163454_00_i-xxiv_r2_as.indd ii 14/10/12 1:47 AM UNITED STATES OF AMERICA ATLANTIC OCEAN MEXICO THE BAHAMAS DOMINICAN CUBA REPUBLIC GUADELOUPE HAITI PUERTO BARBADOS CENTRAL AMERICA RICO (SEE INSET) TRINIDAD AND TOBAGO GUYANA SURINAME VENEZUELA FRENCH GUIANA COLOMBIA ECUADOR PACIFIC OCEAN PERU BRAZIL BOLIVIA PARAGUAY CHILE JAMAICA BELIZE GUATEMALA URUGUAY HONDURAS ARGENTINA EL NICARAGUA SALVADOR PANAMA CANAL COSTA RICA PANAMA CENTRAL AMERICA 0 500 1000 miles Income status, 2011 Low income Lower-middle income Upper-middle income High income Source: World Bank, http://data.worldbank.org/about/country-classifications /country-and-lending-groups LATIN AMERICA 163454_Front_Endpaper_B_sd.indd B 14/10/12 3:59 AM Black Sea Caspian Sea ATLANTIC OCEAN MOROCCO MeTdUitNerIrSaInAean Sea LEBANON SYRIA IRAQ IRAN CCAAPPEE ISRAEL VVEERRDDEE JORDAN KUWAIT Persian ALGERIA BAHRAINGulf LIBYA QATAR EGYPT SAUDI UANRIATEBD OMAN R. ARABIA EMIRATES MAURITANIA Nile Red Se a MALI SENEGAL NIGER REPUBLIC GTUHIEN GEAA-MBIA Niger R. BURKINA CHAD SUDAN ERITREA OGulFf ofY AEdeMn EN BISSAUGUINEA FASO DJIBOUTI O N GNI NIGERIA SLIEEORRNAE D'CIVÔOTIERE TOBE CENTRAL ETHIOPIA GHANA AFRICAN LIBERIA REPUBLIC CAMEROON EQUATORIAL SOMALIA GUINEA Congo R. UGANDA SÃO TOMÉ KENYA AND PRÍNCIPE GABON RWANDA THE DEMOCRATIC BURUNDI REPUBLIC REPUBLIC OF THE SEYCHELLES OF CONGO CONGO TANZANIA CABINDA (Angola) COMOROS ANGOLA MALAWI ZAMBIA ZIMBABWE MADAGASCAR MOZAMBIQUE ATLANTIC OCEAN NAMIBIA MAURITIUS BOTSWANA SWAZILAND SOUTH AFRICA LESOTHO INDIAN OCEAN 0 500 1000 miles Income status, 2011 Low income Lower-middle income Upper-middle income High income Source: World Bank, http://data.worldbank.org/about/country-classifications /country-and-lending-groups AFRICA AND THE MIDDLE EAST 163454_Front_Endpaper_C_sd.indd C 14/10/12 3:59 AM ECONOMICS OF DEVELOPMENT Seventh Edition 163454_00_i-xxiv_r2_as.indd i 14/10/12 1:47 AM 163454_00_i-xxiv_r2_as.indd ii 14/10/12 1:47 AM E C O N O M I C S O F D E V E L O P M E N T Seventh Edition Dwight H. Perkins Harvard University Steven Radelet U.S. Agency for International Development David L. Lindauer Wellesley College Steven A. Block Tufts University B W. W. Norton & Company New York • London 163454_00_i-xxiv_r2_as.indd iii 14/10/12 1:47 AM W. W. Norton & Company has been independent since its founding in 1923, when William Warder Norton and Mary D. Herter Norton fi rst published lectures delivered at the People’s Institute, the adult education division of New York City’s Cooper Union. Th e fi rm soon expanded its program beyond the Institute, publishing books by celebrated academics from America and abroad. By midcentury, the two major pillars of Norton’s publishing program—trade books and college texts—were fi rmly established. In the 1950s, the Norton family transferred control of the company to its employees, and today—with a staff of four hundred and a comparable number of trade, college, and professional titles published each year— W. W. Norton & Company stands as the largest and oldest publishing house owned wholly by its employees. Editor: Jack Repcheck Assistant Editor: Hannah Bachman Manuscript Editor: Candace Levy Project Editor: Rachel Mayer Electronic Media Editor: Nicole Sawa Marketing Manager, Economics: Sasha Levitt Production Manager: Sean Mintus Permissions Manager: Megan Jackson Permissions Clearing: Bethany Salminen Text Design: JoAnn Simony Art Director: Rubina Yeh Composition: Jouve North America—Brattleboro, VT Manufacturing: Quad Graphics—Taunton, MA Copyright © 2013, 2006, 2001, 1996, 1992, 1987, 1983 by W. W. Norton & Company, Inc. All rights reserved. Printed in the United States of America. Library of Congress Cataloging-in-Publication Data Economics of development / Dwight H . Perkins . . . [et al.].—7th ed. p. cm. Rev. ed. of: Economics of development / Dwight H. Perkins, Steven Radelet, David L. Lindauer. 6th ed. c2006. Includes bibliographical references and index. ISBN 978-0-393-93435-9 (hardcover)—ISBN 0-393-93435-7 1. Developing countries—Economic policy. 2. Economic development. I. Perkins, Dwight H. (Dwight Heald), 1934- II. Perkins, Dwight H. (Dwight Heald), 1934- Economics of development. HC59.7.E314 2013 338.9—dc23 2012029688 W. W. Norton & Company, Inc., 500 Fifth Avenue, New York, NY 10110-0017 wwnorton.com W. W. Norton & Company Ltd., Castle House, 75/76 Wells Street, London W1T 3QT 1 2 3 4 5 6 7 8 9 0 163454_00_i-xxiv_r2_as.indd iv 14/10/12 1:47 AM Brief Contents PART ONE Development and Growth 1 Patterns of Development 3 2 Measuring Economic Growth and Development 23 3 Economic Growth: Concepts and Patterns 55 4 Th eories of Economic Growth 89 5 States and Markets 129 PART TWO Distribution and Human Resources 6 Inequality and Poverty 165 7 Population 217 8 Education 257 9 Health 299 PART THREE Macroeconomic Policies for Development 10 Investment and Savings 349 11 Fiscal Policy 391 12 Financial Development and Infl ation 421 13 Foreign Debt and Financial Crises 455 14 Foreign Aid 499 15 Managing Short- Run Crises in an Open Economy 545 PART FOUR Agriculture, Trade, and Sustainability 16 Agriculture and Development 583 17 Agricultural Development: Technology, Policies and Institutions 619 18 Trade and Development 665 19 Trade Policy 709 20 Sustainable Development 757 v 163454_00_i-xxiv_r2_as.indd v 14/10/12 1:47 AM 163454_00_i-xxiv_r2_as.indd vi 14/10/12 1:47 AM