4. KULIAH 4 INDEV GANJIL 2012

7/30/2019 4. KULIAH 4 INDEV GANJIL 2012

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TEORI PEMBANGUNAN

2KULIAH 4 PEMBANGUNAN INTERNASIONAL

ANDRE ARDI

Wednesday, October 17, 12


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WHAT WE ARE GOING

TO SEE?

BIG PUSH THEORY

O-RING THEORY

GROWTH DIAGNOSTIC FRAMEWORK



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BIG PUSH THEORY

Rodenstein-Rodan

Industrializationwould happen

Economic of

scale

Oligopolisticmarket

developedLarge amountof investmentunderdeveloped

Bit-by-bitinvestment wontimpact growth -lead to wastage

of resource

To take off,an airplane

need acritical

ground speed

BIGPUSH



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INDIVISIBILITY

INUNDERDEVELOPEDCOUNTRY

IN PRODUCTIONFUNCTION

In

complementarydemand

In the supplyof saving

NEED HEAVYINVESTMENT

Economic of scale

Oligopolisticmarket

A large number

of industryneed to be set

up

So worker onone industryconsume the

output of otherindustry

Forinvestment

Need highermarginal rateof saving



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Skilled labour

Enlargement marketsize

Centralizedpan-industrial

planning

Cluster or agglomerationof industry

The role of state

The private sector cantundertake such planning



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O-RING

THEORYMICHAELKREMER

SMALLDIFFERENCE INWORKER SKILL

LARGEDIFFERENCES

WAGES

OUTPUT

So wage & productivity differential between countries with different skilllevels are enormous

The solution is subsidies to investment in

human capitalWednesday, October 17, 12


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Poor countries have higher shares of primary production in GNPWorker will be paid more in the industrieswith high value inputIf rms can choose among technologies, thehighest skill worker will use the highesttechnology

The rich countries tend to specialized incomplicated products.Thus subsidies to investment in humancapital may be very efcient.

Small differences between countries inhuman capital investment subsidies and thequality of educational system will lead tomultiplier effects that create largedifferences in worker skill.



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Bad internationalfinance

Low social

returns

Poorgeography

Low

humancapital

Low

domesticsaving

Poorintermediation

Macro risks:

financial, monetary,fiscal instability

Micro risks:

property rights,corruption, taxes

Information

externalities:self-discovery

Coordinationexternalities

Badinfrastructure

Governmentfailures

Marketfailures

Bad localfinance

Low return toeconomic activity

Low

appropriability

Possible causes

High cost of finance

RE 4.3 Hausmann-Rodrik-Velasco Growth Diagnostics Decision Tree

Problem: Low levels of private investment and entrepreneurship

THE HAUSMANN-RODRIKVELASCO GROWTH

DIAGNOSTIC FRAMEWORKDANI RODRIK

Wednesday October 17 12

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4. KULIAH 4 INDEV GANJIL 2012