Q: Many developing countries that became independent of the colonies failed to achieve catch-up economic growth. Explain the reasons for this by using following information.
+Why did some countries achieve catch-up economic growth and not others? *any socio-cultural reasons? I the religion, population growth, gender, education etc. *agricultural productivity? (e.g., difference between the South Asia and the East Asia) > One plausible explanation is the capabilities and functioning of government. 7 ) \"Longterm economic development depends on the existence of states that can commit to policies and rules that enhance productivity.\" (Grabowski 2007) ) The attitudes and actions of the ruling elites matter. the mortality rates experienced by the rst settlers. *9 Low mortality rates 1 the number of settlers increases, the colony expands, and creates similar institutional structures as the mother country. *9 High mortality rates 1 few settlers, extractive apparatus, encourage ethnic conflicts to secure their rule (\"divide and rule (conquer))13 +The impact of colonization on each country varied, but the characteristics of colonial states were usually inherited by new leaders (the ruling elites) of independent states. 14 Smaller impact in East Asia and South- East Asia, compared to Africa, South and Central America and South Asia. depends on "proximity" (Main economic activity at the time was the trans-Atlantic trade) 15(4) the ruling elites and \"commitment\" alrr There might be a fundamental dilemma of an economic system. \"A government strong enough to protect property rights and enforce contracts is also strong enough to conscate the wealth of its citizens.\" ) need to have an appropriate political system to limit state's ability to conscate. 19 9* The ruling elites. usually the relative minority of society. tend to act in order to maximize their benets and wealth. *6 Better picture: The pursuit of wealth maximization by the elite comes to coincide with wealth maximization for society at large. = The political development (i.e.. learning process intertwined with the economic development. 20 *6 In achieving this. the ruling elites have legitimacy and secure supports from the society. = The ruling elites commit to policies to protect and increase the wealth of citizens and hence of the nation. = The political development (i.e.. learning process intertwined with the economic development.) 21 9* However, some (or many) ruling elites do not or fail to act like the above. > Why ? How to avoid? 3% It is assumed that if the survival probability of the ruling elite becomes increasingly dependent on the well- being of the most of society. > How does it happens? Those are necessa . 1 Revenue base: efforts to construct a bureaucratic apparatus to collect revenue. (of. income from natural resources) 1 Reciprocity: if revenue collected from citizens, the state (ruling elites) has to provide services. 24 This is bad. '/ Patron-client relationship: if only the small number of citizen supports the state, the service provided may be limited. > This happens in states where the catch- up development did not occur. = failed commitment 25 *There are rich countries (achieved endogenous economic growth) and poor countries (failed in catch-up economic growth) in the world today and the gap has been widening. *The reason for the failure lies in the state's capabilities or commitment. *The colonization left the impact on state's capabilities or ruling elites attitudes
