Chapter 2
Divers
Structures and Common Characteristics of Developing Nations
In Chapter 2 key terms are noted
but which are missing? Of those used,
what are their implications, limitations and relevance? For my part, key concepts used in the chapter
break out into:
·
Demographics (biological reality) of which it has been
said “Demography is destiny!”;
·
Economics with its arsenal of metrics, concepts of efficiency, effectiveness and
equity and its materialistic concerns;
·
Politics with its hierarchy of power exercised at the local, regional, national
and international levels; and,
·
Undefined including concepts used but not formally defined by the authors. These include ‘soft’ issues like Culture,
Education, Ethnicity, Language and Religion
Below I list definitions of key
concepts by category and will speak to each.
Demographic
Brain drain The emigration of highly
educated and skilled professional and technical manpower from the developing to
the developed countries.
Crude birthrate The number of children born
alive each year per 1,000 population (a crude birthrate of 20 per 1,000 is the
same as a 2% increase). See also fertility
rate and death rate.
Death rate The yearly number of deaths
per 1,000 population - an annual crude death rate of 15 per 1,000 would involve
1.5% of the population. See also crude
birthrate and infant mortality rate.
Dependency burden The
proportion of the total population aged 0 to 15 and 65+, which is considered
economically unproductive and therefore not counted in the labor force. In many LDCs, the
population under the age of 15 accounts for almost half of the total
population, thus posing a burden to the generally small productive labor force
and to the government, which has to allocate resources on such things as
education, public health, and housing for the consumption of people who don’t
contribute to production.
Fertility rate The yearly number of
children born alive per 1,000 women within the childbearing age bracket
(normally between the ages of 15 and 49 years).
See also crude birthrate. The
total fertility rate (TFR) is the number of children that would be born
to a woman if she were to live to the end of her childbearing years and bear
children at each age in accordance with the prevailing age-specific fertility
rates.
Infant mortality rate Deaths among children
between birth and 1 year of age per 1,000 live births
Malnutrition A state of ill health resulting from an
inadequate or improper diet, usually measured in terms of average daily protein
consumption.
Economic
Absolute poverty A
situation where a population or section of a population is, at most, able to
meet only its bare subsistence essentials of food, clothing, and shelter to
maintain minimum levels of living. See
also international poverty line and subsistence economy.
Foreign exchange Claims on a country by
another held in the form of currency of that country. The foreign-exchange system enables one
currency to be exchanged for (converted into) another, thus facilitating trade
between countries. See also exchange rate
and foreign reserves.
Gini coefficient An
aggregate numerical measure of income inequality ranging from 0 (perfect
equality) to 1 (perfect inequality). It
is measured graphically by dividing the area between the perfect equality line
and the Lorenz curve by the total area lying to the right of the
equality line in a Lorenz diagram. The
higher the value of the coefficient, the higher the inequality of income
distribution; the lower it is, the more equitable the distribution of income.
Gross domestic product (GDP) The total final output of goods and
services produced by the country’s economy, within the country’s
territory, by residents and nonresidents, regardless of its allocation between
domestic and foreign claims. See also gross
national product (GNP).
Gross national product (GNP) The total domestic and foreign output
claimed by residents of a country. It
comprises gross domestic product (GDP) plus factor incomes accruing to
residents from abroad, less the income earned in the domestic economy accruing
to persons abroad. See also national
income.
Human resources The quantity and quality of
a nation’s labor force.
Imperfect market A market where the
theoretical assumptions of perfect competition are violated by the
existence of, for example, a small number of buyers and sellers, barriers to
entry, non-homogeneity of products, and incomplete information. The three imperfect markets commonly
analyzed in economic theory are monopoly, oligopoly, and monopolistic
competition.
Income gap The gap between the incomes
accruing to the bottom (poor) and the top (rich) sectors of a population. The wider the gap, the
greater the inequality in the income distribution. Also, the gap between income per
capita levels in rich and poor nations.
See Gini coefficient.
Income inequality The
existence of disproportionate distribution of total national income among
households whereby the share going to rich persons in a country is far greater
than that going to poorer persons (a situation common to most LDCs). This is
largely due to differences in the amount of income derived from ownership of
property and to a lesser extent the result of differences in earned
income. Inequality of personal incomes
can be reduced by progressive income taxes and wealth taxes. See also Gini
coefficient and Lorenz curve.
International poverty line An arbitrary
international real income measure, usually expressed in constant dollars (e.g.,
$1 per day), used as a basis for estimating the proportion of the world’s
population that exists at bare levels of subsistence.
Labor productivity The level of output per
unit of labor input, usually measured as output per worker-hour or
worker-year.
Levels of living The extent to which a
person, family, or group of people can satisfy their material and spiritual
wants. If they are able to afford only a
minimum quantity of food, shelter, and clothing, their levels of living are
said to be very low. If they enjoy a
great variety of food, shelter, clothing, and other things, such as good health,
education, and leisure, they are enjoying relatively high levels of
living. See development.
Lorenz curve A graph depicting the
variance of the size distribution of income from perfect equality. See also Gini
coefficient.
Low-income countries (LIC5) Countries with a gross national income
per capita of less than $755 in 2000.
Middle-income countries (MICs) LDCs
with per capita income above $755 and below $9,265 in 2000 according to World
Bank measures.
Newly industrializing countries (NICs) A small group of
countries at a relatively advanced level of economic development with a
substantial and dynamic industrial sector and with close links to the
international trade, finance, and investment system (
Physical resources The non-human factors of
production (land and capital) used to produce goods and services to
satisfy wants.
Primary industrial sector The part of
the economy that specializes in the production of agricultural products and the
extraction of raw materials. Major
industries in this sector include mining, agriculture, forestry, and fishing.
Production function A technological or
engineering relationship between the quantity of a good produced and the
quantity of inputs required to produce it.
Purchasing power parity (PPP) The purchasing power of a country’s
currency: the number of units of that currency required to purchase the same
basket of goods and services that a U.S. dollar would buy in the
Resource endowment A nation’s supply of factors
of production. Normally such
endowments are supplied by nature (e.g., mineral deposits, raw materials,
timber forests, labor). See also
factor endowment trade theory.
Secondary industrial sector The
manufacturing portion of the economy, which uses raw materials and intermediate
producer goods to produce final goods or other intermediate
products. Industries such as motor
assembly, textiles, and building and construction are part of this sector.
Tertiary industrial sector The services
and commerce portion of an economy.
Examples of services include repair and maintenance of capital
goods, haircuts, public administration, medical care, transport and
communications, finance, and teaching.
See also primary and secondary industrial sectors and services.
Political
Human Development Index (HDI) An index measuring national
socioeconomic development, based on measures of life expectancy at birth,
educational attainment, literacy, and adjusted real per capita income.
Mixed economic systems Economic systems that are a
mixture of both capitalist and socialist economies. Most developing countries have mixed
systems. Their essential feature is the
coexistence of substantial private and public activity within a single economy.
World Bank An international financial
institution owned by its 181 member countries and based in Washington, D.
C. Its main objective is to provide development
funds to developing nations in the form of interest-bearing loans and
technical assistance. The World
Bank operates with borrowed funds. See International
Development Association