TESTBANK Economic Development13/E Michael Todaro .r .r .r .r .r .r
Chapter1: Introducing Economic .r . r .r
.r Development: A Global Perspective .r .r .r
◼ KeyConcepts .r
As curious as students who register to take Development Economics may be, their knowledge and
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experience of the developing world will vary widely. The first main point of Chapter 1 is to emphasise how
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different life in the developing world is. New in the 13th edition is a systematic description of four stylised
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strata of living standards fromextreme poverty to rich based on Rosling,
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Rosling, and Rosling Ronnlund’s book Factfulness. This is followed by a discussion of the World Bank’s
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classification of economies by ranges of average national income using gross national income (GNI)
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statistics.
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The second point is to provide an overview of the nature of development economics as a field. A defense of
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development economics as a distinct field, rather than an agglomeration of other economics subfields, is
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offered. A major theme of the book, that development economics must encompass the study of
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institutional and social, as well as economic, mechanisms for modernising an economy while eliminating
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absolute poverty, is introduced.
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Sections 1.5 and 1.6 looks deeper into the meaning of development and a view of development that is
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multidimensional. Amartya Sen’s “Capabilities” approach is discussed in Section 1.5. In Section 1.6, data
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collectedinaGallupWorldPollontherelationshipbetweenhappiness(asmeasuredbyGallup’s
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life satisfaction “ladder” question and real per capita income) and other research on happiness/life
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satisfaction is discussed. The level of happiness is not only related to level of income but to other factors
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such as democratic freedoms and the quality of social relationships. The role of normative
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values in development economics—a subject dealing with human misery and human potential, with
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equityaswellasefficiency,withculturalchangethatcauseslossesaswellasgains,andwithtransfer
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aswellas creationof wealth—isalsostressed.
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The conclusion is that development is both a physical reality and a state of mind. The meaning and
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objectives of development include the provision of basic needs, reducing inequality, raising living
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standards through appropriate economic growth, improving self-esteem in relation to the developed
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countries, and expanding freedom of choice in the market and beyond.
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Section 1.7 presents an in depth examination of the UN’s Sustainable Development Goals (SDGs). This
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includes a more comprehensive list of the goals themselves (appearing in Table 1.1) and a discussion of the
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shortcomings of the SDGs. In Section 1.8, the plan of the book is introduced through 32 critical
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.questions of development economics. Depending on the amount of material
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covered by the instructor, students should beable to intelligently address most of these questions by the end
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of the course. Finally, a comparative case study of Pakistan and Bangladesh is presented.
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, TodaroandSmith,EconomicDevelopment,13e,Instructor’sManual .r .r .r .r .r .r .r
◼ LectureSuggestions .r
It might be best to begin with a discussion of the immense scale of transformation in the world
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economy. The late Hans Rosling’s video “200 countries, 200 years, 4 minutes” (readily available on .r .r .r .r .r .r .r .r .r .r .r .r .r .r
YouTube) can be used to confirm this point in an entertaining way. It might also be helpful to highlight that
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real gross world product per capita has almost tripled between 1960 and 2018 (implying growth per
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.year of 1.85%) and is 33% higher than it was at the turn of this century
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(implying annual growth of 1.56% from 2000 to 2018). This data can be found on the Saint Louis Federal .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
Reserve’s website in the Federal Reserve Economic Database (or FRED).
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Despite such advances, tremendous disparities continue to exist. In terms of easily accessible statistics the
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.PEW Research Centre’s “World Population by Income” provides an interactive map
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showing the share of economies’ population who are economically poor, low income, middle income, .r .r .r .r .r .r .r .r .r .r .r .r .r
upper middle income, and high income. While regrettably the data provided is for 2011, it
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echoes what Todaro and Smith point out in the text, that more than 75% of the world’s population live on
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$15 or less a day (or about $5,500 per person per year). Several excellent books attempt to give some idea of
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the range of living standards found throughout the world. For example, The Material World by Peter
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.Menzell. This book presents photographic profiles of typical families
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around the world with all of their possessions placed in front of their homes. As one goes from one family to
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the next the instructor has the opportunity to highlight the important differences between nations and
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regions and to touch on key issues of growth and development.
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One of the key strengths of this chapter is that it does not focus solely on the hard numbers that
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supposedly measure development. The discussion of Sen’s Capabilities approach and the far less than .r .r .r .r .r .r .r .r .r .r .r .r .r
perfect relationship between income and happiness are well worth spending a fair amount of class time
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exploring. Class time should also be spent discussing the 32 critical questions listed on
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pages 21–23 of the text and then asking students to identify 3 or 4 questions that they are particularly
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interested in exploring. Asking each student to list what they consider to be “critically” critical questions
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on a sheet of paper, collecting their responses, and then trying to direct the rest of the term to addressing the
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most commonly mentioned critical questions for that class will be helpful
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infurtherdrawingstudentsinandholdingtheirattentionthroughouttheterm.
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At this same point, the instructor might also wish to get some idea of students’ experiences traveling to
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developing countries and, in as subtle a way as is possible, determine how shaky their understanding of the
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wider world is. The instructor perhaps could draw on his or her own experiences and give some
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background as to how he or she first became interested in Development
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Economics. This may – through the kinds of questions asked – help the instructor further gauge students’ .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
level of sophistication in this area. This is not something that should be or, can, be settled in the first one or
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two classes and will develop over the course of the term.
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In many universities, the economic development course will be filled with students who are not majoring
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in economics. These students may come from different colleges with majors such as anthropology,
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sociology, or political science or business (management, finance, etc.). They may have had as little as one
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semester of introductory economics. Given that you are teaching an economics class, you may wish to
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remind the students of this fact and offer whatever help you can. Given video capture software, you might
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consider recording some primers that then could be made available to students through course
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.management software such as Blackboard or Moodle. You
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, TodaroandSmith,EconomicDevelopment,13e,Instructor’sManual .r .r .r .r .r .r .r
certainly should use the first class or two to set the stage for the approach you will take, whether it will be
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more interdisciplinary, more economic, more mathematical and quantitative, more historical, or some
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combination.
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Emphasise that development economics is an exciting subject to study and teach because it does not .r .r . r . r .r .r .r . r .r .r .r .r .r .r . r
focus just on one country, but on all less-developed countries. Further emphasise that you will try to teach
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key concepts and ideas which can be applied to the experiences of many developing countries. These
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concepts and ideas are important for understanding where the developing countries are today, as well
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as what their options are for the future. You might also wish to emphasise that there arguably is no other
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area of economics that is more relevant to the majority of the world’s people.
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As already mentioned, the 32 critical questions can be used to motivate student interest in the subject as
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well as present an overview of what the class is all about. It can be emphasised that there is no one answer to
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the general question of why some countries are more developed than others. There are as many different
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opinions on what a less-developed country should do to become more developed. A good approach is to
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present differing viewpoints throughout the course and let the students make up their minds on their own.
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◼ DiscussionTopics .r
Encouraging class participation is a good way to motivate the students and make them feel involved in the .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
learning process. The first few weeks of class in particular are conducive to this sort of exercise. Two ideas
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for discussions at this stage are:
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• What is the meaning of economic development? Why do we not see a stronger relationship between
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incomeandhappiness,especiallyonceincomehasrisenabove$20,000ayearperperson?
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• Isitpossibleforthewholeworldtobedeveloped?Thiscanbeaninterestingquestiontoaskatthe beginning
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of the course, once environment and development have been covered (Chapter 10), and then again at the
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end of the course.
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◼ SampleQuestions .r
Short Answer .r
1. Providea definitionof development economics. Justifyyour choice carefully. .r .r .r .r .r .r .r .r .r
Answer: See Section 4 (pages 8–10) for some ideas about how the students might answer this . r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
question. They should in some way say that development economics is more than just .r .r .r .r .r .r .r .r .r .r .r .r .r .r
growth in GDP. .r .r .r
2. In defining development to include more than just the growth of per capita income, there is an implicit
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assumption that the growth of per capita income alone is not sufficient to guarantee the reduction of
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poverty and the growth of self-esteem. Is it possible that there could be growth of per capita income
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without the achievement of these other objectives?
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, TodaroandSmith,EconomicDevelopment,13e,Instructor’sManual .r .r .r .r .r .r .r
Answer: Per capita income can show growth even when that growth does not touch vast portions of
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the population. This point is clearly made in Chapter 5 and is suggested in the comparative
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case study of Pakistan and Bangladesh. The growth may be centered in one area or sector of
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the economy, for example. Also, most developed countries have, at some time in their
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histories,introducedpoliciesemphasisingequality. .r .r .r .r .r
3. Inwhatwayisdevelopmenteconomicsgreaterinscopethantraditionaleconomics?
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Answer: Development economics must encompass the study of institutional, political, and social as
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well as economic mechanisms for modernising an economy while eliminating absolute.r .r .r .r .r .r .r .r .r .r .r
poverty and transforming states of mind as well as physical conditions. More details found
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in the chapter. .r .r .r
4. Make a case that development economics might be merely a combination of all the other subfields of
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economics, only applied to low-income countries.
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Answer: SeeQuestion3above. . r .r .r .r
5. Whatdoyouthinkarethemostseriousobstaclestofurtherprogressinthedevelopingworld?
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Answer: The main point here is to ensure that students are thinking carefully about the issues raised
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in the text. You may also wish to draw from the critical questions on pages 21–23..r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
6. In reviewing discussions of life in developing countries, what is it about lifestyles in the low- income
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countries compared with lifestyles in the high-income countries that most strikes you? Why?
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Answer: Thisisanopen-endedquestiontostimulatereflection. . r .r .r .r .r .r .r .r
7. Do you think it is in the material interests of high-income countries to help low-income countries
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improve their economic performance? Why or why not?
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Answer: Answers might touch on increasing the market for products in which high-income
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countries have a comparative advantage, reducing the dangers of regional war and.r .r .r .r .r .r .r .r .r .r .r .r
terrorism, reducing international transmission of disease, and curbing international
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migration. .r
8. Howishappinessrelatedtodevelopment?
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Answer: Answers should make reference to the correlation between happiness and income level as
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well as touch on the connection between happiness and social relationships, personal and
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democratic freedoms, religious beliefs, and health, among other factors listed on page 12.
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Further, answers should include a discussion on happiness as being a part of Amartya
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Sen’s concept of functionings. .r .r .r .r
9. Compare and contrast the UN’s Millennium Development Goals (MDGs) 2000–2015 with the
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Sustainable Development Goals (SDGs) put forward in 2015? What do you consider to be the most
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important of either set of goals and why?
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Answer: The answer should stress that both sets of goals cover a broad range of objectives both
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economic and social. These were put forward so that developing countries would have
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numerical targets against which their progress could be judged and, where warranted,
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appropriate assistance offered. .r .r .r
Chapter1: Introducing Economic .r . r .r
.r Development: A Global Perspective .r .r .r
◼ KeyConcepts .r
As curious as students who register to take Development Economics may be, their knowledge and
.r .r .r .r .r .r .r .r .r .r .r .r .r .r
experience of the developing world will vary widely. The first main point of Chapter 1 is to emphasise how
.r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
different life in the developing world is. New in the 13th edition is a systematic description of four stylised
.r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
strata of living standards fromextreme poverty to rich based on Rosling,
.r .r .r .r .r .r .r .r .r .r .r .r
Rosling, and Rosling Ronnlund’s book Factfulness. This is followed by a discussion of the World Bank’s
.r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
classification of economies by ranges of average national income using gross national income (GNI)
.r .r .r .r .r .r .r .r .r .r .r .r .r .r
statistics.
.r
The second point is to provide an overview of the nature of development economics as a field. A defense of
.r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
development economics as a distinct field, rather than an agglomeration of other economics subfields, is
.r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
offered. A major theme of the book, that development economics must encompass the study of
.r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
institutional and social, as well as economic, mechanisms for modernising an economy while eliminating
.r .r .r .r .r .r .r .r .r .r .r .r .r .r
absolute poverty, is introduced.
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Sections 1.5 and 1.6 looks deeper into the meaning of development and a view of development that is
.r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
multidimensional. Amartya Sen’s “Capabilities” approach is discussed in Section 1.5. In Section 1.6, data
.r .r .r .r .r .r .r .r .r .r .r .r .r .r
collectedinaGallupWorldPollontherelationshipbetweenhappiness(asmeasuredbyGallup’s
.r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
life satisfaction “ladder” question and real per capita income) and other research on happiness/life
.r .r .r .r .r .r .r .r .r .r .r .r .r
satisfaction is discussed. The level of happiness is not only related to level of income but to other factors
.r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
such as democratic freedoms and the quality of social relationships. The role of normative
. r . r . r . r . r . r . r . r . r . r . r . r . r . r
values in development economics—a subject dealing with human misery and human potential, with
.r .r .r .r .r .r .r .r .r .r .r .r
equityaswellasefficiency,withculturalchangethatcauseslossesaswellasgains,andwithtransfer
.r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
aswellas creationof wealth—isalsostressed.
.r .r .r .r .r .r .r
The conclusion is that development is both a physical reality and a state of mind. The meaning and
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objectives of development include the provision of basic needs, reducing inequality, raising living
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standards through appropriate economic growth, improving self-esteem in relation to the developed
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countries, and expanding freedom of choice in the market and beyond.
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Section 1.7 presents an in depth examination of the UN’s Sustainable Development Goals (SDGs). This
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includes a more comprehensive list of the goals themselves (appearing in Table 1.1) and a discussion of the
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shortcomings of the SDGs. In Section 1.8, the plan of the book is introduced through 32 critical
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.questions of development economics. Depending on the amount of material
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covered by the instructor, students should beable to intelligently address most of these questions by the end
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of the course. Finally, a comparative case study of Pakistan and Bangladesh is presented.
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, TodaroandSmith,EconomicDevelopment,13e,Instructor’sManual .r .r .r .r .r .r .r
◼ LectureSuggestions .r
It might be best to begin with a discussion of the immense scale of transformation in the world
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economy. The late Hans Rosling’s video “200 countries, 200 years, 4 minutes” (readily available on .r .r .r .r .r .r .r .r .r .r .r .r .r .r
YouTube) can be used to confirm this point in an entertaining way. It might also be helpful to highlight that
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real gross world product per capita has almost tripled between 1960 and 2018 (implying growth per
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.year of 1.85%) and is 33% higher than it was at the turn of this century
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(implying annual growth of 1.56% from 2000 to 2018). This data can be found on the Saint Louis Federal .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
Reserve’s website in the Federal Reserve Economic Database (or FRED).
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Despite such advances, tremendous disparities continue to exist. In terms of easily accessible statistics the
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.PEW Research Centre’s “World Population by Income” provides an interactive map
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showing the share of economies’ population who are economically poor, low income, middle income, .r .r .r .r .r .r .r .r .r .r .r .r .r
upper middle income, and high income. While regrettably the data provided is for 2011, it
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echoes what Todaro and Smith point out in the text, that more than 75% of the world’s population live on
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$15 or less a day (or about $5,500 per person per year). Several excellent books attempt to give some idea of
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the range of living standards found throughout the world. For example, The Material World by Peter
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.Menzell. This book presents photographic profiles of typical families
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around the world with all of their possessions placed in front of their homes. As one goes from one family to
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the next the instructor has the opportunity to highlight the important differences between nations and
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regions and to touch on key issues of growth and development.
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One of the key strengths of this chapter is that it does not focus solely on the hard numbers that
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supposedly measure development. The discussion of Sen’s Capabilities approach and the far less than .r .r .r .r .r .r .r .r .r .r .r .r .r
perfect relationship between income and happiness are well worth spending a fair amount of class time
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exploring. Class time should also be spent discussing the 32 critical questions listed on
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pages 21–23 of the text and then asking students to identify 3 or 4 questions that they are particularly
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interested in exploring. Asking each student to list what they consider to be “critically” critical questions
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on a sheet of paper, collecting their responses, and then trying to direct the rest of the term to addressing the
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most commonly mentioned critical questions for that class will be helpful
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infurtherdrawingstudentsinandholdingtheirattentionthroughouttheterm.
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At this same point, the instructor might also wish to get some idea of students’ experiences traveling to
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developing countries and, in as subtle a way as is possible, determine how shaky their understanding of the
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wider world is. The instructor perhaps could draw on his or her own experiences and give some
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background as to how he or she first became interested in Development
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Economics. This may – through the kinds of questions asked – help the instructor further gauge students’ .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
level of sophistication in this area. This is not something that should be or, can, be settled in the first one or
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two classes and will develop over the course of the term.
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In many universities, the economic development course will be filled with students who are not majoring
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in economics. These students may come from different colleges with majors such as anthropology,
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sociology, or political science or business (management, finance, etc.). They may have had as little as one
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semester of introductory economics. Given that you are teaching an economics class, you may wish to
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remind the students of this fact and offer whatever help you can. Given video capture software, you might
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consider recording some primers that then could be made available to students through course
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.management software such as Blackboard or Moodle. You
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, TodaroandSmith,EconomicDevelopment,13e,Instructor’sManual .r .r .r .r .r .r .r
certainly should use the first class or two to set the stage for the approach you will take, whether it will be
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more interdisciplinary, more economic, more mathematical and quantitative, more historical, or some
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combination.
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Emphasise that development economics is an exciting subject to study and teach because it does not .r .r . r . r .r .r .r . r .r .r .r .r .r .r . r
focus just on one country, but on all less-developed countries. Further emphasise that you will try to teach
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key concepts and ideas which can be applied to the experiences of many developing countries. These
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concepts and ideas are important for understanding where the developing countries are today, as well
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as what their options are for the future. You might also wish to emphasise that there arguably is no other
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area of economics that is more relevant to the majority of the world’s people.
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As already mentioned, the 32 critical questions can be used to motivate student interest in the subject as
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well as present an overview of what the class is all about. It can be emphasised that there is no one answer to
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the general question of why some countries are more developed than others. There are as many different
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opinions on what a less-developed country should do to become more developed. A good approach is to
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present differing viewpoints throughout the course and let the students make up their minds on their own.
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◼ DiscussionTopics .r
Encouraging class participation is a good way to motivate the students and make them feel involved in the .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
learning process. The first few weeks of class in particular are conducive to this sort of exercise. Two ideas
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for discussions at this stage are:
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• What is the meaning of economic development? Why do we not see a stronger relationship between
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incomeandhappiness,especiallyonceincomehasrisenabove$20,000ayearperperson?
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• Isitpossibleforthewholeworldtobedeveloped?Thiscanbeaninterestingquestiontoaskatthe beginning
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of the course, once environment and development have been covered (Chapter 10), and then again at the
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end of the course.
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◼ SampleQuestions .r
Short Answer .r
1. Providea definitionof development economics. Justifyyour choice carefully. .r .r .r .r .r .r .r .r .r
Answer: See Section 4 (pages 8–10) for some ideas about how the students might answer this . r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
question. They should in some way say that development economics is more than just .r .r .r .r .r .r .r .r .r .r .r .r .r .r
growth in GDP. .r .r .r
2. In defining development to include more than just the growth of per capita income, there is an implicit
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assumption that the growth of per capita income alone is not sufficient to guarantee the reduction of
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poverty and the growth of self-esteem. Is it possible that there could be growth of per capita income
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without the achievement of these other objectives?
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, TodaroandSmith,EconomicDevelopment,13e,Instructor’sManual .r .r .r .r .r .r .r
Answer: Per capita income can show growth even when that growth does not touch vast portions of
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the population. This point is clearly made in Chapter 5 and is suggested in the comparative
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case study of Pakistan and Bangladesh. The growth may be centered in one area or sector of
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the economy, for example. Also, most developed countries have, at some time in their
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histories,introducedpoliciesemphasisingequality. .r .r .r .r .r
3. Inwhatwayisdevelopmenteconomicsgreaterinscopethantraditionaleconomics?
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Answer: Development economics must encompass the study of institutional, political, and social as
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well as economic mechanisms for modernising an economy while eliminating absolute.r .r .r .r .r .r .r .r .r .r .r
poverty and transforming states of mind as well as physical conditions. More details found
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in the chapter. .r .r .r
4. Make a case that development economics might be merely a combination of all the other subfields of
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economics, only applied to low-income countries.
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Answer: SeeQuestion3above. . r .r .r .r
5. Whatdoyouthinkarethemostseriousobstaclestofurtherprogressinthedevelopingworld?
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Answer: The main point here is to ensure that students are thinking carefully about the issues raised
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in the text. You may also wish to draw from the critical questions on pages 21–23..r .r .r .r .r .r .r .r .r .r .r .r .r .r .r .r
6. In reviewing discussions of life in developing countries, what is it about lifestyles in the low- income
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countries compared with lifestyles in the high-income countries that most strikes you? Why?
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Answer: Thisisanopen-endedquestiontostimulatereflection. . r .r .r .r .r .r .r .r
7. Do you think it is in the material interests of high-income countries to help low-income countries
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improve their economic performance? Why or why not?
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Answer: Answers might touch on increasing the market for products in which high-income
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countries have a comparative advantage, reducing the dangers of regional war and.r .r .r .r .r .r .r .r .r .r .r .r
terrorism, reducing international transmission of disease, and curbing international
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migration. .r
8. Howishappinessrelatedtodevelopment?
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Answer: Answers should make reference to the correlation between happiness and income level as
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well as touch on the connection between happiness and social relationships, personal and
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democratic freedoms, religious beliefs, and health, among other factors listed on page 12.
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Further, answers should include a discussion on happiness as being a part of Amartya
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Sen’s concept of functionings. .r .r .r .r
9. Compare and contrast the UN’s Millennium Development Goals (MDGs) 2000–2015 with the
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Sustainable Development Goals (SDGs) put forward in 2015? What do you consider to be the most
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important of either set of goals and why?
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Answer: The answer should stress that both sets of goals cover a broad range of objectives both
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economic and social. These were put forward so that developing countries would have
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numerical targets against which their progress could be judged and, where warranted,
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appropriate assistance offered. .r .r .r
