Course Information. LECTURER s

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1 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 Roger.Hosein@sta.uwi.edu, Daren.Conrad@sta.uwi.edu LECTURER s PHONE CONTACT: EXT Office hours- To be announced on first day of lectures Communication policy Please contact lecturer during assigned office hours - 1 -

2 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

3 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 - 3 -

4 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 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 - 4 -

5 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/ Attendance at the Department s Post Budget Forums 2. Attendance at the Conference on the Economy October 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 Hunte, Diana: Economic Theories of Development: An analysis of Competing Paradigms. New York: Harvester Wheatsheaf Martinussen, John: Society, State and Market: A Guide to Competing Theories of Development. Zed Books Levitt, Kari: Reclaiming Development: Independent Thought and Caribbean Community. Randle Publishers DETAILED READINGS BY SECTIONS OF THE COURSE 1. Meaning and Measurement of Development 1. Amartya Sen: Development: Which Way Now? Economic Journal. Dec Development as Freedom. Oxford University Press.1999.Chs Dudley Seers: What are we Trying to Measure? Journal of Development Studies. 8(3): The Meaning of Development. International Development Review. Vol.11. No.4, 1969 or in IDS Communication Series No Milorad Kovacevic, 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_/

6 8. Jeni Klugman, Francisco Rodríguez and Hyung-Jin Choi. The HDI 2010: New Controversies, Old Critiques. April 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 , Government of Trinidad and Tobago and Central Statistical Office (CSO) 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 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 p 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 , May World Bank Economic Review. Vol. 15. No : 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 Chapters Immanuel Wallerstein: The Capitalist World Economy. Cambridge Univ. Press 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 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 John Martinussen: Society, State and Market: A Guide to Competing Theories of Development, London: Zed Books Chapters 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 Economic Liberalisation, Foreign Capital and Globalisation 1. Anne Krueger: Government Failures in Development. Journal of Economic Perspectives, Vol. No. No Deepak Lall: The Poverty of Development Economics.. The Institute of Economic Affairs, London

7 3. John Martinussen: Society, State and Market: A Guide to Competing Theories of Development, London: Zed Books Market Chapter Lance Taylor: Varieties of Stabilisation Experiences: Towards Sensible Macro-Economics in the Third World. Oxford. Clarendon Press, ECLAC: (Neo-Liberal) Economic Reforms in Latin America Barry Eichengreen et al. Liberalising Capital Movements: Some Analytical Issues. IMF. Economic Issues No 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 (selective reading). 9. R. Hosein and J. Khadan. Trade, Economic and Welfare impacts of the CARICOM-Canada Free Trade Agreement. MPRA Paper O. Groot and M. Ludena. Foreign direct investment in the Caribbean: Trends, determinants and policies. UNECLAC Studies and Perspectives. February b. The 21st century Debate on Globalisation: 1. Kimmo Kiljunen: Towards a Theory of the International Division of Industrial Labour. World Development. Vol. 17. No p Deepak Nayyar: Globalization: The past in our present. Third World Economics. Issue No Sept Raphael Kaplinsky: Globalisation, Industrialisation and Sustainable Growth: The Pursuit of the Nth Rent. IDS DP. 365, June, World Bank Research Observer. Vol. 15. No. 2. Aug papers by Dornbusch et al; Williamson and Srinivasan. 5. IMF: Reforming the Financial Architecture. Finance and Development Sept Chakravarthi Raghavan: New architecture or wrong diagnosis? THIRD WORLD ECONOMICS. Issue No April, Holger Henke and Ian Boxill (eds.). The End of the Ásian Model. John Benjamin Publ. Co. 2000, Chs. 1-3, 6, Vinod K. Anand: Conventional Wisdom in Economics: Focus on Contemporary Thinking. The Indian Journal of Economics. Vol. LXXIX. No.313. Oct c. The Caribbean and Globalisation 1. Hilbourne A. Watson(ed).: The Caribbean in the Global Political Economy. Lynee Rienner Publ Papers by Pantin, Lewis, Watson. 2. Karl Levitt.- The Right to Development. Fifth ECCB Sir Arthur Lewis Memorial Lecture St. Lucia (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, - 7 -

8 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, (2012) Informal Commercial Importers. (ICIs) in the Caribbean: Evidence from Trinidad and Tobago and Guyana. The Transition Journal, Issue No. 41, pp (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 Douglass C. North: Economic Performance Through Time. Nobel Prize lecture in Economic Science. Dec Martinussen, John: Society, State and Market: A Guide to Competing Theories of Development, London: Zed Books Chapters Ha-Joon Chang: Kicking Away the Ladder: Development Strategy in Historical Perspective. Anthem Press Chapters (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: - 8 -

9 *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 Economics of Sustainable Development in Small Caribbean Island Economies 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 K. Levitt: The Plantation Economy Model, in Pantin and Mahabir(ed). Maroonage, No 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 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 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 ) 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 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 v

10 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 Norman Girvan: CSME Vision Report R. Hosein and J. Khadan. The Impact of Emerging Markets (BRICs) on CARICOM Bank of Valletta Review, Europe Issue 45 Spring 201 (2012) pp 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, 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

11 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 (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$ or J$ or TT$ or US$ (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

12 Grading System August 2017 GRADE GPA MARKS% A and Over A A B B B C C C D D F