A list of definitions should be prefaced by an explanation of the some of the different Schools of Thought within Economics. The Chicago School economists (Deepak Lal, Friedman, Bauer etc.) believe in the invisible hand, that everything should b e left up to market forces and that all government intervention is subject to failure, so they argue for globalisation, privatisation, corporatisation and investment in human capital. Theorists such as Bauer also believe that the 3rd world debt crisis is a misnomer that it is a rational response by debtors to reluctance of creditors to press for payments. Keynesian economics argue for the use of both market forces and government intervention to improve economic status. Within this group are Institutionalists, such as Todaro, who advocate only government intervention in changing societal institutions. Then there are the Counter-counter Revolutionaries in development theory such as Krugman, Toye, Joseph Stiglitz, who analyse both government and market failure and specifically, corruption in governments.

Perfect Competition is the ultimate objective of global capitalists and economic rationalists alike on both a global and local level. But this flawed objective is both unrealistic and destructive. This can be proven by mere reference to the necessary assumptions that are required to adopt to achieve this goal:

NIC's: These were the Newly Industrialised Countries: ie: The Asian Tigers: China, Singapore etc.

ROG: Rate of growth. This can be defined as Gross Domestic Product growth or growths in savings, depending on the theoretical background you are coming from.

Trade Liberalisation: Removal of obstacles to free trade, such as quotas, nominal and effective rates of protections and exchange controls.

LDC's: Less Developed Countries, such as the nations of Africa and Asia. The definition fails to include parts of otherwise developed countries, where the people are living in 3rd world conditions of poverty, such as in Australia within many Aboriginal Communities.

G, S, Y, L, K, I, R, r: Economic symbols for: Government Spending, Saving, Income, Labour, Capital, Investment, Exchange rate and Interest rate respectively. These symbols are often applied to practical and mathematical economic models.

Economies of Scale: Reductions in the cost of producing a unit of a product that occurs as the output increases.

Tariff Protection: This is where a tariff or an extra cost is placed on imported goods coming into the country, the objective being to protect produces of products within the exporting country against a forced downward price spiral, making it difficult for them to compete against big, rich foreign companies who can afford lower prices. The effect of the tariff is dependent on the type of tariff.

Opportunity Cost: The best foregone alternative. For example, there is a high opportunity cost of a subsistence farmer in Ghana to change to exporting manufactured goods, because they would not have either the capacity or resources to do so.

Comparative Advantage: This is very important in the discussion of trade theory. This is when a country has an advantage if it can produce a product at a lower opportunity cost than any other country. The Neoclassicists argue that LDC's with a comparative advantage should be subject to free trade.

Debt for Nature Swaps: The exchange of foreign debt held by an organisation for a larger quantity of domestic debt that is used to finance the preservation of a natural resource or environment in the debtor country.

Dependence: A corollary of dominance: A situation in which the LDC's have to rely on developed-country domestic and international economic policy to stimulate their own economic growth. Dependence can also mean that the LDC's adopt developed (Western) education systems, technology, economic and political systems, attitudes, consumption patterns and dress etc.

GATT: General Agreement on Tariffs and Trade. This was a dodgy international body set in 1947, to probe into the ways and means of reducing tariffs on internationally traded goods and services. Tariffs on primary products were drastically slashed in 1964. Member countries signed the Uraguay Round Agreement in 1994 and became the World Trade Organisation.

International Monetary Fund: (IMF): An autonomous international financial institution that originated at the Bretton Woods Conference of 1994. It's main purpose is to regulate the international monetary exchange system, control fluctuations in exchange rates, in a bid to supposedly alleviate sever balance of payment problems. It does this by using a "one size fits all" kind of process, in the mind set that the economic situation: ie: poverty has to get really worse, before it can get better. The four components of a typical stabilisation program are:

1. Removing tariff protections and increasing exports, to try and devalue the official foreign exchange rate.
2. Reduction in the exchange rate: ie: The value of the pound would not be as strong in comparison to the value of other currencies. This would be so as to reduce demand for foreign imports, because they would be more expensive comparatively.
3. A stringent domestic anti-inflation program, consisting of:

a) Less bank credit, raising interest rates, to control for inflation and attract foreign investment. This would increase the likelihood of bankruptcy, corruption and a worsening of the economic situation. (Stiglitz).
b) Control of budget deficit, often through drastic reduction in Government spending, which proves to hit the lower to middle income people particularly: Ie: Less government spending on education, health etc.
c) Either Control of wage increases or wage reduction;
d) Dismantling various price controls and ensuring a freer market so big business can go to town exploiting the poor even further.
4. Encouragements of foreign investment, opening up the economy to international trade so Multi-National Corporations can crush them and developed country Governments.

To receive loans, or negotiate additional credit, countries were required to adopt some or all of the enumerated stabilisation polices. More than 10 countries did this in the early 1980's and there were anti-IMF riots in Venezuela and Nigeria in the early 1990's. "They strike at the heart of development efforts by disproportionately hurting the lower and middle income groups. Third World leaders often also consider these measures a double standard; Harsh adjustment policies for LDC debtors and no adjustment of the huge budget or trade deficits for the world's greatest debtors: The United States" (Todaro, 2000; 516). IMF is merely an arm of the rich industrialised nations; stabilisation policies are measures designed primarily to maintain the poverty and dependence of the Third World nations, while preserving the free trade globalisation market structure for the rich industrialised nations.

Market-friendly Approach: World Bank notion that successful development policy requires Governments to create an environment in which markets can operate efficiently and to intervene selectively in the economy in areas where the market is inefficient.

Invisible Hand: A concept originating from Adam Smith (an old, boring, dead economist) in 1776 that suggests that: The unbridled pursuit of individual self-interest automatically contributes to the maximisation of the social interests. So, essentially, if we all pursuit profit and consume as we please, supposedly the resulting economic growth will benefit everyone.

Tied Aid: Foreign aid in the form of bilateral loans or grants that require the recipient country to use the funds to purchase goods or services from the donor country. This is another manipulation of the rich industrialised (G7) countries in maintaining their dominance over the Third World.

Third World: This represents 145 developing countries of Asia, Africa and the Middle East. It is characterised by low levels of living, low-income per capita, low education provisions, poverty and starvation. This is real people, with real problems, who don't deserve to be wealth reserves for cheap labour or economic experiments for rich countries!

World Bank: The WB is an international financial institution, owned by 181 member countries and based in Washington D.C. Voting power depends on financial contributions, proportional to economic size of the country. So essentially, the G8: Japan, Italy, Germany, US, UK, France, Canada, Russia countries hold over 50% of the power within the World Bank.

It's main objective is supposedly to provide development funds to the Third World nations in the form of interest bearing loans and technical assistance. The World Bank has developed Structural Adjustment programs such as that implemented in Argentina. Unlike the IMF, such programs actually encourage an increase in Government spending and reforming institutional arrangements to support the adjustment process. Otherwise, the program involves reducing tariffs, liberalising trade and encouraging foreign investment.

Washington Consensus: This was originally the development framework of liberalising, privatising and globalising, advocated by the IMF, World Bank, WTO, and Thatcherites. For a summary for the types of policies advocated, refer the IMF policies, but include the mass privatisation of state owned enterprises.

World Trade Organisation (WTO): Geneva based watchdog and enforcer of the 1995 agreement on free trade.

References: Todaro, M.P. (2000) Economic Development, Reading, Mass: Addison and Wesley