CH8 - Global inequality and poverty

what is global inequality?

systematic disparities in income, wealth, health education, access to technology, opportunity, and power between countries, communities, and households around the world

what are some quantitative and qualitative dimensions of global wealth, poverty, and inequality?

much of the world is poor

ten percent of the world lives on less than $1.90 per day

most of these ppl live in developing countries

the wealthiest 1% of the global population hold as much wealth as 6.9 billion ppl

the COVID-19 pandemic may undo the progress that has been made in decreasing this number

T or F: the World Bank categorizes countries based on Gross National Income (GNI) per capita

T

Low income economy countries

Bangladesh, Cambodia, Somalia

Lower middle income economy countries

brazil, belize, lebanon, iran, india

upper-middle income economy countries

south africa, mexico

high-income economy countries

united states, japan, germany, UK

what are the three theoretical perspectives on global inequality?

modernization theory - walt rostow

dependency theory - emmanuel

world system theory

what is modernization theory?

market-oriented development theory that envisions development as evolutionary and guided by “modern” institutions, practices, and cultures

• affluent states have “modern” institutions, markets, and worldviews

• economically underdeveloped states can progress if they adopt Western institutions, markets, and worldviews

what is are the four stages of modernization theory?

stage 1: traditional stage

stage 2: takeoff stage

stage 3: in flight with technological progress and cultural modernity

stage 4: stage of high mass consumption and high living standards

what is the traditional stage of modernization theory?

tradition over innovation

low savings and investment, subsistence over ambition and prosperity, traditional gender roles limit education and economic development for women

what is the takeoff stage of modernization theory?

countries breaking from tradition, embracing economic development, growing practices of savings and investment

what is the “in flight with technological progress and cultural modernity” stage of modernization theory?

technology in agriculture and industry, increasing innovation, less resistance to change, adopting '“modern” cultural values

• progress may take the form in industrialization, which drives greater urbanization

• it may also be accompanied by lower fertility, driven by the increased use of contraception, as opportunities for women grow in education and the labor market

what is the “stage of high mass consumption and high living standards” of modernization theory?

greater emphasis on consumer desires, new affluence, and disposable income

what is a con to modernization theory?

the theory does not ask why some countries are poor, but why some countries are rich

what s dependency theory?

poverty of some countries is a consequence of exploitation by wealthy states (powerful) that control global capitalist system

according to dependency theory, how do multinational corporations function?

multinational corporations reap profits from cheap labor and raw materials of poor countries

what is done with the prices for resources of poor states according to dependency theory?

prices for resources held by poor states intentionally kept low to benefit high-income states

what is the consequence of dependency based on dependency theory?

low-income states unable to develop

maintains dependency relationship with well-off states that buy and exploit labor and raw materials

what is the world systems theory?

global capitalist economic system shaped by a few powerful economic actors who order it to favor their economic and political interests

the world systems theory includes three types of countries/states. what are these?

core countries

peripheral countries

semi-peripheral states

what are core countries?

economically advanced, technologically sophisticated, and well-educated. control majority of wealth and reap greatest benefits

what are peripheral countries?

low incomes, less technology and development; may be agricultural. exploited by core for cheap labor and raw materials

what are semi-peripheral states?

characteristics of both core and peripheral, play intermediate and/or stabilizing role

how does World System’s Theory view international organizations?

they do not affect the fundamental economic positions of core

• most IGOs and INGOs are created by core countries, and will never undermine the dominance of the core

  • IGOs and INGOs tend to perpetuate core dominant

  • ex:WTO has not given big concessions to peripheral countries

what is the global elite?

transglobal class of professionals who exercise economic and political power not limited by national borders

what does David Rothkopf say about the global elites?

the decisions of global elite have impacts on the lives of thousands or even millions of citizens, consumers, and workers

the global elite include corporate executives, presidents, and prime ministers of powerful states and technological innovators

what are plutocrats?

composed largely of working professionals who have made their fortunes rather than inherited them

also have made their fortunes in business, media, or technology