Poor Countries in a Rich World

Read Chapter 7, titled “Poor Countries in a Rich World”, pp. 135-158. Grasping the material will give you a basic understanding of the reasons for the huge gap between rich and poor nations, and how global trade has enabled some countries to develop their economies. It will also help you understand the current tensions over globalization. So the questions below aim to help you learn from it Write a paper in which you answer each of the following 12 questions. Your paper should be at least 1000 words and be a graduate level paper showing that that you have reflected on the chapter. 1. According to Rodrik, why is it better to be poor in a rich country than rich in a poor one? And what does this tell us about the global economy today? 2. “The country you are born in largely determines your life possibilities”, Rodrik writes. What do you think are some of the implications of this statement about today’s global economy today? 3. In two paragraphs (pp. 136-7) Rodrik summarizes how the “great divergence” between rich and poor countries came to be. Which of the facts would you use to describe this gap to a young teenager? 4. What five causes does Rodrik give for low productivity of workers in poor countries? 5. What does Globalization promise to do? And what does Rodrik think is the basic question in arguments about globalization. What is the “middle ground” which he recommends? (NB See pp. 13-15 for definition of “transaction costs” of trade) 6. Using 19th century history as an example, Rodrik shows the economic pluses and the minuses of globalization. Summarize his two arguments for and two against. 7. In what ways was Japan an exception to the rule of dominance of geographic and natural endowments in determining which countries benefitted and which ones lost in the 19th century globalization? 8. The argument about the role of governments in economic development is an ongoing one. The World Bank’s report on “The East Asian Miracle” illustrates that. Why does Rodrik say that the East Asian experience “offers something for everyone”? 9. What were the 10 strategies in the success of South Korea and Taiwan? What big picture lesson does Rodrik draw from this? 10. What have been the keys to China’s economic success, according to Rodrik? Why does he say the country “marched to its own drum”? 11. In the final section of the chapter, Rodrik writes of the importance of developing “social capabilities”. Why are these important to economic development and why are government policies and programs needed to foster them? How is their development related to globalization? 12. Reflecting on this chapter, what insights do you wish to take away from it?

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