CASE NOTES
INTEGRATIVE CASE 1
THE CHINESE MENU (FOR DEVELOPMENT)
Analysis: China’s emergence as a significant economic power is an excellent basis for discussing what can happen in terms of economic development. You might have a discussion in class as to the extent that economic development can occur in the poorest nations on earth.
Answers to Questions:
1. What role do institutions play in economic development?
The student should have no problem identifying roles but help them to see that roles could be both positive and negative. Furthermore, the application of that role may vary based on time, culture, and circumstances.
2. What is behind the differences in economic development between North and
South America?
The student will likely find it easier to explain the differences in terms of institutions rather than resources. While some resources in South America have not been properly developed, the student should be able to explain how that lack of development is most often due to institutions.
3. Some argue that a democratic political system is conducive to economic growth.
How does the experience of recent Chinese economic development support or refute this statement?
Whether the focus is on all of mainland China (PRC) or Hong Kong that was integrated into the PRC, economic development has occurred in spite of a lack of democracy. On the other hand, Taiwan (ROC) has had a relatively democratic country and has enjoyed economic growth. The student should be challenged in whatever response is given and asked if perhaps other aspects such as culture affect whether democracy is best suited to providing the environment needed for economic growth.
4. If you were a policymaker in a poor country or a World Bank official, what would be your advice, based on North’s article and China’s experience, for the most effective economic development?
This is a question in which the answer is not as important