Interest payments to make, annual expenditures on the military — new arms and equipment —

equal or even exceed the amount of annual interest owed on the external debt. Some observers

question why the IACs should be concerned with the developing countries’ external debts so long

as those countries continue to arm themselves excessively and often extravagantly and to expend

major domestic resources on defense.

159

Vocabulary Notes to Text 11.7.1.3

1. prevent... from developing — препятствовать развитию

2. debt-burdened countries — страны, отягощенные долгами

3. ...have had to write off — пришлось списывать долги по кредитам

11.7.1.4. Read the text “Property Rights and Economic Development.” Explain how you understand

the highlighted phrase.

Property Rights and Economic Development

If you were in a country where bank accounts and business were periodically expropriated by

the government, how willing would you be to leave your money in a savings account or to invest in

a business? Periodic expropriation of private property rarely occurs in developed countries. It has

occurred in numerous developing countries, however. For example, private property was once nationalized

in Chile and still is in Cuba. In some cases, former owners are compensated, but rarely

for the full value of the property taken over by the state.

Empirically we have seen that, other things being equal, the more certain private property rights

are, the more private capital accumulation there will be. People are more willing to invest their

savings in endeavors that will increase their wealth in future years. They have property rights in

their wealth that are sanctioned and enforced by the government. In fact, some economic historians

have attempted to show that it was the development of well-defined private property rights that

allowed Western Europe to increase its growth rate after many centuries of stagnation. The degree

of certainty with which one can reap the gains from investing also determines the extent to which

business people in other countries will invest capital in developing countries. The threat of nationalization

that hangs over some Latin American nations may scare away foreign investment that

otherwise would allow these nations to become more developed.

Vocabulary Notes to Text 11.7.1.4

1. Endeavor — усилие, предприятие

2. Reap the gains — получать доходы

11.7.1.5. Read the text “The Entrepreneur Is the Prime Mover in Economic Activity.” Enumerate

the main entrepreneur’s functions (in written form).

The Entrepreneur Is the Pr( i!m) e Mover in Economic Activity

Entrepreneur is an economic agent who perceives market opportunities and assembles the factors

of production to exploit them in a firm. As the prime mover in economic activity the entrepreneur

has received attention from the beginnings of economics (for example, by Cantillon* and

Say**), but, as Mark Casson has recently pointed out, he has never been fully integrated into modem

economic theory. In the static neo-classical economics of perfect competition there is no place

for the entrepreneur, since it is assumed that there is perfect information and perfect freedom of

entry. After Knight***, the pure function of the entrepreneur is to deal with uncertainty in the

dynamic, imperfect, real world in which profit is a return to uncertainty and entrepreneurship is