Lesson 11

Less Developed Countries

Countries at a relatively low level of economic development.

infrastructure

Basic structures necessary for social activity, such as transportation and telecommunications networks, and power and water supply

Infrastructure Context

a way that domestic factors can affect development. Can be compared with other government policies like the rule of law and regime type which also are domestic factors that can affect development

Primary Products

Raw materials and agricultural products, typically unprocessed or only slightly processed. The primary sectors are distinguished from secondary sectors (industry) and tertiary sectors (services).

Primary Products Context

a way international trade affects development; can be compared with oligopoly and terms of trade

Oligolopy

A situation in which a market or industry is dominated by a few firms.

Oligolopy Context

A way international trade affects development; can be compared with primary products and terms of trade

Terms of Trade

The relationship between a country’s export prices and its import prices

Terms of trade Context

A way international trade affects development compared with primary products and oligopoly

import-substituting industrialization (ISI)

A set of policies, pursued by most developing countries from the 1930s through the 1980s, to reduce imports and encourage domestic manufacturing. often through trade barriers, subsidies to manufacturing, and state ownership of basic industries

Import-Substituting Industrialization(ISI) Context

During the 1930s to 1980s, developed countries were at war and could not be concerned with the well-being of developing countries. To combat this, developing countries looked inward to spur economic growth without help of developed nations. This can be compared to EOI. did not work well

export-oriented industrialization (EOI)

A set of policies, originally pursued starting in the late 1960s by several East Asian countries, to spur manufacturing for export, often through subsidies and incentives for export production

Export-Oriented Industrialization (EOI)

During the late 20th century the East Asian Tigers such as China, South Korea rapidly exported technology to spur development in response to developed countries inability to support them. This can be compared to ISI. Worked well

Washington Consensus

An array of policy recommendations generally advocated by developed-country economists and policymakers starting in the 1980s. including trade liberalization, privatization, openness to foreign investment, and restrictive monetary and fiscal policies.

Washington Consensus Context

Relates to globalization as it facilitated economic globalization by promoting free markets and financial integration, but also sparked debates on its role in deepening global inequalities. Also relates to LDC’s as they are the ones that implemented these policy recommendations

Group of 77

A coalition of developing countries in the United Nations, formed in 1964 with 77 members; it has grown to over 130 but retains the original name.

Group of 77 Context

After WWII African, Asian, and Caribbean countries banded together to create the non-aligned movement, pledging not to ally themselves with the American lead west or Soviet lead east. Eventually these relations gave rise to the group of 77. Relates to other international cooperation organizations like NATO.

Commodity Cartels

Associations of producers of commodities that restrict world supply and thereby cause the price of the goods to rise

Commodity Cartels Context

Relates to globalization by influencing global trade flows, prices, and economic stability through coordinated production and pricing strategies. Relates to LDC’s as they attempted to create commodity cartels to make up for international inequalities

Infrastructure Examples

Transportation, Hospitals, roads, schools, telecommunication networks

Primary Product Examples

Cocoa, Beans, Maize, Rice

Oligopoly Example

In the video game industry microsoft, sony, and nintendo dominate the market

Commodity Cartel Example

OPEC