Development Flashcards
What is development?
The progress that a country makes to improve the quality of life for it population and make a country more independent
Not smooth and continuous -> can fluctuate and will over time
Define quality of life
A group of subjective evaluation of life -> ex: happiness
All components are linked -> ex: health and environment is dependent on income, which affects happiness
What are some different things that could effect quality of life?
Physical
Water supply, housing, power and heat, climate, diet, nutrition
Social
Family and friends, education, health
Psychological
Happiness, security, freedom
Economic
Income, job, standard of living
What can further development in a country?
Investment in:
Agriculture
Food supply/health
Power supplies for rural area
Access to education for females
Literacy rates
What can hinder development in a country?
War or conflict
Disease
Disasters
Economic recession
What is the cycle of wealth?
Key development indicators
Economic development:
economic wealth (more people work and earn more)-> disposable income + governmental taxes -> other+ governmental taxes from disposable income -> increased business profits -> profits + taxes=investment -> development -> repeat
What are some measure of national income?
GDP/ capita
GNP/capita
PPP
GNI
What is GDP/ capita?
Total value of goods and services produced within a country in a year divided bu population
Dividing by population -> accurate comparisons
But doesn’t show variation
Can’t know how it is spent
What is GNP/capita?
The value of the products and services produced by citizens both domestically and internationally (no income of foreign residents)
Used when comparing the population (the people of the country??)
Doesn’t take into account cost of living
What is PPP?
Measures how much you would need to spend in one country to get the same goods and services as in another country
Used to even discrepancy in GNP
What is GNI?
Value of a country’s economic production and income of received from abroad
What do measure of national incomes fail to show?
The wealth distribution/gap
Government investment into the people
Where the investment is going
And levels of development vary locally, nationally and internationally -> fails to show that
What is HDI?
Created by UN in 1990
Measures disparities between countries using 5 indicator:
Life expectancy at birth
Average years of school (adult 25 years)
Expected years of school
GNI/capita
How does HDI score and group countries?
4 groups:
Very high human development (VHHD)
High human development (HHD)
Medium human development (MHD)
Low human development (LHD)
Scored on a scale from 0-1
Higher score -> higher development + quality of life
Highest: Norway (0.957), Lowest: Niger (0.394)
What is the GINI coefficient index?
Used to analyse the distribution of wealth and identify countries where wealth distribution is most unequal (fill in gaps messed by GNP and HDI)
How is the GINI coefficient index measured?
On a scale 0-1 or as a percentage
High score -> unequal
Low score -> equal
Average -> 0.24-0.63
Highest inequality -> South Africa, Central Africa, Namibia, Zambia, Suriname
Lowest inequality -> Czech Republic, Croatia
What does transparency international measure?
Political corruption (highly impacts development and welfare-> money isn’t invested into the people and instead those in power take it)
Transparency international
Scores 180 on public sector corruption
Scored out of 100
High -> less corruption (ex: 85+ Denmark New Zealand, Finland, Singapore)
Low -> more corruption (ex; 15- Somalia, Syria, South Sudan)
What are the 4 stages of development (according to the UN)?
Least developed countries
Developing countries
Newly industrialized countries
Developed countries
What is a development gap?
Difference in levels of development between most and least developed countries
What factors could lead to a development gap?
Geography:
Landlocked countries
Small countries
Extreme climates
Extreme landscapes
Natural resources:
No security of supply
Very important, but reliance on imports could be a problem
Water, forest, fossil fuels, soil, rocks, minerals, animals, etc
Demography:
Population structure of the country (birth rates and death rates)
Migration
Technology:
Increase water food and energy security
Mechanisation of farming
Improved land surveying
Efficiency
Social:
Education
Healthcare
Equality
Government policies:
Stability and effectiveness of government
Democratically elected -> generally more development
Government economic policies -> open economy, more development
What is the cumulative causation theory?
Explanation for differences of development within a country
Growth in core regions (new large businesses) -> more jobs -> attract workers (increased population) and investment (increased in core areas due to demand) -> average income increases + increased taxes + investment -> outer regions lose workers and investment -> gap grows between the two -> growth spread to the outer regions due to demand in raw materials
What are the 3 stages of regional inequality?
Pre-industrial age -> regional difference are at lowest
Period of rapid economic growth -> increasing regional differences
Regional economic convergence -> where wealth from the core spread
What are causes of regional inequality?
Residence:
Urban areas -> greater investment
Ethnicity:
Discrimination towards ethnic groups
Lower income that dominant groups
Reduces opportunites to certain groups
Employment:
Formal employment -> usually higher income and benefits
Informal employment -> usually lower income and benefits
Education:
Higher level of education -> higher paying jobs
Land ownership:
Inequalities in land ownership -> linked to inequalities in income
What is economic activity?
production, purchase or selling of goods and services
What are the 4 sectors of economic activity?
Primary sector (raw materials -> mining, fishing, farming)
Secondary sector (production -> factory workers, clothing, steel, production)
Tertiary sector (services -> nurses, lawyers, teachers, shop assistants, chefs)
Quaternary sector (knowledge -> scientist, researchers, development)
Can be indicators of development
How are economic sectors used as a indicator of economic development?
See how much each sector contributes to GDP or the percentage of the population they employ
What are the 3 stages of development, using economic sectors?
Pre-industrial period:
Primary sector dominates
Increase in secondary and tertiary
Country developed -> reliance on primary decreases
Industrial period:
Secondary sector increases to become dominant then decreases
Tertiary increase
Primary decreases
Post-industrial period:
Tertiary and quaternary sector increase
Secondary and primary decreases
Tertiary sector dominates
What causes the change in percentage employed by each sector?
Increased mechanisation in agriculture (decrease in primary sector jobs)
People move to urban areas (secondary and tertiary sectors)
Increased mechanization and global changes (decrease in secondary employment)
Technological improvements (increase in tertiary and quaternary sectors)
What is globalisation?
Where the world becomes more interconnected through economics, culture, politics, trade, and tourism (also environmental -> ex: global warming)
What is time-space compression?
Places seem closer together and more interconnected due to improvements in transport and communications
Past -> trade take weeks to years, modern -> trade and communication almost instantaneous
What has increased globalisation in recent times?
Removal of political borders -> countries are more interdependent, powerful countries affect the world world
Growth of regional economic and trading blocs
Improvements in technology and communications (WWW and internet -> faster, deeper and longer)
Development of transport (faster transport)
What is another word for connections (in terms of globalisation)?
Network flows
Development has created a global economy with many connections/network flows -> what are they?
Trade:
Import and export of raw materials, food, services, etc.
Aid:
Mostly economic
Developing countries invest in education, health infrastructure, etc.
Foreign investment:
Directly or indirectly -> business opportunites
Labor:
Labor migration -> important to economy
Information:
Fast date transfer and communication
What are commodity chains?
Stages involved in manufacturing goods
What does economies of scale entail?
Cost per item reduces when operated on a large scale
Transport improvements -> cost reduced and moved quicker
Labour cost -> cheaper in emerging/ developing countries, also reduced legal restrictions
How can foreign investment help a country?
Individuals and firms invest:
Call centers in India
Investment into country -> local people trained, buildings, taxes
Service provided to donor country
Moving manufacturing from developed -> less developed countries
China is main area for manufacture
Investment into china to produce goods
Good sent back to original country
Investment into the people (labor or expertise)
Surgeons from USA -> Australia
Investment into development attracts labor -> contradiction in Dubai attracts Indian immigrants
Research and development -> motor industry (ex: tesla)
Investment via aid
Rebuild from disaster
Ukraine -> aid provided after war
Fund to gouvernement (may lead to corruption)
Goods and services directed to affected areas + refugee camps
What is a TNC?
Trans National Corporation
Operate in foreign countries individually and not through a centralised management system
Very important in global economies
What role do TNC play in the global economy?
Government and countries set rules for global economy -> TNCs are main investors
TNCs involved in all economic sectors -> impact global economy
Largest TNCs represent biggest % of total global production
TNCs directly invest in one country -> later expand to developing countries
Some only look to expansion of business and not harmony with operating country (need to pleased shareholders)
Process of moving manufacturing results in development of emerging economies and countries
What is the overall impact of globalisation on people?
Cost and benefits for all
Poorest tend to gain the least and lose the most, but argued that they would be worse off without it
Provides job opportunites
Income and investments from TNCs
What are benefits and cost of globalisation at a local level?
Benefits:
Cheaper products and greater choice
Multicultural
Bigger market
Education improves
Freedom of movement
Spread of tech and ideas
Higher standards of living
Better infrastructure, food, water, health
Gender equality and pay gap close
Cost:
Local business cannot compete
Labor drain
Dependence on TNC for employment (TNC becomes very important-> TNC close many lose jobs)
Worker exploitation
Environmental cost
What are benefits and cost of globalisation at a national level?
Benefits:
Higher level of incoming revenue (tourism, exports)
Improved healthcare, infrastructure, social care, education
TNC offer apprenticeships
Cost:
Increased disparity
Many benefits limited to urban areas
TNC control majority of workforce (blacklisting)
Environment impact
Growth of slums
What are benefits and cost of globalisation at a international level?
Benefits:
Skilled workers can easily go between countries
Higher income
Higher quality of life
Access to side levels of research and skills
International trade
Foreign investment
Cost:
Loss of biodiversity
Movement of people (usually those who are skilled)
Increased development gap
TNC usually don’t consider local identities
What are some benefits presented by TNC to a country?
Brings skills, opportunities, money, tech
Brings investment -> increased development
Infrastructure us improved
Creates jobs (buy more -> more taxes)
Multipliers effect (business creates jobs -> more money spent -> increased profits -> other business employ more -> more spending and taxes -> gouvernement invest -> more business)
What are some cost presented by a TNC to a country?
Pays low wages for long hours
General exploitation
TNC -> lots of power -> if they leave can leave economy highly damaged
Leak -> profits are taken to open new businesses
Ignore environmental and social impact
Jobs may not provide any new skills
