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

Owen Barder argued that people should think of development as a property of the economic and social system itself. In Amartya Sen’s idea, development is the sum of the well-being of the people and output of the firms. But Owen argued that development is more like a characteristic of the economic social and political 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?

He made this comparison because average income per person in the two countries are roughly the same in around 1960. However, South Korea started to experience a rapid economic growth after that and its income per person is much higher than that in Ghana in 2010. It shows that average income per person is not a complete measure of well-being and the nature of poverty in development is more complex than we thought.

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 tried to make a new toaster from scratch finding the raw materials. He bought the cheapest toaster from the shop and turned them into parts and then start to make it all by himself. The process is very hard and it took him nine months to do that. In the end, he failed because he cannot get the rubber he needed. The story tells us even the simplest toaster is difficult to make by the effort of one person and that’s why we need an efficient economy system to cooperate and provide people with sufficient goods in the market.

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?

The Harrod Domar growth model is that to make a unit of output, you need to combine a certain amount of capital and a certain amount of labor. So, the two variables are capital and labor in the model. Walter Rostow created the Rostow model that putting more investment in the poor countries would trigger an economic growth circle which posh the country to self-sustained.

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?

Robert Solow added a third variable to the Harrod-Domar model, which is technical change. The model was not very successful because it failed to explain what the ‘technical change’ is, which is the most important part of the model.

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 works in one of the largest steel productions in Nigeria. It illustrates the transition from a focus on policies to institutions because the Steel Works failed to produce any steel because of corruption, which is a problem from the institution instead of policies. In the book Why Nations Fail, the authors argued it was not that convincing politicians what good economics is matter but countries failed because the wrong ways they were running suited with the powerful elites who didn’t want them to change.

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

The economic models are not very successful because it cannot explain why some countries have grown rapidly over the past 50 years while some other countries failed to do that.

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?

Schumpeter’s idea of creative destruction is about firms should keep adapting to the to changes in environment to achieve success or they will be replaced by new firms. For example, Nokia was very successful at producing phones at first. But due to its failure in adopting to the environment to produce smart phones, it was overtaken by Samsung in the end. Co-evolution is about when firms, industries and technology adapt and evolve, they interact with each other, which is significant because the interactions form a complex adaptive society.

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

A complex adaptive system is composed of large number of adaptations and interactions which leads to co-evolving. The complex adaptive systems are difficult to predict in detail, have emergent properties, tend towards greater complexity and do not tend towards an 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 a ruler in Ethiopia. The Emperor is significant because it pointed out the logic behind the Ethiopia regime which is extracting values from the people and prevent the society from moving forward. The Ethiopia emperor used his power to sustain his power, which lead to a stalled development. I agree with the analysis since it fits with human nature of greed.

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

Because many problems are difficult to solve technically but easier through adaptation and change to the specific environment. Iso-morphic mimicry is about that well-functioning institutions and policies what work well in one country may be useless in another country if they don’t connect to the environment.

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

Resist fatalism means that we don’t need to accept whatever result from evolution, but we can choose the direction of evolution. Norman Borlaug was the man who developed high-yield, disease resistant wheat by selecting actively for high-yield seeds, which is called the green revolution.

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

Promote innovation means that we should provide firms with a safer and more supportive environment for them to take risks and make innovations. And effective feedback system is needed to make better selections. Beyond that, paying attention to the direction of the society is also important.

Question 14. Who was Nicholas Georgescu-Roegen and what was his insight about economic systems and evolution?

Nicholas Georgescu-Roegen was a Romanian mathematician, statistician and economist who believes that people should pay more attention on subjective well-beings than economic growth.