0891 29 NA 38 Argentina 48 Costa Rica 61 Saudi Arabia

0891 29 na 38 argentina 48 costa rica 61 saudi arabia

This preview shows page 652 - 655 out of 747 pages.

0.891 29 NA 38 Argentina 0.869 36 4.1 48 Costa Rica 0.846 47 4.4 61 Saudi Arabia 0.812 70 NA 67 Russian Fed. 0.802 59 NA 70 Brazil 0.8 60 9.7 78 Thailand 0.781 71 10.0 81 China 0.777 73 11.7 84 Turkey 0.775 79 9.2 90 Philippines 0.771 77 15.3 94 Iran 0.759 84 12.9 101 Jamaica 0.736 90 14.3 105 Viet Nam 0.733 91 15.2 114 Mongolia 0.7 100 NA 117 Bolivia 0.695 103 13.6 126 Morocco 0.646 112 33.4 128 India 0.619 113 31.3 135 Ghana 0.553 117 32.3 136 Pakistan 0.551 125 36.2 148 Kenya 0.521 127 30.8 154 Uganda 0.505 132 34.7 156 Senegal 0.499 135 42.9 173 Mali 0.38 151 56.4 638 PRINCIPLES OF MACROECONOMICS
Image of page 652
HDI rank Country Human Development Index (HDI), 2005 Gender-Related Development Index (GDI) 2005, Rank Human Poverty Index (HPI), % 2005 177 Sierra Leone 0.336 157 51.7 Source : United Nations Development Program, Human Development Report 2007/2008 (New York: Palgrave Macmillan, 2007). Key Takeaways The World Bank classifies countries as being low-income, middle-income, or high-income. More than 80% of the world’s people live in low- and middle-income countries. Among the problems facing low-income nations are low living standards, inequality, inadequate health care and education, high unemployment, and the concentration of the labor force in low- productivity agricultural work. Economic development is a process that generates sustained and widely shared gains in per capita real GDP. Try It! Provided below is information about two low-income developing countries in Western Africa, Côte d’Ivoire, and Guinea. Use the information to plot their Lorenz curves for consumption, which are similar to Lorenz curves for income distribution, discussed in the chapter on inequality, poverty, and discrimination. Then, based on the material in this section, contrast the concept of economic growth, as discussed in the chapter on that topic, with the concept of economic development, the subject of this chapter. Which of the two countries do you believe fits better the definition of development? Explain. Percentage Share of Consumption Average annual growth rate of GNP (%) Average annual growth rate of GNP per capita Lowest 20% Second 20% Third 20% Fourth 20% Highest 20% Cote d’Ivoire 6.9 4.2 6.8 11.2 15.8 22.2 44.1 Guinea 7.2 4.6 3.0 8.3 14.6 23.9 50.2 1. The definition of deprivation for developed countries applies a higher standard than it does for developing countries. 19.1 THE NATURE AND CHALLENGE OF ECONOMIC DEVELOPMENT • 639
Image of page 653
Case in Point: (Growth and Development) or (Growth or Development)? The 1971 Nobel laureate in economics, Simon Kuznets, hypothesized that, at low levels of per capita income, increases in income would lead to increases in income inequality. The Kuznets hypothesis was later extended to include concern that early growth might not be associated with improvements in other aspects of development, such as those measured by the HDI or HPI. The rationale for growth pessimism was that the structural changes that often accompany early growth—such as rural–urban migration, occupational changes, and environmental degradation—disproportionately hurt poorer people.
Image of page 654
Image of page 655

You've reached the end of your free preview.

Want to read all 747 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes