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What is development ? What is the finality of development? expectancy measured GDP political single economic indicators well-being rate Development is more than just about economic progress. It includes a series of social, political and cultural considerations. There is no single, universally recognised way in which a country’s level of economic development can be measured with any real precision. Rather, there are a variety of which we can use to gauge the relative indicators of a country’s inhabitants. These fall into two broad groups – monetary and non-monetary (or social) indicators, including GDP per capita, life expectancy and a country’s literacy rate Indicators of development include: purchasing power parity GDP per capita (PPP GDP per capita) daily calorie supply per capita adult literacy rate educational enrolment: primary, secondary and tertiary education number of doctors per thousand inhabitants female activity rates access to clean drinking water -(UNDP: improved water sources) energy consumption Constraints on development Poor natural resources Geographic isolation Foreign Debt Dependency on export commodities War and Political unrest Educational backwardness The Aids “pandemic” in Southern Africa Development theory has gone through numerous phases: basic intensive linear agricultural value Neo-classical economic theory tends to treat development as a linear process, following the model of the industrialised world. Countries manage to expand agriculture production and so generate surplus resources (food and labour) which can be invested in basic industries. Traditionally these include textiles and heavy industries such as iron and steel, shipbuilding etc, which are labour intensive . Then, countries seek to develop higher value -added activities. channel challenged planning In the first three decades after WWII, this model was ____________ for a number of reasons. Some were linked to the success of Soviet central ________ , which promised the possibility of accelerating growth and development through the use of centrally controlled plans to ___________ resources into growth sectors. commodities protected terms of trade dependency critiques underdevelopment Other critiques of the neo-classical model were based on the notion of “Third World” dependency . According to this theory, the international division of labour led to a process of underdevelopment, as Third World countries were pushed into producing commodities, whose terms of trade had a long run tendency to deteriorate. Such countries therefore became steadily poorer. To remedy this, a number of governments, especially in Latin America, adopted “Import Substitution Strategies”, which protected home markets from foreign competition. export-led growth pioneered strategy This development strategy was not very successful, especially when compared to the export-led growth and development strategies pursued in Asia. These were pioneered by Japan, which experienced rapid growth for decades after WWII. durables expanding regulated Thanks to a concerted national effort to export products into expanding international markets: first textiles and ships, and then consumer durables (cars and consumer electronics). Similar policies were adopted throughout Asia. It was significant, however, that national markets were kept closed or tightly regulated at the same time. alignment implement influence integration The 1980s saw the start of a fairly broad alignment of development policies onto the export-led model, and in favour of economic integration into the world economy. This policy was partly pushed by the Bretton Woods institutions, which gained great influence in the developing world due to their management of the “Third World Debt Crisis”, and by a general move across the world to implement(outil, instrument)trade liberalisation policies. Noami Klein , The shock Doctrine, 2008. Paralled to shock therapy in psychiatry disorganises the brain and is meant to help patients restructure their personalities political repression ( including torture unsing electronic shocks). Chili : Pinochet regime. Neo-liberal policies after allend's socialist experiment. Chicago boys privatisation cuts in welfare spending etc. Neo liberalism imposed by force in the developing world in the transition countries : shock therapy to impose a market economy. Klein similar neo liberalism privatisation at all State functions, extreme forms, the privitisation of the war in Irak ( private security, firms, necessaries). The privatisation of the reconstruction of new Orleans, Katrina 2005. disaster capitalism Private interests benefiting from natural disasters, wars, security pb severe weakening of the public domaine.
Course 10: Poverty and Inequality
Definitions of poverty :
Working and poor in the United States
nationwide trend joblessness rate living rose income line slowdown decades
In 1979, with an unemployment rate over 7 percent nationwide the poverty rate among all workers was 5.7 percent. In the following two decades, the rate of unemployment fluctuated considerably, rising in the early 1980s, then falling, before rising again during the early 1990s. Thereafter, the rate of unemployment fell until the slowdown in US growth during the early 2000s. In the mid-2000s boom, unemployment fell again. But with the current crisis it has risen to about 10% of the working population.
During the same period, the number of people in poverty followed the trend in joblesness, oscillating between 30 and 40 million. In 2008, there were 39.8 million people living at or below the official poverty
Income line, equivalent to 13.2% of the population. This compares to 39.5 million people who were living in poverty in 1959, or 22.4% of the population at that time. These figures suggest that a large number of people are both working and poor.
Absolute poverty in the developing world
One measure of poverty refers to people living on less that $1.25 (PPP 2005).
Developing constant extreme living
According to the World Bank, extreme poverty has declined in developing countries since the early
1980s. The number of people in the developing living on less than $1.25 a day fell from 1,900 million (or 51.9%) in 1981 to 1,374 million (25.2 percent in 2005). (Source WB Development Indicators, 2010!)
planning regional transition global Saharan
In contrast, the number of people living on less than $2 (PPP 2005) per day rose from 2,542 million in 1981, to 2.,875 million in 1999, before falling to 2,564 million people in 2005 (equivalent to 47.0% of the population living in the developing world).
These global figures, however, hide quite strong differences in regional developments. Thus, the
absolute number of people living on less than $2 per day has fallen strongly in East Asia (including
China). But it rose strongly in Europe and Central Asia, during the 1990s, after the transition from
Soviet central planning , before falling in the early 2000s. The absolute numbers of people living on $2 have also remained quite high, but falling in the Middle East & North Africa, very high in South Asia
(including India), and also in sub- saharan Africa.
Text based on “One third of the world’s urban population lives in a slum” by Simon Whelan
World Web Socialist Web, 17 February 2004
dweller slums billion tenure
In its report “The Challenge of Slums” published late 2003, UN-Habitat estimates that one ____ people, about a third of the world’s urban population, live in______ and in absolute destitution, without water or sanitation, public infrastructure or security of _____ . There are at least 550 million slum ______ in Asia, 187 million in Africa, 128 million in Latin America and the Caribbean and a further 54 million in the world’s richest 30 countries.
inhabitants rural misery urban
Such extreme poverty was once mainly found in ____ areas, but rapid ____ growth in developing
countries is leading to exploding urban poverty. During the 1990s alone, the world’s city ______
increased by 36 percent, and UN-Habitat has predicted that in 30 years as many as two billion people will be living in such ____ .
process inertia wealth poor
The UN agency attributes considerable responsibility for these conditions to the _____ of national
governments and the neo-liberal globalisation _____ which has been encouraged over the last three
decades by international institutions like the IMF and the WTO. The _____ created by deregulated
markets remains highly concentrated and has not “trickled down” to many of the world’s ____ .
proletariat living free shortage provision foodstuffs logistical
Such ____-market policies, demographic growth and rural-urban migration are leading to the rapid
growth of a global ____ which is completely failing to benefit from globalisation. At the end of 1998, the UN Food and Agriculture reported that up to 1 billion people experienced severe malnutrition and food _____ , with workers using up to 80% of their income to buy food. In fact, urban food prices in Africa and Asia are rising faster than the cost of _____ and wages, and even the food available is often contaminated or rotten, especially as 30% of all _______ are inedible as a result of infrastructural problems. A major conglomeration of over 10 million people, for example, needs approximately 6000 tonnes of food per day, which clearly represents significant _____ problems that market forces alone cannot handle. Proper distribution requires good public infrastructures, which rely significantly on extensive and effective public _____ .
affordable inequalities congestion consumes periphery surviving
But the opposite is happening and the expansion of cities has been accompanied by deteriorating
infrastructure. Poor public transport pushes people to use cars and taxis, leading to immense ______
problems and pollution. For people living on the ______ of major cities, commuting accounts for a large share of their day and ______ their income.
The 1990s witnessed unprecedented social ______ emerge, and while decent, ______ housing is a basic requirement of human well-being, millions, if not billions of people across the globe live in completely inhuman conditions. Even in Europe, historically the continent that founded the welfare state, 6.2 percent of the population live in slums, ______ on exceedingly little.
insurance entitlements systems fund
Welfare __________ are historically based on two different models. The first is the “Bismarckian
model”, developed in Germany at the end of the 19th century. To reduce support for communism and socialism, Bismarck introduced a system of social ____________ to protect workers against accidents, sickness and old-age. The key characteristic of this system was (and is) that ____________ depend on workers/employees contributing to a social insurance ______ . Only people who contribute receive benefits.
pension partners Health pay coverage professions contribute high
This type of social insurance is still prevalent in Germany and in France today. _________ insurance, unemployment ______ , and __________ schemes are run by the social _________ in a wide range of social-security funds, often linked to specific _________ . In periods of full-employment, such schemes cover nearly the whole population. However, in times of _____ unemployment, unemployed people may lose their insurance _________ , because they no longer ________ to a fund.
Citizens universal premium state contributions free support
The second historical model of the welfare ___________ follows from the Beveridge report on “Social insurance and allied services”, published in 1942. The report is based on two fundamental principles. The first is that welfare ___________ should be ___________ and flat-rate: it should be available to all citizens (or residents). This has been notably the case of the UK’s National Health System, in which services are delivered “______at the point of use”. The second principle is that the welfare system should take the form of a collective insurance system. To strengthen the political legitimacy of the system, Beveridge insisted that ____________ should be presented as a form of “insurance _________”, which all working _________ must pay, and which gives each the right to a minimum, flat-rate benefit.
Regimes democratic minimal typology formulated redistribution transfer
A more recent, and highly-influential ___________ of welfare states in advanced capitalist countries was
___________ by Esping-Andersen in his study ‘Three Worlds of Welfare Capitalism’ (1990). He
distinguishes between social ____________, conservative and liberal welfare regimes:
1.social democratic ___________ , as in Scandinavia, are based on a high level of welfare support,
and also act to ____________ wealth;
2.conservative welfare regimes, such as those in Germany and France, involve individual insurance
and little __________ of resources between social classes;
3.liberal regimes, with the lowest level of support, provide _________ benefits. They are typically
found in Southern Europe and the United States. Britain has moved from the first to the third
category since the early 1980s.
For N. Barr, the Welfare State should...: match
Efficiency (match the term and the definition)
1. Macro efficiency a) the organisation of benefits should minimise adverse effects on labour
2. Micro efficiency b) a certain fraction of GDP should be allocated to welfare, to avoid
distortions and cost explosions
3. Incentives c) policy should ensure the efficient division of total welfare state
resources between different types of benefits
Supporting living standards
4.Poverty relief d) nobody should face unexpected and unacceptable cuts in living
5. Protection of accustomed living
e) no individual or household should fall below a minimum
standard of living
6. Income smoothing f) institutions should enable individuals to reallocate consumption
over their lifetime
7. Vertical equity g) involves redistributing income to poorer families
8. Horizontal equity h) differences in benefits should take into account age, family
9. Dignity i) benefits should foster a sense of community
10. Social solidarity j) benefits should be delivered so as not to humiliate recipients
11. Intelligibility k) the system should be easy to understand
12. Absence of abuse l) benefits should not be misused
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