the slide discuses about the concept of development and its measurements, values and objectives.

1. The Basic Concepts of Development:
Lecture Note
Henok Teka
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2. Outline:
Definitions and Meaning of Development
Measures of Development
Core values of Development
Objectives of Development
Levels of Development
BASIC CONCEPTS OF DEVELOPMENT
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3. Meaning of Development
Development/Economic Development/ is a concept
tied to the demise of feudalism and the evolution of
capitalism.
TRADITIONAL ECONOMIC MEANING:
- There is a stress on the industrialization
often at the expense of agriculture and
rural development.
- DEVELOPMENT is seen as an economic
phenomena in which rapid gains in
overall growth would either trickle down
to the masses in the form of jobs and
other economic opportunities.
- Development: is the CAPACITY
of the national economy, whose
initial economic condition has
been more or less static for a
long time to GENERATE and
SUSTAIN an annual increase in
its GROSS NATIONAL PRODUCT
at rates of 5% to 7%
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4. Meaning CNTD’
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NEW ECONOMIC VIEW:
- DEVELOPMENT is the reduction or
elimination of poverty, inequality
and unemployment within the
context of a growing economy.
- The development of PEOPLE
rather than development of
things.
- The Challenge of Dev’t is
Improved quality of life.
- Development means less poverty,
cleaner environment, more equal
opportunity, greater individual
freedom and a richer cultural life.
- Therefore, Development is a multi dimensional process involving changes in
social structures, popular attitudes, and national institutions, as well as the
acceleration of economic growth, the reduction of inequality, and the eradication of
poverty.” (Todaro and Smith, 2006)
- Development is both a physical reality and a state of mind for attaining a better
life.

5. Meaning CNTD’
- Sen’s “Capabilities” Approach: 1985
 Economic growth is not an end in itself and has to
enhance the lives people lead and the freedoms that
they enjoy
 Capability to function is what matters for status as a
poor/non-poor person and it goes beyond availability of
commodities
 Capabilities: “freedom that a person has in terms of
the choice of his functionings,…”
 Functioning is what a person does with commodities
of given characteristics that they come to
possess/control. The concept of functioning reflects the
various things a person may value doing.
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6. How is Development measured?
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7. Measurement CNTD
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Growth measurements
Economic growth: the value of output of goods and services
within a year.
Indicators:
 GDP – The value of output produced within a country during a time period
 GNP – The value of output produced within a country plus net property
income from abroad
 GDP/GNP per head/per capital: Takes account of the size of the population
 Real GDP/GNP: Accounts for differences in price levels in different
countries
 PPP Measure: the number of units of a country’s currency required to
purchase the same basket of goods and services in the local market that a US $1
would buy in the USA.
Drawback of growth indicators:
Reliability of data?
Distribution of income?
Quality of life?
Black/informal economy?

8. Development: incorporates the notion of a measure of the
welfare of humans in a society. As such it is a normative
concept – open to interpretation and subjectivity
It may also incorporate measures such as (other than listed
above):
 National Product per person, Occupational Structure of the
Labor Force, Consumption of Energy per Person, Productivity
per Worker, Transportation & Communication per person,
Consumption of Manufactured Metal per Person,
 Other Rates- Literacy, Caloric intake, % of income spent on food,
Amount of savings per person…
 Longevity – Life expectancy
 Knowledge – Access to
Education, literacy rates
 Standard of living – GDP per
capita: Purchasing Power Parity
(PPP)
HDI
Measures CNTD
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9. In short, development can be measure through three general
variables:
Economic indicators of development--GNP/GDP, Per capita income,
value added, employment structure etc.
Social indicators of development--education, literacy, health, welfare
Demographic indicators of development--life expectancy, infant
mortality, rate of natural increase, birth rate, doubling time
Measurement CNTD
Other indicators
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10. Core Values of Development
Three basic core values as a practical guideline for understanding development are:
 SUSTENANCE: The ability to meet basic needs
- When life sustaining basic human needs like food, shelter, health and protection
are absent UNDERDEVELOPMENT exists. Purpose of Development is to create an
environment in which all people can expand their capabilities and opportunities can
be enlarged for both the present and future generations
 SELF-ESTEEM: To be a Person
- Self-Esteem is having a sense of worth and self-respect, of not being used as a tool by others
for their own ends. DEVELOPMENT is legitimized as a goal because it is an important perhaps
even indispensable, way of GAINING ESTEEM.
 FREEDOM FROM SERVITUDE: To be able to choose
- FREEDOM is to be understood in the sense of EMANCIPATION from alienating
material conditions of life and from social servitude to nature, ignorance, other people,
misery, institutions and dogmatic beliefs. 10

11. Objectives of Development
 Three Objectives of Development:
1. To increase the availability and widen the distribution of basic
life-sustaining goods such as food, shelter, health and protection.
2. To raise levels of living including in addition to higher incomes,
the provision of more jobs, better education and greater attention to
cultural and humanistic values , all of which will serve not only to
enhance material well-being but also to generate greater individual
and national self-esteem.
3. To expand the range of economic and social choices available
to individuals and nations by freeing them from servitude and
dependence not only in relation to other people and nation states
but also to the forces of ignorance and human misery.11

12. The level of Development
- Terms to explain the level of development
Developed/Developing or
Underdeveloped
LDC/MDC/NIC
North/South (vs. East/West)
First/Second/Third/Fourth
World
Transition economies
Emerging economies
(The Brandt Line) The distribution of MDC and
LDC
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13.  North-South Gap-most countries in the Core are above 30 degrees latitude
 Viewed from a Polar Projection-more countries are clustered in an inner core,
while less developed countries are relegated to a periphery or outer ring.
 20% of the World’s population controls 85% of the wealth
 Poorest 20% lives in the Southern Hemisphere
Levels of Development CNTD…
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14. Immanuel Wallerstein’s ‘Core-periphery
model’
- It is a new approach to developed and developing or underdeveloped idea
 Core-the nations with a high level of prosperity with dominant economies
globally
- High level of education, salary and technology. It generate more wealth in the
world economy.
 Periphery-poor nations that are dependent on the core as markets for raw
materials and sources of technology
- Low level of education, salary and technology. It generate less wealth in the
world economy
 Semi-Periphery-better off than periphery, but still dominated by the core to
some degree
- Exploited by Core but they exploit the Periphery. Serve as a buffer between
core and periphery.
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15. Conditions in LDCs
• High birth rates, moderate death rates and low life expectancy, High infant mortality rates-
large population under age 15 yrs.
• Poor health care & shortage of doctors, Poor sanitation, lack of fresh and clean water,
Poor nutrition and protein deficiency are common.
• Low per capita income with many women & children doing hard manual labor
• High illiteracy rate with low levels of education, Great disparity between rich & poor,
small middle class, Urban areas overcrowded, lack of services, rapid urban migration.
• Subsistence farming on small landholdings
•Affected by a condition of poverty cycle (Poverty cycle page 17)
 Political instability and corruption
Exploitation of natural resources and workers regardless of consequences
Dependence of agricultural products or primary products such as mineral resources
Misuse of foreign assistance
Misguided priorities
Cultural resistance to modernization…
Conditions That Hamper
Development
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16. Global Economic Disparities
Roots: Much of the disparity existed as Colonialism was established by
European nations.
- The Industrial Revolution increased the need for raw materials and markets
for finished goods.
- Neo-colonialism refers to the economic dominance of the core over the
former colonial nations-economic rather than political control.
A changing world
Till 1980’s there were 3 blocs
 First World-The Capitalist West-the most advanced nations-democratic &
capitalist
 Second World-The Communist East of the Soviet Union & its Eastern European
Satellites, Red China, N. Korea & Vietnam
 Third World-non aligned nations with mixed economies and state control-now an
obsolete term
Now a days,
 More Developed Countries-(MDCs) have high levels of industrialization,
urbanization & standard of living
 Underdeveloped (UDCs or LDC’s) or Developing Countries are moving
toward developed status-not as highly industrialized or urbanized with
a lower standard of living
World Bank- classification by income level
 High Income-(US, Canada, Western Europe, Japan, Australia…)
 Upper Middle Income-(Mexico, Brazil, Chile, Argentina, Poland…) 16

17. 17 Vicious circle

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The End
Henok Gebremedhin Teka
henokteka87@yahoo.com