Chapter 9 Flashcards
why do poorer countries experiences faster population growth?
children of families in those countries can be an economic asset to the family, whereas in wealthy countries they are an economic burden
what is a weakness of ALL global inequality theories?
they underemphasize the role of women in economic development
Market-oriented theories
theories of global inequality stating that the market will benefit in an economy if individuals are free from government restraint. Unrestricted capitalism in the avenue to economic growth in these theories.
Modernization theory
A theory by W. W. Rostow, a version of the market oriented theory arguing that in order for underdeveloped countries to grow economically, they must abandon old traditions and accept modern economic ways, emphasizing savings and productive investment
Rostow’s stages of economic growth
- traditional stage: lack of savings, work ethic. value system that prevents growth
- Takeoff to economic growth: Economic growth when countries abandon traditional values and accept modern values. Countries finance low cost loans and birth control
- Drive to technological maturity: Country follows the path of high income countries and improves technology, reinvests and adopts institutions and values of high income countries.
- High mass consumption: Country achieves a high standard of living
neoliberalism
free market forces with minimum government restriction provide the most economic growth
Dependency theories
theories of global inequality arguing that marxist theories of economy: poverty of low income countries is the result of exploitation by high income countries and transnational corporation from high income countries
dependent development
the theory that poor countries can still develop economically, but only in ways shaped by their reliance on wealthier countries
world-systems theory
All of the national economies should be analyzed as one unit. The world system comprises of 4 overlapping elements
- A world market for goods and labor
- division of population into different classes(capitalists and workers)
- formal and informal international political relations among powerful countries that shape the global economy through competition
- Division of the world into 3 economic zones with powerful countries exploiting less powerful countries
Powerful countries slowly lose their power over time, a slow change is always occurring. Government policies can help develop economies. Movement between zones is very limited.
core
zone of most advanced countries in the world-systems theory taking the greatest profits from the other 2 zones
periphery
zone of low-income, mostly agricultural countries that are manipulated by core countries for their own benefit. Resources flow from periphery to the core. Economic development of these countries is limited(World-systems theory).
semiperiphery
zone of semi-industrialized, middle income countries in the world-systems theory. They extract profits from the periphery countries and these profits end up going to the core countries.
global commodity chains
worldwide networks of labor and production processes yielding a finished product
cons to market-oriented theories of global inequality
they ignore ways the government can interact with the private business sphere to create economic development, it overlooks ties between wealthy and poor countries, fails to explain why some countries take off economically while other remain in poverty
cons to dependency theories
fail to explain how poor countries have experiences rapid economic growth, therefore defying this theory.
