1. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. Chapter 2 Comparative Development: Differences and Commonalities among Developing Countries

2. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-2 Defining the Developing World n The UN’s System n World Bank’s System –Classification by levels of GNI per capita (Table 2.1) n The UNDP’s Human Development Index –Classification by levels of human development (Table 2.9) n The OECD’s system

3. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-3 Table 2.1

4. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-4 Table 2.1 (cont’d)

5. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-5 Table 2.1 (cont’d)

6. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-6 Figure 2.1

7. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-7 Figure 2.1 (cont’d)

8. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-8 The Structural Diversity of Developing Economies n Size and income level (Table 2.2) n Historical background n Physical and human resources n Ethnic and religious composition n Relative importance of public and private sectors n Industrial structure (Table 2.3)

9. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-9 Table 2.2

10. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-10 Table 2.3

11. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-11 Common Characteristics of Developing Nations n Low levels of living –Per capita national income (Figure 2.2)

12. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-12 Figure 2.2

13. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-13 Table 2.4

14. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-14 Common Characteristics of Developing Nations n Low levels of living –Per capita national income –Relative growth rates of national and per capita income (Table 2.5)

15. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-15 Table 2.5

16. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-16 Common Characteristics of Developing Nations n Low levels of living –Per capita national income –Relative growth rates of national and per capita income –Distribution of national income (Table 2.6)

17. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-17 Table 2.6

18. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-18 Common Characteristics of Developing Nations n Low levels of living –Per capita national income –Relative growth rates of national and per capita income –Distribution of national income –Extent of poverty (Table 2.7)

19. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-19 Table 2.7

20. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-20 Common Characteristics of Developing Nations n Low levels of living –Per capita national income –Relative growth rates of national and per capita income –Distribution of national income –Extent of poverty –Health (Figure 2.3 and Table 2.8)

21. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-21 Figure 2.3

22. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-22 Table 2.8

23. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-23 Common Characteristics of Developing Nations n Low levels of living –Per capita national income –Relative growth rates of national and per capita income –Distribution of national income –Extent of poverty –Health –Education –The Human Development Index

24. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-24 Table 2.9

25. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-25 Table 2.10

26. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-26 Common Characteristics of Developing Nations n Low levels of living n Low levels of productivity n High rates of population growth and dependency burdens (Table 2.11)

27. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-27 Table 2.11

28. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-28 Common Characteristics of Developing Nations n Low levels of living n Low levels of productivity n High rates of population growth and dependency burdens n Substantial dependence on agricultural production and primary exports (Table 2.12 and Figure 2.4)

29. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-29 Table 2.12

30. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-30 Figure 2.4

31. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-31 Common Characteristics of Developing Nations n Low levels of living n Low levels of productivity n High rates of population growth and dependency burdens n Substantial dependence on agricultural production and primary-product exports n Prevalence of imperfect markets n Dependence and vulnerability

32. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-32 How Developing Countries Today Differ from Developed Countries in Their Earlier Stages n Physical and human resource endowments n Per Capita incomes and levels of GDP in relation to the rest of the world n Climate n Population size, distributions and growth n Historical role of international migration n International trade benefits n Basic R&D capabilities n Stability and flexibility of political-social institutions n Efficacy of domestic economic institutions

33. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-33 Convergence? n Evidence of unconditional convergence is hard to find (Figure 2.5) n There is some (controversial) evidence of conditional convergence

34. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-34 Figure 2.5

35. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-35 Concepts for Review n Absolute poverty n Brain drain n Crude birthrate n Convergence n Death rate n Dependency burden n Developed world n Foreign exchange n Gross domestic product (GDP) n Gross national product (GNP) n Human Development Index (HDI) n Imperfect markets n Income gap n Income inequality n Incomplete information

36. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-36 Concepts for Review (cont’d) n Infant mortality rate n International poverty line n Labor productivity n Least developed countries (LLDCs) n Levels of living n Low income countries (LICs) n Malnutrition n Middle-income countries (MICs) n Mixed economic systems n Newly industrialized countries (NICs) n Physical resources

37. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-37 Concepts for Review (cont’d) n Primary industrial sector n Production function n Purchasing power equivalent n Purchasing power parity (PPP) n Resource endowment n Secondary industrial sector n Tertiary industrial sector n World Bank

38. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-38 Figure A2.1

39. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-39 Figure A2.2

40. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-40 Figure A2.3

41. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-41 Figure A2.4