chapter 10: developing countries

divisions of developing countries

middle income countries and lower income countries

middle-income countries

less-developed countries that have experience significant economic growth and democratization

world bank threshold for middle income countries

GDP between $4,000-$13,000

lower-income countries

countries that lack significant economic development/political institutionalization

world bank threshold for lower-income countries

GDP lower than $4,000

world bank threshold for a developed nation

GDP higher than $13,000

empire

single political authority that has sovereignty over a large number of regions/territories, and therefore the people living in those areas

imperialism

when a state imposes its regime onto regions/territories beyond it's borders in order to control the people and resources

colonialism

imperialist system where region/territory is physically occupied through use of settling, relocation of business, or military force

3 C's (challenges) of post-imperialist Economic Development

citizenship, corruption, conflict

3 paths to economic growth

import substitution, export-oriented industrialization, structural adjustments

import substitution

state plays strong role in economy, specifically the restriction of importation

export-oriented industrialization

state encourages economic industrialization through maximizing exports and continued restriction of imports

structural adjustment

state role in economy is decreased; state encourages foreign investment

neocolonialism

indirect form of imperialism where countries have powerful economic influence on less-developed countries

middle-income trap

countries sustain economic growth at a rate that can't compete with more developed countries

3 components of economic liberalization

neoliberalism, structural-adjustment process, Washington consensus

terms of economic liberalization

privatizing state firms, reducing tariffs, promoting foreign investment

informal economy

segment of an economy not regulated, protected, or taxed by the state