Economic Development Strategies

The legal rights individuals have over their property allowing them to go to court if their property is stolen.

Property can be used as collateral for loans, increasing investment and aggregate demand and LRAS, leading to economic growth and development. Individuals have more incomes, increase income tax revenue, increase spending on development

Poor people may not take out loans even if they have property rights in the risk of losing their assets if they fail to pay back their loans

When government officials use public funds for their personal gains.

When the part of the price payed on free trade goods is directly payed to the producers increasing their incomes

Incomes of farmers will Increase, increasing consumption, increasing AD leading to economic growth and development as they are more able to spend on necessities increase in income tax revenue, govt more able to spend on development increasing development

Where part of the price you pay goes to the fair trade communal fund where the fair trade producers can decide what the best use of the money will be to lead to an increase in development.

Over $300 billion of Venezuelas public funds has gone missing in the past 10 years.

It gives money directly to the producer of the product.

If only a small part of the price goes to fair trade producers.

Promoting joint ventures between small domestic firms and large multinational corporations has lots of advantages:1. It provides a way of small domestic firms exporting to the rest of the world without having to face high barriers to entry. An increase in exports → increases injections → multiplier effect → more employment → more consumption → more AD → increase real GDP → economic development.2. Small domestic firms can learn from large MNCs and so technology and knowledge can be transferred, which helps to increase productivity → right shift of LRAS → Increase economic growth → Increase economic development

An industry that is based around raw materials like agriculture.

A primary industry is one which is based around raw materials like agriculture. Some advantages of developing primary industries are:1. It is a natural resource and can be a source of absolute advantage for a country e.g. weather conditions in some countries mean they can produce bananas at a much lower cost than the UK2. Primary industries are often labour intensive and many developing countries have large populations with cheap wages. This means that exports of primary goods are often very internationally competitive. An increase in exports → increases injections → multiplier effect → more employment → more consumption → more AD → increase real GDP → economic development.

There are a few potential disadvantages of using tourism as a strategy for development:1. Use of natural resources - tourism can damage natural resources and this is unsustainable (an island called Boracay, in the Philippines, was recently closed to tourism in order to try to clear up all the rubbish they had left on the island!)2. It is very seasonal - there can be large injections at certain times of the year but then unemployment for lots of the year when there are no tourists.3. It can lead to overdependence on one industry, which can leave the economy open to shocks (like when a terrorist attack in Tunisia practically destroyed their tourism industry)

There are a few potential disadvantages of using primary industries as a strategy for development:1. It can lead to overdependence on one industry, which can leave the economy open to shocks2. Prices of primary products are very volatile. A bad harvest, bad weather, or speculative buying of commodities can all create large changes in price, which can have a negative impact on the economy.3. Prices of primary products are often low compared to manufactured products.This means that poor countries tend to export cheap products and import expensive products which means they only get poorer.

Approx 2x of those with coastlines

$833 million meaning that they no longer had national debt