(Original post by usamakhanlodhi)
Hye guys I have noy been on this thread as had bio and maths after this exam and since then have been mostly sleeping etc so can I ask I chose the development question but for the first part I set it out like this
Explain Harrod Domar model, explain how gaps in it can lead to countries being trapped in low capita income trap
Then went on to describe low savings gap, give a reason(primary product dependency, perbeusch sing hypotheses) and how it is a gap in the model.
My next point was foreign exchange gap, reason(lack of exports and explaining why it might be like that) and how that stops countries transition in the model
My 3rd one was low human capital levels(lack of education due to people not perceiving its benifits etc)
My evaluation was throughout essay and was like as follows:
Commodity prices have been rising, can mean possible increased incomes so higher savings, also that some products like gold are normal goods)
Not countries fault, as things like CAP are purposely stopping them from exporting the goods in which they have comparative advantage
Education levels have been rising due to U.N development goals
Also talked about how this foreign exchange gap can be closed also lack of investment due to low savings can be solved by FDI but then showed how FDI is put off by low human capital levels so then used that to show low human capital levels were the most important factor. Then did a conclusion showing other things may be limiting development such as political instability lack of property rights etc
Also throughout the essay linked higher incomes to higher tax revenues to more fiscal power to fund development projects
Would this be valid to get me the higher marks or is me focusing on the problems all linked to one model a downside?
Also for the 2nd part I was really confused how to structure it so this is what i did
explanation of each method, how it would improve development and the downsides.
So for debt cancellation:
I explained why some LDCs accumulated massive debt(the 2 oil crisis), explained what the debt and its interest charged does to LDC how it inhibits development, how debt cancellation would improve devlopment(relating it to uganda) then talked about drawbacks of debt cancellation so
moral hazard, dependency, precedent set, Also only works if accompanied with other changes like political stability.
And with trade liberlisation showed effects of tarrifs(with diagram) so consequently how removing them and the effetcs that would have on development talked about increased exports so foriegn exchange gap filled blah blah blah
Then evaluated by talking about how it will lead to short term job losses, sometimes if it is done with infant industry it may have negative effects, also lack of export demand right now with eurozone crisis, if industries have accumalated an inward looking attitude they may be too inefficient, Govt tax revenues lost, Depends on cooperation from developed countries.
But I didnt compare the two methods and am not sure if you have to just concluded in the last paragraph by saying that only by cancelling debt will government be able to spend tax revenues earnt in long run by trade liberlisation on development projects so you need both
Is that good enough to access higher marks or do you have to compare throughout as really unsure.. Any help would be much appreciated as really need the a*