2281 · 5.4
Differences in economic development between countries flashcards
Revision flashcards for Cambridge 2281 Differences in economic development between countries (syllabus 5.4). Flip, recall, then mark a real past-paper question.
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Typical LIC characteristics?
Low GDP per capita, high primary sector share, high population growth, low HDI, high poverty, often export raw commodities.
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Typical MIC characteristics?
Industrialising — rising secondary sector, urbanisation, export-led manufacturing possible, growing middle class, informal economy.
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Typical HIC characteristics?
Service-dominated economy, high HDI, ageing population, high productivity, but income inequality may still be significant.
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Structural change pattern?
Development shifts employment from primary (agriculture) → secondary (manufacturing) → tertiary (services).
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Gini coefficient interpretation?
0 = perfect equality; 1 = maximum inequality. Higher Gini → Lorenz curve further from equality line.
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Demographic differences?
LICs: high birth rates, young population. HICs: low birth rates, ageing, dependency ratio challenges.
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Structural Change
The long-term shift in the composition of a country's output and employment, typically from the primary sector (agriculture), through the secondary sector (industry), to the tertiary and quaternary sectors (services).
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GNI per capita
Gross National Income divided by the mid-year population. It is the primary metric used by the World Bank to classify countries by income level (LIC, MIC, HIC).
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Primary Sector Dependency
An economic characteristic of many LICs where a large proportion of GDP and employment is derived from agriculture, fishing, and the extraction of raw materials, making the economy vulnerable to price volatility and climate shocks.
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Human Development Index (HDI)
A composite index measuring development based on three dimensions: a long and healthy life (life expectancy), knowledge (mean and expected years of schooling), and a decent standard of living (GNI per capita).
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Kuznets Curve
A hypothesis represented by an inverted 'U' shape, which suggests that as an economy develops, market forces first increase and then decrease economic inequality. Its empirical validity is widely debated.
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Lorenz Curve
A graphical representation of income or wealth distribution. The curve plots the cumulative percentage of total income received against the cumulative percentage of recipients, starting from the poorest. The further the curve is from the 45-degree line of perfect equality, the greater the inequality.
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Middle-Income Trap
A development scenario where a country's growth stagnates after reaching middle-income levels. This occurs when rising wages make it unable to compete with low-cost producers, but it lacks the innovation and productivity to compete with high-income economies.
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Dependency Ratio
A measure of the number of dependents (aged 0-14 and over 65) to the total working-age population (aged 15-64). A high dependency ratio can place a strain on the working population and public finances.