39 - 1 Copyright McGraw-Hill/Irwin, 2002 The Rich and the Poor Growth, Decline, and Income Gaps Overpopulation Impact Upon Development Capital Accumulation Vicious Cycle of Poverty Role of Government Role of Advanced Nations Where From Here? Key Terms Previo us Slide Next Slid e End Show THE ECONOMICS OF DEVELOPING COUNTRIES 39 C H A P T E R
39 - 1 Copyright McGraw-Hill/Irwin, 2002 The Rich and the Poor Growth, Decline, and Income Gaps Overpopulation Impact Upon Development Capital Accumulation.
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39 - 1Copyright McGraw-Hill/Irwin, 2002
The Rich and the Poor
Growth, Decline, and Income Gaps
Overpopulation Impact Upon Development
Capital Accumulation
Vicious Cycle of Poverty
Role of Government
Role of Advanced Nations
Where From Here?
Key Terms
PreviousSlide
NextSlide
EndShow
THE ECONOMICS OF DEVELOPING COUNTRIES
39C H A P T E R
39 - 2Copyright McGraw-Hill/Irwin, 2002
The Rich and the Poor
Growth, Decline, and Income Gaps
Overpopulation Impact Upon Development
Capital Accumulation
Vicious Cycle of Poverty
Role of Government
Role of Advanced Nations
Where From Here?
Key Terms
PreviousSlide
NextSlide
EndShow
THE RICH AND THE POORIACs Industrially Advanced
Countries
DVCs Developing Countries
Global Income DisparityWorld population Percentage of world income
Richest 20%Poorest 20%Poorest 60%
Greater than 80%Less than 2%Less than 6%
39 - 3Copyright McGraw-Hill/Irwin, 2002
The Rich and the Poor
Growth, Decline, and Income Gaps
Overpopulation Impact Upon Development
Capital Accumulation
Vicious Cycle of Poverty
Role of Government
Role of Advanced Nations
Where From Here?
Key Terms
PreviousSlide
NextSlide
EndShow
GROWTH, DECLINE, & INCOME GAPS
Differences in AbilityWidening Income GapObstacles to Economic Development
Greater EfficiencyExpand Resources
Natural ResourcesHuman Resources
39 - 4Copyright McGraw-Hill/Irwin, 2002
The Rich and the Poor
Growth, Decline, and Income Gaps
Overpopulation Impact Upon Development
Capital Accumulation
Vicious Cycle of Poverty
Role of Government
Role of Advanced Nations
Where From Here?
Key Terms
PreviousSlide
NextSlide
EndShow
GROWTH, DECLINE, & INCOME GAPS
Poorest DVCs• Overpopulated• Unemployment and Underemployment Widespread
• Labor Productivity is Low
StandardOf Living
Consumer Goods (Food) Production
Population=
39 - 5Copyright McGraw-Hill/Irwin, 2002
The Rich and the Poor
Growth, Decline, and Income Gaps
Overpopulation Impact Upon Development
Capital Accumulation
Vicious Cycle of Poverty
Role of Government
Role of Advanced Nations
Where From Here?
Key Terms
PreviousSlide
NextSlide
EndShow
OVERPOPULATION IMAPCTUPON DEVELOPMENT
Saving and InvestmentProductivityResource OveruseUrban ProblemsDemographic Transition ViewUnderemploymentLow Labor Productivity
Brain Drain
39 - 6Copyright McGraw-Hill/Irwin, 2002
The Rich and the Poor
Growth, Decline, and Income Gaps
Overpopulation Impact Upon Development
Capital Accumulation
Vicious Cycle of Poverty
Role of Government
Role of Advanced Nations
Where From Here?
Key Terms
PreviousSlide
NextSlide
EndShow
CAPITAL ACCUMULATION
DVC Capital Goods Shortages
Domestic Capital Formation•Savings Potential•Capital Flight•Investment Obstacles
•Infrastructure
39 - 7Copyright McGraw-Hill/Irwin, 2002
The Rich and the Poor
Growth, Decline, and Income Gaps
Overpopulation Impact Upon Development
Capital Accumulation
Vicious Cycle of Poverty
Role of Government
Role of Advanced Nations
Where From Here?
Key Terms
PreviousSlide
NextSlide
EndShow
CAPITAL ACCUMULATION
Technological Advance
Sociocultural & Institutional Factors
•Capital-Saving Technology•Capital-Using Technology
•The Will to Develop•Capricious Universe View•Land Reform
39 - 8Copyright McGraw-Hill/Irwin, 2002
The Rich and the Poor
Growth, Decline, and Income Gaps
Overpopulation Impact Upon Development
Capital Accumulation
Vicious Cycle of Poverty
Role of Government
Role of Advanced Nations
Where From Here?
Key Terms
PreviousSlide
NextSlide
EndShow
39 - 9Copyright McGraw-Hill/Irwin, 2002
The Rich and the Poor
Growth, Decline, and Income Gaps
Overpopulation Impact Upon Development
Capital Accumulation
Vicious Cycle of Poverty
Role of Government
Role of Advanced Nations
Where From Here?
Key Terms
PreviousSlide
NextSlide
EndShow
ROLE OF GOVERNMENTA Positive Role• Law and Order• Lack of Entrepreneurship• Infrastructure• Forced Saving and
Investment• Social-Institutional
ProblemsPublic Sector Problems
•Corruption
39 - 10Copyright McGraw-Hill/Irwin, 2002
The Rich and the Poor
Growth, Decline, and Income Gaps
Overpopulation Impact Upon Development
Capital Accumulation
Vicious Cycle of Poverty
Role of Government
Role of Advanced Nations
Where From Here?
Key Terms
PreviousSlide
NextSlide
EndShow
ROLE OF ADVANCED NATIONS
Expanding Trade
Foreign Aid
Public Loans and Grants
Direct Aid
The World Bank Group
39 - 11Copyright McGraw-Hill/Irwin, 2002
The Rich and the Poor
Growth, Decline, and Income Gaps
Overpopulation Impact Upon Development
Capital Accumulation
Vicious Cycle of Poverty
Role of Government
Role of Advanced Nations
Where From Here?
Key Terms
PreviousSlide
NextSlide
EndShow
ROLE OF ADVANCED NATIONS
Foreign Harm?Dependency and Incentives
Bureaucracy & Centralized
Government
Corruption & Misuse
The Decline of Foreign Aid
Flows of Private Capital
39 - 12Copyright McGraw-Hill/Irwin, 2002
The Rich and the Poor
Growth, Decline, and Income Gaps
Overpopulation Impact Upon Development
Capital Accumulation
Vicious Cycle of Poverty
Role of Government
Role of Advanced Nations
Where From Here?
Key Terms
PreviousSlide
NextSlide
EndShow
WHERE FROM HERE?DVC Policy For Promoting Growth• Establishing the Rule of Law• Opening to International Trade• Controlling Population Growth• Encouraging Foreign Direct
Investment• Building Human Capital• Making Peace with Neighbors• Establishing Independent
Central Banks• Realistic Exchange-Rates• Privatizing State Industries
39 - 13Copyright McGraw-Hill/Irwin, 2002
The Rich and the Poor
Growth, Decline, and Income Gaps
Overpopulation Impact Upon Development
Capital Accumulation
Vicious Cycle of Poverty
Role of Government
Role of Advanced Nations
Where From Here?
Key Terms
PreviousSlide
NextSlide
EndShow
WHERE FROM HERE?IAC Policies For Fostering DVC Growth• Directing Foreign Aid to the
Poorest DVCs• Reducing Tariffs and Import
Quotas• Debt Forgiveness to the Poorest
DVCs• Admitting in Temporary
Workers and Discouraged Brain Drains
• Discouraging Arms Sales to DVCs
39 - 14Copyright McGraw-Hill/Irwin, 2002
The Rich and the Poor
Growth, Decline, and Income Gaps
Overpopulation Impact Upon Development
Capital Accumulation
Vicious Cycle of Poverty
Role of Government
Role of Advanced Nations
Where From Here?
Key Terms
PreviousSlide
NextSlide
EndShow
WHERE FROM HERE?IAC Policies For Fostering DVC Growth• Directing Foreign Aid to the
Poorest DVCs• Reducing Tariffs and Import
Quotas• Debt Forgiveness to the Poorest
DVCs• Admitting in Temporary
Workers and Discouraged Brain Drains
• Discouraging Arms Sales to DVCs
ChapterConclusions
industrially advanced countries (IACs)
developing countries (DVCs)
demographic transition view
underemployment
brain drain
capital flight
infrastructure
capital-saving technology
capital-using technology
the will to develop
capricious universe view
land reform
vicious circle of poverty
corruption
World Bank
direct foreign investment
ENDBACKCopyright McGraw-Hill/Irwin 2002
39 - 16Copyright McGraw-Hill/Irwin, 2002
The Rich and the Poor
Growth, Decline, and Income Gaps
Overpopulation Impact Upon Development
Capital Accumulation
Vicious Cycle of Poverty
Role of Government
Role of Advanced Nations
Where From Here?
Key Terms
PreviousSlide
NextSlide
EndShow Next: Web Chapter
Transition Economies:
RUSSIA & CHINA
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