Ch. 3: Why Some Countries Fail To Thrive (p. 51-56)
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Maize: corn
Gross Domestic Product (GDP): market value of all final
goods and services produced within the borders of a
country during a year
Gross National Product: total market value of all final
goods and services produced by a country’s residents, no
matter where they live, during a year
Income Per Capita: total national income divided by the
number of people in the nation
Extreme Poverty: condition of people living on less than
$1.25 per day
Capital: the wealth, whether in money or property, owned
or employed in business by a person, firm, or corporation#
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*Definitions from: http://www.factcheck.org/2008/02/gdp-vs-gnp/
+Definition from: http://www.onedayswages.org/about/what-extreme-global-poverty
#Definition from: http://dictionary.reference.com/browse/capital
1.
2.
3.
4.
Saving
Trade
Technology
Resource Boom
(larger/more fertile farms
become available)
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5/6ths of the world’s
population is at least a step
above extreme
poverty….doesn’t sound too
bad, right?!
BUT, in a world with almost
7 BILLION people, that
means well over ONE
BILLION people are living in
extreme poverty
1. Lack of saving: capital depreciation may result
2. Absence of trade: could be caused by lack of
roads/infrastructure, violence/war, monetary
chaos (when money isn’t a reliable medium of
exchange), price controls, and other gov’t
interventions that limit trade
3. Technological reversal:
loss of technological
know-how (can happen
if parents die)
4. Natural resource
decline: e.g. nutrient
depleted soil
5. Adverse Productivity Shock: natural disasters
like flood, drought, heat waves, frost, pests, or
household disease
6. Population growth: household gets bigger but
output stays the same
5.
Lack of durable housing
Insufficient living area
Lack of access to clean water
Inadequate sanitation
Insecure tenure
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How does your article compare to this list?
Which features were mentioned?
Were there others you identified? What are they?
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2.
3.
4.
**UN HABITAT=The United Nations Human Settlements Programme, UN-HABITAT, is
the United Nations agency for human settlements. It is mandated by the UN General
Assembly to promote socially and environmentally sustainable towns and cities with the
goal of providing adequate shelter for all.***
Ch. 3: Why Some Countries Fail To Thrive (p. 56-66)
1.
The Poverty Trap: the poorest can’t save because
they need their entire income just to survive
▪ They actually deplete natural capital (e.g. cut down trees for
firewood w/out replanting)
2. Physical Geography: if a country is land-locked, in
mountains, or has no good rivers, harbors, or
coastline, they may be economically isolated
▪ Other geographic limitations:
-arid conditions (low ag. productivity; more vulnerable to droughts)
-ecological conditions ideal for disease
**geographic limits can be overcome with enough money; still increases likelihood of
falling into a poverty trap***
Central African Republic (CAR)
-7th lowest in world GDP (of 221
countries)
-48.6% literacy rate
-9th lowest life expectancy rate (50.7
years) (US is 50th at 78.37)
Stats from: https://www.cia.gov/library/publications/the-world-factbook/index.html
3. Fiscal Trap: Gov’t lacks economic means to improve
infrastructure
▪ 3 Reasons:
a. Little tax income from poor population
b. Inept, corrupt, weak gov’t can’t collect taxes
c. Too much international debt
4. Governance Failures: including failure to fix
infrastructure, create positive econ. environment,
stem corruption, maintain peace/safety, define
property rights, enforce contracts, & defend nat’l
territory
5. Cultural Barriers:
cultural/religious norms
stifle development
▪ e.g: women excluded from
econ. & pol. life; no education,
no economic productivity;
usually higher fertility rates
▪ e.g.: ethnic & religious
minorities denied access to
public services (sometimes
‘ethnic cleansing’ results)
-woman whose ears and nose were cut
off by Taliban after being caught
running away from her abusive husband
http://www.time.com/time/covers/0,16641,20100809,00.html
6. Geopolitics: Trade barriers, such as economic
sanctions, stifle development
7. Lack of Innovation: little funding provided for
research & development (R & D); small markets to
test new products….so inventors can’t recoup cost
of R & D
8. The Demographic Trap: poor families have many
kids; more kids=less resources to care for &
educate them; next generation raised in same
conditions
Ways to avoid The Demographic Trap:
 Educate girls; more women into workforce
 Education, laws, & social action
for women to more easily make
fertility choices
 Better healthcare for kids;
parents less likely to have many
kids to care for them in old age
http://www.nytimes.com/slideshow/2005/12/22/international/20
051223_ETHIOPIA_SLIDESHOW_2.html