Final Exam: Political Economy of Development

Final Exam

ECON 371- Political Economy of Development

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Instructions: The test includes two sections. Please, answer ONE question of Section A. Answer ONE question of Section B. You also have an extra question worth 5 additional points over your grade on the final exam.
Guidelines: 2-3 pages per answer recommended. Font= Arial 11 pt. Spacing=1.5. I highly encourage that you use examples to strengthen your argument.

SECTION A.
Please answer one of the following questions. Please develop a thorough argument using the material we have seen during the semester (with emphasis on the second half of the course).

1. What are the principal elements that explain underdevelopment? Do an analysis of what you consider are the main factors that have pushed countries to low levels of development and have made their progress more difficult. Make sure you include the different elements we have seen in class.

2. Across time, different policies and programs have been implemented to reduce poverty. However, international migration seems to be one the best alternatives to reduce the levels of poverty. As Adams and Page (2005) put it:

“A 10% increase in the share of international migrants in a country’s population will lead to a 2.1% decline in the share of people living on less than $1 USD per day”.
If this is the case, why do you think different development programs exist to stop international migration? What are the other benefits and the costs of migration (for both the host and the country of origin)? What are the potential risks that exist? Should migration be allowed or more policies implemented to stop it?

3. What are the pros and cons of considering culture when thinking about development? In your opinion, how and when should we introduce it in the analysis? How does arguments around ethnicity contribute or hinder development?

SECTION B.
Using your knowledge and your experience, please answer one of the following questions. There is no wrong or right answer, I will consider how well you develop the argument.

1. Think about one development program that you would like to implement in a low- or middle-income country. Explain what is the issue that you would like to solve, where would you ideally implement it (you do not need to name a particular geographical place, but you need to mention the context: semi-rural place, or agricultural areas, etc.), who would be the target (kids, young women, etc.), how would you implement it (how would you randomize it, for instance), and how would you measure its impact. Do you think the program could be extended to other areas/countries? How?

2. Suppose you work as an assistant to the Minister of Economic Development in Tanzania. She wants to develop a plan on sustainable development 2020-2030. She asks you to write a policy memo referenced to specific stakeholders (other ministers and other organizations) with detailed points of view that includes the following:

a) Outlines the necessity to include the deleterious effect of not including a “sustainability” element in the Economic Development Plan 2020-2030
b) Highlights the major components that this sustainable development plan should include
c) Include the challenges and opportunities that need to be considered during the elaboration of the plan.
d) Discuss how international assistance could affect (in a positive and negative way) the development of the plan)

Note: Your answer can be general. We have not discussed Tanzania and so there is no need for specific knowledge of Tanzania in this case, although you are encouraged to briefly investigate and report on the relevant features of the country.

3. The impact of the COVID-19 pandemic will be hard. However, some people will struggle more than others. For instance, it is forecasted that COVID-19 will be the cause for the first increase in global poverty since the Asian Financial Crisis of 1998 (World Bank, 2020). Two main conditions will determine how a household may struggle from the effects of COVID-19: (a) how hard the pandemic hits a community; (b) how close is the household to the poverty threshold.

Please analyze the following questions:
a) What else do we need to consider in order to measure the size of the impact of this pandemic on the livelihoods of the population?
b) How could it affect global income inequality?
c) In Kenya, a measure in which individuals voluntarily transfer their tax refunds to the poorest sectors
of the population has been proposed (https://www.givemoretomorrow.co.ke/home) * This tax refund is the result of an income tax reduction policy in which The Government of Kenya are proposing to eliminate income tax on the first 2 tiers (12,298-23,885 KSH) and reduce the marginal rate on the top tier (47,059 KSH+) by 5% to 25%.
Do you think that this type of measure may help to reduce the economic effects of the pandemic? Why?
d) Do you have any other idea on a policy that could be implemented?

SECTION B. EXTRA SECTION (worth 5 extra points over the final grade of the exam)
1. What was your favorite topic along the course? Was there one that you did not like?

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