Download Sample Research Assignment 5

Sample Research Assignment 5: Debt, trade, policy, and institutions
1. What has been the country's debt level over the past 50 years, as a share of
GDP or GNI?
At http://www.gapminder.org/data/ I put Debt into the Search box and clicked
Enter. I selected Debt to foreigners by public and private (% of GNI) and clicked the
Visualize icon. This took me to the page with the country bubbles. I clicked Benin in
the list of countries, which made Benin highlighted on the graph. On the x-axis
(bottom), I clicked the arrow next to “Income per capita” to get the drop-down
menu, and clicked “Time.” I then clicked the Play button. Benin’s debt level made a
timeline from 1970 to 2010. I’m using a Mac so I used the Grab Utility to take
Screenshot. Here it is:
Benin’s debt level was 13% of GNI in 1970 and rose to 88% in 1985, and remained
high, peaking at 95% in 1994, before falling after 2000.
2. During what years was debt highest?
Benin’s debt level was highest in 1994, but was generally high (60s-90s) from 19822002.
3. What has been the country's trade level over the past 50 years, as a share of
GDP?
To change to trade, I clicked the arrow on the y-axis (left side of the graph) to
change from Debt to Trade (I chose Merchandise Trade, % of GDP, which is under
the Economy Menu). I clicked Play to make the Benin timeline again. Here it is, from
1960-2010:
Benin’s trade was under 40% of GDP prior to 1980. It rose in the 1970s to 45% in
1981 and remained in that range through the 1980s, and then rose to 56% in 1991,
and generally stayed in the 40s or 50s through the 1990s and 2000s.
4. Did the country change policies to "open trade" in the past 50 years, using
the Sachs and Warner measure?
According to Table A-2 in the Wacziarg and Welch (2002) paper (posted on the
Assignments page on the class website), Benin’s trade policy became open in 1990.
Benin’s trade level, as share of GDP, increased after that policy change.
5. How have debt and trade levels related to changes in the economy?
I made a time series graph of GDP per capita (inflation adjusted). Benin’s GDP per
capita has not changed dramatically. However, it looks like it was more volatile in
the 1970s and 1980s, when debt was high and trade was not as open, and then slow
steady (but not very robust) growth began around 1990, when the economy became
more open, and debt levels stopped rising and eventually fell.
To look at the relationship between debt and growth, and between trade and
growth, more directly, I put economic growth per capita over the following 10 years
on the y-axis (on the left) and put debt to foreigners (% of GNI) on the x-axis (on the
bottom) and pressed Play. At first it was difficult to see the changes in debt level, so I
changed the x-axis from Linear to Logarithmic (this stretches out the lower
numbers). As debt increased in the 1970s, growth rates were pretty high (over 2%
per capita), but then in the 1980s, debt continued to increase and Benin’s economic
growth was stagnant or falling. In the 1990s, as the debt level stabilized and then
fell, economic growth rates rose slightly, but did not reach the peak reached in the
years following 1975.
I then did the same with Merchandise Trade (% of GDP) on the x-axis. Trade was
low in the 1960s and so was economic growth. Trade rose somewhat in the 1970s
and so did economic growth. In the years of more trade in the 1990s, growth was
not noticeably improved.
6. How have debt and trade levels related to changes in institutions, including
democracy and quality of government (corruption, rule of law, etc.)?
Trade openness in Benin coincided with the shift to democracy in 1991.
Gapminder doesn’t have as much quality of government data. There is corruption
data but it begins in 2008.