Chapter 10: DevelopmentUnit 4

Why Does Development Vary Among Countries?

• Development• The process of improving the material conditions of people through the

diffusion of knowledge and technology• More developed countries (MDCs)

• AKA developed countries

• Lesser developed countries (LDCs)• AKA emerging or developing countries

• Human Development Index (HDI)• The measurement of the development of every country• Focuses on:

• Economic: A decent standard of living• Social: Access to knowledge • Demographic: A long and healthy life

Why Does Development Vary Among Countries?

• HDI: Economic—A Decent Standard of Living• Income

• Gross national income (GNI)—value of the output of goods and services produced in a country in a year; includes money that leaves and enters the country

• Gross domestic product (GDP)--value of the output of goods and services produced in a country in a year; does NOT include money that leaves and enters the country

• Purchasing power parity (PPP)—adjustment to the GNI based on differences of costs of goods between countries

• “Per capita”—

Why Does Development Vary Among Countries?

• HDI: Economic—A Decent Standard of Living• Economic Structure

• Primary Sector

• Secondary Sector

• Tertiary Sector

Why Does Development Vary Among Countries?

• HDI: Economic—A Decent Standard of Living• Productivity

• The value of a particular product compared to the amount of labor needed to make it

• Value added—the gross value of a product minus the costs of raw materials and energy

• MDC: produce more with less energy• More machines, tools, equipment

• LDCs: use mainly human and animal power

Why Does Development Vary Among Countries?

• HDI: Social—Access to Knowledge• The more education a society receives, the wealthier they become

• Studies at the years of schooling for adults• Studies the expected years of school for youths• Studies the pupil to teacher ratio• Studies the literacy rate

• HDI: Demographics—Health and Wealth• Long and healthy life

• Life expectancy at birth• MDCS have a higher life expectancy

• Have the money and access to resources that benefit society’s health• IMR, NIR, CBR

• Consumer Goods• MDCs have the money to purchase goods and services

• Some of the most important: transportation and communications

Where Are Inequalities in Development Found?

• Unequal and Uneven Development• Inequality-adjusted Human Development Index (IHIDI)—measures the extent

of inequality

• Inequalities can be measured from country to country or region to region (within a country)• What can we determine using the IHIDI?

Where Are Inequalities in Development Found?

• Gender Inequality• Gender Inequality is measured in 2 ways: the GII/GEM and GDI

• There is not a single country on earth where females are treated equally to males

• Countries that work to have equality between the sexes will further their development

Where Are Inequalities in Development Found?

• Gender Inequality:

• Gender-related Development Index (GDI)—measures the gender gap in the level of achievement for income, education, and life expectancy

• Compares the level of women’s development with that of both sexes

• Four measures (similar to HDI):• Per capita female incomes as a percentage of male per capita incomes

• Number of females enrolled in school compared to the number of males

• Percent of literate females to literate males

• Life expectancy of females to males

Where Are Inequalities in Development Found?

• Gender Inequality:

• Gender Inequality Index (GII) or the Gender Empowerment Measure (GEM)—measures the gender gap in the level of achievement in reproductive health, empowerment, and the labor market• How is the United States doing????

• Compares the decision-making capabilities of men and women in politics and economics

• Uses economic and political indicators:• Per capita female incomes as a percentage of male per capita incomes

• Percentage of technical and professional jobs held by women

• Percentage of administrative jobs held by women

• Percentage of women holding national office

Where Are Inequalities in Development Found?

• GII/GEM:• Empowerment: can women achieve economic and political power?

• National Legislature

• Secondary School

• Employment: ability of women to hold full-time jobs outside the home

• Reproductive Health: how does reproductive health hinder women in a society?• Maternal mortality rate

• Adolescent fertility rate

• Every country tat offers women a full range of reproductive health options has a very low total fertility rate

Where Are Inequalities in Development Found?

• Core and Periphery Model: 30 degrees North

Why Do Countries Face Challenges to Development?

• Two Paths to Development1. Self-Sufficiency Path

• Countries want domestic production of goods, discourage foreign ownership of businesses and resources, and want to protect their businesses from international competition• Barriers to limit imports: taxes/tariffs, fixing quotas, requiring licenses

• Investment is spread equally across all sectors of a country’s economy and in all regions

• Reducing poverty takes precedence over encourage some to gain wealth

• Problems with this model:• Protection of inefficient businesses

• Need for large bureaucracy

Why Do Countries Face Challenges to Development?

• Two Paths to Development2. Development through international trade

• Countries are opening themselves to foreign investment and international markets• Rostow’s model of development

• Examples of international trade approach• The “four Asian dragons”

• Petroleum-rich Arabian Peninsula states

• Three major problems:• Uneven resource distribution

• Increased dependence on MDCs

• Market decline

Rowstow’s Development Model

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Why Do Countries Face Challenges to Development?

• World Trade• Many benefits and triumphs through the international trade approach

• World Trade Organization (WTO)• How does it work?

• Issues?

Why Do Countries Face Challenges to Development?

• Financing Development• Foreign direct investment (FDI)—investment made by a foreign company in

the economy of another country• Money is not distributed equally

• Transnational corporation—corporations that invest and operate in countries other than the one in which the company headquarters are located

• Loans• World Bank

• International Monetary Fund (IMF)

Why Do Countries Face Challenges to Development?

• Development challenges during hard times• Stimulus or Austerity?

• Stimulus strategy—government should spend more money than they collect in taxes, mainly through infrastructure project.

• Austerity strategy—government should reduce taxes so that people and businesses can revive the economy by spending their savings

• Structural Adjustment Programs• Plan that includes economic goals, strategies for achieving the objectives, and external

financing requirements

• Microfinance—giving a small loan and other financial services to individuals/small businesses in developing countries that wouldn’t be able to get a loan from a bank

Why Are Countries Making Progress in Development?

• Fair trade approach• Products are made and traded in a way that protects workers and small

businesses in LDCs

• Two sets of standards• Fair trade producer standards

• Fair trade worker standards

• Producers and workers usually earn more

• Consumers usually pay higher prices• Cooperative store—member owned, member governed business that operates for the

benefit of its members according to principles agreed upon by the international cooperative community.

Why Are Countries Making Progress in Development?

• Measuring Progress• Sustainable Development Goals and Millennium Development Goals