Intro To Human Geography:
People, Places, & Landscapes
Patterns of Development & Change
Department of Geography
University of Denver
• What is Economic Development?
• How can one compare countries‟ Economies
• Measures of Gross National Product (GNP)
• Geography of Exchange Rates
• GNP and the environment
• GNP and the quality of Life
• Theories of Economic Development
• Global Patterns of Economic development
• National Economic Development Policies
• Transportation & Information Infrastructure and
relationships to Economic development
• Distribution of Wealth and Economic Development
What is Economic Development?
• Economic Development: Improving the economic productivity (as
measured in money) of a nation.
• Questions: (absolute or per capita?) (How is wealth distributed?)
“Development that meets the needs of the present
generation without compromising the ability of
the future generations to meet their own needs.”
This simple definition /sentence has spawned research
industries, international debates, and considerable
attention. A formal, explicit, and practical definition of
„sustainable‟ has yet to be identified. Nonetheless,
Bruntland must be credited for causing a profound
shift in the collective consciousness of the human race
for coining such a phrase.
Why do governments want
• …‟to promote the general welfare, maintain
• Raise standards of living to maintain power and
• What effect is globalization having on
• How do national policies vary with respect to
promoting economic development?
Analyzing and Comparing the
Economies of different nations
• Are national statistics „apples and oranges‟?
• The word „statistic‟ is derived from the word „state‟.
Benjamin Disraeli (past prime minister of Britain) knew
that countries count things differently and might even lie
in order to exaggerate their power or achievement or to
conceal relative backwardness, thus many national
statistics are unreliable.
….“Lies, Damn lies, and Statistics”
• Can we think of examples where countries might lie
about : Birth Rates? Poverty? Nuclear Capability?
Example of Problems with „Statistics‟:
Japan in 1989
• In 1989 the leading economic newspaper of Japan
(Nihon Keizai Shumbun) reported the following:
Japan is the world‟s richest country with total
assests of land, stocks etc. of $43.7 trillion
U.S. at that time only worth $36.2 trillion
(according to the U.S. Fed Reserve Board)
Japan‟s per capita wealth more than twice U.S.
The city of Tokyo worth more than the whole U.S.
- Does this make sense to you?
- Strikes me that Economics is a funny discipline
GNP and GDP definitions and problems
• GDP (Gross Domestic Product): the total value of all goods and services
produced within a country
• GNP (Gross National Product): the total income of a country‟s residents
regardless of where income comes from
Example: I declare the state of „Suttonia‟: I make wind chimes and drums on my land and make
$100,000 a year doing so. I also invest in a shoe factory in Indonesia making Nike shoes with slave
labor. I receive $60,000 a year from this investment. Four people live in „Suttonia‟ and only I am
working. The GDP of Suttonia is $100,000. The GNP of „Suttonia‟ is $160,000. The GDP/capita is
$25,000 and the GNP/capita is $40,000 The GNP/GDP is 1.6 as is the GNP/Capita /GDP/capita
ratio. The income of the other four residents of „Suttonia‟ is zero. What does that say about the
distribution of wealth in „Suttonia‟? [See The GINI coefficient on the next slide]
• What do GNP and GDP mean relative to one another?
GDP measures economic productivity of a space
GNP measures economic productivity of a people in a space
If GNP greater than GDP the people of that space are deriving some of their wealth
from people outside that space
If GNP is less than GDP the people of that space are producing wealth for people
outside that space
The GINI coefficient:
A measure of the distribution of wealth
Distribution of Wealth in a
The Kingdom of Suttonia perfectly socialist State: GINI = 0
%Age of Wealth
%Age of Wealth
it h w it e
ew e ne v
lin curv ient e li l cur icien t
the al f ic th
en actua coeff
een actu oef e
e t w he
etw the INI c a b d t GIN
a b nd e G are 1 an f the
are a h e
he e = 1 e of t
T p T h ope = ue o
slo valu sl val
is t is t
0 25 50 75 100 0 25 50 75 100
%Age of Population %Age of Population
GINI curve typical of GINI curve typical of
India or Brazil: Large Value Sweden or Norway: Low Value
%Age of Wealth
%Age of Wealth
h it h
w it e ew e
ne v lin cu rv ient
th e li l c u r i c ie n t the al ffi c
en actua coeff e en c t u
tw the a NI co
bet the INI e a a nd h e G I
rea 1 and the G ea
r 1 t
ea Th ope = ue of
T h pe = u e o f
s lo val sl v al
is t is t
0 25 50 75 100 0 25 50 75 100
%Age of Population %Age of Population
Explanation of GINI coefficient
What countries have what kind of
GNP to GDP ratios?
• Kuwait (1990) GNP/GDP = 1.35
• United States (1990) GNP/GDP = 1.01
• Canada (1990) GNP/GDP = .95
• Ireland (1990) GNP/GDP = .87
• Brazil (1990) GNP/GDP = .86
• What number GNP or GDP is better for comparing
people‟s standard of living between nations? (mention
• What number GNP or GDP is better for comparing
nations internal economies?
Some problems with GNP and
• Both GNP and GDP measure goods and services exchanged in markets. Many
countries (particularly the LDCs have large „informal‟ economies in which goods
and services are not traded in „markets‟)
• How will the „informal economy‟ influence measures of wealth?
• Does this exacerbate or mitigate differences between MDCs and LDCs?
• Because these measures undercount rural subsistence farming etc. urban areas
dominate measures of economic productivity:
Sao Paulo, Brazil (10% of Population, 25% of economy)
Abidjan, Ivory Coast (15% Population, 70% of economy)
(Does Abidjan strike you as a likely Primate City?)
Could you survive for a whole year in the U.S. on $250?
How could the women of Kenya double Kenya’s GDP?
The Geography of Exchange Rates and
„Purchasing Power Parity‟
• GDP and GNP measures are often fail because there are
„No Common Measures of Value‟
• The value of products and services are measured in local
currencies that are changeable and can be manipulated
• How much would you have to pay for a 5 lb bag of rice
in: Denver? Beijing? Rural India?
• Note: It would be a fair question on the final for you to
put the above prices in at least ordinal order by using
geographic reasoning and knowledge
An interesting story about the U.S.
Dollar between 1985 and 1990
• Between 1985 and 1990 the U.S. Government
intentionally lowered the value of the dollar relative to
the Yen and Western European currencies by 50%.
• This had profound consequences:
1) American Goods cheaper to buy outside U.S. Thus… U.S. Exports up 80%
2) Foreigners invested Billions in the U.S. and millions more tourists to U.S.
(note: the Japanese make Hondas in Tennessee now )
3) In 1989 more tourism money to U.S. than out of U.S. (first time ever)
4) Summary results: Goods out (Exports up), Investment & Tourists in
5) Other results: Real kicker for globalization – Americans saw more foreigners
on American soil, cultures exchanged yadda yadda yadda
6) American investment money stayed at home, Exports to the U.S. dropped,
Many Foreign economies suffered
What do you think happened to the price of a Lexus or a Volkswagen during that time?
What is „Purchasing Power Parity‟?
• PPP attempts to measure what goods or services a certain
amount of money will buy at different places
• Just because the GDP/capita in Japan is $30,000 does not
mean that an average Japanese can buy the same amount
of „stuff‟ that an American making $30,000 can.
• Great Example: Some 40 million Indians live in
households making incomes of over 900,000 rupees
(This is equivalent to about $30,000 U.S. dollars)
However, its purchasing power is about $600,000
Is it really appropriate to call India a poor country?
Gross Domestic Product and the Environment
• Some Economists and their stupid accounting tricks
1) Standard Business Practice
Machines and Buildings etc. counted as assets
As they deteriorate (are used up) they are depreciated
and this depreciation is called a loss.
2) Standard National Accounting Practice
Call sales of Oil, Timber, & Water: profits
Ignore the loss of natural resources as losses
Call housing starts economic growth
Ignore loss of housing from flood, fire, earthquakes
An Oil Spill in Mexico
Good for the Economy? You betcha.
Where best: U.S., Mexico, or Ecuador?
A wildfire in Laguna Beach
Do you think these people are hoping their homes will burn down
To help boost the local economy?
Gross Sustainable Product
• If natural resources were treated as assets, then statistics might (would)
demonstrate that protecting the environment is good economic policy
• Many people are working on a new statistic: Gross Sustainable Product (GSP)
• The GSP would subtract the value of natural resources destroyed or depleted
from the GNP
• A Costa Rica study showed that 25% of GDP dissappeared due natural resource
• A U.S. Study showed natural resource losses balanced by new resources found
Incorporating impacts to productivity of renewable resources like fisheries, forests,
agriculture, and water supplies and incorporating costs of impacts of loss of
ecosystem services will further erode measures of GSP
Is GSP a useful measure?
GNP and „Quality of Life‟
• How would you think that GDP/capita covaries with:
Energy Consumption, Food Supply, Literacy Rates, and
Access to safe drinking water?
• The relationships are not always obvious. Is it possible
for Mexico to have a lower Death rate than the U.S. and a
lower life expectancy?
• Variability of „Quality of Life‟ index can vary more
within a nation than between nations. Do you think the
GINI coefficient could predict within country variation?
The United Nations:
Human Development Index (HDI)
• 1/3(Purchasing Power Parity) + (1/3) Life Expectancy +
(1/3) Adult Literacy
• A multi-variable Index
• Uruguay 30, South Korea 33, Saudi Arabia 84 (lower
score better) The HDI endices for these countries
opposite the GNP/Capita ($2,620, $5,454, $7,070)
• These kinds of indexes are problematic because of
debate over the variables to choose and the weights to be
assigned to them
• Population Growth and Economic Development (next slide)
The Relative Sizes of National Economies
This map type is called a „Cartogram‟. What does that mean?
Per Capita Gross National Product
What could I reasonably expect you to remember from this map?
Categories of Per Capita GNP
Where are the People? Where is the money?
Human Development Index (1994)
Looks like a map of money to me………..
Pre-Industrial, Industrial, and Post-Industrial Economies:
Characterizing the Nature rather than the Magnitude of an Economy
• Recall the primary (mining, farming), secondary
(manufacturing), and tertiary (service) sectors of an
• Sectoral Evolution: Pre-Industrial, Industrial, and Post-
Industrial economies have the largest proportion of their
population in the primary, secondary, and tertiary sectors
of their economies respectively
• White man shows up in Africa and observes that to
become „great like me‟ an economy „evolves‟ from
primary to secondary to tertiary. (any comments?)
Many Societies today are still „Pre-Industrial‟. Despite the fact
A large proportion of their population works in the Agricultural
Sector many have difficulty feeding themselves.
How many of you work in Agriculture? Do you know anyone that does?
• As countries industrialize people move from
agricultural labor to manufacturing. The
proportion of workers in the primary sector
diminishes as the proportion in the secondary
sector increases. At some undefined point the
economy is considered „secondary‟ or
Industrial. In the U.S., for example, this
transition occurred during WWI.
(manufacturing employment exceeded
agricultural employment) By 1925
manufacturing emplyoment represented the
largest single occupational group in the U.S.
• Is this progress?
• Upton Sinclair might Disagree?
(do you know who Sinclair is?)
• What do WTO protesters have to do with this?
Post Industrial Societies
• What happens after Industrialization? Some
would argue „exploitation‟. The standard line is
that the workers of an Industrial society
increasingly become involved in „Service‟
industries. Once that happens the economy is
considered „Post-Industrial‟. This happened in the
U.S. sometime between 1929 and 1945. In 1990
the „service‟ sector of the economy represented
over 75% of the U.S. labor force. „Where do you
see yourself working in 5 years?‟ Ironically some
poor nations have large proportions of their
population in „tertiary‟ or „service‟ sectors or
their economies. GUESS WHY?
• Bob Dylan‟s Song: „Sundown on the Union‟
What does it say? (Who is Bob Dylan anyway?)
• What does „Separation of Production &
Consumption‟ mean to you?
The „Post-Industrial‟ Economy
• You Live in a „Post-Industiral‟ Economy.
• What will you do for a living?
• Is it sustainable?
• To what extent are your needs met by the natural resources,
labor, and capital in places outside the United States?
• The U.S. GNP/GDP ratio is almost 1.0……Did the 1985-1990
devaluation of the Dollar relative to Yen and EU ameliorate this
• Ted Rall Cartoon: BONUS PRIZE …‟But Jean Paul Sarte said…”
How do the sectors of the Economy
contribute to Gross Product?
• 1/3 Pop. primary, 1/3 Pop. secondary, 1/3 Pop. tertiary
DOES NOT MEAN
1/3 GDP primary, 1/3 GDP secondary, 1/3 GDP Tertiary
• Value Added/worker greatest in Secondary
(Manufacturing) (for now anyway )
• Millers get richer than Farmers & Manufacturers get
richer than Miners. Millers and Manufacturers typically
get richer than their Sales Reps.
• This is one reason why some places get richer than others.
Should the United States be concerned?
Rostow‟s „Stages of Growth‟
• The „natural‟ evolution of peoples are to
„evolve‟ from „Hunter-Gatherer‟ to
„Agriculture‟ to „Industrial‟ to whatever.
• Is this Social Darwinism?
• Is it reasonable?
Why are some countries Rich and some countries Poor?
• Natural Environmental Endowments of Raw Materials
etc. DO NOT explain National Wealth
• The Theory of Environmental Determinism has
problems with this
• „Adding Value‟ to raw material is key to Wealth
• „Downstream Activities‟ are key to wealth creation
because they are nearer the source of money.
• Processing, Manufacturing, Transporting, Advertising,
Insuring, Marketing, and Financing the flow of goods is
more profitable than extracting the raw materials they
are derived from.
How did this happen?
• Making things out of Copper Ore is more
remunerative than the mining of the Ore itself
• Grinding Wheat into flour is more remunerative
than growing the Wheat in the first place
• Raw Diamonds are valuable but the cutters,
polishers, and sellers of Diamonds make more
money than the Diamond miners.
“Conceptual” Value Added
The term „Value Added‟ has even been extended to conceptual value added, as in
advertising. If a $10million advertising campaign convinces people to spend
$100 million more for Brand X than for Brand Y, when those brands are, in fact,
nearly identical, then $90 Million of value has been added to Brand X
“conceptually”. (pay no attention to the man behind the curtain) That $90
million can provide a lot of jobs. The conceptual value added to products by the
advertising industry in New York City today is far higher than the value added
by manufacturing in many of the world‟s greatest manufacturing cities. The
trademark of a good is often more valuable than the good itself. Selling brand
name cookies can be more profitable than the total sum of revenue generated by
growing the wheat, sugar, eggs, and production of the cookies themselves. (the
Girl Scouts are making a killing ) The tertiary sector of the economy is
chasing the secondary for „value added‟ domination.
Note: If the world begins to „pay attention to the man behind the curtain‟ and
realizes there is no reason to pay a difference when there is no difference, what
will happen to the U.S. economy?
Does anyone out there get the „man behind the curtain‟ reference?
The United Fruit Company
• Why is it that Oil producers can capture downstream activities but food producers cannot?
• How many alternative sources of oil are there? How many alternative sources of food products?
• The story of the United Fruit Company exemplifies the geography of „Value Added‟. In the 19 th century the
company established banana plantations in Central America. Several countries came to depend economically on
the export of bananas, and many aspects of their local cultures were consequently transformed. Their politics, for
example, were manipulated internally by banana interests and externally by relations with the United States;
their social structures reflected peoples‟ positions in the dominant export-oriented cash crop economy; the
peoples‟ diet came to depend on imported staples. (ever bought clothes from „Banana Republic‟ ever wondered
where the name came from or why?) The United Fruit Company owned the banana plantations and the ships that
transported the bananas, and it marketed the bananas. Eventually many Central Americans began to resent the
foreign control of the plantations, and they accused the company of “Yankee Imperialism”. The company
responded by abruptly surrendering many of its plantations to local governments. This might sound like a
financial sacrifice, but what really happened? The company was no longer tied to one supply (its own
plantations), so it could bargain with several potential suppliers (and play one off the other). The producers
increased production in order to raise their incomes, but they increased production faster than demand could be
raised. This only lowered prices. Competition among the suppliers reduced the price of bananas still further. As a
result, the new plantation owners got poorer. Transporting bananas and marketing them- „adding conceptual
value through name brand advertising’- is considerably more profitable than growing them, and it supposedly
causes far fewer headaches for the company‟s management. Eventually the company even changed its name to
Chiquita Brands International, and it is now applying its valuable trademark to marketing other fruits from a
great variety of sources worldwide. By focusing on downstream activities, the company transformed itself from a
raw material supplier into a marketing company. Its profits fattened, while the countries that supplied the raw
materiel got poorer. A similar tale could be told about almost any raw material or food supplier in the world
today and its relationship with multinational corporations that control every aspect of handling and processing
goods from the raw material to the final consumers. Compare the story of the United Fruit Company with the
story of OPEC‟s petroleum marketing networks. In that case, the suppliers of raw materials are themselves
seizing control of downstream activities.
Output of Secondary Sector as Percentage of GDP
What is this a map of?
Is the a map of: A) % Pop Urban B) Rice Production/Capita C)% Pop with AIDS
Note: Darker Red is Higher number
What is this a Map of?
A) # Automobiles/Capita B) HDI C) Total Fertility Rate
What is this a Map of?
A) GNP/Capita B) The Crude Death Rate C) Kangaroos/Capita
What is this a Map of?
A) Percent Urban B) Population Density C) Infant Mortality
Government Involvement in the National Economy
•Communism: Govt owns the natural resources and the productive Enterprises in the name of the
workers. Known as „top down‟ or „command and control‟ economy
Example countries include – Cuba, China
•Laissez-faire Capitalism: Minimal government involvement in The business affairs of the
country Example countries include– United States, Britain
•Capitalism with State ownership of some industries. Many Latin American countries have
nationally owned industries (e.g. Pemoco in Mexico). Many European nations
have nationally Owned industries (25% GNP France, 11% in Germany) However,
Privatization of these industries is running rampant particularly in Eastern Europe.
•State Directed Capitalism: Many Asian countries do not own the private enterprises;
however, their governments plan and regulate Their economies. This kind of
situation is often referred to as an „Industrial Policy‟
Example story: South Korea is considered a capitalist, free-market economy, yet the government
proposes national economic plans and subsidises some new industries. Industry is dominated by
combinations of corporations that are affiliated by inter-locking dictatorships and ownership.
Japan and Taiwan are similar. In the U.S. such situations/relationships would be broken up as
Fascistic top down ‘Industrial Policy’ while not ‘communism’ has its strengths and many people
Feel that the U.S. should adopt some sort of ‘Industrial Policy’ to fight forces outside the U.S.
Domestic Economic Geography
• Countries try to organize their population,
territory, and resources for economic production.
• Education, Training, National Pride, and political
stability are key to successful „nation building‟
• Internal Population Mobility: Workers are
expected to move to jobs. Countries try to
maintain „spatially homogenous‟ unemployment.
Large spatial variability suggests inefficiency.
• Why do people still live in Buffalo, NY?
States with Frontiers
• „Manifest Destiny‟ and other propaganda motivated much of
the American population west. We occupied valuable
territory and have benefited greatly from westward
• Brazil has similar concerns. They located their planned
capital city „Brasilia‟ in their hinterlands. With economically
and ecologically disatrous results.
• The Island of Java is only 7% of Indonesia‟s territory yet it
houses 60% of its population. The government has made
efforts to „spread‟ its population with little success.
• Russia has similar problems with Siberia
• Canada and many African nations have similar spatial
distribution of population problems.
National Transportation Infrastructures
• Transportation and Communication
Infrastructures enable economic, population and
• Problems arise when transporation corridors are
undeveloped (e.g. Columbian oil fields
controlled by rebels and drug dealers.)
• Economic growth in profoundly enabled by
transportation. India is working on this.
• Africa is characterized by „Tap Routes‟ which
benefit foreign exploitation more than pan-
National Communications Infrastructure
• You have lived in the „buzz of the information economy‟. You
can‟t eat information, you can‟t drive it, nor will it build your
house; nonetheless, it is clearly a tertiary if not fourth economy.
Only time will tell how valuable information is.
• In any case, a wealth of diverse sources of information supports
both economic efficiency and development, and political liberty.
• How „Diverse‟ is the information you presently receive? Why?
• The U.S. and Canada have 40% of the world‟s phones. Africa 1%
This is changing rapidly (see next slide)
• Information is a very unusual commodity. We could spend a
whole quarter on this issue and only scratch the surface.
• Any comments on your impressions of the Info Age you live in?
New Paths for Economic Development
• Wireless technology like Cell Phones are
changing old ideas of economic development
• Poor nations can develop sophisticated
communications infrastructures without building
expensive „Land-Line‟ com networks.
• If China industrializes on the established
patterns of Western Europe and the U.S. their
CO2 emissions will dwarf historical emisssions.
• Is there an „energy consumption‟ analog to the
communications revolution/bypass. I hope so.
National Spatial Data Infrastructure
• Some people are arguing that Spatial Data that
can be used in Geographic Information Systems
also have institutional and public good value.
• A good NSDI allows for more efficient use and
allocation of resources, better urban and
regional planning etc.
• There is a huge digital divide in terms of
hardware, software, data, and human capital
National Trade Policy
• Why do countries vary in the degree to which
they participate in world trade and circulation?
• To develop their own economy.
• To ensure National Security.
• To protect/maintain cultural identity.
• Two Distinct approaches to addressing above
Import-Substitution & Export-Led
• Some countries subsidize „infant industries‟ in the hope
that they will eventually achieve economies of scale and
be able to compete in the global market place. (e.g.
Brazil & computers, BTW it didn‟t work)
• The philosophy of „Import Substitution‟ is one of self-
sufficiency and potential independence
• Countries that chose „Import Substitution‟ as national
economic polices fell behind countries that chose
„Export-Led‟ policies. However, the tides are turning
and debate is growing as to what policy is best.
• The U.S. protects its textile workers with subsidies to
the tune of $145,000 per job saved per year in the U.S.
• Cheap labor outside the U.S. raises difficult questions…
• Export Led National economic policies have
been the „darling‟ policy of economists in the
• Nations that adopted „Export Led‟ Policies (the
Asian Tigers) have enjoyed greater economic
growth than nations adopting „Import
• Export Led policies rely on global capital
markets to facilitate international investment and
global marketing networks to distribute
Import Substitution vs. Export Led
National Economic Policies
• In many respects the debate of Export-Led vs. Import Substitution
led economic growth national policy is a debate about
globalization vs. Local or Regional Diversity.
• Export-Led economic policy essentially recognizes and accepts
dominant patterns of power and will ultimately result in a world of
powerful Chinese, Americans, Europeans, Japanese, and
eventually every ethnicity/nationality; However, the differences
will dissappear and the international distribution of wealth will be
uniform across the globe. The internal distribution of wealth will NOT
• Import Substition economic policy is an attempt at fighting
globalization, maintaining national identity, and establishing
independence culturally, economically and ideologically.
Some Comments on Globalization:
What‟s Better, a homogenous globalized world; or, a world
of differences economically, socially, and culturally?
• Once we‟re homogenized we won‟t lynch people because they are
black, hate them because they are Jewish, or blockade them
because they live in Iraq. (Sounds good to me…………but)
• Will „Mc-Gumbo‟ from McDonald‟s really taste as good as a
down-home gumbo from New Orleans tastes today?
• Will the allure of „Mulan‟ or „Dark Angel‟ really work once the
differences she derives her identity from are gone?
(The media (particularly Disney) play strange roles in the forces for globalization – Bigger Markets eh?)
• Are we ready to celebrate diversity? Pay for it?
What is this a map of?
Everything and Nothing. In a globalized world.