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Less Developed Countries

Less Developed Countries. Charles Hauss . Comparative Politics . . Less Developed Countries (LDCs). Term “3 rd World” is obsolete since Cold War ended. Majority of the world’s countries. Less Developed Countries (LDCs). CHARACTERISTICS Struggle economically Most are fragile democracies.

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Less Developed Countries

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  1. Less Developed Countries Charles Hauss. Comparative Politics.

  2. Less Developed Countries (LDCs) • Term “3rd World” is obsolete since Cold War ended. • Majority of the world’s countries.

  3. Less Developed Countries (LDCs) CHARACTERISTICS • Struggle economically • Most are fragile democracies Charles Hauss. Comparative Politics.

  4. Assessing Levels of Development • Gross Domestic Product per capita (GDP) • The total value of goods and services produced by an economy, divided by population of the country. • GDP by Sector • Agriculture, Industry, Service • Human Development Index (HDI) • Health, Education, and Income • Freedom House Score • Corruption Index • Failed State Index

  5. Purchasing Power Parity (PPP) • Estimates the buying power of income across different countries by using the U.S. as a benchmark. • Ideally, the same basket of goods should cost the same in every country. • PPP in LDCs are generally lower. • Cheaper labor costs, cost of living, & less productivity. • Overvaluing currency can also drive up the price. The Big Mac Index (Jan 2012) • Switzerland $6.81 • Euro $4.43 • U.S. $4.20 • UK $3.82 • Mexico $2.70 • Russia $2.55 • China $2.44 Actual Exchange • 1 dollar=0.96 Swiss Franc Ideal • 1 dollar=1.55 Swiss Franc • Overvalued by 38% The EconomistJan 2012

  6. Newly Industrializing Countries (NICs) • Top tier of LDCs • Recent economic growth • Emerging democracy • Mexico

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