ECO2517A - Introduction to Economic Development
Winter 2018 Session Midterm Exam (out of 75 points)
Time allowed: 2 hours - March 13, 2018
Clarification of evaluation criteria (for each question, scored out of 25 points). There may be several ways to answer a
short answer question. Grading will assess the student's level of understanding as well as coherence. The
elements of the answer that are not related to the question are necessarily detrimental
- Definition: 5% and Presentation: 2%.
- Argument and coherence: 18% (i.e. 6% for each argument that is well-founded and coherent), or for each argument:
* 6%, if the explanation is fair and coherent; * 4% for a fair but approximate argument; * 2% for an approximate
2% for an approximate but coherent argument; * 0 to 1% for an irrelevant or very very approximate argument.
Short answer questions
For each question, the context is a developing country.
A. Explain, using three arguments, why taking into account the institutional dimension would allow for a better analysis of the level of economic development in a country.
A. Explain, using three arguments, why taking into account the institutional dimension would allow for a better analysis of the level of economic development of a country.
General idea: The aim is to explain, i.e. to show with reasoned arguments, the extent to which everything related to laws and conventions in a country is
laws and conventions in a country would allow a better analysis of the level of economic development of that country.
Essentially, "Why" always refers to "because" (or a similar phrase) in an answer.
Definition(s): at least what is meant by an institution.
Elements of argumentation, not exhaustive.
...because the institutional dimension allows a better :
taking into account the qualitative dimension in the explanation of economic development; taking into account considerations
of social equilibrium; understanding of the mechanisms that contribute to achieving the best level of efficiency in the process of
economic growth; understanding the mechanisms that contribute to achieving the best level of equity in order to preserve social
social cohesion and cooperation; understanding the mechanisms that contribute to the elimination of (negative) externalities
(negative) externalities due to opportunistic behavior in society; consideration of social welfare issues due to the assertion of
the affirmation of particular interests to the detriment of those of society; etc. Also, arguments specific to each factor of production are
producer are also acceptable.
References: "Collection of texts" (pp.47-51); "Lecture and course notes" (Les institutions conomiques
(especially Section II) session of February 6, 2018; the general summary of Part II, session of March 6, 2018). References
Cross-cutting: all sessions dealing with factors of production.
B. Explain with three arguments, how the "micro-macro paradox" of the production factor "human capital -
B. Explain, using three arguments, how the "micro-macro paradox" of the production factor "human capital - education" could promote the triggering of a vicious circle of development.
General idea: The aim is to show with reasoned arguments, based on the divergence between individual interests and
general interest of the society (micro-macro paradox), three different ways in which human capital - education could counteract
(degrade/prevent/etc.) the economic development of a country. Essentially, "How" (in a question) always refers to the description of a
In essence, "How" (in a question) always refers to the description of a process (mechanism, or similar phrase) in an answer.
Definition(s): at least, micro-macro paradox and production factor human capital-education.
Elements of argumentation, not exhaustive. Basically, whenever individual interest overrides collective interest, this will result in inefficiency
inefficiency of human capital-education (factor of production) which in turn will create the conditions for a cumulative
of a cumulative decline in the level of economic development. This may depend, among other things, on the
institutional environment ("individually profitable but socially counterproductive activities"); the structural environment
(significant mismatch between the "demand" and "supply" of qualifications); the environment of the education system
(when the system creates its own limits); the global environment (a source of brain drain); etc.
References: "collection of texts" (p.52; pp.54-58); "Lecture and lecture notes" (Human Capital - Education
(especially section II.a) session of February 13, 2018.
C. Explain, with three arguments, the issues and challenges related to the use of theoretical models in an analysis of
of a country's level of economic development.
General Idea: The purpose is to provide arguments to highlight the issue(s) that arise from the use of theories.
Definition(s): at least, what a theory is.
Elements of argumentation, not exhaustive. For the most part, it is a question of presenting

(advantages) or disadvantages (limits) to using theoretical models to explain economic development.

References: collection of texts (pp.27-28; pp.29-51); Magisterial presentation and course notes (Economic Theories, in particular Introduction, Sections I and II, etc.) session of February 6, 2018 and Summary of Part II of March 6, 2018.