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Development

Development. Poverty. Huge, worldwide, inequality gap The poorest 40% of the world’s population accounts for 5% of global income. The richest 20 percent accounts for three-quarters of world income . The top 20% consumes 86% of the world’s goods and services

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Development

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  1. Development

  2. Poverty • Huge, worldwide, inequality gap • The poorest 40% of the world’s population accounts for 5% of global income. • The richest 20 percent accounts for three-quarters of world income. • The top 20% consumes 86% of the world’s goods and services • Poorest fifth consumes about 1% of world’s goods and services

  3. Global Inequality • The three richest people in the world have wealth that exceeds the combined economic output of the 47 least-developed nations • The world’s richest 200 people together have more money than the combined income of the lowest 40% (2.4 billion people) • About half of the world’s people live on less than $2 a day (the World Bank’s definition of poverty

  4. Global Inequality • Girls and women are disproportionately disadvantaged. Women represent 2/3 of the world’s illiterate people and 3/5 of its poor. • Stemming from cultural practices, food rations are often given to fathers and sons before daughters and mothers, resulting in greater malnourishment and disease.

  5. Why is there global inequality? • Geographic isolation, climate, and natural resources • Power

  6. Gini Coefficient • Used to measure income inequality • Number between 0 and 1 • 0 means perfect equality (all resources are evenly distributed) • 1 means perfect inequality (one person has control of all resources)

  7. Gini Coefficient Australia = .352 Mexico = .546 China = .447 UK = .360 France = .327 US = .408 Germany = .283 India = .325 Japan = .249

  8. Theories of Global Inequality • How does the first world explain global inequality? • Modernization theory • Focuses on deficiencies in poor countries – absence of democratic institutions, capital, technology and initiative • Speculate how to repair deficiencies • Global wealth and poverty are linked to industrialization

  9. Modernization Theory • Rostow’sstages of Economic Development (1960) 1. Traditional society – no change 2. Preconditions for take-off – traditional society challenged 3. Take-off – belief in individualism, capitalism 4. Drive to technological maturity 5. High Mass Consumption

  10. Modernization Theory • Polarizes “tradition” and “modernity” • Looks at global economic integration especially by the International Monetary Find and the World Bank

  11. Theories of Global Inequality • How does the third world explain global inequality? • Dependency theory • Third World countries are exploited by first world countries • Economic growth in advanced countries created third world poverty in its wake

  12. Dependency theory • 16th Century capitalism developed as a global system • Workers produced raw material for export to rich countries • After independence, countries borrowed money from the First World in the 50s and 60s during the Cold War

  13. Dependency theory • Money was given to dictators that went to the military or the dictator’s family • Oil in OPEC countries went to Western Banks and was loaned to Third World countries • Interest rates on the loans went up/OPEC crisis made cost of oil go up

  14. Dependency theory • Countries went into debt to pay off loans and used this money to pay for food for their populations • Success of capitalism depends on labor earnings of third world staying low • Third World does not have economic independence; they give up more than they get back

  15. World Systems Theory • Capitalism is truly a global system that is held together with economic ties • Three types of nations • Core • Semi-Peripheral • Peripheral

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