1. Development and Trade The Geography of the Global Economy

2. Development What is development? – The process of improving the material condition of people through the growth and diffusion of technology and knowledge We group countries into more or less “developed”

3. Measures of Development Gross Domestic Product (GDP) – Size of the economy GDP per capita using Purchasing Power Parity (PPP) – What can people buy? – Standard of living UN Human Development Index

4. GDP (2012)

5. PPP (2012)

6. GDP Density

7. UN HDI (2014)

8. Informal Sector In many developing countries, much economic activity is not counted – Barter – Black Markets – Illegal Activity

9. Modernization Model 1) Traditional Society Limited Technology; Static Society 2) Preconditions for Takeoff Extractive Export Industries 3) Takeoff Development of Manufacturing 4) Drive to Maturity Wider industrial/commercial base 5) High Mass Consumption Shift to service sector, domestic consumption Rostow’s Model: Stairway to Development Critiques: Does not account for “roadblocks” and colonial legacies

10. Structuralism In contrast to classical views of development, some critics recognize structural impediments for poorer nations Dependency Theory (Wallerstein) – Nations locked in patterns set in colonial past – Core-periphery relationships hard to break

11. Trade Trade is necessary for development – Exports bring wealth into country Comparative Advantage – Idea that countries will specialize in certain goods for trade

12. Globalization Economic globalization – The interconnectedness of the world economy Multinational Corporations – Main agents of globalization – Production spread across globe

13. Foreign Direct Investment When foreign corporations open new factories or offices in a country Important for development But is all FDI the same? – Plantation – Research

14. NICs New Industrialized Countries – States that are succeeding in moving forward in industrial development Asian Tigers (1980s) – Taiwan, South Korea, Hong Kong, Singapore BRIC (2000s) – Brazil, Russia, India, China

15. NAFTA North American Free Trade Agreement (1992) – Reduction of tariffs among US, Canada, Mexico – Enabled US corporations to take advantage of cheap Mexican labor Maquiladoras – Export processing zones along Mexican border – Changed economic geography of Mexico

16. Implications of Globalization New International Division of Labor – Economic production is spread across globes – Research/HQ in core – Production in periphery – Are states able to move up chain?

17. Implications of Globalization Race to the bottom? – Are companies playing states off against each other? Are we seeing a drive to: – Lower Wages – More Lax Environmental regulations – Tax Evasion