International development + poverty settings 1.9 - 1.11 Flashcards
What is the definition of international institutions?
An organisation with an international membership, scope or presence
Give examples of international institutions (x4)
International Monetary Fund
International Bank for Reconstruction + Development
World Bank
World Trade Organisation (1995)
What does the International Monetary Fund do?
It is cooperative and public
Focuses on crisis and may lend money
Overseer of orderly monetary system + guardian of economic stability
What does the World Bank do?
Investment Bank that mediates between investors and recipients
Promotes economic + social progress in LEDCs
Advice and training
What does the World Trade Organisation do?
Formed in 1995
Powers over national governments
Clear + stringent rules to govern global trade liberalisation
What are the 3 types of multilateral organisations?
International institutions
Multinational corporations
International civil organisations
What is the definition of a multinational corporation?
A corporate organisation which owns/controls production of goods/services in at least one country other than home country
What do international civil organisations do?
Humanitarian, peace work
Global trade liberalisation
Give examples of international civil organisations (x3)
UN
International Red Cross
WHO
What are the achievements of globalisation? (x6)
Quicker economic growth International trade flows, access to markets Access to jobs Access to knowledge Interconnectedness Innovation, richer cultural exchange
What are the disappointments of globalisation? (x6)
Crises: lack of stability + funds; IMF imposes conditions
Developing countries: persistent poverty despite World Bank promises
Trade regime: invasive IMF, WTO
Growing divide: ‘haves’ and ‘have nots’ - inequality
Funds diversion: privatisation, less social services, health impacts of economic growth, insecticides, pollution
Environment: unprecedented global degradation; uncertainty over nature withstanding pressures from global scale economic activity; increasing global effects of human activity on the environment
What is the theory behind international trade?
International trade enhances a country’s income by forcing resources to move from less productive uses to more productive uses aimed to utilize a nation’s comparative advantages
Enhances stability by diversifying the sources of funding
What are the equity problems with international trade?
LEDCs lowered trade barriers
Advanced countries maintained subsidies on agricultural goods
Short of capital and entrepreneurship
Moving resources from low productivity to zero productivity
Conditions + fast pace reforms requested by IMF
What is the Washington Consensus?
A set of 10 economic policy prescriptions considered to constitute the “standard” reform package promoted for crisis-wracked developing countries - ‘one size fits all’
Formed by institutions such as IMF, World Bank and US Department of the Treasury
Macroeconomic stabilisation - austerity
Expansion of market forces within the domestic economy
Why is poverty a complex concept?
Multiple definitions encompassing lack of income/wealth, human underdevelopment, social exclusion, ill-being, vulnerability, relative deprivation
‘Voices of the poor’ (2000, World Bank) - 40 000 interviews to collect experience of the poor and found it is a multidimensional phenomenon
Why should poverty be measured?
If you cannot measure it, you cannot improve it (Lord Kelvin) Allocate funds Target groups/communities Assess impact of policies + programs Track progress Enhance accountability Diagnose problems/bottlenecks Advocacy + communication Make policies - design, evaluation, link w/ other methods
Why should poverty be studied?
Matter of basic human rights
Less likely to accumulate ‘human capital’
Less likely to invest
Intergenerational transmission
What is a poverty measure?
Part of the population that falls short of some minimum level (=poverty line) + provides a VALUE that summarises deprivation in the society e.g. World Bank’s $1 a day
What is an inequality measure?
Consider the ENTIRE DISTRIBUTION (one or several indicators) and provide a VALUE that summarises the inequalities between every person/group and the rest of the population/groups e.g. Gini index, coefficient of variation
What is a well-being measure?
Consider the entire distribution of achievements + provides a VALUE that summarise the well-being of the entire population e.g. GDP, Human Development Index, Happiness Indices
What has been the evolution of poverty?
Classical economists (19th century) view poverty as a social phenomenon (Smith, Ricardo, Marx) - lack of a historical-societal subsistence Neoclassical economists (late 19th century to modern day) view poverty in the context of individual circumstances + behaviours - shortfall in consumption from a given poverty line
What is the poverty line?
Z
Dichotomises the population in 2 categories = poor/non-poor
Monetary approach = amount of financial resources considered necessary
Multidimensional approach = minimum amount required in order not to be deprived in that dimension/indicator
What are the key steps in measuring poverty as described by Sen, 1976?
1) Choice of space of analysis (how do you define poverty?)
2) Identification - what is the threshold to identify the ‘poor’?
3) Aggregation - How do you aggregate the information for the people that are defined as ‘poor’?
What is the World Bank’s poverty line as of 2015?
$1.9 a day measured in international dollars w/ purchasing power parity adjustment
