International Development
SDG 3
Ensure healthy lives and promote well-being for all at all ages
Reasons for investment in LEDCs
1. Gain access to (natural) resources, 2. Lower labor costs, 3. Access to growing markets (with rising incomes), 4. Less strict regulatory environment
when was structuralism
1945-1960s
SDG 5
Achieve gender equality and empower all women and girls
Definition development 1980s and onwards
Broader definitions of development to include freedoms and capabilities (Sen 1983), human security, gender empowerment, and recently, an emphasis on inequality.
SDG 14
Conserve and sustainably use the oceans, seas and marine resources for sustainable development
SDG 1
End poverty in all its forms everywhere
What are the four key principles of human development and the capability approach?
Equity, efficiency, participation, and sustainability
Aspects of development
Health Economy Environment Education Infrastructure Technology Culture
1960s
ISI, dependency theory
MDG 5
Improve maternal health
Possible causes of poor nutrition
Intra-household conflict, difficulty with self-control, and lack of savings mechanism
SDG 11
Make cities and human settlements inclusive, safe, resilient and sustainable
Foreign Direct Investment
Overseas investments in productive facilities by MNCs.
Microcredit
Pro: better than aid, allow people living in poverty to transition from subsistence to entrepreneurship. Con: Exploit of poor, debt cycles
MDG 3
Promote gender equality and empower women
Capital Flight
Sudden, rapid transfer of large amounts of funds (often FII) to a foreign country. Often refered to as "hot" money.
SDG 13
Take urgent action to combat climate change and its impacts
Targeting for poverty reduction
Targeting is attempt to ensure that a program is received by target population (poor) rather than other people (non-poor)
Life expectancy
The average period that a person may expect to live
Infant mortality
The death of children under the age of one year.
Gross natural producr
The measure of a nations total economic activity
Income
The measure of the net monetary movement of profit, interest, and dividends moving in and out of the country over a given time period
Infrastructure
The underlying physical and financial capital embedded in transport systems, communications systems, utilities, public health, and education. All of these things are necessary for private industry to function.
Corruption
The use of public resources of private gain
GENDER AND DEVELOPMENT
WID ignored existing inequitable gender relations WAD ignored how gender relations shaped women's experience founded in socialist and radical feminist theory empowered through locally organizaed self help groups
What are conditions leading to human development?
World War II, Colonialism, and the Cold war
Structuralism
a method of interpretation and analysis of aspects of human cognition, behaviour, and experience that focuses on relationships of contrast between elements in a conceptual system that reflects patterns underlying a superficial diversity.
Endogenous Development
based on local people's own idea of how to fix their situation idea behind participatory freedom addressing "felt" need
FERTILITY RATE REDUCTION APPRAOCHES
coercion (One Child Policy) improved access to healthcare education social norms improved access to savings
Demands of the IMF:
(1) inflation brought under control (2) requires reducing state spending (3) closing budget deficits Effect: spur of unemployment and require that subsidies of food and basic goods be reduced or eliminated.
Infant Mortality rate drop in China
(1970) One-child policy
• Long call for a "new model" in foreign aid (2)
- Concern over waste, corruption, and inefficiency... - New impetus to address problems in the post-Cold War era
benefits of free trade
1. Access to goods and services unavailable domestically, 2. Increased competition: encourages firms to innovate and increase productivity: lower prices, 3. Encourages specialization in production of goods in which they have comparative advantage, 4. Opportunity to gain economies of scale, 5. Earn foreign revenue, 6. Engine for growth
Human Development Index
A composite statistic of life expectancy, education, and per capita income.
Aid
A source of help or assistance
Approaches to development and basic need approach
Can concentrate on providing means to survive in poverty, but not escape it. This causes dependency and requires a continuous flow of aid to the country. Therefore we look towards an long term solution; education, capacity building and empowerment. Eventually aid and support will fade out over time as the country will have access to resources to sustain itself.
Environment
Clean air, water, soil production and social environment
MDG 6
Combat HIV/AIDS, malaria and other diseases
SDG 7
Ensure access to affordable, reliable, sustainable and modern energy for all
SDG 6
Ensure availability and sustainable management of water and sanitation for all
MDG 7
Ensure environmental sustainability
MDG 1
Eradicate extreme poverty and hunger
Problems with GDP/GNP
DP figures are averages that say nothing. they do nothing more than measure production. Omits other human activities that have value: Reproductive labor, household labor and informal economy.
How do they finance the UN? What are the Problems?
Decided by the General Assembly, who calculate each country's debt and GDP Problem: 5 countries make up 50% of the total budget, with the US contributing 22% Mandatory contributions pay for regular budget (infrastructure) and peacekeeping operations
Economic efficiency
Dependent on how income is distributed. Efficiency and equity are inseparable. If there is no bank willing to loan money to poor, their ability to buy fertilizer probably depends on their ability to self-finance their production.
MDG 8
Develop a global partnership for development
Microcredit
uses small loans to poor ppl, especially women, to support economic self-sufficciency. The borrowers are organized into small groups and take responsibility for each other.
AMARTYA SEN
wrote development as freedom believed you had to remove a person's unfreedoms for them to participate in their own development freedom leads to capabilities leads to the agency which leads to the participatory development
What do you think is the most important reason people do not use bednets, get immunized, or otherwise engage in preventive health care?
People perceive the illnesses these things prevent as not worth their time (if free) or money. Both of these could be spent elsewhere and often the impulse decision is for food. Lack of trust in cheap prevention because since it is more inexpensive, they believe that it is related to the quality and durability of the mechanism. They would rather pay for more expensive things because they believe the quality is better.
Gross domestic product
The total values of goods produced and services provided in a country in one year
Socialists, argue, that meaningful economic development should improve the position of the whole population and of the poor--sooner rather than later.
They dispute the idea that greater equity will impede efficiency
Structural adjustment
a controversial series of economic and social reforms promoted by the IMF and world bank following the 1982 debt crisis that aimed to promote economic development through minimizing the role of the state in societies and liberalizing markets
'Green Revolution'
a significant increase in agricultural productivity, resulting from the introduction of high-yield varieties of grain, the use of pesticides, and improved management techniques.
Differential Approach
addressing poverty as a disease Sachs (based off of his wife's profession) treating the symptoms of poverty --infrastructure --lack of sanitation --lack of education --lack of housing --etc come up with a unique solution for each region's situation no more linear approach everyone should increase ODA sahel region agriculture and infrastructure and high fertility rates get countries to the bottom rung
• Problems - Congo _______________________________ - Ethiopia ________________________________
aid was funneled to markets, lowering crop prices. Profits used to buy weapons for gov't. - same story but used profits to buy Soviet weapons.
How did NICs succeeded?
by developing particular sectors and industries that were competitive on world markets. These sectors and industries can create enough capital accumulation within the country and raise income levels across the population more broadly. Extra: these semiperiphery states exported light manufactured goods (1980-1990)
EFFICIENT ECONOMIC GROWTH
diversification of economy knowledge based economy good governanec sustianble technologies
what poverty headcount index doesn't tell us
doesn't tell us all we need to know in order to analyze poverty and design policies to alleviate it. We don't only need to know whether people are poor but also the depth of poverty they re in.
Sustainable Human Development
economic and social development that meets the needs of the current generation without undermining the ability of future generations to meet their own needs social+environment+economic stuff reflected by Amartya Sen considers needs but also considers limitations from environment energy etc needs and limitations
LDC profile - high illiteracy
education needs to achieve modernisation go beyond basic literacy
Structuralism
import substitution industrialization --produce consumer goods within countries that were previously imported --factories --do everything in house --increase trade among LDCs external factors are barriers to economic growth
PARTICPATORY FREEDOM
local people must be directly involved in their own development
1980s
lost decade of development, debt crisis that led to SAPs
FERTILITY RATE CORRELATION
lower fertility rat4es are associated with higher levels of development
cost of unemployment
lower standard of living (malnutrition, obesity, drugs), poverty trap, crime, spending on unemployment benefits (opportunity cost), lower tax revenue
EMPOWERMENT APPROACH
main example = Grameen Bank that had 97% go to women small tiny investments to increase income and allow for savings !!!
Neo-liberalism
mainstream international economic theory posting that markets are almost always the best decision-makers in terms of efficient resource allocation and that trade and investment flows across borders are optimized when there are few restrictions as possible
LDC profile - political instability
most developing states are characterised by one-party authoritarian regimes
SOCIAL ENTREPRENAUERSHIP
motivated by social impact not making money
Factors Contributing to Development: The "Resource Curse" • Countries with abundant valuable _________________ tend to do poorly • Why? (3) - "Dutch Disease"
natural resources - Patronage and corruption - Lack of economic diversification • Vulnerability to commodity price shocks
LDC profile - poverty
poverty is an economic barrier to the process of development as people in poverty have little capacity to save and invest.
Social Entrepreneurship
pursues innovative ways to solve pressing social problems
What is purchasing power parity (PPP)?
rate currency of country "A" to currency of country "B" to buy the same goods and services... there is a gap between exchange rates and PPP-based rates
3 PILLARS OF SUSTAINABILITY
social, economic, environmental
3 Pillars of Sustainability
social, environment, economic
Empowerment
the capacity of individuals for self-development to act and participate in decisions that affect their livelihoods and living standards
Economic development
the combined processes of capital accumulation, rising per capita incomes, increasing skills in the population, et al. other social and economic changes
Rural-urban migration
the movement of people from rural to urban areas within a country, caused by such factors as changes in agricultural production, the effects of climate change and the hope for employment
Social capital
the networks of relationships between individuals and communities that provide, to a greater or lesser extent, support in times of financial, health and emotional need and connections in terms of securing employment; broad and diffuse social trust
Trade liberalization
the removal or reduction of restrictions or barrier on the free exchange of goods between nations. This includes the removal or reduction of tariff obstacles, such as duties and surcharges, and non-tariff obstacles, such as licensing rules, quotas and other requirements.
GDP
the total value of goods produced and services produced in a country during one year.
Causes of poverty trap
"You need money to make money" "To get a job you first need job experience" To earn more money, you need to be healthy. To become healthy, you need to earn more money to purchase nutrient-rich foods To make higher profits, you need more capital. To get more capital, you need higher profit
Many states with fairly equitable income distribution have high growth rates
(including South Korea, Taiwan, Singapore, and Hong Kong).
Foreign Aid: • Key debates (3)
- Does aid lead to growth and development? - Does it help the poor? - Should we give more or less? - (How/much) should we condition the aid?
Benefits of International Trade
- Lower Prices - Greater Choice - Economies of scale
Examples of the Millennium Development Goals
- No poverty - Life below water - Climate action - Gender inequality
Key Objectives (MDG)
- peace, security and disarmament - Development and poverty eradication - protecting out common environment - human rights, democracy and good governance - protecting the vulnerable - getting the special needs of Africa - strengthen the United Nations
Economic Development
-Accumulating capital -Rising per capita incomes (with consequent falling birthrates) -Increasing skills in population -Adopting new technology -Measured by per capita GDP -Difficult to measure
Point IV Program Rationale
-Address roots of development comprehensively & long-term -Extend success of Marshall Plan (1948-52) to the developing world -Supplement Bretton Woods institutions (1945 - )
IMF Conditionality
-Attaching economic and political conditions to loans for recipient states -Accusations of one-size fits all approach -Often painful for locals
Demographic change
-Birth rate declining in industrialized states and it is literally hard to find people to work -Jobs can be filled by immigrants which leads to economic and culture conflict
Point IV Program Goals
-Build infrastructure ànd create investment climate -Make public administration more efficient -Improve agriculture -Extend industry beyond extractive and into processing & manufacturing --Import Substitution Industrialization (ISI) -Need for economic & social progress for all people --Improve education & health
Globalization Pros
-Can provide overall macro economic growth for a state as result of being interconnected
Direct Cash Transfers
-Cash is more effective, flexible, and likely to get to source -6% of humanitarian assistance -Can be unconditional -Does not take years, does not require different disbursements
Global Development
-Decline in poverty -Increase in economic growth (Fewer states recording negative growth) -Big health improvements -More education -More democracy
Best way to give loans
-Don't give to govt or business, just people -Coordinate with others -Be transparent how much is going where -Should go through government, not politicians
Downside of Direct Cash Transfers
-Don't know how money will be spent -Individuals could be corrupt, inefficient, and prolong lack of development
Pros of Microcredit
-Good track record of investment, repayment -Boosts family, community-level development -Bottom-up approach -Part of "smart economics" -Money gets invested for the correct purpose, is paid back
Examples of aid
-Grants, technical cooperation, credits, loans, loan guarantees, military aid, emergency assistance -Bilateral or multilateral
What are some of the important structural features of low income countries?
-High birth and death rates -Higher population growth -Poverty, child labor, low education -Agriculture based -Rural to Urban migration
Amartya Sen
-Indian economist & philosopher -Welfare economics / Evaluation of well-being -Important impact on research and practice of development -removal of "un-freedoms" -a free people will reach their full capability freedoms --> capability/agent for change --> participatory role in gov't
Characteristics of 3rd world countries
-Low levels of standard of living and productivity -High rates of population growth -High and rising levels of unemployment and underemployment -Substantial dependence on agricultural production and primary product for exports -Dependence and vulnerability
Possible Reason for low use of healthcare service
-Low quality of health services High absenteeism of healthcare workers Low wages could cause this Weak institutions, so low enforcement Deliberate program targeting of the poor The rich won't try to access these public services -Low actual benefits of healthcare Harm to labor productivity from anemia Working on your own farm - benefits go directly to you, so not a problem Working for others - employer does not know if your performance is due to anemia or other factors, so less direct earnings impact Information problem -Private benefits lower that private + public benefits Vaccination "herd immunity" Anti-parasite pills - re-infection from neighbors Externality and collective action problem -Lack of information about, and trust in, health benefits Cause and effect hard to link Vaccines - benefits may come years later Don't notice absence of illness as much Trust in the scientific community? Trust in healthcare providers? Are providers well-trained? Possibility of counterfeit medicine Infant formula scandal in China -Tendency to not plan ahead Instant gratification often results in a desire to payoff sooner rather than invest in later payoff Do not care about the future much Contrast with procrastination Desire payoff later, but assume "future self" will do it Possible solution: government plans ahead on behalf of people Automatic or mandated health interventions Vaccination require for schooling Building codes requiring indoor plumbing Vitamin-fortified food
What is the issue of GDP as a measure of development?
-Measures market production -only monetary transactions -Inequality: distribution of income and wealth -Threshold effect -Depletion of natural resources -Ignores key elements (Natural, social, human)
What is absolute poverty?
-Minimum standard necessary to meet basic needs -Estimated cost of basic foods and nonfood needs -Considered more relevant
Foreign aid
-Money or other aid given (mostly by governments) to third world states to help them speed up economic development or meet humanitarian needs -Can be humanitarian, political, military, or economic
What are the constraints of education?
-No Budget -No schools in remote village -Bad roads and bad transportation -Shortage of teachers -Poorly trained teachers -Large class sizes
Causes of poverty
-Political: War, Oppression, Poor public spending choices, gov't corruption and inefficiencies etc. -Economic: Unemployment & underemployment & Exploitation of labor -Social/psychological: Discrimination based on class, age, gender, race , Domestic violence, poor health including lack of access to birth control, lack of education, low self-esteem, dis empowerment etc -Environmental: Lack of access to resources due deforestation, erosion and natural disasters (floors, typhoons relationship. Poverty & health (poor sanitation, nutrition etc.)
What are the three approaches for calculating GDP?
-Production approach -Expenditure approach -Income approach
Upside of Direct Cash Transfers
-Reduction of government corruption -Better use of money by people who need it, increases development
Conditions of IMF
-Structural adjustment program -Cut inflation, subsidies, government spending -Crack down on corruption, move towards democracy
Point IV Program Methods
-Technical Assistance provided by US Government --Transfer technical information and know-how to fill knowledge and skills gap --State Department's Technical Cooperation Agency --Grants for small scale projects -Export-Import Bank & World Bank guarantees to private investors --Private capital to supplement $35M funds allocated by US Congress --Protection against Foreign Direct Investment (FDI) risks ---e.g. expropriation, nationalization, etc. -Bi-lateral treaties of "friendship, commerce and navigation"
Critiques of SDG
-The goals are more about intentions than practicality -Problem with special interests
Globalization
-The rapid integrating economies, technologies, and even societies -Rise of Multinational Corporations (MNCS) and Intergovernmental Organizations (IGOS)
Globalization Cons
-Unemployment -Economic depression -Resentment of politicians and international economic institutions -Friction among states and communities
What are the five major assumptions of dominant thinking in international development?
1) Economic growth is good 2)West is good for the rest 3) Domination of economics 4) Focus on the bottom billion 5) Evidence-based approach
Why we might care about international development
1) empathy and morality, 2) raising incomes of people in other countries means more consumers for US goods,3)nationalsecurityandgeopolitics
In order to get high-quality household surveys, you must...
1) randomly select households, 2) have a high response rate (could be mandated by government), and 3) be representative of population under study
Briefly describe three development programs or policies that have been evaluated via randomized controlled trials.
1)Do people who learn that they are HIV positive change their sexual behavior? In Malawi, people tested for HIV were randomly selected to be paid to be informed about the result of their test. the cash incentive doubled the number of people who picked up their results. people who learn that they are HIV positive are three times more likely to purchase condoms. In Kenya, when people were to be paid to receive their HIV test results, they took the results more seriously and began using contraception to prevent the spread of infection. 2)What is the impact on poor people of access to microfinance loans? New branches were randomly opened by a microfinance lender in Hyderabad, India. Results showed no effect on the lifestyles of poor people, but suggested potential future gains as access to credit helped pre-existing businesses increase investment and achieve higher profits When new microfinance bank branches were opened in low-income areas in Hyderabad, India, the poor's lifestyles did not change but their businesses increased investment and profit with greater access to credit. This shows potential benefit. 3)How effective is providing textbooks in raising test scores? In Kenya, schools were randomly selected to receive official government textbooks in English. Results show that textbooks did not increase average test scores. Only students with high pre-test scores benefited because the textbooks were ill suited for the typical student with difficulty in reading in English, which is not their mother tongue. When schools in Kenya were given government textbooks in English, only the test scores of the top-testing students were increased because they likely knew more English than the typical student, as this is not their native language.
Advantages of trade blocs
1. Access to larger market, 2. Increased competition + efficiency + lower prices, 4. Greater choice, 5. FDI attracted to larger markets, 6. Easier to negotiate trade deals
Arguments against protectionism
1. Industry that lost efficiency unlikely to regain it (improve labor market flexibility through supply side policies), 2. Higher prices (protectionism against more efficient producers, inefficient allocation of resources), 3. Prevent foreign industries from using comparative advantage to grow
Disadvantages of trade blocs
1. Some producers suffer when tariffs removed, 2. Small economies not in the trade block can suffer, 3. Lack of economic sovereignty
BASIC APPROACH TO ANALYZE INTERNATIONAL DEVELOPMENT POLICY:
1. Use economic theory to construct models of human behavior 2. Use the models to predict behavioral patterns and develop policies and programs that work with - not against - these patterns 3. Evaluate the impact of these policies via statistical methods to test the models and improve the policies and programs
Basic approach to analyze international development policy:
1. Use economic theory to construct models of human behavior 2. Use the models to predict behavioral patterns and develop policies and programs that work with - not against - these patterns 3. Evaluate the impact of these policies via statistical methods to test the models and improve the policies and programs
Arguments for protectionism
1. protect domestic producers, 2. Protect from dumping, 3. Maintain health safety environmental standards, 4. support infant industries, 5. raise government revenue, 6. avoid over.specialization
What are the stages of Rostow's Model
1. transitional stage (infrastructure built) 2. take off (industrialization) 3. drive to maturity (decrease dependence on imports and change political policy to protect civilians) 4. high mass consumption (advanced econ w massive investments)
Sustainable Development Goals
17 goals over next 15 years and 169 targets 1st goal to end poverty by 2030 (starting in 2016) too idealistic? more goals and targets focused more on environment too many? more comprehensive and inclusive specifics about migrants trafficking and refugees only vaguely included one size doesn't fit all
when was modernization
1950s
Millennium Development Goals
8 international development goals 21 targets that all members of UN agreed to achieve by 2015 bring together all targets too broad but good achievable targets not enough about environment
Two definitions of 'poor' used by Banerjee & Duflo
A "poor" person was essentially defined as someone without enough to eat. Poverty lines: the extremely poor are those living with less than 1.08 per person per day. The merely "poor" are those living with less than 2.16 per person per day.
Absolute poverty
A condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation services, health, shelter, education and information
Illegal immigrant
A foreigner who enters a country without an immigrant visa
Neo-liberalism.
A mainstream international economic theory positing that markets are always the best decision makers.. Focuses on the Laissez faire economics.
HDI
A measure of a country's standard of living, including health and education. life expectancy years of schooling expected vs. how many they actually get health (life expectancy) knowledge (years of schooling) and wellbeing (GNI)
Capital Transfers
A measure of the net monetary movements gained or lost through actions such as the transfers of goods and financial assets by migrants
Dependency Theory
A model whose main proposition is that underdevelopment exists because of continuing exploitative relationships with the MDCs.
Reporting bias
A news source might run a story on an experiment's "outcome" before the results are deemed valid and reliable by the scientific community
NGO
A non- profit organization that operates independently of any government, typically one whose purpose is to address a social or political issue
Refugee
A person who has been forced to leave their country in order to escape war, persecution, or natural disaster
Migrant
A person who moves from one place to another in order to find work or better living conditions
Economic migrant
A person who travels from one country or area to another in order to improve their standard of living
Agency
A person's ability to pursue and realize goals she values and has reason to value
Capability
A person's freedom to enjoy various functionings... to be or do things that contribute to their well-being
UN's Human Development Index:
A single number that summarizes the level of development in a country. Incorporates statistics on: Life expectancy (affected by health, nutrition, women's empowerment) Years of schooling (affected by supply and demand for education, nutrition, incentive to engage in child labor) Gross national income per capita (Affected by education, macroeconomic and trade policy, rate of technology adoption)
absolute poverty
A state of severe deprivation of basic human needs or goods and services needed to achieve a minimal but sustainable standard of physical well-being.
Tariff
A tax imposed on imports aimed at restricting their flow into the country and protecting domestic producers
Import substitution
A way to create trade surplus. It is the development of local industries to produce items that country had been importing. --> Industries may receive state subsidies or tariff protection. This helps to shrink a trade deficit or to build a trade surplus.
MDG 2
Achieve universal primary education
Examples of Education Indicators
Adult literacy rate, net enrollment ratio in primary educations
Debt Crisis
After the surge in oil prices in the mid 1970s, some LDCs took out huge development loans, which they then had difficulty paying back in hard currency.
Official Development Assistance
Aid that is provided to a country by another government or an official government agency.
Preferential Trade Agreements
An agreement between two or more countries to lower trade barriers between them on particular products
Microfinancing
An array of financial services, including loans, savings and insurance, available to poor entrepreneurs and small business owners who have no collateral and wouldn't otherwise qualify for a standard bank loan
World Bank
An int'l financial institution owned by its 181 menbers based in Washington DC. It's main mission is provide development funds in the form of interest bearing loans and technical assistance.
International Monetary Fund
An organization working to foster global monetary cooperation, secure financial stability, facilitate international trade and reduce poverty
Grant
An outright transfer or gift, usually from one government to another. Can be in cash, kind or technical assistance.
Jeffrey Sachs
Author of "The end of poverty: the economic possibilities of our time" Poverty traps are numerous Need a "big push" to surmount the development hurdle AKA foreign aid "Millennium Villages" project in Kenya was an example of how foreign aid might help developing communities overcome this hurdle
Bill Easterly
Author of "the white man's burden: why the west's efforts to aid the rest have done so much Ill and so little good" "Big push" ideas were tried in 1950s to 1970s and failed because they are inappropriate projects Aid is captured by corrupt power structure and worsens corruption
Examples of targeting
Badly targeted (roads, hydrodams, subsidies that affect prices for everyone) Well targeted (use eligibility thresholds (means testing) and subsidy vouchers) Procampo was not well targeted (large number of poor farmers make maize. gave farmers fixed amount of money for every hectare of land they cultivate)
SDG 9
Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation
Lack of information about, and trust in, health benefits
Cause and effect hard to link (Vaccines - benefits may come years later, Don't notice absence of illness as much) Trust in the scientific community? Trust in healthcare providers? (Are providers well-trained? Possibility of counterfeit medicine Infant formula scandal in China)
Modernization theory bullet points
Causes of 'backwardness' are internal Traditions, cultural values, and political institutions hinder modernization Countries go through similar stages of development The structure of world economy has no bearing to development of the Third World Early theorization of modern capitalism Capital scarcity and institutional characteristics as source of problems Developing countries can rely on exports for growth (e.g. liberal export economy in Latin America) Markets, rather than states, play a central role in development
Collier
Collier stresses the need for peace and the use of a broad set of instruments focused on the poorest billion—basically the population of extreme poor living on less than a dollar a day. Stresses the potential role of aid in reducing conflict and in focusing on growth policy instruments
Name one reason why greater foreign aid may harm a country's democratic institution.
Corruption and dependency Foreign aid is an outside influence which has a stronger influence than the home people Foreign aid can postpone necessary reforms, perpetuate dysfunctional institutions, facilitate non-democratic forms of governance, and feed corruption and clienteles Rigorous evaluations of the micro effects of foreign aid is SCARCE, while self-reported results are INFLATED and with LIMITED CREDIBILITY
Dependency theory
Countries are disadvantaged due to the structure of inequality and asymmetries in power embedded in the world economy. The answer lies in between...
Modernization theory
Countries are poor because developing countries do not have the 'right institutions and policies' to generate capital accumulation.> they should look more like the West
Poverty Gap
Difference between a person's income and the per capita poverty line. If we know the poor persons income and the poverty line, we can easily calculate the person's poverty gap.
Negatives about PPP
Differences in quality of goods has an underlying effect on the basket Everyone in a nation is treated the same Not everyone consumes the same bundle of goods (rural vs. urban prices) Not everyone pays the same prices (bulk vs. small quantity prices) Overall U.S. Consumer Price Index (CPU) is for "urban Wage Earners and Clerical Workers"
Point IV Program Benefits to US
Economic Benefits, Political Benefits, Perception of Humanitarianism
Inequality
Economic growth is a necessary but insufficient condition for development. Countries, cities, and households can experience economic gains but are distributed unequally, or even worse off, squandered by government officials.
Critique Against Modernization Theory
Emphasis on 'internal factors', incorrect policies but modernist thinking Nation state as unit of analysis - rationality, universalism, and merit No attention to the 'external' system as constraints to national and local development Single path to economic development through capitalism - "trickle down effect" Assumption on balance and harmony - everyone benefits
SDG 2
End hunger, achieve food security and improved nutrition and promote sustainable agriculture
SDG 4
Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
SDG 12
Ensure sustainable consumption and production patterns
Official Development Assistance
FDI specifically from a gov't to another government financial aid
Microfinance
Financial services such as credit applied in small allotments to peopel who might otherwise have no access to them or at best only on very favorable terms.
Macro level
Focuses more upon social structure, process and problems, and interrelationship (effects on gender and income effect older people's well being)
Tied Aid
Foriegn assistance that has some conditions on the loan. Perhaps it requires the recipient to use the funds to purchase goods or services from the doner.
What are the three central concepts of the capability approach?
Functioning, capability, and agency
GNI is equal to
GDP + ( Income earned by nationals living abroad - income living in the country)
GDP per capita as basic measure of development (assuming that it will trickle down to citizens)
GDP is the total goods and services produced by a state in a given year. The number is divided by the population to obtain GDP per capita. To account for living standards, this number is adjusted by calculating the differences in the total cost of the same basic goods (also known as purchasing power parity or PPP). The higher the PPP, the more income you have that is disposable, the more money you have to consume GDP per capita is NOT development! Growth rate is a baseline since countries have a different starting point
GNP
GDP plus income from assets abroad
GNI
GDP plus income from foreign nationals (gradually replacing GNP they are defined identically but calculated differently)
UN aid target
Goal: each developed country contributing 0.7% of GDP to foreign aid
What is GDP?
Gross Domestic Product, which is the monetary value of all goods and services produced over a given period of time produced within a country
What are two reasons why we might blame the government for the lack of preventive health care?
High absenteeism and low motivation among government health providers to properly treat patients. 1. Governments in developing nations do not intensely regulate public clinics and therefore nurses routinely fail to show up to work during scheduled hours. The people in the village know that going to the public clinic only provides only a chance of being seen, so it is not worth their time to go there for preventive healthcare. 2. (this answer is iffy if you have a better one) Governments base policy on data from previous aid programs and not on in-the-village information which factors in things like beliefs.
Low quality of health services
High absenteeism of healthcare workers Low wages could cause this Weak institutions, so low enforcement Deliberate program targeting of the poor The rich won't try to access these public services
The Virtuous Cycle
High savings leads to high investment leads to high incomes leads back to high savings.
How do we learn about poor
Household surveys (only small portion of population and must visit households) carried out by governments, international orgs, researchers, ngos
Accesse to Health care
How long it would take to see a doctor, the cost and quality of care
Bretton Woods Institutions
IMF and the World Bank created after WWII as one of the earliest stages of development aiding in economic development
Import Substitution Industrialization
ISI is the process by which many LDCs have attempted to industrialize by manufactoring consumer goods themselves rather than importing them.
Laissez-faire
Idea that government should play as small a role as possible in economic affairs.
Participatory Freedom
If a traditional way of life has to be sacrificed to escape grinding poverty or minuscule longevity...then it is the people directly involved who must have the opportunity to participate in deciding what should be chosen
Conflict traps
Increased likelihood of a civil war with large economic cost to a country.
Empowerment (gender ref)
Indicates change in gender relations that challenges assumptions about power, helping , achieving
CORE ASSUMPTIONS OF ECONOMIC THEORY
Individuals have preferences Individuals optimize their behavior to satisfy their preferences and respond to incentives Individuals have limitations to accomplish their goals, such as -Scarce time -Limited budget -Technology (transformation of goods and services into other goods and services) Imperfect information
Examples of Health indicators
Infant mortality, maternal mortality, and life expectancy at birth
Foreign Aid
International transfer of resources for the purpose of assistance in the form of grants, loans and technical assistance.
Foreign Direct Investment
Investment by firms based in one country in productive activities in another country
Foreign Direct Investment
Investment made by a foreign entity in the economy of another country.
Factors that could lead to economic development
Investments in education, women, infrastructure, access to credit and micro-credit
Participatory development
Is a right held by all people to engage in society and in the decisions that impact their lives. Participation is thus a political endeavor that challenges oppression and discrimination, in particular of the poorest and most marginalized people.
Asset-based Development
It involves assessing the resources, skills, and experience available in a community; organizing the community around issues that move its members into action; and then determining and taking appropriate action. This method uses the community's own assets and resources as the bases for development; it empowers the people of the community by encouraging them to utilize what they already possess.
Why do we think education is important for development?
It leads to higher income (by how much is a somewhat open question) More informed populations help democracy work better More educated mothers raise healthier kids Learning has consumption/utility value
LEDC
Less economically developed countries
Poverty line
Level of income that separates the poor from the non-poor. There are many types of poverty, food poverty, clothing poverty, shelter/property poverty, health poverty, education poverty... Where the poverty line is drawn will depend on the cost of all these things, so it reflects a more complete consumption context.
Human development index
Life expectancy, GDP and social status average percentage
Poverty trap theory
Like climbing up or down a ladder: you move, and then you rnew position determines your next step that you move to Change over time diagrams look: WITHOUT a poverty trap: A sharp increase in wealth followed by a leveling off later WITH a poverty trap: an S-shaped curve dipping below the line at first, then above later
Micro level
Limited to specific observations and are not intended to be universal. Focuses on the individual and their interactions (Ex/ the relationship between adult children and their parents)
• what? • Begins formally in the 1970s. - Grameen Bank in Bangladesh - Today, over 2100 branches of ______________________
Loans by private banks/NGOs to finance small-scale development projects. Grameen Bank
William Easterly
MDGs are unfair to Africa absolute measurements instead of where you start overlap of goals discouraging for countries who started high
ADAPT AND MITIGATE
MITIGATE: Global system based on production, consumption, movement of commodities, capital & people ADAPT: Change behaviors to take into account global scope and scale of environmental problems such as reduce emissions AND build resilience to the adverse impacts of e climate change
Free trade area
Members eliminate trade barriers between them, but each member country maintains its own external tariff
What is the issue with population growth for low income countries?
Most of the population is young, so child labor is needed. Child labor is bad for obvious reasons, but if they end it, it lowers the families already low income
MNCs
Multinational Corporations, which have headquarters in one country and production untites in one or more countries. Also called TNCs--transnational corporations
Is the poor's unwillingness to pay for these technologies evidence that they do not care about health?
No, the poor spend most of their money on health treatment rather than prevention. Many of the treatments are given by unqualified doctors who are not treating the actual issue. The poor also spend more on treatment than prevention because the former is usually more expensive and they may perceive low-cost items, like prevention, as not good quality because they are usually cheaper than treatment. No, the poor spend their money on things that are timely and important, not important overall. This is why they're willing to pay far more for a cure to an ailment than paying cents in USD PPP terms to prevent a condition. The poor are shortsighted.
NGOs
Non governmental Organizations are non-profit organizations often involved in providing financial and technical assestance to LDCs.
Easterly (and Moyo) on aid and poverty
Oppose aid spending, not only because it corrupts government but also because at a more basic level, they believe that we should respect people's freedom. (We shouldn't force people to do something they don't want) Aid does more bad than good; it prevents people from searching for their own solutions
Non-government organizations
Organizations that are not associated with a government that exist to promote economic development and humanitarian ideals
Evidence for low demand as the problem
Parents are sensitive to job opportunities (In india had recruiters from call-centers go recruit in new villages. Finds an increase in girls education. (Jensen)) But, children aren't the ones making the decisions (Higher return of education to females)
International migration
People from poor countries to rich countries, people from developing countries to other developing countries, developed countries to other developed countries, developed countries to developing countries
Define "poverty trap"
Poverty trap is when individuals are poor because they are poor. They have the potential to become rich but they need to be dislodged from where they are stuck and be set on the way to prosperity. There will be a poverty trap whenever the scope for growing income or wealth at a very fast rate is limited for those who have too little to invest, but expands dramatically for those who can invest more. If the potential for fast growth is high among the poor then tapers off as one gets richer, there is no poverty gap.
Peace building
Process that establishes durable peace and tries to prevent recurrence of violence through reconciliation, institution building, political as well as economic
Human Capital
Productive investments emboddied in human beings, including skills, abilities, ideals, and health, resulting from expenditure on education.
SDG 16
Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
SDG 8
Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
SDG 15
Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
Why do the poor spend so much more on treating illnesses than pre-venting them?
Psychological sunk cost Privatized healthcare People only pay attention to the present. What they say they will get done in the future may get done. Preventative health care falls under the umbrella of preparing for a future event that only has a chance of occurring and therefore the poor would rather spend their money on food.
Examples of trade protectionism
Quotas, tarifs, subsidies, and regulatory barriers
MDG 4
Reduce child mortality
SDG 10
Reduce inequality within and among countries
CONTROVERSIAL QUESTION: is a higher income itself a source of greater happiness?
Relationship between the two is complex and tenuous In countries with non-democratic governments (China and Brazil when they were under military dictatorship), believe that with rapid income growth comes happiness and along with that an acceptance of the regime and political stability There IS strong empirical evidence supporting that rising GDPpc in developing countries DOES increase happiness This also depends on how income gains are achieved It may be MORE important to be employed so as to EARN an income than to get equivalent unemployment compensation Happiness research shows that social trust and the quality of personal relations with others becomes more important than material rewards once survival is secured Research ALSO shows that higher inequality has negative effects on happiness Deaton (2013) shows that a given percentage gain in income continues to raise happiness at all income levels CONCLUSION: as income rises, other factors beyond income become increasingly more important in contributing to happiness
GENDER AND HEALTH
SEN: 100 MILLION WOMEN ARE MISSING because men receive better healthcare than women
Why does Sachs believe that people get trapped in poverty?
Sachs believe that people get trapped in poverty because they don't have access to basic means and knowledge. Once people receive means and are taught how to effectively use those means, they can escape the trap. Sachs believe that certain countries are trapped in poverty because they face a set uncontrollable obstacles (climate, geography, etc.) that impede their development potential. Unless they receive a significant amount of aid that can push them on the development ladder, they cannot amass enough wealth to break out of poverty.
Of the six development thinkers discussed in detail, Which do you agree with most and why? Talk about all 6 development thinkers
Sachs: Strong advocate of increased aid to governments Advocates planning aid to achieve coordination across sectors and agencies Strong believer in the potential effectiveness of feign aid and has been calling for a major increase in expenditure levels Theory is one of multiple equilibria, where only a coordinated big push in foreign aid can help poor countries take-off toward sustained growth Easterly: Deep skeptic of the current practice of foreign aid to governments Recommends experimentation and learning from past mistakes, while calling for a major overhaul of the aid industry to achieve accountability to beneficiaries Prods the development community towards results-based management approach Supports impact evaluations of development projects prevent experimenting and learning for institutional change and project improvement Collier: Collier stresses the need for peace and the use of a broad set of instruments focused on the poorest billion—basically the population of extreme poor living on less than a dollar a day. Pragmatist; stresses the need for peace and the use of a broad set of instruments focused on the poorest billion Stresses the potential role of aid in reducing conflict and in focusing on growth policy instruments Is the head of the Research Division at the World Bank Aid will not succeed without giving priority to peace and security, and should target the bottom billion Moyo: Advocates to cut foreign aid to quell corruption Looks at the perverting effects of official foreign aid on local governance Calls for an end to aid other than emergency relief Has a background in corporate finance and is a developing-country researcher Exposes the frequent corrosive influence of aid and governance, with dire consequences for the poor Karnani: Advocate of the role of small- and medium-enterprise development for job creation This has the greatest potential for job creation Knows people desire a good job - not the opportunity for self-employment Believe in the assistance of NGOs for job creation Believes that the state has a strong role in three aspects: Improve the investment climate for SMEs through public goods, the rule of law, and a favorable macroeconomic context Make poor people more employable through health, education, and skills, especially targeting at the youth Help connect supply and demand on the labor market through employment services and job-creation programs Deaton: Foreign aid makes poor countries WORSE-off This is due to lack of good governance, presence of corruption, undermined democracy, and authoritarian regimes
Opposite of Liberal view on development
Sees conflict as integral to development and is likely to produce conflict, although violent conflict may be continued by proper policy measures.
UN human development index
Single number that summarizes the level of development in a country. Incorporates stats on life expectancy, years of schooling, and gross national income per capita
Jeff Sachs on aid and poverty
Spend more on aid, and believes that things should be given away and that poor people should be enticed to do what we think is good for them. They are hot, infertile, malaria infested, landlocked; can make it hard for them to be productive without an initial large investment to help them deal with these problems
Dependency Theory
Stated that capitalist system has enforced rigid international division of labor and is responsible for the underdevelopment of areas around the world Response to the north/south disparity and victimization of the poor
SDG 17
Strengthen the means of implementation and revitalize the global partnership for sustainable development
Solution to natural unemployment
Supply side policies: 1. Interventionist: spending on infrastructure, healthcare, education, subsidies, research and development policies, 2. Market-oriented: labor market+tax reforms, privitization, trade liberalization, reduce gov spending, deregulation
Can poverty be cultural or structural?
The Caste System(Hindu Religion) prevents people from educational, ownership, and employment opportunities The caste system, keep hundreds of millions of Indians away from educational, ownership, and employment opportunities, and to violence for "getting out of line." British rulers encouraged caste privileges and customs, at least before the 20th century.
Comparative Advantage
The ability of a country to produce a good at a lower cost than another country can. david ricardo
Purchasing Power Parity
The buying power equivalence. Method of currency conversions accounting for difference in price levels
Empowerment
The capacity of individuals for self-development-to act and participate in decisions that affect their livelihoods.
The Green Revolution
The increase in grain production in LDCs through the development of hybrid seeds in the 1960s.
Neo-colonialism
The perpetuation/use of economic, political, cultural, or other pressures to control or influence other countries, especially former dependencies.
Economic development
The process of an improvement of standards of living for a population as a whole
Literacy rate
The total percentage of a population of an area at a particular time aged 7 years or above that can read and write with understanding
Structuralist Critique on Modernization Theory
There are 'external' factors that influenced underdevelopment: Enduring legacies of colonialism and imperialism in the developing world Terms of trade in exports vs manufacturing Control over technology by Western capital
Aim of the World Trade Organization
To increase trade by lowering trade barriers and providing a forum for negotiotion
Gross National Income
Total money value of all final goods and services produced in an economy in 1 year + net property income from abroad
Gross Domestic Product
Total money value of all final goods and services produced in an economy in a given time period
2. Factors Contributing to Development: Geography • __________________ regions tend to be poor, ________________ regions rich • Geography can be a disadvantage: (4)
Tropical temperate -Landlocked countries - Incidence of disease - Distance from markets - "Bad institutions"
What is the UN?
UN is the biggest international Organization that exists today. It is an open forum for international representatives to discuss and facilitates on issues ranging from international law, to world peace, and international security. They also discuss economic and social development, humanitarian issues and human rights.
GNP
Value of goods and services from only nationals both at home and abroad.
Poverty Trap
When low levels of income lead to low levels of savings, which lead to low levels of investment, which leave country with low levels of income.
Relative poverty
When people lack the minimum amount of income needed in order to maintain the average standard of living in the society they live in
Inequalitu
When wealth and access to services is not shared equally to a society
Poverty trap
a self-perpetuating condition whereby an economy, caught in a vicious circle, suffers from persistent underdevelopment. • Can be applied to individuals as well • Initial conditions determine which state of welfare people move toward - Low and high equilibrium • Above a certain threshold, become increasingly rich • Below the threshold, become increasingly poor
What is Gini Coefficient?
a statistical measure of the degree of variation or inequality represented in a set of values, used especially in analyzing income inequality.
PPP (Purchasing Power Parity)
adjusted price to known currencies such as USD based on a basket of goods to make better sense of the poor's spending internationally (has shortcomings) Naive comparison of currencies would be either: Temporal (Across time) comparisons to 'current dollars' International comparisons that are exchange-rate based Sophisticated comparisons would include Constant dollars (particular year as a reference point) PPP-adjusted dollars (USD as a reference point to adjust inflation to "Real" dollars)
economic development
an emphasis on poverty reduction, and recently, on inequality within societies structural transformation of the economy, or the move from rural, agricultural-based production towards industrial and manufacturing-based activities.
States look for exporting manufactured goods, rather than raw material
as the key to export-led growth
SOLUTIONS TO HEALTH
behavioral modification (education and preventative medicine) strategy action and cooperation
Dependency Theory
built on structuralism first world caused third world economic problems by forcing "one size fits all" solution.. all resources flow from them to us and now they are screwed because they have no raw resources anymore also their environment is ****ed
Stabilization Program
by IMF reduce gov't spending, raise taxes --> screws everyone over devalues currency --> serious inflation economic strategy that gov'ts and central banks practice monitor business cycle and stabilize economy trying to keep prices the same
Structural Adjustment Program
by the World Bank liberalizing decrease regulation, privatize state firms goal of increasing economic output -help people make more money deregulate --> don't have to do nice things for your workers anymore --> more money in pockets hurts LDC societies.. reduction of welfare
MOST VULNERABLE CHILDREN IN THE WORLD
children in conflict areas, refugees, girls, minorities, child labor
Infant mortality rate
compares the number of deaths of infants under one year old in a given year per 1,000 live births in the same year.this rate is often used as an indicator of the level of health in a country.
Relative Poverty
contextually inequality in location or society in which people live. One may be relatively poor without being in a state of absolute poverty.
development paradox
contradictory relations that question the claim of and express the various social inequalities, environmental impacts, rights conflicts, cultural/aesthetic outcomes and practices crystallized in, the development process
Poverty trap
countries/populations trapped in a permanent vicious cycle of poverty. (Easterly thinks of it as permanent and Sachs thinks of it as having the potential to get out of poverty)
Sustainable Development Goals
developed by the world commission on environment and and development in 1987 debt crisis that meets the needs of the present without compromising the ability of future generations to meet their own needs
Amartya Sen
developed the Capability approach - she argues that development should not be seen simply as rising income levels but rather as an increase in individuals' substantive freedoms and ability to make choices they value.
LDC profile - exposure to endemic disease
disproportionately subjected to epidemics and endemic diseases and other health related problems
Relative poverty
does not threaten daily survival but in which an individual may not have the necessary income to fully participate in his/her society
Neo Liberalism
economic and political concept that challenges dependency theory based on the idea that states and markets are related to individuals in society state should be kept to a minimum decrease regulation and increasing financial liberalization let companies do whatever they want because they can -- small businesses die because of inability to pay back necessary loans -- higher jobless rate due to outsourcing Reagan comes and we lost a decade of development laissez faire we don't do shit to help people because we wanna be rich also every man for himself
Millennium Development Goals
eight objectives established by the united nations in 2000 related to global development and aimed at eradicating extreme poverty and improving gender equality, under 5 mortality rates, educational opportunity, environmental sustainability , and health outcomes
development and poverty
elimination of extreme poverty as a moral imperative > political power associated with the claims of the poor (empower the poor to voice out) (Gauri & Gloppen 2012). Poverty is often conceived in terms of income - lack of monetary capacity to secure basic needs. Poverty is multidimensional, and is essentially about lack of opportunities and capabilities of people to do what they want to do. Deprived of choice.
Sustainability Project
emergent set of quite diverse political, social, and economic initiatives in the 21st century driven by the recognition and/or urgency of reducing biodiversity loss, environmental harm, human exposure to pollutants, and greenhouse gas emissions (2000s onward)
Globalization Project
emerging vision of the world and its resources as a globally organized and managed free trade/free enterprise economy pursued by the largely unaccountable political and economic elite; 1980s-present
1970s
endogenous dev, basic needs approach
IHDI
equal to the HDI, but falls below the HDI when inequality rises. differentiates between a country with a ton of rich and a ton of poor vs. a country where everyone's the same
LDC profile - weak economic base
export trade of most developing countries is based on the production or extraction of one of a few primary commodities.
FAIR TRADE
fair prices with a trading relationship based on a set of commonly agreed values empower produces to participate in the global market on fair terms use fair trade to change beliefs: incetivize ppl to attend school install sanitation infrastrcture provide work training pro
FAMINE VS STARVATION
famine as a failure of policy !! (man made! a result of bad policy
Non-governmental organizations (NGO's)
first established in the 1960s in the form of "private voluntary organizations" // they serve a range of contradictory purposes, some charitable, some political // such organizations are often supported by governments and sometimes serve not to promote change but to sustain the existing order
Basic Needs Strategy
focus on people's basic needs --basic services --services ---sanitation healthcare education --employment --human rights/participation gov't supposed to directly provide services increase welfare what is a basic need??
political development
focus on political democracy and state effectiveness, but also demanding rights, justice, and social citizenship. building representative and accountable governments (a bias towards 'democracy')... or institutionalization of political organizations and procedures to improve government performance (Huntington 1968). BUT development can also be about claiming rights and demanding justice from political authorities.
social development
focus on social conditions of the populace
4 ASPECTS OF FOOD SECURITY
food availability food access food utilization food stability
free market economic is responsible
for global economic growth
WOMAN AND DEVELOPMENT
founded in southern marxist tradition capitalism is the source of their opressions
ADAM SMITH
free market and individual liberty (no state interference)
RESULTS OF MDGs
goals reached on average bu not everywhere, especically conflcit areas and low income areas need more work on malnutrition, poverty, endere eqaulity, and access to clean water SDGs are supposed to have more efficient data collection and better access to all countries and more public-private cooperation
Modernization Theory
goes along with Rostow's model identify conditions that have given rise to development in developed countries --> one size fits all focus on economic growth everybody steals their raw materials --> extractive
who implements policies and programs
governments in developing countries governments of developed countries NGOs international organizations
Meanwhile, the East Asian "Miracle" While ISI economies languish, Asia booms • Post-WWII: Japan • 1960s-70s: The Asian "tigers" (Hong Kong, Taiwan, Korea, Singapore) • 1970s-80s: Malaysia, Thailand, Indonesia • 1990s:-present: China • Faster growth than all other LDCs in the post-WWII era • Massive rise in (3)
growth, exports, manufacturing, living standards
Modernization theory
guided development thinking - society moved in a linear pattern (traditional, backward societies)
John Maynard Keynes
high gov't spending in tech etc invest in human capital solves extreme poverty gov't fixes economy when needed heavy gov't interventions
common characteristics of developing countries
high levels of poverty, relatively large agricultural sectors, high birth rates, weakness in infrastructure and institutions
Economies of scale
in microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation (typically measured by amount of output produced), with cost per unit of output decreasing with increasing scale.
TYPES OF MIGRATION
internal, intra-continental, inter continental circular and transborder
Capability approach
is a theoretical framework that entails two core normative claims: first, the claim that the freedom to achieve well-being is of primary moral importance, and second, that freedom to achieve well-being is to be understood in terms of people's capabilities, that is, their real opportunities to do
Import-substituting industrialization
is a trade and economic policy which advocates replacing foreign imports with domestic production. ISI is based on the premise that a country should attempt to reduce its foreign dependency through the local production of industrialized products.
International Monetary Fund (IMF)
is an international organization created for the purpose of standardizing global financial relations and exchanges rates. The IMF generally monitors that global economy, and its core goal is to economically strengthen its member countries.
When a state specializes in the export of a few raw materials
it leaves poor countries vulnerable to sudden price fluctuations for their export.
FOOD SECURITY AND POOR
lack of information weak beliefs procrastinate
POPULATION GROWTH
large families and uncontrolled populations have negative consequences for countries risk of a youth bulge, environmental pressure, and unchecked global migration
IMPACT OF POVERTY ON HEALTH
lifetime impact of disease and malnutrition on young children economy / cost of health care lack of clean water and sanitation illiteracy sex work (vicious cycle)
SLUMS
many environmental problems service burden urban farming promotes food security
weakness of household surveys
measurement error (business records are rare, who to ask in household, non-standardized units, and integer reporting bias) and concealment by respondents (concern over taxes, illegal activities)
LIMITS OF GDP GNP GNI
measures flows, not stocks incomplete doesn't really measure overall well being
GDP
measures the total market value of the goods and services produced in an economy. The average wealth in a country but does not account how wealth is contributed.
Wealth should be concentrated on
middle class
ADAPTIVE APPROACH
must take into account local tradition and culture when implementing policies
PUSH AND PULL FACTORS
no land, unfair competition, econoic crisis VS economic opporutinty, diversify income, regular/circular migration
FREE TRADE
not the choice to have no rules, but the choice to have a particular set of rules
fair trade
practice that includes social and environmental costs in the price of traded commodities, to compensate producers and their habitats, and to render more transparent the conditions of producers and their relation to consumers
nongovernmental organization
private development agency usually geared to financial, educational, empowerment, skill provision, and development training assistance, with varying political impact, and sometimes unaccountable policy influence
Capacity building
process of developing and strengthening the skills, instincts, abilities, processes and resources that organizations and communities need to survive, adapt, and thrive in the fast-changing world
Development definition by Amartya Sen
process of enlarging a person's "functionings and capabilities to function, the range of things that a person could do and be in her life."
ISI
reduce overall dependency on developed nations produce goods previously imported produce intermediate goods --> capital goods increase trade with developed nations
VULNERABILITY TO POVERTY
rural populations (resources are going to urban areas) women and children (societal bias prefers men) minorities (at a disadvantage) disabled (lots of healthcare expensive) EQUITY: anti-poverty strategies place an emphasis on these people
EQUITABLE ECONOMIC DEVELOPMENT
safety nets for the marginalized welfare progressive taxing human resource development labor mobility
Liberal view on development
sees under development as a cause of conflict and development as a way out of strife and towards peace.
Nationalism
set of ideas that holds that a nation, ethnic identity, is the fundamental unit of life
HUMAN DEVELOPMENT
shift to view income as a means, not an end achieve overall level of well being enable a process of expanding people's choices production and distribution of commodities expansion and use of capabiltiies basic needs satisfication and participatory process
SUSTAINABLE DEVELOPMENT
social progress, economic growth, efficiency, equity, capabilitiy, political participation, human security, WELL BEING
urban bias
stereotyping of rural populations as backward and unproductive, and privileging of urban classes and manufacturing sector to legitimize development strategies
GENDER MAINSTREAMING
stop developing gender-specific programs but rather integrate a gender analysis into all programs but then they end up removing genmder equaltiy programs all tgoether the nsome just put the analysis in for show but nothing actually changes
Import Substitution Industrialization (ISI)
strategy of protecting domestic industry through tariff and other barriers pursued initially to overcome the specializing effects of the colonial division of labor
1990s
sustainable human dev, debt relief programs
Point IV Program
technical assistance program announced by Truman help undeveloped areas based on democratic fair dealing started the concept of undeveloped poor version of the Marshall Plan benefitted the US : more exports less regulations made us look like humanitarians cancelled out communism in those countries limited to those it was trying to help: temporary fixes not enough money no real change
PARTICIPATORY APPRAOCH
the local people must play a role in their own development
Urbanization
the process of transition from a rural to a more urban society // reflects an increasing proportion of the population living in settlements defined as urban
social contract
the re-distributive ethic for securing a rights-based society respecting the dignity of each human being, where states (within cooperative international relations) are responsible for sustaining a just distribution of material and non-material needs; citizens' rights
Privatization
to make private; especially: to change from public to private control or partnership ~ privatize an industry.
5 Stages of Development
traditional society--> preconditions for take off--> take off--> drive to maturity--> age of high mass consumption went along with structural and modernization theory.. every nation should industrialize like Europe and the US.. one size fits all solution don't consider health and environment til the 4th step
CLIMATE CHANGE
victims: poorest counties, sub saharan africa culprits: US, China, Russia SOLUTIONS adapt (reduce vulnerability) and mitigate (efficient use of energy)
Gloablization is creating winners and losers
while sharpening income disparities.
The problem (2)
• Even if aid works, poor countries have accumulated so much they may never be able to repay • Debt inflows are often less than repayment outflows
Gustavo Esteva
-unified approach --> cultural humility -participatory freedom -"the new commons" ^ -from Mexico -upper class his whole life but champion of the poor -we don't want globalization.. we want to maintain our grassroots culture (their commons)
What is relative poverty?
-Relation to overall distribution -Below mean income
MEDC
More economically developed countries
