Term that analysts use instead of the term "less developed country."
A process of improvement in the material conditions of people through diffusion of knowledge and technology.
Alternative to international trade that emphasizes small businesses and worker owned and democratically run cooperatives and requires employers to pay workers fair wages, permit union organizing, and comply with minimum environmental and safety standards.
foreign direct investment (FDI)
Investment made by a foreign company in the economy of another country
Gender Empowerment Measure (GEM)
Compares the ability of men and women to participate in economic and political decision making.
Gender-Related Development Index (GDI)
Compares the level of development of women with that of both sexes.
Gross Domestic Product (GDP)
The value of the total output of goods and services produced in a country in a given time period (normally one year), also known as Gross National Income (GNI).
Gross National Product (GNP)
Like "gross domestic product," only the incomes that people earn abroad are also considered.
Human Development Index (HDI)
Indicator of level of development for each country, constructed by United Nations, combining income, literacy, education, and life expectancy.
Less Developed Country (LDC)
A country that is at a relatively early stage in the process of economic development.
The percentage of a country's people who can read and write.
Millennium Development Goals
Eight international development goals that all members of the United Nations have agreed to achieve by 2015
More Developed Country (MDC)
A country that has progressed relatively far along a continuum of development.
The portion of the economy concerned with the direct extraction of materials from Earth's surface, generally through agriculture, although sometimes by mining, fishing, and forestry.
The value of a particular product compared to the amount of labor needed to make it.
Purchasing Power Parity (PPP)
A theory that states that if the exchange rates of two countries are in equilibrium, a product purchased in one will cost the same in the other, expressed on the same currency.
The portion of the economy concerned with the collection, processing, and manipulation of information and capital. Examples include finance, administration, insurance, and legal services
Rostow's Stages of Development (Modernization Model)
Model created in the 1950's that gives an idea of where a country is in their stage of development. The model of economic development describes a country's progression which occurs in five stages transforming them from least-developed to most-developed countries. There are five stages in this model, including: 1. "The traditional society," 2. "The preconditions for takeoff," 3. "The takeoff," 4. "The drive to maturity," 5. "The age of mass consumption."
The portion of the economy concerned with manufacturing useful products through processing, transforming, and assembling raw materials.
structural adjustment programs
Economic policies imposed on less developed countries (LDC) by international agencies to create conditions encouraging international trade, such as raising taxes, reducing government spending, controlling inflation, selling publicly owned utilities to private corporations, and charging citizens for more services.
The portion of the economy concerned with transportation, communications, and utilities, sometimes extended to the provision of all goods and services to people in exchange for payment.
A company that conducts research, operates factories, and sells products in many countries, not just where its headquarters or shareholders are located.
The gross value of the product minus the cost of raw materials and energy.
Technology that increases the efficiency and productivity of hand labor without displacing workers. Workers improve their security without changing the social or economic system.
A school of thought that explains low development as being a result of the LDCs economic dependency on the MDCs.
Statistics that provide information about the performance of the economy and its position in the business cycle.
human welfare indicators
Literacy rate, education, life expectancy
Development strategy that uses tariffs and other barriers to imports, and therefore stimulates domestic industries.
A new form of global power relationships that involves not direct political control but economic exploitation by multinational corporations
Reinforce growth in the core at the expense of the periphery
A shift in the relative share of national output and employment that is attributed to each business sector, i.e. primary, secondary, and tertiary sectors.
Any farm economy in which most crops are grown for nearly exclusive family or local consumption.
The communication of specific plans, designs, or educational programs necessary for the use of new technologies from one society or class to another. (p. 358)
A transition economy or transitional economy is an economy which is changing from a centrally planned economy to a free market
The contrast between the technology available in developed core regions and that present in peripheral areas of underdevelopment.
trickle-down (spread) effect
Trends that start in the upper classes and then are copied by lower classes.
Series of links connecting the many places of production and distribution and resulting in a commodity that is exchanged on the world market.
per capita GNI
The Gross National Product of a given country divided by its population.
Gross National Income (GNI)
The total value of goods and services produced by a country per year plus net income earned abroad by its nationals; formerly called "gross national product."
The legal economy that is taxed and monitored by a government and is included in a government's Gross National Product; as opposed to an informal economy
Economic activity that is neither taxed nor monitored by a government; and is not included in that government's Gross National Product; as opposed to a formal economy
A general term for a model of economic development that treats economic disparities among countries or regions as the result of historically derived power relations within the global economic system.
A structuralist theory that offers a critique of the modernization model of development. Based on the idea that certain types of political and economic relations (especially colonialism) between countries and regions of the world have created arrangements that both control and limit the extent to which regions can develop.
When a poorer country ties the value of its currency to that of a wealthier country, or when it abandons its currency and adopts the wealthier country's currency as its own.
core-periphery model (world-systems theory)
Theory developed by Immanuel Wallerstein that explains the emergence of a core, periphery, and semi-periphery in terms of economic and political connections first established at the beginning of exploration in the late 15th century and maintained through increased economic access up until the present.
With reference to Immanuel Wallerstein's world-system's theory, the divisions of the world into the core, the periphery, and the semi-periphery as means to help explain the interconnections between places in the global economy.
When a family sends a child or an adult to a labor recruiter in hope that the labor recruiter will send money, and the family member will earn more money to send home.
structural adjustment loans
Loans granted by international financial institutions such as the World Bank and the International Monetary Fund to countries in the periphery and the semi periphery in exchange for certain economic and governmental reforms in that country(e.g. privatization of certain government entities and opening the country to foreign trade and investment)
export processing zones (EPZ)
Zones established by many countries in the periphery and semi-periphery where they offer favorable tax, regulatiory, and trade arrangements to attract foreign trade and investment.
special economic zones
In 1979, the Chinese government set up these zones on the coast near Macao, Hong Kong and Taiwan. Improved transportation, lower taxes, and other incentives attracted investments from foreign businesses. They helped stimulate innovation and helped China grow economically.
nongovernmental organizations (NGOs)
International organizations that operate outside of the formal political arena but that are nevertheless influential in spearheading international initiatives on social, economic, and environmental issues.
Program that provides small loans to poor people, especially women, to encourage development of small businesses.
Economic activities that surround and support large-scale industries such as shipping and food service.
The negative effects on one region that result from economic growth within another region.
An economic theory or policy of the absence of restrictions or tariffs on goods imported into a country. There is no "protection" in the form of tariffs against foreign competition.