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Econ Development Chapters 8&9

Global warming – increasing average air
and ocean temperatures.
Climate Change – non-transient altering of
underlying climate.
Environmental capital – portion of a
country’s overall capital assets that directly
relate to environment.
Sustainable development – permits future
generations to live at least as well as the
current generation.
Sustainable NNI – measure of the total
annual income that can be consumed
without diminishing the total capital assets of
the nation.
Environmental Kuznets curve – reflects the
environmental degradation first arises and
falls with increases in income per capita.
Biomass fuels – any combustible organic
matter that may be used as fuel.
Desertification – transformation of a region
into dry, barren land with little or no capacity
to sustain life w/o an artificial source of
Soil erosion – loss of valuable topsoils.
Deforestation – clearing of forested land.
Total net benefit – sum of net benefits to all
Marginal cost – additional to total cost
incurred by the producer.
Producer surplus – excess of what a
producer of a good receives.
Consumer surplus – excess utility over price
derived by consumers.
Scarcity rent – premium rent charged for the
use of a resource that is in fixed or limited
Present value – discounted value at the
present time of a sum of money to be
received in the future.
Marginal net benefit – benefit derived from
the last unit of a good minus its cost.
Property rights – acknowledged right to use
or benefit from a product.
Common property resource – collectively
owned and allocated under a system of
unrestricted access.
Externality – any benefit borne by an
individual economic unit .
Internalization – process whereby external
environmental or other costs are borne by
the producers or consumers who generate
Public good – provides benefits to all
individuals simultaneously.
Public bad – imposes costs on groups of
individuals simultaneously.
Free rider problem – people can secure
benefits that someone else pays for.
Clean technologies – technologies that by
design produce less pollution and waste
and use resources more efficiently.
Private costs – direct monetary outlays of an
individual economic unit.
Pollution tax – tax levied on the quantity of
pollutants released into the physical
Social cost – full cost of an economic
decision to society as a whole.
Absorptive capacity – capacity of an
ecosystem to assimilate potential pollutants.
Greenhouse gases – trap heat within the
earth’s atmosphere and can contribute to
global warming.
Biodiversity – variety of life forms within an
Global public good – PG whose benefits
reach across national borders and
population groups.
Debt for nature swap – exchange of foreign
debt held by an org for a larger quantity of
domestic debt.
Economic planning – deliberate and
conscious attempt by the state to formulate
decisions on how the factors of production
will be allocated.
Economic plan – written document
containing government policy decisions on
how resources will be allocated.
Comprehensive plan – sets target to cover
all the major sectors of the national
Partial plan – covers only a part of the
national economy.
Planning process – procedure for drawing
up and carrying out a formal economic
Economic infrastructure – capital embodied
Market failure – phenomenon that results
from the existence of market imperfections.
Aggregate growth model
– formal
economic model describing growth of an
economy in one or few sectors using a
limited number of variables.
Input output model – formal model dividing
the economy into sectors and tracing the
flow of interindustry purchases and sales.
Project appraisal – quantitative analysis of
the relative desirability of investing a given
sum of private or public funds in alternative
Cost benefit analysis – tool of economic
analysis in which the actual and potential
private and social costs of various economic
decisions are weighed against actual and
potential private and social benefits.
Social profit – difference between social
benefits and social costs.
Shadow prices – prices that reflects the true
opportunity costs of resources.
Market prices – prices established by
demand and supply in markets.
Exchange rate – rate at which the domestic
currency may be converted into a foreign
Rent seeking – efforts by individuals and
businesses to capture the economic rent.
Social rate of discount – rate at which a
society discounts a potential future social
benefits to find out whether such benefits
are worth their present social cost.
Net present value – value of a future stream
of net benefits discounted to the present by
means of an appropriate discount rate.
IRR – discount rate that causes a project to
have a net present value of zero.
intervention worsens outcomes.
Political will – determined effort by persons
in political authority to achieve certain
economic objectives through various
Path dependency – condition in which the
past condition of an individual or economy,
measured by the level of one or more
variables, affect future conditions.
NGO – involved in providing financial and
Voluntary failure – inability of NGO and
citizen sector more broadly to efficiently
achieve social objectives in their areas
supposed comparative advantage.
Corruption – appropriation of public
resources for private profit and other private
purposes through the use and abuse of
official power or influence.
Globalization -