How does Owen Barder define development? How does he extend Amartya Sen’s definitiion to include the idea of complexity?

He defines it as a complex development system. He says “it is not a series of individual successes but a property of the system as a whole it is the emergence of self organizing complexity.” Meaning sometimes the economic systems are too complicated to understand right now, but they seem to organize, and eventually improve themselves over time. This kind of sounds like the Adam Smith invisible hand, individual needs and actions by many will shape countries. He extends Amaryta Sen’s definition (think expansion of freedoms and removal of unfreedoms) to include the idea of complexity by saying that the goal of developing further for the market is that there is no specific market equilibrium towards which the market is moving towards.

question 2. Who was Thomas Thwaites and what was his “toaster project”? Was he successful? What is the significance of this example in the context of Barder’s talk about complexity and development?

Thomas Thwaites’s toaster project was not really successful (although when the toaster worked for two seconds before exploding, he (probably jokingly) considered that a success). The project was to see if he could build a basic toaster from scratch using only the materials around him. The significance of this example in the context of Barder’s talk about complexity and development is because for you to be able to assemble and make your own cheap toaster, the economy must be rich enough for you to be able to provide all of these resources.

question 3. Barder compared the economic growth of South Korea and Ghana between 1960 and 2010. Why was this example instructive as part of his talk? What did this comparison demonstrate when used as the basis to validate (or invalidate) economic models?

It was instructive because in 1960 the wages of Ghana and South Korea were pretty similar, and now South Korean wages have skyrocketed compared to Ghana. This example was disparaging the idea that technology was the main factor of development (when looking at South Korea vs Ghana). You would have to say that Ghana’s technology has been diminishing (vs South Korea). Barder doesn’t think that this is the main factor/economic indicator.

What was the Harrod-Domar model? What are the two fundamental variables in this model? Who was Walter Rostow and what the impact of his work on development? Was the Harrod-Domar model effective at predicting development outcomes?

It was the model that said when a country wasn’t developed, it was lacking either capital or human labor, which were the two variables. Since most developing countries had an abundance of human labor, it had to be that the countries were missing capital. Walter Rostow was an economist who said that there was a circle of development that went from investment to capital to growth to income to savings, and then back around to investment again. He thought that if you invested hugely into a country, then the country would be able to self sustain itself more and become more developed. I don’t believe the Harrod-Domar model was effective at predicting development outcomes. With the example given with Ajaokuta steel, so much money was invested into it, but it never produced any steel, probably due somewhat to the management. So there was an abundance of capital and human labor, yet no development.

Question 5. What was the Robert Solow model and how did it address the limitations of the Harrod-Domar model? Was this model successful as predicting economic growth?

The Robert Solow model says that the reason for development or lack of development is technology and the abundance or lack of it. Technology could possibly fill the hole in explaining why development requires more than just human labor and capital (and even management). It was not successful at predicting economic growth because we can see now that many developing countries have access to smartphones but also lack basic needs and goods.

Question 6. What was the Washington Consensus? How did it propose to improve upon models of economic growth?

The Washington Consensus was saying that the reason for development was bad policies. World organizations proposed policy changes that were supposed to help these economies grow. Some of these policy changes actually may have done some good in helping guide the developing countries.

Question 7. What was the Ajaokuta Steel Works? How did it illustrate the transition from a focus on policies to institutions. How productive has the Nigerian steel works proven to be?

The Ajaokuta Steel works was a failed steel works company (at least I assume it’s still failed). I believe Barder said that billions of dollars were invested into this steel company, and it has tons of people employed or waiting to be employed, yet no steel was produced! It now illustrated that perhaps instead of policies being the problem, instead it was institutions, that corruption was a big hindrance on development.

Question 8. Who was Haile Sellasie? What is the significance of Kapuscinski’s book the Emperor? How did Ethiopia exemplify the suppression of emergent systemic change? Do you agree with Barder’s interpretation?

Haile Sellasie was the former emperor of Ethiopia. The significance of Kapuscinski’s book was the absurdity of the total control of the Emperor. It was seen as dangerous to give information to the emperor that people were starving. This is one way of how the systemic change in Ethiopia was suppressed. Powerful elites control the resources and have power because of this. Therefore, they would not want to see any change occur in their countries. I do agree with Barder’s interpretation, as it seems to make sense.

Question 9. Who was Steve Jones? What did he do at Uni-Lever? Was he successful? How significant were his results?

Steve Jones worked at Uni-Lever and I believe created an improved spray nozzle, essential for making soaps. Instead of trying to find out how to best solve the problem, he just made a bunch of random nozzle designs, tested them, and the company ended up using one of the models. In this, he was successful. His results were significant, because he showed that it was possible to solve an issue by just creating random solutions and seeing what works best.

Question 10. What is the significance of Schumpeter’s idea of creative destructive? How does it relate to firms and industries?

The significance of Schumpeter’s idea of creative destructive is that it models the economy in that only the strong survive. The inefficient companies die out and more efficient ones replace them, as well as surviving companies gaining strength, which is how it relates to the economy.

Question 11. Why does Barder recommend resisting engineering as a policy implication? Does he suggest a different approach? What did he mean by his use of the term, iso-morphic mimicry?

Barder recommends resisting engineering as a policy implication because it’s difficult to engineer specific solutions for an economy. It’s also really hard to predict what will happen as a result of the engineered solutions. So, instead of trying to solve an economic characteristic, instead we should try and grab on for the rise and make smaller solutions along the way. Iso-morphic mimicry means creating divisions and ‘best practices in general’ for developing countries. You should instead make specific best practices for a country based on experiences in that country.

Question 12. What did Barder mean by “resist fatalism”? Who was Norman Borlaug and what is the green revolution?

When Barder says to resist fatalism, he is saying to resist the idea that things are set in stone, and instead try and change things, or experiment to see if you can change things for the better. Norman Borlaug was someone who pioneered cross breeding of plants/ grains and was able to naturally engineer wheat crops that had a higher yield than normal wheat. The green revolution was applying this idea to other foods.