Chapter 8 Global Stratification
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Wealth and Poverty in Global Perspective
Problems in Studying Global Inequality
Classification of Economies by Income
Measuring Global Wealth and Poverty
Global Poverty and Human Development
Theories of Global Inequality
Global Inequality in the Future
What Is Global Stratification?
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Unequal distribution of wealth, power, and
prestige on a global basis.
Between 1960 and 1990, the gap in global
income between the rich and poor countries
continued to widen.
Studying Global Inequality
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The “Three Worlds” Approach
– Distinguishes nations based on economic
development and standard of living.
Levels of Development Approach
– Most controversial terminology used to
describe global stratification.
Economic Categories Used by the
World Bank
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Low Income - nations with a GNP per capita of
$785 or less, in 1998 dollars.
Middle-income - nations with a GNP per
capita of more than $785 but less than $9,655
in 1998 dollars.
High-income Economies (25 nations)nations with a per capita income of $9,655 or
more in 1998 dollars.
Poverty
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Absolute poverty- people do not have the
means to secure the necessities of life.
Relative poverty- people can afford
necessities but are unable to maintain an
average standard of living.
Subjective poverty- actual income compared
with income earner's expectations.
The Gini Coefficient
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A measure of income inequality ranging from 0
(everyone has the same income) to 100 (one
person receives all the income).
Indicates that global inequality between the
rich and poor countries continues to exist.
Shows that similar disparities exist within
nations in the world.
Human Development Index (HDI)
Criteria for measuring a country’s level of
development:
 life expectancy
 education
 living standards
Theories of Global Inequality
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Development and Modernization Theory
Dependency Theory
World System Theory
Development and Modernization
Theory
Four Stages of Economic Development:
1. Traditional stage -very little social change
takes place and people do not think of
changing their present circumstances.
2. Take-off stage - period of economic growth
accompanied by a growing belief in
individualism, competition, and achievement.
Development and Modernization
Theory
Four Stages of Economic Development:
3. Technological maturity- the country
improves in technology, reinvests in new
industries, and embraces the values and
institutions of high-income developed nations.
4. High mass consumption - a high standard
of living that encourages consumption.
Dependency Theory
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Disputes that economic growth is the key to
meeting important human needs in societies.
Argues that the poor nations are caught in a
cycle of structured dependency on the richer
nations.
Most often applied to the newly industrializing
countries.
World System Theory
Three types of nations:
 Core nations- possess most of the world's
capital and technology.
 Semiperipheral nations- a midpoint between
the core and peripheral.
 Peripheral nations- dependent on core
nations.
New International Division of Labor
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Production is fragmented and assigned to
whichever part of the world can provide the
most profitable combination of capital and
labor.
High-income countries have become
dependent on low-income countries for labor.
Global Inequality In The Future
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In some regions, poverty continues to
undermine human development.
Modern technology and economic growth could
reduce poverty and increase opportunities.
Health and education may continue to improve
in lower-income countries, resulting in more
advances.