comp gov unit 5: political and economic changes and development

Austerity Measures

are governmental budget cuts and/or tax increases intended to decrease budget deficits and national debt. These are often required for IMF emergency loans.[

Developing countries

are sovereign states in various stages of achieving economic advancement that have lower standards of living that developed countries; also known as Less Developed Countries (LDCs)[

Economic Diversification

occurs when a country is able to obtain economic balance between agriculture, manufacturing and service without over dependence on one commodity or economic sector[

Economic Globalization

includes economic networks that are growing more interconnected, a worldwide market with actors unconstrained by political borders, and a reduction in state control over economies[

Environmental Degradation

is a term that refers to the environmental problems created by industrialization and other forms of economic development[

Foreign Direct Investment

is money invested in private businesses by individuals or a corporation outside of the country that can pose a challenge to a government’s foundational economic and political ideas and principles[

Import Substitution Industrialization (ISI)

refers to the policies aimed at reducing foreign dependency by raising tariffs and encouraging local production of industrialized products[

International Monetary Fund (IMF)

exerts great influence through preconditions for financial assistance. Countries that receive IMF assistance often must agree to structural adjustment programs requiring privatization of state-owned companies, reduced tariffs, and reduced governmental subsidies of domestic industries. This organization could be considered supranational for countries that have to give up some sovereignty over economic policies in order to receive aid from this group.[

International Organizations

are organizations joined by member states with a common interest such as the International Monetary Fund (IMF), the World Bank, and the United Nations[

Multinational Corporations (MNCs)

are businesses with a large presence in countries in different regions of the world. MNCs increasingly dominate global markets and pose challenges to, and sometimes conflict with, domestic economic policies regarding labor, the environment, land rights, taxation, and the budget.[

Nationalization

refers to government-owned industries run without free-market forces[

Privatization

occurs with the conversion of government-owned industries to businesses run with free-market forces that owned and operated by private investors[

Purchasing Power Parity (PPP)

is a method of calculating the value of a country’s money based on the actual cost of buying goods and services in that country rather than how many U.S. dollars they are worth[

Rentier States

are countries that obtain a sizable percentage of total government revenue from the export of oil and gas or from leasing the resource to foreign countries and have been able to raise standards of living and fund governmental programs based on their huge reserves[

Resource Curse

occurs when countries that rely too heavily on the export of commodities face negative economic, political, and environmental consequences[

Structural Adjustment Programs

are neoliberal reforms often required by international organizations granting emergency loans to countries that require privatization of state-owned companies, reduced tariffs, and reduced governmental subsidies of domestic industries[

Subsidies

refers to government funding made to support domestic industries against foreign competition or to shape economic behaviors[

Supranational Organizations

are organizations in which member states grant the governing organization sovereignty over policies typically related to trade such as the Economic Community of West African States (ECOWAS), the European Union (EU), and the World Trade Organization (WTO)[

Tariffs

are taxes imposed by a government against imported goods[