10.1 Global Stratification and Classification

Global stratification divides countries into economic tiers, affecting wealth, power, and opportunities worldwide. This system impacts everything from individual life chances to international relations, shaping migration patterns and perpetuating inequality between nations.

Various classification systems, like the World Bank's income categories and the UN's Human Development Index, measure global development. These models inform aid decisions and shape public perceptions of global inequality, though they can oversimplify complex realities.

Global Stratification and Classification

Global stratification and societal impact

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• Global stratification refers to the unequal distribution of wealth, power, and prestige on a global scale
  • Divides countries into different strata or levels based on their economic, political, and social characteristics (core, periphery, semi-periphery)
  • Results in significant disparities in living standards, access to resources, and opportunities across nations (education, healthcare, employment)
• Impact on societies worldwide
  • Perpetuates inequality and unequal power dynamics between countries (favorable terms of trade for core countries)
  • Affects individuals' life chances, including access to education, healthcare, and employment
  • Shapes global migration patterns as people seek better opportunities in more affluent nations (brain drain from peripheral to core countries)
  • Influences international relations and geopolitical decision-making (foreign aid, trade agreements)

Economic classification systems for countries

• World Bank's model classifies countries based on Gross National Income (GNI) per capita into four main categories: low-income, lower-middle-income, upper-middle-income, and high-income economies
  • Provides a standardized method for comparing economic development across countries
• United Nations Human Development Index (HDI) measures a country's development based on life expectancy, education, and per capita income, offering a more comprehensive assessment of well-being beyond economic factors
• International Monetary Fund (IMF) classification categorizes countries as advanced economies or emerging and developing economies, focusing on economic indicators such as GDP, inflation, and balance of payments
• Different systems emphasize various aspects of development (economic, social, human capital) and may have overlapping or differing classifications based on specific indicators and thresholds used
• The concept of Global North and Global South is often used to broadly categorize countries based on socio-economic and political characteristics, with the Global North generally referring to more developed countries and the Global South to less developed ones

World systems theory in global economics

• Wallerstein's world systems theory divides countries into three main categories:
  1. Core countries: industrialized, economically dominant nations that exploit the resources of peripheral countries (United States, Japan, Germany)
  2. Peripheral countries: less developed, often former colonies, that provide raw materials and cheap labor to core countries (many African and Latin American nations)
  3. Semi-peripheral countries: have characteristics of both core and peripheral nations and may exploit peripheral countries while being exploited by core countries (Brazil, India, China)
• Unequal exchange between core and peripheral countries
  • Core countries benefit from favorable terms of trade, while peripheral countries face declining terms of trade over time
  • Peripheral countries often specialize in primary sector activities with lower value-added (agriculture, mining)
• Dependency and power imbalances exist as peripheral countries are dependent on core countries for capital, technology, and market access, while core countries maintain economic and political power over peripheral nations
• Multinational corporations (MNCs) headquartered in core countries exploit labor and resources in peripheral nations, contributing to the transfer of wealth from the periphery to the core
• Foreign direct investment (FDI) from core countries to peripheral and semi-peripheral countries can have both positive and negative impacts on economic development and global stratification

Classification systems vs global inequality perceptions

• Classification systems inform international aid, development programs, and investment decisions, with countries targeted for specific interventions based on their classification (poverty reduction strategies in low-income countries)
• Limitations and biases exist as classification systems may oversimplify complex realities, mask within-country inequalities, and perpetuate stereotypes or stigmatize certain countries or regions
• Media and public discussions often rely on these classifications to frame global inequality, influencing how people view and relate to different countries and their populations
• A holistic approach combining multiple classification systems, qualitative data, and context-specific analysis can provide a more comprehensive understanding of global inequality while recognizing the dynamic nature of global stratification and the potential for countries to shift between categories over time

Theories and Approaches to Global Development

• Modernization theory suggests that less developed countries can achieve economic growth by following the development path of industrialized nations, emphasizing the adoption of Western values, technologies, and institutions
• Globalization has intensified economic, cultural, and political interconnectedness, leading to increased trade, communication, and cultural exchange, but also contributing to new forms of inequality and dependency
• Neocolonialism refers to the economic and cultural influence exerted by powerful countries over less developed nations, often through economic policies, multinational corporations, and international financial institutions
• Structural adjustment programs, often implemented by international financial institutions, aim to promote economic stability and growth in developing countries but have been criticized for their potential negative social impacts and reinforcement of global inequalities