Disparities in Wealth and Development
|Developing Country||Poorer countries, but in the process of becoming "developed" economically. Process of change is emphasised. The "have-nots". Low HDI. May fit some/all characteristics: agricultural based, underemployment, low income/capita, narrow range of exports - primary resources, inadequate housing and other services, low levels of technology, small farms, high birth rates or pop'n growth(depending on DTM stage), overcrowding in rural areas, illiteracy and child labour, unstable gov'ts, dependent on their natural environment.|
|Developed Country||The "haves". Wealthy, high HDI.|
|Brandt Line||Division of the world between MDCs and LDCs (MDCs in north have relatively high HDIs while southern countries have lower indexes)|
|ELDC vs. EMDC|| ELDC - Economically Less Developed Country |
EMDC - Economically More Developed Country
emphasis on economic aspect of development rather than cultural, human, or social
implies a fixed categories, cannot "graduate" from less to more developed.
|LEDC vs. MEDC|| LEDC - Less Economically Developed Country|
MEDC - More Economically Developed Country
ELDC and EMDC written differently.
|Economic Development||Advancement in the quality and standard of life of a specific area through the improvement of the economic, political, and social well-being of people.|
|Economic Growth||expansion in the size of a country's economy|
|Underemployed|| Possible to reduce the number of workers and obtain the same total output. |
Not using a person's full skillset. ie. When a PhD moves from LEDC to MEDC, they become a cab driver.
|Quantitative indicators||Use statistics to try and measure certain aspects of a country, three categories: economic, social, and demographic. (ie. economic: GDP per capita, social: literacy rates, demographic: average life expectancy)|
|Qualitative indicators||A country's development in terms of factors that influence people's quality of life, instead of measuring development, it tries to describe it.|
|Composite indicators||Combines several other measures of development into a single figure.Broader and more useful indicator by combining several measures of develop. (ie.Gender-related Development Index - GDI)|
|HDI|| Human Development Index |
Uses 3 measures: GDP/capita (PPP), life expectancy, literacy rate. Attempts to balance social measures of development with economic measure (as resources and wealth is seen as an important aspect of quality of life).
|GNI|| Gross National Income|
Measures the total value of goods and services produced within a country together with the balance of income and payments from or to other countries.
|Purchasing Power Parity|| PPP|
Number of units of a country's currency needed to buy the same amount of goods and services in a country as USD$1 would buy in the United States.
(ie. $1 of petrol in Australia might be $2.40 in Belgium even though they have similar GDPs)
|PQLI|| Physical Quality of Life index|
Literacy - crude indication of access to education
Life Expectancy - assumption that having life is prereq to quality of life, reflects healthcare and nutrition,
Infant Mortality Rate - access to healthcare and nutrition
|Dumping||MEDCs give subsidized surplus produce to LEDCs, driving down price of local produce|
In combination with lack of trade barrier - result of debt reducion agreements - took away protection from farmers, made the poor poorer because they can't compete with subsidized goods and the LEDCs can't afford to subsidize their goods to protect them.
|Starvation||Severe or total lack of nutrient needed for maintenance of life.|
|Malnutrition||When the body does not get the right amount of nutrients needed for maintenance of life caused by unbalanced or insufficient diet.|
|Food aid|| MEDCs have a surplus stock of food, argued that if LEDCs need food, MEDCs should send food. |
Makes situation worse (See dumping).
|subsistence||Producing only enough to feed farmers and immediate family with little surplus to sell - neither incentive nor means to increase production to create a surplus.|
|Absentee Landlords||Someone who owns and rents out profit earning properties, but does not live in or near the property. Often charge excessive rental to farmers, forcing them to work to pay off their debt to the landlord. Provides little incentive to boost production more than necessary.|
|Agribusiness||Convince farmers to abandon growing food and switch to commercial crops such as cotton, rubber, tobacco or tea for export. Prices of these crops have fallen in recent decades so farmers not earning enough money to buy the food they use to grow themselves.|
|Green Revolution||Widespread increase in use of chemical pesticides and fertilizers on farms, increases farm productivity - in short term - despite biophysical side effects on the environment.|
|Malaria||Transferred by mosquitos, multiplies in the liver, infects red blood cells. Causes fever, headache, and vomiting. Becomes life threatening if not treated quickly, disrupts blood supplies to vital organs.|
|External Forces||Forces outside the country affecting its development.|
|Internal Forces||Factors affecting a country's development from within.|
|Transnational Corporations||A corporation that operates in multiple countries at a time. Some believe it is a new form of colonization. |
Benefits: bring investments funds and new technology.
Drawbacks: large social costs from inappropriate capital intensive technology - ie. unemployment due to labour reducing machine. MNC's have flexibility to adjust buying and selling prices of raw materials and components within the corp to shift profits to countries with low taxes from high tax countries. Incentive to lower taxes reduce financial benefits.
|Bilateral Trade||A trade agreement between two country, trade barriers removed or lowered. Creates market access. ie. Brazil and Canada's trade agreement, free trade between two countries - we get fruit out of season, they get market access, investments, etc.|
May slow the economic development of countries outside the agreement.
|Multilateral Trade||Trading bloc. Trade agreements between many countries. ie. World Trade Organization aims create free trade. European Union, African Union.|
|Cycle of Poverty|| Low income leads to low spending and low saving, and low demand for goods. This leads to low capital and low consumption of goods. Leading to low productivity and investments. Leading to low employment. Leading to low supply. Leading back to low income. |
Relates to Internal capital formation.
|Millennium Development Goals||8 goals set out by the UN aiming to reduce the disparities between the rich and poor world through international cooperation.|
|Import substitution||Encourages local production and local consumption instead of production for export through emphasis replacement of agricultural or industrial imports.|
|Development Gap|| describe gap in level of development of 2 geographical areas. |
ie. North-South divide, or Northern India and Southern India, or Rural China and Urban China.
|Cash Crop||LEDCs encouraged to grow crops for export, end up spending money to import money they originally grew. Local farmers offered good price for sales abroad, but as the supply grows, prices drop.|
|Export Processing Zone|| Region where group of countries agree to reduce or eliminate trade barriers so that goods can processed|
ie. China - areas where captalism is allowed, MNC's have access to cheap labour and cheap resources, creating jobs, modernization, money. MNC's take advantage of the lax environmental laws.
|Core Periphery Model||developed core surrounded by an undeveloped periphery.|
|Structural Change Phase||Progressive stages of economic growth, economic structural change, trickle-down economics through investments, technological transfer, large-scale industries|
|Dependency Phase||Emphasis on human welfare, core-periphery model, circular and cumulative causation, neo-colonialism, bottom-up economics through small scale and rural enterprises, import substitution, appropriate technology, and nationalization.|
|Neo-Liberal Counter Revolution Phase||Free market economies through privatization, foreign direct investment, reduced role of government, free global trade, and currency devaluation|
|Sustainable Development Phase||Global environmental change and environmental (green) economics through partnerships between LEDCs and MEDCs, market mechanisms for environmental regulation, resource conservation, and renewable resources.|