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北京大学-樊纲发展经济学7
Ch. 4 the Early Development Theories: Dominance-dependence models 1. “Dominance-dependence” Model Model tries to explain why backward countries may not be able to grow as the result of relative disadvantages, and policy implications (Latin America Structuralism models, Raul Prebisch, Santos, others) for poor countries. 2. Structuralism Models Neocolonial dependence model: Periphery vs. center countries Dualism, dependence vs. dominance; “Center-periphery dual world”: unequal footing, specialization (division of labor) in different industries and technologies, and locked in, developing countries depend on developed countries; rigid dualism. The income elasticity of demand for industrial (high tech.) products is greater than income elasticity of demand for primary goods, price adjustment is in favor of industrialized countries. “Consumer surplus” of international trade is distributed unequally between developed and developing nations, terms of trade changes in favor of developed countries, and more benefits go to center countries. Due to the deterioration of terms of trade, developing countries will run trade deficits and debt, leading to financial and payment crises. due to the un-equal capacity of innovation, developed countries have more (innovation) profits. Lack of good market mechanism (including the capital market and financial system) and infrastructures, developing countries are slower in reallocation of resources and adjustment of supply in response to the demand changes. “comprador group” – 买办集团 3. How to get out of the vicious circles: Earlier “development strategies” and their failures The “Development Strategies” Nationalization, National development strategy, planned economy; government leads “Great leap forward” or “catch-up strategy” Autarky…closed economy, trade barriers; Protection for “infant industries”. Import substitution; Equilibrium vs. disequilibrium Approaches Equilibrium growth: Linkage effects (interdepend
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