Chapter 9

Development

development: the process of improving the

material conditions of people through

diffusion of knowledge and technology

LDC’s

MDC’s (“developing” or “emerging”)

Key Issue 1 Why Does Development Vary

Among Countries?

Economic Indicators of

Development

Human Development Index

(HDI)

- economic factor is GDP

- social factors are literacy

rate and education

- demographic factor is life

expectancy

gross domestic product: value of

the total output of goods and

services produced in a country

in a year

Types of jobs

-primary

-secondary

-tertiary

-quaternary

Social Indicators of

Development

-amount of education

-literacy rate (percentage of a country’s

people who can read and write)

*student to teacher ratio in

elementary schools:

LDC’s over 30 to 1

MDC’s under 20 to 1

MDC’s spend more money

on the health and welfare

of their citizens than

LDC’s usually can

Demographic Indicators of

Development

-life expectancy

-infant mortality rate

-natural increase rate

-crude birth rate

Key Issue 2 Where are MDC’s and

LDC’s Distributed?

More

Developed

Regions

North America – high in GDP

and literacy, but high drop out

rate and lower life expectancy

Europe – Western Europe

strong, but Eastern side

lagging behind

Russia – struggling to convert from

communism to market economy

Japan - strong, educated

workforce and high-value

products such as electronics

Oceana – Oz and Nz

strong due to minerals

and food production, but

smaller islands in the

area are struggling

Less Developed

Regions Latin America – varied

development from cities

to villages and

inequitable income

distribution

East Asia – China

the key economy;

second largest in

world and is

largest market and

manufacturer.

Working out kinks

of balancing

communism and

market economies

Southeast Asia – limited in

cultivation due to climate and

topography; struggling to

recover from decades of war

Central Asia – still making their way

after separating from Soviet Union,

“stans” usually lower HDI except

where oil available like in Iran

South Asia – region has

second-highest

population and second-

lowest per capita

income; high population

density and NIR

Southwest Asia and

North Africa – desert

conditions and religious

and cultural practices

slow business growth;

vast oil reserves help

some otherwise desperate

countries

Sub-Saharan Africa –

South Africa is most

developed; many

countries struggle

with high poverty

levels, low education,

and corrupt

governments

Key Issue 3 Where Does Level of

Development Vary by Gender? * The United Nations has not found a

single country in the world where

women are treated as well as men

How are we doing in the

U.S., Utah, Centerville?

Gender-related

Development Index (GDI)

measured by economic,

social, and demographic

comparisons to males

economic = per capita income

of females to males

social = females enrolled in

school and literacy rates

compared to males

demographic = life expectancy

of females to males

Gender Empowerment (GEM)

measures the ability of women to

participate in the process of achieving

economic and political power

economic indicators = per capita

female income as percentage of

per capital male income;

percentage of professional and

technical jobs held by women

political indicators = percentage of

administrative jobs held by

women; and percentage of

members of national parliament

who are women

* In every

country of the

world, fewer

women than men

hold positions of

economic and

political power

Key Issue 4 Why Do LDC’s Face

Obstacles to

Development?

Development through

self-sufficiency

Self-sufficiency approach

spreads investment as equally

as possible across all sectors

of the economy in all areas;

reducing poverty takes

precedence over wealthy

consumers

Problems with self-

sufficiency model:

-protection of inefficient

businesses

-need for large bureaucracy

Development Through International Trade -

sale of products in the world market brings

funds into the country that can be used to

finance other development Rostow’s Development Model

1. traditional society – high

percentage of agriculture

2. preconditions for takeoff –

elite group begins innovative

economic activities

3. takeoff – rapid growth in

limited economic activities

4. drive to maturity – modern

technology diffuses to a

wide variety of industries

5. age of mass consumption –

economy shifts from heavy

industry to light industry

Success of International Trade Approach:

WTO – reduces restrictions on trade

transnational corporations – operate all over the world

World Bank and IMF – make loans to countries

fair trade – standards to protect workers and small businesses in LDC’s