It was my Paper presentation on the 1st Bangladesh Economics Summit.

1. A Cross Country Analysis to Determine the Causes
of ‘Growth without Development’ and Solving this
Paradox by Sustainable Economic Growth in
Bangladesh
Topic

2. ECONOMIC GROWTH
• Economic growth refers to the increase in
the value of the goods and services
produced by an economy overtime.
• It is measured as the percentage change
in GDP
• It is a Positive Economy concept
ECONOMIC DEVELOPMENT
• Economic development is an increase in
living standard, improvement of self-esteem,
needs and freedom from oppression as well
as a greater choice
• It is measured with HDI
• It is a Normative Economy concept
Growth vs Development
Taslim, M. A. & Chowdhury, A., 1995. Macroeconomic Analysis for Australian Students, Sydney: Prentice Hall Australia
Pty Ltd.
Todaro, M. P., 2015. Economic Development. 12 ed. New York: Pearson Education Inc..

3. Growth vs Development
Growth DevelopmentParadox
Sen, A., 1998. The Concept of Development. In: T. N. Srinivasan & H. Chenery, eds. Handbook of Development Economics. s.l.:Elsevier
Science Publishers.

4. Objectives of the study
► Exploring the causes of ‘Growth
without Development’
► Measuring National level
Development

5. Literature Review
Lawrence I Edet (2015) finds the major causes behind the
paradox in Nigeria, which are: corruption, fraud, high level of
insecurity, treasury looting, unfavorable business
environment, poor budgetary formulation and implementation,
involvement of non-experts in decisions and policies.

6. Literature Review
Gustav Ranis (2000) shows a significant relationship between
economic growth and human development in both directions with a
cross country regression. Economic growth will not be sustained
without improvement in human development, he comments. He also
summarizes economic growth as a necessary but not sufficient
condition for development, especially human development. Economic
policies should be revolved around human development.

7. Literature Review
Gupta et al (2002), Lawrence I Edet (2015), Ndikumana (2000),
Ramlogan-Dobson (2010), Gyimah Brempong (2002), Tanji
(1998) find Corruption as a major factor that hinders
Development.

8. Literature Review
Bole and Bosede (2014) shows that business contributes to
Economic Development through generation of employment in
Nigeria.

9. Literature Review
Esther Duflo (2012), Filmer (1999), Morrison, et al. (2007) show
women empowerment and gender equality to be closely related with
Economic Development.

10. Literature Review
Economic growth can lead to inclusive growth through human
development which depends on employment creation, poverty and
inequality reduction, socioeconomic amenities, governance and
gender equity according to Vellala et al., 2014.

11. Literature Review
P. K. Rao suggests poverty, unemployment and economic inequality
are better to be controlled with policies to enhance economic and
other well-being of the society.

12. This paper suggests some innovative policies
to solve the ‘Growth vs Development’
Paradox in Bangladesh after analyzing the
causes behind less proportional development
with the growth in the economy from the
evidence of 21 countries.
Contribution of this study
#

13. BANGLADESH
Growth and Development Scenario

14. -20
-15
-10
-5
0
5
10
15
Economic Growth in Bangladesh

15. 0
5
10
15
20
25
30
35
40
1980 1985 1990 1995 2000 2005 2010 2015 2020
Inequality (Gini index)

16. 0
1
2
3
4
5
6
Unemployment Rate

17. 0
5
10
15
20
25
30
35
40
45
2005 2010 2016
Poverty Trend in Bangladesh
Poverty headcount ratio at national poverty lines (% of population)
Poverty gap at $1.90 a day (2011 PPP) (%)

18. HDI in South Asia
Countries HDI
Bangladesh 0.579
India 0.624
Pakistan 0.55
Sri Lanka 0.766
Nepal 0.558
Maldives 0.701
Bhutan 0.607
Afghanistan 0.667

19. Data Sources:
01 World Bank
databank
02 Human Development Report
2016
03 UN Data
04 HIES 2005,2010,2016; LFS
2016
21 countries, 201605

20. National Development Index
Poverty Inequality Unemployment
Todaro 1977The index is created using max-min method

21. Multiple Variable Linear Regression Model
Dependent Variable
• The derived NDI has been taken as the dependent variable
Independent Variable
• CPIA transparency, accountability, and corruption in the public sector rating (1=low to 6=high)
• Ease of doing business index (1=most business-friendly regulations)
• Human Development Index measured with Health, Education and Standard of living dimensions (ranged
between 0 to 1)
• Gender Development Index as a gender-sensitive extension of the HDI, that addresses gender-gaps in life
expectancy, education, and incomes
• Government expenditure on education and Domestic general government health expenditure (% of total
expenditure)
• Central Government Debt (% of GDP).

22. Findings:
▪ No multicollinearity, Solved Heteroscedasticity.
▪ Equation has performed reasonably well (R2= 0.60)
▪ All the estimated coefficients are significantly different from zero. (F-
statistics significant at 10% level of significance)
▪ CPIA transparency, accountability and corruption in public sector (p<0.05);
Ease of doing business indicator (p<0.10); Human Development Index
(p<0.05): these variables are significant. Others found to be insignificant.

23. CORRUPTION
1 unit increase in CPIA transparency, accountability and corruption in the
public sector rating will lead to 14.94 unit increase in the National
Development Index.
Therefore, we can safely conclude that corruption plays a crucial role in ‘not
developing’ of any country.

24. EASE OF DOING BUSINESS
Ease of doing business has positive impact on development.
Business friendly regulation helps create small and medium enterprises as
well as expand large business farms. This fills up the lack of diversification of
economy and reduces overdependence on some sectors. Diversification
creates new employment opportunity, minimizes inequality among sectors,
helps to reduce poverty.

25. HUMAN DEVELOPMENT INDEX
National development is highly elastic to human development. Thus,
comparing development of countries in terms of HDI instead of NDI is
justified.

26. GENDER DEVELOPMENT, GOVT SOCIAL EXPENDITURE AND GOVT DEBT
Lack of Gender based development, Misallocation of budget and Poor
budget implementation were expected to hinder development
But the evidence proved no significance.

27. Corruption, difficulty of doing business, low human development
are the major challenges in the way towards development.
CONCLUSION

28. Policy Recommendation
▪ The government should take a drastic step to control corruption.
▪ Over-dependency should be transferred to other sectors to diversify
the economy.
▪ Development is achievable within the shortest possible time by
stimulating human development in health, education and income
dimensions.
▪ Government policies should be concerned with sustained growth.
Sustainable growth will lead to real development and reduction in
miserable indices of poverty, inequality and unemployment.

29. Further Research Scopes
▪ The major limitation of this study is the low number of observation
due to data unavailability.
▪ The causes are found by cross country analysis, which does not
necessarily mean that causes are same in case of Bangladesh.
▪ Further research can be carried out to investigate the impact of unfair
distribution of revenue, political freedom, civil liberties, involvement
of non-experts in policy-making on national development.

30. THANKS!