Third World

DEFINITION of 'Third World'

A phrase commonly used to describe a developing nation, but actually started as term used to describe a country's allegiance. A Third World country is a country whose views are not aligned with NATO and capitalism or the Soviet Union and communism. The use of the term Third World started during the Cold War and was used to identify which of three categories the countries of the world aligned with. The First World meant that you aligned withe NATO and capitalism, and the Second World meant you supported Communism and the Soviet Union.

BREAKING DOWN 'Third World'

Developing nations are commonly referred to as Third World. These developing countries can be found in Asia, Africa, Oceania and Latin America. These countries were at one point colonies which were formally lead by imperialism. The end of imperialism forced these colonies to survive on their own. With lack of support, these colonies started to develop characteristics such as poverty, high birthrates and economic dependence on other countries. The term was then affiliated to the economic situation of these former colonies and not their social alliances to either capitalism or communism.


RELATED TERMS
  1. Capitalism

    A system of economics based on the private ownership of capital ...
  2. Fourth World

    These are the most underdeveloped regions in the world. The Fourth ...
  3. Alternative Investment Market - ...

    A sub-market of the London Stock Exchange that permits smaller ...
  4. Communism

    A political and economic ideology based on communal ownership ...
  5. Developed Economy

    While there is no one, set definition of a developed economy ...
  6. World Bank Group

    Five international organizations dedicated to providing financial ...
Related Articles
  1. Economics

    What Is An Emerging Market Economy?

    Emerging markets provide new investment opportunities, but there are risks - both to residents and foreign investors.
  2. Options & Futures

    Evaluating Country Risk For International Investing

    Investing overseas begins with determining the risk of the country's investment climate.
  3. Fundamental Analysis

    An Evaluation Of Emerging Markets

    Get the full story on this asset class before you write it off as too risky.
  4. Economics

    The Wealth Gap: Developing Nations Are Catching Up

    The difference between rich, developed nations and poor, developing nations is shrinking. Find out what this means for you.
  5. Options & Futures

    An Introduction To Emerging Market Bonds

    The rewards associated with this fixed-income asset are significant, but so are the risks.
  6. Investing News

    How Interest Rates Can Go Negative

    Central banks from Europe to Japan have implemented a negative interest rate policy (NIRP) in order to stimulate economic growth.
  7. Economics

    How Bernie Sanders Has Avoided Big Money (Mostly)

    Bernie Sanders hasn't entirely avoided PACs with his fundraising, but he has gotten a lot of bang for the buck
  8. Investing News

    Obama Wants to Double Wall Street Regulation

    President Obama wants to double the budgets of the SEC and the CFTC over the next five years.
  9. Economics

    Does Big Money Hurt or Help Clinton and Rubio?

    Marco Rubio and Hillary Clinton lead their parties in raising money from Wall Street. Is that a help or a hindrance?
  10. Economics

    The Delicate Dance of Inflation and GDP

    Investors must understand inflation and gross domestic product, or GDP, well enough to make decisions without becoming buried in data.
RELATED FAQS
  1. What is a derivative?

    A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, ... Read Full Answer >>
  2. What is comparative advantage?

    Comparative advantage is an economic law that demonstrates the ways in which protectionism (mercantilism, at the time it ... Read Full Answer >>
  3. What is securitization?

    Securitization is the process of taking an illiquid asset, or group of assets, and through financial engineering, transforming ... Read Full Answer >>
  4. How does the Wall Street Journal prime rate forecast work?

    The prime rate forecast is also known as the consensus prime rate, or the average prime rate defined by the Wall Street Journal ... Read Full Answer >>
  5. What's the difference between microeconomics and macroeconomics?

    Microeconomics is generally the study of individuals and business decisions, macroeconomics looks at higher up country and ... Read Full Answer >>
  6. Can hedge funds trade penny stocks?

    Hedge funds can trade penny stocks. In fact, hedge funds can trade in just about any type of security, including medium- ... Read Full Answer >>
Hot Definitions
  1. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  2. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  3. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  4. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  5. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
Trading Center