Development Economics Quiz

Basic Needs Approach (Chapter 10)

• Popularized in the 1970s, this approach prioritizes policies, budgets, and actions ensuring basic well-being for disadvantaged people.
• Basic needs include food, shelter, water, and primary education.
• Supported by World Bank President McNamara (1968-1981) who funded direct anti-poverty efforts.

Empowerment (Chapter 10)

• Refers to individuals' capacity for self-development and participation in decisions affecting their well-being.
• Focuses on enhanced participation and personal change rather than altering systemic structures.
• In the context of gender, it promotes changing power dynamics and challenging traditional roles.

Foreign Portfolio Investment (Chapter 10)

• Includes investments like foreign debt, loans, and stock market purchases.
• Prioritized by the IMF in the 1990s.
• Promotes capital account liberalization and attracts capital to developing countries.

New Institutional Economics (Chapter 10)

• Studies how institutions impact economic outcomes.
• Associated with economists Ronald Coase and Douglass North, emphasizing institutional contexts in development.

Poverty Reduction Strategy Papers (Chapter 10)

• Replaced structural adjustment programs in the late 1990s.
• Designed to encompass comprehensive social, economic, and political reforms, emphasizing good governance and country ownership.
• Became the primary means of financing for low-income countries.
• Implemented by a clear division of labor between the IMF and World Bank, likened to breathing in and out.

National Development Agencies and Bilateral Aid (Chapter 9)

• Author: Stephen Brown

Bilateral Aid (Chapter 9)

• Foreign aid provided directly by one government to another.
• Accounts for ~70% of donor aid.

Bilateral (Chapter 9)

• Relations or agreements involving only two governments.

Donors (Chapter 9)

• Governments or international agencies providing foreign aid.

Good Governance (Chapter 9)

• Political systems must be accountable, transparent, responsive, efficient, and inclusive for market-oriented development strategies to be effective.

Multilateral (Chapter 10)

• Arrangements among three or more states for peaceful purposes and long-term objectives.

Non-Governmental Organizations (NGOs) (Chapter 10)

• Emerged in the 1960s.
• Serve a range of purposes (charitable, political).
• Often supported by governments and can be instrumental in promoting or maintaining the existing order.
• Supported by the World Bank for their roles in poverty reduction and good governance.

Official Development Assistance (ODA) (Chapter 9)

• Defined by Western donors in 1969, aimed at promoting developing countries' welfare.
• Contains at least 25% grant element.
• Often referred to as foreign aid.

Recipients (Chapter 9)

• Governments receiving foreign aid.

Tied Aid (Chapter 9)

• Aid used to purchase goods/services from the donor country.
• Donor economy benefits from aid.

Bilateral Investment Treaties (Chapter 12)

• Agreements outlining foreign investor treatment standards.
• Allow MNCs to sue host governments for treaty breach via international arbitration.
• Negotiated between developed and developing countries.

Emerging Multinationals (Chapter 12)

• MNCs based in developing countries (e.g., Brazil, China, India, South Africa).
• Increasingly transnationalized. Often Chinese-dominated.

Entrepreneurship (Chapter 12)

• Individuals with innovative abilities combining resources for economic growth.
• Theorised by Joseph Schumpeter

Foreign Direct Investment (Chapter 12)

• Investment across borders with physical presence and control, distinguishing it from indirect portfolio investment.

Free Trade (Chapter 12)

• 19th-century concept promoting trade liberalization and limited state intervention for social gains.
• Revived in the 1970s, supporting market efficiency and unregulated markets as superior to state intervention.

Informality (Chapter 12)

• The informal economy condition involving weak property rights, poor financing, and limited growth potential.

International Division of Labour (IDL) (Chapter 12)

• Recognizes different global economic roles.
• Developing countries export commodities, while developed countries export manufactured goods.
• Paul Baran discusses MNCs maintaining and deepening periphery underdevelopment via the IDL.

Multinational Corporations (MNCs) (Chapter 12)

• Invest and operate across national borders.
• Synonyms: Transnational corporations, multinational enterprises.
• Contentious role in development.

Multinational Enterprises (MNEs) (Chapter 12)

• Invest and operate across national borders.
• Synonyms: Transnational corporations, multinational corporations.

OLI Paradigm (Chapter 12)

• Developed by John H. Dunning. Explains internationalization through intertwined ownership (O), location-specific (L), and internalization (I) advantages.
• Analyses the multinational firm as an institution and actor.

Partnerships (Chapter 12)

• Alliances among businesses, governments, and civil society organizations to address global issues.
• Private actors as development agents.

Policy Space (Chapter 12)

• Limits on governmental policy-making due to international agreements and MNC influence.
• The Uruguay Round restricted developing countries' policy choices.

Property Rights Regime (Chapter 12)

• Legal framework defining property assets.
• Crucial for accessing loans – thus necessary for business development.
• Hernando de Soto connected poor entrepreneurs' lack of capital to a deficient property rights regime.

Public-Private Partnerships (PPPs) (Chapter 12)

• Public services provided by private companies under government contract.
• Supposedly cheaper, more cost-effective; better customer service, greater expertise.

Shared Value (Chapter 12)

• Business model enhancing competitiveness through social programs with governments and NGOs.
• Porter and Kramer advocate combining competitiveness with solving societal issues.

Transaction Costs (Chapter 12)

• Costs of market transactions (e.g., information asymmetry, transportation).
• Multinationals invest in foreign production to address market imperfections.

Transfer Prices (Chapter 12)

• Internally set prices for multinational products across borders, not determined by supply and demand.
• Multinationals may utilize transfer pricing to reduce overall tax burden.

Civil Society and Development (Chapter 13)

• Author:* Henry Veltmeyer

Civil Society (Chapter 13)

• Collective of non-state, non-business organizations (e.g., church groups, environmental lobbies).
• Presence and participation are seen as crucial for democracy, good governance, and participatory development.
• Correlation with democratisation in Latin America and Eastern Europe.

Neoliberal Globalization (Chapter 13)

• Economic doctrine rejecting state control in favor of market-driven global integration.
• Promotes free-market capitalism.

Social Capital (Chapter 13)

• Networks of interpersonal relationships supporting individuals and communities in various needs (financial, health, emotional), and securing jobs.
• Robert Chambers and Robert Putnam

Social Movements (Chapter 13)

• Groups advocating for social change through collective action (e.g., workers' movements, civil rights movements).

Sustainable Livelihoods (Chapter 13)

• Holistic approach considering rural livelihood strategies (e.g., farming, other means).

Humanitarian Assistance and Intervention (Chapter 29)

• Author:* Laura Hammond

Aid Economy (Chapter 29)

• System of employment, incentives, goods, and services generated through humanitarian assistance.
• Can distort national economies and potentially incentivize conflict actors to prolong crises for personal gain.

CNN Effect (Chapter 29)

• Global television broadcasts of humanitarian crises stimulating public interest.
• First observed globally in 1984, during BBC coverage of the Ethiopian famine.

Diaspora (Chapter 29)

• Transnational community outside the country of origin.
• Frequently support their country of origin in times of crisis, with quickly mobilized resources.

Downward Accountability (Chapter 29)

• Aid recipients' ability to assess aid effectiveness through complaints systems.

Humanitarian Assistance (Chapter 29)

• Short-term crisis-related life-saving support.
• Addresses immediate suffering without necessarily addressing underlying systemic issues.

Humanitarian Intervention (Chapter 29)

• Military intervention partially or fully motivated by humanitarian concerns.

Liberal Humanitarianism (Chapter 29)

• Post-Cold War (1989-present) approach using services like healthcare and social nets to address human suffering, and viewed by some as states' responsibility.

Wilsonian Organizations (Chapter 29)

• NGOs aligned with political stakeholders.
• Utilizing humanitarian assistance to achieve political objectives.

China and the Emerging Economies (Chapter 14)

• Author:* Jing Gu

Belt and Road Initiative (BRI) (Chapter 14)

• China's flagship initiative integrating Asia, Middle East, Europe, and Africa.

One Belt, One Road (Chapter 14)

• China's initiative integrating regions through infrastructure, cultural exchange, and trade.
• 143 countries signed by 2020

People-to-People (Chapter 14)

• Chinese diplomacy strategy promoting academic, cultural, tourism, and information-sharing.
• Promotes economic growth and competitiveness.

South-South Cooperation (Chapter 14)

• Cooperative social, cultural, and economic activities between Global South nations.

White Paper on Foreign Aid (Chapter 14)

• Chinese government documents detailing perspectives on international development.
• Differs ideologically from Western approaches (e.g., partnership rather than donor/recipient structures), adhering to non-interference.
• 5 principles: Self-reliance; no political conditions; equality, mutual benefit; realistic, forward-thinking; reform & innovation.

UNCTAD (Chapter 14)

• United Nations Conference on Trade and Development.
• Promotes trade, economic diversification, reducing debt and financial volatility.

HDI (Human Development Index) (Chapter 14)

• Measures knowledge, healthy life, and standard of living.
• Categorizes development levels (very highly developed, low development).
• Amartya Sen - Capabilities approach

Millennium Development Goals (Chapter 14)

• Increased focus on development as poverty eradication.

Sustainable Development Goals (Chapter 14)

• Promotes economic, social, and environmental development, emphasizing global partnership.

International Financial Institutions (Chapter 10)

• Author: Marcus Taylor

Bretton Woods Institutions (Chapter 10)

• World Bank and International Monetary Fund.

Bretton Woods System (Chapter 10)

• Post-WWII system of fixed exchange rates, pegged to the US dollar (backed by gold initially), promoting financial stability and trade

Structural Adjustment (Chapter 10)

• Economic reforms promoted by IMF and World Bank after the 1982 debt crisis to minimize state involvement in economies.

Washington Consensus (Chapter 10)

• Agreement between IMF, World Bank, and US on developing country development policies.
• Promoted macroeconomic prudence, export-led growth, and economic liberalization.

Private Enterprise and Development (Chapter 12)

• Author:* Paul A. Haslam

Corporate Social Responsibility (Chapter 12)

• Corporations' voluntary commitment to improve relations with stakeholders (employees, community).
• Acknowledges responsibilities beyond shareholders.

Enclaves (Chapter 12)

• Company operations with limited beneficial links to the wider economy, often associated with extractive industries and MNCs, especially resource seeking ones

Informal Sector (Chapter 12)

• Part of the economy involving unregistered/unregulated individuals and enterprises. Often small/micro businesses.

Obsolescing Bargaining Model (Chapter 12)

• Explains state-firm relations, where multinationals initially hold power but eventually loses it over time as states regulate investment terms.

Dunanist (Chapter 29)

• NGOs adopting a neutral, impartial position regarding conflict, responding to humanitarian need without influencing outcome.

Resilience (Chapter 29)

• Ability to recover from and adapt to hazards and crises.

Test your knowledge on key concepts in development economics, including the informal sector, resilience, and the basic needs approach. This quiz will challenge your understanding of institutional impacts and significant models in humanitarian scenarios. Perfect for students and enthusiasts of economic development.