Economic Development

Ch. 9 Part 1

Warm Up

The idea that once a culture locates in another area, the original customs and traditions eventually die out or are less strong is:

A. Place utility

B. Acculturation

C. Distance decay

D. Transhumance

E. Gravity model

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Basics of Economics

• 4 major types of Economies:• Traditional• Communism• Socialism• Free Enterprise/Capitalism• All fall along a spectrum

Economic Spectrum

Free Enterprise

• Allows the competitive market to determine the price of goods

• People have the freedom to choose their own outcomes based on their ability and freedom to pay

• Based on competition and supply and demand• Creates winners and losers

Communism

• Karl Marx—a response to Capitalism• Communist Manifesto-Prediction that proletariat would

eventually rise against the bougeousis• Total government control of all prices in a society• Government determined careers• Equal pay for all workers

Socialism

• Government controls basic items in an economy (transportation, agriculture, energy)

• Individuals control other businesses• Higher taxes but more government services• Most European countries

What is Development?

• Simply, an improvement in material conditions• Can be measured by GDP, Literacy, Life expectancy, birth

rate, etc.

Economic Sectors

PrimaryExtraction of raw materials (agriculture, fishing, mining)

SecondaryProduction of goods

(construction, manufacturing)

TertiaryProvides services to

businesses and general population

Economic Sectors

• Primary-Work directly with raw materials• Secondary-Processes/manufactures raw materials• Tertiary-Provides a service• Quaternary-Research or management

Primary, Secondary, Tertiary, or Quaternary?

Primary, Secondary, Tertiary, or Quaternary?

Primary, Secondary, Tertiary, or Quaternary?

Primary, Secondary, Tertiary, or Quaternary?

Primary, Secondary, Tertiary, or Quaternary?

Primary, Secondary, Tertiary, or Quaternary?

Primary, Secondary, Tertiary, or Quaternary?

Developed Nations: • More tertiary and quaternary sector jobs• Less of primary sector jobs.

United States - Labor Force by Sector: • Agriculture: 1.6% (Primary) • Industry: 19.2% (Secondary)• Services: 79.6%

(Tertiary/Quaternary)

Newly Industrialized Nations: • More secondary sector jobs• Even split between 3 sectors

China - Labor Force by Sector: • Agriculture: 36.7% (Primary) • Industry: 28.7%(Secondary)• Services: 34.6% (Tertiary/Quaternary)

Developing Nations: • Less tertiary and quaternary sector jobs• More primary sector jobs.

Liberia - Labor Force by Sector: • Agriculture: 70% (Primary) • Industry: 8% (Secondary)• Services: 22%

(Tertiary/Quaternary)

Levels of Development Rotations

• Groups of 4• 6 groups total

Warm Up

What do the languages of English, Spanish and Hindi have in common?A. they are all part of a major religious system

B. they are all spoke in the same countries

C. all three derive from the Afro-Asiatic language family

D. all three are spoken where they are due to colonialism

E. all three are in the Indo-European language family

MUST have textbook tomorrow!

Measures of Development

• GNP/GDP• Per capita• Life Expectancy• Literacy Rate• Education• Standard of Living• Birthrate

Why isn’t death rate an indicator?

Remember Hans?

• http://www.youtube.com/watch?v=jbkSRLYSojo

What is HDI...And how do I read it?

• Human Development Index• Created by the UN …Mahbub ul Haq • Composed of Education, Life Expectancy, and

GDP/Capita• Number from 1 to 0 (1 being greatest)• ‘‘to shift the focus of development economics from

national income accounting to people centered policies.’’

The Math Behind It…

Sub-Saharan Africa

South Asia

Arab States

East Asia

C and E EuropeLatin America

OECD

2009 Human Development Index - Top 38 Countries with HDI Score

2011 UN HDI

HDI

• http://en.wikipedia.org/wiki/List_of_countries_by_Human_Development_Index

Criticism of HDI…

• Fails to consider the environment/pollution• Redundant… we already measure this stuff• Bryan Caplan says it’s culturally biased…

– It’s a measure of how Scandinavian you are…

Development Game

• Guess the HDI Rank!• 1= best• 187= worst