Key terms
There are many technical terms related to international aid, world poverty and giving. Here we explain some of the most important ones.
$
When we use the dollar sign, we are referring to current US dollars. Dollars for other nations or for purchasing power parity will be denoted specially. The only exceptions are the 'dollar a day' poverty lines.
$1 a day
A former World Bank poverty line which is no longer used. See extreme poverty for details about the current version.
Antiretrovirals
Antiretrovirals are the medicines used to suppress HIV/AIDS in a sufferer.
DALYs (Disability Adjusted Life Years)
In order to work out the most effective way to provide aid, we need some way to compare the benefits that different interventions would have. One measure is the number of lives saved, but it is a truism that you can never really save someone's life, since they will still die at some later time. All you can do is to extend their life for while. A better measure would thus be the total number of life-years saved. On the other hand, some interventions don't even save life-years, but instead improve the quality of people's lives by preventing or curing illness. An ideal measure of the effectiveness of health interventions would thus take into account improvements to both quantity and quality of life.
Disability Adjusted Life Years (DALYs) offer a way to do this. They are a measure of lost health due to illness used by the World Health Organization. One DALY represents the equivalent to losing a year of life at full health. Each illness has a disability weight assigned to it, representing the amount it reduces a person's quality of life. For example, a year of life spent with blindness counts for 0.6 DALYs. Preventing 10 years of blindness is thus worth the same amount as letting someone live for six more years at full health. DALYs aren't a perfect measure of health outcomes, but they are very versatile and serve as a useful rough guide. For further information see the WHO's definition.
Developing country / developing world
A developing country is a country with a low level of material wealth, and the developing world is the collection of all such countries and consists of about 5 billion people. There is no universally accepted way to determine exactly which countries count as developing rather than developed, but economic measures such as GDP per capita are often used. For example, the World Bank defines developing countries as those with a GNI per capita of less than $11,905 (which includes several eastern european countries). On all uses of the term, the developing world covers a wide range of countries, some of which are much poorer than others.
The term 'developing country' has a number of weaknesses. For example, the term is often seen as having the connotation that Western economic life should be the goal of all countries, and the term obscures the fact that not all such countries are actually improving economically. Alternative names include 'the third world', 'the global south', 'less economically developed countries', or just 'poor countries'. A useful term for the very worst off countries is 'least developed countries' or LDCs.
Disease Control Priorities Project (DCPP)
The Disease Control Priorities Project is a group dedicated to researching global health priorities. Their information on cost-effective interventions is particularly useful. The project was initiated by the World Bank, and is also supported by the WHO, the Population Reference Bureau, and the Gates Foundation.
Extreme Poverty
A distinction is often made between 'absolute poverty' and 'relative poverty'. The latter implies that someone is much worse off relative to a reference group , while the former implies that someone is very badly off compared to a fixed standard. 'Extreme poverty' is sometimes used as a technical term for a very severe level of absolute poverty, where people have great difficulty meeting their basic needs for food, water, shelter, sanitation and health care.
The World Bank defines extreme poverty as living below its $1.25 poverty line. This is determined on a 'family per capita' basis, so a family of four with $5 in total per day would be right on the $1.25 line. The dollars in question are adjusted for purchasing power parity, so they take into account the fact that goods and services cost less in other countries. So comparisons can be made across different years, the values in the poverty lines are fixed to 2005 dollars. That is, a person living below the $1.25 line can buy less per day than $1.25 could buy in the US in the year 2005. Roughly 1.4 billion people live below the $1.25 poverty line and 2.5 billion live below the $2 a day poverty line.1
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Note that the poverty lines mentioned above were introduced in 2008 and replace the 1993 $1 a day and $2 a day poverty lines.
Fair Trade
Fair trade is a social movement dedicated to helping producers in developing countries and promoting sustainability. It is often seen as an attempt to fix some of the problems of free trade. The largest practical effects of the fair trade movement are through the certification of products such as coffee, chocolate and handicrafts that have been produced with good labour standards, sustainable farming practices, and with a guaranteed sale price for the producer.
Free Trade
Free trade is a trade policy that allows trade between different organizations or countries without any governmental interference, such as subsidies, taxes, tariffs, or other barriers. There is a complex system of free trade agreements between countries, which require that a country does not create trade barriers to favour its local industries over those in the other countries bound by the agreement. An important regulatory of such agreements is the WTO.
Free trade has the potential to produce large overall economic benefits, but there is controversy over how those benefits are distributed and the tendency of production to move to countries with the lowest environmental or workplace standards.
See also Fair Trade.
G8
The G8, or Group of Eight, is a forum for eight of the world's most powerful countries: Canada, France, Germany, Italy, Japan, Russia, the UK and the USA. Each year one of the countries takes its turn hosting a summit and gets to set the agenda to be discussed. Since the summits are an important opportunity for these countries to discuss world affairs, they have received a lot of attention from aid campaigners.
Gift Aid
Gift Aid is a form of tax deduction that is common in the UK. When you give to a charity under the Gift Aid scheme, the government makes an additional contribution to the charity. This will be a percentage of the amount donated that depends on your tax bracket. It is set up to offer a convenient alternative to tax deductions: the government offers the same support in each case, it is just the way it is handled that is different.
Gross Domestic Product (GDP)
GDP is the most common measure of a country's economic productivity. It is defined as the value of all final goods and services produced in the country in one year. It can be used to examine the relative wealth of citizens in different countries by dividing by the population of the country and adjusting for purchasing power parity. Note that there are a number of criticisms of using GDP to measure productivity, for example it takes no account of unpaid economic activity such as a parent's caring for his or her children.
Gross National Income (GNI)
GNI is a measure of a country's economic productivity that is similar to GDP. The difference is that GNI adds in the value of payments from other countries (notably dividends from companies and interest on loans), and subtracts the value of payments to other countries. Thus, a US owned company which was based abroad would contribute to the US GNI and not the host country's GNI.
Gross National Product (GNP)
GNP is a measure of a country's economic productivity that is similar to GDP. The difference is that GNP adds in the income of that country's citizens abroad and subtracts the income of foreign citizens working in that country. Thus, the US GDP is a measure of the economic productivity of the USA, while the US GNP is a measure of the economic productivity of all US citizens (wherever they might live).
HIV/AIDS
HIV is a virus (Human Immunodeficiency Virus) that causes a syndrome called AIDS (Acquired Immunodeficiency Syndrome). It is believed to have first infected humans in the early 20th Century and was first recognized in 1981. In 2007, there were about 33 million people living with HIV and about 2.5 million new infections. Approximately 2.1 million people died from AIDS that year.2Around 66% of people with HIV live in sub-Saharan Africa 3 and HIV/AIDS has rapidly become one of the region's largest concerns.
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Human Development Index (HDI)
The HDI is a measure of quality of life in a country. It combines measures for life expectancy, education, literacy rates and average income.
Human Development Report (HDR)
The Human Development Report is an annual report produced by the UNDP which charts progress in the quality of life in different countries. Each year has a different theme, such as water or climate change.
International Monetary Fund
The International Monetary Fund is an international organization designed to oversee the global financial system by regulating macroeconomic policies and offering loans to developing countries. The IMF has been criticized for lending money to illegitimate regimes, and for some of the stringent conditions that it attaches to its loans, such as the privatization of national assets and the lowering of corporate taxes.
Least Developed Countries (LDCs)
The least developed countries are those which combine low economic productivity with very poor quality of life. The exact criteria for whether a country counts as an LDC are set by the United Nations and take into account: personal income, nutrition, health, education, and economic vulnerability.
Millennium Development Goals (MDGs)
The Millennium Development Goals are a set of eight poverty reduction targets for the year 2015. They were set by the member states of the United Nations at the millennium summit in 2000. They are:
- Eradicate extreme poverty and hunger
- Achieve universal primary education
- Promote gender equality and empower women
- Reduce child mortality
- Improve maternal health
- Combat HIV/AIDS, malaria, and other diseases
- Ensure environmental sustainability
- Develop a global partnership for development
Progress towards the goals has been very mixed, with good results in China and India, but little progress in sub-Sarahan Africa.
Microfinance
Microfinance is the provision of financial services such as credit, savings, insurance, and fund transfers to low-income clients in developing countries. It has been seen as a way to help people break out of poverty through the promotion of small businesses and entrepreneurialism. Microfinancial services are being offered by both NGOs and for-profit companies.
Microcredit
The particular part of microfinance concerned with offering small loans. See above for more details.
NGO (Non-governmental organization)
An NGO is any legally constituted organization that has no participation or representation of any government. NGOs can be funded by governments, so long as they do not admit government representatives as members. They can be staffed by both volunteers and paid employees. International NGOs have existed since the early 19th century, and have had a role in ending slavery and in winning women the right to vote. NGOs can have many different goals, both national and international, including fighting the causes and effects of extreme poverty in the developing world.
Odious Debt
Odious debt is a theory in international law regarding the national debt incurred by a regime for purposes that are not in the nation's best interests, such as for financing a war of aggression. On the theory, such debts are considered to be personal debts of the regime and thus the country would not be obliged to repay them.
Official Development Assistance (ODA)
ODA is a measurement of governmental aid to developing countries that is used by the Development Assistance Committee (DAC). It does not include money that is given to a country for military, or other non-development purposes, but can include concessionary loans and debt relief. In 1970, a UN resolution was passed which said that a group of the most economically advanced countries were obliged to reach an ODA target of 0.7% of their GNI by the middle of the decade. In the subsequent four decades, this target has been re-affirmed numerous times, most recently in Monterrey in 2002 . However, as of 2011, only five countries have met this target, with the average amount given being 0.47% and the US giving far less: a mere 0.207%.4
Purchasing power parity (PPP)
When comparing incomes between people in different countries, it is well known that converting from one to the other based on the market exchange rates does not tell the whole story. For example, a US dollar converted into Rupees and then spent in India will tend to buy more there than it would in the US. Thus, people in developing countries are a bit richer than their incomes would indicate, if those incomes were converted into our currency using market exchange rates.
To compensate for this, most statistics for incomes in developing countries are adjusted for Purchasing Power Parity. This is done by determining a 'basket' of basic goods and seeing how many US dollars they would cost to buy in each country. The ratio of how much the basket would cost in the foreign country to how much it would cost in the US is the PPP ratio.
Randomized Control Trials
Randomized control trials are experiments where a test group and a "control group" are randomly selected from a pool of potential subjects. The test group receive the actual treatement (in a medical trial), while the control group receive treatment indistinguishable from the actual treatment, but which has no effect. This allows researchers to separate out the effects of receiving the treatment from other factors that may have an effect.
Ideally, such trials should be "double blind": that is, set up so that neither the subjects nor those administering the treatment know whether any particular subject is in the test group or the control group. If this is not done it can lead to subtle biases.
Relative Poverty
A distinction is often made between 'absolute poverty' and 'relative poverty'. Relative poverty is a measure of how badly off someone is relative to their social context (such as the other citizens of the country), while absolute poverty is a measure of how badly off someone is based on a fixed list of requirements such as access to food and shelter. Poverty lines in developed countries measure relative poverty (for instance, earning less than 60% of the median household income for that country), while people living in developing countries are often much worse off than this.
Tax Deductions
Many governments choose to provide incentives to encourage their citizens to give to worthwhile charities. They often do so through tax deductions . Donations to appropriate charities are considered 'tax deductible' which means that you can subtract the total of these donations from your taxable income. To you it seems that the more you give to charity, the less tax you pay. In effect, it means that the government pays part of the donation for you.
Gift aid is a form of tax deduction used in the UK where the government's contribution goes straight to the charity.
United Nations Development Programme (UNDP)
The UNDP is a United Nations agency which provides expert advice, training, and financial grants to support developing countries. It aims to help countries reduce poverty, move towards democratic institutions, fight HIV/AIDS, prevent armed conflict and avoid environmental degradation.
UNICEF (United Nations Children's Fund)
UNICEF is a United Nations agency which promotes the health and well-being of the world's children. It is an inter-governmental organization, rather than an NGO, which gives it access to every country in the world, but limits its ability to directly criticize governments.
World Bank
The World Bank is an international financial institution which offers loans and technical assistance to developing countries with the goal of reducing poverty. The World Bank has been criticized for focusing on the needs of the economically powerful countries who run it and for tying the loans to various free market reform policies which have potentially caused more harm than good.
World Trade Organization (WTO)
The World Trade Organization is an international body designed to help the world move towards a system of free trade between countries. In practice, it provides a forum for the creation and enforcement of free trade agreements. It has a large role in determining the prosperity of developing countries, as they are typically reliant on international trade. The WTO has been criticized for providing too much power to the richer nations in its negotiations, and for ignoring environmental and labour issues.
World Health Organization (WHO)
The WHO is a United Nations agency which serves as a coordinating authority on international public health. They produce a number of influential reports, including information on the cost effectiveness of health interventions (WHO-CHOICE), information about the international pattern of early death and ill-health (The Global Burden of Disease), and the yearly World Health Report.
