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EDPSE-C01 Introducing Economic Development A Global Perspective

Jan 07, 2024, 5 min read

EDPSE-C1: Introducing Economic Development: A Global Perspective

1. Introduction 1

1.1. The poor’s experience

  • Poor Health

    • No medicine/healthcare
    • Nutrition
    • Famine

  • Relations suffer for survival

    • Even family won’t share food

  • Powerless: no say in public

    • Voting
    • No progress in Family

  • Unneeded in society

  • Depends on everyone

  • Unemployed

    • Insufficient salary
    • Must join military to survive
    • Must migrate to city

1.2. Economic and Development Studies

  • Political Economics: the social and institutional processes through which groups influence the allocation of scare resources for their own or certain group’s benefits
  • Economic Development isn’t just Economic indicators alone
    1. Economic Indicators: GDP, GNI, Income Per Capita
    2. Politics Issues: cause economic issues (replacing foreign advisers with local decision makers)
      • Without addressing political economy, economy might not able to grow
    3. Norm/Values: Social System: the interdependent relationships between economic and non-economic factors are important
      • Success or Failure of Development Policy: must account for institutional and structural variables too: Healthcare, quality education, rule of law, labor market that is foundation for better future development
      • Institutional and structural problems are less focused upon than economics
      💡 Ex of poverty trap: Poor children can’t study → Can’t get high earning job → Can’t progress

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1.3. Historical Evolution of Economic Development Definition

  • 1950s: Traditional Economic Development: only measured by GNI/GDP (not inclusive)
    • Problems with this
      • Misreporting of income by developing countries: to raise status, for self not to be third world country
      • High proportion of income is generated for self-consumption
      • Prices of non-traded goods are not appropriately reflected in exchange rates
      • Markets are not competitive: is the market structure that ensures maximum gain for consumer and producer (welfare)
        • Negative externalities: pollution of environment, abusive to workers
  • 1970s: ‘Redistribution from Growth’
    • Economic Development becomes reduction or elimination of poverty, inequality, unemployment
      • Increasing focus on social indicators (non-economic indicators)
  • 1985: economic growth should be a tool to enhance people’s lives and freedom
    • Poor vs Non-Poor: person’s status is determined by own Capability to Function

💡 Capability to Function: the number of choices a person has in surviving in society

  • Choices of good/bad education, healthcare, freedom of speech
  • People’s ability to choose what they enjoy doing to live a valuable life and not
  • attempts to assess the freedom people actually have to make high-quality choices. Because the value of a set of capabilities represents an individual’s effective freedom to live a life that is valuable in terms of the value of the functionings available to that individual, when available functionings are enhanced, so is the individual’s effective freedom.
  • Amartya Sen’s 5 sources of disparity between real income & actual advantages
    • Personal heterogeneities
    • Environmental Diversities: cold/hot weather
    • Social Climate Variations: post-materialism
    • Differences in relational perspectives: family norms, hierarchy in society, status
    • Distribution within family: boys or girls are treated differently in society
  • 1990s: World Bank’s definition is ‘challenges of development is to improve quality of life’
    • Economic Factors: capital, labor, natural resources, technology, established markets (labor, finacial, goods)
    • Non-economic factors (institutional, social, values)
      • Attitude toward life and work: hardworking, laidback, activist
      • Public and private structures: is it integrative or hinder things in society
      • Cultural Traditions: what people place values on (technology, progressive, traditionalist, conservative)
      • System of land tenure, property rights
      • Integrity of government agencies: corruption, effectiveness, satisfaction of people with government

❗ Author’s Concluding Definition of Economic Development

“Development is a multidimensional process involving changes in social structures, popular attitudes, and national institutions as well as the acceleration of institutions, as well as the acceleration of economic growth, the reduction of inequality, and the eradication of poverty”

  • 3 Core values of Development and objectives to improve
    1. Sustenance: ability to meet basic needs of people to maintain minimum living standard
    2. Self-Esteem: to be a person: worthiness, promote human values, respect, dignity, integrity, self-determination, equality
    3. Freedom from Servitude: ability to choose own’s preference (Capability to Function)

1.4. Millennium Development Goals

  • The MDG aims for 8 different impacts: not in use anymore 2

    1. Demands eradication of extreme poverty that is undermined by other impacts
    2. Demand universal primary education because disasters makes schooling expensive and require children to work more.
    3. Promote the empowerment of women as disasters can increase sexual violence against women and children and gender inequality.
    4. Seek to reduce child mortality rate as they are vulnerable to the disasters but also post-disaster disease.
    5. Aims to improve maternal health as damaged health infrastructure, stress, and cost impact pregnant women.
    6. Seek to combat chronic diseases like HIV, malaria, and tuberculosis that disasters can make more common of.
    7. Aspire to ensure environmental sustainability to ensure disaster management does not neglect aquatic and land-based ecosystems.
    8. Calls for global partnership for development especially for small island developing states who are vulnerable to climate change.

  • Sustainable Development Goals (SDG): new and improved MDG, with new non-traditional international issues (environment,

    1. No Poverty
    2. Zero Hunger
    3. Good Health and Well-Being
    4. Quality Education
    5. Gender Equality
    6. Clean Water and Sanitation
    7. Affordable and Clean Energy
    8. Decent Work and Economic Growth
    9. Industry, Innovation, and Infrastructure
    10. Reduced Inequalities
    11. Sustainable Cities and Communities
    12. Responsible Consumption and Production
    13. Climate Action
    14. Life Below Water
    15. Life on Land
    16. Peace, Justice, and Strong Institutions
    17. Partnerships for the Goals

  • Traditional economic measures

  • New economic view of development

  • Amartya Sen’s Capability Approach

  • Development and happiness: values and objectives

References

Footnotes

  1. EDPSE - Economic Development, 11th Edition (The Pearson Series in Economics, 2011) ↩

  2. Reflection Paper-IS402-G6 ↩

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