Globalisation, poverty and inequalities — practice questions

Dependency argument: Frank — satellite/metropole links trap periphery exporting raw materials; TNCs repatriate profit; debt keeps control (IMF); neo-colonialism.

Supporting evidence: Historical colonial extraction; trade terms favour manufactured goods; debt crises in Global South.

Criticisms: Modernisation — some former colonies developed (Asian tigers); internal corruption not only external; globalisation lifted millions in China/India; too deterministic.

Evaluation: Strong on historical exploitation and structural inequality — weaker if ignoring domestic policy and successful development cases.

Conclusion: Partial explanation — combine with world-systems and state capacity.

Step 1: Define the Palma Ratio. The Palma Ratio is a measure of inequality that compares the total income of the richest 10% of the population to the total income of the poorest 40%.

Step 2: Identify the income groups. In a community of 10 households:

• The richest 10% is the single household with the highest income.
• The poorest 40% are the four households with the lowest incomes.

Step 3: Calculate the total income for each group.

• Income of the richest 10% (1 household): £250,000
• Income of the poorest 40% (4 households): £10,000 + £15,000 + £20,000 + £25,000 = £70,000

Step 4: Calculate the Palma Ratio. The formula is: Palma Ratio = (Total Income of Richest 10%) / (Total Income of Poorest 40%)

• Palma Ratio = £250,000 / £70,000
• Palma Ratio ≈ 3.57

Step 5: Interpret the result. A Palma Ratio of 3.57 means that the richest 10% of this community earns 3.57 times the entire income of the poorest 40%. This indicates a significant level of income inequality. Sociologists use this measure because it focuses on the extremes of the income distribution, which the Gini coefficient can sometimes obscure. For context, a ratio of 1.0 would suggest relative equality between the top and bottom, while ratios above 3.0 are considered high.