TOPIC 4: Characteristics of Developing Countries and Global Living Standards

Flashcards covering the ten common characteristics of developing countries and six types of global living standards convergence, based on lecture notes.

Characteristics of Developing Countries

Common traits shared by developing nations, including low levels of living and productivity, low human capital, high inequality and poverty, high population growth, social fractionalization, large rural populations and fast urbanization, lower industrialization, adverse geography, weak institutions, and colonial legacy.

Low Levels of Living and Productivity

A characteristic of developing countries where share of global income and output per worker are typically low.

Low Levels of Human Capital

A characteristic of developing countries involving high child mortality rates and often lower primary enrollment and higher student-teacher ratios.

High Levels of Inequality and Absolute Poverty

A characteristic of developing countries marked by significant disparities in income and a large number of people living in absolute poverty.

High Population Growth

A characteristic of developing countries typically exhibiting high crude birth rates.

Social Fractionalization

A characteristic of developing countries referring to the presence of diverse ethnic, linguistic, or religious groups within a country, potentially leading to social divisions.

Larger Rural Populations and Fast Urbanization

A characteristic of developing countries where a higher percentage of the population lives in rural areas, but also experiences rapid growth in urban populations.

Lower Levels of Industrialization

A characteristic of developing countries indicated by a higher share of employment and GDP (Gross Domestic Product) in agriculture compared to industry and services.

/Adverse Geography

A characteristic of developing countries including factors like being landlocked, exposure to unique tropical diseases, vulnerability to climate change, and north-south continental orientation affecting development.

Weak Institutions and Under-Developed Markets

A characteristic of developing countries indicating a lack of robust 'rules of the game' for economic life, including weak property rights, contract enforcement, and limited provisions for social insurance.

Colonial Legacy and External Dependence

A characteristic of developing countries referring to the historical impact of different colonial regimes and resulting post-colonial institutional quality, often leading to reliance on external powers.

Convergence

The concept of global living standards becoming more similar, where poorer countries catch up to wealthier ones.

Leap frogging

The ability of currently developing countries to catch up to developed countries by rapidly transferring and adopting existing technologies.

Absolute Convergence

A type of convergence where the levels of per capita income of countries become more similar, requiring poorer countries to grow faster than wealthier countries and be sufficiently close to begin catching up.

Relative Convergence

A type of convergence focusing on whether poorer countries are growing faster than wealthier countries, requiring a negative correlation between growth rates and per capita income.

Population Weighted Relative Convergence

A type of convergence that gives more weight to countries with larger populations, prioritizing whether the global population's living standards are converging.

Conditional Convergence

A type of convergence (relative or absolute) that is conditional on specific characteristics such as urbanization levels or existence of certain resources.

World as One Country Convergence

A type of convergence that attempts to estimate the income of everyone in the world, accounting for divergence/convergence within countries.

Sectoral Convergence

A type of convergence that examines whether specific economic sectors, such as manufacturing, are converging across countries.