2. Generally speaking – that is, considering the industry globally: what are the central
tendencies as regards the governance structure of the industry? a) Where in the value
chain does the dominant power reside with respect to market access, technology transfer
(if any), selection of subcontractors, provision of working capital, access to critical
inputs, etcetera? Is consequential power – with respect to each element, considered
individually – distributed among agents of different kinds? b) What are the loci of
institutional and technological change within the value chain? c) Where in the value
chain are the rents (monopoly profits due to any and all sources of monopoly power)
concentrated? 3. Are the industry-specific features of globalization identified in answer to question
1 present in the industry’s development in China? Give details to illustrate the extent
they are present. If not present, why? 4. What factors have importantly motivated the key transnational players in the
industry to become involved in China? E.g., global sourcing to serve multinational
markets, establishing a presence in China. 5. What role(s) has globalization played in the industry’s development in China as
regards market access; technology transfer; technology assimilation; development of
subcontractors, suppliers; access to critical inputs, etcetera? 6. How have specific factors relating to the industry’s governance structure considered
globally, identified in answer to question 2, affected the industry’s development in China?
Does the industry’s governance structure as observed in its operations in China differ from
its structure considered globally or as observed in its operations in some other country(ies)?
If so, how and why? 7. Consider the inter-governmental agreements governing international commerce:
a) How, if at all, have changes in them affected key dimensions of globalization in
the industry? b) What has been their impact on LDCs’ abilities to realize development
through participation in international commerce? How, if at all, has the impact in China’s
case differed from that in the “average” LDC's case? E.g., more specifically, consider
the consequences of the Uruguay Round, one of which was the establishment of the WTO. 8. Does the Chinese government (federal, provincial, and/or local) appear to have an
explicit policy toward the industry’s development? If so: what are it’s central features;
are they well aimed to maximally exploit the forces of globalization in achieving China’s
development objectives? What are the deficiencies, if any, of existing policy? If there
is no explicit policy, is one advisable; what should be it central elements?
1. Be prepared to answer, briefly!, for each element below:
How did the HPAEs’ performance / achievements (from the 1960s up to the Asian crisis) differ
in general terms from that / those of developing economies elsewhere in the world? What
factors appear to explain the difference? How did the difference contribute, either directly
or indirectly, to the HPAEs’ superior overall development performance?
2. For each term or concept below, be prepared briefly!
to give a definition / explanation and to indicate its significance in the context of
East Asia’s stellar development performance. Where relevant, be sure to distinguish
between as well as discuss separately causal factors and consequences. 3. One of the following three essay questions will appear on the exam
(worth 40 out of 100 points); you may bring to the exam one 5x8 inch card
(or equivalent) containing on one side (other side blank) any notes you may
have prepared (with or without prior discussion of the questions with fellow
students) to assist you in answering the question, whichever it may be. a. What are the principal themes of Kristof’s and WuDunn’s Thunder from
the East? What arguments do they advance in support of these themes; what
evidence do they cite in support of them? Where, if at all, might it be thought
that they are misguided or wrong (based on what else you’ve learned in the course
to date)?
b. How does Westphal’s interpretation (in “Technology Strategies...”) of East
Asia’s development performance differ from the interpretation given by The East
Asian Miracle? What arguments does he make in support of his interpretation; what
evidence does he cite as being corroborative? How does his view regarding the differences
between the “early achievers” and the “late comers” differ, if at all, from the “miracle
study’s” view? c. To what extent are the roots of the (East) Asian Crisis found in factors that the
interventionists argue were the critically important enablers (i.e., among the principal
causes) of the East Asian Miracle? To what degree, and in what respects, does your answer
to the foregoing question suggest that the interventionists are wrong to emphasize these
factors in drawing the lessons from East Asian development experience?
Growth of GNP
Agricultural development
Population growth
Human capital formation
Wage and employment growth
Poverty and income inequality
Export growth
Savings and investment rates
Productivity growth
Macroeconomic stability
Participation in globalization
Technological development
Contests
Cultural factors
Dynamic versus static comparative advantage
Efficiency in relation to economic development
Export-led, or export-push
Factor accumulation
Financial repression
First- versus second-tier East Asian economics
Import substitution
Initial conditions
Industrialization
Deliberation councils
Directed credit
Neoclassical versus revisionist
Performance criteria
Policy fundamentals
Pragmatic flexibility
Price distortions
Risk sharing
Selective intervention
Total factor productivity
Wealth sharing programs
1. (7 points per answer; spend ~4+ minutes on each; totals:
21 points; 12++ minutes)
Answer, concisely! for any three of the four elements
below: How did the HPAEs' performance / achievements (from the 1960s up to
the Asian crisis) differ in general terms from that / those of developing
economies elsewhere in the world? What factors appear to explain the difference?
How did the difference(s) contribute, either directly or indirectly, to the
HPAEs' superior overall development performance?
2. (8 points per answer; spend ~5- minutes on each; totals:
40 points; 24 minutes)
For any five of the eight terms / concepts below, concisely!
give a definition / explanation and indicate its significance in the context
of East Asian development.
Deliberation councils
Initial conditions
Directed credit
Performance Criteria
Dynamic versus static comparative advantage
Pragmatic Flexibility
First- versus second-tier East Asian economies
Wealth Sharing Programs
Part II -- Essay, longer-answer question.
(40 points; spend ~ 24 minutes) To what extent are the roots of the (East) Asian Crisis found in factors that the interventionists argue were the critically important enablers (i.e., among the principal causes) of the East Asian Miracle? To what degree, and in what respects, does your answer to the foregoing question suggest that the interventionists are wrong to emphasize these factors in drawing the lessons from East Asian development experience?
You have one hour and fifteen minutes (or, 75 minutes) to take the exam.
Answer questions as indicated below. If you chose to bring into the exam a 5x8
card with your notes, be sure to turn in the card when you turn in your blue books.
In answering the questions, please take care to note the point values (out of 100
points in total) and notional time allotments for each part. Note: The questions appearing below were given to the students in advance
of the exam; students could bring notes individually prepared into the exam,
one single-sided 5x8 card per part.
In answering this question, indicate each of the different ways that you consider to be valid. For each, provide a brief justification, indicating just why you think it a way in which development(s) in one or more of the East Asian economies contributed to globalization. The basis for grading your answer will be the number of valid ways given and the quality of the justification provided for each.
Dicken argues that “relationships [italics in the original] between TNCs and states ... are, in many ways, at the very centre of the processes of global shift and of global economic transformation.” Based on the material in all of the course readings and on our discussions in class, answer the following question: What does development experience across the East Asian economies (China and Japan included) suggest are the elements of an appropriate government strategy for enlisting the involvement of TNCs in the process of economic development? In your answer be sure to consider how initial conditions and cultural as well as social and political factors affect the elements of what is appropriate.
Note: It is important to recall that Dicken defines a TNC to be “a firm that has the power to coordinate and control operations in more than one country, even if it does not own them.”