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Today, with ICTs proliferating rapidly in developing countries, new questions and debates have emerged about the role ICTs can play in education. For theorists of ICTs and the digital divide in education, developing countries test questions about the universality of technology and usage. For educational practitioners, developing countries offer a complex set of challenges and opportunities for ICTs as educational tools. This paper seeks to examine the conceptual and practical aspects of ICTs in developing countries’ educational initiatives. It does so with an overview of the socio-economic features of developing countries and the implications for educational technology, followed by a discussion of the digital divide that hampers ICT usage in education. The paper then discusses India as a case study of a developing country attempting to overcome the economic, geographical and social challenges that have thus far limited ICT usage. It examines a selection of Indian ICT-for-education initiatives, and highlights the features of these programs that have proven successful. The paper concludes with a discussion on the importance of networks in educational development, and the complex relationship that exists between ICTs and the diverse cultures found in developing countries.

The chapter first examines the limitations of conventional open-economy macro models, such as the Mundell–Fleming model, when they are applied to developing countries. It discusses the Swan–Salter model and the three-sector dependent-economy model that better capture the reality of the external sector in poor countries. It then discusses the impact of devaluation under conditions of closed and open capital accounts and shows the limitation of a devaluation unaccompanied by structural measures in little diversified poor economies and in economies with large dollar liabilities. In this regard, it examines the results of the empirical literature on the contractionary or expansionary effect of devaluation in developing countries. Finally, it reviews the pros and cons of alternative exchange rate regimes, the impossible trinity theorem, and measures to control exchange rate volatility through capital controls.

The chapter discusses the reasons whycKeynesian policies and development macroeconomics in low-income countries received any attention relatively late, as well as the factors that led to a gradual acceptance of demand-side measures. It also discusses the data, conceptual, and accounting problems encountered when measuring economic performance in low-income countries, including the importance of self-consumption, barter, unilateral transactions, and unrecorded monetary transactions in the informal economy. All this reduces the impact of monetary and fiscal policies and underline the importance of structural policies. The chapter also discusses the accounting conventions and practices used to overcome such problems, and the impact all this has on the estimates of the main macroeconomic aggregates and the evaluation of the impact of public policies.

This chapter discusses the structural difference in family size, structure, location, and preferences, as well as the features of the formal and informal financial markets that determine the access to credit of various types of firms. It also reviews the role of the exchange rate, interest, rate and inflation in determining money demand. It then discusses behavioural equations for aggregate consumption, investment, and money demand that fit the reality of developing countries, and compares them with those discussed in Chapter 3 for the advanced economies. It shows that their inclusion in the IS-LM and AS-AD models often modifies the impact of policy changes and endogenous shocks in relation to those obtained in the advanced economies.

This chapter discusses the IS-LM and AS-AD models developed for developing countries, as discussed for the developed countries in Chapter 3. However, while the basic components of such models are similar to those used for the industrialized countries, their analytical specification is markedly different, as they rely on the behavioural equations discussed in Chapter 13 that reflect the structural differences of developing countries. As a result, the effects of exogenous shocks and government macroeconomic policies often differ from those derived on the basis of the conventional IS-LM and AS-AD models obtained for the advanced economies.

The policy consensus for increasing school attainment across the world, summarized by “education for all”, has been eroding as improvements in schooling have not consistently led to better economic performance of countries. The prior analysis, however, strongly points to a focus on cognitive skills as the key issue, and this chapter highlights the fact that expanding school attainment has not systematically led to improved knowledge capital. Based on an overview of general facts about the knowledge capital in developing countries, this chapter turns to general cases that have been treated as puzzles, albeit for opposite reasons: Latin America with its inexplicable slow growth and East Asia with its stunning rapid growth. The focused analysis shows that there is nothing special in terms of growth and development about the East Asian experience or about the Latin American experience once knowledge capital is taken into consideration.

Chapter 10 reviews the factors responsible for the strong dependence of developing countries on foreign capital and foreign aid, as well as the cyclical capital inflows and long-term development problems entailed by such a situation. It then discusses a family of models, some of which were developed after the debt crisis and recession of the 1980s and 1990s. These models aim to determine the amount of foreign loans and grants required to reach a preset rate of growth of GDP. It finally assesses the macroeconomic and growth impact of high dependence on foreign finance and foreign aid.

Many analyses of long-term development neglect the importance of formal and informal political and economic institutions in developing countries. This chapter discusses the nature of such institutions, their endogeneity and persistence over time as well as their impact on growth, inequality, and political stability. The chapter places particular attention on the institutions that build the market and facilitate economic exchange, and on the public organizations mandated with their enforcement. It then discusses their impact on growth and macroeconomic stability as well as the role played by informal institutions in developing countries where formal institutions are often perceived as a costly obstacle to economic development.

This chapter presents a general framework to analyse the impact on inequality, growth, and poverty of the internal and external structural adjustment reforms introduced in a large number of the developing, transitional, and developed countries over the last three decades. It then discusses the main theories of the relation between inequality and growth and shows that the achievement of given poverty targets is influenced favourably by a decline of income inequality. This debate has acquired considerable relevance with the adoption in 2015 by the United Nations General Assembly of the Sustainable Development Goals strategy that focuses—inter alia—on eradicating poverty by 2030 and reducing income inequality to tolerable levels.

This chapter illustrates the features of the external sector of commodities-exporting and investments-importing developing countries. It discusses in particular the value of the price and income elasticities of commodity exports and compares them with those of capital goods and intermediate inputs imported from the industrialized countries. It then illustrates the Thirlwall model that shows that unfavourable values of such import and export elasticities may reduce the rate of growth of GDP compatible with balance of payments equilibrium. Such a conclusion tends to suggest a need for a structural diversification of the economy of developing countries out of the resource sector.

In developing countries, the issue of macroeconomic stabilization has generated a considerable theoretical and political controversy. The chapter presents the theory behind the standard monetary models of stabilization in a closed and open economy that inspires adjustment programmes supported by the IMF, the concrete measures adopted as part of this stabilization approach, and their pitfalls. Mention is also made of the criticism attracted by the approach. The final section analyses the relation between orthodox stabilization and poverty incidence and the trade-off between rapid, front-loaded stabilization, and poverty incidence, as well as a series of measures to reduce the impact of orthodox stabilization on the poor.

The informal sector is an important component of the economy of many developing countries and a source of livelihood for a large section of the population. Yet, the empirical evidence shows that, despite this, the informal sector contributes little to economic growth. There is a little agreement on the origins of informality that can be explained with alternative paradigms. The chapter analyses the causes of high rates of informality, the economic efficiency of the informal sector, its relation with the formal sector, and its impact on aggregate growth. To this end, the chapter presents the Loayza model that posits a negative link between informality and the rate of growth. Other viewpoints that emphasize the impact of limited capital accumulation and overregulation on informality are also discussed.

This chapter discusses the extent to which the neoclassical long-term growth models developed for the advanced economies are able to reproduce the developing countries’ long-term growth path, convergence with the advanced countries, and steady state equilibrium. To do so, the chapter assesses first whether the hypotheses at the basis of the original Solow model are verified in a prototypical developing country. It then lists the factors that explain the lack of convergence between the GDP per capita of developing and developed countries predicted by the Solow model, and the problems faced by low-income countries in exiting low-level equilibrium poverty traps. It then presents a modified Solow model characterized by multiple equilibria that fits the situation of less developed countries.

This chapter reviews alternative sets of macroeconomic policies to support the achievement of the Sustainable Development Goals (SDGs) 1 and 10 to the year 2030. The first goal of this strategy is the complete eradication of poverty by 2030, following its successful halving between 2000 and 2015. While poverty can also be reduced by means of social policies, the accent of this chapter is on a macroeconomic policy consistent with the SDG goals. An appropriate policy approach includes preventative macroeconomic measures to be introduced before crises break out, and policy approaches to be adopted once unavoidable shocks hit a country. Indeed, fiscal, monetary, exchange rate, capital account, and debt management policies are shown to have an important impact on poverty eradication and income inequality.

This chapter examines the long-term economic prospects of developing countries whose growth depends to a large extent on cash crop exports, mining, and oil extraction. It analyses the causes of the slow and unstable long-term growth of such countries, including those due to the fluctuating world prices, the macroeconomic effects of the Dutch Disease, the under-investment in human capital, and an adverse political economy that favours the continued dependence on natural resource rents. It then presents a simple Solow-type model of long-term growth for such economies, and historical evidence of how public policy can moderate or offset the problems linked to this kind of productive specialization.by means of investments in technical progress, productive diversification, and the creation of stabilization funds.

This chapter analyses the growth prospects of developing countries with a dualistic economy consisting of an important agricultural sector and a manufacturing sector, the growth of which is influenced by the price of food. Food supply in turn depends on various types of supply rigidities in agriculture, including those due lack of modernization (despite the fall in farm size), institutional factors, adverse terms of trade effects, and lack of incentive goods in the countryside. The chapter then discusses the Kalecki dual economy model that suggests that—in a closed economy—the rigidity of food supply is a source of rising food prices and overall inflation that may frustrate Keynesian expansionary policies to reduce unemployment in a demand-constrained manufacturing sector.

An A to Z Compendium of eighteen key words and development concepts mentioned in Part One. The key terms provide further background on some of the key international organisations and institutions with a role in aid and development. They run from A—Aid Effectiveness, through to U—United Nations Development System, and they allow the reader to dip into more detailed ideas and concepts.

Distinguishing between less developed, or developing, countries, on the one hand, and newly industrialised countries (NICs) on the other, the chapter discusses, first, the extent and causes of corruption in these countries; second the effects of corruption there, and finally, attempts to combat it. The chapter argues that the problems of corruption in the two types of country are of a somewhat different order of magnitude deriving, ultimately, from their distinctive characteristics. These are, in the case of the developing countries, limited manufacturing sectors; dependence on raw materials, or agricultural commodities, for export earnings (and therefore unusually heavily reliance on world markets over which they have little control); weak states. In the NICs, stronger states have enabled them to undergo rapid industrialisation and urbanisation such as to lead them, in terms of (what is often export-led) growth, to outpace their developing-country counterparts. Consequently, relatively high levels of corruption in the NICs have not been as strong a break on economic and social improvement as they have in the developing countries.