Summary Issues in Global Economics
Lecturer: Roel Dom
Table of contents
Chapter 1. Introduction.................................................................................................................................. 3
What is development?.........................................................................................................................................3
Development as seen in the 20th century......................................................................................................4
Development as seen in the 21st century.......................................................................................................4
What are global issues?.......................................................................................................................................5
Different types of global issues............................................................................................................................5
Key players in global issues..................................................................................................................................5
The withering role of the state in addressing global issues.................................................................................6
Two big forces......................................................................................................................................................7
The demographic explosion.............................................................................................................................7
The new economy............................................................................................................................................7
The three developments leading to the new economy........................................................................................8
Reality checks.......................................................................................................................................................8
New challenges....................................................................................................................................................8
The Great Acceleration.........................................................................................................................................8
Instruments of governance..................................................................................................................................9
Global turning points............................................................................................................................................9
Economy and business.....................................................................................................................................9
Society and demography...............................................................................................................................10
Politics............................................................................................................................................................10
Chapter 2. Poverty and wealth..................................................................................................................... 10
What is poverty?................................................................................................................................................10
Evolution of poverty...........................................................................................................................................11
The Millenium Development Goals (MDGs).......................................................................................................12
The Sustainable Development Goals (SDGs)......................................................................................................12
The Malthusian trap...........................................................................................................................................14
Poverty traps......................................................................................................................................................15
Facts on global income.......................................................................................................................................16
Global income inequality....................................................................................................................................16
Income and other dimensions............................................................................................................................17
Geography and development.............................................................................................................................17
Approaches to development..............................................................................................................................17
The market approach....................................................................................................................................17
The state approach........................................................................................................................................18
The blended approach (state capitalism approach)......................................................................................19
Globalization......................................................................................................................................................20
,Chapter 3. Population.................................................................................................................................. 20
Global population trends....................................................................................................................................20
The five phases of demographic transition........................................................................................................21
Factors of national population growth..............................................................................................................21
Fertility...........................................................................................................................................................22
Life expectancy or mortality rates.................................................................................................................22
Migration.......................................................................................................................................................22
Causes of population growth.............................................................................................................................24
Economic theory of the family...........................................................................................................................24
Population policies.............................................................................................................................................26
Future population growth..................................................................................................................................27
Chapter 4. Food, hunger and malnutrition.................................................................................................... 27
Facts on food, hunger and malnutrition............................................................................................................27
Causes of hunger and famines...........................................................................................................................29
Agricultural economics, policies and politics.....................................................................................................30
How does food affect development?.................................................................................................................32
How does development affect food?.................................................................................................................32
The Green Revolution.........................................................................................................................................34
Chapter 5. Energy........................................................................................................................................ 35
What is energy?.................................................................................................................................................35
The world’s energy problem...............................................................................................................................36
Facts on energy supply and energy consumption..............................................................................................36
Energy and development...................................................................................................................................38
Development and energy...................................................................................................................................39
Guest lecture by Bryan Bille...............................................................................................................................40
Chapter 6. Climate change........................................................................................................................... 41
Greenhouse gases..............................................................................................................................................42
Impacts of climate change.................................................................................................................................44
Climate change as an economic problem..........................................................................................................46
When to take action?.........................................................................................................................................47
Global collective action on climate change........................................................................................................47
Chapter 7. The environment........................................................................................................................ 49
Environment and development..........................................................................................................................49
The rise of environmental concerns...................................................................................................................50
Natural resources...............................................................................................................................................50
Environmental damage......................................................................................................................................52
Air pollution...................................................................................................................................................52
Water.............................................................................................................................................................54
Land...............................................................................................................................................................55
, Waste.............................................................................................................................................................57
The extinction of species....................................................................................................................................57
Environmental policies.......................................................................................................................................58
Chapter 8. Technology and alternative futures............................................................................................. 59
Technology and development............................................................................................................................59
Technology and the tragedy of the commons...................................................................................................60
Unanticipated consequences of technology......................................................................................................61
Inappropriate uses of technology......................................................................................................................62
Limits to the technology fix................................................................................................................................62
War and technology...........................................................................................................................................62
Alternative futures.............................................................................................................................................63
Key global trends................................................................................................................................................64
Biodiversity.........................................................................................................................................................64
Collapses of societies..........................................................................................................................................65
Exam information, exam questions and answers!.........................................................................................66
Exam information...............................................................................................................................................66
Exam questions and answers.............................................................................................................................66
Chapter 1. Introduction
The course material consists of the book, the slides and extra material made available on
BlackBoard.
With respect to the exam, you should know key headlines, trends, overall developments and
headline number. You are not expected to know every number, but you should know the
most important ones.
What is development?
Development refers to “the ways in which economies progress through their societies to
improve well-being”. But how do we define well-being? How do we measure progress?
Should we look only at the economic aspects? Or is there more? Should we look at longer
lives, better health, smarter people, greater happiness?
The main definition or measure of development that most countries and people use is the
one that the United Nations (UN) has developed. It defines human development as the
, enlarging of human capabilities and choices (cf. Amartya Sen’s “capabilities approach”). That
means that development is the increase of people’s freedom and the possibility of their
pursuing the life they want to live. So, it is not only economic freedom that counts, also
social freedom like access to health and education should be included.
Every year, the UN ranks nations based on the Human Development Index (HDI), which
measures what countries achieve in terms of health (life expectancy), knowledge
(educational attainment) and standard of living (gross national income). The measure thus
consists of three key elements and is multidimensional.
Development as seen in the 20th century
In the 20th century, development was only seen in economic terms and was identified with
economic growth. The idea was that accumulation of capital is the same as development.
Hence measures like the Gross National Product (GNP) or per capita income were seen as
measures of economic development. Broadly speaking, in the second half of the 20th
century two types of policies were pursued to encourage development: on the one hand a
government approach. This is about policies focusing on creating jobs and providing social
services to meet basic needs. On the other hand, there was the market approach:
minimizing government influences, stimulating deregulation, using the private sector as a
problem-solver for public services.
The problem is that this kind of development doesn’t work for everyone. It ignores the
needs of people in poverty and neglects issues like inequality and environmental challenges.
That is why in the 21st century, countries began to shift their focus to an all-encompassing
sustainability approach.
Development as seen in the 21st century
From the 1970s onwards, there was already increased attention for the negative effects of
economic growth on social and environmental aspects. This led to the notion of sustainable
development. Sustainable development is development that meets the needs of the present
without compromising the ability of future generations to meet their needs (Our Common
Future). In other words, future generations should also have the freedom to pursue the life
they want to live, just like the present generations. Economic growth now shouldn’t
undermine the conditions of people living on earth in the future. Hence, economic growth
and the environment are two sides of the same coin.
The sustainability approach led to the Millennium Development Goals (MDGs) (1990-2015)
and the Sustainable Development Goals (SDGs) (2015-2030). The recognition of the MDGs
meant that countries acknowledged that market-based solutions alone don’t work: social
policies such as healthcare and education are needed to avoid poverty and crises. This is the
‘‘basic needs’’ approach. The SDGs envision four basic objectives of a good society, namely:
economic prosperity, social inclusion and cohesion, environmental sustainability, and good
governance by major social actors, including governments and businesses. The UN adopted
Lecturer: Roel Dom
Table of contents
Chapter 1. Introduction.................................................................................................................................. 3
What is development?.........................................................................................................................................3
Development as seen in the 20th century......................................................................................................4
Development as seen in the 21st century.......................................................................................................4
What are global issues?.......................................................................................................................................5
Different types of global issues............................................................................................................................5
Key players in global issues..................................................................................................................................5
The withering role of the state in addressing global issues.................................................................................6
Two big forces......................................................................................................................................................7
The demographic explosion.............................................................................................................................7
The new economy............................................................................................................................................7
The three developments leading to the new economy........................................................................................8
Reality checks.......................................................................................................................................................8
New challenges....................................................................................................................................................8
The Great Acceleration.........................................................................................................................................8
Instruments of governance..................................................................................................................................9
Global turning points............................................................................................................................................9
Economy and business.....................................................................................................................................9
Society and demography...............................................................................................................................10
Politics............................................................................................................................................................10
Chapter 2. Poverty and wealth..................................................................................................................... 10
What is poverty?................................................................................................................................................10
Evolution of poverty...........................................................................................................................................11
The Millenium Development Goals (MDGs).......................................................................................................12
The Sustainable Development Goals (SDGs)......................................................................................................12
The Malthusian trap...........................................................................................................................................14
Poverty traps......................................................................................................................................................15
Facts on global income.......................................................................................................................................16
Global income inequality....................................................................................................................................16
Income and other dimensions............................................................................................................................17
Geography and development.............................................................................................................................17
Approaches to development..............................................................................................................................17
The market approach....................................................................................................................................17
The state approach........................................................................................................................................18
The blended approach (state capitalism approach)......................................................................................19
Globalization......................................................................................................................................................20
,Chapter 3. Population.................................................................................................................................. 20
Global population trends....................................................................................................................................20
The five phases of demographic transition........................................................................................................21
Factors of national population growth..............................................................................................................21
Fertility...........................................................................................................................................................22
Life expectancy or mortality rates.................................................................................................................22
Migration.......................................................................................................................................................22
Causes of population growth.............................................................................................................................24
Economic theory of the family...........................................................................................................................24
Population policies.............................................................................................................................................26
Future population growth..................................................................................................................................27
Chapter 4. Food, hunger and malnutrition.................................................................................................... 27
Facts on food, hunger and malnutrition............................................................................................................27
Causes of hunger and famines...........................................................................................................................29
Agricultural economics, policies and politics.....................................................................................................30
How does food affect development?.................................................................................................................32
How does development affect food?.................................................................................................................32
The Green Revolution.........................................................................................................................................34
Chapter 5. Energy........................................................................................................................................ 35
What is energy?.................................................................................................................................................35
The world’s energy problem...............................................................................................................................36
Facts on energy supply and energy consumption..............................................................................................36
Energy and development...................................................................................................................................38
Development and energy...................................................................................................................................39
Guest lecture by Bryan Bille...............................................................................................................................40
Chapter 6. Climate change........................................................................................................................... 41
Greenhouse gases..............................................................................................................................................42
Impacts of climate change.................................................................................................................................44
Climate change as an economic problem..........................................................................................................46
When to take action?.........................................................................................................................................47
Global collective action on climate change........................................................................................................47
Chapter 7. The environment........................................................................................................................ 49
Environment and development..........................................................................................................................49
The rise of environmental concerns...................................................................................................................50
Natural resources...............................................................................................................................................50
Environmental damage......................................................................................................................................52
Air pollution...................................................................................................................................................52
Water.............................................................................................................................................................54
Land...............................................................................................................................................................55
, Waste.............................................................................................................................................................57
The extinction of species....................................................................................................................................57
Environmental policies.......................................................................................................................................58
Chapter 8. Technology and alternative futures............................................................................................. 59
Technology and development............................................................................................................................59
Technology and the tragedy of the commons...................................................................................................60
Unanticipated consequences of technology......................................................................................................61
Inappropriate uses of technology......................................................................................................................62
Limits to the technology fix................................................................................................................................62
War and technology...........................................................................................................................................62
Alternative futures.............................................................................................................................................63
Key global trends................................................................................................................................................64
Biodiversity.........................................................................................................................................................64
Collapses of societies..........................................................................................................................................65
Exam information, exam questions and answers!.........................................................................................66
Exam information...............................................................................................................................................66
Exam questions and answers.............................................................................................................................66
Chapter 1. Introduction
The course material consists of the book, the slides and extra material made available on
BlackBoard.
With respect to the exam, you should know key headlines, trends, overall developments and
headline number. You are not expected to know every number, but you should know the
most important ones.
What is development?
Development refers to “the ways in which economies progress through their societies to
improve well-being”. But how do we define well-being? How do we measure progress?
Should we look only at the economic aspects? Or is there more? Should we look at longer
lives, better health, smarter people, greater happiness?
The main definition or measure of development that most countries and people use is the
one that the United Nations (UN) has developed. It defines human development as the
, enlarging of human capabilities and choices (cf. Amartya Sen’s “capabilities approach”). That
means that development is the increase of people’s freedom and the possibility of their
pursuing the life they want to live. So, it is not only economic freedom that counts, also
social freedom like access to health and education should be included.
Every year, the UN ranks nations based on the Human Development Index (HDI), which
measures what countries achieve in terms of health (life expectancy), knowledge
(educational attainment) and standard of living (gross national income). The measure thus
consists of three key elements and is multidimensional.
Development as seen in the 20th century
In the 20th century, development was only seen in economic terms and was identified with
economic growth. The idea was that accumulation of capital is the same as development.
Hence measures like the Gross National Product (GNP) or per capita income were seen as
measures of economic development. Broadly speaking, in the second half of the 20th
century two types of policies were pursued to encourage development: on the one hand a
government approach. This is about policies focusing on creating jobs and providing social
services to meet basic needs. On the other hand, there was the market approach:
minimizing government influences, stimulating deregulation, using the private sector as a
problem-solver for public services.
The problem is that this kind of development doesn’t work for everyone. It ignores the
needs of people in poverty and neglects issues like inequality and environmental challenges.
That is why in the 21st century, countries began to shift their focus to an all-encompassing
sustainability approach.
Development as seen in the 21st century
From the 1970s onwards, there was already increased attention for the negative effects of
economic growth on social and environmental aspects. This led to the notion of sustainable
development. Sustainable development is development that meets the needs of the present
without compromising the ability of future generations to meet their needs (Our Common
Future). In other words, future generations should also have the freedom to pursue the life
they want to live, just like the present generations. Economic growth now shouldn’t
undermine the conditions of people living on earth in the future. Hence, economic growth
and the environment are two sides of the same coin.
The sustainability approach led to the Millennium Development Goals (MDGs) (1990-2015)
and the Sustainable Development Goals (SDGs) (2015-2030). The recognition of the MDGs
meant that countries acknowledged that market-based solutions alone don’t work: social
policies such as healthcare and education are needed to avoid poverty and crises. This is the
‘‘basic needs’’ approach. The SDGs envision four basic objectives of a good society, namely:
economic prosperity, social inclusion and cohesion, environmental sustainability, and good
governance by major social actors, including governments and businesses. The UN adopted
