Development: Measurements

1. Development: Measurements Measuring what, how, and where wealth is produced Development implies progress in technology, production, and socioeconomic well-being (not necessarily happiness) Gross National Product (GNP): total value of officially recorded goods & services produced, inside and outside a country’s territory Gross Domestic Product (GDP): total value of officially recorded goods & services produced inside a country’s territory

2. Development: Measurements Gross National Income (GNI): monetary worth of all products + investment income – payments to other countries Per capita GNI: GNI / population Includes only formal economy Informal economy: uncounted or illegal economy, not taxed or recorded Masks extremes of wealth/poverty within a country (e.g., UAE)

3. Development: Measurements GNI also measures only outputs, cost to environment or health Other ways to measure development: % of workers in certain fields (technology, food production Transportation & communication facilities per person Infrastructure per person Dependency ratio: number of supported dependents Various statistics (e.g., literacy, infant mortality, savings, etc.)

4. Development: Models “Development” has possible western bias Rostow’s Modernization Model: based on economically powerful countries 1: traditional (subsistence farming) 2: preconditions for takeoff (new leadership, openness, flexibility) 3: takeoff: (a kind of industrial revolution 4: drive to maturity (technology, specialization, international trade)

5. Development: Models Rostow’s Ladder of Development: criticisms and limitations Fails to take into account context: not every country’s experience the same Making “industrialization” the ultimate goal doesn’t take into account the negative effects of, for example, too rapid industrialization

6. Development: Theories Neocolonialism: major world powers continue to control economies of politically independent poorer countries (e.g., diamonds in South Africa) Structuralist Theory: fundamental economic structures can’t be changed quickly Dependency Theory: poorer countries remain dependent upon wealthy nations Dependency established during colonialism Dollarization: change to U.S. currency means that a nation is dependent on monetary policies of U.S. government

7. Development: Theories World-Systems Theory: not all places can be equally wealthy in a capitalist economy Socio-economic change occurs differently in different places Capitalism ensures that the powerful will always seek to dominate the less powerful Core-periphery relationship can exist in regions, within countries, etc.

8. Development: Goals & Barriers UN Human Development Index: long and healthy life, knowledge, decent standard of living Millennium Development Goals: 2015 Social Conditions Barriers: Birth rates, nutrition, many dependents, poor health care, sewage and water, lack of education access especially for girls Trafficking: adults and children manipulated into conditions they don’t choose

9. Development: Goals & Barriers Foreign Debt barrier: strings attached to loans IMF and World Bank Structural adjustment loans: loans required reforms (privatization, foreign trades, reduced tariffs, foreign investment) Repaying principal plus interest may be higher than revenues Neoliberalism: government intervention into markets should be resisted = privatization Loan defaults decrease the chance of future foreign investment

10. Development: Goals & Barriers Disease: vectored (spread by host and intermediate host) in hot, humid places Malaria: infant and child mortality, one million die each year, mosquito-killing drugs cause cancer, attempts today at genetic interference Political corruption: worsened by poverty (is wealth necessary for democracy?) Peripheral countries: less chances of democracy and elections Economic instability = political instability (e.g., Afghanistan, Zimbabwe)

11. Development: Costs Export Processing Zones (EPZ): favor foreign investors with tax breaks, de-regulation, trade incentives Maquiladoras (Mexico) / special economic zones(China) Wealthier nations take advantage of these zones for cheap labor, lower taxes, etc. NAFTA

12. Development: Costs Agriculture: large-scale, modernized agriculture produced for foreign consumption Most farms are small subsistence level with low protein crops Desertification: results from misuse of soil and erosion, and overgrazing Africa hardest hit by desertification

13. Development: Costs Tourism: strains countries supply system, control by multinational corporation, strain on infrastructure Creates low-paying jobs Can debase culture, dehumanize workers, privilege “resort” areas Natural disasters can stop flow of tourists, disrupt economies

14. Development: Institutional Influence What contributes to the great disparity between wealth and poverty Government’s role: control tariffs, taxes, trade, land ownership, environmental laws, etc. In the U.S., individual states have different laws and policies that affect development (e.g., providing educational opportunities)

15. Development: Institutional Influence Islands of Development: governments often prioritize creation of wealth in capital cities Some governments move colonialist capital to new location to improve economic development in interior regions (e.g., Brazil) or to break ties with the past (e.g., Malaysia) Corporations also influence development through placement of subsidiaries (e.g., Gabon) Nongovernmental Organizations (NGOs): non-profit, unregulated funds Mircocredit program: loans to poor and women, develop small businesses (least successful in most impoverished, diseased regions)