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Development Concepts

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Introduction to the DPA 314 Administration of Economic Development

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Development Concepts

  1. 1. 4-1 Administration of Economic Development DPA 314 Development Concepts
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  3. 3. 3 Seers (1969) marked the change needed in setting development objectives. The goal of development during the period was thus not limited to economic growth but to concentrate on the reduction of poverty, inequality and unemployment.
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  5. 5. 5 Countries' income inequality (2014) according to their Gini coefficients measured in percent: red = high, green = low inequality
  6. 6. 6 In the 1990s, economists increasingly recognized that it was the quality of life that determines whether people are from developing countries or not. Diseases, malnourishment and death that happen in the everyday lives of those from the developing countries changed the view of development goals dramatically
  7. 7. 7 The 2014 Global AgeWatch Index ranks 96 nations on the quality of life for the over 60s. Norway, Sweden and Canada are currently the best countries to grow old in. At the opposite end of the scale is Afghanistan, Mozambique and West Bank and Gaza. The US is in 8th place, the UK is in 11th and Australia is in 13th
  8. 8. 8 By then, like many scholars around the world, Stiglitz (1998) contributed to shift the development goals set by governments in developing countries to wider objectives, including improvements in income distribution, environment, health and education. A broader perspective of development goals is hence necessary as reflected in the World Bank’s Development Report (1991, p. 4) as “to improve the quality of life. Especially, in the world’s poor countries, a better quality of life generally calls for higher incomes— but it involves much more. It encompasses as ends in themselves better education, higher standards of health and nutrition, less poverty, a cleaner environment, more equality of opportunity, greater individual freedom, and a richer cultural life.”
  9. 9. 9 The capability approach is a framework pioneered and advocated primarily by Amartya Sen and Martha Nussbaum (1985). It arose from the need to measure progress in development, and the dissatisfaction with existing methods in the field of economy (Robeyns 2011).
  10. 10. 10 Sen’s (1985, 1992, 1999) work perhaps has brought about the broadest perspective of development goals. According to Sen (1985), the ultimate goal of development is to enhance human capabilities, which is defined as “the freedom that a person has in terms of the choice of functionings, given his personal features (conversion of characteristics into functionings) and his command over commodities.
  11. 11. 11 Higher income is necessary but not sufficient in terms of quality of life. Under his approach, goals of economic development change from promotion of growth to promotion of well-being (Sen 1985, p. 13).
  12. 12. 12 These changes in the definition of development goals posed the need to construct alternative composite indices to reflect quality of life. These indices should take into account not only money indicators but also non-monetary indicators to reflect the development levels achieved. There have been attempts to build indicators that measure the standard of living and quality of life, which focus on the quantitative and qualitative aspects: health, education, environment and material well-being (Berenger and Verdier- Chouchane 2007).
  13. 13. 13 The Human Rights approaches come closer to the philosophy behind the capability approach. They aim to secure the freedoms that are central for human beings (Alexander 2004). The Universal Declaration of Human Rights is a good example of this approach in practice
  14. 14. 14 Using Sen’s (1985) approach, the Human Development Index (HDI) has been published annually since 1990 by the United Nations Development Programme as an attempt to provide an aggregate measure of life expectancy, education and income (Elkan 1995)
  15. 15. 15 * Life expectancy at birth, as an index of population health and longevity * Knowledge and education, as measured by the adult literacy rate (with two-thirds weighting) and the combined primary, secondary, and tertiary gross enrollment ratio (with one- third weighting). * Standard of living, as measured by the natural logarithm of gross domestic product per capita at purchasing power parity The HDI combines three dimensions:
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  17. 17. 17 Increasingly, academics and societies realize the effects of human actions on the environment. On the way to achieve rapid economic growth, countries around the world have been exploiting their natural resource reserves at alarming rates. Although early economists included the natural environment in their economic analysis, environmentalism only drew international attention in the 1960s (Pearce and Turner 1990). Sustainable Development Concept The relationship between development and environment has given birth to the sustainable development concept. The central idea of sustainable development is that global ecosystems and humanity itself can be threatened by neglecting the environment.
  18. 18. 18 Environmental economists are concerned that the long-term neglect of the environmental assets is likely to jeopardize the durability of economic growth (Thampapillai 2002). Sustainable development therefore “involves maximizing the net benefits of economic development, subject to maintaining the services and quality of natural resources over time” (Pearce and Turner 1990, p. 24). Its concern is about balancing the objectives of economic growth and attending to environmental considerations.
  19. 19. 19 In a broader sense, sustainable development is defined by the Brundtland Commission, formally the World Commission on Environment and Development, as “progress that meets the needs of the present without compromising the ability of future generations to meet their own needs” (World Commission on Environment and Development 1987, p. 8). Although this standard definition brings the term “sustainable development” into common use, it has created ambiguity in application (Redclift 1992; Daly 1996; Payne and Raiborn 2001).
  20. 20. 20 Although this standard definition brings the term “sustainable development” into common use, it has created ambiguity in application (Redclift 1992; Daly 1996; Payne and Raiborn 2001). Much of the debate around the definition seeks to answer the two questions “What should be sustained” and “What should be developed” (Kates et al. 2008)
  21. 21. 21 Today, sustainable development aims to improve the quality of life in a comprehensive manner, including economic prosperity, social equity and environmental protection. Economic, social, environmental and cultural aspects must be integrated in a harmonious manner to enhance the intergenerational well-being (World Bank 2003).
  22. 22. 22 The Millennium Development Goals Eight Millennium Development Goals (MDGs) were adopted by member countries of the United Nations in September 2000. The MDGs were developed to address the most pressing problems in developing countries, including poverty and hunger, primary universal education, gender equality, child health, maternal health, HIV/AIDS, environmental sustainability and global partnership. Member countries of the United Nations have committed themselves to end poverty and achieve other development goals by 2015. Quantitative targets of these goals were then assigned based on rates of international development achievements (United Nations 2011). The Millennium Development Goals
  23. 23. 23 However, the MDGs were criticized for failing to include other critical objectives of development, such as improving legal and human rights of the poor, slowing global warming and leveraging the contributions of the private sector. Critics also argued that the MDG targets were not ambitious enough and were not prioritized (Todaro and Smith 2009).
  24. 24. 24 The latest 2012 report showed a remarkable progress made by countries, including those in sub-Saharan Africa. The review maintained that the MDGs are still achievable. Increased supports from national governments, the international community, civil society and the private sector are considered necessary to meet the MDGs (United Nations ,2012).
  25. 25. 25 1. Eradicate extreme poverty and hunger • The global economic crisis has slowed progress, but the world is still on track to meet the poverty reduction target 2. Achieve universal primary education • Hope dims for universal education by 2015, even as many poor countries make tremendous strides 3. Promote gender equality and empower women • For girls in some regions, education remains elusive 4 Reduce child mortality • Child deaths are falling, but not quickly enough to reach the target 5 Improve maternal health • Reduce by three quarters, between 1990 and 2015, the maternal mortality ratio 6 Combat HIV/AIDS, malaria & other diseases • The spread of HIV appears to have stabilized in most regions, and more people are surviving longer 7 Ensure environmental sustainability • The rate of deforestation shows signs of decreasing, but is still alarmingly high 8 Develop a global partnership for development • Aid continues to rise despite the financial crisis, but Africa is shortchanged
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