Question 1. How does Owen Barder define development? How does he extend Amartya Sen’s definition to include the idea of complexity?

Sen’s defifnition highlights the idea that development should be judged not only on the basis of increases in average incomes but on whether it creates the circumstances for people to make choices (i.e becoming a doctor) and freedoms. However, Barder argues that development should not be measured by its effect on the people, but rather a proptery of the economic and social system.

Question 2. Barder compared the economic growth of South Korea and Ghana between 1960 and 2010. Why did he make this comparison? What did this comparison demonstrate when used as the basis to validate economic models?

This comparsion highlights the average income of people in these two countries where Korea had a durastic increase in income overtime, while Ghana stayed relatively the same. The comparsion emphazies that althoguh we argue that average income is not a complete measure of well-being, the reality is that this econmic growth has completely changes the lives of South Koreans. The common consensus is that development is a gradual process following more productivity, but the Ghana example proves otherwise. This ilistrates there’re border factors in play than viewing development from an individual prospective.

Question 3. What was the toaster project? What did Thomas Thwaites attempt to do? Was he successful? What is the significance of this example in the context of complexity?

Thomas Thwaites attempted to create a toaster from scratch, like literally. He gathered all the raw materials such as steel, plastic, etc in an attempt to create a toaster that took him 9 months to complete. He was partially successful in the sense that the toster worked for a total of 5 secs. This project demostrated that in order to make something simple like a toaster, there has to be an array of firms, finanical institutions, legal systems in place. This reinforce the idea that development does not stem from the individual, but the advancement of the collective instituitions in a society that contribute to the well-being of individuals.

Question 4. What was the Harrod Domar growth model? What are the two fundamental variables in this model? Who was Walter Rostow and what was the impact of his work on development?

In the harrod Domar growth model, if there is an increase in the amount of capital and amount of labor, then you should observe an increase in output of the economy. Walter Rostow created a model where he claimed that if a nation could increase investment by five or ten percent of the national income then it would triggered a “virtuous circle” that pushes the country into self sustainable growth.

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

The Robert Solow’s model introdced a new factor called technical change ontop of labor and capital. The benefit of it is that it fit the data much better than Domar’s model. however, it’s not very successful in predicting growth in the sense that the technical change factor is hazzy and undefined.

Question 6. What was the Ajaokuta Steel works? How did it illustrate the transition from a focus on policies to institutions? How did Acemoglu & Robsinson’s book Why Nations Fail address governance and politics? How is their argument a response to the previously failed idea regarding engineering prosperity by providing the correct economic advice?

Ajaokuta steel workds is located in nigeria, and is one of the largest investment in steel and it follows the traditional econmic growth model. However, it has produced no steel or increases to the national income, because of cronic corruption and poor institutions. Some common problem are spending aid funding in technical institutions rather than economic conterparts, and confusion in which institution to focus on. The Book address that it is a mistaken view that a country’s prosperity is based on how well a ruler run the country, and the notion of convincing politicians of what is good economics. Rather, the institutions are setup to suit the elites or it is generated to suit the country’s politics. In the end, the book basically explain that everyone before them is wrong, and there’s something elase missing.

Question 7. According to Barder, how successful have economic models been at describing and predicting growth over the past 50 years?

In the past 50 years Barder believe it was the most successful for countries growth as a whole. He state that economuc models does not explain or predict the growth of countries very well, because there are always more contributing factors in play that led to the rapid econmic growth of a country.

Question 8. What was the significance of Schumpeter’s idea of creative destruction? How does it relate to firms and institutions? What is co-evolution and why is it significant?

Creative destruction allows for econmic expansion in that 80% of productivity improvement comes from new firms replacing old firms. Such as indutries(firms) adaptng to new econmic opportunities, and new firms overtaking the old one that are better suited for today’s environment. Institutions also adapt such as rules, cutural norms,etc. Everything adapt and evolve and these evolutions influence eachother and futher their evolution, and this is the concept of co-evolutions. Because of this the environment, society, social interactions, ways to do things, regualtions all constantly changing for the better or wrose.

Question 9. What is a complex adaptive system? What are some of its important features?

A complex adaptive system is a system where the economy and society are viewed as being composed of a rich set of interactions between numerous adaptive agents all of which are co-evolving. It is non-linear, they are difficult to predict in detail, broad-brush predictions can be made, there are emerging properties such as patterns, the system trend toward greater complexity, and the system does not tend towars equilibrium.

Question 10. 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 this analysis?

Haile Sellasie was the last emperor of ethiopia. The big gave an internal account of suppressive regimes and how they extracted economic account from the population , and challenges to the political systems. They are stuck in a poverty trap and the elites control everything by money from natural resources.

Question 11. Why does Barder recommend resisting engineering as a policy implication? What did he mean by iso-morphic mimicry?

It is almost impossible to engineer a solution for econmic growth, because institution and the environment has to adapt with it. Iso-morphic mimicry means that theoretically it should work on paper, but in actually practice it fails greatly.

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

Interving evolution by preventing the preventable. Borlaug created highly resistant and high-yield crop that saved many from starvation.

Question 13. Barder also recommended to promote innovation, embrace creative destruction and shape development. What did he mean by these recommendations?

Innovation is the key to the adaptive process, and the state should support that in the sense of aiding the start of firms. Embrace creative destruction by creating feedback loops. Overall the goal is to promote diversity of development, and create an environment that encourges co-evolution.