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Robert Brym
Study Guide

of 5
Chapter 9- Development and Underdevelopment
Capitalism: an economic system based on profit seeking in competitive markets
Deindustrialization: process linked to neoliberal policies, that facilitates business mov-
ing to the lowest wage jurisdictions nationally or abroad that result in economic decline
in older industries
Dependency Theory: explanation of uneven global development that stresses the ex-
ploitative relationships that have existed between Europe and the global south, to the
determent of the latter
Income Inequality: difference in income earned by high and low income earners, within
a country or among countries
Modernization Theory: economic growth and development can best be achieved if the
valued underlying market capitalism are aggressively fostered
Neoliberalism: calls for the elimination of government involvement in the economy
which allows free markets to achieve economic growth
Purchasing Power Parity: number of units of a country’s currency needed to buy the
same amount of goods and services int he domestic market
Stages of Development: developmental phases through which societies supposedly
State Terrorism: deliberate act of physical or psychological violence perpetrated by
state organizations to intimidate certain groups causing panic fear or horror
Structural Adjustment Programs (SAPs): policies imposed on debtor countries by the
World Bank that entail privatization of state enterprises, elimination poverty and meeting
Terms of Trade: refers to the ratio of the price of exports to the price of imports
Underdevelopment: idea that the development of Europe required to exploitation of the
global south and undermined its economic development
Washington Consensus: shared view of the International Monetary Fund, promoting a
neoliberal approach to economic development and stabilization in the global south
Summary/ Facts
-Canada is among the nations with the highest percentage of low-paying jobs at 25%
Gini Co-efficient
-Gini index of 0 indicates that every income recipient receives exactly the same amount
of income.
-Gini index of 1.0 a single income recipient receives all of the income
-Gini index measures income distribution
-0 (perfect equality) to 1.0 (max. inequality)
Modernization Theory
-global inequality results from inadequacies in poor societies themselves
-lack of: capital, western business techniques, stable governments, western mentality
on investment, savings, innovation and education etc
Dependency Theory I
-250 years powerful countries impoverished the least powerful countries as a matter of
state policy
Dependency Theory II
-industrial revolution enabled Britain, France, Spain, Portugal, Italy, Russia and the US
to amass enormous wealth, which they used to establish powerful armed forces to
subdue and colonize most of the rest of the world in the middle of the 20th century
-Japan excluded (considered less than China and India)
Dependency Theory III
-Neo-colonialism established by creating a system of dependency involving three main
-1. substantial foreign investment
-2. support for authoritarian governments
-3. mounting debt
Core, Periphery and Semi-periphery (Wallerstein)
-core: major sources of capital and technology (USA, Japan and Geramany)
-periphery: major sources of raw materials and cheap labor (most former colonies)
-semi-periphery: former colonies that are making considerable headway in their at-
tempts to become prosperous (china, india brazil etc)
- Semi-peripheral Countries
-type of colonialism
-geopolitical position
-state policy
-social structure
Canada as a Semi-Peripheral Country
-colonialism: white settler society in which settlers reinvested rather than sending
wealth back to europe
-geopolitical position: ally of global powers (France, Britain and USA)
-state policy: occasionally protective of Canadian industry
-Social structure: french-english conflict has drawn attention from development policy
-after world war II industrialization became a process to generate economic growth in
countries that were poor
-after business in the west developed US interested in new markets outside their tradi-
tional spheres
-when a poor society comes into contact with a developed society they go into what is
known to be a “take off” which occurs when and if an increase in market transactions,
manufacturing and trade takes place
-“need for achievement”; the desire for feelings of accomplishment and personal satis-
-societies that encourage entrepreneurship are likely to succeed
-development happen when the citizens o the poor countries adopt the virtues of the
developed north