Economic and Development Terminology Explained
Economic and Development Terminology
Public Services – Services mandated by state law and directly consumed by citizens, not generating profit.
Subsidized Services or Subsistence – Services mandated by state law and indirectly consumed by the public, not generating profit.
Subsistence Economy – Economic activities beyond state control (black market).
Pre-industrial Capitalism – The bourgeoisie, with wealth based on capital accumulation.
Laissez-faire Capitalism – Adam Smith’s ideology advocating minimal state intervention in the economy, with free markets, private property, and supply and demand.
Monopoly Capitalism – Characterized by large concentrations of capital, attempting to eliminate competition and create monopolies.
Interventionist Capitalism – John Maynard Keynes’ ideology advocating strong state intervention, emphasizing the public sector, labor legislation, and social protection.
Neoliberal Capitalism – Capitalism promoted by the U.S. and UK, characterized by the privatization of companies and public services.
Brain Drain – Qualified individuals from developing countries emigrating to developed countries.
Self Development – Capitalism emerging as a result of historical processes.
Integrated Development – Developing country with all sectors of the economy developing.
Expansive Development – Countries with large multinational industries in constant expansion.
Technological Development – Countries using technology in constant expansion.
Development Induced – Capitalism imposed as a colonial imposition in these countries.
Development Disintegrated – Economy based on the production of few products.
Dual Economy – Where fully capitalist sectors coexist with traditional sectors of economy and livelihood.
Uneven Technological Development – Technology in these countries is modern in the capitalist sector but behind in other economic activities.
Neo-colonialism – Colonialism allowing political independence of the colonized country without genuine economic independence.
Commercial Unit – Poor countries export raw materials cheaply and import more expensive, elaborate products (unequal exchange).
Financial Dependence – To finance services, developing countries resort to international loans conditioned to be invested in companies that mortgage the state (debt).
Technology Dependence – Developing countries must buy the most advanced technology from developed countries.
Globalization – The great interdependence between the economies of the world.
Market Planetarium – The growth of international trade.
Globalization of Production – Different production processes of one company are produced in various countries.
IMF – International Monetary Fund.
WTO – World Trade Organization.
NAFTA or FTA – (North American) Free Trade Agreement.
OPEC – Organization of Petroleum Exporting Countries.
Macroeconomic Indicators – Allow a classification to compare the degree of material wealth in different countries.
HDI, IBED … – Indicators that attempt to complement economic data with other social data.
Indicators not directly related to the economy but also provide information on the well-being of the population:
- Literacy rate
- Life expectancy
- Mortality Data
- Access to basic services
- Data access to significant assets
GDP – Gross Domestic Product: the value of production within a territory in a whole year, regardless of whether companies are national or foreign.
GNP – Gross National Product: the value of total production in one year with the national capital both inside and abroad. GDP – corporate profits in the territory of foreign capital + business benefits of equity capital invested abroad.
Per Capita Income – Used to assess the standard of living of the population.
HDI, IBED, grain consumption per person – Indicators devised by the UN trying to measure non-monetary aspects.
HDI – Human Development Index: a measure of life expectancy, the literacy rate, and per capita GDP adjusted for purchasing power.
IBED – Index of Sustainable Economic Welfare: the HDI joined with environmental data, social guarantees, etc.
Poverty Threshold – Amount of resources needed to meet basic family needs.
Extreme or Absolute Poverty – Situation in which all revenues fail to meet basic needs.
Poverty – Income level is insufficient to satisfy some of the other basic needs.
Fourth World – Pockets of poverty that exist in rich countries.