4.3 - Other Development Methods Flashcards
What are the ‘other’ strategies to increase development?
Develop tourism
Aid
Fairtrade Schemes
Debt Relief
Industrialisation - Lewis Model
What are the drawbacks of expanding tourism?
TNC exploitation
Rising property prices
Cyclical industry
Construction project externalities
Profit repatriation
What are the benefits of expanding tourism?
Employment creation
Female labour participation
Reduces primary dependency
Local AD + multipliers
Accelerator Effect
What was the purpose of fairtrade?
Correct market failures in primary sector commodity industries
E.g., Transnational Monopsony power
What are the key aims of Fairtrade?
Guarantee premium to producers
Achieve price stability
Improve production standards
What are the criticisms of Fairtrade?
Harms non Fairtrade farmers
Who receives the benefit?
Investment targeted elsewhere
What are the investment arguments against fairtrade?
Raise farm productivity
Reduce vulnerability (Climate)
Reach trade agreements (Tariffs etc)
What is debt relief?
Cancellation/rescheduling/refinancing
Often conditional agreements
What are the arguments for offering debt relief?
Conditional
May include social + economic reforms
Reduces extreme poverty
Primary export dependency
Why is primary export dependency an argument for debt relief?
Poor indebted nations reliant on primary exports
Vulnerable to external shocks
Lost revenue + worsens debt
Moral arguments
What are the arguments against debt relief?
Moral hazard argument
Improved macro policy would reduce interest
Loans easier to repay
What is the Moral Hazard argument?
Party lacks incentive to reduce financial risk due to external protections
Debt relief may increase extent + recklessness of govt spending
