Development: Causes of Wealth and Poverty

Flashcards covering the causes of wealth and poverty, factors affecting development, and development policies.

Geography

Can affect development through factors like being landlocked, prevalence of diseases, distance from major markets, and location in the tropics.

Natural Resources

Can impact development; abundance may lead to the natural resource curse, while scarcity may drive economic productivity.

Economic Infrastructure

Includes roads, railroads, airports, utilities, and ports that facilitate trade and exchange.

Financial and Monetary Systems

Systems that enable payments and investments, crucial for economic development.

Social Infrastructure

Includes public health, sanitation, education, and urban planning, which support economic activities.

Property Rights

Protection of property rights encourages investment and economic growth.

Representative Political Institutions

Give weight to public concerns, provide public goods like education and healthcare, and ensure equitable distribution of land.

Resource Curse

Abundance of natural resources can lead to focus on exporting commodities, lower investment in people, and poverty.

International Trade

Trade can benefit both rich and poor countries through stable and well-functioning systems.

Import-Substituting Industrialization (ISI)

A strategy to reduce imports, encourage domestic manufacturing, and move away from primary goods production.

Export-Oriented Industrialization (EOI)

A strategy that encourages manufacturers to produce for foreign consumers through low-cost loans, tax breaks, and weak currency.

Foreign Aid

Aid can be misused, but targeted interventions combined with policy changes can effectively boost development.

Colonialism and Development

Areas difficult to colonize often developed extractive institutions leading to worse development outcomes, while areas easy to colonize saw better enforcement of property rights and development.

Human Development Index (HDI)

A summary measure of key dimensions of human development: a long and healthy life, a good education, and a decent standard of living.