Introducing Economic Development: A Global Perspective

Vocabulary flashcards covering key concepts from the lecture notes.

Development

A comprehensive process that improves the overall well‑being of a society, combining economic growth with advances in education, health, infrastructure, and living standards.

Economic growth

An increase in a country’s output of goods and services, typically measured by GDP growth.

Gross National Income (GNI)

Total income earned by a nation’s residents, including GDP plus net foreign factor income.

GDP

The market value of all final goods and services produced within a country in a given period.

Atlas method

World Bank approach for classifying countries by income per capita, smoothing exchange-rate fluctuations when computing thresholds.

Lower-Middle-Income Countries (LMCs)

Countries with GNI per capita between $1,036 and $4,045; economies in transition with rising urbanization and industrialization.

Upper-Middle-Income Countries (UMCs)

Countries with GNI per capita between $4,046 and $12,535; increasingly diversified economies.

High-Income Countries (HICs)

Countries with GNI per capita above $12,535; advanced economies with high living standards.

Extreme poverty

Living on less than $1.90 per day (PPP); lacking basic services and often in rural areas of LICs.

Near poverty

Income around $3.80 per day; vulnerable, often in informal work with limited access to basic services.

Hans Rosling’s Four Strata

A framework dividing global living standards into Extreme Poverty, Near Poverty, Lower-Middle, and High Income strata to reflect real conditions beyond GDP per capita.

World Bank poverty lines (updated 2025)

Thresholds for poverty: Extreme poverty $1.90/day (PPP); updated lines include $3.00/day, $4.20/day, and $8.30/day.

Remittances

Funds sent by residents working abroad back to their home country; a component of net foreign income.

Net Foreign Income

Income residents earn from abroad minus income foreigners earn domestically; added to GNI.

Amartya Sen

Economist who developed the Capability Approach, focusing on freedoms and capabilities as the basis of development.

Capability Approach

A framework that defines development as expanding people’s capabilities and freedoms to lead valued lives.

Capabilities

Freedoms to achieve valued states of being and doing (functionings).

Functionings

Actual achievements or states of being and doing, such as being nourished or educated.

Beings and Doings

Sen’s idea that well-being comes from capabilities (beings) and functionings (doings) together.

Multidimensional poverty

Poverty that includes lack of health, education, basic rights, political voice, and social stigma, not just income.

Gini index

A measure of inequality within a country; higher values indicate greater inequality.

Life expectancy

The average number of years a newborn is expected to live; e.g., Sub-Saharan Africa around 62.6 years in 2023.

GNI vs GDP

GDP measures domestic production; GNI adds net income earned by residents from abroad.

Sustainable Development Goals (SDGs)

17 global goals to end poverty, protect the planet, and ensure prosperity for all.

Gross National Happiness (GNH)

Bhutan’s development measure focused on well‑being across multiple domains, not production alone.

Easterlin paradox

Happiness rises with income within a country but not necessarily between countries at higher income levels.

Happiness and development

Well‑being is shaped by health, education, freedom, relationships, and trust; income has diminishing returns after basic needs are met.

Gender equality

Empowering women improves health, education, and economic outcomes; central to sustainable development.

Gender pay gap

Difference in earnings between men and women; historically around 0.77 of men’s earnings in many contexts.

Education and skills in development

Education improves marriage timing, health, and community outcomes; empowerment of women is key.