CH2.1 ComparingEconomicDevelopment_E.pdf - Comparative...

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Comparative Economic Development
Chapter 2 In this chapter we present the commonalities and differences among developing countries Consider key differences between conditions in today’s developing countries and those in now-developed countries at an early stage of their development Examine the controversy over whether developing and developed countries are now converging in their level of development We clarify why and how such an equal world remains so persistently unequal We shed light on the positive factors behind recent rapid progress in a significant portion of the developing world
The developing world has made substantial economic development progress in recent years. However, disparities still persist. Output per worker in the United States (around $48,820) is about 10 times higher than in India (around $3,640) and more than 100 times higher than in Democratic Republic of Congo (DRC) (around $340). There are also enormous gaps in measures of welfare Life expectancy is 79 in the US, 65 in India, and just 48 in DRC The percent of underweight children is less than 3% in the US but 43% in India and 24% in DRC. Practically all US women are literate while just 51% are in India and 57% in DRC
How have such large gaps managed to persist and even widen? Why have some developing countries made so much progress in closing these gaps while others have made so little? This chapter introduces the study of comparative economic development.
2.1 Defining the Developing World World Bank Scheme: ranks countries on GNP/capita LICs: Low income countries ($1,025 or less) LMCs: Lower-middle-income countries (between $1,026 and $4,035) UMCs: upper-middle-income countries (between $4,036 and $12,475) High-income Organization for Economic Cooperation and Development (OECD) countries ($12,476 or more) Other high-income countries Developing countries are those with low-, lower-middle, or upper-middle income.
Table 2.1 Classification of Economies by Region and Income, 2013
Table 2.1 Classification of Economies by Region and Income, 2013 (continued)
Table 2.1 Classification of Economies by Region and Income, 2013 (continued)
2.2 Basic Indicators of Development: Real Income, Health, and Education Gross National Income (GNI) The total domestic and foreign output claimed by residents of a country, consisting of gross domestic product (GDP) plus incomes earned by foreign residents, minus income earned in the domestic economy by non-residents Gross Domestic Product (GDP) The total final output of goods and services produced by the country’s economy within the country’s territory by residents and non-residents, regardless of allocation between domestic and foreign claims Purchasing power parity (PPP) Calculation of GNI using a common set of international prices for all goods and services, to provide more accurate comparisons of living standards
Figure 2.1 Nations of the World, Classified by GNI Per Capita Source: Data from Atlas of Global Development , 4th ed., pp. 16-17: World Bank and Collins. 2013.

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