Development Economics Definitions Flashcards
Economic Growth
The increase in a country’s output over time, that is an increase in national income or an increase in real GDP.
Economic Development
A much broader concept than merely economic growth, often involving non-economic and often quite intangible improvements in the standard of living, such as freedom of speech, freedom from oppression, health care, education and employment.
Sustainable Development
Refers to the use of the factors of production by the current generation that result in the resources being available for future generations.
Human Development Index (HDI)
a composite statistic of life expectancy, education, and income per capita indicators. A country scores higher HDI when the life expectancy at birth is longer, the education period is longer, and the income per capita is higher.
Infant Mortality Rate
The number of live-born infants who die before one year old per 1,000 of the population.
Trickle Down
The theory that rapid economic growth will filter down to the rest of the economy, primarily the lower and middle classes, in time. Primarily used by supply side theorists to rationalize giving tax breaks for business and the wealthy.
Absolute Poverty
Where income falls below that required for minimum consumption, such as insufficient basic goods and services like food and water to sustain life.
Diversification
The strategy to reduce reliance on the export of a narrow range of goods and services to reduce the risk of overspecialization.
Relative Poverty
A situation where individuals do not have access to the same living standards as enjoyed by the average person. Those people whose level of income falls near the bottom of income distribution in their particular country live in relative poverty. For example, low-income person in Australia may be in the top income levels of income in some sub-Saharan countries.
Poverty Cycle
The connection between low incomes, low savings, low investment and so on and the idea that poverty perpetuates itself from one generation to the next.
Standard of Living
The level of well-being of a person or groups of people
Staple Food
A food that is eaten by lots of people, particularly those on a relatively low income
Corruption
the abuse of public office for private gain, the dishonest use, or abuse, of power.
Primary Health Care
Refers to the provision of health services based upon preventing, rather than curing, diseases. I.e. Providing clean water and immunization.
Subsistence Agriculture
The production of farm output mainly for own consumption.
Primary Production
the sector of the economy engaged in producing goods that can be found in, or depend upon, nature. i.e. iron ore, nickel, precious metals, rare-earth, coal-mining
Primary School Enrollment Rate
The percentage of children of primary school age that attend primary school.
Multinational Companies/Corporations (MNC)
A firm that owns production units in more than one country.
Less Developed Country (LDC)
Refers to countries with a low standard of living, such that many people do not have the basic necessities of life such as adequate food, water, clothing, health and education.
Most Developed Country (MDC)
Refers to a country where its people have the basic necessities of life, plus the majority of people have money for luxuries. A country that has a high level of economic development - Real GDP per capital plus a high standard of living.
Lorenz Curve
Measures income inequality within the population.
Low-Income Households
Refers to households where the basic necessities of life cannot be met. Covers approximately 3 billion of the world’s population.
Infrastructure
Areas such as good roads, railways, gas, electricity, water, schools, hospitals and housing need to be in place for development to occur
Property Rights
A system protecting people’s property rights needs to be in place to enable security to investors and also landowners
