(The following was excerpted from material written in 1988.) For over a decade the most common policy advice given to...
GMAT Reading Comprehension : (RC) Questions
(The following was excerpted from material written in 1988.)
For over a decade the most common policy advice given to developing countries by international development institutions has been to copy the export-oriented path of the newly industrializing countries, the celebrated NIC's. These economies—Brazil, Hong Kong, Mexico, Singapore, South Korea, and Taiwan—burst into the world manufacturing market in the late 1960's and the 1970's; by 1978 these six economies, along with India, enjoyed unequaled growth rates for gross national product and for exports, with exports accounting for 70 percent of the developing world's manufactured exports. It was, therefore, not surprising that dozens of other countries attempted to follow their model, yet no countries—with the possible exceptions of Malaysia and Thailand—have even approached their success. In "No More NIC's," Robin Broad and John Cavanagh search for the reasons behind these failures, identifying far-reaching changes in the global economy—from synthetic substitutes for commodity exports to unsustainable levels of foreign debt—as responsible for a glut economy offering little room for new entrants. Despite these changes, the authors maintain, the World Bank and the International Monetary Fund—the foremost international development institutions—have continued to promote the NIC path as the way for heavily indebted developing countries to proceed. And yet the futility of this approach should, according to the authors, be all too apparent so many years into a period of reduced growth in world markets.
Given the information in the passage, which of the following is a true statement about the NIC's?
1. Passage Analysis:
Progressive Passage Analysis
| Text from Passage | Analysis |
|---|---|
| (The following was excerpted from material written in 1988.) | What it says: This information is from 1988. What it does: Sets historical context for the passage Source/Type: Editorial note Connection to Previous Sentences: First sentence - establishes timeframe Visualization: Timeline marker: 1988 - when this analysis was written Reading Strategy Insight: Note the date - this helps us understand why certain economic trends were seen as established patterns at the time. |
| For over a decade the most common policy advice given to developing countries by international development institutions has been to copy the export-oriented path of the newly industrializing countries, the celebrated NIC's. | What it says: For 10+ years, international organizations told developing countries to follow the same economic strategy as a group called NICs. What it does: Introduces the main topic and central policy approach Source/Type: Factual observation about policy trends Connection to Previous Sentences: Builds on the 1988 timeframe - so this advice has been given since the late 1970s Visualization: Late 1970s → 1988: International organizations repeatedly saying "Copy the NICs!" to developing countries Reading Strategy Insight: This establishes the central policy we'll be examining. The word "celebrated" suggests these NICs were seen as huge successes. |
| These economies—Brazil, Hong Kong, Mexico, Singapore, South Korea, and Taiwan—burst into the world manufacturing market in the late 1960's and the 1970's | What it says: The NICs are these 6 specific countries that suddenly became major manufacturers in the late 60s and 70s. What it does: Defines what NICs are and when their success began Source/Type: Factual identification and historical timeline Connection to Previous Sentences: This directly clarifies what "NICs" means - the author is helping us by providing specific examples of the general concept just introduced. Visualization: Late 1960s-1970s: Brazil, Hong Kong, Mexico, Singapore, South Korea, Taiwan → Sudden entry into world manufacturing Reading Strategy Insight: Feel relieved here - this is clarification, not new complexity. The author is making the abstract concept of "NICs" concrete with specific countries and timeframes. |
| by 1978 these six economies, along with India, enjoyed unequaled growth rates for gross national product and for exports, with exports accounting for 70 percent of the developing world's manufactured exports. | What it says: By 1978, these countries (plus India) had amazing economic growth and controlled 70% of all manufacturing exports from developing countries. What it does: Provides specific evidence of how successful the NIC strategy was Source/Type: Statistical evidence of success Connection to Previous Sentences: This builds on the previous sentence by showing the results of their "burst into manufacturing" - it quantifies their success. Visualization: 1978 Success Meter: NICs + India = 70% of all developing world's manufactured exports (7 out of 10 items manufactured in developing countries came from these economies) Reading Strategy Insight: This sentence reinforces why everyone wanted to copy them - 70% market share is domination. The timeline is also becoming clearer: success in late 60s/70s → proven results by 1978. |
| It was, therefore, not surprising that dozens of other countries attempted to follow their model, yet no countries—with the possible exceptions of Malaysia and Thailand—have even approached their success. | What it says: Because NICs were so successful, many other countries tried to copy them, but basically none succeeded (maybe Malaysia and Thailand got close). What it does: Introduces the central problem/puzzle of the passage Source/Type: Logical conclusion about policy outcomes Connection to Previous Sentences: This creates a cause-and-effect chain: NIC success (previous sentences) → other countries copying them → but the copying failed. This introduces the mystery the passage will solve. Visualization: NICs (huge success) → Dozens of countries try to copy → Almost all fail (except possibly Malaysia and Thailand) Reading Strategy Insight: This is the "but" moment that signals the main tension. We've established why the NIC model looked good, now we see it doesn't work for others. This is setup, not complexity. |
| In "No More NIC's," Robin Broad and John Cavanagh search for the reasons behind these failures, identifying far-reaching changes in the global economy—from synthetic substitutes for commodity exports to unsustainable levels of foreign debt—as responsible for a glut economy offering little room for new entrants. | What it says: Two researchers wrote a study explaining why countries failed to copy NICs: the global economy changed in ways that made it much harder for new countries to succeed. What it does: Introduces the expert analysis and their main explanation Source/Type: Research findings/expert analysis Connection to Previous Sentences: This directly answers the puzzle from the previous sentence. We went from "why did copying fail?" to "here's the research that explains why." Visualization: Economic Changes: Synthetic substitutes replacing natural exports + Too much foreign debt = Overcrowded market with no room for newcomers Reading Strategy Insight: The specific examples (synthetic substitutes, foreign debt) are just illustrations of the main point: the global economy changed and became less welcoming to new entrants. |
| Despite these changes, the authors maintain, the World Bank and the International Monetary Fund—the foremost international development institutions—have continued to promote the NIC path as the way for heavily indebted developing countries to proceed. | What it says: Even though the global economy changed and made the NIC path much harder, the World Bank and IMF keep telling countries to follow it anyway. What it does: Introduces the criticism of current policy Source/Type: The researchers' critical observation Connection to Previous Sentences: This connects back to the opening about policy advice, but now shows it as problematic. We've gone from "this was the common advice" to "this advice doesn't work anymore but institutions keep giving it." Visualization: World Bank & IMF (still saying): "Follow the NIC path!" BUT Economic Reality (now): Path is blocked/much harder Reading Strategy Insight: This reinforces the central problem with concrete institutions. The "despite" signals the disconnect between evidence and policy. |
| And yet the futility of this approach should, according to the authors, be all too apparent so many years into a period of reduced growth in world markets. | What it says: The researchers think it should be obvious by now that this approach isn't working, especially since world economic growth has been slow for years. What it does: Concludes with the researchers' strong criticism of continuing failed policies Source/Type: The researchers' evaluative judgment Connection to Previous Sentences: This is essentially a restatement of the main argument in stronger terms. Instead of new complexity, this drives home the central point: the policy doesn't work and should obviously be abandoned. Visualization: Timeline of Evidence: Years of reduced world growth + Failed copying attempts = Should be obvious the approach is futile Reading Strategy Insight: Feel confident here - this sentence reinforces rather than complicates. The authors are making their final point stronger, not introducing new concepts. "Futility" summarizes everything we've learned about why the NIC path no longer works. |
What We Know So Far:
- NICs were hugely successful in the 1970s
- Other countries tried to copy them but failed
- Researchers identified why: global economic changes made the path much harder
- International institutions keep promoting this approach anyway
- The researchers think this is obviously futile
Key Pattern Recognition:
Success Story → Attempted Replication → Failure → Expert Explanation → Criticism of Continued Bad Policy
2. Passage Summary:
Author's Purpose:
To explain why a popular economic development strategy no longer works and criticize international institutions for continuing to promote outdated advice.
Summary of Passage Structure:
The author builds their argument by showing how a successful economic model became obsolete:
- First, the author establishes that international development institutions have been telling developing countries to copy the economic strategy of successful countries called NICs (newly industrializing countries).
- Next, the author shows why this advice made sense by explaining how successful the NICs were - six countries that dominated manufacturing exports and achieved amazing economic growth in the 1970s.
- Then, the author introduces the central problem: while many countries tried to copy this successful model, almost all of them failed to achieve similar results.
- Finally, the author presents research that explains why the copying failed (global economic changes made the path much harder) and criticizes international institutions for continuing to promote a strategy that no longer works.
Main Point:
International development institutions like the World Bank and IMF are giving bad advice by continuing to promote an economic development strategy that worked in the 1970s but no longer works today due to major changes in the global economy.
3. Question Analysis:
This question asks us to identify a true statement about the NICs (newly industrializing countries) based on the information provided in the passage. We need to find factual information that is directly stated or can be clearly inferred from the text.
Connecting to Our Passage Analysis:
From our passage analysis, we learned several key facts about the NICs:
- The NICs are Brazil, Hong Kong, Mexico, Singapore, South Korea, and Taiwan
- They "burst into the world manufacturing market in the late 1960's and the 1970's"
- "By 1978 these six economies, along with India, enjoyed unequaled growth rates for gross national product and for exports"
- Their exports accounted for "70 percent of the developing world's manufactured exports" (not the entire world)
- They became the model that other countries tried to copy
The passage analysis showed us that the timeline is crucial: late 1960s-1970s for their emergence, 1978 as the benchmark year for their dominance, and the period since then when others failed to replicate their success.
Prethinking:
Based on our analysis, we should look for an answer choice that accurately reflects the specific facts about the NICs' growth rates, their market share (being careful about "developing world" vs "entire world"), and their timeline of success. The passage emphasizes their "unequaled growth rates" by 1978, which would make their growth rates among the highest in the world during that period.