Economic Development Overview

These flashcards cover key concepts related to economic development, measurement, and policy approaches.

What is development?

Development refers to the process of economic growth and social progress in a society.

How is development traditionally measured?

Traditionally, development is measured by economic indicators, particularly Gross Domestic Product (GDP).

What is Modernization Theory?

A theory that suggests traditional economies and societies undergo stages of development toward modernization, typically modeled after US and European economic structures.

What is Sustainable Development?

An approach to development that prioritizes individual well-being and considers social, economic, and environmental sustainability.

What is the Human Development Index (HDI)?

A summary measure that evaluates key dimensions of human development through health, education, and standard of living.

What is the GINI Index?

A measure of income inequality within a population, indicating the distribution of income among individuals.

What is comparative advantage?

The economic theory that countries should produce and export goods they can make the most efficiently, while importing other goods.

What is Protectionism?

An economic policy that restricts imports from other countries through tariffs and other measures to protect domestic industries.

What is Import Substitution?

An economic strategy aimed at self-reliance by promoting domestic production to reduce dependency on foreign imports.

What is Foreign Direct Investment (FDI)?

Investment made by foreign firms in another country's economy, typically through building or acquiring factories.

What is the Washington Consensus?

A set of ten economic policy recommendations for developing countries advocating free markets, trade, and a limited role for government.

What is Export-led Growth Model?

An economic strategy where governments guide the economy to promote exports while protecting certain industries through subsidies.

What is Free Trade?

An economic policy that aims to eliminate barriers to trade between countries, allowing goods and services to flow freely without tariffs or quotas.

What are some core principles of the Washington Consensus?

Its core principles included fiscal discipline, privatization of state-owned enterprises, deregulation, and trade liberalization.

What are potential benefits of Foreign Direct Investment (FDI) for a host country?

Potential benefits include capital inflow, technology transfer, job creation, and increased competition stimulating local businesses.