Development Economics

Agrarian System

The pattern of land distribution, ownership and management, also the institutional and social structure of the agro-based economy.

Agricultural extension services

Services offered to the farmers, usually by the government or non-governmental organisations, in the form of transmitting information, new ideas, methods, and advice relating to use of fertilisers, pest control, soil testing and conservation methods, etc. with a view to encouraging and assisting them to achieve larger agricultural output.

Appropritate technology

Technology of production that is appropriate for a country given its factor endowments.

Capability

Amartya Sen introduced the concept of 'capability' in development economics. Sen defined capabilities of an individual as 'the freedom that a person has in terms of the choice of functioning, given his personal features and his command over commodities.'

Capital accumulation

Increase in a country's stock of real capital like plants, machineries and productive equipments. Economic development of a country largely depends on the rate of capital accumulation.

Foreign direct investment (FDI)

Overseas investments by private multinflational corporations. Broadly, foreign direct investment includes 'mergers and acquisitions', building new facilities, reinvesting profits earned from over seas operations and intra-company loans.

Amortization

Gradual pay of a loan principal.

Appropriate technology

Technology that is appropriate for an economy given its existing factor endowments. For example, a technology employing a higher proportion of labour relative to other factors in a labour-abundant economy is usually more appropriate than one that uses smaller labour proportions relative to other factors.

Basic needs

The basic goods and services (food, shelter, clothing, sanitation, education, etc.) is necessary for a minimum standard of living.

Big push

A concerted effort, led often by the Government policy, to initiate or accelerate economic development across a broad spectrum of sectors and industries in the economy.

Biodiversity

The variety of life forms within an ecosystem.

Biomass fuels

Any combustible organic matter that may be used as fuel, such as rewood, dung, or agricultural residues.

Brain drain

The emigration of highly educated and skilled professional and technical manpower from the developing to the developed countries.

Buffer stocks

Stocks of commodities such as food items held by some authority to be used during scarcity or to moderate price fluctuations.

Capability

The freedom that a person has in terms of the choice of functioning, given his personal features and his command over commodities.

Capital intensive technique

A technique of production that uses a higher proportion of capital relative to other factors of production such as labour or land per unit output.

Capital-labour ratio

The number of units of' capital per unit of labour.

Capital-output ratio

The units of capital required to produce a unit of output over a given period of time.

Capital stock

The total amount of physical goods existing at a particular time that have been produced for use in the production of other goods (including services).

Casual employment

Employment on an ad hoc basis without regular hours or a wage contract most often found in the informal sector.

Common market

A form of economic integration in which there is free internal trade, a common tari, and the free movement of labour and capital among partner states. The European Union is an example.

Common property resource

A resource that is publicly owned and allocated under a system of unrestricted access.

Customs union

A form of economic integration in which two or more nations agree to free all internal trade among nations while levying a common tariff for trade with other nations.

Debt-service ratio

The ratio of interest and principal payments due in a year to export receipts for that year.

Deforestation

The clearing/destruction of forested land.

Dependency burden

The proportion of the people aged 0 to 15 and above 65 to total population. The people in this age group is considered economically unproductive and therefore not counted in the labour force.

Dualism

Two situations or systems (one desirable and the other not), co-existing side by side in one place. For example, modern and traditional sectors, urban and rural, extreme poverty and affluence, etc.

Economic union

Complete integration of two or more economics into a single economic entity.

Export promotion

Government policy to increase the volume of a country's exports through export incentives and other means with a view to generating more foreign exchange.

Incremental capital-output ratio (ICOR)

The amount of additional capital needed to increase output by one unit.

Infant industry

A newly set-up domestic industry which requires the protection of a tariff carrier to grow.

Informal sector

In many countries, a large part of the urban economy is characterized by small competitive individual or family firms, petty retail trade and services, labour-intensive methods, free entry and non-observance of labour laws etc.

Innovation

The application of scientific inventions in production processes and methods to produce new products with a view to making profit.

Financial intermediary

Any financial institution, public or private, that serves to channel loanable funds from savers to borrowers. Examples include commercial banks, cooperative banks, non-banking finance companies and development banks.

Fixed exchange rate

When exchange value of a national currency remain fixed in relation to another (usually the US dollar) and is not allowed to fluctuate on the international money market.

Flexible exchange rate

The exchange value of a national currency that is free to fluctuate in response to shifting demand and supply of foreign exchange.

Foreign direct investment (FDI)

Overseas investments by private multi-inflational corporations.

Formal educational system

The organized and accredited educational system, with qualified teachers, standard curricula, regular academic years, and recognized certification.

Free-rider problem

Situation in which people enjoy benefits without paying for it.

Free-trade area

A form of economic integration in which there exists free internal trade among member countries but each member is free to levy different external tariff against non-member nations.

Globalization

The increasing integration of national economies with the international markets.

Government failure

Situation in which government intervention in an economy worsens outcomes.

Human capital

Productive investments embodied in human beings. These include skills, abilities, and health resulting from expenditures on education, training and medical care.

Inward-looking development policies

Policies that stress economic self-reliance of a nation, by promoting development of indigenous appropriate technology, the imposition of substantial protective tariff and non-tariff trade barriers to promote import substitution, and the general discouragement of private foreign investment.

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