Case Study Analysis
Economic Development (TENT H EDITION) Michael P. Todaro New York University and the Population Council Stephen C. ...
Case Analysis: 1 Progress in the Struggle for More Meaningful Development: Brazil Inflation (IPCA) Progress in the Struggle for More Meaningful Development: Brazil Although the growth performance of Brazil from the 1960s through the early 1980s was the best in Latin America with at least some parallels with East Asian export policy and performance, Brazil has been cited as an example of a country that has experienced “growth without development” because of its
12.53% 9.30% 7.60% 5.69% 3.14% 4.46% 5.91%
extremely high economic inequality and social division that have been undermining its growth prospects.
Income and Growth Growth is generally necessary, through not sufficient, for achieving development. In 2005, Brazil’s per capita income was $3,460. Using purchasing
Gross Fixed Capital Formation (% of GDP) 19.47% 18.32% 17.78% 19.58% 19.99%
power parity, its average income was still only $8,2302, about one-fifth of that of the United States but almost five times that of Haiti (World Bank Data).
Average GDP growth rate
Social Indicators Issues:
Rank in HDI Index
Despite of some growth and increase , According to a Brazilian government research institute cited by the UNDP, 15% of Brazilians have incomes of less than $1 a day.
However, poverty is now falling and the recent Bolsa Familia (or family stipend) government program has received high marks for addressing poverty through its “conditional cash transfers” of resources to poor families provided that they keep children vaccinated and in school; it is similar to the Mexican Progresa/Oportunidadas program.
Inequality For decades Brazil’s inequality in income (as well as in land and other assets) has ranked among the worst in the world. High inequality not only produces social strains but can also ultimately retard growth.
Fraction of Population
Share Received (%)
Source: 2008 survey data, reported in World Development Indicators, 2007
As these figures show, the top 10% of income earners receive about 45% of national income, while the bottom 40% receive just 9
The UNDP concludes that high inequality is the reason for the high level of extreme poverty and the very slow rate of poverty reduction. Inequality in assets is also high.
Land is very unequally distributed in Brazil, and there is both an efficiency and a social equity case for land reform.
Land reform has been repeatedly blocked in Brazil by the political power of large plantation owners (fazenderos).
Sustainability of Development
Deforestation of the Brazilian Amazon rain forest.
Problems of Social Inclusion
Current Economic Status and Outcomes of Government Measure:
Successive Brazilian governments, of rival political parties, have succeeded in improving education, health and the living standards of millions of impoverished citizens who have now joined a growing middle class.
Brazil has an energy policy that has spawned the world's most vibrant biofuels industry
In 1995, 15 percent of Brazilian school-age children did not go to school. In 2005, this fell to 3 percent, and today Brazil has practically achieved universal basic education
The Brazilian government also launched a program for economic development acceleration called Programa de Aceleração do Crescimento, aiming to spur growth.
Decline in Inequality is due to two main reasons: 1) Improvements in education 2) Direct cash transfers from the state to families and individuals. Brazil achieved significant progress in reducing poverty, during the 1990s. This advance was largely achieved as a result of the successful taming of inflation. Through the introduction of the Plano Real in 1994. (No Further Reduction is noticed after 1995) The life expectancy of the Brazilian population increased from 69.66 years in 1998 to 73.5 years in 2011 At 2007 rates, it was considered that in two decades the Amazon Rainforest would be reduced by 40%.The rate of deforestation is now slowing, and in 2011 deforestation figures were the slowest on record, although the forest is still shrinking. The Government has established Amazon Fund, Which collects donation from various countries and the donation is used for slowing down the deforestation of the Amazon rainforest.
There are still a lot of areas for improvements, Such areas includes Racism, Poverty reduction.
Brazil will have to make social inclusion and human development, as well as environmental sustainability, top priorities if it is to resume rapid economic growth, let alone achieve true multidimensional development.
Bosala Family Program was a successful initiative, that encouraged education & improved standard of leaving of people.
Health care and availability of medicines has improves that can be seen from the increase in life Expectancy and child mortality ratios
Malnutrition has also decreased in Brazil
So to conclude Brazil has experienced some economic growth without as much social development, rather than the more blanketing “growth without development”
Case Analysis: Understanding a Development Miracle: China If people anywhere would try to assess how China emerged as the world’s second largest economy, well, what’s obvious is the country’s export-oriented industry. Everybody in the India will certainly agree that explanation. With the very large export surplus, we witness how every Chinese products are displayed on almost every Indian stalls. This is just one of the efforts done by the Chinese in shaping the kind of development that the country is moulding for many years. It feels so interesting to understand how income per capita in China by 2008 was well over 5 times what it was in 1978. However, the increase might be as well embarrassing to know that China’s income per capita in comparison to some other countries is far behind. Just late last year, TIME Magazine had this issue comparing countries of big economies. Though Japan is behind China in the world ranking, the former leads a significant higher in income per capita compared to the latter. This low income per capita relative to other countries might explain why the country still has large number of poor people. Even if World Bank estimate that the number of poor in China is falling from 53% to just 8% in 2001, still, 8% is too many in a country who has 1.3 Billion population. Moreover, if China hailed the benefits of markets, trade, and globalization, it is still very important to understand that the country had adopted activist industrial policies, meaning, less privatization which gave China the wisest decision that led to their advantage in the race for rapid growth. With the neoclassical counterrevolution theories (i.e. free market model) not doing well in Africa and Latin America, China’s own crafted development policies might as well be failure without their good performance in transitional institutions which is primarily their difference against Russia who immediately abolish its central planning institutions, not allowing to coexist both institutions. With the European countries and Russia who aimed for a “big bang” in the changeover to a free-market economy, China opted to be different. They introduced new and transitional institutions that exist side by side with previous institutions of central planning for extended periods. It was in this core reason that perhaps generates further miracle for the country. Well, in the investment atmosphere, China is the most favoured. It has an eventual market of more than 1.3 billion consumers that is more than enough to expound the pour of investments in the region. A factor of being homogenous also matters. Ethnic diversity impedes economic growth which associates African slow pace of growth.
In the other part of the globe, whether the country is a developing or in a transition period, state-owned enterprises were sold off to private investors quickly. China is a different case. These enterprises still remained in the government’s hands, however this was contested with many problems that later on led to some of it privatized or even closed. Another important thing to consider is also their focus on township and village enterprises. These are local government owned enterprises. Though these were privatized lately, it spread development to rural areas. It was a perfect choice for their country to have early reforms on agriculture in rural areas, then strategic for shifting it lately toward industry. Upon looking China’s prosperity, there are some certain Drawbacks that are might as well problems encountered by almost all other counties. Extreme poverty is one. Official land grab from peasants also losses the farmers security. Also important to note is their rising local taxes and minimal improvement in technology. The latter is more delicate for the country in the years to come. With the competing countries all over the world, China who mainly relies on labour-intensive approach may not come at par with high and sophisticated technologies of their economic rivals. It is also a country who situates the most of the polluted cities in the world. This aggravates health problems among its people. Moreover, with its skyrocketing surplus that caters too many people around the globe, we cannot forget their publicized scandals concerning their safety on food, drugs, and others. A perfect example was their melamine tainted products on milk that led too many victims especially in the South East Asia. This created a threat to international public image on Chinese products added by lists of health hazardous exported materials. Conclusion: To wrap up, China has made the wisest decision for its own boundary. With a gradual change in adjusting itself into the demands of globalization, they had found themselves in a win-win situation. China is currently engaging in the largest experiment of economic, social, and political reform in the world. The relative success of China’s economic reforms has mapped out a basic course for China’s political reforms.
Case Analysis: Divergent Development: Pakistan & Bangladesh Bangladesh got its independence in 1971 as a result of Pakistan’s defeat against India in war before 1971 Bangladesh was part of Pakistan and was known as east-Pakistan and the Pakistan of today was known as west-Pakistan, though both were 1000 miles apart, but were part of a unified Pakistan with economic and political power concentrated in westPakistan and this was also a major factor which gave impetus to independence movement people in east-Pakistan accused the government of draining revenue from east-Pakistan for development in west-Pakistan. After independence Bangladesh showed no signs of development, some scholars started saying that if development could happen in Bangladesh it could happen anywhere in the world. But now Bangladesh proved those scholars wrong to some extent but it does not mean that Bangladesh has dramatically break all records of development or outperformed Pakistan but it has made relatively better progress than Pakistan on social development and even in recent years in economic growth. Further I will compare these two countries on various economical and social issues.
Economic Indicators: Economy
GDP per Capita
GDP Growth Rate
Public Debt (% of GDP)
Demographics & Health Indicator
Population Growth Rate
Fertility Rate (Children/Woman)
Infant Mortality/1000 Live Births
Net Migration/1000 Persons
Education Education Expenditures (% of GDP)
*All data is based on the year 2009 CIA report.
Data as Per Year 2012 Location
Total Area (sq km)
190,291,129 Median age Life Expectancy
Population Growth Rate
23.6 70.06 1.58%
GDP per Capita
$2,800 External Debt Inflation Rate Military Expenditures (% of GDP) Labor Force
$33,840,000,000 10.7% 1.3%
5.6% Literacy Ease of Doing Business Rank (Out of 183)
Both Nations have certain favourable and unfavourable aspects, but the drivers of growth vary from country to country.
Bangladesh has not just achieved Growth but it has achieved growth with development, while facing problems like geographical situations, end of multifiber agreement and many other problems.
Pakistan has achieved Growth but the growth is without or with very less development. Despite of being a state with high grants and aids, it has failed to achieve desired development.
Case Analysis: School of Thoughts in context: South Korea & Argentina Here I am going to compare both countries on the bases of theories of economic growth & Developmet. Both countries are well fit for such comparisons due to 1) both are midsize in population 2) both are middle income countries
South Korea: South Korea creatinly meets the maturity criterion of being integrated with world economy through new types of export and imports. South Korea confirms some linear- stage views, but in a limited way. South Korea today is in stage of a Drive to Maturity and on its way toward mastering the range of currently available technology and appears to be entering in the age of high mass consumption. So this shows the development and growth of South Korea is a well fit with Rostow’s Model. South Korea also confirms some patterns of development structural –change models. Rapidly increasing agriculture productivity, shifts of labour from agriculture to industry the steady growth of education and skills and capital stocks and the demographic transition from high to low fertility. These changes happened when South Koreas per capita income grew. South Korea carried out a thorough going land reforms so agriculture was neglected; but otherwise its rapid growth through rapid expansion of percentage of the labour force in industry has broadly confirmed the Lewis model of development South Korea fits well in these two models but at the same time it poses some serious contradictions with dependence revolution and neoclassical counterrevolution theories. Today south Koreas is OECD member and considered strong candidate for developed country status, all this it has achieved without dependency. It has implemented most ambitious land reforms and put emphasise on primary education. The nation was highly interventionist at home and in international trade, with government using extensive use of development planning.
Argentina In contrast to South Korea for Argentina , stages and patterns theories illuminate relatively little economic history, where as the dependence revolution and neoclassical counterrevolution theories together offers important insight. The country relied to a large extent on the export of primary goods and the real prices of goods fell compared to imports. MNC’s Played a large role due to its incompetent manufacturing export industry. They heavily depends on the MNC’s for the supplies of these goods. It was victim to developed country economic interests, especially those of British and American corporations. It also offers some vindication for neo classical counterrevolution theory in that faulty restriction, inefficient state enterprise, bias against production for exports, unnecessary red tape ended up hurting industry and entrepreneurship. Government polices were also seems to be biased towards privileged interest group and not to the general public and industry.