DEVELOPMENT ECONOMICS

1. absolute a situation where people are so poor that they 20. export promotion an outward-oriented economic growth
poverty cannot meet their basic needs (export-led strategy, based on increased international
growth) trade and less protectionism
2. adult literacy the percentage of people over 15, who can
rate read or write a short statement relating to 21. fair trade an attempt to ensure that producers in
their everyday life developing countries receive fair prices for
selling their products in order to improve
3. aid assistance given to a country that would not
the chances that their work will lead to
have been given through market forces
improve development
4. appropriate capital that is suited to the demographic and
22. financial institutions where lending and borrowing
technology economic needs of the population (existing
markets takes place
factor endowments)
23. financial the services of lending and saving, usually
5. bilateral aid aid given directly by one country to another
services provided by banks
6. capital when there is an increase in the amount of
24. foreign direct long-term investment by multinational
deepening capital for each worker (improves labour
investment (FDI) corporations in other countries
productivity)
25. GDP per capita the total value of all goods and services
7. capital flight when people take money out of a country to
produced in a country divided by the
invest, usually because of high risk or
population
economic / political instability in a country
26. gender related a composite index that combines the HDI
8. capital when extra capital is used with an increased
development along with the differences in HDI indices
widening amount of labour, but the ratio of capital per
index (GDI) between men and women. Inequality
worker does not change (labour productivity
between men and women will result in a
doesn't change)
lower GDI than the HDI
9. child % of population under 15 / % of population 15
27. GNI per capita the total income earned by a country's
dependency to 64
factors of production, regardless of where
ratio (burden)
they are located, divided by the population
10. child the number of children out of 1,000 that die
28. grant aid short-term aid provided as a gift and does
mortality before the age of five
not have to be repaid; includes food aid,
11. corruption the use of power for personal gain medical aid, and emergency aid
12. debt relief the process of forgiving some of all of the 29. Heavily Indebted a program by the World Bank and IMF that
debts of LEDCs to free up money for Poor Countries helps reduce debt levels among the
development goals (HIPC) Initiative poorest countries
13. debt-servicing the payment over time of debt plus interest 30. Human a composite index that measures health
14. de- worsening development conditions Development (through life expectancy), education
development (sometimes brought about by structural Index (HDI) (through the literacy rate and primary /
adjustment policies of IMF) secondary / tertiary school enrolment) and
income (through GDP per capita)
15. development an improvement in standards of living,
including improved health, education, 31. humanitarian aid aid given to improve short-term suffering
freedom, and security usually due to wars or natural disasters

16. development long-term aid given to reduce poverty and 32. import a strategy that says that a country should,
aid improve the welfare of people; should have substitution when possible, produce goods domestically
some part as grant aid (import rather than import them
substitution
17. diversification moving from over-specialization to an industrialization)
increased number of products to produce and
export; reduces the risk associated with 33. income how income is spread among the quintiles
focusing production of a few goods distribution of the population

18. drought when there is not enough rain to sustain food 34. indebtedness the state of being in debt
production 35. infant mortality the number of babies out of 1,000 born
19. economic an increase in the total value of all goods and rate who die before the age of one
growth services produced in the country (increase in 36. informal markets that are not monitored or taxed by
GDP) markets (black governments
markets,
underground
economies)

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37. infrastructure the essential facilities and services that are 51. official aid organized by a governments or multilateral
necessary for economic activity (roads, development agencies and given to governments
sewers, phone, etc.) assistance
(ODA)
38. institutional the structures of human interaction that
factors impact choices and affect the performance of 52. old age % of population over 64 / % of population 15
societies and economies dependency to 64
ratio (burden)
39. International a multinational organization that develops
Monetary Fund global monetary cooperation, secures 53. over- when a country focuses too much on the
(IMF) financial stability by helping members who specialization production of a few goods, increasing the
have balance of payments difficulties, risks to economic growth if there are problems
promotes international trade, promotes high with the production or sale of those goods
employment and sustainable economic growth
54. poverty the state of being extremely poor
40. interventionist government policies that involve an active
55. poverty trap any linked combination of barriers to growth
development role for government in the economy and
(cycle) and development that form a circle
strategies markets to achieve goals; includes trade
protectionism, import substitution, exchange 56. price when the prices of goods changes
rate intervention, regulation and volatility significantly; depending on elasticity, can
nationalization result in significant changes in revenues
earned
41. life the average number of years that a person
expectancy at can be expected to live 57. primary raw materials used for the production of other
birth commodities goods

42. market-led government policies to promote development 58. productivity output per person
development that focus on letting free markets operate to 59. project aid money given for a specific project in a
strategies achieve maximum economic efficiency; country, often targeted at infrastructure
includes deregulation, privatization, free trade
policies 60. property a group of rights that includes the right to
rights own, use, sell and prevent others from using
43. micro-loans small loans, often given to women, that personal assets
(micro credit) enable entrepreneurs to start small
businesses to increase income or accumulate 61. pro-poor economic growth that leads to a fall in poverty
capital growth

44. Millennium eliminate extreme poverty and hunger, reduce 62. purchasing an adjustment to national income data, that
Development child mortality, improve maternal health, power parity considers the prices in various countries so
Goals (MDGs) establish global partnerships for development, (PPP) as to better represent the purchasing power of
achieve universal primary education, promote a level of income
gender equality and empower women, combat 63. relative a situation where people are poor relative to
HIV/AIDS malaria and other diseases, ensure poverty the average levels of income in their country
environmental sustainability
64. Structural policies demanded by the IMF as a condition
45. multilateral aid given by MEDCs to international aid Adjustment for loans to prevent debt default in LEDCs;
aid agencies such as the World Bank and Policies mainly market-oriented reforms like trade
International Monetary Fund (IMF) liberalization, privatization, and balancing
46. multinational a firm that produces goods and services in government budgets through reduced
corporation multiple countries; a source of FDI government spending

47. net enrolment the number of children enrolled in primary 65. sustainable when meeting the needs and wants of people
in primary school divided by the total number of children growth today does not hinder the ability of future
education of primary school age generations to meet their needs and wants

48. non- a currency that is not widely accepted for the 66. tariff a situation where a country may increase
convertible purposes of global exchange escalation tariffs on processed goods, thereby reducing
currency the ability of some countries to add value to
commodities to earn higher revenue
49. non- groups that work to improve development, but
governmental are not a part of government 67. technical aid in the form of training and assistance from
organization assistance experts on projects
(NGO) aid

50. odious debt refers to debt that is taken on by a

government, but not used to help the people;
many believe that odious debt should be
forgiven by MEDCs

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68. Third-World a situation that started in the 1970s where many LEDCs borrowed heavily from Western Banks at low interest rates;
Debt Crisis later these countries found they could not pay back the money, resulting in debt defaults that threatened the
international financial system
69. tied aid grants or loans given to an LEDC, but with conditions that the funds are used to buy goods and services from the donor
country
70. trade justice the idea that trade is conducted in a fair way and that LEDCs should not be forced to lower trade barriers while MEDCs
keep theirs
71. trade the process of removing trade barriers such as tariffs and quotas
liberalization
72. trickle-down where the rich increase incomes and through greater spending improve incomes of low income groups
effect
73. uneconomic when increases in production result in over-use of resources and damage to well-being
growth
74. unofficial aid aid organized by a non-government organization
75. Washington a set of policies that promoted free markets around the world, and include such measures as reducing trade barriers,
Consensus freeing up exchange rates, privatization, and deregulation
76. World Bank a group of organizations that aim to provide aid and advice to LEDCs to reduce poverty levels, mainly in the form of low-
or no-interest loans and technical advice

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