1
Q
Development
A
- originated with Industrial Revolution
- idea that technology can improve lives of people
- focus on three factors: economic well-being, technology, and production/social wellfare
2
Q
Economic Wellbeing
A
- began in 1960s. measured through gross national product (GNP)
- a measure of the total value of officially recorded goods and services produced by residents of a country in a given year (includes goods and services inside and outside)
- broader than gross domestic product (GDP) - only within country
- Gross national income (GNI) : calculation of (monetary value of products in country and investments) - (income payments to other countries)
3
Q
Shortcomings of GNI
A
- does not account for informal economy, ex) drug trade
- distribution of wealth ex) UAE billionaires control 40% of wealth
- only measures outputs, doesn’t consider resource used or pollution
4
Q
Productivity
A
- production over course of year / total pop. in labor force
ex) US - 83735 in 2016, but China was 5325 - more production = more technology in production
5
Q
Dependency Ratio
A
size of working pop. vs older/younger/those not contributing to economy
- proportion of dependents in population to every 100 working age
- oldest and youngest ratios
6
Q
Walt Rostow’s Model
A
- grew out of decolonization in 1960s
- concerned how new independent countries would survive
- five stages
- traditional (farming)
- preconditions to takeoff (new leadership_
- takeouff (industrial revolution, sustained growth)
- drive to maturity (tech diffuses, specialization, int. trade)
- high mass consumption (high incomes, widespread production, enter service sector)
7
Q
Rostow’s Model Limitations and Criticism
A
- no context for development ie. dependent on just their country or others
- considerations that influence decisions, cultural and political differences
- treats countries as individual and autonomous units
- people thought of world as two economic realms, developed and less developed
- eventually countries not developed called “developing” which is misleading
8
Q
Neocolonialism
A
- continuation of colonial relationships after formal colonialism ends
- continuing ability of former colonial powers control economies of lower income countries
- goods and capital continue to flow toward former colonizers
9
Q
Structuralist Theories
A
- barriers of development due to colonialism
- economic arrangements shape potential development
- wealth disparity, wealth concentration
- less wealthy countries face different barriers than western Europe in Rostow’s model
10
Q
Dependency Theory
A
- political and economic relationships between countries control and limit economic development potential of lower income areas
ex) colonialism created political and economic structures making colonies dependent - based on idea that economic prosperity is difficult in areas used to be dominated by external powers
- relationship persists after independence
11
Q
Dollarization
A
- adopting U.S. currency
- 40+ peg value of currency to US
- 10 countries underwent dollarization
ex) El Salvador - con: surrender aspects of policymaking that affect local economy
pro: stabilization of country’s currency due to dollar stability
12
Q
Transnational Corporations
A
- powerful corporations with global reach
- can shape development through investment
- manufacturing corps. influence production networks
13
Q
Commodity Chain
A
- series of links connecting places of production and distribution involved in creating final product
- every link adds value and produces wealth at each step
- break of bulk locations
14
Q
Foreign Aid
A
- can be catalyst for development
- US and China highest in dollars, not % of GNI
- Marshall Plan (US -> Europe)
- establish relationships
- stop problems from impacting donor
- gain access to markets
- political control
- can harm by undermining domestic production
15
Q
World Bank and IMF
A
- postwar relief
- promote economic reconstruction, free trade, stability
- source of development funds for poor countries and newly independent countries
- US and Europe biggest donors and influence
16
Q
Third World Debt Crisis
A
- 1970s global economy downturn
- harder for countries to pay off debt
17
Q
Structural Adjustment Loans
A
- borrower countries must implement economic and gov. reforms
- privatize gov entities, foreign trade, reduce tariffs, encourage foreign investment
- called Washington Consensus
18
Q
Neoliberism
A
- variant of neoclassical idea that gov. intervention into markets is inefficient and bad
- economic control gov. -> private sector
19
Q
China Banks
A
- top 4 banks (assets) are Chinese
- owned by government
- provide as much dev. financing to poor countries as World Bank
- focus on environmentally bad projects
