Glossary
Economic Growth
An increase in the amount of goods and services produced per head of the population over a period of time.
Example:
A nation experiencing strong economic growth might see rising incomes, more job opportunities, and increased consumer spending.
Economic Liberalization
The process of reducing government control over the economy, often involving policies that promote free markets and private enterprise.
Example:
When a country decides to open its borders to more international trade and investment, it is engaging in economic liberalization to boost its economy.
Environmental Issues
Problems with the planet's systems (air, water, soil, etc.) that arise from human activity, often intensified by rapid economic growth and industrialization.
Example:
Unregulated industrial expansion due to economic liberalization can lead to severe environmental issues like air pollution and deforestation.
FDI (Foreign Direct Investment)
An investment made by a firm or individual in one country into business interests located in another country.
Example:
When a multinational car manufacturer builds a new factory in a different country, it represents a significant FDI, bringing jobs and capital.
Free Market Mechanisms
Economic principles that allow supply and demand to determine prices and production with minimal government intervention.
Example:
In a system driven by free market mechanisms, the price of a new smartphone is determined by consumer demand and manufacturer supply, not by government mandates.
GDP (Gross Domestic Product)
The total monetary value of all finished goods and services produced within a country's borders in a specific time period, usually a year.
Example:
If a country's GDP increases significantly, it generally indicates a healthy and expanding economy.
Gini Coefficient
A measure of statistical dispersion intended to represent the income or wealth distribution of a nation's residents, ranging from 0 (perfect equality) to 1 (perfect inequality).
Example:
A country with a Gini Coefficient close to 0.2 would indicate a relatively equitable distribution of wealth among its citizens.
Human Development
A measure of a country's progress in terms of the well-being of its people, encompassing health, education, and living standards.
Example:
Policies focused on improving literacy rates, life expectancy, and access to healthcare contribute directly to a nation's human development.
Human Development Index (HDI)
A composite statistic of life expectancy, education, and per capita income indicators, which are used to rank countries into four tiers of human development.
Example:
A country with a high Human Development Index typically has excellent public education, long life expectancies, and high average incomes.
Inequality
The uneven distribution of resources, opportunities, or wealth within a society.
Example:
Despite rapid economic growth, some countries struggle with high levels of income inequality, where a small percentage of the population holds most of the wealth.
Neoliberalism
A political and economic philosophy that advocates for free market capitalism, deregulation, and reduced government spending.
Example:
Many international financial institutions encourage developing nations to adopt neoliberal policies, such as privatization and free trade, to foster economic growth.
Political Corruption
The abuse of public power for private gain, often exacerbated by increased opportunities for private influence in liberalized economies.
Example:
When government officials accept bribes from private companies to secure lucrative contracts, it exemplifies political corruption.
Political Tensions
Increased strain or conflict within a political system, often arising from disagreements over economic policies like liberalization.
Example:
Debates over the extent of government intervention in the economy can lead to significant political tensions between different parties and social groups.
Privatization
The transfer of ownership of a business, enterprise, agency, public service, or public property from the public sector (a government) to the private sector.
Example:
The decision to sell a state-owned telecommunications company to a private corporation is an act of privatization, aiming for increased efficiency.
Subsidies
Financial aid or support extended by a government to an economic sector, business, or individual, typically to promote economic and social policy.
Example:
A government might offer subsidies to farmers to ensure a stable food supply or to encourage the production of certain crops.
Tariffs
Taxes imposed on imported goods and services, typically used to protect domestic industries or generate revenue.
Example:
To protect its local steel industry, a country might impose high tariffs on imported steel, making foreign products more expensive.
Urban Sprawl
The uncontrolled expansion of urban areas, often characterized by low-density development and increased reliance on automobiles.
Example:
As more people move to cities for economic opportunities, the rapid and unplanned growth of residential areas on the outskirts contributes to urban sprawl.