Corruption & Development

I.B. ECONOMICS.

An educational podcast that looks at the  Section 4 topic of Development, in particular at the question of ‘the balance between markets and government intervention’  (Section 4.8).

Should governments intervene a lot in markets and in that way boost or accelerate development? Or is it better for them to leave markets alone and take a ‘stand off approach’?

What happens if the government in question is corrupt? Does a corrupt government, when it intervenes in markets, hinder, or help the situation?

The following video discusses corruption, its causes, its effects, possible solutions to the problem, and the government’s role in the development process.

Development Economics – South Africa Verses Brazil

IB Economics.

The Similarities and Differences Between South Africa and Brazil.

(Syllabus Section 4.1 – Similarities and Differences Between Developing Countries).

I am spending the holiday in South Africa at the moment so thought that I would do a post on South Africa and Brazil.

When I started studying economics all those years ago we used the terms ‘ the First World’, the ‘ Second World’ and the ‘ Third World’ – meaning the rich countries, the Soviet Bloc countries and the poor countries of the world. However, the phrase ‘ Third World’ implies that all the poor countries are lumped into one block and are the same. Not true.

One of the most difficult things about development economics ( and for the politicians and government bureaucrats that try and ‘manage’ the development of a country) is that every county is different – they have different histories, different resource endowments, different cultures, different political systems, different climates, different languages and different social institutions.

Each country therefore faces it’s own unique problems that require their own unique solutions.

Here are the similarities between Brazil and South Africa ( SA) :-

  • Both are middle income countries – $ 6617 GDP per capita for SA in 2013, and $ 11208 for Brazil.
  • They are regarded as the industrial power hubs of their two continents
  • Both have been classified as BRICS
  • Both rely on the extraction and export of raw materials
  • Both have been suffering from falling economic growth recently because of the slowdown in the growth of China and the fall in raw material prices
  • Both countries currencies have depreciated a lot recently
  • Colonization – Brazil by the Portuguese, South Africa by the Dutch and the British, are common to both countries.
  • Both are located in the Southern Hemisphere
  • Both countries became truly democratic relatively recently ( see below)
  • A strong African culture exists in both countries – in the case of Brazil due to slavery
  • Extreme inequality of income and wealth, as shown by the shanty towns of SA and the favela’s of Brazil, are features of both countries.
  • Both suffer from very high crime rates
  • Both suffer from corruption

Here are some of the differences:-

  • South Africa’s experience of colonialism was longer and much more traumatic for the country, due to the racist system of ‘ Apartheid ‘ – the forcible separation of races and cultures in the country. Apartheid only ended in 1994.
  • South Africa’s peoples and cultures are more diverse than Brazil’s – SA has  eleven official languages!
  • Brazil’s population is much bigger than SA’s – 250 million verses 53 million
  • Brazil is a much bigger country than SA
  • SA, arguably, has a better infrastructure than Brazil.

This thirteen minute video is about the life of Nelson Mandela, one of the greatest leaders of the 20th Century,  and the man largely responsible for  ending Apartheid  in South Africa.