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Course Information

Course Code ECON 6031

Course Title Caribbean Economic Development

Course Discipline M.Sc. Economics

Units of Credit 3

Pre-requisite First degree in Economics

Semester of Offering Semester I, 2017/2018

Course Lecturers Dr. Roger Hosein (roger.hosein@sta.uwi.edu)

Lecture Schedule

COURSE DESCRIPTION

The main objective of this course is to ‘interrogate’ the literature on the economics of

development and critically review its applicability to the Caribbean-specific case. The

rationale is that at this stage of its development the Caribbean is characterized by universal

economics challenges as well as other challenges which are specific to the region.

PURPOSE OF THE COURSE

Students are expected to become familiar with the theories associated with development

and be able to apply these to the Caribbean critically. Additionally students would become

more aware of the various inter-linkages among the economies internationally and

regionally.

The course exists so that students can better understand the fundamentals of what

development is about particularly for small open economies like those in the Caribbean.

This course will further delve into how small open economies can pursue sustained

development.

INSTRUCTOR INFORMATION

LECTURER: Dr. Roger Hosein, Dr. Daren Conrad

LECTURER’s EMAIL:Roger.Hosein@sta.uwi.edu, Daren.Conrad@sta.uwi.edu

LECTURER’s PHONE CONTACT:662-2002 EXT 83041

Office hours- To be announced on first day of lectures

Communication policy – Please contact lecturer during assigned office hours

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LETTER TO THE STUDENT

Dear Students,

Caribbean Economic Development is a course that will allow you to get a better

understanding of issues of sustainable development and how they relate to economic

prospects of small open economies like those of CARICOM.

This course is going to be very interactive and it will be to your benefit to participate during

lectures as your comments and questions will guide the sessions and make the class more

interesting. Development issues relate to every day issues for all citizens of a country and

the goal of this course is for students to better appreciate how important efficient policy

planning is to propelling growth and development for every country.

Note that your success with the material depends on you. Welcome to Caribbean Economic

Development. I look forward to your participation and engagement.

GOALS / AIMS

To equip students with an adequate set of tools; theoretical and practical; to understand the

issues in sustainable development

To provide students pursuing the Msc. Economics degree with the ability to conduct

in-depth analysis of development issues affecting CARICOM.

To provide students wishing to further their academic careers in Development

Economics with the analytical skills to have a good command of major topics in

the field.

To broaden the career potential for graduates who intend to pursue planning based

careers as economic analysts/consultants within the Caribbean or elsewhere.

GENERAL OBJECTIVES

To simplify development theory into practical approaches to policy making.

To enable the students to understand sustainable development issues within

CARICOM

To enable the students to have a better understanding of the concept of and need

for local economic development.

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LEARNING OUTCOMES

Students who successfully complete this course will have, (by means of identification and

interpretation), acquired a grasp of:

the range of definitions and approaches to development;

how these approaches are converted to measurable indicators; and

of key policy issues which must be considered by small open developing economies

such as those in the region.

Finally, the students will also garner a detailed understanding of the specificities of the

development challenges.

ASSESSMENT

The course will be assessed via a project which will account for 40% of the marks with a

final examination contributing the remaining 60%. The project will draw on the material

covered by the course and would require application of said material to one or more specific

challenges of development facing Caribbean countries. The final examination also will

reflect a similar approach.

COURSEWORK ASSIGNMENT

1. Outline and discuss any five (5) reasons why the T&T economy has not been

successful at diversifying into the non-energy sector? What can be done from an

institutional perspective to get the diversification process going in the T&T

economy case?

2. Describe the potential role of China in the economic development of the Caribbean.

In this regard calculate the trade intensity of St Lucia, Guyana, T&T and Suriname

with China. Offer 5 detailed policy suggestions to the CARICOM Secretariat as to

how the region can deepen its ties with the Chinese economy.

3. Consider the debt to GDP ratios of T&T, Guyana and Suriname. Explain how the

debt to GDP ratio is linked to the import cover ratio, the fiscal balance and the

structure of trade? For the T&T economy offer 5 ways by which the state can

improve on the current account balance, in the context of a declining stock of oil

and natural gas reserves.

4. As an emerging energy producer, Guyana must take stock of its various governance

indicators. Provide a detailed discussion of the same. Against this backdrop

describe an optimal government expenditure strategy for Guyana in the context of

its pending energy sector boom.

5. What is meant by RCA and of what relevance is this index to policy makers in

SIDS. Describe how the Harmonic Mass Index can be used to calculate the extent

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of change in a country’s pattern of trade? What is a transition probability matrix?

How is it linked to the Harmonic Mass Index? Look at the TPM for Suriname,

Trinidad and Tobago and Guyana. What can you say about persistence and the

evolving structure of comparative advantage with the EU as compared to the rest

of the world.

6. Describe the Citizenship by Investment Program (CIPs) which exists in St Lucia?

Outline why the CIP may be at risk because of a race to the bottom amongst the

OECS countries.

7. Using the 2 sector model developed by Corden and Neary as a point of reference,

outline the need for deliberately targeted CSR activity in the non-energy sector of

resource abundant Caribbean economies.

8. What is the EODB index and how is it related to the corruption perception index

and the Global Competitive Index (focus on 2 snapshot years, 2005 and 2016). For

Guyana, T&T and Suriname provide a detailed evaluation of each economy’s

distance to frontier as relates to each subcomponent of the EODB index. Provide

policy guidelines to these economies using information from the best ranked

CARICOM economy, in each subcomponent grouping.

9. T&T and Barbados recently changed their tertiary level education funding regimes.

Why were the funding regimes changed in these economies? Briefly describe the

tertiary level education funding regimes of Guyana, T&T and Jamaica. Drawing

from the international best practice experience of any 2 other SIDS, provide policy

advice as to how tertiary level education could be better financed in these small

economies.

10. What is Okun’s Law? Describe the various permutations of the law. Is Okun’s

Law applicable to the T&T economy in the context of the voracity effect? Of what

policy relevance is the experience of Okun’s Law in T&T for the Guyanese

economy?

11. Describe the intensive and extensive margins of trade with the world for T&T,

Suriname and Guyana. How did the intensive and extensive margin of trade change

in T&T and what was the impact of the appreciating REER in T&T on both margins

over the period 2000-2016.

12. Describe the governance issues which face the state owned enterprises sector in any

selected Caribbean resource based economy. Discuss 5 ways the efficiency of

monitoring and evaluating SOE can be improved.

13. Provide a detailed overview of the economic contribution of a community based

localized economic intervention, such as a Fish Fry on a selected CARICOM

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economy. What lessons can be drawn from the chosen case study for the T&T

economy?

14. In the context of a resource based industrialization taking place in Guyana, what

are some strategies that the Guyanese government can put in place in order to

mitigate against the Dutch Disease impact on its agriculture sector.

STUDENT PARTICIPATION IN PLANNED DEPARTMENTAL ACTIVITIES

FOR 2017/2018

1. Attendance at the Department’s Post Budget Forums

2. Attendance at the Conference on the Economy 2017 - October 2017.

REQUIRED READING

Demas, William G. The Economics of Development in Small Countries: with special

reference to the Caribbean. Kingston, Jamaica: UWI Press: 2009

Pantin, Dennis: Reader in Caribbean Economy. Randle Publishers. 2005

Hunte, Diana: Economic Theories of Development: An analysis of Competing Paradigms.

New York: Harvester Wheatsheaf. 1989

Martinussen, John: Society, State and Market: A Guide to Competing Theories of

Development. Zed Books. 2004.

Levitt, Kari: Reclaiming Development: Independent Thought and Caribbean Community.

Randle Publishers. 2006

DETAILED READINGS BY SECTIONS OF THE COURSE

1. Meaning and Measurement of Development

1. Amartya Sen: Development: Which Way Now? Economic Journal. Dec. 1983

2. --------------------Development as Freedom. Oxford University Press.1999.Chs1-6

3. Dudley Seers: What are we Trying to Measure? Journal of Development Studies.

8(3): 21-36. 1972

4. -----------------The Meaning of Development. International Development Review.

Vol.11. No.4, 1969 or in IDS Communication Series No. 44.

5. Milorad Kovacevic, 2011. Review of HDI Critiques and Potential

Improvements.

hdr.undp.org/en/reports/global/hdr2010/papers/HDRP_2010_33.pdf

6. UNDP: Human Development Report, latest year available

7. Morse, Stephen. For better or for worse, til the human development index do us

part. Ecological Economics 45 (2003) 281_/296

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8. Jeni Klugman, Francisco Rodríguez and Hyung-Jin Choi. The HDI 2010: New

Controversies, Old Critiques. April 2011. Available from:

hdr.undp.org/en/reports/global/hdr2011/papers/HDRP_2011_01.pdf

9. DasGupta, Partha and Weale, Martin. On Measuring the Quality of Life.

World Development, Vol 20, No. 1 pp 119-131, 1992.

10. Government of Trinidad and Tobago and Central Statistical Office (CSO).

2012. Human Development Atlas.

11. Gerald M. Meier and Joseph E. Stiglitz: Frontiers of Development Economics:

The Future in Perspective. World Bank and Oxford University Press. 2000.

2. ‘Theoretico-historical’ perspective

1. J.L. Anderson: Explaining Long-Term Economic Change. Cambridge University

Press.1997;

2. H.N. Ardnt: Economic Development: A Semantic History. Economic

Development and Cultural Change. Vol. 29.1981. p.457-467

3. Lant Pritchett. "Understanding Patterns of Economic Growth: Searching for

Hills among Plateaus, Mountains, and Plains," World Bank Economic Review,

Oxford University Press, vol. 14(2), pages 221-50, May. 2000

4. World Bank Economic Review. Vol. 15. No.2. 2001: Papers by Easterly and

Levine and Brock and Durlauf as well as comments on both of these papers.

5. John Martinussen: Society, State and Market: A Guide to Competing Theories

of Development, London: Zed Books. 1997. Chapters 1-3.

6. Immanuel Wallerstein: The Capitalist World Economy. Cambridge Univ.

Press. 1979. Part 1- The inequalities of core and periphery (p.1-164).

7. Ha-Joon Chang: Kicking Away the Ladder: Development Strategy in

Historical Perspective. Anthem Press.2002.

3. From Modernisation to Dependence Theories: The post World War Two Debate

and Development policy practice to the 1970s;

1. Diana Hunte: Economic Theories of Development: An analysis of Competing

Paradigms. New York: Harvester Wheatsheaf. 1989

2. John Martinussen: Society, State and Market: A Guide to Competing Theories

of Development, London: Zed Books. 1997. Chapters 4-9

3. Kari Levitt and S. Wyeth: A Balanced View of Development Economics: An

Annotated Bibliography. (mimeo)

4. World Development, Special Issue: The Methodological Foundations of

Development Economics. Vol.14. No.2. Feb. 1986

4. Economic Liberalisation, Foreign Capital and Globalisation

1. Anne Krueger: Government Failures in Development. Journal of Economic

Perspectives, Vol. No. No.3. 1990.

2. Deepak Lall: The Poverty of ‘Development Economics.”. The Institute of

Economic Affairs, London. 1984.

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3. John Martinussen: Society, State and Market: A Guide to Competing Theories

of Development, London: Zed Books. 1997. Market Chapter 18

4. Lance Taylor: Varieties of Stabilisation Experiences: Towards Sensible

Macro-Economics in the Third World. Oxford. Clarendon Press, 1990.

5. ECLAC: (Neo-Liberal) Economic Reforms in Latin America. 2000.

6. Barry Eichengreen et al. Liberalising Capital Movements: Some Analytical

Issues. IMF. Economic Issues No.17. 1999

7. Foreign Policy (Fall, 1999): articles by Beddoes (on the International Financial

System); Enriquez (Too many Flags?); Hausmann (Should there by Five

Currencies or one hundred and five?);Sachs and Larrian (Why Dollarization

is more straitjacket than salvation)

8. Andrew Krieger: The Money Bazaar: Inside the Trillion Dollar World of

Currency Trading. Times Books. 1992 (selective reading).

9. R. Hosein and J. Khadan. Trade, Economic and Welfare impacts of the

CARICOM-Canada Free Trade Agreement. MPRA Paper. 2014

10. O. Groot and M. Ludena. Foreign direct investment in the Caribbean: Trends,

determinants and policies. UNECLAC Studies and Perspectives. February 2014.

4b. The 21st century Debate on Globalisation:

1. Kimmo Kiljunen: Towards a Theory of the International Division of Industrial

Labour. World Development. Vol. 17. No.1. 1989.p.109-138

2. Deepak Nayyar: Globalization: The past in our present. Third World Economics.

Issue No. 168. 1-15 Sept. 1997

3. Raphael Kaplinsky: Globalisation, Industrialisation and Sustainable Growth: The

Pursuit of the Nth Rent. IDS DP. 365, June, 1998

4. World Bank Research Observer. Vol. 15. No. 2. Aug. 2000 – papers by

Dornbusch et al; Williamson and Srinivasan.

5. IMF: Reforming the Financial Architecture. Finance and Development Sept. 1999

6. Chakravarthi Raghavan: New architecture or wrong diagnosis? THIRD WORLD

ECONOMICS. Issue No. 183. 16-20 April, 1998

7. Holger Henke and Ian Boxill (eds.). The End of the Ásian Model’. John Benjamin

Publ. Co. 2000, Chs. 1-3, 6, 9.

8. Vinod K. Anand: Conventional Wisdom in Economics: Focus on Contemporary

Thinking. The Indian Journal of Economics. Vol. LXXIX. No.313. Oct. 1998.

4c. The Caribbean and Globalisation

1. Hilbourne A. Watson(ed).: The Caribbean in the Global Political Economy.

Lynee Rienner Publ. 1994. Papers by Pantin, Lewis, Watson.

2. Karl Levitt.- The Right to Development. Fifth ECCB Sir Arthur Lewis Memorial

Lecture St. Lucia. 2000 (also in Levitt Right to Development book, Randle

publishers, 2006).

3. The following Readings from D. Pantin (ed). Reader in Caribbean Economy 2005:

Clive Thomas: The Inversion of Meaning: Trade Policy and the Caribbean

Sugar Industry,

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D.A. Pantin: The Experience of the offshore Oil Refinery Industry in the

Caribbean

Lou-Anne Barclay, Ralph Henry and Vanus James: Caribbean Economies

in the New International Trading Environment

*Keith Nurse: The Caribbean Music Industry

*Oral Williams: Off-short Financial Services

Wendell Samuel: Migration and Labour Remittances: A Case Study of the

Caribbean,

4. D.A. Pantin: Long Waves and Caribbean Development, SES. Vol 36 #2.

5. Mishra, Prachi: Emigration and Brain Drain: Evidence from the Caribbean. IMF

Working paper(WP/06/25). January, 2006

5. (2012) Informal Commercial Importers. (ICIs) in the Caribbean: Evidence

from Trinidad and Tobago and Guyana. The Transition Journal, Issue No. 41,

pp. 22 – 51. (with M. Franklin and A. Persaud).

6. Mahabir (2011) Early Signals of the CARIFORUM-EU Economic Partnership

Agreement

7. Lorde and Alleyne (2016) Estimating the Trade and Revenue Impacts of the

European Union CARIFORUM Economic Partnership Agreement: A Case Study

of Barbados.

5. Institutions

1. Rodrik and Subramanian: Rodrik, D., A. Subramanian and F. Trebbi (2002),

“Institutions Rule: The Primacy of Institutions over Geography and Integration in

Economic Development”, NBER Working paper no. 9305.

2. Douglass C. North: Economic Performance Through Time. Nobel Prize lecture in

Economic Science. Dec. 1993

3. Martinussen, John: Society, State and Market: A Guide to Competing Theories of

Development, London: Zed Books. 1997. Chapters 12-15

4. Ha-Joon Chang: Kicking Away the Ladder: Development Strategy in Historical

Perspective. Anthem Press. 2002. Chapters 3-4

5. (ongoing) Political Economy of Make Work Programs in the Context of Mineral

Booms

6. Van der Ploeg and Venables J. (2010) Harnessing Windfall Revenues: Optimal Policies

for Resource- Rich Developing Economies.

7. Collier, Van de Pleog and Venables (2009), Managing Resource Revenues in

Developing Economies

8. Shankha Chakraborty and Era Dabla-Norris (2009) The Quality of Public Investment

6. Small Size, Islandness and Natural Resource Dependence

6a. Small Size, ‘Islandness’

1. The following *readings from D. Pantin ed. Reader on Caribbean Economy:

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*W.A. Lewis: Industrialisation of the British West Indies

L. Best: Model of the Pure Plantation Economy

*W. Demas: Economics of Development of Small Economies

*Foote, Nelson: Barbados and Denmark compared

*Blackman, Courtney: Heterodox Adjustment model of the Caribbean.

2. D. Pantin: Review of Demas in L. Clarke(ed). In honour of W. Demas. CCMS

3. ---------------Economics of Sustainable Development in Small Caribbean Island

Economies. 1994. Ch.2

4. Looney, Robert E. – Macroeconomic Consequences of the Size of Third World

Nations: With Special Reference to the Caribbean. WORLD DEVELOPMENT Vol.

17. No. 1989.

5. K. Levitt: The Plantation Economy Model, in Pantin and Mahabir(ed). Maroonage,

No. 1.

6. Hosein R., Tewarie, B.: (2003), Arthur Lewis and Lloyd Best on Development

Strategy in Trinidad and Tobago, in S. Ryan, Independent Thought and Caribbean

Freedom: Essays in Honor of Lloyd Best, ISER pp 309-352.

7. Wong and Petreski: Dutch Disease in Latin American countries: De-industrialization,

how it happens, crisis, and the role of China. MPRA Paper (2014)

8. F. Carneiro, R. Longmore, M. Cazorla, and P. Jaupart. A Future without Oil?

Diversifying Options for Trinidad and Tobago. World Bank, No. 142, May 2014.

9. D. Pantin and R. Hosein. Competitiveness in small, open Mineral-based Economies:

The Case of the Hydrocarbon based Trinidad and Tobago Economy. In L. Brigullio

and Gordon Cordina(eds). Competitiveness Strategies for Small States.

Commonwealth Secretariat and University of Malta. (pages 170-187). 2004

10. Corden and Neary (1982) Booming Sector and De-Industrialization in a Small Open

Economy

11. Hosein (2016) Elements of the design of an ICL for a small petroleum exporting but

resource depleting economy.

12. Sinanan, Hosein and Franklin (2016) Dutch Disease, Labour Productivity and

Revealed Comparative Advantage in a small hydro-carbon based economy.

13. Arman and Moradi (2015) Procyclical Fiscal Policy: Is OPEC and Exception?

14. (Chian 2016) Fiscal Cyclicality in Brunei Darussalam

6b. Natural Resource Dependence

1. Macartahn Humphreys, Jeffrey D. Sachs& Joseph E. Stiglitz(eds).: Escaping the

Resource Curse. Columbia University Press. 2007

2. D. Seers: Mechanism of the Open Petroleum Economy: SES.

3. From Pantin(ed). Reader in Caribbean Economy:

*D. A. Pantin: The Political Economy of the Rentier Economy Revisited

*Clive Thomas: The Caribbean Sugar Industry

*C. Pemberton and S. Ragobir: The Caribbean Cocoa Industry

4. Application of International Trade Theory: The Caribbean Perspective, UWI

Press (2013).

5. R. Hosein and D. Sinanan. Transition Probability Matrices and Revealed

Comparative Advantage Persistence in a Small Oil-based Economy, West Indian

Journal of Engineering, Vol.34, Nos.1/2, January (2012), pp.16-29-v.

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7. Role of Regional Integration and Cooperation

1. From Pantin ed. Reader:

* H. Brewster and C. Thomas: Introduction to the Dynamics of West Indian

Integration

* Caricom Secretariat: Caricom Trade & Investment Report 2000

2. Norman Girvan: CSME Vision Report. 2008.

3. R. Hosein and J. Khadan. The Impact of Emerging Markets (BRICs) on

CARICOM Bank of Valletta Review, Europe Issue 45 Spring 201 (2012) pp 1-54 .

4. C. Lindsay. The EU-CARIFORUM EPA: Regulatory and Policy Changes and Lessons

for Other ACP Countries. Caribbean Journal of International Relations and Diplomacy,

Vol 1, No. 3 (2013).

5. M. L. Bishop, T, Heron and A. Payne. Caribbean development alternatives and the

CARIFORUM–European Union economic partnership agreement, Journal of

International Relations and Development (2013) 16, 82–110.

6. Hosein, Gookool and Mohammed (2016) Small Country Trade Competitiveness and

Export Sustainability: A CARIFORUM Perspective

7. Hosein, Gookool (2016) Unpausing the Caribbean Single Market and Economy:

Trinidad and Tobago as a Labour Hub for the CARICOM

NB: Please note that the reading list will be supplemented with additional materials as the

course progresses.

ADDITIONAL INFORMATION

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Please note that UWI Examination Regulation No. 19 states that:

Any candidate who has been absent . . . . or whose attendance at prescribed lectures,

classes, ... tutorials, ... has been unsatisfactory . . . . or who has failed to submit essays or

other exercises . . . . may be debarred by the relevant Academic Board, on the

recommendation of the relevant Faculty Board,. . . .from taking any University

examinations . . . . “

The Department of Economics//Faculty of Social Sciences requires students to attend

and participate in at least 75% of tutorials for a course to avoid being debarred from

taking the final exam.

“97. (i) Cheating shall constitute a major offence under these regulations.

(ii) Cheating is any attempt to benefit one’s self or another by deceit or fraud.

(iii) Plagiarism is a form of cheating.

(iv) Plagiarism is the unauthorized and/ or unacknowledged use of another person’s

intellectual effort and creations howsoever recorded, including whether formally

published or in manuscript or in typescript or other printed or electronically presented

form and includes taking passages, ideas or structures from another work or author

without proper and unequivocal attribution of such source(s), using the conventions for

attributions or citing used in this University.

103. (i) If any candidate is suspected of cheating, or attempting to cheat, the circumstances shall

be reported in writing to the Campus Registrar. The Campus Registrar shall refer the

matter to the Chairman of the Campus Committee on Examinations. If the Chairman so

decides, the Committee shall invite the candidate for an interview and shall conduct an

investigation. If the candidate is found guilty of cheating or attempting to cheat, the

Committee shall disqualify the candidate from the examination in the course concerned,

and may also disqualify him/her from all examinations taken in that examination

session; and may also disqualify him/her from all further examinations of the

University, for any period of time, and may impose a fine not exceeding Bds$300.00 or

J$5000.00 or TT$900.00 or US$150.00 (according to campus). If the candidate fails to

attend and does not offer a satisfactory excuse prior to the hearing, the

Committee may hear the case in the candidate’s absence.”

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Grading System

GRADE GPA MARKS%

A+ 4.3 86 and Over

A 4.0 70 -85

A- 3.7 67 -69

B+ 3.3 63 -66

B 3.0 60- 62

B- 2.7 57- 59

C+ 2.3 53 -56

C 2.0 50 -52

C- 1.7 47 -49

D+ 1.3 43 -46

D 1.0 40 -42

F 0.0 0 - 39

August 2017