Development Economics Flashcards
growth diagram with and without development
poverty cycle diagram
dependency ratio
percentage of old-age adults and below-working age children relative to the number of working-age adults
extreme poverty
earning less than $1.25, in purchasing poewr parity-adjusted terms, per day
millenium development goals
- eradicate extreme poverty and hunger
- achieve universal primary education
- promote gender equality and empower women
- reduce child mortality rate
- improve maternal health
- combat HIV/AIDS, malaria and other diseases
- ensure environmental sustainability
- develop a global partnership for development
expand on two millennium development goals
eradicate extreme poverty and hunger
- target: halve the proportion of people living on less than $1 per day
- indicators: PPP values, poverty gap ratio, share of poorest quintile in national consumption
promote gender equality and empower women
- target: eliminate gender disparity in primary and secondary education
- indicators: ratio of girls to boys in primary, secondary and tertiary education, share of women in wage employment in non-agricultural sector, proportion of seats held by women in national parliament
human development index
composite indicator of development created by the UN which ranks country development on the basis of average income, education levels and life span
gender inequality index
composite indicator of the disparity in well-being between women and men in three areas: reproductive health, empowerment and the labor market
poverty trap
self-perpetuating mechanism that contributes to the persistence of poverty in a nation
natural resource trap diagram
geography trap diagram
education/poor governance trap diagram
conflict trap diagram
institutional and political obstacles to economic development
- ineffective tax structure: nation is unattractive to foreign investors because of uncertainty, rich households keep savings abroad
- lack of property rights
- political instability
- inequality in income distribution
- lack of infrastructure
- lack of access to credit: ineffective banking systems
social and cultural obstacles to economic development
- religion: especially if conflict exists
- tradition
domestic factors that contribute to economic development
- education
- health
- banking, credit, micro-credit
- reduced fertility rates: reduces burden on working members of society
- women in workforce increases productive capacity
international obstacles to economic development
- narrow range of exports
- over-dependence of primary products: commodity prices fluctuate
- if value of dominant export declines, standard of living declines over time
- protectionist policies by rich countries
micro-credit
provides financial credit or technology loans to entrepreneurs in poor communities to create small businesses (especially those with a socially beneficial purpose)
import substitution policies
protectionist policies meant to reduce domestic consumers’ dependence of imported goods, for which they substitute domestic goods and services thus promoting the development of domestic industries
international factors that contribute to economic development
import substitution policies
export promotion policies
trade liberalization
WTO
export promotion policies
- protectionist measures aimed at increasing the competitiveness of domestic producers in foreign markets
- subsidies for domestic producers of exportable goods and intential devaluation of the nation’s currency give domestic producers an advantage in international markets and promote export-oriented growth
diagram showing aid and FDI influence on poverty trap
foreign direct investment
long-term investment by foreign firms into the domestic markets of other countries
multinational corporation
large company with trading, manufacturing or service operations across several countries
