Economic Development Strategies II

Human capital development. Investment in education, health, training — raises labour productivity.

• Education: literacy, secondary, tertiary, technical skills.
• Health: vaccinations, sanitation, maternal/child health.
• Training: vocational, on-the-job.

Returns: well-documented as one of the highest-return investments. Each year of additional schooling raises individual earnings ~10%.

Examples: Cuba's high health and education outcomes despite low income; Vietnam's investment in basic education preceding its growth take-off.

Institutional reform.

• Rule of law: predictable courts, contract enforcement.
• Property rights: secure land titles, business protection.
• Anti-corruption: transparency, accountability, asset disclosure.
• Financial system: banking, capital markets, microfinance.
• Democracy (debated): some argue democracy supports development; others (Lee Kuan Yew's view) that early-stage development requires strong leadership.

Market-based reforms (Washington Consensus 1990s):

• Privatisation of state enterprises.
• Trade liberalisation.
• Capital account opening.
• Fiscal discipline.
• Tax reform.

Adopted across Latin America, Africa, post-Soviet space. Mixed results — some successes, but accusations of imposing one-size-fits-all reforms inappropriate for local conditions.

Interventionist reforms (developmental state model):

• State-led industrial policy.
• Picking strategic sectors for support.
• Public investment in infrastructure and R&D.
• Sometimes state-owned enterprises.

Examples: South Korea, China. Successful where institutions strong; vulnerable to political capture elsewhere.

Infrastructure. Hard preconditions for development:

• Transport (roads, ports, airports).
• Energy (electrification, grid).
• Water and sanitation.
• Digital connectivity.

Often need public investment + sometimes public-private partnerships.

Sustainable Development.

The 2022+ syllabus treats sustainability as a CORE concept. MongoDB has no dedicated Sustainable Development subtopic — this note covers it.

Brundtland definition (1987): "Development that meets the needs of the present without compromising the ability of future generations to meet their own needs."

Three pillars of sustainability:

• Economic: viable economy, jobs, income.
• Social: equity, well-being, social cohesion.
• Environmental: ecological balance, biodiversity, climate stability.

All three must be balanced.

Strategies for sustainable development:

• Transition to RENEWABLE ENERGY.
• Circular economy (reuse, recycle).
• Sustainable agriculture (less inputs, more efficient).
• Public transport, urban density.
• Carbon pricing.
• Green technology investment.
• International climate finance from developed to developing countries.
• Conservation of forests, oceans.

UN Sustainable Development Goals (SDGs). 17 goals, 169 targets, monitored to 2030. Progress mixed — most goals off-track.

Paris Agreement (2015). Limits warming to "well below 2°C, ideally 1.5°C." Each country sets Nationally Determined Contributions (NDCs). 2024 update: collective commitments still insufficient.

Doughnut economics (Kate Raworth). Operating within social FOUNDATIONS (basic needs met) and ecological CEILINGS (planetary boundaries respected). Influential framework.

Tensions:

• Developing countries' need for growth vs emissions limits.
• Short-term economic vs long-term sustainability.
• Distributional fairness — who pays for transition?

Conclusion. Sustainable development is non-negotiable for the IB Economics 2022+ syllabus's key concept lens — every policy choice must consider it.