Tutorial Case Essay

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Tutorial 2 Question 1 Summary of Case Study: The Poorest Continent The opening case focuses on the lack of economic development in Sub-Saharan Africa. The case suggests that Africa is poor in part due to corrupt government and bad economic policies. The case highlights the importance of property rights in stimulating investment and economic growth. Because property rights are either not established or simply not respected in much of Sub-Saharan Africa, it is difficult for property owners to raise capital to start businesses. Further, there is little incentive to make the investments necessary to make the properties more efficient and productive. Foreign companies also shy away from making investments in the region because of the poor economic state of the countries. One bright spot in the region is Mozambique, where the government has strengthened property rights spurring both domestic and foreign investment. (i) Outline the reasons of why Sub-Saharan Africa is the world’s poorest continent. (ii) Explain how the lack of clear property rights in Sub-Saharan Africa has impeded economic growth in the region. Question 2 Summary of Case Study: The Changing Political Economy of India The closing case describes the changes in India’s political economy since the country gained independence from Britain in 1947. Until the early 1990s, India followed a mixed economy system that was characterized by a large number of state-owned enterprises, centralized planning, and subsidies. The system failed to deliver significant growth and in 1991 India’s government implemented a series of reforms designed to foster increased privatization, inward investment, and exports. While initially successful, economic reform stalled by the later 1990s, and poverty was widespread. A discussion of the case can revolve around the following questions: (i) What kind of economic

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