Values - principles, standards or qualities that a
society/ groups within it considers worthwhile or
desirable.
Attitudes- state of mind, feelings of an individual,
group, or society regarding issues such as material
gain, hard work, saving for the future, and sharing
wealth.
Institutions - norms, rules of conduct, and generally
accepted ways of doing things.
Income per capita - total gross national income of a
country divided by its total population.
Gross National Income- total domestic and foreign
output claimed by residents of a country.
Gross Domestic Product- total final output of goods
and services produced by the country’s economy
Capabilities- the freedoms that people have, given
their personal features and their command over
commodities
Sustenance- basic goods or services that are
necessary to sustain an average human being at the
bare minimum level of living.
Self Esteem- feeling of worthiness that a society
enjoys when its social, political and economic
systems and institutions promotes human values.
Freedom of Servitude- a situation in which a society
has at its disposal a variety of alternatives from
which to satisfy it wants
Absolute Poverty- a situation of being unable to
meet the minimum level of income, food, clothing,
health care, shelter and other essentials.
Subsistence Economy- an economy in which
production is mainly for personal consumption and
the standard of living yields little more than basic
necessities of life
Development- the process of improving the quality
of all human lives and capabilities by raising people’s
levels of living, self- esteem and freedom.
Developing countries- countries of asia, Africa, the
middle east, latin America, eastern Europe, and the
former Soviet Union that are presently characterized
by low levels of living and other development
deficits. Used in the development literature as a
synonym for less developed countries.
Traditional Economics- an approach to economics
that emphasizes utility, profit maximization, market
efficiency and determination of equilibrium.
Political Economy - the attempt to merge economic
analysis with practical politics - to view economic
activity in its political context.
Development Economics- study of how economies
are transformed from stagnation to growth and from
low income to high income status, and overcome
problems of absolute poverty.
More Developed Countries- the now economically
advanced capitalist countries of Western Europe,
North America, Australia, New Zealand and Japan.
Globalization- the increasing integration of national
economies into expanding international markets.
Social System- organizational and institutional
structure of a society, including its values, attitudes,
power structure and traditions.
MILLENIUM DEVELOPMENT GOALS
1. Eradicate extreme poverty and hunger
2. Achieve universal primary education
3. Promote gender equality and empower
women
4. Reduce child mortality
5. Improve maternal health
6. Combat HIV/ AIDS, malaria and other
diseases
7. Ensure environmental sustainability
8. Develop a global partnership for
development.
DIMENSIONS OF POVERTY
1. Income- pertains to people’s purchasing
power and consumption
2. Health- is assessed by infant mortality and
psychological status plus life expectancies
3. Education- characterized by the knowledge
in reading and writing and numeracy and
literacy
4. Working Conditions- describe the welfare of
the employees
5. Empowerment- the ability to participate in
social realms (social undertakings)
FIVE SOURCES OF DISPARITY
1. Personal Heterogeneities- connected with
disability, illness, age or gender
2. Environmental Diversities- heating and
clothing requirements in the cold or
infectious diseases in the tropics, or the
impact of pollution
3. Variations in Social Climate- prevalence of
crime and violence and “social capital”
4. Distributions within the family- economic
statistics measure incomes received in a
family because it is the basic unit of shared
consumption
5. Differences in relational perspectives- some
goods are essential because of local
customs and conventions
Newly Industrializing Countries (NICs)- countries at a
relatively advanced level of economic development
with a substantial and dynamic industrial sector and
with close links to the international trade, finance
and investment system
Least Developed Countries- a UN designation of
countries with low income, low human capital, and
high economic vulnerability.
Human Capital- productive investments in people,
such as skills, values and health resulting from
expenditures on education, on the job training
programs, and medical care
Value Added- the portion of a product’s final value
that is assed at each stage of production
Depreciation (of the capital stock)- the wearing out
of equipment, buildings, infrastructure, and other
forms of capital, reflected in write-offs to the value
of the capital stock
Capital Stock- the total amount of physical goods
excluding at a particular time that have been
produced for we in the production of other goods
and services.
Purchasing Power Parity (PPP)- standard of living
(measure)
Divergence- a tendency for per capita income (or
output) to grow faster in higher- income countries
that in lower-income countries that the income gap
widens across countries over time
Convergence- tendency for per capita income (or
output) to grow faster in lower-income countries
than in higher-income countries so that lower-
income countries are “catching up” over time
ROSTOW’S STAGES OF GROWTH
1. The traditional society
2. The preconditions for take-off into self-
sustaining growth
3. The take- off
4. The drive to maturity
5. The age of high mass consumption
Dependence – the reliance of developing
countries on developed country economic
policies to stimulate their own economic
growth
- Developing countries adopt developed
country education systems, technology,
economic and political systems,
attitudes, consumption patterns, dress
and so on
Dominance- in international affairs, a situation
in which the developed countries have much
greater power that the less developed countries
in decisions affecting important international
economic issues

Neocolonial Dependence Model- a model

whose main proposition is that
underdevelopment exists in developing
countries because of continuing exploitative
economic, political, and cultural policies of
former colonial rulers toward less developed
countries

Underdevelopment- an economic situation

characterized by persistent low levels of living in
conjunction with absolute poverty, low income
per capita, low rated of economic growth, low
consumption levels, poor health services, high
death rates, high birth rates, dependence on
foreign economies, and limited freedom to
choose among activities that satisfy human
wants.

Center- in independence theory, the

economically developed world

Periphery- in independence theory, the

developing countries