Introduction: Global Stratification in Broad Outline

Some Initial Comparisons

The distribution of wealth among people in the world is extremely unequal, with the wealthiest 10% of the world's population receiving 54% of annual global income and the poorest 40% accounting for just 5% of global income.1 More than 1 billion people, or one in every five, live on less than $1 a day and another 1.5 billion on $2 a day. At the bottom of the income ladder, this translates into low education levels, poor health, reduced life expectancies and sometimes starvation.

Most countries have large numbers of poor people, and in some nations, a substantial proportion live in abject poverty. In other countries, however, most people are relatively well-off. Americans in the bottom 10 percent of the US income distribution are more affluent than two-thirds of the world population.3 The main aim of this chapter is to explore the reasons for the extremes in wealth and poverty that we find around the world.

Gross national income (GNI) is the most common overall measure of a country's economic status.

Another way of comparing incomes among countries is purchasing power parities (PPPs). These are national income calculations that take into account differences in the prices of goods and services from country to country.







Country income groups (World Bank classification)

Sources World Bank. 2008. World Bank list of economies (country classification). http://go.worldbank.org/K2CKM78CC0 (Accessed December 3, 2008)

 

Most Popular: Richest Most Populated Largest Most Expensive Poorest Cleanest Richest People Fastest Top 10 Lists

Top 5 Countries With the Highest Income per Capita Country Income per Capita (US $)
1. Norway
43,400
2. Switzerland
40,680
3. United States
37,870
4. Japan
34,180
5. Denmark
33,570

 

Poorest Countries in the Worldview as:
Country GDP per capita

Most Popular: Richest Most Populated Largest Most Expensive Poorest Cleanest Richest People Fastest Top 10 Lists

List of Poorest Countries in the World
Country GDP per capita

1. Zimbabwe
$200
2. Congo, Democratic Republic of the
$300
3. Burundi
$400
4. Liberia
$500
5. Guinea-Bissau
$600

6. Somalia
$600
7. Central African Republic
$700
8. Eritrea
$700
9. Niger
$700
10. Sierra Leone
$700

http://www.aneki.com/

 


A large proportion of people in low income countries work in agriculture.
Figure 7.2: Per Capita GNI and Economic Development Indicators for 16 Countries
Source: World Bank, 2005, Table 1.1, Table 2.3.


The infrastructure of poor countries is often inadequate to attract industry.






Not surprisingly, the wealth of a nation has a great deal to do with people’s quality of life. The data in Table 7.1 give two examples. Life expectancy and child mortality are clearly related to a country’s income level, and many other measures of well-being show the same pattern.

Table 7.1: Life Expectancy and Child Mortality by Economic Level

Life Expectancy at Birth
 
Under-5 Mortality Rate (per 1,000)
  Low income
58
  Lower middle*
69
  Upper middle*
74
  High income
78
  Low income
123  
  Lower middle*
39  
  Upper middle*
22  
  High income
7  
*The breaking point between "lower middle" and "upper middle" is $3,255.
Source: World Bank, 2005, Table 2.19.

Country-by-country comparisons do not reveal the full extent of global income inequality among people, because income and wealth vary enormously within most countries, even the rich ones. Thus, when we compare people around the world, rather than countries, the separation between the wealthiest and the poorest is even more striking.



infrastructure: The structural features of a country that facilitate human welfare, economic production and the flow of goods and services. Examples include communications and transportation systems, sanitation, medical facilities, power systems and housing.

 

 

 

 



Recent Trends

Today we are seeing processes of economic restructuring that are unique in history for their extensiveness and their speed. These processes are importantly modifying the global system of stratification in a number of key ways. Several trends are evident.

First, economic disparities between the most affluent countries and the poorest ones are increasing. In other words, the gap between the average citizen in the richest and in the poorest countries is wide and getting wider. In 1990 the average American was 38 times richer than the average Tanzanian. Today that American is 61 times richer.8 In some countries, per-capita incomes are lower today in absolute dollar figures than they were 30 years ago.


 




Although health, education and income around the world have improved substantially during the past several decades, in some countries there has been no significant progress. Other countries have experienced overall declines in living conditions.
Countries of Sub-Saharan Africa (south of the Sahara Desert; see Figure 7.3) are among the worst off. There, the number of extremely poor people has doubled since 1980. Almost 80% of more than 700 million people who live in this part of the world survive on less than $2 a day. Life expectancies in a number of these countries have always been among the lowest in the world. But since 1990, because of the AIDS crisis, they have fallen even lower. For every 1,000 babies born here in 2003, 171 will not not live to their fifth year. all The others can expect to live just 46 years -- 32 years fewer than the average life expectancy for high income countries9 (see Table 7.1).

Living conditions have also worsened recently in countries of the former Soviet Union and other former socialist countries Eastern Europe. Many of these countries have known both economic and political turmoil since the mid 1980s, and several continue to be unstable. During these years the number of poor people there has increased by 100 million.10


Figure 7.3: Sub-Saharan Africa



What we are seeing, overall, are dramatic increases in both affluence and extreme poverty.

A second change that is underway in the global stratification system is in the trend toward increasing inequality within countries. There is also a growing gap between wealthiest and the poorest citizens in many countries -- a trend that is parallel to the growing inequality among countries.

 


A third trend, however, reflects overall improvement in the quality of life for people in most countries of the world. A number of human development gains during the last few decades have resulted from accelerated economic growth in developing countries. Life expectancy has increased by eight years in the past three decades, and illiteracy has been reduced by nearly half. Infant mortality is down, and since 1981 extreme poverty has fallen almost 50% . Most people around the world are better off economically today than they were several decades ago, as average per capita incomes have more than tripled during the past 50 years. Globally, democracy is spreading. Since 1990 the proportion of countries with democratic political systems has risen from 39 to 55 percent. This means that an additional 1.4 billion more people are now living in democracies than was the case less than 20 years ago.16


OECD countries: The 30 member countries of the Organisation for Economic Co-operation and Development, whose members include most of the wealthiest nations in the world. OECD countries produce two thirds of the world's goods and services.
See OECD member countries

 



The gains, however, do not offset the problems. Amartya Sen, an economist and a Nobel prize laureate, points out that even though the world is incomparably richer than ever before, ours is also a world of extraordinary deprivation and staggering inequality. Sen argues that whether there have been some gains for all is not as important as whether the distribution of gains has been fair.

A fourth trend in many countries is increasing rates of poverty. This trend often appears in both developing and industrial countries. There are more poor people now in many countries in Africa, Latin America and Eastern Europe and Central Asia than there were twenty years ago. The number of people living on less than $1 a day in Sub-Sahara Africa has grown by 150 million since 1981 and there are now 226 million more who live on less than $2 a day. There were 99 million more poor people in Latin America in 2001 than in 1981.18 The world's ten poorest countries, in per capita GNI, are listed in Table 7.2. When one takes into account the fact that the "national poverty line" in these countries is often very low -- even below $1 a day in some countries, the magnitude of the poverty problem becomes apparent.

 

 

 


Poverty in rich countries requires different solutions from poverty in their poor counterparts. In developing countries, the biggest problem tends to be a shortage of jobs because the climate for investment is not attractive and average education levels are low. For large numbers of new jobs to be created in these countries, massive resources need to be invested in people and infrastructure if citizens are to be competitive on the world market. In rich countries, on the other hand, poverty tends to go hand-in-hand with inadequate job skills among particular segments of the population (high school dropouts, for example) and other factors that prevent many individuals from obtaining jobs that are available. Resources are abundant in wealthy countries for addressing these problems, whether attention is focused on job training programs, child care subsidies for parents whose earnings are low, or related initiatives.

Put differently, the rich countries can solve their own poverty problems, but help from these countries is vital to poverty reduction in the world's developing economies.

Aid should be thought of as … an investment in shared security and shared prosperity. By enabling poor people and poor countries to overcome the health, education and economic resource barriers that keep them in poverty, aid can spread the benefits of global integration, expanding shared prosperity in the process. It can also reduce the mass poverty and inequality that increasingly threaten the collective security of the international community.

 

Historic Trends


 

 



Today's striking differences among nations in levels of economic well-being are a recent development in human history. Historian Fernand Braudel estimates that that around the year 1800, average incomes in Europe and North America were not a great deal different from those in China and India (Table 7.3).23 By the late twentieth century, however, the per capita GNIs of France and the United States were more than 30 times that of China and more than 60 times that of India.

 


Historian David Landes suggests that 250 years ago, incomes in the wealthiest nations averaged perhaps 5 times as much as in the poorest countries. Now, per capita GNIs in the world's richest countries are more than 300 times greater than in the poorest countries. Using PPPs rather than GNI figures makes the ratio about 56 to 1.

United Nations analysis indicates that the gap between the world's richest and poorest nations has progressively widened during the last 200 years. In 1820 the per capita income in the richest countries was about three times greater than in the poorest countries. By 1950 the ratio was 35 to 1, and by 1992 the difference was 72 to 1.25 By 2003 forty-one countries were poorer than they had been in 1990. National poverty is particularly acute in Sub-Saharan Africa, where 18 of the 54 countries are found that have declining incomes.26



Table 7.3: Estimated Per Capita GNIs of Selected Regions/Countries, 1800.
 Western Europe
$213 
 North America
$266 
 China
$228 
 India
$160-210
Source: Braudel, 1984, p. 534.

purchasing power parities (PPPs):A National income calculations that are obtained by comparing actual prices for goods and services in countries.




The fortunes of some countries have varied notably at different times. Japan, for example, was one of the world's poorest countries in 1820 but had joined the ranks of the world's most affluent nations by the year 2000. Some other countries in Asia have also made striking economic progress over time. Affluent countries have tended to remain wealthy through time, however. None of the world's five richest countries in 1820 had left the ranks of high-income economies nearly 200 years later.

What explains these trends? Why do some nations achieve so much more, economically, than others, and what accounts for the pronounced and growing inequalities that are to be found among and within nations? Patterns of inequality within countries will be the principal subject of the next chapter. I will discuss three factors that are especially critical in accounting for the widening gap between the richest and the poorest countries during the last two hundred years: environmental factors, the prevalence of key institutions, and the changing nature of international relations.




 


Environmental Factors

In his Pulitzer Prize-winning book Guns, Germs, and Steel (1997), UCLA physiologist Jared Diamond gives one set of answers. He begins by describing a conversation he had nearly three decades earlier with a local politician named Yali in New Guinea. The country was anticipating independence after having been colonized by white Europeans two centuries ago, and Yali, who had never been outside New Guinea and had not been educated beyond high school, was trying to prepare himself and his people for self-government.

As the conversation turned to relations between the people of New Guinea and European colonizers, Yali spoke of how whites had not only imposed their own government when they arrived but had also brought a steady stream of inventions that local people had never seen before: steel axes, medicine, clothing, matches and other goods that transported New Guineans out of "the Stone Age." Before that time, the people of New Guinea had been using simple tools of the type that Europeans had known thousands of years ago. The imported goods that Europeans brought were prized, of course. They made work more efficient, improved health, and made life more comfortable. These European goods, from tools to soft drinks, were referred to by the local people as "cargo." At one point Yali asked, "Why is it that you white people developed so much cargo and brought it to New Guinea, but we black people had little cargo of our own?"27

That question, and its logical extensions, provide the organizing theme for Diamond's book. He asks not only why Europeans developed new technologies while New Guineans did not, but also why it was Europeans who colonized the New World rather than Native Americans coming to colonize Europe. More generally, Diamond explores the question of why history "has proceeded very differently for peoples from different parts of the globe," resulting in enormous prosperity for some and wrenching poverty for others.28

Diamond's answer is that the main factor producing these divergences is the environment -- that "the striking differences between the long-term histories of peoples of the different continents have been due not to innate differences in the peoples themselves but to differences in their environments."29 The types of environmental factors of which Diamond writes include geography, climate, the availability of animals for domestication, and the opportunity to grow plant foods efficiently. Europeans lived in an area that had both plants and animals that could be domesticated, and which allowed them to produce surpluses of wealth, Diamond reasons. There is great variation from one continent to another in the availability of species that can be domesticated, and Europeans were lucky to be living in the right place.

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



The environmental dimension is clearly an important factor in contributing to differences among nations and cultures. Whereas it would be possible to take issue with several of Diamond's arguments, some of them are compelling. And Diamond is hardly alone in arguing for the importance of environment in shaping cultural and national destiny. The question is not so much "Does the environment make a difference?" as it is "How much of the difference can be accounted for by environmental factors?" Other dimensions are also significant, as I will indicate below.



 

 


 

The Importance of Institutions

In his book Centuries of Economic Endeavor, economic historian John Powelson discusses a second factor that helps to explain the economic inequality that can be found from one country to another. He begins the book by asking, "Why do Japan, western Europe, North America, and Australia and New Zealand lead the world in economic development, and why are their prosperity, infrastructure, and standards of living far, far greater than those of the less-developed zones?"34 Powelson concludes that in the more economically successful countries, a diversity of interest groups created a balance of power that allowed key institutions to flourish which permitted economic development. Institutions that were important to this process promoted the rule of law, banking and credit, market rules, limited government and eventually representative democracy.


A Karen Boy, North Thailand

 




What happened in the regions that fell behind? For Powelson, at some point in their development a balance of power among interest groups was not allowed to develop further, or could not be sustained, against centralized power. Facing a dominating ruler and military force, "the people either could not resist, or they lost."45

Powelson identifies several factors in today's poorer regions that prevented a balance of power from being developed and maintained at the time that the West was experiencing the economic upsurge of the Industrial Revolution. In some cases, an imperial bureaucracy prevented the development of independent mechanisms for initiative-taking and power outside of the family and a consequent decline in initiative-taking and innovativeness in the larger society. In others, the stifling of interest groups led to conquest by outside powers and further economic decline.

Powelson undertakes a region-by-region inquiry into historical processes that account for today's economic inequalities. The central theme of Powelson's analysis is that institutions were needed that never quite got off the ground in today's poor countries -- systems of rules that would nurture a diversity of perspectives and interests and that would lead to inventiveness and economic growth. Geography is critically important as well, Powelson maintains. His institutional explanation is not presented as the only important factor, or even as necessarily the most important one. Writing about Africa, for example, Powelson concludes that Africa's "failure of economic development may ultimately lie in geography," because the geographical setting contributed to an essential instability over time that helps to account for "migrations, state formation and dissolution, capture and enslavement, the quick rise and fall of states, new empires and their breakup" -- all factors that contrasted sharply with what happened at the same time in Western Europe and Japan.46



 

 

 




The Changing Nature of International Relations

Domination and Dependency,
Past and Future

Today's poor countries have long-established patterns of relations with high-income countries. The nature of these relations, both now and in the past, are a third factor in the widening inequality between the world's richest and poorest countries.

The fifteenth century saw the beginnings of European empire building, and with the rise of industrial capitalism, a pervasive pattern of domination and dependency was established between European colonists and the people who lived in territories, many of them in Africa and Asia, that were subject to foreign control. The territory controlled by the dominant powers was vast. The British Empire included an area that was about 125 times larger than the United Kingdom; Belgium's territories were 78 times as large as Belgium; and the Dutch Empire was 55 the size of the Netherlands.47


 




With the end of colonialism, which endured in many places into the 1960s, came freedom from European domination. However, many analysts see the legacy of foreign control as being deeply implicated in the continuing crises that these newly-freed countries now face. European governments had not invested in these regions with the goal of bringing them to the level, economically and socially, of their own countries. From the beginning, their primary reason for having established themselves in these foreign territories was economic gain for their own nations. And when they left, the calculated expenditures that had been made in these territories were often sharply curtailed. Even more fundamentally, there had been no effort to stimulate the growth of institutions that could support pluralist societies, once the colonial powers were gone. Adding to these problems was the additional disadvantages of political boundaries that had been drawn more to satisfy European interests than to ensure that cultural groups would be kept intact in the political divisions that were to become new nations with the end of colonialism.





Further, global developments have not been favorable to poor countries in their efforts at beginning to catch up with the West economically. Rapid population growth in these regions, which resulted primarily from better sanitation and medical technology, created a huge burden on national social service budgets and severe strains on underdeveloped agricultural systems. Compounding those problems, oil prices multiplied by six times during the 1970s, which further imperiled the fragile economies of the newly independent nations that had just exited from colonial rule. The prices of many raw materials and agricultural products that were lifeblood exports for these countries plummeted, and national indebtedness soared as leaders attempted to make ends meet. Many leaders were corrupt, which added further to the people's problems and those of their countries.48 The combination of these difficulties has led several researchers to share the perspective of urban historian Nezar AlSayyad that "globalization is the third phase in the relationship between the dominant and the dominated."49

The current economic, political and social situation in Sub-Saharan Africa, much of Asia and large swaths of Latin America lend credibility to AlSayyad's assessment, but recent advances in the world's Newly Industrializing Countries suggest that impressive national economic gains are sometimes possible. These themes are elaborated below.



 


 

 

 


Traditional Theories of Development

For many years, divergence in prosperity among nations was accounted for according to two competing theories. Modernization theory holds that the less prosperous countries need to adopt the economic policies that have been so successful in the West, along with the cultural traditions and values that support them. In contrast, dependency theory argues that it is capitalism itself that retards development in poor countries -- that the world's rich countries profit from cheap labor and raw materials in the less developed countries, and that their trade policies are structured to maintain the dominance of affluent First World nations over the more peripheral Third World countries that are home to most of the world's people. (Also a part of this three-part categorization is the Second World, which is made up of countries that were formerly a part of the Soviet sphere of influence.)

The preferred strategy for Third World countries, according to dependency theorists, is for those nations to attain a larger measure of independence from wealthy nations, through a process of relatively autonomous self-development. Other explanations have also been developed which involve modifications and elaborations on basic themes of both modernization and dependency theory (for example, world systems theory50 [linked page included in Paul Halsall's Internet Modern History Sourcebook; ] and the new international division of labor theory.51

The leading edge of analysis has been harsh on dependency theory as oversimplified and inadequate on a number of dimensions.52 Modernization theory, also, is now widely seen as offering a narrow perspective on thorny problems of national development.53 The realities of international stratification indicate that the engine to promote affluence in Third World countries is not as simple a matter to construct as modernization theory would suggest, nor are the barriers to development as sinister as dependency theory argues. Third World countries, having often started out behind First World nations in relative advantages of the kinds that Jared Diamond highlights, are confronted today with formidable obstacles. Frequently among the most difficult are population expansion that continues at a high rate, corrupt and undemocratic governments, and an infrastructure that is not well suited to the demands of a global world economy.

A Chain of Underdevelopment?

Many of these problems are connected to each other in what often seems to be a downwardly spiraling chain of underdevelopment which perpetuates and even intensifies national poverty. For example, rapid population growth overwhelms both cities and the countryside in many Third World countries, making it difficult for city administrators to provide even minimal urban services to city residents and leading to overuse and degradation of marginal land. Farm workers, when they are displaced from good farm land, often have no place to go except to already-overcrowded cities, where unemployment is discouragingly high, or to rural areas that are not well suited for farming where they try to scratch out a living. These problems worsen a country's overall ability to provide infrastructural features that could attract foreign investment -- such necessities of present-day business activities as dependable telephone systems and good roads. Thus, investment goes elsewhere, a country's tax base suffers as a result, and as its international debt grows the country is ever less able to provide the educational opportunities to its citizens that are needed for competition in today's global economy.

This situation is worsened when governments are corrupt. In The Wealth and Poverty of Nations, Landes identifies a not uncommon "combination of mismanagement, profligacy, corruption and . . . bad government" that produce a situation in which "the clocks go backward as well as forward".54 The root causes of this problem vary from region to region -- a point on which I will elaborate below.

Is dependency Africa's current problem? Today, with the colonial legacy that is a defining feature of most African nations, isolation from the more affluent countries looms as a larger obstacle to progress than dependency, as a number of analysts interpret the situation. Manuel Castells, for example, after noting that foreign direct investment in Africa is currently declining, and that half of the countries in Africa were without any access to the Internet in 1995, adds that the countries in Africa remain largely "switched off".



modernization theory:  A perspective which holds that the less prosperous countries need to adopt the economic policies that have been so successful in the West, along with the cultural traditions and values that support them.

dependency theory: Argues that it is capitalism itself that retards development in poor countries -- that the world's rich countries profit from cheap labor and raw materials in the less developed countries, and that their trade policies are structured to maintain the dominance of affluent First World nations.


First World: The most affluent countries, comprising the nations of Western Europe, the U.S., Canada, Australia, New Zealand and Japan, with a few other countries at the bottom of this hierarchy.

Second World: Countries that were formerly a part of the Soviet Union or that were directly influenced by Soviet policies. Today, Second World countries are poorer than First World countries, and they tend to be less stable politically, economically and socially.

See Second World countries.
Third World: The world's poorest countries. Most countries, and most people, are in this category.

 

 

 

 

 

 

 

 

 

 



   

Hunger in the Third World

A notable feature of Third World hunger is that, in recent times, it has often been found side-by-side with rising agricultural productivity -- under conditions where the problem isn't so much food shortages as the inability of impoverished people to buy what they require to stay alive.62 Complex factors account for starvation under conditions where food is available. First, farmers who are pushed off land where they once grew their own food often find themselves in need of money for basic essentials of life but without any means to acquire it. How can this problem be solved? There are only two choices: jobs, to provide the money that is necessary to buy food in a market-oriented economy, or an economic system where the distribution of basic necessities such as food is not tied to people's ability to pay.

Karl Marx envisioned the second type of arrangement under communism, as we'll see in chapter nine: "From each according to his ability to each according to his needs." Capitalism requires that most people pay, however, for most of what they get. But Third World countries are characterized by high rates of unemployment -- a situation which is especially common among recent migrants to cities from rural areas.

Not only do people need money who aren't able to produce their own food, but in many Third World countries food is increasingly expensive. This second component of the hunger problem is often connected to a growth in the production of food for export, at the expense of food for consumption within the country. Export crops such as coffee, bananas and sugar cane, are more profitable to landowners than staple foods that are in demand locally. As farmers switch to take advantage of better prices, the falling production of everyday foods mean that they become more expensive.


 

 

 

 


 


Light at the End of the Tunnel?

The prospects for Third World countries are not all gloomy. One need not be unrealistically optimistic to conclude that the fortunes of underdeveloped countries could take a rapid turn for the better early in the next century.

A rising drama throughout the world is the question of what the repercussions will be, in the political and social spheres, as well as the economic, of today's globalization trends. No one has a higher stake in the outcome than those who are today on the margins, and for whom two different scenarios are quite possible, depending on the situation: improving living standards with expanded opportunities, or the hopelessness that accompanies poverty when jobs disappear and alternatives are few. Globalization trends until now have shown that both of these outcomes are possible.


 

 

 

 

 

 

 

 



Glossary

dependency theory: Argues that it is capitalism itself that retards development in poor countries -- that the world's rich countries profit from cheap labor and raw materials in the less developed countries, and that their trade policies are structured to maintain the dominance of affluent First World nations.

developing countries: A term that is often used in reference to countries in the low-income and middle-income (lower-middle and upper-middle) categories in the World Bank's classification system.

First World: The most affluent countries, comprising the nations of Western Europe, the U.S., Canada, Australia, New Zealand and Japan, with a few other countries at the bottom of this hierarchy.

gross domestic product (GDP): The total market value of all goods and services that are produced within a country during a specified time period (usually a year). The GDP does not include purely financial exchanges, such as the sale of stocks, and it does not take into account nonmarket activities, such as child care provided by parents.

gross national income (GNI): The total value of goods and services that are produced by a country's residents during a specified time period (usually a year), whether or not the production occurs within the country itself. The GNI of the United States, for example, includes income of US firms that are doing business in foreign countries, but it does not include income produced in the US by foreign companies.

modernization theory: A perspective which holds that the less prosperous countries need to adopt the economic policies that have been so successful in the West, along with the cultural traditions and values that support them.

Newly Industrializing Countries (NICs) or Newly Industrializing Economies (NIEs): Asian countries whose economies have performed exceptionally well in recent years, including Hong Kong, Korea, Singapore, Taiwan, Indonesia, Malaysia and Thailand.

pluralist society: A society in which there are many interest groups that negotiate with one another.

purchasing power parities (PPPs): National income calculations that are obtained by comparing actual prices of goods and services in different countries.

Second World: Countries that were formerly a part of the Soviet Union or that were directly influenced by Soviet policies. Today, Second World countries are poorer than First World countries, and they tend to be less stable politically, economically and socially.

Third World: The world's poorest countries. Most countries, and most people, are in this category.








 


Summary Study Questions

1. Be able to define the terms that are discussed in the chapter.

2. Countries are categorized in the chapter as being "low-income," "lower-middle-income," "upper-middle-income" and "high-income" countries. You need not know exact figures to distinguish among these categories (and they change every year, anyway), but do have a sense of the overall divergence that is reflected in this categorization.

3. In low income countries, a large proportion of the population work in ______, which means ______.

4. How is infrastructure (e.g., highway and communication systems) related to a country's ability to attract foreign investment? Why is a country's infrastructure important to many potential investors?

5. It is stated in the textbook that "Today we are seeing processes of economic restructuring that are unique in history for their extensiveness and their speed. These processes are importantly modifying the global system of stratification in a number of key ways." In what ways is the global system of stratification being transformed by the processes that are discussed in the chapter? (How is inequality between countries being affected? Within countries? What changes are evident in the quality of life for most people in most countries of the world? Is democratization spreading or contracting around the world? What changes can be seen in the proportion of people who live in poverty, in some countries, and where do the most severe rates of poverty tend to be found?

6. Are the differences among nations in levels of economic well-being that we see today a recent development in human history, or do they reflect a long-standing pattern? (You should have a general sense of the trends during the past 200 years -- those that are discussed in the chapter.)

7. Three factors are discussed in the chapter that are especially critical in accounting for the widening gap between the richest and the poorest countries during the last two hundred years. What are these factors, and what is their importance in explaining this trend?

8. What is the organizing theme for Jared Diamond's book Guns, Germs, and Steel?

9. The types of environmental factors of which Diamond writes include geography, climate, the availability of animals for domestication, and the opportunity to grow plant foods efficiently. What is important about each of these factors for economic development? Why did Europeans have an advantage over people in some other regions on these dimensions?

10. It is noted in the textbook that "the question is not so much 'Does the environment make a difference?' as it is _______.

11. In his book Centuries of Economic Endeavor, economic historian John Powelson concludes that in the more economically successful countries, a diversity of ______ created ______ that allowed ______ which permitted economic development.

12. Powelson's analysis indicates that institutions which were important to the process of economic development in countries promoted ______.

13. Powelson argues that interest group alliances of a particular kind were vital to the development of a pluralist society. What was the key characteristic of these interest group alliances? What evolved from this process of interest group activity?

14. What seems to have happened in China that prevented it from developing into a powerful empire the way that several European countries did?

15. What happened in the regions that fell behind economically, according to Powelson's analysis? As Powelson describes it, at some point in their development ______.

16. Powelson identifies several factors in today's poorer regions that prevented a balance of power from being developed and maintained at the time that the West was experiencing the economic upsurge of the Industrial Revolution. What are they?

17. The central theme of Powelson's analysis is that ______ were needed that never quite got off the ground in today's poor countries.

18. The ______ century saw the beginnings of European empire building, and with the rise of ______, a pervasive pattern of domination and dependency was established between European colonists and the people who lived in territories, many of them in Africa and Asia, that were subject to foreign control.

19. Why did the usual pattern of European investment in colonial territories often not serve those territories well when they were freed from domination by the colonists?

20. Why have the political boundaries that created nations in colonial territories often turned out to be problematic?

21. Both modernization theory and dependency theory are often faulted by analysts. Why?

22. What is the source of the term "Third World"?

23. It is stated in the chapter that "complex factors account for starvation under conditions where food is available." What key factors explain starvation in such circumstances?

Broader Question for Further Thought

1. Why is a country's infrastructure important for economic development, and why is there often a "vicious cycle" of underdevelopment that is tied to the absence of an adequate infrastructure? What are possible solutions to this problem?

2. The fifteenth century saw the beginnings of European empire building, and with the rise of industrial capitalism, the relationship of domination and dependency was strengthened that has survived the end of the colonial era. Nezar AlSayyad contends that

Under [the] colonial paradigm, the world became divided into two kinds of people and two types of societies: powerful, administratively advanced, racially Caucasoid, nominally Christian, and principally European dominant nations; and powerless, organizationally backward, traditionally rooted, and mainly nonwhite dominated societies (1996: 110).

David Landes, while noting that "five hundred years of domination" is "a long time," adds,

And yet, for all of colonialism's enormous effects, it was a passing phenomenon in the larger sweep of world history. Pomp and pride on the one side, humiliations on the other -- all are gone. Not forgotten; the memories remain. Yet the losses are reparable; the gains are savable; the tasks and opportunities lie ahead (1998, p. 422).

Is Landes correct in his conclusion, or is AlSayyad's cautionary vision, quoted below, more on the mark?

Globalization is the third phase in the relationship between the dominant and the dominated (1996, p. 116).

3. How different from one another, economically, are high- and low-income economies (that is, First and Third world countries)? Why are some countries so much better off than others? Does it seem that the relative status of most low-income economies is likely to soon improve? Why or why not?

4. Three factors are discussed in the chapter that are especially critical in accounting for the widening gap between the richest and the poorest countries during the last two hundred years: environmental factors, the prevalence of key institutions, and the changing nature of international relations. As we think about improving the economies, and thus the quality of life, in developing countries, what strategies might be usefully considered to change the negative effects of these factors on the world's least prosperous countries?

5. Is dependency Africa's most prominent current problem? Why or why not?

6. What are both promising and troubling signs as we consider the prospects for Third World development?

7. Looking at the data in Table 7.4 (to the right, above), do any of the figures surprise you? If so, why? What do you think accounts for any surprises you find there, in the First World, the Second World or the Third World? What do these data suggest to you about the economic repercussions of political changes in the Second World during the 1990s?



 

 

 



Footnotes

1UN HDR, 2005, Ch.1, pp. 36-38.
2UN HDR, 2005, Ch.1, p. 24.
3The World Revolution. Inequality.
4World Bank, 2005, GNI 2004.
5World Bank, 2006, Income Group. (Total of 208 with populations of more than 30,000)
6UN HDR, 2005, Ch.1, p. 37.
7UN HDR 2005, Overview, p.4.
8UN HDR, 2005, Ch.1, p. 37.
9World Bank, 2005, Table 2.5 and Table 2.19. See also UN HDR, 2005, Ch.1, p. 36.
10World Bank, 2005, Table 2.5.
11Castells, 1998, p. 30.
12UN HDR 2005, Overview, pp. 3-4.
13UN HDR, 2005, Ch.2, p. 55.
14See Forster, 2002, OECD.
15UN HDR, 2005, Ch.1, p. 34 Table 1-2.
16UN HDR, 2005, Ch.1, p. 20.
17Amartya Sen, 2001.
18World Bank, 2005, Table 2.5.
19World Bank, WDR 2006, Ch.3, p. 66.
20UN HDR, 1998, p. 27.
21UN HDR, 2005, Ch.3, Ch.4, Ch.5.
22UN HDR, 2005, Ch.3, p. 75.
23Braudel, 1984, p. 534.
24Landes, 1998, p. xx. Both Landes and Braudel draw on calculations by Paul Bairoch.
25UN HDR, 1999, p. 38.
26UN HDR, 2005, Ch.1, p. 53.
27Diamond, 1997, p. 14.
28Diamond, 1997, p. 13.
29Diamond, 1997, p. 405.
30Diamond, 1997, p. 411.

31Diamond, 1997, p. 214.
32Chirot,1986 & Chirot, 1994. 33Chirot, 1986, p. 13. See also Chirot, 1994, pp. 22-25.
34Powelson, 1994, p. 1.
35Powelson, 1994, p. 6.
36Powelson, 1994, p. 2.
37Braudel, 1982, p. 466. Braudel adds that the reasons are not obvious for the fact that power is always in the hands of the few. "And yet," he writes, "this is a stubborn fact, taunting us at every turn. We cannot argue with it: all the evidence agrees . . . -- whatever the society and whatever the period" (p. 467).
38Powelson, 1994, p. 6.
39Powelson, 1994, p. 2.
40Chirot, 1986, p. 31.
41Braudel, 1984, p. 529.
42Chirot, 1986, p. 31.
43Braudel, 1984, pp.528-9.
44Powelson, 1994, p. 91.
45Powelson, 1994, p. 1.
46Powelson, 1994, p. 105.
47Davies, 1996, pp. 1068-69.
48see Iliffe, 1995, pp. 252-56.
49AlSayyad, 1996, p. 116.
50Wallerstein, 1979, 1984.
51Waters, 1995; Gereffi, 1994
52see Packenham, 1998.
53see World Bank, 1997.
54Landes, 1998, pp. 494-507.
55see Schaeffer, 1997, p. 15.
56For discussions of these developments, see Pakenham, 1991; and Iliffe, 1995, esp. chapter 9.
57quoted in Davies, 1996, p. 1068.
58AlSayyad, 1996, p. 112.
59Keller, 1995, p. 169.
60Halfini, 1996, p. 93.
61Castells, 1998, p. 93.
62Schaeffer, 1997, pp.165-8.
63World Bank, 1993, pp.28-9.
64Faiola, 1999, p. A1.






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