ECON 260Theories of Economic Development.
Instructor: Jorge Aguero.
Fall 2008.
Lecture 1 September 29, 2008 1
General information
Time and location: TR 2:10 - 3:30 p.m. SPR 3123
Office hours: T 10am-11am, W 11am-12pm (4108 Sproul Hall)
Phone: 951.827.4108.
E-mail: [email protected]
Website: http://faculty.ucr.edu/~jorgea/econ260
Lecture 1 September 29, 2008 2
Requirements and grading
Two research ideas (due Oct. 28 and Nov. 25) 15% each.
Two referee reports (due Oct. 14 and Nov. 11) 15% each.
One presentation (to be scheduled later) 10%.
One take-home final (December 9, 10 a.m.) 30%.
Lecture 1 September 29, 2008 3
Reports
• The referee report is a critical (but constructive) evaluation ofan academic paper.
• The list of papers is available on the course website.
• Choose two out of three papers.
• The research ideas can cover any topic related in appliedeconomics.
• Must have: goal and motivation in detail, (if possible) themodel, data and methodology.
• Limit your writings to five pages per piece.
Lecture 1 September 29, 2008 4
Textbooks
• Aghion, P. and S. Durlauf, eds. (2005) Handbook of EconomicGrowth, Vol. 1A. North Holland [AD, HD75.5 .H35 2005,available at Science Direct].
• Banerjee, A., R. Benabou, and D. Mookherjee (2006)Understanding Poverty. Oxford University Press. [BBM,HC79.P6 U534 2006]
• Barro, R. and X. Sala-i-Martin (2004) Economic Growth.Second edition. MIT Press. [BSM]
• Rodrik, D. editor (2003) In Search of Prosperity: AnalyticNarratives on Economic Growth Princeton University Press.[HD73 .I52 2003]
• D. Mookherjee and D. Ray (2001) Readings in the Theory ofEconomic Development. Blackwell Pubs. [HD75 .R423 2001].
Lecture 1 September 29, 2008 5
Economic growth: measurement
Lecture 1 September 29, 2008 6
AGO
ALB
ARE
ARG
ARM
ATG
AUSAUT
AZE
BDI
BEL
BENBFA
BGD
BGR
BHR BHS
BIHBLRBLZ
BOL
BRABWA
CAF
CANCHE
CHL
CHN
CIV
CMR
COG
COL
COM
CPV
CRI
CYPCZE
DEU
DJI
DMA
DNK
DOMDZA
EAP
ECA
ECUEGY
EMU
ERI
ESP
EST
ETH
FIN
FJI
FRA
GAB
GBR
GEOGHA GIN
GMB
GNB
GRC
GRD
GTMGUY
HICHKG
HND
HPC
HRV
HTI
HUN
IDNIND
IRL
IRN
ISLISR
ITA
JAMJOR
JPN
KAZ
KEN
KGZ
KHM
KNA
KOR KWT
LAC
LAO
LBNLCA
LDC
LIC
LKA
LMCLMY
LSO
LTU
LUX
LVA
MAR
MDA
MDG
MEX
MICMKD
MLI
MLT
MNA
MNG
MOZ
MRT
MUS
MWI
MYS
NAM
NER
NGA
NIC
NLDNOR
NPL
NZL
OEC
OMN
PAK
PANPER
PHL
PNG
POL
PRT
PRY
ROMRUS
RWA
SAS
SAU
SDNSEN
SGP
SLB
SLE
SLV
SSA
SVK
SVN
SWE
SWZ
SYC
SYR
TCD
TGO
THA
TJK
TON
TTO
TUN TUR
TZA
UGA
UKR
UMCURY
USA
UZB
VCT VEN
VNMVUT
WLD
WSM
YEM
ZAF
ZAR
ZMB
ZWE
46
810
12G
DP
per
cap
ita, P
PP
(co
nsta
nt 2
000
inte
rnat
iona
l $)
4 6 8 10 12GDP per capita (constant 2000 US$)
Source: WDI
Relation between GDP percapita with PPP and US$: 2002
Lecture 1 September 29, 2008 7
AGO
ALB
ARE
ARG
ARM
ATG AUSAUT
AZE
BDI
BEL
BEN
BFA
BGD
BGRBIHBLR
BLZBOL
BRA
BWA
CAF
CHE
CHL
CHN
CIV
CMR
COG
COL
COM
CPVCRI
CZEDEU
DMA
DNK
DOMDZA
EAP
ECAECU
EGY
EMU
ERI
ESPEST
ETH
FIN
FJI
FRA
GAB
GBR
GEO
GHA
GIN
GMB
GNB
GRC
GRD
GTM
GUY
HICHKG
HND
HPC
HRV
HTI
HUN
IDN
IND
IRL
IRNISL
ITA
JAM
JORJPN
KAZ
KEN
KGZ
KHM
KNA KOR
KWT
LAC
LAO
LBNLCA
LDC
LIC
LKA
LMCLMY
LSO
LTU
LUX
LVA
MAR
MDA
MDG
MEX
MIC
MKD
MLI
MNA
MNG
MOZ
MRT
MUS
MWI
MYSNAM
NER
NGA
NIC
NLD NOR
NPL
OECOMN
PAK
PAN
PER
PHL
PNG
POL PRT
PRY
ROM
RUS
RWA
SAS
SAU
SDN
SEN
SGP
SLE
SLV
SSA
SVK SVNSWE
SWZ
SYC
SYR
TCDTGO
THA
TJK
TON
TTO
TUN
TUR
TZA
UGA
UKR
UMCURY
USA
UZB
VCT
VEN
VNM
VUT
WLD
YEM
ZAF
ZAR
ZMB
ZWE
020
4060
80A
gric
ultu
re, v
alue
add
ed (
% o
f GD
P)
6 7 8 9 10 11GDP per capita, PPP (constant 2000 international $)
Source: WDI
GDP per capita and agriculture: 2002
Lecture 1 September 29, 2008 8
AGO
ALB
ARE
ARG
ARM
ATG
AUS
AUT
AZE
BDI
BEL
BEN
BFA
BGD
BGRBIH
BLR
BLZ
BOL
BRA
BWA
CAF
CHE
CHL
CHN
CIV
CMR
COG
COL
COM
CPV
CRI
CZE
DEU
DMA
DNK
DOM
DZA
EAP
ECA
ECU
EGY
EMUERI
ESPEST
ETH
FIN
FJI
FRA
GAB
GBRGEOGHA
GIN
GMBGNB
GRCGRD
GTM
GUYHIC
HKG
HND
HPC
HRV
HTI
HUN
IDN
IND
IRLIRN
ISL
ITA
JAM
JOR
JPN
KAZ
KEN
KGZ
KHM
KNA
KOR
KWT
LAC
LAO LBN
LCA
LDCLIC LKA
LMC
LMY
LSO
LTU
LUX
LVA
MAR
MDA
MDG
MEX
MIC
MKD
MLI
MNA
MNG
MOZ
MRT MUS
MWI
MYS
NAM
NER
NGA
NIC
NLD
NOR
NPL
OEC
OMN
PAK
PAN
PERPHL
PNG
POL PRT
PRY
ROM
RUS
RWA
SAS
SAU
SDNSEN
SGP
SLE
SLVSSA
SVK
SVN
SWE
SWZ
SYCSYR
TCD
TGO
THA
TJK
TON
TTO
TUN
TUR
TZA
UGA
UKR
UMC
URY
USAUZBVCT
VEN
VNM
VUT
WLD
YEM
ZAF
ZAR
ZMB
ZWE
020
4060
80In
dust
ry, v
alue
add
ed (
% o
f GD
P)
6 7 8 9 10 11GDP per capita, PPP (constant 2000 international $)
Source: WDI
GDP per capita and industry: 2002
Lecture 1 September 29, 2008 9
AGOALB
ARE
ARG
ARM
AUS
AUT
AZE
BEL
BEN
BGD
BGR
BHR
BIH
BLR
BOL
BRA
CAN
CHE
CHL
CHN
CIVCMR
COG
COL
CRI
CYP
CZE DEUDNK
DOMDZAEAP
ECA
ECUEGY
EMU
ESPEST
ETH
FIN
FRA
GAB
GBR
GEO
GHA
GRC
GTM
HIC
HKG
HND
HPC
HRV
HTI
HUN
IDN
IND
IRL
IRN
ISL
ISR ITA
JAM
JOR
JPN
KAZ
KEN KGZ
KOR
KWT
LAC
LBN
LDC
LIC
LKA
LMCLMY
LTU
LUX
LVA
MAR
MDA
MEX
MIC
MLT
MNA
MOZ
MYS
NAM
NGA
NIC
NLD
NOR
NPL
NZL
OECOMN
PAK
PAN
PER
PHL
POLPRT
PRY
ROM
RUS
SAS
SAU
SDN
SEN
SGP
SLVSSA
SVK SVN
SWE
SYR
TGO
THA
TJK
TTO
TUN
TUR
TZA
UKRUMC
URY
USA
UZBVEN
VNM
WLD
YEM
ZAF
ZAR
ZMB
ZWE
56
78
910
Ene
rgy
use
(kg
of o
il eq
uiva
lent
per
cap
ita)
6 7 8 9 10 11GDP per capita, PPP (constant 2000 international $)
Source: WDI
GDP per capita and energy consumption: 2002
Lecture 1 September 29, 2008 10
AGO
ALB
ARE
ARG
ARM
ATG
AUSAUT
AZE
BDI
BEL
BEN
BFA
BGD
BGR
BHR
BHS
BIH
BLR
BLZ
BOL
BRA
BWA
CAF
CANCHE
CHL
CHN
CIV CMR
COG
COL
COM
CPV
CRI CYP
CZE
DEU
DJI
DMA DNK
DOM
DZA
EAPECA
ECU
EGY
EMU
ERI
ESP
EST
ETH
FIN
FJI
FRA
GAB
GBR
GEO
GHA
GIN
GMB
GNB
GRC
GRD
GTM
GUY
HIC
HKG
HND
HPC
HRV
HTI
HUN
IDN
IND
IRL
IRN
ISLISR
ITA
JAMJOR
JPN
KAZ
KEN
KGZ
KHM
KNA
KORKWT
LAC
LAO
LBN
LCA
LDC
LIC
LKA
LMC
LMY
LSO
LTU
LUX
LVAMAR
MDA
MDG
MEX
MIC
MKD
MLI
MLT
MNA
MNG
MOZ
MRT
MUS
MWI
MYS
NAM
NERNGA
NIC
NLDNOR
NPL
NZL OEC
OMN
PAK
PAN
PERPHL
PNG
POL
PRT
PRY ROM
RUS
RWA
SAS
SAU
SDNSEN
SGP
SLB
SLE
SLV
SSA
SVK
SVN
SWE
SWZ
SYCSYR
TCD
TGO
THA
TJK
TON
TTO
TUN
TUR
TZAUGA
UKRUMC
URY
USA
UZB
VCT
VEN
VNMVUT
WLD
WSM
YEM
ZAF
ZAR
ZMB ZWE
4050
6070
80Li
fe e
xpec
tanc
y at
birt
h, to
tal (
year
s)
6 7 8 9 10 11GDP per capita, PPP (constant 2000 international $)
Source: WDI
GDP per capita and life expectancy: 2002
Lecture 1 September 29, 2008 11
AGO
ALBARG
ARMAZE
BDI
BEN
BFA
BGR
BHR
BIH
BLR
BOLBRA
BWA
CAF
CHL
CHN
CIV
CMR
COLCRI
CYP
DOM
DZA
EAP
ECA
ECU
EGY
EST
GHA
GIN
GRC
GTM
HND
HPC
HRV
IDN
IND
IRN
ISRITA
JAM
JOR
KAZ
KEN
KGZ
KHM
KWT
LAC
LAO
LIC
LKALMC
LMYLSO
LTULVA
MAR
MDA
MDG
MEXMIC
MKD
MLI
MLT
MNA
MNG
MRT
MUS
MWI
MYS
NAM
NER
NIC
NPL
OMN
PAK
PAN
PER
PHL
PNG
ROMRUS
RWA
SAS
SAU
SDN
SEN
SGP
SLE
SVK
SWZ
SYC
SYR
TCD
TGO
THA
TJK TON
TUN
TUR
TZA
UGA
UKR
UMCVEN
VNM
VUT
ZAF
ZAR ZMB
2040
6080
100
Lite
racy
rat
e, a
dult
tota
l (%
of p
eopl
e ag
es 1
5 an
d ab
ove)
6 7 8 9 10 11GDP per capita, PPP (constant 2000 international $)
Source: WDI
GDP per capita and literacy: 2004
Lecture 1 September 29, 2008 12
AGO
ALB
ARE
ARG
ARM
ATG
AUS
AUT
AZE
BDI
BEL
BEN
BFA
BGD
BGR
BHR
BHS
BIH
BLR
BLZ
BOL
BRA
BWA
CAF
CAN
CHE
CHL
CHN
CIV
CMR
COG
COL
COM
CPV
CRI
CYP
CZEDEU
DJI
DMA
DNK
DOM
DZA
EAP
ECAECU
EGY
EMU
ERI
ESP
EST
ETH
FIN
FJI
FRA
GAB
GBR
GEO
GHA
GIN
GMB
GNB
GRC
GRD
GTM
GUY
HIC
HKG
HND
HPC
HRV
HTI
HUN
IDN
IND
IRL
IRN
ISLISR
ITA
JAM
JOR
JPN
KAZ
KEN
KGZ
KHM
KNA
KOR
KWT
LAC
LAO
LBN
LCALDC
LIC
LKA
LMC
LMY
LSO
LTU
LUX
LVA
MAR
MDA
MDG
MEX
MIC
MKD
MLI
MLT
MNAMNG
MOZ
MRTMUS
MWI
MYS
NAM
NER
NGA
NIC
NLDNOR
NPL
NZL
OEC
OMN
PAK
PAN
PER
PHL
PNG
POL
PRTPRYROM
RUS
RWA
SAS
SAU
SDN
SEN
SGP
SLB
SLE
SLV
SSA
SVK
SVN
SWE
SWZ
SYCSYR
TCD
TGO
THA
TJKTON
TTO
TUNTUR
TZA
UGA
UKR
UMC
URY
USA
UZB
VCT
VEN
VNMVUT
WLD
WSM
YEM
ZAF
ZAR
ZMB ZWE
020
4060
8010
0U
rban
pop
ulat
ion
(% o
f tot
al)
6 7 8 9 10 11GDP per capita, PPP (constant 2000 international $)
Source: WDI
GDP per capita and urban population: 2002
Lecture 1 September 29, 2008 13
NigerSierra Leone Burkina FasoMali ChadGuinea−BissauCentral African RepublicEthiopiaBurundi MozambiqueCongo, Dem. Rep. of theZambiaMalawiTanzania, U. Rep. of Côte d’IvoireBeninEritrea AngolaRwandaNigeria Senegal GuineaGambiaKenya HaitiMauritaniaYemen DjiboutiCameroonLesotho SwazilandMadagascar ZimbabweUgandaTogoCongo SudanBangladeshGhanaPapua New GuineaNepal PakistanBhutanLao People’s Dem. Rep.Comoros BotswanaCambodiaSolomon Islands IndiaSão Tomé and Principe NamibiaMorocco GabonTajikistan Equatorial GuineaSouth AfricaVanuatu EgyptGuatemalaHondurasMoldova, Rep. ofMongolia BoliviaNicaraguaUzbekistan IndonesiaKyrgyzstan Viet Nam GuyanaCape VerdeSyrian Arab RepublicEl Salvador AlgeriaAzerbaijanGeorgia Iran, Islamic Rep. ofTurkmenistanJamaica Dominican RepublicTurkeySri Lanka Fiji TunisiaBelizeJordanParaguayChinaSaint Vincent and the GrenadinesPhilippinesEcuador LebanonArmenia KazakhstanPeruUkraineVenezuela Saudi ArabiaSaint LuciaSamoa (Western) ThailandAlbania OmanDominica ColombiaBosnia and HerzegovinaBelarus Grenada MauritiusBrazilRomaniaRussian FederationMalaysiaMacedonia, TFYRAntigua and BarbudaTrinidad and TobagoPanamaBulgariaTonga MexicoSeychelles BahamasSaint Kitts and NevisLatviaCosta RicaUruguay Croatia KuwaitBahrainUnited Arab EmiratesSlovakia QatarLithuaniaEstoniaChilePolandHungaryArgentina Brunei DarussalamMaltaCzech RepublicBarbadosCyprusKorea, Rep. ofSloveniaPortugal SingaporeGreeceIsraelHong Kong, China (SAR)Spain GermanyNew ZealandItaly AustriaFranceUnited KingdomFinland DenmarkNetherlandsJapanUnited StatesBelgium IrelandSwitzerlandLuxembourgCanadaSweden AustraliaIcelandNorway
050
100
150
200
Ran
k by
hum
an d
evel
opm
ent i
ndex
0 50 100 150 200Rank by GDP per capita, PPP (constant US$)
Source: Human development report 2005
Comparing rankings by GDP per capita and HDI: 2003
Lecture 1 September 29, 2008 14
Economic growth: facts
Lecture 1 September 29, 2008 15
Income disparities (Durlauf et. al 2005)Table 1: International Disparities in GDP per Worker
Country Population(m, 2000) R1960 R2000
USA 275 1 1
United Kingdom 60 .69 .69
Argentina 37 .62 .40
France 60 .60 .76
Italy 58 .55 .84
South Africa 43 .47 .34
Mexico 97 .44 .38
Spain 40 .40 .68
Iran 64 .30 .30
Colombia 42 .27 .18
Japan 127 .25 .60
Brazil 170 .24 .30
Turkey 67 .17 .24
Philippines 76 .17 .13
Egypt 64 .17 .21
Korea, Republic of 47 .15 .57
Bangladesh 131 .10 .10
Nigeria 127 .08 .02
Indonesia 210 .08 .14
Thailand 61 .07 .20
Pakistan 138 .07 .11
India 1016 .06 .10
China 1259 .04 .10
Ethiopia 64 .04 .02
Mean .29 .35
Median .21 .27
Notes:
- R is GDP per worker as a fraction of that in the USA.
Lecture 1 September 29, 2008 16
Figure 2: Output Per Worker: 1960 versus 2000
TWN
BWA
HKG
KOR
SGP
THA
CYPJPN
CHN
ROM
MUSMYS
PRT
IDN
ESP
PAK
GRC
COG
AUTITA
IND
SYR
FIN
GABTUR
ISR
BEL
DOM
FRA
EGY
LSO
BRA
NOR
MAR
LKA
PAN
MWI
NPL
BGD
IRN
CHL
GBR
USA
DNK
TTO
NLDSWE
AUS
GNB
CAN
MEX
ZWE
JOR
ECU
GTM
UGA
NAM
CIV
PHL
BFA
FJI
GMB
PNG
ZAF
GUY
TZA
URY
PRY
KENGHA
COL
ARG
ETH
SLVCRI
BEN
GINHND
CMR
BDI
TGO
JAM
RWA
BOL
PER
MRT
SEN
TCD
MOZMDG
ZMB
MLI
VEN
NER
NGA
NIC
CAFAGO
ZAR
.2.4
.6.8
1Log G
DP
per
work
er
rela
tive t
o U
SA
, 2000
.2 .4 .6 .8 1Log GDP per worker relative to USA, 1960
Relative GDP per worker
Lecture 1 September 29, 2008 17
Economic miracles: 1960-2000 (Durlauf et. al 2005)
Country Growth 1960-2000 Factor increase
Taiwan 6.25 11.3
Botswana 6.07 10.6
Hong Kong 5.67 9.09
Korea, Republic of 5.41 8.24
Singapore 5.09 7.29
Thailand 4.50 5.83
Cyprus 4.30 5.39
Japan 4.13 5.04
Ireland 4.10 5.00
China 3.99 4.77
Romania 3.91 4.63
Mauritius 3.88 4.58
Malaysia 3.82 4.48
Portugal 3.48 3.93
Indonesia 3.34 3.72
Lecture 1 September 29, 2008 18
Economic disasters: 1960-2000 (Durlauf et. al 2005)
Country Growth 1960-2000 Ratio
Peru 0.00 1.00
Mauritania -0.11 0.96
Senegal -0.26 0.90
Chad -0.43 0.84
Mozambique -0.50 0.82
Madagascar -0.60 0.79
Zambia -0.61 0.78
Mali -0.77 0.74
Venezuela -0.88 0.70
Niger -1.03 0.66
Nigeria -1.21 0.62
Nicaragua -1.30 0.59
Central African Republic -1.56 0.53
Angola -2.04 0.44
Congo, Democratic Rep. -4.00 0.20
Lecture 1 September 29, 2008 19
Unpredictable growth?: 1960-2000 (Durlauf et. al 2005)
TWN
BWA
HKG
KOR
SGP
THACYP
JPN
IRL
CHN
ROM
MUS
MYS
PRTIDN
ESP
PAK
GRC
COG
AUTITA
IND
SYR
FIN
GAB
TURISRBEL
DOM
FRA
EGY
LSO
BRA
NOR
MAR
LKA
PAN
MWI
NPL
BGD
IRN
CHLGBRUSADNK
TTO
NLDSWE
AUS
GNB
CAN
MEX
ZWE
JOR
ECU
GTM
UGA
NAM
CIV
PHL
BFA
FJIGMB
PNGZAF
GUY
CHE
TZA
URY
PRY
KENGHACOL
ARG
ETHSLV
CRI
BENGIN
NZL
HNDCMR
BDITGO
JAM
RWA
BOL
PER
MRT
SEN
TCD
MOZ
MDG
ZMBMLIVEN
NER
NGA
NICCAF
AGO
42
02
46
8G
row
th,
1980
2000
4 2 0 2 4 6 8Growth, 1960 1980
Unpredictable growth?
Lecture 1 September 29, 2008 20
Summary: growth facts
• Between 1960-2000 the relative distribution of world incomeseems stable.
• The rich countries remain rich and the poor remain poor.
• However, there are miracles and disasters.
• Is this evidence against “poverty traps”?
• Is growth predictable?
Lecture 1 September 29, 2008 21
Economic growth: explanations
Lecture 1 September 29, 2008 22
GDPPPP 1995$465-1,999$2,000-4,999$5,000-9,999$10,000-15,999$16,000-44,000No data
Tropic of Capricorn
Tropic of Cancer
Note: GDPPPP= 1995Gross Domestic Product perperson in purchasing power parity internationaldollars.
Figure 1. Income per person, 1995 (with sub-national data for 19 countries)
Lecture 1 September 29, 2008 23
Malaria risk - 1946, 1966, 1994
1946
1966
High risk of Malaria1994
Tropic of Cancer
Tropic of Capricorn
Lecture 1 September 29, 2008 24
Latitude and income (Acemoglu et. al)
.
Log G
DP
per
capita, P
PP
, in
1995
Latitude0 .2 .4 .6 .8
6
8
10
AFG
DZA
AGO
ARG
ARM
AUSAUT
AZE
BHSBHR
BGD
BRB
BLR
BEL
BLZ
BEN
BTNBOL
BIH
BWABRABGR
BFA
BDI
CMR
CAN
CPVCAF
TCD
CHL
CHN
COL
COM
ZAR
COG
CRI
CIV
HRV
CZE
DNK
DJI
DMA
DOM
ECU
EGYSLV
EST
ETH
FJI
FINFRA
GAB
GMB
GEO
DEU
GHA
GRC
GRD GTM
GIN
GNB
GUY
HTI
HND
HKG
HUN
ISL
IND
IDN
IRN
IRQ
IRL
ISR
ITA
JAM
JPN
JOR
KAZ
KEN
KORKWT
LVA
LSO
LBR
LBYLTU
LUX
MDGMWI
MYS
MLI
MLT
MRT
MUSMEX
MDA
MAR
MOZ
MMR
NAM
NPL
NLD
NZL
NIC
NERNGA
NOR
OMN
PAK
PAN
PNG
PRYPERPHL
POL
PRT
QAT
ROM
RUS
RWA
STP
SAU
SEN
SLE
SGP
SVKSVN
SOM
ZAF
ESP
LKA
KNA
LCA
VCT
SDN
SWZ
SWE
CHE
SYR
TJK
TZA
THA
TGO
TTO
TUN TUR
TKM
UGA
GBR
UKR
ARE
URY
USA
UZB
VEN
VNM
YEM
YUG
ZMB
ZWE
Lecture 1 September 29, 2008 25
Pritchett (1997)
• How did the world income distribution evolved since 1870?
• How did the rich countries growth?
• How did the poor countries growth?
• Is evidence presented by Pritchett consistent with thegeography hypothesis?
Lecture 1 September 29, 2008 26
Expropriation and income (Acemoglu et. al)
12
.
Log G
DP
per
capita, P
PP
, in
1995
Avg. Protection Against Risk of Expropriation, 1985-954 6 8 10
6
8
10
AGO
ARE
ARG
AUSAUTBEL
BFA BGD
BGR
BHR
BHS
BOL
BRABWA
CANCHE
CHL
CHN
CIVCMRCOG
COLCRI
CZE
DNK
DOM DZAECU
EGY
ESP
ETH
FINFRA
GAB
GBR
GHAGIN
GMB
GRC
GTM
GUY
HKG
HND
HTI
HUN
IDN
IND
IRL
IRN
ISL
ISRITA
JAMJOR
JPN
KEN
KOR
KWT
LKA
LUX
MAR
MDG
MEX
MLI
MLT
MNG
MOZ MWI
MYS
NERNGA
NIC
NLDNOR
NZL
OMN
PAK
PAN
PER
PHL
POL
PRT
PRY
QAT
ROM RUS
SAU
SDNSEN
SGP
SLE
SLVSUR
SWE
SYR
TGO
THATTO
TUN
TUR
TZA
UGA
URY
USA
VEN
VNM
YEM
ZAF
ZAR ZMB
ZWE
Lecture 1 September 29, 2008 27
Corruption and income (Acemoglu et. al)
.
Lo
g G
DP
pe
r ca
pita
, P
PP
, in
19
95
Control of Corruption0 .5 1
6
8
10
ARG
ARM
AUSAUTBEL
BFA
BGR
BOL
BRA
CANCHE
CHL
CHN
COL
CZE
DEUDNK
DOMECU
EGY
ESP
FINFRA
GBR
GEO GHA
GRC
HKG
HRV
HUN
IDN
IND
IRLISRITA
JAM JOR
JPN
KAZ
KEN
KOR
LBN
LKA
LTULVA
MAR
MDG
MEX
MLIMOZ MWI
MYS
NGA
NLDNOR
NZL
PAK
PAN
PER
PHL
POL
PRT
ROMRUS
SEN
SGP
SVK
SVN
SWE
THA
TUN
TUR
TZA
UGA
UKR
URY
USA
VEN
VNM
ZAF
ZMB
ZWE
Lecture 1 September 29, 2008 28
Reversal of fortune 1 (Acemoglu et. al)
.
GD
P p
er
capita, P
PP
, in
1995
Urbanization in 15000 5 10 15 20
7
8
9
10
ARG
AUS
BGD
BLZ
BOL
BRA
CAN
CHL
COL CRI
DOM DZAECU
EGY
GTM
GUY
HKG
HND
HTI
IDN
IND
JAM
LAO
LKA
MAR
MEXMYS
NIC
NZL
PAK
PAN
PER
PHLPRY
SGP
SLV
TUN
URY
USA
VEN
VNM
Lecture 1 September 29, 2008 29
Reversal of fortune 2 (Acemoglu et. al)
.
GD
P p
er
capita, P
PP
, in
1995
Log Population Density in 1500-5 0 5
6
7
8
9
10
AGO
ARG
AUS
BDI
BEN
BFA BGD
BHS
BLZ
BOL
BRA
BRB
BWA
CAF
CAN
CHL
CIVCMRCOG
COL
COM
CPV
CRI
DMADOM DZAECU
EGY
ERI
GAB
GHAGIN
GMB
GRDGTM
GUY
HKG
HND
HTI
IDN
IND
JAM
KEN
KNA
LAO
LCA
LKA
LSO
MAR
MDG
MEX
MLIMOZ
MRT
MWI
MYS
NAM
NERNGA
NIC
NPL
NZL
PAK
PAN
PER
PHLPRY
RWA
SDNSEN
SGP
SLE
SLVSUR
SWZ
TCD
TGO
TTO
TUN
TZA
UGA
URY
USA
VCT
VEN
VNM
ZAF
ZARZMB
ZWE
Lecture 1 September 29, 2008 30