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,ECS3707:ECP EXAM 2021
UNIVERSITY EXAMINATIONS
June/July 2021
ECS3707
Development Economics
100 Marks
Duration: 2 Hours
First examiner: Ms K Nchoe
Second examiner: Mrs L Stone
External examiner: Dr S Gumede
CONFIDENTIAL ECS3707
Page 1 of 3 May/June 2021
,Question 1
1.1 Why do we not see a stronger relationship between income and happiness, especially once
income has risen above $20,000 a year per person? (5)
The belief that high income is associated with good mood is widespread but mostly illusory,” the
researchers wrote. “People with above-average income are relatively satisfied with their lives but are
barely happier than others in moment-to-moment experience, tend to be tenser, and do not spend more
time in particularly enjoyable activities. According to economic development indicators wellbeing of
individuals are also determined by life expect self-esteem, freedom and proper healthy facilities.
1.2 In what way is development economics greater in scope than traditional economics?
(5)
Traditional economics is an approach to economics that emphasizes utility, profit maximization, market
efficiency and determination of equilibrium while development economics is the study of how
economics are transferred from stagnation to growth and from low income to high income status,
and overcoming problems and absolute poverty. (Combine traditional and political
economics to eradicate poverty) .Development economics has a greater scope than traditional
economics. Development economics shall be able to bring in quick and significant improvement in the
standard of living of the poor and downtrodden defying all the issues of political, social, economic, and
institutional systems, whether public or private. This is achieved in addition to the efficient allocation of
already scared or idle productive resources and also provides sustained growth as it is achieved in the case
of the traditional economy. Development economics can rapidly transform the structure and institution
systems, as it addresses the economic issues arising due to the imperfect markets and lack of market
knowledge among businesses. It also addresses the political & social levels of culture and traditions of the
underdeveloped or less developed countries
1.3 What are the essential characteristics that have shaped Pakistan and Bangladesh’s economic
and social progress since the early 1970s? (10)
The different experiences of Bangladesh and Pakistan since 1971 are relevant for
understanding how aid can affect governance in vulnerable recipient countries where states
face serious economic and political challenges. Aid does affect the development prospects
of such countries but in more complex ways than is often assumed. The cases of
Bangladesh and Pakistan challenge the idea that aid can be used to achieve what is
described as “good governance.” However, the interaction between types of aid and
preexisting political and governance structures can result in positive or negative outcomes
, for economic development and political stability. It is interesting to compare Bangladesh and
Pakistan because they were the same country until 1971 when a civil war, followed by a war
of independence, led to the emergence of Bangladesh.
Bangladesh was poorer and less developed, and was famously written off by Henry
Kissinger as a “basket case” dependent on aid. Both countries had vulnerable democracies
after 1971, with interludes of military governments. Both received roughly 50 billion dollars of
foreign aid in nominal terms in the 40 years following 1971. While both remain poor and
vulnerable to internal conflicts, Bangladesh has arguably made greater progress given its
starting point, while Pakistan has become more fragile.
Pakistan’s per capita GDP was higher in 1971 and remained so in 2011, but economic
growth has been faster in Bangladesh since the 1990s and the gap in per capita GDP
between the two countries has narrowed significantly. Bangladesh has also done better in
terms of a number of social indicators with more rapid progress in areas such as infant
mortality. Its manufacturing sector has grown more rapidly, creating jobs for millions in the
garments industry, while industrial growth in Pakistan has languished. The most striking
difference is that despite intense internal conflicts in its early years, Bangladesh has moved
toward somewhat lower levels of internal violence and greater political stability (though
progress remains vulnerable to reverses) while Pakistan appears to have moved in the
opposite direction.
1.4 Why are women often referred to as playing a central role in economic development?
(5)
1) The rate of return on women’s education and development is higher than men
2) Increasing women’s education increases their productivity and results in greater labor force
participation, later marriage, lower fertility and greatly improved child health and nutrition
3) Multiplier effect of improved economic development child health and educated mothers on the quality
of future human resources
4) Will break the vicious cycle of poverty as woman carry a disproportionate burden of poverty
and landlessness
Question 2
2.1 Compare and contrast the UN’s Millennium Development Goals (MDGs) with the Sustainable
Development Goals (SDGs). Which goals do you consider to be the most negatively affected
Email:
http://theeconomistsoe.com/
,ECS3707:ECP EXAM 2021
UNIVERSITY EXAMINATIONS
June/July 2021
ECS3707
Development Economics
100 Marks
Duration: 2 Hours
First examiner: Ms K Nchoe
Second examiner: Mrs L Stone
External examiner: Dr S Gumede
CONFIDENTIAL ECS3707
Page 1 of 3 May/June 2021
,Question 1
1.1 Why do we not see a stronger relationship between income and happiness, especially once
income has risen above $20,000 a year per person? (5)
The belief that high income is associated with good mood is widespread but mostly illusory,” the
researchers wrote. “People with above-average income are relatively satisfied with their lives but are
barely happier than others in moment-to-moment experience, tend to be tenser, and do not spend more
time in particularly enjoyable activities. According to economic development indicators wellbeing of
individuals are also determined by life expect self-esteem, freedom and proper healthy facilities.
1.2 In what way is development economics greater in scope than traditional economics?
(5)
Traditional economics is an approach to economics that emphasizes utility, profit maximization, market
efficiency and determination of equilibrium while development economics is the study of how
economics are transferred from stagnation to growth and from low income to high income status,
and overcoming problems and absolute poverty. (Combine traditional and political
economics to eradicate poverty) .Development economics has a greater scope than traditional
economics. Development economics shall be able to bring in quick and significant improvement in the
standard of living of the poor and downtrodden defying all the issues of political, social, economic, and
institutional systems, whether public or private. This is achieved in addition to the efficient allocation of
already scared or idle productive resources and also provides sustained growth as it is achieved in the case
of the traditional economy. Development economics can rapidly transform the structure and institution
systems, as it addresses the economic issues arising due to the imperfect markets and lack of market
knowledge among businesses. It also addresses the political & social levels of culture and traditions of the
underdeveloped or less developed countries
1.3 What are the essential characteristics that have shaped Pakistan and Bangladesh’s economic
and social progress since the early 1970s? (10)
The different experiences of Bangladesh and Pakistan since 1971 are relevant for
understanding how aid can affect governance in vulnerable recipient countries where states
face serious economic and political challenges. Aid does affect the development prospects
of such countries but in more complex ways than is often assumed. The cases of
Bangladesh and Pakistan challenge the idea that aid can be used to achieve what is
described as “good governance.” However, the interaction between types of aid and
preexisting political and governance structures can result in positive or negative outcomes
, for economic development and political stability. It is interesting to compare Bangladesh and
Pakistan because they were the same country until 1971 when a civil war, followed by a war
of independence, led to the emergence of Bangladesh.
Bangladesh was poorer and less developed, and was famously written off by Henry
Kissinger as a “basket case” dependent on aid. Both countries had vulnerable democracies
after 1971, with interludes of military governments. Both received roughly 50 billion dollars of
foreign aid in nominal terms in the 40 years following 1971. While both remain poor and
vulnerable to internal conflicts, Bangladesh has arguably made greater progress given its
starting point, while Pakistan has become more fragile.
Pakistan’s per capita GDP was higher in 1971 and remained so in 2011, but economic
growth has been faster in Bangladesh since the 1990s and the gap in per capita GDP
between the two countries has narrowed significantly. Bangladesh has also done better in
terms of a number of social indicators with more rapid progress in areas such as infant
mortality. Its manufacturing sector has grown more rapidly, creating jobs for millions in the
garments industry, while industrial growth in Pakistan has languished. The most striking
difference is that despite intense internal conflicts in its early years, Bangladesh has moved
toward somewhat lower levels of internal violence and greater political stability (though
progress remains vulnerable to reverses) while Pakistan appears to have moved in the
opposite direction.
1.4 Why are women often referred to as playing a central role in economic development?
(5)
1) The rate of return on women’s education and development is higher than men
2) Increasing women’s education increases their productivity and results in greater labor force
participation, later marriage, lower fertility and greatly improved child health and nutrition
3) Multiplier effect of improved economic development child health and educated mothers on the quality
of future human resources
4) Will break the vicious cycle of poverty as woman carry a disproportionate burden of poverty
and landlessness
Question 2
2.1 Compare and contrast the UN’s Millennium Development Goals (MDGs) with the Sustainable
Development Goals (SDGs). Which goals do you consider to be the most negatively affected
