Section 4.7, 4.8, 4.9, & 4.10 Vocabulary

Official development assistance (ODA)

Disbursements of loans and grants at concessionary rates by governments.

Non-governmental organizations (NGOs)

A non-government organization that exists to promote economic development and/or humanitarian ideals and/or sustainable development.

Fair-trade

A scheme where products from producers in economically least developed countries can be certified to display the registered Fairtrade mark encouraging consumers to buy them because they know that the producers of the products have been paid a fair price and the products have been produced under approved conditions.

Microfinance

Provision of small loans and financial services to individuals and small businesses in developing countries

Sustainable development

The level of development needed to meet the needs of the present generation without compromising the ability of future generations to meet their own needs.

World Bank

an organization whose main aims are to provide aid and advice to developing countries, as well as reducing poverty levels and encouraging and safeguarding international investment.

International Monetary Fund (IMF)

An organization working to foster global monetary cooperation, secure financial stability, facilitate international trade, and reduce poverty.

Market-oriented policies

An economy is organized so that companies, prices, and production are controlled naturally by the demand for goods and services rather than by government:

Interventionist policies

Is an economic orientation that advocates for government intervention in the market process to correct market failures in the public interest. An economic intervention is any action taken by a government or international institution in a market economy or market-based mixed economy in an effort to impact the economy beyond the basic regulation of fraud and enforcement of contracts and provision of public goods.

Good governance

Governance that demonstrates these 8 major characteristics. It is participatory, consensus oriented, accountable, transparent, responsive, effective and efficient, equitable and inclusive and follows the rule of law. It assures that corruption is minimized, the views of minorities are taken into account and that the voices of the most vulnerable in society are heard in decision-making. It is also responsive to the present and future needs of society.

Empowerment of women

Empowering women to participate fully in economic life across all sectors to build stronger economies, achieve internationally agreed goals for development and sustainability, and improve the quality of life for women, men, families and communities.

Ineffective taxation structure

A country that cannot tax effectively does not receive a steady flow of income, leading to a unusual, unreliable pattern to government spending, eventually leading to a decrease in development projects. The ineffective taxation causes the government to provide little or no basic institutions such as education, infrastructure, effective banking systems and health care.

Corruption

The misuse of public power for personal gains.

Unequal distribution of income

Redistribution of assets often does not happen or does not happen fairly (transparently). If the most important cause of inequality is an unequal distribution of land, natural resources and capital, attempts must be made to redistribute at least some natural resources such as land.

Capital flight

This occurs when money and other assets flow out of a country to seek a "safe haven" in another country.

Brain drain

A loss of trained professional personnel to another company, nation, etc., that offers greater opportunity.

Absolute poverty

The state of people who live on less than $1.25 per day (purchasing power parity), as defined by the World Bank. Generally, such individual are unable to afford the basic necessities of life: food, shelter, education, health, etc.

Heavily Indebted Countries

Are a group of 39 developing countries with high levels of poverty and debt overhang which are eligible for special assistance from the International Monetary Fund (IMF) and the World Bank.

Relative poverty

The state of earning an income that puts one in the lowest income level within his or her own country. Unlike absolute poverty, it exists everywhere, since within even the richest nations a proportion of the population earns relatively less than the top income earners.

Appropriate technology

Where technology caters to the particular economic, social and environmental characteristics of its users.

Debt relief (cancellation)

The act of eliminating the debt owed by an economically least developed country in order to allow it to achieve development objectives.

Development aid

Aid that consists of grants, concessional long-term loans, project aid, and programe aid.

Economic Development

A broad concept involving improvement in standard of living, reduction in poverty, improved health and education along with increases freedom and economic choice.

Economic growth

The growth of the real value of outputs in an economy over time. Usually measured as growth in real GDP.

Economically least developed countries (ELDC's)

Those countries classified by the UN as being "low-income countries confronting severe structural impediments to sustainable development. They are highly vulnerable to economic and environmental shocks and have low levels of human assets".

Export promotion

Strategies based on openness and increased international trade. Growth is achieved by concentrating on increasing exports, and export revenue, as a leading factor in the AD of the economy. Growth in the international market should be translated into growth in the domestic market, over time.

Foreign aid

The international transfer of capital, goods, or services from a country, or international organization, for the benefit of a recipient country and its population.

Foreign direct investment (FDI)

A long-term investment by a multinational corporation in a foreign country, (where the foreign investor owns more than 10% of the domestic company).

Happiness Index

An index which is used to measure the collective happiness and well-being of a population.

Happy Planet Index

An index that combines four elements to show how efficiently residents of different countries are using environmental resources to lead long, happy lives. The elements are well-being, life expectancy, inequality of outcomes, and ecological footprint.

Human Development Index (HDI)

An indicator constructed by the U.N. to measure the level of development for a country through a combination of income, education, and life expectancy.

Human Opportunity Index (HOI)

This index measures how individual circumstances, such as place of residence, gender, and education of the household head, can affect a child's access to basic opportunities such as water, education, electricity and sanitation. It is created by the World Bank.

Humanitarian aid

Aid given to alleviate short-term suffering, consisting of food aid, medical aid, and emergency relief aid.

Import substitution

Strategies to encourage the domestic production of goods, rather than importing them. It should mean that industries producing the goods domestically should grow, as will the economy, and then should be competitive on world markets in the future. The strategies encourage protectionism.

Informal markets

The part of an economy that is neither taxed nor monitored by the government. The activities of the informal economy are not included in a country's national income figures.

Multidimensional Poverty Index (MPI)

An international measure of acute poverty covering over 100 economically least developed countries. It complements traditional income-based poverty measures by capturing the deprivations that each person faces at the same time with respect to education, health and living standards.

OECD Better Life Index (BLI)

An index to compare well-being across countries, based on 11 topics that the OECD has identified as essential, in the area of material living conditions and the quality of life.

Official foreign aid

Aid that is provided to a country by another government or multilateral agency.

Poverty

The scarcity or the lack of a certain amount of material possessions or money.

Poverty trap/poverty cycle

any circular chain of events starting and ending in poverty, such as low income means low savings means low investment means low growth means low incomes.

Property rights

the exclusive, legal authority to own and determine how a resource is used, whether that resource is owned by the government or by individuals.

Sustainability

Meeting the needs of the present generation without compromising the ability of future generations to meet their own needs.

UN Sustainable Development Goals (SDGs)

A collection of 17 global goals set by the United Nations to mobilize efforts to end all forms of poverty, fight inequalities and tackle climate change, while ensuring that no one is left behind.

World Trade Organization (WTO)

An international body that sets the rules for global trading and resolves disputes between its member countries. It also hosts negotiations concerning the reduction of trade barriers between its member nations.

Inequality-adjusted Human Development Index (IHDI)

Adjusts the Human Development Index (HDI) to account for inequalities in the distribution of the three dimensions of human development: a long and healthy life, knowledge, and a decent standard of living.

Gender Inequality Index (GII)

A statistical measure of gender inequality that combines data on reproductive health, empowerment, and labor-market participation.

Mobile Banking

A wireless service that allows financial transactions by using an app or Web browser from a mobile device.