[This question paper contains 6 printed pages.

Sr. No. of Question Paper : 7037 D Your Roll No ....•......•....

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Unique Paper Code 227502

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Name ofthe Course : B.A. (Hons.) Economics

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Name of the Paper : Development Theory and Experience

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Semester : V
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Duration : 3 Hours Maximum Marks: 75

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Instructions for Candidates

1. Write your Roll No. on the top immediately on receipt of this question paper.
2. This paper consists of 8 questions.
3. Answer any 5 questions.
4. The use of non-programmable calculators is permitted.
5. Answers may be written either in English or in Hindi; but the same medium should
be used throughout the paper.

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PT.O.
7037 2 .

1. (a) What is a mobility matrix ?

(b) Construct an imaginary mobility matrix from a sample of countries that shows
no mobility at all.

(c) Comparing the growth processes in India and China, can· we say that
an authoritarian state is a necessity in the early stages of development ?
Discuss. (4,2,9)

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2. (a) What are the basic structural characteristics of developing counties?

(b) How would you evaluate per capita income as an indicator of

development ?

(c) How, and how far, is the Human Development Index an improvement over
per capita income as a measure of development ? (5,5,5)

3. Comment on the validity of the following statements, with arguments in support

of your answers :
 7037 3

(a) If a relatively poor person loses income to a relatively rich person, the mean
absolute deviation must rise.

(b) The income gap ratio and the head count ratio as measures of poverty may
lead to very different uses of anti-poverty resources by policy makers.

(c) The poverty gap ratio and the income gap ratio are insensitive to inequality
among the poor. (5,5,5)

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4. The ~conomy of Zenda has 10 people. Three of them live in the modern
sector ·of Zenda and earn Rs. 200 per month. The rest live in ·the traditional
sector and earn only Rs. 100 per month. One day, two new modern sector
jobs open up and two people from the traditional sector move to the modern
sector.

(a) Show, that the Lorenz curves ofthe income distributions before and after
must cross. Do this in two ways

(i) By graphing the Lorenz Curves.

(ii) By first expressing both income distributions as divisions of a cake of

size one and then showing that the two distributions are linked by
opposing Dalton transfers.

PT.O.
7037 4

(b) Calculate the coefficient of variation and the Gini coefficient for the two
distributions. Do they agree about changes in inequality? Why? (7 ,8)

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5. (a) A country is described by the Solow model with a production function of

y = k 113 , where y is the output per capita and ·k is the stock of capital per
capita. Suppose that k equals 9000. The fraction of output saved is 30%
and the rate of depreciation is 5%. Population does not grow. Is the country
at its steady state level of output per worker, above it or below it ? Explain
how you arrived at your answer.

(b) State one reason why a country with a lower ratio of capital to labour might
grow faster that a country with a higher ratio, and one reason why it might
grow slower.

(c) Does studying the growth expenence of countries that are currently
rich provide evidence in support of the convergence hypothesis ?
Explain. (5,5,5)
7037 5

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6. (a) Explain why the endogeneity of population growth and sayings alters the
implications of the Harrod Domar model.

(b) Discuss the endogenous growth model with complementarities as

externalities. (7,8)

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7. From the diverse growth experiences across countries, illustrate that economic
convergence need not necessarily entail convergence in institutions. (15)

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8. (a) "The problem is that the really big sums cannot be picked up through
uncoordinated individual actions" (Mancur Olsen) Do you agree ? Give reasons
for your answer. In the light of your answer, comment briefly on the role of
the state in economic development.

PTO.

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 7037 6

(b) The first step to reduce corruption should be to create an accounting system
that prevents theftfrom the government. Elaborate. (9,6)

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