Activity on the Questions and Discussions

1. For all of their diversity, many less developed countries are linked by a range of common
problems. What are these problems? Which do you think are the most important? Why?
Less developed countries are linked with a range of common problems. These common problems
are: Low levels of industrialization; High levels of inequality and absolute poverty; High
population growth rates; Larger rural populations but rapid rural-to-urban migration;
Underdeveloped financial and other markets; Lower levels of living and productivity; and etc. I
believe the most important problem is the high level of inequality and absolute poverty.
Inequality happens when there is an unequal distribution of wealth in a country. This means that
the gross income of a country is heavily controlled by the topmost rich people. This is the main
problem of most of the developing countries today. It is also the reason why there is absolute
poverty (where an individual is unable to meet their basic needs.) I believe it is the most
important because solving it could lead to prosperous development which every individual can
benefit. A lot of other problems could be solved if we could work out this problem first. In
simpler sense, it has the heaviest impact among the mentioned problems.

2. Explain the distinction between low levels of living and low per capita incomes. Can low
levels of living exist simultaneously with high levels of per capita income? Explain and give
some examples
Low levels of living refer to inability of a population to intake the required calorie count per day.
This is commonly caused by extreme poverty or high levels of unemployment. Meanwhile low
per capita incomes are generated if the income is less compared to the size of a population of a
certain country. As per the definition of per capita income, low levels of living can exist
simultaneously with high levels of per capita income. This is because per capita income is
acquired by dividing national income of a country by its population. Majority of this income
could come from the rich people in that certain country. Therefore, even though a country can
have a high per capita income, low levels of living can still exist. An example of this is Brazil. It
has a high per capita income, however absolute poverty still exists.

3. Can you think of other common (not necessarily universal but widespread) characteristics of
less developed countries not mentioned in the text? See if you can list four or five and briefly
justify them.
Other common characteristics of less developed countries not mentioned in the text:
 Incompetent workers – Less developed countries usually have incompetent workers. This
may be caused by factors like having a hard job but only receiving a minimum income,
thus workers are unmotivated and give the bare minimum.
  Low life expectancy – Less developed countries lack in healthcare. Most citizens are
malnourished and cannot even afford to live healthy due to absolute poverty.
Consequently, a high number of people die early.
 High rate of illiteracy – Due to being financially incapable, most citizens of less
developed countries cannot finish or even go to school. They are forced to work so that
they can have food in their table.
 Citizens working abroad – Income rates in less developed countries are most likely not
enough to support a family. Thus, people are forced to work blue-collar jobs abroad even
though they are professionals in their countries.

4. Do you think that there is a strong relationship among health, labor productivity, and income
levels?
I believe there is a direct relationship between those things. An increase in the level of
productivity per individual is called economic growth. If a person is healthy, he/she could be
more productive and earn more depending on the circumstances. It could also be the other way
around. The main point is, an increase or a development/upgrade in those areas could also
increase the other areas and lead to economic growth.

5. What is meant by the statement that many developing nations are subject to “dominance,
dependence, and vulnerability” in their relations with rich nations? Can you give some
examples?
It basically means that countries are dominated, being dependent to and are more vulnerable to
developed nations. It happens because of certain reasons. First of which is that developing
countries lack resources, due to this, they tend to ask help and depend on developed nations for
the resources they are lacking. This results in developed countries dominating the less developed
ones because usually in these situations, they earn more from what they have credited or helped.
By vulnerability, it means that developing nations are more prone to problems that can cause
their nation harm. It also means that developing countries tend to have a higher probability to fail
in their goals than developed ones.

6. Explain the many ways in which developing countries may differ in their economic, social,
and political structures.
Different factors are to account for when explaining why developing countries may differ in their
economic, social and political structures. First, their geographical locations. Countries differing
in their locations have different advantages and disadvantages as to trade routes and the market
in their respective locations. Culture could also affect the difference of structures in a country.
These cultures create different demand and supply systems. Social and demographic structures
may also be different because of certain influences from other countries and the preferences of
the people. Lastly, the kind of government has a great impact on the differences in political
structures. Most countries having democracy tends to have different government structures that
best reflects their countries.
7. What are some additional strengths and weaknesses of the Human Development Index as a
comparative measure of human welfare? If you were designing the HDI, what might you do
differently, and why?
“The HDI was created to emphasize that people and their capabilities should be the ultimate
criteria for assessing the development of a country, not economic growth alone.” It enables the
government in the allocation of funds in underdeveloped areas. It does not measure countries on
economic growth alone but considers different factors also. However, most of these metrics used
in HDI aren’t necessarily useful and data from some developing countries may not be very
reliable. If I were to design the HDI, I would include values, principles, work ethic, and morale.
If we could focus more on the individual level, it would be easy for us to advance and grow
nations. I believe, the snowball principle is the key to every aim of development.

8. “Social and institutional innovations are as important for economic growth as technological
and scientific inventions and innovations.” What is meant by this statement? Explain your
answer.
This basically means that social and institutional innovations, technological and scientific
inventions and innovations, are all important in achieving economic growth. “Social Innovation
is a process of developing and deploying effective solutions to challenging and often systematic
social and environmental issues in support of social progress.” Meanwhile “institutional
innovation refers to change that neither destroys the old institutional order nor brokers a new
one, but instead, creates interstitial institutional spaces that can serve as a locus for innovation.”
There are as important as technological and scientific innovations simply because of society’s
law and order which limits human possibilities. We are not immortal nor invincible, thus
innovations in these areas are also a must.

9. Why do many economists expect income convergence between developed and developing
countries, and what factors would you look to for an explanation of why this has occurred for
only a limited number of countries and in such a limited degree so far?
Income convergence refers to the hypothesis that developing countries’ per capita incomes
would increase quicker than developed ones. Different factors should be considered when talking
about income convergence. However, the main factors why only a limited number of countries
and only in such a limited degree this has occurred so far is because that the current gap in per
capita income of developed and developing countries is so large that even if the low income
countries grow for the foreseeable future at much higher rates than the high income countries,
there is still a very little probability of them catching up. Taiwan, Singapore and Korea are the
only ones to do it but in a such limited degree.
10. What are good economic institutions, why do so many developing countries lack them, and
what can be developing countries do to get them. Justify your answer.
Good economic institutions mean property rights, honest government, political stability,
dependable legal system, and competitive and open markets. Most developing countries lack
them because of their inability to sustain their economic policies, greedy people placed in
governments and they lack competent people to lead them. Developing countries can do a lot in
achieving good institutions. However, the people must unify to do it. Citizens must demand
competency and not just the bare minimum. It could be started by putting the right people to lead
countries, instead of corrupt officials.

11. Which measure shows more equality among countries around the world—GNI calculated at
exchange rates or GNI calculated at purchasing power parity? Explain.
I believe GNI calculated at purchasing power parity shows more equality among countries
around the world for it is based using purchasing power parity rates which is usually in dollars. It
gives the countries an equal measurement since it is based on a single rate.

12. “South Asia has a lower income per capita than sub-Saharan Africa.” Comment on the
validity of this statement.
This statement, which is based on income per capita at market exchange rates understates the
standard of living of people and outdated. As what we all know, income per capita does not tell
the whole story. It is a measure of only one aspect, which in this case is based on market
exchange rates. South Asia had the most indigent population, evidenced by a weak economy and
low capita per income. However, after 2005, South Asia’s per capita gross domestic product
grew at a rate of 3.4 percent each year, while Sub-Saharan Africa experienced no growth. It may
still be not a conclusive measure but that statement is clearly outdated. In today’s time, South
Asia is performing better than Sub-Saharan Africa in terms of poverty rate and income per
capita.

13. What is the meaning of a “colonial legacy”? Discuss any disadvantages and possible
advantages
“Colonial legacy is a term used to describe the changes that affect nations and regions governed
by invasive colonial rulers.” Basically it is when powerful countries take control of vulnerable
ones. Disadvantages of it are enslavement, abuse of power, exploitation, unequitable use of
scares resources. These disadvantages outweigh the possible advantages. Still, possible
advantages would be a powerful nation to depend on, and economic partnership.
14. State five characteristics of the developing world. Discuss diversity within the developing
world on these characteristics in relation to the developed world.
Some characteristics of the developing world are low per capita income, high population growth
rate, high rates of unemployment, dependence on primary sector and absolute poverty. Low per
capita real income is one of the most defining characteristics of developing economies.
Meanwhile, developed countries have high per capita income. Population growth in developed
countries are also low, these may be caused by proper family planning due which is not practiced
in developing countries. High rates of unemployment are also experienced, jobs are not enough
to cater the population while in developed countries, there are more than enough jobs for
everyone. Most developing countries also depend on the primary sector alone, since their
economies are struggling in other sectors. Meanwhile, this seldom happens in developed
countries. Lastly, absolute poverty is hardly seen in developed countries while it is rampant in
countries like the Philippines and India.

15. Discuss the differences between the traditional HDI in comparison to the “new” (NHDI)
formulation. In what ways do you think either one is a better measure of human
development?
The differences are the following:
 GNI / capita replaces GDP/capita Since GNI considers the importance of remittances and aids
from abroad
 Expected educational attainment, the other new component, is not an achievement but a UN
forecast
 The education index has been completely changed; two new components have been added; the
average actual educational attainment and the expected attainments of today's children
 The two previous components of the education index, literacy and enrollment, have been
dropped

I believe the new HDI is the better of the two since it entails a more advanced measurement of
growth and development and it provides a more accurate and thorough measure of development
than the old HDI. The addition and removal of some factors could possibly lead into a more
reliable result and can reflect societal development better.