Development Flashcards
Which 3 indicators make up the Human Development Index?
- Life expectancy at birth
- Mean years of schooling received/ mean expected years of schooling
- GDP per capita by PPP
What are 2 advantages of using the HDI to measure development?
- Incorporates 3 of the most important metrics for households
- Widely used around the world
What are 3 disadvantages of using the HDI to measure development?
- Does not measure poverty or inequality
- Outdated data
- Does not consider quality of education or happiness
What are 2 other useful composite development indicators?
- Inequality-adjusted HDI (IHDI)
- Multi-dimensional poverty index (MPI)
Which 10 economic factors influence growth and development?
- Primary product dependency
- Volatility of commodity prices
- Savings gap (Harrod-Domar model)
- Foreign currency gaps
- Capital flight
- Demographic factors
- Access to credit and banking
- Infrastructure
- Education and skills
- Property rights
What is the Harrod-Domar model?
Increased savings -> increased investment -> higher capital stock -> higher economic growth -> increased savings
What are foreign currency gaps?
Where currency outflows are constantly higher than foreign currency inflows
Which 5 non-economic factors influence growth and development?
- Governance/corruption
- War
- Political stability
- Geography
- Institutions
Which 6 market-oriented strategies influence growth and development?
- Trade liberalisation
- FDI
- Subsidy removal
- Floating exchange rate system
- Microfinance
- Privatisation
What is microfinance?
Small loans made available to unemployed or low income households who otherwise would not have had access to credit
Which 6 interventionist strategies influence growth and development?
- Human capital
- Protectionism
- Managed exchange rates
- Infrastructure
- Joint ventures
- Buffer stocks
What is human capital?
Knowledge and skills possessed by people
What is a buffer stock scheme?
Where the government buys agricultural products when supplies are plentiful and sells them when supplies are low
What are 3 costs of buffer stock schemes?
- Storage is expensive
- Wastage
- Requires all producers to participate honestly
What are 6 alternative strategies that promote growth and development?
- Industrialisation (Lewis model)
- Developing primary industries
- Fairtrade schemes
- Developing tertiary industries (like tourism, finance)
- Aid
- Debt relief
