developmental Flashcards
(18 cards)
multinational corporations
[ MNCs ]
–firms with an established presence and managed facilities in more than one country
–the result of foreign direct investment
–aka: transnational corporations or transnational enterprises
foreign direct investment
- long-term investment in another country
- investment by a multinational corporation (MNC)
- investment in another country representing (at least 10% ) ownership (i.e. in a firm/industry etc.)
non-governmental
organizations
[ NGO s]
–organizations usually independent of governments
–typically they aim to design and implement development projects
–one example is Oxfam, which is concerned with poverty reduction
poverty cycle
–an economic cycle related to financial capital accumulation
–low incomes lead to low levels of savings; these savings can finance only limited domestic investment
–this leads to low levels of income
(a vicious circle)
brain drain
the migration of highly skilled or educated individuals from one country to another, often in search of better job opportunities or working conditions.
economic growth vs. development
growth - increase in potential/real output of an economy throughout a timeframe
–measured by ‘national income’
–distinguished from ‘actual growth’ and ‘potential growth’
development - a sustained improvement of the living standards of a country’s population; implies increased per capita income (etc.)
relative poverty
a state where an individual/household’s income is below a certain percentage (usually 50%) of median income in an economy
- can afford basic needs, but standard of living is below overall average standard of living in a society
- different for every country; relative to overall wealth of population
absolute poverty
individual/housholds cannot afford basic necessities (eg. shelter, water, nutrition, healthcare)
OR
- UN definition: living on less than ~$2 a day
land locked
surrounded by land of other countries; not next to a large body of water
-> for LDC’s, makes trade more difficult cuz they have to cross thru another country’s border
poverty trap
self-perpeutation mechanism that contributes to persistence of poverty in a nation
growth side: low income -> low savings -> low investment -> low growth
development side: low income -> low education & healthcare -> low lvl of human capital -> low productivity
capital flight
when assets/money rapidly flow out of a country, often due to economic or political instability (eg. change of political party in power)
international monetary fund (IMF)
An international agency that functions to:
* ensure the stability of the international monetary system
* promote international monetary cooperation
* lend money to help members in balance of payments difficulties
- usually requires structural adjustment policies (SAP) - internal changes imposed on a country to restructure economy
-> reduce gov spending/intervention (liberalization)
-> eg. privatization, trade liberalization
tied aid
aid on the conidtion that recipient country buys goods from donor country
*Multidimensional poverty index
measures the intensity of poverty by looking at factors outside of income
OECD better life index
factors: housing, income, jobs, community, education, environment, civic engagement, health, life satisfaction, safety, and work-life balance
- quality of life & material living conditions
UN happiness index
measures per capita GDP, ‘healthy life’ expectancy, corruption
happy planet index
(wellbeing x life expectancy x inequality) / ecological footprint
*human development index (HDI)
+ Inequality-adjusted Human Development Index (IHDI)
DIMENSIONS: long and healthy life, knoweldge, decent standard of living
- each component is 1/3
INDICATORS: life expectancy at birth, mean/expected years of schooling, GNI per capita
IHDI - HDI but adjusted by accounting for lvl of inequality in each of these criteria
