Engage Activity

Why are some countries more developed than others?

Economic Economic DevelopmentDevelopment

What is Economic Development?

• A measure of the welfare of people in a society that tells how advanced an economy is

Development is not purely an economic phenomenon but rather

a multidimensional one.

We used to label countries as 1st, 2nd, and 3rd world. This originated

after WWII.• The 1st world was the U.S. and its allies.

• The 2nd world was the USSR and its allies.

• The 3rd world was the remaining countries, which were unaligned and had less political and military power.

1st 2nd3rd

This terminology is now considered politically incorrect, so we say

“more developed country” (MDC), and “less developed country”

(LDC).

MoreDeveloped

LessDeveloped

What is Economic Development?

• Countries are classified into 3 categories– More Developed (MDCs)– Less Developed (LDCs)– Newly Industrialized (NICs)

• Based on the country’s Human Development Index (HDI)

More Developed Countries

• Countries with a modern industrial society, well advanced economy, and a higher standard of living

More Developed Countries

• MDCs usually share some other common features, including:– a highly industrialized society with

modern technology– efficient transportation and communication

systems– commercial agriculture– urban population– high per capita GNP (gross national product),

Less Developed Countries

• Countries with less advanced technologies and lower standards of living

Less Developed Countries

• LDCs usually share some other common features, including:– Low GDP per capita– Exhibits lowest indicators of economic

development– Lowest HDI ratings of all the countries in the

world– Large % of population in agriculture– Poor infrastructure

Analyze the images Below

Country A Country B

Decide whether each indicator below describes a MDC or LDC.

• Higher GDP per capita

• Lower GDP per capita• High literacy rate• Shorter life

expectancy• Agricultural society• High tech jobs• Many factories• Modern technology • Efficient transportation

system• Subsistence

agriculture• Rural population• Urban population• Low life expectancy

More Developed Less Developed

Newly Industrialized Countries

• Countries that are moving from less to more developed economies

Newly Industrialized Countries

• NICs usually share some other common features, including:– Increased social freedoms and civil rights– Strong political leaders– Shift from agricultural to industrial economies– Increasingly open-market economy– Multinational corporations– Strong capital investment from foreign

countries– Lowered poverty rates

Human Development Index

• Numerical index developed by the United Nations

• Ranks countries based on development issues, progress, and policies

• Looks at a number of factors– Demographic indicators– Economic indicators– Social indicators– Political indicators

Demographic indicators

• Life expectancy

• Birth rate

• Death rate

• Infant mortality rate

• Life expectancy (M, F): The average number of years a newborn infant can expect to live under current mortality levels. (US = 75, 80)

• Infant Mortality: the annual number of deaths of infants under age 1 year per 1,000 live births. A country, which has less than 50 per 1,000, is said to have conquered hunger. (US = 6.6 per 1,000)

• Population and Population Double Time: the number of years it would take for the population to double if the rate of natural increase remained constant. (US = 297 million people, doubles in 116 years.)

True or False: A more developed nation has a high birth rate,

high infant mortality rate, and a short life expectancy.

Economic Indicators

• GDP• GDP per capita• GNP• GNP per capita• employment rate• # of automobiles per

capita• # of computers per

capita

• # of telephones per capita

• # of televisions per capita

• GNP per capita: total goods and services produced by a country divided by its population. This is the most typical indicator of economic development. (US = $32,000)

True or False: An LDC has a low GDP per capita income.

Small Group Discussion

How do GDP and HDI differ? What are the pros and cons of

using these indicators to determine the level of

development of a country?

Social Indicators

• Literacy rates• % attending college• # of professionals• Housing

• Water supply• Sanitation• Access to basic

services

Literacy rate: % of people over the age of 16 who can read and write. (US = 97%)

Population/physician: the total population divided by the number of doctors. (US = 446/1)

• % of people employed in agriculture: the # of people involved in agriculture indicates subsistence (more farmers) vs. commercial (less farmers) and industrial vs. non-industrial. (US = 2%)

• Subsistence Farming: people grow only enough for their own family’s or village’s needs. They grow food to eat, not sell.

• Commercial Farming: farmers raise crops and livestock to sell in the market. Modern equipment makes these farmers more productive, so there are fewer farmers as a percentage

of the work force.

Characteristic of

developed nations.

True or False: A less developed nation has a high literacy rate and a

small number of doctors and hospitals to serve the population.

Political Indicators

• Freedoms enjoyed• Type of governance• Voting rights • Level of human

rights• impact of colonialism• Degree of

government oppression

• Level of tolerance for different points of view

True or False: There is a direct relationship between economic

development and the type of government a country has.

Physical Indicators

• climate• access to water

(landlocked)• natural disasters• availability of natural

resources

HDI Classification Activity• Select four countries:

– United States– A country with high human development – A country with medium human development – A country with low human development

• In a table, identify and list the components of the HDI (life expectancy, literacy rate, GDP per capita, birth rate, infant mortality rate, type of government, and population per doctor)

• Rank the countries according to their respective HDIs

Small Group Discussion

• Explain the relationship between each indicator and economic development.

• Discuss the consistency of relationship between their HDIs and the HDI components.

• If you were to judge the country by its GDP or GNP only, would it still have the same level of development? Why?