DRM Arguments

Question 1

DRM BreakDown

Answer 1

• Introduction
• Argument
• Argument 1: External Borrowing + Capital Flight
• Argument 2: FDI failures
• Argument 3: Taxation Benefits
• Issues of DRM
• Ways Forward

Question 2

DRM Introduction

Answer 2

1. DRM is important because development is domestically funded/ Public Savings Definition
2. Arthur Lews 12%
3. Development is funded Public, Private, Domestic, External

Question 3

DRM Argument

Answer 3

DRM is Good Because:

1. External Borrowing = Capital Flight
2. FDI is good, but dangerous without savings
3. Taxation makes state legitimate

Question 4

Argument #1: External Borrowing = Capital Flight

Answer 4

1. Aid is unreliable +Volatile/ High Liquidity = Consumption
2. Ndikumana + Boyce = Capital Flight = money overseas, 1$/80c, positive + significant impacts on CF
3. Lucas Paradox

Question 5

Argument #2: FDI Doesn’t Solve Problems

Answer 5

1. FDI Flows + Gaps in Investment + Savings
2. Marginalization + Stock Markets
3. Trade + Financial Liberalization

Question 6

Argument #3: Taxation is the Key

Answer 6

1. Di John + North
2. Determinants of Tax Capacity
   a) supply + demand
   b) initial conditions
3. Issues of Taxation
   a) Trade liberalization
   b) household constraints
4. Moore
   a) tax bargaining/ social contract
   b) redistribution
   c) state building
   d) Senegal

Question 7

Issues of DRM

Answer 7

1) Banking systems
- Development banks and Local Banks
2) Financial Repression + Neoliberal Economics
3) Resource Curse

Question 8

DRM Ways Forward

Answer 8

1) EA Miracle - Autonomous Revenue Agencies
2) Pensions
3) Development Banks