Part One: Principles and Concepts -- 1. Economics, Institutions, and Development: A Global Perspective -- How the Other Half Live -- Economics and Development Studies -- The Nature of Development Economics -- Why Study Development Economics? Some Critical Questions -- The Important Role of Values in Development Economics -- Economies as Social Systems: The Need to Go Beyond Simple Economics -- What Do We Mean by Development? -- Traditional Economic Measures -- The New Economic View of Development -- Sen's "Capabilities" Approach -- Three Core Values of Development -- The Three Objectives of Development -- The Millennium Development Goals -- Conclusions -- Case Study: Progress in the Struggle for More Meaningful Development: Brazil -- 2. Comparative Development: Differences and Commonalities among Developing Countries -- Defining the Developing World -- The Structural Diversity of Developing Economies -- Size and Income Level -- Historical Background -- Physical and Human Resources -- Ethnic and Religious Composition -- Relative Importance of the Public and Private Sectors and Civil Society -- Industrial Structure -- Political Structure, Power, and Interest Groups -- Common Characteristics of Developing Nations -- Low Levels of Living -- A Holistic Measure of Living Levels: The Human Development Index -- Low Levels of Productivity -- High Rates of Population Growth and Dependency Burdens -- Substantial Dependence on Agricultural Production and Primary-Product Exports -- Prevalence of Imperfect Markets and Incomplete Information -- Dependence and Vulnerability in International Relations -- How Developing Countries Today Differ from Developed Countries in Their Earlier Stages -- Physical and Human Resource Endowments -- Relative Levels of Per Capita Income and GDP -- Climatic Differences -- Population Size, Distribution, and Growth -- The Historical Role of International Migration -- The Growth Stimulus of International Trade -- Basic Scientific and Technological Research and Development Capabilities -- Stability and Flexibility of Political and Social Institutions -- Efficacy of Domestic Economic Institutions -- Are Living Standards of Developing and Developed Countries Converging? -- Conclusion -- Case Study: Divergent Development: Pakistan and Bangladesh -- Appendix 2.1 Components of Economic Growth -- 3. Classic Theories of Economic Development -- Classic Theories of Economic Development: Four Approaches -- Development as Growth and the Linear-Stages Theories -- Rostow's Stages of Growth -- The Harrod-Domar Growth Model -- Obstacles and Constraints -- Necessary versus Sufficient Conditions: Some Criticisms of the Stages Model -- Structural-Change Models -- The Lewis Theory of Development -- Structural Change and Patterns of Development -- Conclusions and Implications -- The International-Dependence Revolution -- The Neocolonial Dependence Model -- The False-Paradigm Model -- The Dualistic-Development Thesis -- Conclusions and Implications -- The Neoclassical Counterrevolution: Market Fundamentalism -- Challenging the Statist Model: Free Markets, Public Choice, and Market-Friendly Approaches -- Traditional Neoclassical Growth Theory -- Conclusions and Implications -- Classic Theories of Development: Reconciling the Differences -- Case Study: Schools of Thought in Context: South Korea and Argentina -- Appendix 3.1 The Solow Neoclassical Growth Model -- 4. Contemporary Models of Development and Underdevelopment -- The New Growth Theory: Endogenous Growth -- Motivation for the New Growth Theory -- The Romer Model -- Criticisms of the New Growth Theory -- Underdevelopment as a Coordination Failure -- Multiple Equilibria: A Diagrammatic Approach -- Starting Economic Development: The Big Push -- The Big Push: A Graphical Model -- Why the Problem Cannot Be Solved by a Super-Entrepreneur -- Further Problems of Multiple Equilibria -- Kremer's O-Ring Theory of Economic Development -- The O-Ring Model -- Implications of the O-Ring Theory -- Summary and Conclusions: Multiple Equilibria and Coordination Failures -- Case Study: Understanding a Development Miracle: China -- Part Two: Problems and Policies: Domestic -- 5. Poverty, Inequality, and Development -- Measuring Inequality and Poverty -- Measuring Inequality -- Measuring Absolute Poverty -- Poverty, Inequality, and Social Welfare -- What's So Bad about Inequality? -- Dualistic Development and Shifting Lorenz Curves: Some Stylized Typologies -- Kuznets' Inverted-U Hypothesis -- Growth and Inequality -- Absolute Poverty: Extent and Magnitude -- Growth and Poverty -- Economic Characteristics of Poverty Groups -- Rural Poverty -- Women and Poverty -- Ethnic Minorities, Indigenous Populations, and Poverty -- The Range of Policy Options: Some Basic Considerations -- Areas of Intervention -- Policy Options -- Summary and Conclusions: The Need for a Package of Policies -- Case Study: Making Microfinance Work for the Poor: The Grameen Bank of Bangladesh -- Appendix 5.1 Appropriate Technology and Employment Generation: The Price-Incentive Model -- Appendix 5.2 The Ahluwalia-Chenery Welfare Index.

6. Population Growth and Economic Development: Causes, Consequences, and Controversies -- The Basic Issue: Population Growth and the Quality of Life -- A Review of Numbers: Population Growth-Past, Present, and Future -- World Population Growth through History -- Structure of the World's Population -- The Hidden Momentum of Population Growth -- The Demographic Transition -- The Causes of High Fertility in Developing Countries: The Malthusian and Household Models -- The Malthusian Population Trap -- Criticisms of the Malthusian Model -- The Microeconomic Household Theory of Fertility -- The Demand for Children in Developing Countries -- Some Empirical Evidence -- Implications for Development and Fertility -- The Consequences of High Fertility: Some Conflicting Opinions -- Population Growth Is Not a Real Problem -- A Deliberately Contrived False Issue -- A Desirable Phenomenon -- Population Growth Is a Real Problem -- The Empirical Argument: Seven Negative Consequences of Population Growth -- Goals and Objectives: Toward a Consensus -- Some Policy Approaches -- What Developing Countries Can Do -- What the Developed Countries Can Do: Resources, Population, and the Global Environment -- How Developed Countries Can Assist Developing Countries with Their Population Programs -- Conclusion -- Case Study: Population, Poverty, and Development: China and India -- 7. Urbanization and Rural-Urban Migration: Theory and Policy -- The Migration and Urbanization Dilemma -- Urbanization: Trends and Projections -- The Role of Cities -- Industrial Districts -- Efficient Urban Scale -- The Urban Giantism Problem -- First City Bias -- Causes of Urban Giantism -- The Urban Informal Sector -- Policies for the Urban Informal Sector -- Women in the Informal Sector -- Urban Unemployment -- Migration and Development -- Toward an Economic Theory of Rural-Urban Migration -- A Verbal Description of the Todaro Model -- A Diagrammatic Presentation -- Five Policy Implications -- Summary and Conclusions: The Shape of a Comprehensive Migration and Employment Strategy -- Case Study: Rural Urban Migration and Urbanization in Developing Countries: India and Botswana -- Appendix 7.1 A Mathematical Formulation of the Todaro Migration Model -- 8. Human Capital: Education and Health in Economic Development -- The Central Roles of Education and Health -- Education and Health as Joint Investments for Development -- Improving Health and Education: Why Increasing Income Is Not Sufficient -- Investing in Education and Health: The Human Capital Approach -- Child Labor -- The Gender Gap: Women and Education -- Consequences of Gender Bias in Health and Education -- Educational Systems and Development -- Educational Supply and Demand: The Relationship between Employment Opportunities and Educational Demands -- Social versus Private Benefits and Costs -- Distribution of Education -- Education, Inequality, and Poverty -- Education, Internal Migration, and the Brain Drain -- Health Systems and Development -- Measurement and Distribution -- Disease Burden -- Malaria and Parasitic Worms -- HIV and AIDS -- Health and Productivity -- Health Systems Policy -- Policies for Health, Education, and Income Generation -- Case Study: AIDS-Economic Development Impact and the Needed Response: Uganda and South Africa -- 9. Agricultural Transformation and Rural Development -- The Imperative of Agricultural Progress and Rural Development -- Agricultural Growth: Past Progress and Current Challenges -- The Structure of Agrarian Systems in the Developing World -- Two Kinds of World Agriculture -- Peasant Agriculture in Latin America, Asia, and Africa -- Conclusions -- The Important Role of Women -- The Economics of Agricultural Development: Transition from Peasant Subsistence to Specialized Commercial Farming -- Subsistence Farming: Risk Aversion, Uncertainty, and Survival -- The Transition to Mixed and Diversified Farming -- From Divergence to Specialization: Modern Commercial Farming -- Conclusions -- Toward a Strategy of Agricultural and Rural Development: Some Main Requirements -- Improving Small-Scale Agriculture -- Conditions for Rural Development -- Case Study: Improving Agricultural Extension for Women Farmers: Kenya -- 10. The Environment and Development -- Economics and the Environment -- Environment and Development: The Basic Issues -- Sustainable Development and Environmental Accounting -- Population, Resources, and the Environment -- Poverty and the Environment -- Growth versus the Environment -- Rural Development and the Environment -- Urban Development and the Environment -- The Global Environment -- The Scope of Environmental Degradation: An Overview -- Rural Development and the Environment: A Tale of Two Villages -- Traditional Economic Models of the Environment -- Privately Owned Resources -- Common Property Resources -- Public Goods and Bads: Regional Environmental Degradation and the Free-Rider Problem -- Limitations of the Public-Good Framework -- Urban Development and the Environment -- The Ecology of Urban Slums -- Industrialization and Urban Air Pollution -- Problems of Congestion and the Availability of Clean Water and Sanitation -- The Need for Policy Reform -- The Global Environment: Rain Forest Destruction and Greenhouse Gases -- Policy Options in Developing and Developed Countries -- What Less Developed Countries Can Do -- How Developed Countries Can Help LDCs -- What Developed Countries Can Do for the Global Environment -- Case Study: Economic Growth and Environmental Sustainability: The Philippines ; Elizabeth M. Remedio.

11. Development Policymaking and the Roles of Market, State, and Civil Society -- The Planning Mystique -- The Nature of Development Planning -- Basic Concepts -- Planning in Mixed Developing Economies -- The Rationale for Development Planning -- The Planning Process: Some Basic Models -- Aggregate Growth Models: Projecting Macro Variables -- Multisector Models and Sectoral Projections -- Project Appraisal and Social Cost-Benefit Analysis -- Conclusions: Planning Models and Plan Consistency -- Problems of Plan Implementation and Plan Failure -- Theory versus Practice -- Reasons for Plan Failure -- Government Failure and the Resurgent Preference for Markets over Planning -- The Market Economy -- Sociocultural Preconditions and Economic Requirements -- Role and Limitations of the Market in LDCs -- The "Washington Consensus" on the State in Development and Its Limitations -- Toward a New Consensus -- Development Political Economy: Theories of Policy Formulation and Reform -- Understanding Voting Patterns on Policy Reform -- Institutions and Path Dependency -- Democracy versus Autocracy: Which Facilitates Faster Growth? -- Development Roles of NGOs and the Broader Citizen Sector -- Trends in Governance and Reform -- Tackling the Problem of Corruption -- Decentralization -- Development Participation -- Development Policy and the State: Concluding Observations -- Case Study: A National Development NGO: The BRAC Model -- Part Three: Problems and Policies: International and Macro -- 12. Trade Theory and Development Experience -- Globalization: An Introduction -- International Trade and Finance: Some Key Issues -- Five Basic Questions about Trade and Development -- Importance of Exports to Different Developing Nations -- Demand Elasticities and Export Earnings Instability -- The Terms of Trade and the Prebisch-Singer Thesis -- The Traditional Theory of International Trade -- Comparative Advantage -- Relative Factor Endowments and International Specialization: The Neoclassical Model -- Trade Theory and Development: The Traditional Arguments -- Some Criticisms of Traditional Free-Trade Theory in the Context of Developing-Country Experience -- Fixed Resources, Full Employment, and the International Immobility of Capital and Skilled Labor -- Fixed, Freely Available Technology and Consumer Sovereignty -- Internal Factor Mobility and Perfect Competition: Increasing Returns, Imperfect Competition, and Controlled Markets -- The Absence of National Governments in Trading Relations -- Balanced Trade and International Price Adjustments -- Trade Gains Accruing to Nationals -- Some Conclusions on Trade Theory and Economic Development Strategy -- Case Study: Taiwan: A Development Success Story -- 13. The Trade Policy Debate: Export Promotion, Import Substitution, and Economic Integration -- Trade Strategies for Development: Export Promotion versus Import Substitution -- Export Promotion: Looking Outward and Seeing Trade Barriers -- Import Substitution: Looking Inward but Still Paying Outward -- The IS Industrialization Strategy and Results -- Foreign-Exchange Rates, Exchange Controls, and the Devaluation Decision -- Summary and Conclusions: Trade Optimists and Trade Pessimists -- Trade Pessimist Arguments -- Trade Optimist Arguments -- The Industrialization Strategy Approach to Export Policy -- Reconciling the Arguments: The Data and the Consensus -- South-South Trade and Economic Integration: Looking Outward and Inward -- The Growth of Trade among Developing Countries -- Economic Integration: Theory and Practice -- Regional Trading Blocs and the Globalization of Trade -- Trade Policies of Developed Countries: The Need for Reform -- Rich-Nation Tariff and Nontariff Trade Barriers and the 1995 Uruguay Round GATT Agreement -- Case Study: Industrial and Export Policy: South Korea -- 14. Balance of Payments, Developing-Country Debt, and the Macroeconomic Stabilization Controversy -- The Balance of Payments Account -- General Considerations -- A Hypothetical Illustration: Deficits and Debts -- Financing and Reducing Payments Deficits -- Some Initial Policy Issues -- Trends in LDC Balance of Payments -- The Debt Crisis of the 1980s -- Background and Analysis -- Origins of the Debt Crisis -- Attempts at Alleviation: Macroeconomic Instability, IMF Stabilization Policies, and Their Critics -- The IMF Stabilization Program -- Tactics for Debt Relief -- Has the Debt Problem Disappeared? Winners and Losers -- Conclusions -- Case Study: Mexico: Crisis, Debt Reduction, and the Struggle for Renewed Growth -- Appendix 14.1 A Brief History and Analysis of the International Monetary Fund and the World Bank -- 15. Foreign Finance, Investment, and Aid: Controversies and Opportunities -- The International Flow of Financial Resources -- Private Foreign Direct Investment and the Multinational Corporation -- Multinational Corporations: Size, Patterns, and Trends -- Private Foreign Investment: Some Pros and Cons for Development -- Private Portfolio Investment: Boon or Bane for LDCs? -- Foreign Aid: The Development Assistance Debate -- Conceptual and Measurement Problems -- Amounts and Allocations: Public Aid -- Why Donors Give Aid -- Why LDC Recipients Accept Aid -- The Growing Role of Nongovernmental Organizations (NGOs) -- The Effects of Aid -- Case Study: Botswana: African Success Story at Risk -- 16. Finance and Fiscal Policy for Development -- The Role of the Financial System -- The Painful Road to Macroeconomic Stability -- Differences between MDC and LDC Financial Systems -- The Role of Central Banks -- The Emergence of Development Banking -- Informal Finance, Group Lending, and Microfinance Institutions for Small-Scale Enterprise -- Reforming Financial Systems -- Financial Liberalization, Real Interest Rates, Savings, and Investment -- Financial Policy and the Role of the State -- Debate on the Role of the Stock Markets -- Fiscal Policy for Development -- Macrostability and Resource Mobilization -- Taxation: Direct and Indirect -- Public Administration: The Scarcest Resource -- State-Owned Enterprises -- Improving the Performance of SOEs -- Privatization: Theory and Experience -- Military Expenditures and Economic Development -- Significance and Economic Impact -- Case Study: Chile and Poland Privatization: What, When, and to Whom? -- 17. Some Critical Issues for the Twenty-First Century -- Global Independence and the Growth of Developing-World Markets -- The Global Environment and the Developing World -- Pollutants and Their Consequences for the Global Environment -- MDC and LDC Contributions to Greenhouse Gases -- Rain Forest Preservation as a Public Good: Who Should Pay? -- Searching for Solutions: The 1992, 1997, and 2002 Summits -- The Crisis in Sub-Saharan Africa -- Globalization and International Financial Reform -- Concluding Remarks -- Glossary -- Name Index -- Subject Index.