Chapter 5

• Read Chapter 5 and Case Study 5. Write detailed answers to Questions for Discussion numbers 4 and 13.

• View on YouTube: Ghana - The Face of Poverty (5:12 minutes) and answer the following questions:

Elaborate on three ways Ghana has improved economic conditions of the rural poor.

• View on YouTube: Ivory Coast's bittersweet cocoa industry (2:27 minutes)

Why coca farmers are poor? How Ivory Coast government help reduce rural poverty?

Instructions

To earn full credit for your work, (1) write a 250-300 words essay to answer each textbook question and (2) mention textbook page numbersat the beginning of each answer.

Questions for Discussion

4. What are the principal economic characteristics of high-poverty groups? What do these characteristics tell us about the possible nature of a povertyfocused development strategy?

5. Describe Kuznets's inverted-U hypothesis. Discuss the conceptual merits and limitations of this hypothesis for contemporary developing countries.

6. In the text, when we examined statistics from a wide range of developing countries, we found that growth does not guarantee poverty reduction; while higher income is clearly associated with less poverty, economies can even reach upper-middle-income status but continue to struggle with a quite high incidence of extreme poverty. What does this tell us about the importance of the character of a nation's growth process and about its institutional structure?

7. What is the relationship between a Lorenz curve and a Gini coefficient? Give some examples of how Lorenz curves and Gini coefficients can be used as summary measures of equality and inequality in a nation's distribution of income.

8. "The major determinant of a country's income distribution is its distribution of productive and income-earning assets." Explain the meaning of this statement, giving examples of different kinds of productive and income-earning assets.

9. Are rapid economic growth (as measured by either GNI or per capita GNI) and a more equal distribution of personal income necessarily conflicting objectives? Summarize the arguments both for and against the presumed conflict of objectives, and state and explain your own view.

10. How might inequality lead to faster growth or development? How might it lead to slower growth or development?

11. Is progress being made in the fight against poverty? Why or why not?

12. What types of poverty policies have proved effective?

13. Economic growth is said to be a necessary but not sufficient condition to eradicate absolute poverty and reduce inequality. What is the reasoning behind this argument?

14. Outline the range of major policy options for a developing country to alter and modify its size distribution of national income. Which policies do you believe are absolutely essential? Explain your answer.

Text Book: Economic Development Twelfth Edition by Michael P. Todaro and Stephen C. Smith.