Revise Globalisation, poverty and inequalities for Cambridge 9699 (8.1)

Global poverty is typically categorised into absolute and relative poverty. Absolute poverty, as defined by the World Bank, refers to a condition of severe deprivation of basic human needs, including food, safe drinking water, sanitation, health, and shelter, often measured by an income threshold (e.g., living on less than $2.15 per day). Relative poverty, in contrast, is defined in relation to the economic standards of a particular society and refers to living below a certain income threshold in that context. Global inequality refers to the systematic differences in wealth and power between countries (international inequality) and within countries (internal inequality). Sociologists use measures like the Gini coefficient and the Human Development Index (HDI) to quantify and analyse these disparities, moving beyond purely economic indicators.

Modernisation theory, a functionalist perspective popular in the 1950s and 60s, argues that poverty in developing nations is caused by internal, cultural factors. Theorists like Walt Rostow proposed a five-stage model of development, suggesting all societies could progress from 'traditional' to 'high mass-consumption' by adopting Western values, technology, and capitalist economic systems. This perspective sees traditional values, such as fatalism and collectivism, as barriers to development. Globalisation, from this viewpoint, is a positive force that diffuses modern values and provides capital investment and technological aid from developed (MEDCs) to less-developed countries (LEDCs), helping them overcome their internal obstacles and 'take off' economically.

In direct opposition to Modernisation Theory, Dependency Theory, developed by thinkers like Andre Gunder Frank, posits that underdevelopment is not an initial stage but a condition created by the historical relationship between dominant and subordinate states. This Marxist-inspired perspective argues that colonialism and neo-colonialism have locked developing countries (the 'periphery') into a state of dependency on developed nations (the 'core'). Globalisation is viewed as the latest stage of this exploitation, facilitated by Transnational Corporations (TNCs), the IMF, and the World Bank, which extract resources and profits from the periphery. Immanuel Wallerstein's World Systems Theory expands this by adding a 'semi-periphery' category, describing a three-tiered global capitalist system where upward or downward mobility is difficult.

Neoliberalism is an economic ideology that champions free-market capitalism. It advocates for minimal state intervention, privatisation of state-owned industries, deregulation, and free trade. From the 1980s, the International Monetary Fund (IMF) and World Bank imposed these principles on many indebted developing nations through Structural Adjustment Programmes (SAPs) as a condition for receiving loans. Proponents argued this would stimulate economic growth and reduce poverty. However, critics, such as Joseph Stiglitz, argue that SAPs often worsened poverty and inequality by forcing governments to cut spending on public services like health and education, remove food subsidies, and open their markets to foreign competition that overwhelmed local industries.