The term "Third World" arose during the Cold War to define countries that remained non-aligned with either NATO or the Warsaw Pact. The United States, Canada, Japan, South Korea, Western European nations and their allies represented the "First World", while the Soviet Union, China, Cuba, North Korea, Vietnam and their allies represented the "Second World". This terminology provided a way of broadly categorizing the nations of the Earth into three groups based on political divisions. Strictly speaking, "Third World" was a political, rather than an economic, grouping. Since the fall of the Soviet Union and the end of the Cold War, the term Third World has decreased in use. It is being replaced with terms such as developing countries, least developed countries or the Global South. The concept itself has become outdated as it no longer represents the current political or economic state of the world and historically poor countries have transited different income stages.
Economic history is the academic study of economies or economic events of the past. Research is conducted using a combination of historical methods, statistical methods and the application of economic theory to historical situations and institutions. The field can encompass a wide variety of topics, including equality, finance, technology, labour, and business. It emphasizes historicizing the economy itself, analyzing it as a dynamic force and attempting to provide insights into the way it is structured and conceived.
Human capital is a concept used by social scientists to designate personal attributes considered useful in the production process. It encompasses employee knowledge, skills, know-how, good health, and education. Human capital has a substantial impact on individual earnings. Research indicates that human capital investments have high economic returns throughout childhood and young adulthood.
Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy over a certain period of time. Statisticians conventionally measure such growth as the percent rate of increase in the real gross domestic product, or real GDP.
In the economics study of the public sector, economic and social development is the process by which the economic well-being and quality of life of a nation, region, local community, or an individual are improved according to targeted goals and objectives.
Development economics is a branch of economics which deals with economic aspects of the development process in low- and middle- income countries. Its focus is not only on methods of promoting economic development, economic growth and structural change but also on improving the potential for the mass of the population, for example, through health, education and workplace conditions, whether through public or private channels.
The knowledge economy is an economic system in which the production of goods and services is based principally on knowledge-intensive activities that contribute to advancement in technical and scientific innovation. The key element of value is the greater dependence on human capital and intellectual property for the source of the innovative ideas, information and practices. Organisations are required to capitalise this "knowledge" into their production to stimulate and deepen the business development process. There is less reliance on physical input and natural resources. A knowledge-based economy relies on the crucial role of intangible assets within the organisations' settings in facilitating modern economic growth.
International development or global development is a broad concept denoting the idea that societies and countries have differing levels of economic or human development on an international scale. It is the basis for international classifications such as developed country, developing country and least developed country, and for a field of practice and research that in various ways engages with international development processes. There are, however, many schools of thought and conventions regarding which are the exact features constituting the "development" of a country.
Walt Whitman Rostow was an American economist, professor and political theorist who served as National Security Advisor to President of the United States Lyndon B. Johnson from 1966 to 1969.
Rostow's stages of economic growth model is one of the major historical models of economic growth. It was published by American economist Walt Whitman Rostow in 1960. The model postulates that economic growth occurs in five basic stages, of varying length:
- The traditional society
- The preconditions for take-off
- The take-off
- The drive to maturity
- The age of high mass-consumption
Underdevelopment, in the context of international development, reflects a broad condition or phenomena defined and critiqued by theorists in fields such as economics, development studies, and postcolonial studies. Used primarily to distinguish states along benchmarks concerning human development—such as macro-economic growth, health, education, and standards of living—an "underdeveloped" state is framed as the antithesis of a "developed", modern, or industrialized state. Popularized, dominant images of underdeveloped states include those that have less stable economies, less democratic political regimes, greater poverty, malnutrition, and poorer public health and education systems.
Modernization theory is used to explain the process of modernization within societies. The "classical" theories of modernization of the 1950s and 1960s drew on sociological analyses of Karl Marx, Emile Durkheim and a partial reading of Max Weber, and were strongly influenced by the writings on Harvard sociologist Talcott Parsons. Modernization theory was a dominant paradigm in the social sciences in the 1950s and 1960s, then went into a deep eclipse. It made a comeback after 1991, when Francis Fukuyama wrote about the end of the Cold War as confirmation on modernization theory and more generally of universal history. But the theory remains a controversial model.
The idea of convergence in economics is the hypothesis that poorer economies' per capita incomes will tend to grow at faster rates than richer economies, and in the Solow growth model, economic growth is driven by the accumulation of physical capital until this optimum level of capital per worker, which is the "steady state" is reached, where output, consumption and capital are constant. The model predicts more rapid growth when the level of physical capital per capita is low, something often referred to as “catch up” growth. As a result, all economies should eventually converge in terms of per capita income. Developing countries have the potential to grow at a faster rate than developed countries because diminishing returns are not as strong as in capital-rich countries. Furthermore, poorer countries can replicate the production methods, technologies, and institutions of developed countries.
Export-oriented industrialization (EOI) sometimes called export substitution industrialization (ESI), export led industrialization (ELI) or export-led growth is a trade and economic policy aiming to speed up the industrialization process of a country by exporting goods for which the nation has a comparative advantage. Export-led growth implies opening domestic markets to foreign competition in exchange for market access in other countries.
Development theory is a collection of theories about how desirable change in society is best achieved. Such theories draw on a variety of social science disciplines and approaches. In this article, multiple theories are discussed, as are recent developments with regard to these theories. Depending on which theory that is being looked at, there are different explanations to the process of development and their inequalities.
Local Economic Development (LED) is an approach to economic development, of note in the developing world that, as its name implies, places importance on activities in and by cities, districts and regions. Local economic development combines economic development activities, urban planning, infrastructure development and social development activities to improve local conditions. LED encompasses a range of disciplines including physical planning, economics and marketing, all with the goal of building up the economic capacity of a local area to improve its economic future and the quality of life for all.
The balanced growth theory is an economic theory pioneered by the economist Ragnar Nurkse (1907–1959). The theory hypothesises that the government of any underdeveloped country needs to make large investments in a number of industries simultaneously. This will enlarge the market size, increase productivity, and provide an incentive for the private sector to invest.
Unbalanced growth is a natural path of economic development. Situations that countries are in at any one point in time reflect their previous investment decisions and development. Accordingly, at any point in time desirable investment programs that are not balanced investment packages may still advance welfare. Unbalanced investment can complement or correct existing imbalances. Once such an investment is made, a new imbalance is likely to appear, requiring further compensating investments. Therefore, growth need not take place in a balanced way. Supporters of the unbalanced growth doctrine include Albert O. Hirschman, Hans Singer, Paul Streeten, Marcus Fleming, Prof. Rostov and J. Sheehan.
The anthropology of development is a term applied to a body of anthropological work which views development from a critical perspective. The kind of issues addressed, and implications for the approach typically adopted can be gleaned from a list questions posed by Gow (1996). These questions involve anthropologists asking why, if a key development goal is to alleviate poverty, is poverty increasing? Why is there such a gap between plans and outcomes? Why are those working in development so willing to disregard history and the lessons it might offer? Why is development so externally driven rather than having an internal basis? In short why does so much planned development fail?
Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist is a 2017 non-fiction book by Oxford economist Kate Raworth. The book elaborates on her concept of doughnut economics, first developed in her 2012 paper, A Safe and Just Space for Humanity.
