Economic development

    Subdecks (1)

    Cards (38)

    • Development?
      A multi-dimensional process that involves significant qualitative and quantitative improvements overtime in human welfare including expanding choices to give peoples lives value and meaning.
    • Tradtional vs new view?
      Traditionally- economic growth, structural change, improvement in social indicators
      New- reduction or elimination of poverty, inequality and unemployment within a growing economy
    • Key development objectives?
      Sustenance- ability to meet basic needs, above international poverty line
      Self-esteem- raising standards of living, self worth, dignity
      Freedom from servitude- political and relgious freedoms
    • Millenium development goals?
      Now the sustainable development goals which began in the 1990s.
      Includes ending of poverty, education, gender equality, protecting ecosystems
    • Diverse nature of developing economies?
      Size (population, income, area)- climate, control problems, resource endownment
      Historical background- former colonial powers
      Physical and human resource endownments- landlocked, cliamte conditions, mountains or desert
      Ethnic and religious composition- conflict
      Importance of public and private sector
      Industiral structure
      External dependence
      Political structure and interest groups
    • Sectoral balance?
      shows the proportion of employment and output in each industrial sector changes as an economy develops
      Primary sector- extractive
      Secondary sector- manufacturing and construction
      Teritary sector- services such as financial services
    • Changes in sectoral balance?
      Primary dominace- small surplus in food creates leisure time, tech advancement creates demand for agricultural machinery allowing further surpluds and income from trade. Aspirations increase and the demand for consumer goods grow, increasing the growth of the secondary sector.
      Secondary dominance- tech progress release rural workforce, comparative advantage becomes secondary as the products can be traded for higher values. Higher living standards allow for demand for services and tertiary grows
    • Features of economy developing?
      Primary sector is in contintual relative decline, share of tertiary sector continutally ruses
      Manufacturing initially rises then declines
      The rise in dominance of each sector is supported by its preceding sector
    • Causes of sectoral change?
      Changes in income levels- more spent on secondary and tertiary products than primary
      Demographic change
      Education
      Applying new tchnology
      Government action
    • Problems of sectoral change?
      Factor immobility
      Structural unemployment
      Rural to urban migration- falling productivity from unemployment, overcrowding
      Neglect of agriculture
    • Classify LEDCs?
      Low income- GNI less than $1145
      Lower-middle income- GNI less than $4515
      Upper-middle income- GNI less than $14005
      Higher income- greater than $14005
      Used to eradicate poverty, aid, common problems and policy
    • common characteristics of developing nations?
      Low levels of living, low levels of factor productivity, high rates of population growth and dependency burdens, high levels of underemployment/ informal economy, dependence upon agriculture and primary exports, imperfect markets/ limited information, vulnerable in international relations
    • Measurements of development?
      Living standards- clean water, calorie intake
      Growth
      Health
      education
      poverty
      Development diamonds- composite measure portraying relationships among four socioeconomic indacators
      HDI
    • Development diamonds?
      Uses life expectancy, gross primary school (or secondary) enrolement, access to safe water, GNP per capita
      A polygon is formwed with the size and shape portraying development.
      another country is overlapped and any point outside the referenced diamond shows a value better than average
    • HDI?
      Includes health, education and standards of living
      0 represents the worst while 1 represents the best
      Measures relative not absolute development
      Can be disaggregated to show difference social classes, or regions etc
      Highest is Switzrland with 0.967
      Lowest is Somalia with 0.380
    • Benefits of national income statistics?
      Money value to real values- using the GDP/GNP deflator
      Per capita measures
      Cost of living differences
    • Issues measuring economic welfare?
      Composition of output- military expenditure
      Distribution of income
      Issue of accuracy
      Problems of ommission- informal economy, non-marketted (subsistence farming)
      Other qualitative factors eg political freedoms, leisure, social environment
    • Obstacles to development?
      The resource curse- the Dutch disease, volatile commodity prices, enclave effects, neglect of human resources, political effects
      Low levels of health, life expectancy and education
      Poor infrastructure
      Low levels of technology and capital
      MEDC protectionsm policies
      Poor governance
      Public sector debt
      Rapid population growth
    • Resource curve?
      the abundance of natural resources tends to cause less economic growth, less democracy, lower development outcomes
      The dutch disease- high export demand causes currency appreciation making industries less competitive
      Volatile commodity prices- difficult for government planning
      Enclave effects- temporary high profits reduce diversification and over reliance, prevents sectoral change
      Neglect of human resources
      Political effects- collusion, lower democracy
    • MEDC protectionsim trade policies?
      Impose tariffs, quotas and other protectionisms either individually or in trading blocks. Difficult for LEDCs to industralise.
      MEDCs are losing their comparative advantage in manufacturing so are using protectionism to maintain low costs
    • poor governance?

      Failure to protect property rights
      Forced labour, discrimination
      Power elites controlling an economy
      Stateless areas
      Public goods- lacking education, healthcare, transport
    • World Happiness Report?
      A poll asks people to rank between 0-10 (10 being the best) on their view of their lives based on questions focussed on their own freedom, health and other factors which they view as important for affecting their life quality. This differs from national income measures as the questions are not based on weaith. More qualitative as specific standards aren't needed to be classed as a particular ranking
    • Savings gap?
      Occurs in lower income countries, where high levels of extreme poverty make it difficult to generate sufficent savings to provide funds needed for investment projects. This increases reliance on aid or borrowing from overseas
    • Public sector debt?
      Opportunity cost of spending on education, clean water and healthcare
      Slower growth- negative multiplier effect due to money leaving circular flow of income
      Capital flight- large scale withdrawal of investment funds to a less risky economy.
    • Rapid population growth?
      Decling GDP per capita
      High dependency burdens
      Increases poverty and inequality
      Restricts education
      Negative impact on health
      Environmental degradation
      Continuous cycle which worsens overtime
    • Causes of sectoral change
      Education- work within services
      applying new technology- releases rural workforce
      Difference in YED in sectors- inelastic primary, elastic secondary
      Demographic changes- falling death rates, long life expectancy allow greater education
    See similar decks