Politics of Socio-Economic Development

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1 POLI 4062 Comparative Political Economy, Fall 2009 Politics of Socio-Economic Development Tuesday 6:10 9:00 pm, 220 Stubbs Prof. Wonik Kim, Office: Stubbs 229, Department of Political Science OH: 2:00 4:00 pm on Tuesdays, or by appointment Natura non facit saltum. Alfred Marshall, Principles of Economics Nowhere has liberal philosophy failed so conspicuously as in its understanding of the problem of change. Karl Polanyi, The Great Transformation The Misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all. Joan Robinson, Economic Philosophy This advanced upper-level course provides the fundamentals of political economy or political socioeconomics. Our central puzzle throughout the course is, in David Landes words, Why Are We So Rich and They So Poor? Traditional political economy studied this topic, by assuming that political institutions are given and neutral with regard to the market allocations; they are there but they do not act. New political economy differs from the traditional approach in its treatment of politics. It accepts that political institutions and their relation to the economy and society are populated by actors who have interests/ideologies and pursue them. As such, this course is based on the belief that socio-economic development is fundamentally a political phenomenon. Another belief is that political scientists cannot study political economy without knowing some sort of economics, as we cannot study political history without dealing with history. So, we will study economic theories and formulations. This course has three main purposes: 1) to provide a rigorous analytical framework and various theories and empirics of socio-economic development, 2) to equip students with solid understanding of the origins and historical formation of the capitalist nation-state, and 3) to make sense of the relationship between political institutions and socio-economic development. To do so, this course is divided into four parts: I. The Nature of Socio-Economic Development II. III. IV. Theories of Development and Underdevelopment The Structural Transformation and Strategies for Growth Political Institutions and Socio-Economic Development 1

2 SCHEDULE/OUTLINE OF TOPICS 1 August 25 Introduction I. The Nature of Socio-Economic Development 2 September 1 Meaning, Measures and Trends 3 September 8 Imperialism, Colonialism, and Capitalism II. Theories of Development and Underdevelopment 4 September 15 Classical and Neoclassical Theories 5 September 22 Developmentalist and Heterodox Theories 6 September 29 New Growth Theories III. The Structural Transformation and Strategies for Growth 7 October 6 The State as an Agent of Transformation 8 October 13 Midterm Examination (in class 6:10 9:00 pm) 9 October 20 Initial Transformation and Strategy Switching 10 October 27 Agrarian Questions 11 November 3 Population, Human Capital and Technology IV. Political Institutions and Socio-Economic Development 12 November 10 Regime Type and Long-Run Growth 13 November 17 Politics of Inequality and Democratic Representation 14 November 24 Thanksgiving Holiday 15 December 1 Polanyian Market-Society Dynamics (final paper due) 16 December 8 Final Examination (in class 8:00 10:00 pm) 2

3 READINGS Each student is expected to read (before class) all the required readings for each session (see the reading assignments below). Required readings are: 1) Cypher, James, and James Dietz The Process of Economic Development. 3 rd Edition. London and New York: Routledge. 2) Journal articles and book chapters. These readings are posted on Moodle. All students should have a LSU account for access to Moodle through the PAWS desktop. Students also need to purchase and read the following book to write a final paper (see below). 3) Polanyi, Karl. 2001[1944]. The Great Transformation. Boston: Beacon Press. REQUIREMENTS Basically, classes will involve lectures and discussions of the reading materials assigned for each session. But, I will introduce and explain some issues and concepts that are not in the readings, so attendance is crucial. This means that a significant amount of material on the examinations will come from class lectures presenting information not discussed directly in the text and other readings. Participation from students is important and will count toward the final grade. Students are expected to complete: 1) Two in-class examinations (mid-term and final) (25% each) 2) Critical review paper (25%) You will write a critical review of Polanyi s The Great Transformation. The text should be no longer than six single-spaced pages. The format and guide of the paper will be discussed in class. You should submit a hard copy due in class on December 1. 3) Attendance and participation (25%) Since class meets only once in a week, it is extremely important to come to class. It is virtually impossible for you to receive a satisfactory grade if you miss several classes. Attendance will be taken for each session. Students may earn credit for their attendance at each class session, while repeated and unexcused absence will cause deduction in student s total grade. In addition to attending class, students are highly encouraged to ask and answer questions, and to make appropriate comments on issues covered in class. GRADING SCALE A: 90~100; B: 80~89; C: 70~79; D: 50~69; F: 0~49 NOTE: If you do not take any of the examinations, if you do not submit the final paper, or if you miss more than seven classes (half of lectures throughout the semester), you will automatically receive an F. No make-up examinations will be given; no late papers will be accepted. 3

4 Week 1 (08/25) Introduction Scope and roadmap of the course. READING ASSIGNMENTS AND SPECIFIC TOPICS I. The Nature of Socio-Economic Development Week 2 (09/01) Meaning, Measures and Trends What is development? Trends and patterns. Growth and level. GNI and GDP. Purchasing power parity (PPP). Human Development Index (HDI). Within-country, international and world equality compared. Kuznet curve. Depth and pace of change. Sustainable development. Cypher and Dietz, Chapter 1 and 2. Week 3 (09/08) Imperialism, Colonialism, and Capitalism Origins of capitalism. War and the nation-state formation. Merchant and industrial capital. New imperialism. Colonial legacies. Deindustrialization and decolonization. Path dependence and critical juncture. Causality and counterfactuals. Cypher and Dietz, Chapter 3. Tilly, Charles War Making and State Making as Organized Crime. In Bringing the State Back In, edited by Peter Evans, Dietrich Reuschemeyer, and Theda Skocpol. Cambridge: Cambridge University Press, pp II. Theories of Development and Underdevelopment Week 4 (09/15) Classical and Neoclassical Theories Universal motive. Miracle of market. Invisible hand vs. pin factory. De-centralized and centralized allocation mechanism. Malthusian model. Static and dynamic comparative advantage. Primitive accumulation. Contradiction between forces and relations of production. Creative destruction. Neoclassical models. Cypher and Dietz, Chapter 4. Heilbroner, Robert The Worldly Philosophers. New York: Touchtone Book, pp Week 5 (09/22) Developmentalist and Heterodox Theories Hidden potential and big push. Industrial linkage. Surplus labor and dual economy. Take-off. Reactive nationalism. ECLA. Import substitution industrialization (ISI). Terms of trade. Cumulative causation. Dependency theory. World-system theory. Bureaucratic authoritarian state. Cypher and Dietz, Chapter 5 and 6. O Donnell, Guillermo State and Alliances in Argentina, Journal of Development Studies 15(1):

5 Week 6 (09/29) New Growth Theories Convergence debate. Poverty traps. Endogenous growth model. Increasing returns. Learning by doing. Technical efficiency change. East Asian miracle. Cypher and Dietz, Chapter 8. III. The Structural Transformation and Strategies for Growth Week 7 (10/06) The State as an Agent of Transformation Neoliberalism. Market failure vs. government failure. Export-led industrialization (ELI). Developmental state and embedded autonomy. Fragmented intermediate state. Miracle revisited. Corruption. Who guards the guardians? Cypher and Dietz, Chapter 7. Evans, Peter Predatory, Developmental, and Other Apparatuses: A Comparative Political Economy Perspective on the Third World State. Sociological Forum. 4(1): Week 8 (10/13) Midterm Examination Week 9 (10/20) Initial Transformation and Strategy Switching Structural change. Dual-economy model revisited. Easy ISI and infant industry tariff. Importance of development bank. Timing of strategy switching. Industrial sequencing. East Asia vs. Latin America: Is this dichotomous view relevant? Lacuna of political dimensions. Cypher and Dietz, Chapter 9 and 10 Week 10 (10/27) Agrarian Questions Agrarian origin of capitalism. Triple biases. Moral economy. Colonialism revisited. Moral economy and subsistence ethics. Structural conditions and motivations of rebellions. Structural barriers. Land reforms. Cypher and Dietz, Chapter 11. Wood, Ellen The Origin of Capitalism: A Lover View, Ellen Wood. London and New York: Verso, pp Scott, James C The Moral Economy of the Peasant. New Haven: Yale University Press, pp Week 11 (11/03) Population, Human Capital and Technology Population problem. Malthus revisited. Demographic transition. Direction of causality. Human capital accumulation. Growth accounting. Total factor productivity (TFP). Innovation and Schumpeterian growth. Cypher and Dietz, Chapters

6 IV. Political Institutions and Socio-Economic Development Week 12 (11/10) Regime Type and Long-Run Growth Modernization theory. Exogenous vs. endogenous democratization. Emergence and sustainability of democracy. Statistical regularity as evidence. Institutions, geography, and development. De facto and de jure power. Reversal of fortune. Hold-up and blocking. Do institutions matter? Przeworski, Adam and Fernando Limongi Modernization: Theories and Facts. World Politics 49: Acemoglu, Daron, Simon Johnson, and James Robinson Institutions as the Fundamental Cause of Long-Run Growth. In Handbook of Economic Growth, edited by Philippe Aghion and Steven Durlauf. Amsterdam: Elsevier. Przeworski, Adam The Last Instance: Are Institutions the Primary Cause of Economic Development? European Journal Sociology 45(2): Week 13 (11/17) Politics of Inequality and Democratic Representation The US as a case study. Income inequality. Does class matter? Partisan control of the economy. Elections. Information. Accountability and representation. Democratic incapacity? Structural dependence of the state on capital. Three dimensions of power. Are we continuously duped? Bartel, Larry Unequal Democracy: The Political Economy of the New Gilded Age. Princeton: Princeton University Press, Chapter 1-3. Week 14 (11/24) Thanksgiving Holiday Week 15 (12/01) Polanyian Market-Society Dynamics Self-regulating market and self-preserving society. Modes of integration. Embeddedness. Fictitious commodities and commodity fiction. Shifting place of the economy in human society. Double movement. Disruptive strains. Liberal dilemma. Role of the state. Polanyian equilibrium. Review of the course. Final paper due in class. Polanyi, Karl. 2001[1944]. The Great Transformation. Boston: Beacon Press. Week 16 (12/08) Final Examination 6

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