Geography, Poverty Traps
Institutions & Power
Smith, Rostow & Unger
Land, Labor & Industrialization
Real World Synthesis
100

This economist argues that rich countries should significantly increase development aid and financing to help poor countries escape poverty traps, emphasizing direct aid for infrastructure, health, and agriculture

Who is Jeffrey Sachs?

100

These economists argue that the key difference between rich and poor nations lies in inclusive versus extractive institutions.

Who are Daron Acemoglu and James Robinson?

100

Adam Smith used this metaphor to describe how individual self-interest can lead to socially beneficial outcomes.

What is the invisible hand?

100

This term describes when abundance of natural resources leads to economic underperformance and institutional weakness.

What is the resource curse or What is the paradox of plenty?

100

This East Asian country is often cited as successfully moving from extractive to inclusive institutions post-WWII, contradicting geographic determinism.

What is South Korea?

200

According to Sachs, these are the three main types of capital needed to escape poverty traps.

What are human capital, business capital, and infrastructure?

200

This concept describes how extractive institutions create feedback loops that maintain poverty and prevent institutional reform.

What is the vicious cycle?

200

Rostow's model is criticized for this assumption: that all countries must follow the same linear Western developmental path.

What is linear/unilinear development or What is the stages of growth approach?

200

This development economist's model shows how economies with unlimited supplies of labor in the subsistence sector can industrialize by absorbing workers into the modern sector.

Who is W. Arthur Lewis?

200

Apply Sachs and Acemoglu-Robinson: This African country faces both a poverty trap (landlocked, disease burden) AND extractive institutions from colonial legacy.

What is Malawi, Niger, Chad, or Central African Republic?

300

Sachs advocates for this type of approach, which involves differential diagnosis based on local conditions rather than one-size-fits-all solutions.

What is a diagnostic/clinical approach to development?

300

According to Acemoglu and Robinson, this historical moment in England created a critical juncture that led to more inclusive institutions.

What is the Glorious Revolution (of 1688)?

300

According to Unger, this concept explains how past institutional choices constrain current development options and lock countries into certain trajectories.

What is path dependency?

300

According to development theory, this process describes how prosperity and growth spread from advanced to less developed regions through trade, investment, and technology transfer.

What is the diffusion of prosperity?

300

The World Bank uses this dollar amount per day as the international poverty line to measure extreme poverty globally.

What is $2.15 per day?

400

In Sachs's clinical economics approach, what are the key diagnostic steps to identify barriers to development?

What are: differential diagnosis, identifying specific constraints, and prescribing targeted interventions based on local conditions?

400

Acemoglu and Robinson argue that this factor, related to property rights and economic participation, distinguishes inclusive from extractive economic institutions.

What is secure property rights for broad segments of society and/or enforcement of contracts?

400

Adam Smith argued this is the primary source of economic growth, enhanced by market size.

What is division of labor/specialization?

400

This fundamental economic transformation involves moving from agriculture-based economies to manufacturing and industry, changing the composition of output and employment.

What is structural change and industrialization?

400

The World Bank classifies economies into these four income groups to analyze development patterns.

What are low-income, lower-middle-income, upper-middle-income, and high-income countries?

500

Sachs identifies these geographic and disease-related factors as key structural barriers that can create poverty traps in tropical regions.

What are malaria, poor soil quality, and landlocked geography?

500

In their analysis of labor systems, Acemoglu and Robinson examine how extractive institutions manifested through these coercive labor arrangements in Latin America and Africa.

What are the encomienda/mita systems and forced labor/slavery?

500

Unger emphasizes that development is shaped by these deliberate decisions about institutional arrangements, rather than being determined by geography or culture.

What are political choices (in development)?

500

This concept explains how resource-rich countries often develop weak institutions because elites can extract rents without building broad-based taxation and accountability systems.

What is the rentier state or What is rent-seeking behavior?

500

Explain why Botswana avoided the resource curse despite diamond wealth, while many resource-rich African countries did not.

What are pre-existing inclusive institutions, transparent governance, investment in education and infrastructure, and accountable leadership?