Deck 9: The Political Economy of Third World Development

Question 1

What is a command economy?

A) A feudal economy in which serfs follow the command of their overlords
B) A highly decentralized economy
C) An economy in which state planners, rather than the free market, determines production
D) An economy limited by religious commands
E) A capitalist economy

Answer 1

C

Question 2

When Bueno de Mesquita et al.compared the economic growth rates of hundreds of democratic and autocratic governments during the last half of the 20th century,they found that

A) the autocratic governments had a slightly higher growth rate.
B) for most of that time democratic regimes had a faster economic growth rate, but in the last decade of the century autocratic regimes had much faster growth.
C) the most democratic administrations had far greater economic growth than the most autocratic ones.
D) the democratic administrations grew more rapidly in Latin America, but less rapidly than the autocratic governments in Asia.
E) there was no obvious pattern.

Answer 2

C

Question 3

Neoliberalism advocates

A) firm government policies on social issues such as school prayer and abortion.
B) raising taxes on the most wealthy citizens.
C) increased government spending on welfare programs.
D) more government spending.
E) free trade and relatively unrestrained capitalism.

Answer 3

E

Question 4

In a "developmental state" the state (government)

A) invests heavily in new industries.
B) invests heavily in health care and education.
C) develops production goals for agriculture.
D) actively intervenes in the economy to promote certain goals.
E) rescues new companies if they are in danger of bankruptcy.

Question 5

Which one of the following was NOT true of Latin American statism?

A) It encouraged greater state ownership in the economy
B) It led countries in the region to lower protective tariffs and supported free trade
C) It left most of the economy in the hands of the private sector
D) In the major Latin American economies it was associated with import-substituting industrialization (ISI)
E) It protected many inefficient local industries

Question 6

The evidence is that the neoliberal reforms that the IMF recommends to ailing Third World economies

A) often stimulate economic growth and reduce poverty.
B) often stimulate economic growth, but usually hurt the poor at least for a while.
C) often benefit the poor, but slow economic growth.
D) often slow the economy and hurt the poor.
E) has little effect on the level of poverty.

Question 7

What is an economic policy of laissez faire?

A) Selling state-owned industries to private stockholders.
B) Allowing free-market forces free reign with little or no government intervention.
C) Reducing public spending on welfare programs.
D) Increasing public funding for health care and education.
E) Strengthening state regulation of financial activities.

Question 8

Government policy makers in both East Asia and Latin America faced two models for stimulating industrial production: Import-substituting industrialization (ISI)and export-oriented industrialization (EOI).Which of the following most accurately describes their policies?

A) Both regions started with ISI policies but quickly moved to EOI
B) Both regions stuck with EOI policies for too long
C) East Asia never tried ISI, but Latin America has never tried EOI
D) Both regions started with ISI, but while East Asia soon moved to EOI, Latin America stuck with ISI only until the 1990s
E) Both regions tried EOI policies but they didn't work well in either region

Question 9

Which of the following economies is normally identified with the developmental state?

A) South Korea and Taiwan
B) China and Vietnam
C) India and Pakistan
D) Argentina and Brazil
E) Chile and Cuba

Question 10

In recent decades the Third World's rate of poverty (the poor as a percentage of the total population)

A) has declined in India and China
B) has risen for the Third World generally.
C) has declined at about the same rate in the major regions of the developing world.
D) declined in the closing decades of the 20th century but then rose sharply during the financial crisis of the early 21st century.
E) has remained rather static.

Question 11

One of the defining characteristics of contemporary globalization is that

A) the volume of international trade is declining.
B) national markets are fused transnationally.
C) the level of international trade as a percentage the world's economy (GNP) has grown enormously.
D) transnational financial investments are more tightly regulated.
E) neoliberal economists see it as a great danger.

Question 12

When do economic historians believe that economic globalization began?

A) The growth of the Roman empire
B) The spread of Western capitalism
C) The late 19th century
D) The last decades of the 20th century
E) They have a variety of conflicting positions on this issue

Question 13

Hong Kong's economy comes closest to the neoclassical ideal,a refinement of Adam Smith's recommendations.What is the neoclassical ideal?

A) Involving the state primarily in agricultural production
B) Heavy government regulation, but not ownership, of the economy
C) Allowing the state a very limited role in the economy
D) Having the state tightly regulate environmental and health regulations
E) Establishing high tariffs and other protection for start-up companies

Question 14

Which type of economy has best reduced environmental pollution?

A) An capitalist or largely capitalist economy coupled with liberal democracy
B) An economy based on laissez faire
C) A command economy
D) A communist economy
E) The neoclassical model

Question 15

Which one of the following was NOT a weakness of centrally controlled,communist economies in China until the 1980s and in the Soviet Union?

A) They produced rapid economic growth in the early stages of industrialization, but stagnated, at least somewhat, later on.
B) Centrally controlled economic plans lacked accurate measures for deciding what goods to produce and how much of them.
C) Since companies were rewarded solely for meeting their production quotas (i.e., the quantity of goods they produce), there was little attention to quality and consumer goods were frequently shoddy.
D) They were prone to very high inflation.
E) They gave excessive power to economic planners (state bureaucrats) and were prone to corruption.

Question 16

Currently the world's greatest source of greenhouse gases comes from

A) India.
B) the United States.
C) China
D) Brazil
E) Germany

Question 17

As a number of more advanced Latin American economies begin to shift,at least in part,to EOI,some economists worry that

A) Latin America will never be able to compete with East Asia.
B) the First World has been so saturated with imported goods from China and other Asian exporting nations, that developed countries may not be able to absorb a large jump in additional Latin American industrial exports.
C) Latin American governments would have been better off if they stuck with an ISI model.
D) Latin American exports won't be able to compete with more cheaply produced exports from North Africa.
E) Asian countries would put up protective tariffs against Latin American products.

Question 18

Countries such as Mexico and Bangladesh benefit a lot from remittances.What are they?

A) Profits on the sale of oil
B) Taxes paid by workers in the First World
C) Funds that workers living abroad send back to their home country
D) Taxes on foreign companies with investments in the Third World
E) Positive balances of trade

Question 19

What is a major reason why Asian countries generally have more equitable income distribution than Latin American nations do?

A) Socialist redistributive policies in Asia
B) The U.S. economy is less dominant in Asia than in Latin America
C) Asian governments tax the rich at a higher rate than Latin American governments do
D) Spanish colonial policy in Latin America favored big landholdings far more than Asian rural policies did
E) Asia has a more extensive safety net for the poor than Latin America does

Question 20

Which of the following statements about less developed countries is true?

A) Greenhouse gas emissions have recently declined in Western Europe and East Asia
B) Greenhouse gas emissions have been limited in China by tough government regulation
C) India was the most important industrial power to refuse to sign the Kyoto Protocol on greenhouse gas emissions
D) Third World nations have been the most committed to limiting greenhouse gas emissions
E) Western industrialized countries have higher per capita emissions of greenhouse gas but emissions are rising at a faster rate in industrializing Third World countries such as China and India

Question 21

One of the major foci of the study of political economy is how politics determines important aspects of the economy.

Question 22

The Developmental State model began in

A) Japan
B) China
C) South Korea
D) South Africa
E) Argentina

Question 23

While they had some important achievements in health and welfare,governments in command economies have a poor environmental record.

Question 24

Free-market economic reforms,which were introduced by Gorbachev in the Soviet Union in the 1980s and by Deng Xiaoping in China after the late 1970s led quickly to rapid economic growth in both countries.

Question 25

China and Vietnam have both moved away from market socialism for a market economy.

Question 26

No government today has a complete policy of laissez faire.

Question 27

According to the Neoclassical Ideal,a primary government role in the economy is to guarantee that loans to new industries go to firms that promote the national interest.

Question 28

Latin America's statism strongly discouraged government consumer subsidies.

Question 29

Which of the following is an important reason why Latin American policy makers initially chose an ISI model of industrialization while East Asian planners quickly turned to an EOI model?

A) Latin America was better suited for early industrialization than Asia was
B) Many of the Latin American nations had command economies
C) Latin America began to industrialize during the Great Depression, when there was a great decline in world trade. On the other hand, East Asia began its major industrial growth in the decades after World War II, when world trade was expanding rapidly
D) The unions were too powerful in East Asia
E) The U.S. blocked EOI in Latin America

Question 30

The major accomplishment of many command economies has been reducing inequality.

Question 31

Which of these countries challenges the widespread belief that democracies are not well suited for the early expansion of industrialization?

A) China
B) India
C) Nigeria
D) Mexico
E) Singapore

Question 32

Because they had smaller populations and fewer agricultural products to export than did Argentina,Brazil,or Mexico,East Asian countries such as Taiwan and Singapore opted for an EOI economic strategy.

Question 33

China emits much more greenhouse gas than the United States does,but only emits slightly more on a per-capita basis.

Question 34

Globalization appears to have narrowed the income gap between highly developed countries and most countries in Asia,Africa,and Latin America

Question 35

When the ISI model was introduced in Latin America,its effect from the 1930s to the 1970s was to curtail economic development.

Question 36

What is the meaning of "sustainable development"?

A) Economic growth that can be sustained for a long period of time
B) Development plans that are carefully planned out well into the future
C) Economic growth that does not bring a country into conflict with neighboring countries
D) Economic development that does not compromise the ability of future generations to meet their own needs
E) Economic growth that is neither too rapid nor too slow

Question 37

The United States never ratified the Kyoto Protocol

Question 38

Under their Developmental State model,East Asian governments intervened less in the economy than European governments did.

Question 39

Which group of consumers was Latin American ISI production designed to serve?

A) The U.S. market
B) The European Union (EU) and the United States
C) Rural Latin America
D) Consumers in the Latin American nations' own country
E) Latin American exporters

Question 40

Since the 1970s,China has moved away from a command economy.

Question 41

What is the developmental state model? Where has it been used? How successful has it been? Why might it be difficult to successfully follow that model in other regions of the Third World?

Question 42

Discuss the successes and failures of Latin American statism as an economic model.

Question 43

What factors have caused many international financial institutions to advocate and many Third World governments to adopt aspects of the neoclassical (neoliberal)ideal? What have been the major accomplishments and weaknesses of recent neoliberal reforms in the developing world?

Question 44

What were the major accomplishments of the ISI model in Latin America? What have been the major accomplishments of the EOI model in East Asia? What are some dangers of EOI?

Question 45

What are the main characteristics of a command economy? What advantages and disadvantages have command economies brought to countries that use that model?