EconDev Ch. 2

What does PPP do?

Adjusts incomes for price differences across countries.

PPP

Purchasing Power Parity

Why use PPP in poverty measurement?

To adjust for price differences across countries, ensuring comparability of income/consumption .

SWIFT

Survey of Well-being via Instant and Frequent Tracking

What is SWIFT used for?

Uses mobile tech & big data to frequently measure poverty and well-being .

What does the Gini coefficient measure?

Income inequality; values closer to 1 = more unequal. Over 0.40 = “high inequality”

Why can two countries with the same Gini differ greatly?

Because underlying income distributions can vary widely .

HDI

Human Development Index

HDI Use

a composite statistic used to evaluate a country's development based on three key dimensions: health, education, and standard of living

What three dimensions does HDI measure?

Health (life expectancy), Education (mean & expected years of schooling), Standard of Living (GNI per capita in PPP)

IHDI

Inequality-adjusted Human Development Index

What does IHDI adjust for?

Accounts for inequality in distribution of health, education, and income .

GII

Gender Inequality Index

What are the three dimensions of the GII?

Reproductive health

Empowerment

Labor market participation .

GII Range and Interpretation

• 0 to 1 


• 0: women and men fare equally across all measured components. 


• 1: maximum disparity—one gender fares as poorly as possible in all dimensions. 

GSNI

General Social Norms Index (GSNI)

GSNI Uses

quantifies biases against women by measuring attitudes in the population

Four Dimensions of GSNI

Political

Educational

Economic

Physical Integrity

GDI

Gender Development Index

GDI Uses

measures gender inequalities in achievement

GDI Dimensions

Health

Education

Command over economic resources

MPI

Multidimensional Poverty Index

What does MPI measure?

Poverty across multiple dimensions: education, health, living standards.

What are extractive institutions?

Systems designed for resource extraction and control, associated with poor long-term growth.

What are inclusive institutions?

Systems that protect property rights and encourage investment, associated with better growth.

What does dependency theory argue?

Colonialism created “feeder economies” dependent on imperial metropoles.

How does structuralism view colonial impact?

Argues colonial structures locked the South into underdevelopment.

ISI Meaning

Import Substitution Industrialization

ISI use

economic policy where a country promotes its domestic industries to replace foreign imports, achieved through policies like high tariffs, import quotas, and subsidies to foster self-sufficiency and reduce dependency on developed nations. 

What is ISI?

A post-independence policy replacing imports with domestic production.

SAPs

Structural Adjustment Programs

What were SAPs?

World Bank/IMF-imposed reforms in developing nations, often criticized for worsening inequality .

What is the World Bank’s mission?

Reduce poverty by financing development and providing research/policy advice.

Entities under World Bank Group

IBRD

IDA
IFC

MIGA

ICSID

IBRD

International Bank for Reconstruction and Development

What does IBRD do?

Provides loans to low- and middle-income countries.

IDA

International Development Association

What does the IDA provide?

Finance to low-income countries, often at zero or very low interest.

IFC

International Finance Corporation

What is IFC’s role?

Supports private sector investments in developing nations.

MIGA

Multilateral Investment Guarantee Agency

What does MIGA do?

Provides guarantees / insurance to private investors in foreign (developing) countries to reduce political risk.

ICSID

International Centre for Settlement of Investment Disputes 

What does ICSID handle?

Dispute resolution between states and private investors.

WDI

World Development Indicators

What is WDI?

World Bank’s leading compilation of development data across countries.

UNDP

United Nations Development Programme

What does the UNDP Data Center provide?

Global, regional, and country data aligned with SDGs, covering HDI, gender, poverty, planetary pressures .

What is the demographic dividend?

Boost in growth when working-age population increases relative to dependents.

What are the three categories in World Systems Theory?

Core (wealthy)

Semi-periphery (transitioning)

Periphery (poor, dependent).

What do “growth miracles” (e.g., East Asia) show?

Poverty is not destiny; with strong institutions and incentives, rapid growth is possible