- The goal of this subject is to provide relevant theoretical and empirical knowledge to be able to describe, evaluate and advise on the contribution of micro, small and medium enterprises (MSMEs) to economic development at a local, regional and international level. It begins with an overview of the comparative development in the world and then moves on the four major areas that propel contemporary research in this field, namely:
- ‘CONCEPTS’ of economic development: traditional and Contemporary models of economic development including ‘Coordination failures’ and ‘Cluster’ theories and their direct link to MSMEs’ networking capacity;
- ‘COOPERATION’ for economic development: the role of globalisation and supranational organisations in the process of development and the increasing recognition of MSMEs’ potential in global policy initiatives;
- ‘CONSTRAINTS’ on economic development: economic imbalances and inefficiencies, rapidly growing or declining population, lack of financial and/or human capital, over-exploitation of environmental capital, poor governance, missing markets, barriers to trade and the increasing role of MSMEs as drivers of innovative, inclusive and sustainable development;
- ‘COORDINATION’ of economic development: the advent of strategic economic development planning, public-private partnership initiatives, support to local entrepreneurs and the evolution of ‘crowd-funding’ and ‘niche-development firms’.
Based on these 4Cs of contemporary Development Economics, the ‘Learning Outcomes‘ will be:
- L01 Analyse theories and concepts relevant to contemporary issues in economic development
- L02 Critically evaluate the different approaches of the international community towards economic development.
- L03 Explain the major development challenges, choices and opportunities currently faced by economies today.
- L04 Compare and Contrast empirical work for the purpose of designing economic development projects with an action oriented approach.
The meaning of the term economic development is not as clear as you might expect. Development is not simply growth; it is economic growth plus sustainable changes in people’s quality of life. Economists usually measure economic growth in terms of the rate at which GDP changes over time. Whilst it is important to understand the factors that promote this growth, it is just as important to understand the factors that change people’s quality of life, allowing people to make choices and to participate in the economy.
This deals with the changing paradigms of economic development and the implications of these changes for development policy. The main rationales and arguments for each theoretical approach will be covered. There will be focus on the origin of the concept of economic development, carry out a comparison of the levels of development between regions in the global economy and analyse in a chronological order the various economic theories of development.ot available
The role of international institutions in promoting economic development will form an important part. The unit shows how approaches to economic development strategies are aligned to changes in both the political and socio-cultural context. The main focus will therefore be the changing landscape of development assistance over the past 50 years and why international institutions are increasingly highlighting topics of good governance and MSMEs empowerment in their international development discourse.
Consequently, the unit will describe the most pertinent development challenges and the way forward. This will be done in the light of the recent ‘Stockholm Statement’, developed by thirteen of the world’s leading economists, including Nobel laureate Joseph Stiglitz and four former chief economists of the World Bank. It will examine the recent experts’ opinions and studies dealing with the reasons why traditional economic thinking might no longer apply in today’s world and how economic progress and development needs to be seen in a progressively more innovative, inclusive and sustainable manner.
ALL answers need to be justified by examples with informed opinion!
Task 1. Which economic development theories, best explain, the contrasting realities of the European Union, the United States of America and China? Justify your choice with illustrative examples.
(Assessment Criteria: Analyse the main features of the traditional theories of economic development as well as those of some of the newer models…..7 Marks)
5) HINT: Emphasise is more on the Modern side of the development theory such as clustering, social capital, endogenous theories etc…..which economic theories best explain the EU, USA and China right now. China uses (very mercantilist methods) a cocktail of both classical on modern theories. What about EU and USA? – with this new president closing USA from the rest of the world, thus creating barriers rather than bridges – what theories of development might explain that type of behaviour and mentality? There is no one fixed answer for this, but there is a combination of theories that have to be justified for that choice.
Important – justification needs backing! Thus justifying with examples! 3 THEORIES ON EACH:
CHINA: 1.STRUCTURAL Theory (Classical Theory)
- Geography – NETWORKS (Modern Theory)
- New Endogenous – KNOWLEDGE.
EU/USA: 1. Neo Classical;
- Geography – Networks (modern Theory)
- Sustainability- SPACE (Modern Theory)
Unit 2 talks more about the institutions of Cooperation and Coordination issues
Task 2. A joint UNDP-UNRISD report ‘Global Trends: Challenges and Opportunities in the Implementation of the Sustainable Development Goals’, published in March 2017 reviews ‘six megatrends’ that are fundamentally important to achieving the 2030 Agenda for Sustainable Development. The choices governments and societies make to manage these long-term trends will be fundamental to whether the world can get onto a pathway of sustainable development. Discuss.
(Assessment Criteria: Illustrate how selected trends, problems and challenges of development feed into development praxis…..7 Marks)
(6) HINT: Six megatrends: Discuss why we need more Cooperation and Coordination i.e. discusses why we need more partnership and why we need more of this coming together of the various actors.
COOPERATION vs COORDINATION: To some extent there is plenty of cooperation going on and much willingness to make it, but we lack in coordination – we should argue to what extend this coordination is going to rule everything or not along the way. Compare these six mega trends and show how they are moving or failing within Cooperation and Coordination by showing what is working or not.
In case the agenda of the report is not taken seriously or quickly, the targets set might easily not be achieved. From a negative perspective some might argue that the institutions are obsolete which are getting us nowhere and sometimes even worse, thus whatever we plan may not be achieved until we reform the international governance such as the UN. Even the UN realized that it is very difficult to reform, however they acknowledged the fact that they need to make a step back in the background and let the people dominate the scene. The UN may be promoting the whole issue but still it seems that it is not being communicated well, even though there are reports that show what every country is doing to achieve the SDGs.
From a positive point of view based on facts……
Task 3. Evaluate, the following five ways in which the 2030 Agenda is affecting practitioners of international development:
(7) Give your opinions based on facts (evaluate). How these five are affecting practitioners (i.e. ALL THE ACTORS grouped together) of development outside i.e. how they are practically re-servicing the whole issue of development:
- The SDGs have recast development as a shared, universal enterprise.
This idea for shared responsibility thus moving away from assistance to more cooperation.
Yes but it depends as we all need sustainability along the way however some countries may not be sustainable at all as they may not be doing their part or may be not sustaining enough. What is being shared?
- International development is seeking to incorporate environmental concerns to a greater extent than before. Why we are running late especially with the environment – how is this changing practices out there
From the 17 SDG goals, there are most of them that talk about the environment although indirectly. Therefore the environment is featuring a lot but not in a direct way and more often being indirectly. How? Why?
iii. Poor countries are increasingly recognised as stewards of planetary resources for all humanity.
Steward is another word for facilitator/catalyst.
We are finally acknowledging that the poor countries are the most resourceful. They are the poorest in terms of GDP, etc but when it comes to physical resources they could be the richest. The SDGs are acknowledging this and we should put them more on the spotlight and actually we should make good use of these resources and not abuse. Is this happening? Evaluate?
- The 2030 Agenda has brought with it higher expectations around monitoring of progress.
Monitoring – this issue of a report every year for latest and updated information; how is this changing the way things are done when it comes to development? UN is sort of watchdog: barks but does not bite.
With regards to monitoring, there are tones of reports that monitor but are we taking action? But what is actually being done with those reporting? Are we just reporting and stopping there? When some countries are lagging behind, it seems that nothing will happen and the UN/ institutions do not intervene while acting only as a watchdog.
- Crowd-sourcing of development solutions will become a more frequent and respected complement to technical, expert-led approaches. Why of this highlight towards crowd-funding? How it is changing the way we do things out there? To what extend is crowd funding working and helping the actors of international development to bring more development? 3Es to sustain one another!
Important: Is crowd funding bringing more Efficiency, Effectiveness and Equality! For the SDGs are trying to change the whole perspective of development. Thus making everyone acknowledge the fact that we are all still in a developing stage i.e. we all need to sustain one another, sustain the environment for the economy etc.
(Assessment Criteria: Evaluate the various connections between the globalisation debate and the development debate and the new role of foreign aid and assistance in a post 2015 world….10Marks)
Task 4. Assess why the UN’s sustainable development goals have somewhat ‘stalled’ in recent years?
(Assessment Criteria: Assess the progress (to date) and the remaining gaps in the implementation of the outcomes of the major summits on inclusive and sustainable development…..7 Marks
(8) The SDGs have stalled for many reasons such as low action taken but ultimately they have stalled due to lack of Coordination. Thus making sure that there are all the 3Es in the development plans.
Task 5. The BRICS nations spearheaded by China, represent a challenge to the established global order. The dynamic changes and future impacts of these ‘power shifts’ for the architecture of global governance and the developing world are far from clear and not at all determined. Discuss.
(Assessment Criteria: Identify and compare the main actors shaping and implementing international development policies and their specifities in terms of mandates and modalities….5 Marks)
(9) HINT: Choose any 3 points and elaborate/expand on them. Show good knowledge and understanding of power shifts by China, etc….
Why this ambiguous situation of double resources? Such as double institutions – for Example, another World bank created by China and another Chinese version IMF (International Monetary Fund) while on paper we are asking for more cooperation and coordination. There is this fact that the developing countries are using the services of these Chinese institutions; even EU countries are now investing in the Chinese ‘road’ initiative.
Is still America still leading the way through GDP and growth figures or else it may be that China or other BRIC nations could be reaching and exceeding America?
Task 6. Give a detailed appraisal of the following two considerations:
- Should the international institutions be reformed to better fulfil their ‘duty of assistance’ to the poor?
- Or is a better standard for their evaluation, one that asks whether the institutions could be reformed to ‘lower cost to their contributors’ so that in turn, these rich countries could be able to provide more benefits to the poor ones?
(Assessment Criteria: Evaluate the efficacy of states, international institutions and civil society in achieving or constraining effective economic development and formulate considered proposals for reform…..10 Marks)
(10) HINT: Answer could be both (a) to transform not reform, (b) or else yes to reform as transformation could be far beyond reaching. Try to synthesis outside the box to evaluate by appraising what makes sense and what does not make sense in statements i. and ii. Thus putting everything on a scale and weighing things. There is a difference in the ideology of assistance and ideology of development.
Should we contribute to extreme poverty and development of poor regions by giving them more ‘fishes/carrots’? or stop giving them fishes and start saving funds, energy and efforts to distribute them the ‘fishing rods’. However (if they are given the fishing rod) they should also need to learn how to fish, otherwise the situation remains the same. Therefore, instead fishes and fishing rods it is required to begin by teaching them the actual skill, and afterwards introduce the fishing rods, and eventually the fish will come. What happens in the meantime until they start learning how to fish?
Do you agree more with i or ii ? Check performance & delivery of the international institutions…..CROWD FUNDING might be the solution! UN is saying this too.
In point ii, the contributors of UN are the rich countries. These contributors are saying to put less pressures on rich countries so that they can free more resources to help poor countries directly instead of indirectly through UN and World bank. This could be reasonably risky in order to select where contribution would be delivered while politics could have a major say. The latest solution could be to introduce other actors together with the politicians. Other actors might be the NGOs and people themselves – by starting and concluding with the Territorial approach which relies on issues of ‘My project’ and My Space’ in a way that the politicians do not control everything but form part of the actors. This brings up Crowd funding to be at the centre of attraction.