Samples questions 385 Spring 2012

Bethell Book

1. a. What is the major thesis of Bethell’s book?

b. Bethell offers a reason for his collection of essays–explain what it is.

c. What are the "blessings of property" according to Bethell?

d. Bethell reasons that a well established system of property rights constitutes a "bulwark against

power". Summarize his reasoning.

e. In his first chapter Bethell criticizes economists of the 20th century. What is the basis of his

criticism?

2.a. According to Bethell, what common problem confronted Jamestown and Plymouth colonies?

b. What was Thomas Dale’s contribution to the resolution of the problem? Explain.

c. What was William Bradford’s contribution to the resolution of the problem?. Explain.

d. What is the relevance of Garret Hardin’s concept of the "tragedy of the commons" to

Jamestown and Plymouth colonies.

e. What is "Plato’s Conceit"?

3. a. What is the major point of Bethell’s chapter titled "To Each His Due"?

b. Briefly discuss the importance of the views of philosopher John Rawls in Bethells’ chapter 11.

c. Discuss the major thesis of the "condominium example" in chapter 11.

d. Bethell offers in chapter 11he offers his opinion on what the defense of a system based on property rights must ultimately rest. What is that defense?

e. In chapter 11, Betthell reasons that without a well established system of property rights "the weak

will be at the mercy of the strong". Present his reasoning.

1. Discuss the major points in Bethell’s Chapter 12- Rights and Property Rights.

Include in your essay any four of the following:

a. the thoughts of Hobbes and Locke on the matter of property rights

b. Bethells thesis regarding individual rights, human rights, and capitalism.

c. outline Bethell’s narrative regarding the evolution of property rights in 20Century

America.

d. what are the major points of the section called "Signs of Recovery"

e. according to Bethell, what is the significance of Richard Epstein’s book, Takings?

3. Discuss the major points in Bethell’s Chapter 16- "Why Did Ireland Starve?"

Include in your essay the following:

a. the significance of phylothora infestans

b. the significance of the Britains abandonment of the "gold standard" in 1797.

c. the paradox of the self destructive behavior of landowners/landlords.

d. the history of Ireland as a country subjected to repeated conquests.

4. Discuss the major points in Bethell’s Chapter 21- "China, Property and Democracy"

Include in your essay any four of the following:

a. the relevance of Bethell’s observations on China to the "Lipset Hypothesis"

b. the relevance of the "Great Leap forward" and the "Cultural Revolution"

as antecedents to the Chinese economic reforms that began in the 1970's.

c. Bethell states that "China enjoyed the largest tax cuts in history". Explain what

he means by that and its significance.

d. the major point of the section on "Property and Democracy".

e. the major point of the section on "Property and Some Progress".

1. Bethell’s chapter on "Property and the Environment" presents a line of reasoning concerning the relationship between secure property rights and all the "gifts of nature" (broadly interpreted

to include the full spectrum of "species". Present the line of reasoning and give specific

examples from the chapter.

2. Discuss the major points of Bethell’s article "Property in Araby"

Include in your essay:

a. the significance of the prevalence of nomadic goat farming observed in Araby

b. the signifiance of Bethell’s report of a 1970's satilite photo of a "green spot"

observed in the desert of Sahel.

c. according to Islamic scholar Daniel Pipes, what was the most significant factor

contributing to the decline of "Islam".

3. Based on the reasoning found in Bethell’s chapter on the Environment, which property

rights arrangement is most likely to secure the availability of "resources for the future"?

Explain.

1. Bethell’s chapter on "Property and the Environment" presents a line of reasoning concerning the relationship between secure property rights and all the "gifts of nature" (broadly interpreted

to include the full spectrum of "species". Present the line of reasoning and give specific

examples from the chapter.

2. Discuss the major points of Bethell’s article "Property in Araby"

Include in your essay:

a. the significance of the prevalence of nomadic goat farming observed in Araby

b. the signifiance of Bethell’s report of a 1970's satilite photo of a "green spot"

observed in the desert of Sahel.

c. according to Islamic scholar Daniel Pipes, what was the most significant factor

contributing to the decline of "Islam".

Gov’t Failure Boook

1. In the chapter on "Rent Seeking" Gordon Tullock discusses the history of rent seeking. In his discussion he explains the relationship between rent seeking societies and mercantilism. Explain the connection.

2. According to Tullock, the people of Taiwan and China come from the same cultural gene pool but pursued very different development paths. Explain the differences and the consequences according to Tullock.

 

 

 

 

Revolutions book

1. Pick two

a. From chapter 4 of the Revolutions text, discuss Deepak Lal’s views on the relationship between the functional form of

government and a robust economy.

b. Deepak Lal discusses two models of government. Discuss what they are, his views on which is the preferred model, and give

examples.

c. Discuss the context of Lal’s statements on Pinochet’s Chile and Lee Kwan Yew’s Singapore

2. In chapter 5 of the Revolutions text, Julian Simon raises the question: Is Population Growth a Drag on Economic Development?

What is his answer. Explain.

a. Explain the meaning of the "malthusian problem" and its importance in the study of economic development.

b. It was pointed out in class discussion that "neo Malthusian" concerns break out from time to time and that we are currently

experiencing another episode. Explain.

3. Discuss the views of Douglas North on the importance of "institutions" in economic performance.

a. Discuss North’s concept of "adaptive efficiency" and its importance in economic development.

b. North criticizes "neoclassical economics". Explain his criticism

4. Alan Water’s article argues that property rights are "human rights" and focuses on the importance of property rights as an antecedent

to a robust economy.

Pick three:

a. he identifies four important features of property rights which are required. Name three.

b. Waters addresses the circumstances under which attempts to acquire "human capital"may be pathological. Explain the

circumstances and the remedy.

c. Waters addresses the paradox that there is evidence of greater "social cohesion and cooperation among individuals in the

U S than in "collectivized" societies. Discuss his observation.

d. Waters gives attention to the "Role of Failure" and its relavance to economic

development. Discuss his reasoning

5. In chapter 8 of the Revolutions Text Charles Rowley looks at some economic development issues from a "public choice" point of

view.

Pick two.

a. He discusses government as a "night watchman". Explain

b. He points to the "Asian Tigers" as examples—of what? Explain.

c. He points to the analogy between self mutilating chinese beggars and rent seekers. Explain.

d. Rowley focuses on the unique attributes of the U S constitutions that he believes are worthy of replication elsewhere.

Discuss his ideas.

1. Pick two

a. From chapter 4 of the Revolutions text, discuss Deepak Lal’s views on the relationship between the

functional form of government and a robust economy.

b. Deepak Lal discusses two models. Discuss what they are and give examples.

c. Discuss the context of Lal’s statements on Pinochet’s Chile and Lee Kwan Yew’s Singapore

2. In chapter 5 of the Revolutions text, Julian Simon raises the question: Is Population Growth

a Drag on Economic Development? What is his answer. Explain.

a. Explain the meaning of the "malthusian problem" and its importance in the study of

economic development.

3. Discuss the views of Douglas North on the importance of "institutions" in economic performance.

a. Discuss North’s concept of "adaptive efficiency" and its importance in economic development.

b. North criticizes "neoclassical economics". Explain his criticism

4. Alan Water’s article argues that property rights are "human rights" and focuses on the

importance of property rights as an antecedent to a robust economy.

Pick three:

a. he identifies four important features of property rights which are required. Name

three.

b. Waters addresses the circumstances under which attempts to acquire "human capital"

may be pathological. Explain the circumstances.

c. Water’s addresses the paradox that there is evidence of greater "social cohesion

and cooperation among individuals in the U S than in "collectiveized" societies.

Discuss his observation.

d. Waters gives attention to the "Role of Failure" and its relavance to economic

development. Discuss his reasoning

5. In chapter 8 of the Revolutions Text Charles Rowley looks at some economic development

issues from a "public choice" point of view.

Pick two.

a. He discusses government as a "night watchman". Explain

b. He points to the "Asian Tigers" as examples—of what? Explain.

c. He points to the analogy between self mutilating chinese beggars and rent seekers.

Explain.

d. Rowley focuses on the unique attributes of the U S constitutions that he believes

are worthy of replication elsewhere. Discuss his ideas.

Desoto Book

1. Identify and explain the importance of the following:

Homestead Act of 1862

"squatting"

"Tamahawk rights

"Premption"

"Fee simple ownership"

"Green vs Biddle"

"Fungibility of assets"

2. Discuss the reasoning that H Desoto presents that a formal property rights apparatus "creates

individuals out of the masses" and thus fosters accountability which is in turn an important

antecedent to a robust economy.

3. In his discussion of the effects of property DeSoto focuses on two important functions of

property rights: security for the owner and security for transactions. He states that the absence of formal property rights observed in many 3rd world countries creates a circumstance in they

become "custodians of the wishes of the dead". Explain what he means.

4. I scholar in the area of property rights, H. Demzetz, has hypothesized that property rights

will emerge when the marginal benefits exceed the marginal costs. Discuss Desotos narrative

on miners claims associations in the context of Demzetz thesis.

5. DeSoto focuses on the relationship between "social contracts" and a sytem of formal property

rights . Discuss his main thesis.

6. Discuss DeSoto’s concept of the "bell jar" and his recommendations.

7. DeSoto draws a distinction between "Roman Law" and "Western Law". Discuss the

distinction and its importance.

 

 

 

1. What is the major thesis of Bethell’s book?

2. Bethell offers a reason for his collection of essays–explain what it is.

3. What are the "blessings of property" according to Bethell?

4. Bethell reasons that a well established system of property rights constitutes a "bulwark against power". Summarize his reasoning.

5. In his first chapter Bethell criticizes economists of the 20th century. What is the basis of his criticism?

6. According to Bethell, what common problem confronted Jamestown and Plymouth colonies?

7. What was Thomas Dale’s contribution to the resolution of the problems in Jamestown Colony? Give details and relevance to the

course.

8 What was William Bradford’s contribution to the resolution of the problems of Plymouth Colony?.Give details and relevance to the course.

9. What is the relevance of Garret Hardin’s concept of the "tragedy of the commons" to Jamestown and Plymouth colonies.

10. According to Bethell, what is "Plato’s Conceit" and what relevance does it have to the thesis of Bethell’s book?

11.What is the major point of Bethell’s chapter titled "To Each His Due"?

12 Briefly discuss the importance of the views of philosopher John Rawls in Bethells’ chapter 11.

13. Discuss the major thesis of the "condominium example" in chapter 11.

14.Bethell offers in chapter 11 his opinion on what the defense of "free market systems" must rest. What is that defense? What is his reasoning?

15. Discuss the major points in Bethell’s Chapter 12- Rights and Property Rights.

16. Discuss Bethell’s descriptions/characterizations of the thoughts of Hobbes and Locke on the matter of property rights

17 Discuss Bethell’s thesis regarding individual rights, human rights, and capitalism.

18. Summarize Bethell’s narrative regarding the evolution of property rights in 20Century America.

19.What are the major points of the section called "Signs of Recovery"

20. According to Bethell, what is the significance of Richard Epstein’s book, Takings?

21. Bethell briefly references the adoption of a "flat tax" in Jamestown Colony. What is it and what was its impact?

22. In what sense was the "flat tax" in Jamestown Colony consistent with contemporary economic reasoning?

23. Compare hypothesized merits of a "flat tax" in comparison with a "lump sum tax".

24. What do Plymouth Colony and Kentucky share in common?

25. According to Bethell, what is the importance of Jean Bodin’s Six Books of A Commonwealth ?

26. Bethell refers to a criticism of John Rawl’s theory of justice by J.R. Lewis. What is that criticism?

27. Bethell argues that, in the absence of secure property rights ‘one is more likely to get rule of men/women than

rule of law’. Provide a summary of his reasoning.

28. According to Bethell, what is meant by "classical liberalism"? How does it differ from contemporary "liberalism"?

 

1. Compare and contrast the views of Karl Brunner (Poverty of Nations) on "social justice"

with those of Tom Bethell (To Each his Due/Rights and Property Rights).

2. Based on the readings in this course, discuss, with attribution, the relationship between/among the following:

a. social justice

b. inequality

c . inequity

d. injustice

 

 

Define and Explain the relevance of:

1. The bifurcation of human behavior

2. The "Auspices"

3. Voting paradox

4. Median voter

5. Logrolling

6. Rational ignorance

7. Agency problem or principle/agent problem

8. Iron triangle

9. Tax avoision

10. Egalitarianism

a. Preemption

b. "Green vs Biddle"

c. copyhold

d. Lipset hypothesis

e. " shumpetarian rents "

f. "fee simple"

g. Tomahawk rights

h. dirigiste

I. rack-renting

j. Appropriability

k. Rent seeking

l. adaptive efficiency

m. Braudel’s bell jar

n. claims associations

o. neo-Malthusians

Flat tax

Robert Nozick

John Rawls

G. solow's residual

"a rentier economy"

comparative advantage

 

 

1. What is the "public choice" view of the "public servant"?

2. According to Gordon Tullock (GT) , what is wrong with democracy?

3. GT argues in favor of "very small government". Present his reasoning.

4. According to GT, more dishonesty is to be expected in the private sector than in the public sector.

TRUE OR FALSE. Explain.

5. GT describes a mercantilist society as a "rent seeking" society. Explain what he means and discuss its

importance.

6. GT argues that homo economicus and homo politicus are the same. Explain, provide his reasoning, and

discuss the importance of his views.

7. GT argues that the U. S. Constitution was crafted to reduce rent seeking by states. Explain.

8. GT writes favorably of "bi-cameral" legislatures. Provide his reasoning.

9. According to GT, the economy/society of 1750 in China was equal to or superior to that of "the West". What

is Gordon Tullock’s explanation for the change in the status of China and "the West"?

10. According to GT, rent seeking societies are not likely to be robust. Provide his reasoning.

11. Summarize GT’s criticism of "inefficient transfers of wealth". What are his recommended remedies?

12.GT argues that a "James Watt" or a "Thomas Edison" is not as likely to surface in a mercantilist society.

Provide a summary of his reasoning.

13. GT cites Taiwan, Hong Kong, Singapore, and South Korea as having similar histories. Discuss the

similarities and the implications for economic development.

14. What are GT"S recommendations for remedying the defects of democracy?

15. Compare the "voting" process in the private market for goods and service with that in "political markets".

16. According to GT, what is the strongest argument in favor of democracy?

17. What is the Public Choice criticism of the "Neo Classical’ Welfare Triangle"?

18. Can "rent seeking’ be a positive influence? Explain.

19. Summarize GT’s views on "Bureaucracies" .

20. According to GT bureaucrats have more power over politicians than the other way around.

TRUE OR FALSE? Explain.

21. Discuss the importance of marginal tax rates versus average tax rates.

22. According to GT there are advantages of the U. S. Federal System. Discuss what those are.

23. GT addresses the "paradox of protectionism". Explain what it is and provide a possible reason for it.

24. Compare "import substitution" economic development strategy with the "export base" strategy. Give

examples.

25. According to Steve Hanke and Barney Dowdle, what is the major factor contributing to the poor status

of Native Americans?

26. What are the major points of Peter Bauer’s "Western Subsidies and Eastern Reform"?

27. Peter Bauer provides advice on development grants. Explain what they are.

 

 

From the syllabus page

Course Threads:Things you should be able to write about on the Final Exam

(Necessary but not sufficient conditions for a robust economy)

1. The Rule of Law

a. provision of security internal and external

2. Property rights

a. Legal Appropriability

b. environment for residual claimancy

3. Micro economic policies

a. controls/regulations

b. anti-trust policies

c. entrepreneurial environment

4. Macro economic policies

a. fiscal

b. monetary

5. Financial/central bank/monetary system

6. Previous history and pre-existing conditions

7. Trade policies

8. Legal institutions and traditions

8a. Importance of "institutional architecture"

9. Cultural variables

10. The importance of the "Continuity of expectations"

11. Speed of reforms

12. Social delivery mechanisms

13. Environmental issues

14. Equity issues (and the tensions between redistributive urges and development promoting policies )

15. Efficiency and integrity of political institutions

a.corruption

b. presence of parallel markets

16. Population growth/control.

17. Education

18. Debt relief/aid/loans

19. National government

20. Leadership

21. The problem of " rent seeking "

22. The importance of infrastructure and how to provide it

23. Economic efficiency and the concept of Dead Weight Costs

24. The importance of the concept of "adaptive efficiency"

25. What do economists mean when they refer to "inefficicient transfers" of wealth or income

26. The concept of "economic efficiency" as a criterion for judging outcomes.

27. What is the relevance of the concept of "dead weight cost" in assessing the wisdom of public policy?

28. What is the relevance of the "Principle/Agent problem" in the study of economic development?

29. What is the importance of a "system of residual claimancy" in the study of economic development?

30. The idea of "positive sum" world

-dead weight costs

-What is the relevance of the concept of "dead weight cost" in assessing the wisdom of public policy?

-consumer/producer surplus

-rent seeking

-"a rentier economy"

-"Bifurcation of human behavior"

--"residual claimant"

-"tragedy of the commons"

-"approprability "

-"adaptive efficiency"

- "inefficient transfers" of wealth or income

-property rights

-usufruct rights

-dirigiste or dirigisme

-laissiez faire

-"infant industry"

-"industrial policy"

-tragedy of the commons-

-relationship between culture and institutions

-What is the relevance of the "Principle/Agent problem" in the study of economic development?

-What is the importance of a "system of residual claimancy" in the study of economic development?

-What is the importance of an "efficient capital market" in fostering a robust economy? Provide reasoning with attribution

-The idea of "positive sum" world

-The Rule of Law

- parallel markets

-corruption

-government as the "night watchman"

-"predator state"

-"rentier state"

-"protective state"

-"redistributive state"

-government as an "enterprise association"

-government as a "civil association"

-"Peter Bauer on "western guilt"

-What does Chile’s Penochet and Singapore’s Yew have in common?

-Population growth and economic growth and development

-Relationship between democracy and economic growth and development

-dvantages and disadvantages of "majoritarian democracies"

-religion and economic growth--is there a relationship?s

-according to Douglas North the single most important determinant of economic performance is_________

-in what context may the acquisition of "human capital" (education) be evidence of a "pathology"?

-Alan Waters asserts that property rights are "human rights". Provide the reasoning.

-Alan Waters asserts that property rights must have several characteristics to be effective. List them and provide the accompanying reasoning.

-Alan Waters argues that "bankruptcy can be a "good thing". Provide the reasoning.

-Alan Waters argues that there are important differences in the disciplining mechanisms in the private and public sectors. Explain what he means and the implications of those differences.

-it is argued that secure private property rights foster responsibility. Provide the reasoning.

-Allen Waters states that "competition is the engine of growth". Explain what he means.

-Allan Waters argues the advantages of "failure". Provide the reasoning and explain what that has to do with "entrepreneurship" as a factor in economic growth.

 

 

Sample Quiz questions.

Revolution chapters. 9,14,18,19.

Government Failure: A Primer in Public Choice Chaps. 1 through 8

Overview of Desoto’s Mystery of Capital

 

Define and Explain the relevance of:

1. The bifurcation of human behavior

2. The "Auspices"

3. Voting paradox

4. Median voter

5. Logrolling

6. Rational ignorance

7. Agency problem or principle/agent problem

8. Iron triangle

9. Tax avoision

10. Egalitarianism

 

Government Failure: A Primer in Public Choice

1. What is the "public choice" view of the "public servant"?

2. According to Gordon Tullock (GT) , what is wrong with democracy?

3. GT argues in favor of "very small government". Present his reasoning.

4. According to GT, more dishonesty is to be expected in the private sector than in the public sector.

TRUE OR FALSE. Explain.

5. GT describes a mercantilist society as a "rent seeking" society. Explain what he means and discuss its

importance.

6. GT argues that homo economicus and homo politicus are the same. Explain, provide his reasoning, and

discuss the importance of his views.

7. GT argues that the U. S. Constitution was crafted to reduce rent seeking by states. Explain.

8. GT writes favorably of "bi-cameral" legislatures. Provide his reasoning.

9. According to GT, the economy/society of 1750 in China was equal to or superior to that of "the West". What

is Gordon Tullock’s explanation for the change in the status of China and "the West"?

10. According to GT, rent seeking societies are not likely to be robust. Provide his reasoning.

11. Summarize GT’s criticism of "inefficient transfers of wealth". What are his recommended remedies?

12.GT argues that a "James Watt" or a "Thomas Edison" is not as likely to surface in a mercantilist society.

Provide a summary of his reasoning.

13. GT cites Taiwan, Hong Kong, Singapore, and South Korea as having similar histories. Discuss the

similarities and the implications for economic development.

14. What are GT"S recommendations for remedying the defects of democracy?

15. Compare the "voting" process in the private market for goods and service with that in "political markets".

16. According to GT, what is the strongest argument in favor of democracy?

17. What is the Public Choice criticism of the "Neo Classical’ Welfare Triangle"?

18. Can "rent seeking’ be a positive influence? Explain.

19. Summarize GT’s views on "Bureaucracies" .

20. According to GT bureaucrats have more power over politicians than the other way around.

TRUE OR FALSE? Explain.

21. Discuss the importance of marginal tax rates versus average tax rates.

22. According to GT there are advantages of the U. S. Federal System. Discuss what those are.

23. GT addresses the "paradox of protectionism". Explain what it is and provide a possible reason for it.

24. Compare "import substitution" economic development strategy with the "export base" strategy. Give

examples.

25. According to Steve Hanke and Barney Dowdle, what is the major factor contributing to the poor status

of Native Americans?

26. What are the major points of Peter Bauer’s "Western Subsidies and Eastern Reform"?

27. Peter Bauer provides advice on development grants. Explain what they are.

 

 

 

1.In their review of the Heritage Foundation/Wall St. Journal Economic Freedom Index. Mr Johnson and Mr.

Sheeley provide a narrative on the importance of the following 10 metrics. Discuss their importance.

1. Trade Policy

2. Tax Policy

3. Government consumption

4. Monetary policy

5. Foreign investment

6. Banking policy

7. Wage and pricing policies

8. Property rights

9. Regulations

10. Black market activity

2. Karl Brunner discusses two views on "social justice". List them and discuss Brunner’s views on each.

 

3. What does Hernando DeSoto mean by the "Mystery of Capital"?

4. According to DeSoto, what is the relationship between "assets" and "capital"?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Economic Development(385) Fall, 2006 Mid Term Exam NAME

Inclass portion ( 60 points of a total 100 points)
Answer question #1 plus any two additional questions. 20 points each

*1. From Attachment A  showing the results of  Robert Barro’s empirical work on Equation #1(in column 1):
 a. Interpret the regression coefficient for each of following list of variables. Include attention to the sign
                  of the variable, discuss whether the findings are “statistically significant”, and whether the results were
                   consistent with a priori economic reasoning.  Finally, discuss the practical implications of the findings
                   on the variables.
  1. Interpret Barro’s findings on  “democracy” (that is, democracy and democracy squared)
  2. Interpret Barro’s findings on  Log (GDP)
  3. Interpret Barro’s findings on Government consumption ratio
  4. Interpret Barro’s findings on  Rule of law index
  5. Interpret Barro’s findings on Log (life expectancy)
 b. Interpret the meaning of the R2..
 c.  Interpret Barro’s findings on the regional dummy variables in Equation #2(in column 2).
2.  Identify eight of the following and briefly discuss their importance:
 a.  “a rentier economy”
 b.  “Gini Coefficient”
 c.   “dirigiste” strategies/policies
 d.   “ the auspices”
 e.  “ median voter theorem”
 f.  “ shumpetarian rents ”
 g.   “Bifurcation of human behavior”
 h.   “rational ignorance”
 I.  “rent seeking”
 j.  “statism”
 k.  “residual claimant”
 l.  “tragedy of the commons”
 m. “approprability ”
              n. “agency problem” or “principle/agent” problem
3. a. Compare the views of the state as a “civil association” versus an “enterprise state”. Discuss how these differing  views of the state           are related to the issue of promoting economic development.
     b.  Discuss the strengths and  weaknesses of majortarian democracies in achieving and maintaining robust economies.
4.   a.  Discuss the views of Gordon Tullock on the topic of  “federalism” and the relevence of those view to the topic of economic       development.
       b. Discuss the views of Gordon Tullock on the topic of  “democracy” and the relevence of those view to the topic of economic    development.
5. Discuss the “public choice” criticism, as descrbed by Gordon Tullock ,of the neoclassical treatment of negative rent seeking.
6. Discuss the major points made in two of the following articles:
 a. Competing Visions of Development Policy by James Dorn.  What is the “competing vision?”
 a. “Disregard of reality” by Peter Bauer.  What does Bauer say about “collective guilt” and its relevance to development    policy.
 b.  “The Poverty of Nations” by Karl Brunner What is Brunner’s view on “the state” as a contributor to development?
 c.  “ The Transformation Developing   Economies: From Plan to Market”  by Deepak Lal What was Lal’s views on  “Dirigiste” approach to development. What are his view on the role of government in the development process?
7.  Using the information below in TABLE I  and assuming:
 1. A community of 1,000 self interested people with an opportunity cost of four clams per unit of time for  each person
 2.  all transactions are voluntary
 3.  two inputs labor and capital(boat)
 4.  production function for boat crew size shown in the first two columns

     a. Explain how a property rights arrangement in which each member of the boat crew is assured an equal share of  the daily catch of            clams may jeopardize the interests of the broader community.
     b. explain how private property rights may induce a self interested boat owner to behave in a way that serves the  interests of the                 community at large.
     c. Explain how a property rights arrangement in which the boat is declared “public property” may lead to  the “tragedy of the                      commons”.
     d. Explain the circumstances under which system of  “absentee ownership” of will not jeopardize the interests of the                                     community.
     e.  Explain Adam Smith’s “invisible hand” theorem.
     f.  Discuss, using this example,  the importance of having an “efficient capital market” in promoting a robust  economy..
     g.  Explain how this example and related questions pertain to this class. and the article by this year’s winner of the Nobel Prize in                 Economics, Edmund Phelps, that appeared in the Wall Street Journal on  Tuesday, October 10, 2006.
 

     TABLE I

 Clam Production
 (An example of team production)
    Number     Total   Marginal     Average  Net Social     Social Total
             of Clamers   Catch   Efficiency    Efficiency   Total          (land&boat)
             on the Boat     Of Clamers  Of Clamers

       0              0         0             0        0           4,000+0   = 4,000
       1              6       +6             6        2        3,996+6   = 4,002
       2            16      +10             8        6        3,992+16 = 4,008
       3            24        +8             8        4        3,988+24 = 4,012
       4            30        +6          7.5        2        3,984+30 = 4,014
       5            34        +4          6.8        0        3,980+34 = 4,014
       6            36        +2             6       -2        3,976+36 = 4,012
       7            36          0        5.14       -4        3,972+36 = 4,008
       8            32        -4             4       -8        3,968+32 = 4,000
       9            27        -5             3       -9        3,964+27 = 3,991
     10            21        -6          2.1     -10        3,960+21 = 3,981
 

Attachment A
 ECONOMIC GROWTH AND CONVERGENCE
 Regression for Per Capita Growth Rate
Dependent Variable: Per Capita Growth Rate
Independent Variable (1) (2)
Log (GDP) -.0254
 (.0031) -.0225
 (.0032)
Male secondary and higher schooling   .0118
   (.0025)   .0098
 (.0025)
Log (life expectancy) .0423
 (.0137)  .0418
 (.0139)
Log (GDP) *male schooling -.0062
 (.0017) -.0052
 (.0017)
Log (fertility rate) -.0161
 (.0053) -.0135
 (.0053)
Government consumption ratio -.136
 (.026)   -.115
 (.027)
Rule of law index  .0293
 (.0054)   .0262
 (.0055)
Terms of trade change .137
(.030)   .127
(.030)
Democracy index .090a
(.027)    .094
(.027)
Democracy index squared -.088
(.024)  -.091
(.024)
Inflation rate -.043
(.008)  -.039
(.008)
Sub-Saharan African dummy  -.0042b
(.0043)
Latin America dummy  -.0054
 (.0032)
East Asia dummy   .0050
 (.0041)
R2 .58 .60, .52, .47
Number of observations 80 80, 87, 84
 
 
 

Economic Development(385) Fall, 2005 Mid Term Exam NAME

     Take home portion of Mid Term Exam( 40 points of a total 100 points)
      You are encouraged to use the sources from the course web page but you may use any published source you wish. All sources
       used must  be fully  identified and cited. You may not consult with any other person.  Academic dishonesty will result in an F in         the course.  Your answers will be collected at the begining of the in class portion (60 points) on Monday Oct 17.
     Write an essay in which you describe the current circumstances of a developing/less developed economy that is considered to be        performing poorly.
      Include in your essay:
     1. a brief description of the state of the economy you have chosen
     2. identify the major factors contributing to the poor performance of the chosen economy,
     3. discuss what, if any, of these factors represent variables  that can be affected  by deliberate changes in policies
     4. give your policy recommendations for improving the performance of the economy and give attention to how they could be           implemented
     5. give supporting arguments based on the scholarly materials from the course or from your own readings (A tactical suggestion:            avoid expressing "unfounded" opinions and assertions that  have no connection to some research conclusion.)

Inclass portion ( 60 points of a total 100 points)
Answer any three questions. 20 points each

*1. From Attachment A  showing the results of  Robert Barro’s empirical work on Equation #1(in column 1):
 a. Interpret the regression coefficient for each of following list of variables. Include attention to the sign
                  of the variable, discuss whether the findings are “statistically significant”, and whether the results were
                   consistent with a priori economic reasoning.  Finally, discuss the practical implications of the findings
                   on the variables.
  1. Interpret Barro’s findings on  “democracy” (that is, democracy and democracy squared)
  2. Interpret Barro’s findings on  Log (GDP)
  3. Interpret Barro’s findings on Government consumption ratio
  4. Interpret Barro’s findings on  Rule of law index
  5. Interpret Barro’s findings on Log (life expectancy)
 b. Interpret the meaning of the R2..
 c.  Interpret Barro’s findings on the regional dummy variables in Equation #2(in column 2).
2.  Identify eight of the following and briefly discuss their importance:
 a.  “a rentier economy”
 b.  “Gini Coefficient”
 c.   “dirigiste” strategies/policies
 d.   “ the auspices”
 e.  “ median voter theorem”
 f.  “ shumpetarian rents ”
 g.   “Bifurcation of human behavior”
 h.   “rational ignorance”
 I.  “rent seeking”
 j.  “statism”
 k.  “residual claimant”
 l.  “tragedy of the commons”
 m. “approprability ”
3. a. Compare the views of the state as a “civil association” versus an “enterprise state”. Discuss how these differing  views of the state           are related to the issue of promoting economic development.
     b.  Discuss the strengths and  weaknesses of majortarian democracies in achieving and maintaining robust economies.
4.   a.  Discuss the views of Gordon Tullock on the topic of  “federalism” and the relevence of those view to the topic of economic                    development.
       b. Discuss the views of Gordon Tullock on the topic of  “democracy” and the relevence of those view to the topic of economic                    development.
5. Discuss the “public choice” criticism, as descrbed by Gordon Tullock ,of the neoclassical treatment of negative rent seeking.
6. Discuss the major points made in two of the following articles:
 a. “Disregard of reality” by Peter Bauer(87)
 b.  “The Poverty of Nations” by Karl Brunner
 c.  “ The Transformation Developing   Economies: From Plan to Market”  by Deepak Lal
7.  Using the information below in TABLE I  and assuming:
 1. A community of 1,000 self interested people with an opportunity cost of four clams per unit of time for  each person
 2.  all transactions are voluntary
 3.  two inputs labor and capital(boat)
 4.  production function for boat crew size shown in the first two columns

     a. Explain how a property rights arrangement in which each member of the boat crew is assured an equal share of  the daily catch of            clams may jeopardize the interests of the broader community.
     b. explain how private property rights may induce a self interested boat owner to behave in a way that serves the  interests of the                 community at large.
     c. Explain how a property rights arrangement in which the boat is declared “public property” may lead to  the “tragedy of the                      commons”.
     d. Explain the circumstances under which system of  “absentee ownership” of will not jeopardize the interests of the                                     community.
     e.  Explain Adam Smith’s “invisible hand” theorem.
     f.  Discuss, using this example,  the importance of having an “efficient capital market” in promoting a robust  economy..
     g.  Explain how this example and related questions pertain to this class. and the article by this year’s winner of the Nobel Prize in                 Economics, Edmund Phelps, that appeared in the Wall Street Journal on  Tuesday, October 10, 2006.
 

     TABLE I

 Clam Production
 (An example of team production)
    Number     Total   Marginal     Average  Net Social     Social Total
             of Clamers   Catch   Efficiency    Efficiency   Total          (land&boat)
             on the Boat     Of Clamers  Of Clamers

       0              0         0             0        0           4,000+0   = 4,000
       1              6       +6             6        2        3,996+6   = 4,002
       2            16      +10             8        6        3,992+16 = 4,008
       3            24        +8             8        4        3,988+24 = 4,012
       4            30        +6          7.5        2        3,984+30 = 4,014
       5            34        +4          6.8        0        3,980+34 = 4,014
       6            36        +2             6       -2        3,976+36 = 4,012
       7            36          0        5.14       -4        3,972+36 = 4,008
       8            32        -4             4       -8        3,968+32 = 4,000
       9            27        -5             3       -9        3,964+27 = 3,991
     10            21        -6          2.1     -10        3,960+21 = 3,981
 
 
 
 
 
 
 

Attachment A
 ECONOMIC GROWTH AND CONVERGENCE
 Regression for Per Capita Growth Rate
Dependent Variable: Per Capita Growth Rate
Independent Variable (1) (2)
Log (GDP) -.0254
 (.0031) -.0225
 (.0032)
Male secondary and higher schooling   .0118
   (.0025)   .0098
 (.0025)
Log (life expectancy) .0423
 (.0137)  .0418
 (.0139)
Log (GDP) *male schooling -.0062
 (.0017) -.0052
 (.0017)
Log (fertility rate) -.0161
 (.0053) -.0135
 (.0053)
Government consumption ratio -.136
 (.026)   -.115
 (.027)
Rule of law index  .0293
 (.0054)   .0262
 (.0055)
Terms of trade change .137
(.030)   .127
(.030)
Democracy index .090a
(.027)    .094
(.027)
Democracy index squared -.088
(.024)  -.091
(.024)
Inflation rate -.043
(.008)  -.039
(.008)
Sub-Saharan African dummy  -.0042b
(.0043)
Latin America dummy  -.0054
 (.0032)
East Asia dummy   .0050
 (.0041)
R2 .58 .60, .52, .47
Number of observations 80 80, 87, 84
 
 
 
 
 

Economic Development(385) Fall, 2002 Mid Term Exam NAME
 

Take home portion of Mid Term Exam( 40 points of a total 100 points)
 You are encouraged to use the sources from the course web page but you may use any published source you wish. All sources
  used must  be fully  identified and cited. You may not consult with any other person.  Academic dishonesty will result in an F in the
  course.  Your answers will be collected at the begining of the in class portion (60 points) on Tuesday September 30.

Write an essay in which you describe the current circumstances of a developing/less developed economy that is considered to be performing poorly.
 Include in your essay:
1. a brief description of the state of the economy you have chosen
2. identify the major factors contributing to the poor performance of the chosen economy,
3. discuss what, if any, of these factors represent variables  that can be affected  by deliberate changes in policies
4. give your policy recommendations for improving the performance of the economy and give attention to how they could be implemented
5. give supporting arguments based on the scholarly materials from the course or from your own readings (A tactical suggestion: avoid
    expressing "unfounded" opinions and assertions that  have no connection to some research conclusion.)

Inclass portion
Answer question number one plus two additional questions. 20 points each (maximum of 60 points )

*1. From the attachment showing the results of  Robert Barro's empirical work on Equation #1(in column 1):
     a. Interpret the regression coefficient for any five of the 14 variables shown. Include attention to the sign
                  of the variable and whether the results were consistent with a priori economic reasoning.
     b. Discuss whether the findings are " statistically significant" for the five variables you have chosen and
                  and explain the basis for your conclusions.
     c. Discuss the practical implications of the findings on five of the variables in the equation shown.
     d. Interpret the meaning of the R2..
2. Discuss Barro's findings on "economic inequality" in his empirical work on economic growth.
3. Explain what is mean by a Gini Coefficient. Include in your essay:
     a. the relationship between a Lorenze Curve and a Gini Coefficient.
     b. the uses of a Gini coefficient in looking at the problem of economic growth or development.
4. Discuss the major point(s) of Easterly's Chapter 2 on "Aid for Investment".  What recent proposal
    has come from the Bush Administration that is consent with Mr. Easterly's view of foreign aid for
    purpose of promoting economic development?
5. From the Easterly book, discuss what is meant by "Solow's Surprise".
6. From the Easterly book, discuss what is meant by the "Luddite Fallacy".
7. From the Easterly book, discuss:
     a.  the major points of Chapter 4 "Educated for What?".
     b. the major points of Chapter 5 "Cash for Condoms?".
8. Discuss and compare the potential advantages and disadvantage of  an "import substitution"  economic development
    strategy with one that is "market based" or "export based". Discuss what is meant by "industrial policy" or "strategic trade
    policy" and their potential as a development strategy.  Give specific examples.
 

Attachment
 ECONOMIC GROWTH AND CONVERGENCE
 Regression for Per Capita Growth Rate
Dependent Variable: Per Capita Growth Rate
Independent Variable (1) (2)
Log (GDP) -.0254
 (.0031) -.0225
 (.0032)
Male secondary and higher schooling   .0118
   (.0025)   .0098
 (.0025)
Log (life expectancy) .0423
 (.0137)  .0418
 (.0139)
Log (GDP) *male schooling -.0062
 (.0017) -.0052
 (.0017)
Log (fertility rate) -.0161
 (.0053) -.0135
 (.0053)
Government consumption ratio -.136
 (.026)   -.115
 (.027)
Rule of law index  .0293
 (.0054)   .0262
 (.0055)
Terms of trade change .137
(.030)   .127
(.030)
Democracy index .090a
(.027)    .094
(.027)
Democracy index squared -.088
(.024)  -.091
(.024)
Inflation rate -.043
(.008)  -.039
(.008)
Sub-Saharan African dummy  -.0042b
(.0043)
Latin America dummy  -.0054
 (.0032)
East Asia dummy   .0050
 (.0041)
R2 .58 .60, .52, .47
Number of observations 80 80, 87, 84
 
 
 

Economic Development(385) Fall, 2001 Final Exam NAME
Take home portion of the Final Exam( 40 points of a total 100 points)

1.Write an essay in which you describe the current circumstances of two developing economies (from different        continents) that are considered to be performing poorly. For each of the countries include in your essay:
 a. a brief description of the state of the economies chosen and a brief narrative including the                                       relevant historical outline of the economies.
 b. identify the major factors contributing to the poor performance of the chosen economy,
 c. discuss which of these factors represent "policy variables" that can be affected by deliberate changes                     in policies and which, if any, factors are due to reasons beyond the reach of policy changes. Provide                      the appropriate reasoning for each.
 d. give your policy recommendations for improving the performance of the economy and give attention      to how they could be implemented
 e. include supporting arguments based on the scholarly materials (with complete citations on sources)     from the course or from your own readings.
2.  Write an essay in which you address the following question. "What are the necessary(as opposed to sufficient       conditions) conditions for economic growth and/or development?" Give reasons for each of the factors cited       and provide a  ranking of their order of  importance with supporting reasoning  and scholarly work (cite       sources).

 You may use any published source you wish including those the course web page. All sources used must be    identified and cited with full citations. You may not consult with any other person.

 Reminder: In class portion (60 points) will be given on Tuesday December 11 at 10:30am..
 
 

Economic Development(385) Fall, 2001 Final Exam NAME

In Class portion

Part A. Answer three questions from this section. 20 points each
 

1. Easterly identifies several ways in which governments can "kill growth". Discuss four of these ways, give examples, rank each of           them in order of importance, and explain why these policies exist.
2. a. Write and essay in which you address the following question: Which is more important, economic freedoms or political                           freedoms in fostering economic growth?  Provide your reasoning with examples and references.
    b.  Write and essay in which you address the following question: Which is more important, "luck" or "discretion" in fostering                      economic growth?
3. Drawing on Easterly's work, address the issue of "corruption" and its relationship to economic growth.  Address specifically the             following:
 a. Varieties of corruption
 b. The determinants of corruption
 c. Remedies/policies to reduce corruption
 d. In so far as reducing corruption entails an economic loss to certain groups, what strategy would you recommend to increase                    the chances of successful reform.
4. In his chapter on "Polarized Peoples" Easterly addresses the issue of ethnic/cultural tensions and their relationship to economic               growth.
 a.  Summarize his views and the major points of this material.
 b.  Is ethnic diversity and division inherently inimical to economic growth? Present your reasoning and give examples.
 c.  What are/is the most important attribute in reducing ethnic/cultural conflict?
5. a. Easterly addresses the role of "expectations" and their relationship to economic growth.  Critically evaluate his views?
       To what extent are expectations "policy driven"
    b. Easterly addresses the importance of "appropriability" in his discussion of technological progress and its role in economic                       development.  Discuss the importance of "appropriability" and critically evaluate his views.

PART B Answer two questions from this section. 20 points each
 

5. Compare the findings of Barro and Easterly on the importance of "inequality" as measured by a Gini Coefficient.
6. a. Certain of the countries of South East Asia have acquired a reputation for success in their  efforts to achieve economic growth.                Drawing on the findings of Easterly and others, discuss what countries would be included in this group  and discuss the possible             reasons for their success. What are the potential weaknesses in these  economies that may limit their success in the future?
    b. It has been observed that recent successes of certain of the countries of South East Asia were not observed among similarly                     situated countries of Latin America and Africa.  Drawing on the findings of Easterly and others, write an essay in which you                    address the possible reasons for these developments and what, if any, remedies are available.
7. Discuss Easterly's views on "path dependence", "mean reversion", and "luck".
8.The Bush Administration has announced plans to adopt a different approach to foreign aid design to promote economic                            development.  Write an essay in which you discuss: what is "new" about the proposed changes; how the proposed changes address a      concerns raised by William Easterly in his "Quest for Growth"; and
9. Easterly states (p. 155) that:

  "This story about knowledge leaks also makes it clear that the market left to itself will not necessarily create growth.                                 Laissez-faire policy by the government may well leave the economy,...., in a vicious circle. Getting into the virtuous
    circle may require conscious government intervention in knowledge creation. The principle that knowledge leaks                                     fundamentally changes our view of how markets work for good or ill. Markets will often nee an injection of                                             government subsidies to start the knowledge ball rolling."

 Critically evaluate this point of view.
10. a. Easterly devotes attention in Chapter 8 to "traps" .  Discuss what these are, give examples, and evaluate some potential remedies.
      b. Kentucky is widely considered an "underdeveloped (read poor) state.  What accounts for this and what "policy" changes or                     reforms do you think have potential for advancing the economic development of the state?
11. Write a narrative in which you describe the current circumstances of Argentina.  There is a line of reasoning which says that                    Argentina has been "doing the right things" but has been the "victim of circumstances beyond its control" an thus is not to be held        entirely accountable for the current state of its economy. Present the reasoning.  There is another line of reasoning which says that          Argentina represents a "text book case" of what not to do if a country is seriously interested in promoting economic growth.
     Present the reasoning
12. Discuss the mechanism of a "currency board".   Under what circumstance a currency board most appropriate? What are the                     potential advantages and disadvantages of a currency board and how might it contribute to economic growth? What is the               relationship between a currency board and "dollarization"?  What are the potential advantages and disadvantage of "dollarization"          as compare to a currency board?  Give examples.
 
 

Sample Test Questions:
1. Discuss and compare the potential advantages and disadvantage of  an "import substitution"  economic development
    strategy with one that is "market based" or "export based". Discuss what is meant by "industrial policy" or "strategic trade
    policy" and their potential as a development strategy. Give specific examples and sources.
2. Sample Final Exam Question
Below are listed some of the items that we have given attention to this semester in this course.
Consider the absolute and relative importance of each of the following.  Discuss the importance of these items, rank the importance of each, and provide a defense of your ranking.          (The best answers are those that offer reponses based on scholarly attribution rather than uncorroborated opinions)
1.  The Rule of Law
2. Property rights
     a.  Legal Appropriability
     b. environment for residual claimancy
3. Micro economic policies
     a. controls/regulations
     b. anti-trust policies
     c. entreprenuerial environment
4. Macro economic policies
     a. fiscal
     b. monetary
5. Financial/central bank/monetary system
6. Previous history and pre-existing conditions
7. Trade policies
8. Legal institutions and traditions
9. Cultural variables
10. The importance of the “Continuity of expectations”
11. Speed of reforms
12. Social delivery mechanisms
13. Environmental issues
14. Equity issues
15. Efficiency and integrity of political institutions
     a.corruption
     b. presence of parrallel markets
16. Population growth/control.
17. Education
18. Debt relief/aid/loans
19. National government
20. Leadership

3. To what extent is the content of this course apply to the economic development of  Kentucky or Eastern Kentucky, or "Applalachia"?
 
 
 

Economic Development(385) Fall, 2004 Final Exam NAME
Take home portion ( 50 points of a total 150 points) You are encouraged to use the sources from the course web page but you may use any published source you wish. All sources  used must  be fully  identified and cited. You may not consult with any other person and all your work must be your own.   Your answers will be collected at the begining of the in class portion (100 points) on Tuesday, December 14, 2004 at 1pm in GH438.

1. Below are listed some of the items that we have given attention to this semester in this course.  Consider the absolute and relative importance of
   each  of the following.  Discuss the importance of these items, rank the  importance of each, and provide a defense of  your ranking.  (The best
   answers are those that offer responses based on scholarly attribution rather than uncorroborated opinions).
     a. Rule of Law
     b. Property rights
          1.  Legal Appropriability
          2. environment for residual claimancy
     c. Micro economic policies
          1. controls/regulations
     d. Macro economic policies
          1. fiscal
          2. monetary
     e. Financial/central bank/monetary system
     f. Previous history and pre-existing conditions
     g. Trade policies
     h. Legal institutions and traditions
     I. Cultural variables
     j. Social service delivery mechanisms
     k. Environment
     l. Distribution of income and wealth
     m. Efficiency and integrity of political institutions
          1. The “pathology” of corruption and its remedies
          2. presence of parallel markets
     n. Population growth/control.
     o. Education
     p. Debt relief/aid/loans
     q. National government
     r. Leadership
     s. civil order
Economic Development(385) Fall, 2006 Final Exam NAME
 

Answer question number one plus any four additional questions. 30 points each

1. a What is meant by “economic development” and why is it desirable?

     b.Below are listed some of the items that have been given attention this semester. Write an essay in which you explain the               importance of  each in promoting economic development.  Rank the  importance of each, and provide a defense of  your             ranking with attribution to the appropriate scholarly readings/authors. (More than one item can share the same ranking)
 

1.  The Rule of Law
2. Property rights
3. Micro economic policies
4. Macro economic policies
5. Trade policies
6. Cultural variables
7. Equity issues
8. Population growth/control.
9. Education
10. Debt relief/aid/loans
11. National government
12. Leadership
 
2. Identify any 12 of the following 15 items and give a brief explain their relevance to this course:
 a. Preemption
 b. “Green vs Biddle”
 c. residual claimant
 d. Lipset hypothesis
 e. “ shumpetarian rents ”
  f. squatting
 g. Tomahawk rights
 h. dirigiste
 I. rack-renting
 j. Appropriability
 k. Rent seeking
 l. Voting paradox
 m. Bifurcated view of human behavior
 n. claims associations
 o. neo-Malthusians
               p. “fee simple”

3. a.  Compare and contrast the “dirigiste” model with the “laizze faire” model as approaches to building a    robust economy.
 b.  Tolluck and other authors we have studied this semester have reasoned that “mercantilists” societies are  inherently flawed                       and thus prone to low growth trajectories.  These authors argue further that societies  organized around a system of private                      property rights combined with  unregulated markets (aka “capitalism” are prone to be more robust.  Present the                                       reasoning.
 c.   Tolluck, Bauer, Freidman, Hayek, and others have argued the importance of “appropriability” and system  of residual                              claimancy as an ingredients of a robust economy. Present the reasoning
    d .  It has been argued in class that an “efficient” capital market is an important component of a high  performing economy.                             Discuss why this is an important component..
 
 

4. a. Discuss the major premise of Hernando Desoto’s book, The Mystery of Capital.
    b. From Hernando Desoto’s book, The Mystery of Capital, discuss the main points of his essay  on “The Missing  Lessons From                    U.S. History” and their relevance to the subject matter of this course.
    c.  Desoto argues that property rights foster civic responsibility and accountability.  Present his reasoning
    d. Discuss Desoto’s views on the importance of institutions in achieving economic development.
5  a.  What is the major proposition/thesis of Thomas Bethell’s book? Assess its importance.
 Chose two of the following:
                b.  Bethell argues that the success of the “Marshall Plan” was “ misinterpreted”.  Explain what he meant and  discuss its                          importance.
               c. According to T. Bethell, “Why did Ireland Starve?”
               d.  From T Bethell’s book,  discuss the major points in his essay “Property  at Jamestown and Plymouth”.
               e. From T Bethell’s book,  discuss the major points in his essay “The Blessings of Property”
6 a. Discuss the importance of “culture” in determining how robust an economy is likely to be.  Give examples
  b. Discuss the importance of “institutions” in determining how robust an economy is likely to be. Give examples
7.  Discuss the difference between a capitalist economy and a mercantilist economy.  Tullock and others have argued that capitalist               economies have produced superior results and have offered reasons as to why.  Discuss the reasons.
8.  From your readings write an essay on one of the following themes:
 a. The morality of private property
 b. The morality of capitalism
 c. The “lipset” hypothesis
9. One the pathologies common observed  in emerging economies is that of “corruption”. Explain why it is a problem. Discuss the             causes and potential remedies for corruption.
10. Explain the major thesis or contribution attributed to three of the following:
 a.  Harold Demsetz
 b. John Rawls vs  Robert Nozick
 c. Julian Simon
 d. Peter Bauer
11. There is much antipathy toward market based (capitalist) economies/systems (around the world and on college campuses in                    America).  Yet empirical evidence support the  view that such systems tend to be associated with robust economies.  Based on the          readings  present the reasoning  that suggests such views are  predicated on the belief that  private enterprise/capitalistic system is          inherently  exploitive (i.e., zero sum  game) . What makes the  Dirigiste model appealing?
12.  a Write and essay in which you discuss the relative importance of “political freedom”, “civil freedom (liberties)”, and “economic              freedom” in promoting the interests of the citizenry of a country.
       b.  Discuss the potential advantages and disadvantages of “democracy” in promoting the interests of the citizenry of a country.
13.a. Explain how the equivalent of a “flat tax” was used effectively in the “Jamestown Colony”
     b.  Explain how the equivalent of a “flat tax” was used effectively in the economic reforms in China beginning in the late 1970"s

14. Below are two articles from the editorial page of today’s Wall Street Journal reflecting on the life of Augusto Pinochet.  Critically        evaluate the articles based on what you have learned from the readings and discussion in this course.
 

The Pinochet Paradox
WSJ December 12, 2006; Page A18

Augusto Pinochet died on Sunday at the age of 91, more than 18 years after he agreed to a 1988 plebiscite that turned him out of power. The standard Pinochet narrative is to emphasize the loss of liberty during the 17 years he ruled the country as a military dictator. The real story is more complicated.

Though General Pinochet became a devil symbol of the international left, he was a far more complex figure and cannot be understood apart from the global Cold War conflict of which he and his country were a part. Pinochet's legacy is a paradox -- a long string of them.

He took power in a coup in 1973, but ultimately he created an environment where democratic institutions would prevail. He is responsible for the death and torture that occurred on his watch, but had Salvador Allende succeeded in turning Chile into another Cuba, many more might have died.

Late in life it emerged that he had probably stashed millions in personal bank accounts. But he also supported the free-market reforms that have made Chile prosperous and the envy of its neighbors. Finally, his legacy includes a Chile that is democratic, that truly belongs to the Chilean people; it exists in stark contrast to the nearly five decades of personal (and soon to be fraternal) dictatorship that Fidel Castro is leaving in Cuba.

Pinochet proved the truth of Jeane Kirkpatrick's Cold War distinction between authoritarian and totalitarian regimes, with the former far more likely to evolve into freer places. That the international left still gives Castro higher marks is something for democrats everywhere to ponder. The popular notion that the U.S. sanctioned the coup or condoned Pinochet's torture also hasn't held up under historical scrutiny. In particular, his behavior can't be understood without considering the behavior of the Allende government he deposed.

Contrary to mythology, Allende was never a popular figure in Chile. He garnered only 36% of the vote in the 1970 election. His path to the presidency had to run through Chile's congress. Reluctantly, the Christian Democrats agreed to let him go forward only after he promised to accept a "Statute of Guarantees" supporting the rule of law. In office, he moved fast and hard to the left.

Government threats to jail journalists in 1972 brought condemnation from the Inter-American Press Association and the International Press Institute. That same year, shortages and spiraling inflation sent Chilean housewives to the streets banging pots and pans. In the first days of 1973, Allende proclaimed government rationing.

In March, he tried to further accelerate the state's unlawful assault on private property through expropriation. In May the 14 members of the Supreme Court denounced "an open and willful contempt of judicial decisions [by the executive]" that threatened an "imminent breakdown of legality." Throughout 1973 street violence escalated. The coup came in September.

The official death toll of the Pinochet dictatorship is some 3,197. An estimated 2,796 of those died in the first two weeks of fighting between the army and the Allende-armed militias. The balance died in the next 17 years. The Pinochet dictatorship was fraught with illegality. Civil liberties were lost and opponents tortured. But over time, with the return of private property, the rule of law and a freer economy, democratic institutions also returned. An economic crisis in 1982 led to even more economic liberalization.

Let no one doubt that, for the peoples of many nations, the Cold War years were dark times. Like Spain's Franco, Pinochet was an authoritarian who resisted the Communists and created the foundation of what would become a democratic transition. What remains is a Chile that has the healthiest economy in Latin America, a free press and a competitive political system that has allowed Socialists to come to power.
 

Pinochet
By ALVARO VARGAS LLOSA
WSJ December 12, 2006; Page A18

In 1971, Fidel Castro visited Chile, where the left-wing government of Salvador Allende was under pressure from the second most powerful Marxist movement in the Western Hemisphere to speed up the revolutionary process. The president provided the Cuban visitor with a military escort. His name was Augusto Pinochet Ugarte -- the same man who in 1973 overthrew Allende to prevent what he called "a second Cuba."

Thirty-five years later, the two aging men who embodied the competing strands of Latin American authoritarianism saw their health deteriorate irreversibly. Pinochet seemed to be escorting Castro once again, this time on the way to the afterlife. In the last few months, Latin Americans had been asking themselves: Who will go first? Last Sunday, the escort decided to go first. They sometimes do.

The difference between the two men is that Castro, who has been in power almost three times longer than Pinochet and has committed even more crimes, continues to have some supporters around the world while Pinochet was one of the most reviled men on Earth. Why was Pinochet more hated than every other dictator?
[Illustration]

Probably because he gave a bad conscience to almost everybody across the political spectrum. For the left, he symbolized the tragic consequences of the Third World's socialist utopia. For the right, he embodied the diabolical temptation to dispose with the rule of law when the political institutions of democracy are tested to the limit. For Latin American democrats of the left and of the right, he was a walking reminder of their own failure to bring about economic prosperity. For free marketers, he was that ugly example of economic success and political repression that used to make it so hard to defend free markets without appearing to condone torture and mass murder. And for human-rights groups, he was, until the discovery of his hidden fortune in 2004, the "ethical" dictator who could be accused of many things but not corruption.

The Pinochet saga did not start with the bloody coup in 1973. It started with the class struggle unleashed by the Marxist left when it tried to push Allende toward all-out revolution. Allende had only won a third of the popular vote and, according to Chile's constitution, Congress was able to declare him president over his center-right opponent after making a commitment to respect the rule of law. The left's responsibility in the erosion of the rule of law and the establishment of a 17-year military government that brought about human-rights atrocities and the interruption of a democratic tradition in that country is a matter of historical truth. Today, Chile's Socialist government is the antithesis of the Allende government precisely because of that truth. The left feels very uncomfortable with the humiliating lesson of history.

But the center-right, represented by the Christian Democrats in Chile, also had reasons to feel guilty. They voted for Allende in Congress after he failed to win victory outright and they openly called for a coup d'état when his government turned into chaos. They soon realized that Pinochet did not intend to restore democratic rule and was determined to establish a permanent autocracy that he eventually sought to institutionalize through a custom-made constitution in 1980. Christian Democrats in Chile and around the world never quite got over that feeling of guilt. That is probably one of the reasons why they continue to be allied with the Socialists in the governing coalition known as the "Concertación," even though they have much in common with Chile's conservative parties.

Democrats in the developing world were also uneasy knowing that a soldier with very limited intellectual acumen was able to preside over an economic transformation. The Pinochet reforms came about almost fortuitously when, given the devastation of the country's economy, the general hired a coterie of young economists familiar with the ideas of one Milton Friedman, whom Pinochet had never heard of. Because free markets tend to bring about prosperity regardless of the moral nature of the regime that opens a country's economy, Chile prospered. We also know that dictatorships don't last very long once they open the economy because the middle class tends to expand and develop a desire for political and civic participation. That is why Pinochet lost the referendum in 1988 and why Fidel Castro, who toyed with limited markets in the 1990s, quickly reversed course.

Some free marketers argued that free-market reforms opened the way to democracy to justify his regime. But the reforms could easily have been implemented without killing 3,197 people, torturing some 29,000, and sending thousands more into exile -- the horrendous human rights violations exposed by the National Commission for Truth and Reconciliation in 1991. In fact, Pinochet probably contributed to postponing the cause of free markets in Latin America because most governments feared being associated with his regime. The fact that the Chilean conservative opposition distanced itself publicly from Pinochet in the 1999 and the 2005 elections -- and that its former presidential candidates stayed away from the military hospital where the general died on Sunday -- suggests the wish to break the awkward connection once and for all.

Finally, human rights groups were frustrated for years with the image of Pinochet as the austere dictator who never stole one peso. That image provided the Chilean courts with a cover for not acting against the general until his detention in London in 1998 made it impossible to avoid prosecuting him at home. If Chileans had known that he had stashed millions in foreign bank accounts, it would have been almost impossible not to try him for embezzlement; that, in turn, would have led to human-rights prosecutions. In the absence of that information, the argument against prosecuting him was always that Chile's transition might be imperiled. Pinochet's image changed when in 2004 a U.S. Senate investigation stumbled upon the evidence that the general had stored millions of dollars in the former Riggs Bank and other financial entities using a dozen false identities. After that, an endless stream of revelations did away with the idea that there can be such a thing as a dictatorship without corruption. By then it was too late. Although he could not avoid having his immunity lifted a total of 14 times and suffering house arrest, Pinochet managed to escape being sentenced or physically taken to prison by alleging old age and mental incapacity.

When he learned of Pinochet's death last Sunday, a well-known left-wing Uruguayan writer said: "Death beat Justice." Actually, it was the other way around: The old dictator died knowing that he had given enough people a bad conscience to make him one of the world's most reviled figures. There is some poetic justice in that.

Mr. Vargas Llosa is the director of the Center on Global Prosperity at the Independent Institute.