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 Why Do We Need To Study Development?

 How we can we say some Cs are developed/
ing?

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₋ Notions related to Dev’t are Change, Evolution, Growth, Expansion,
Enlargement, Spread, Progress, Success, transformation etc.

₋ The terms dev’t defined differently by

 1. different professions
 2. many people from the same professions
 3. dev’t in some area may not be dev’t in some where else
 4. Different countries have their own specificities into
account in order to develop their societies.
₋ Dev’t is value-laden and subjective complex, broad
comprehensive, contested and ambiguous term. it’s
very elusive (difficult to understand )
₋ Therefore, it is impossible to think of a universally
acceptable definition

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 however in actual sense it means
˗ moving from a lower stage to a better stage or
˗ the process of developing or being developed. or
˗ unfolding something/
˗ it’s just refers to a change that is desirable.

 But what is desirable is subjective (time, place,

person)

₋ The development needs of a starving population must be

different from those where there is sufficient nutrition
(Matowanyka, 1991).

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1. Traditional perspective
 Dev’t is an increase in per capita income, national income,
economic welfare and positive change in economic structure.
 All the definitions based on only quantitative aspect
 Ignores distribution of means and resources eg. social problems
as poverty, beggary, inequality and unemployment exist in the
country.

2. Modern perspective….. After 1970s

 “redistribution from growth” became a common slogan.
 Dev’t is an improvement in quality of life of people.
 Multidimentional

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1. It’s an attack on the chief evils of the world today: malnutrition, disease, illiteracy,
slums, unemployment, and inequality, measured in terms of aggregate growth rates,
development has been a great success.(Paul P. Streeten)
2. it is process of change which is dynamic. It is the process of societal, economic,
political and cultural changes.(Uma Kothari)
3. Development means steady progress to wards improvement in human condition. It
means reduction eventually elimination of poverty, ignorance, and disease, and
expansion of well being for all. (Esman)
4. he writes development as “the combination of mental (attitudinal) and social changes
among the population which decide to increase its real and global products,
cumulatively and in sustainable manner” (Perroux, 1978:65).
5. Development implies growth with justice. (equitable distribution or redistribution of
the gains made from economic growth. )
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6. Dev’t is not purely an economic phenomenon but rather a multi-dimensional
process
₋ involving major and radical changes in social structure, popular attitude, and national
institutions administrative structures, as well as the acceleration of economic growth, the
reduction of inequality and the eradication of poverty) and even customs and beliefs.
₋ involving the reorganisation and reorientation of the entire systems.(Todaro )
₋ He argues that economic growth would make sense only when it ensures the
reduction of inequality and the eradication of absolute poverty.
₋ development should satisfaction of basic human needs rather than simply
growth maximization.

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7. Dev’t is about the expansion of citizen’s capabilities (enhancing the
freedoms we enjoy) & fulfilling their rights as a citizen and individual. ( Sen, 1999)
 beings and doingsthe status of poor and non poor person is
determined by the capability to function
 beings and doings
 “Social Development is equality of social opportunities”.
 Dev’t involves reducing deprivation or broadening choice.
Deprivation /Unfreedoms represents a multidimensional view
of poverty that includes hunger, illiteracy, illness and poor
health, powerlessness, voicelessness, insecurity, humiliation, and
a lack of access to basic infrastructure
 Economic growth cannot be sensibly treated as an end in itself.
 A. Sen and J. stigliz were also list dimension of wellbeing are
(Health, Education , income/per capita, Political voice and
governance, Social connection and relationship & Environment
and security of economic and physical nature)

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8. The purpose of development is to reduce poverty, inequality, and
unemployment. Seers (1979) . Answering all these issues in together
9. Coffey defined development as "sustained(continuous) and irreversible economic
growth, which will be characterized in quantitative terms by an increase in real
income per capita …accompanied by certain structural and social
transformation(in qualitative terms) of a given country".

10. Despite progress in the levels of Per Capita Income, GNP, or GDP in
many developing nations, disparities in living conditions between rich
and poor countries and between the richest and poorest people within
developing countries continue to widen, and the absolute number of the
poor increases overtime (Rondinelli, 1993:1)

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  Values are desired conditions in a society (e.g. health, ame, long life,
high income, etc.).
 values represent common goals sought by all individuals & societies.
 They related to fundamental human needs that find their expression
in almost all societies and cultures at all times.
 Three core values serve as standards of development/guidelines for
understanding the inner meaning of development.
1. Sustenance: The ability to meet basic needs or the condition of life.
 All people have certain basic needs without which life would be
impossible.
 This refers to the capacity to meet basic necessities such as food,
clothing, and shelter.
 Lack of even one of these means that a person's life is not
progressive/
 Without improving the levels of living (life sustenance) the
prospect for development non-existent.

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2. Self-esteem: To be person or a goal to be achieved.
 The quality of life is good when there is authenticity, respect, trust,
and self-value. honor, or recognition
 A person's worth as an individual cannot simply be measured by the ownership
of material things which is often given emphasis by progressive capitalist
countries such as the United States.
 Material wealth is not the only important thing but the love for one's
family, the family's reputation, and a person's dignity and self-esteem
 Self esteem is an inherent value of human beings.
 Self-esteem features a sense of worth and self respect, of not being used
as a tool by others for their own ends.
 It is difficult to feel self-esteem without development, which includes better
material welfare.
 From this natural value of human being, development is legitimized as a goal of
gaining self-esteem.
 Absence or denial of self-respect indicates lack of development.

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3. Freedom from Servitude: To be able to choose or The capacity to grow and change
 This freedom can be seen in
 Expanded the range of choices in a society. their members
together with a minimization of external constraints in the pursuit of
some social goal we call development.
 emancipation from alienating material conditions of life and from
social servitude to nature, ignorance, other men, misery
institutions and dogmatic and harmful beliefs.
 What is good about development is not only the joy of being free from
poverty but also the availability of a wide range of choices.
 The concept of human freedom should also encompass various components
of political freedom including, but not limited to personal security, the rule of
law, freedom of expression, political participation, and equality of opportunity,
freedom to choose their religion, to vote and to express their opinion .
 Development is expected to endow people with ability of choosing.
Development in wealth increases happiness, control over nature and physical
environment.

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 Majority of scholars from development administration agree in that the
major elements of development objectives include: This in turn requires
the formulation of appropriate development policies.

˗ Nation-building - Nation-building is "the deliberate fashioning of an

integrated political community within the fixed geographic boundaries in
which the nation-state is the dominant political institution,

˗ Socio-economic progress
 empowerment of underprivileged populations

 achieving social justice through changing society's basic values.

˗ Overcome poverty and to increase human options.

 Ensuring well-being (the experience of good quality life) for all.

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- Livelihood Security: Livelihood can be defined as adequate stocks and flows
of food and income to meet basic needs. Security refers to assured rights, physical
safety, and reliable access to resources, food and income, and basic services.

- Capabilities: Are a means to livelihood and well-being. Capabilities refer to

what people are capable of doing and being. They are a means to livelihood and
fulfillment, and their enlargement through learning; practicing, training and education
is the core to better living and to well-being.

- Equity: Suggests that the poor, the weak, the vulnerable, and the exploited should
come first. Equity includes human rights, intergenerational and gender equity, and the
reversals of “putting the last first and the first last”, to be considered in all contexts.

- Sustainability: To be good, conditions and changes must be sustainable

economically, socially, institutionally, and environmentally.
 They sound similar. Yet, they are different.
Basis Growth Development
Definition It refers to the increase in the It refers to the overall development of the
monetary growth of a nation quality of life in a nation, which includes
in a particular period. economic growth.
Span of narrower. It is a broader concept than that of
Concept economic growth.
Scope It is a uni-dimensional It is a multi-dimensional approach that
approach that deals with the looks into the income as well as the
economic growth of a nation. quality of life of a nation.
Term Short-term process Long-term process

Measure Quantitative Both quantitative and qualitative

ment
Emphasiz Emphasizes production Emphasizes equity and social
es and consumption welfare

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.
Applicabe Developed economies Developing economies

Government It is an automatic process It requires intervention from the government

Support that may or may not as all the developmental policies are formed
require intervention from by the government
the government
Expected Quantitative changes Quantitative as well as qualitative changes

Term Short-term process Long-term process and sustainability

Measurem Quantitative/monetary Both quantitative and qualitative/ non-

ent indicators monetary indicators
Focuses on the increase in GDP Focuses on improving living standards
Possibility It is possible even without Not possible
dev‟t
Example GDP, GNP, Real per capita HDI, per capita Income, industrial dev‟t
income

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.
Example GDP, GNP, Real per capita HDI, per capita Income, industrial dev‟t
income
occur Can occur without Requires improvements in human
significant well-being
improvements in
living standards
achieved Can be achieved Requires investment in human
by through capital capital
accumulation
Lead Can lead to income Aims to reduce income disparities
inequality

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The term development contains diverse and varied
elements. But, The following are the basic elements:
 Removal of inequality and poverty

 Increase in material welfare of the people

 Increase in social well-being (education, health, housing, etc.)

 An equitable distribution of the gains of development among

different groups of people in a region or country
 An enhancement in technology and the capacity to produce a
wider range of goods and services in the economy leading to
a better quality of life.
 Building institutional structures which permit participation in
decision-making at all levels, equalization of opportunities for
development and removal of disparities.

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 The terms "Developed", "Underdeveloped", undeveloped, "Developing",

„‟Third world Countries and "Less Developed" are often used to denote the
social and economic conditions of countries.
 Dear students, you know that some countries are considered to be more
developed than others. It is not uncommon to come across references to the
Less Developed Countries (LDC) as compared to the Developed Countries
(DCs).
 Similarly, within our own country, some regions are said to be more
developed than others. Clearly, development, therefore involves making
relative comparisons.


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 Most developing countries are characterized by the following conditions:

˗ Mass poverty-The poverty levels are very striking in the developing countries.
˗ Low levels of income and concentration of incomes in a few hands- Low levels of
income for large sections of the masses and high inequalities in the distribution of
income are very apparent in the developing countries due to the fact that assets are
unequally distributed.

˗ Poor health, nutrition, illiteracy and poor housing. The low levels of income
obviously play a central role in perpetuating these problems.

˗ Low levels of productivity and backward technology. Increased

productivity is an indication of greater efficiency. Improvement in
technology and better management and organization are necessary for this
purpose.

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o High levels of unemployment and underemployment are characteristics of

developing countries. Since the level of industrialization is low and the

agricultural sector cannot absorb the entire workforce, the problem of
unemployment and underemployment continues to grow.

o Lower status of women- In underdeveloped countries, women are much

more vulnerable than their counterparts in the developed countries. Their

health and nutrition is not at satisfactory levels for large numbers. Female
illiteracy is highly widespread. Women are often paid lower wages even
though they perform the same work.

o Higher Population Growth Rates

 Crude Birth rates

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o High levels of unemployment and underemployment are characteristics of

developing countries. Since the level of industrialization is low and the

agricultural sector cannot absorb the entire workforce, the problem of
unemployment and underemployment continues to grow.

o Lower status of women- In underdeveloped countries, women are much

more vulnerable than their counterparts in the developed countries. Their

health and nutrition is not at satisfactory levels for large numbers. Female
illiteracy is highly widespread. Women are often paid lower wages even
though they perform the same work.

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˗ Greater Social Fractionalization
˗ Larger Rural Populations but Rapid Rural-to-Urban Migration
˗ Colonial Legacy and External Dependence
◦ Institutions, Private property
◦ Personal taxation, Taxes in cash rather than in kind
˗ Lower Levels of Industrialization and Manufactured Exports
˗ Underdeveloped Financial and Other markets
◦ Imperfect markets
◦ Incomplete information
10. Adverse Geography
˗ Resource endowments

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 Economists equate it with the capacity to produce a high
level of material output or resources in relation to size of
population.
 You may know that countries are sometimes classified as
developed, developing, or emerging.
 How is a country's development measured?
 There are a few main indicators that measure development.
 Like Gross National Product (GNP), Gross Domestic Product
(GDP), and Per Capita Income (PCI). HDI, HPI, etc

 1. Gross Domestic Product (GDP)
 The total values of all final good & services produced within a
countries borders in a given year.
 C+G+I+NX=GDP
 GDP is s how much money a country makes from its products
over the course of a year, usually converted to US Dollars:
 The sum of gross value added by all resident producers in the economy + product
taxes - any subsidies not included in the value of the products.
• Based on ownership not allocation
 How can help GDP / Why GDP a measure of economic
indicator
 Economic performance
Comparing GDP values of one country by different year/over time
 Standard of living
 Comparing policies
 International GDP Comparison
 2. Gross National Product (GNP)
 GNP is the total values of all final good & services
produced by a country’s resident during a period.
• GNP is the GDP of a nation together with any money
that has been earned by investment abroad minus
the income earned by non-nationals within the
nation. Or
• GNP=GDP + Net income from asset abroad - net income paid to foreign asset
operated domestically

• Based on ownership not allocation

• More accrue than GDP
 3. GNP per capita
 GNP per capita is calculated as GNP divided by population;
it is usually expressed in US Dollars.
 It's a common indicator used for measuring development,
but is imperfect as the calculation doesn’t take into
account certain forms of production, such as subsistence
production.
4. Infant mortality rate
 Infant mortality rate is the number of infants dying before
reaching one year of age per 1,000 live births in a given
year.
 5. The Human Development Index (HDI)
˗Highly applied by (UNDP)
˗This is the most used index to measure development. It
takes the following three factors into account:
1. Health. Long and Healthy Life.
2. Education. Mean years of schooling and
Expected years of schooling.
3. Standard of living. Gross national income per
capita
˗HDI=1/3(LEI*EI*II)
˗Countries are ranked based on their score and split into
categories that suggest how well developed they are.
The expected Maximum and minimum values set between 0 and 1

Indicators Minimum maximum

Life expectancy 20 85
at birth
Expected years 0 18
of schooling
Mean years of 0 15
schooling
GNI $100 $75000
 1. life expectancy index =Actual -Minimum
Maximum- minimum
=68.8-20 =48.8 =0.751
85-20 65
2. Educational index
 Expected years of schooling=Actual -Minimum

Maximum- minimum
=12.3-0 =0.683
18-0
 Mean years of schooling=Actual -Minimum
Maximum- minimum
=6.4-0 =0.427 and education index =0.683 +0.427/2=0.555
15-0
 3.GNI= Log Actual –log Minimum
log Maximum- log minimum
=log (6353)-log (100) =1.803 =0.627
log (75000)-log (100) 2.875
HDI= 3√LEI*EI*II

˗˗
= 3√ 0.751 *0.555*0.627=0.64
Very high development group =HDI of 0.8 and above

˗˗
High development group = HDI of O.7 to 0.799
Medium development group = HDI of 0.550 to 0.699
Low development group =HDI of less than 0.550
 6. Literacy rate
 The rate, or percentage, of people who are able to read is a
useful indicator of the state of education within a country.
 High female literacy rates generally correspond with an
increase in the knowledge of contraception and a falling
birth rate.
7. Life expectancy
 This simple statistic can be used as an indicator of the:
◦ healthcare quality in a country or province
◦ level of sanitation
◦ provision of care for the elderly
 8. Birth and death rates
 Crude Birth and Death rates (per 1000) can be used as an overall measure of
the state of healthcare and education in a country, though these numbers do
not give a full picture of a nation’s situation.
9. Other indicators includes:

Employment Rates Gender equality Peacefulness

Media freedoms Corruption Democracy

Civil Rights Crime/ social Suicide Rates

unrest
Internal Barriers
 Inequality in income distribution
 Inefficiency of infrastructural development
 Underdeveloped educational system
 Inefficient natural resources
 Influence of government
 Corruption
 Market failure

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External Barriers
 MNCs that controls natural resources
 Primary vs. manufactured Commodity exporting
Countries
 Function of International Financial Institutions. i.e.
IMF and WB
 Economic Policy of developed nations
 The influence of Geo-political and Strategic interest
of larger economies

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 It must be emphasized that there cannot be a single well defined path
towards development.

 Different countries and regions will have their own specificities into
account in order to develop their societies.

 This is one reason why development has been a much debated subject.

 In this section we will highlight some of the major issues, which have
featured in this debate and provide contrasting accounts for making
policy priorities.
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 One of the major outcomes of this situation was the ‘trickle down’ theory, which
stated that if there was sufficient growth everybody would benefit from it.

 However, growth by itself doesn’t guarantee an improvement in the quality of

life for the vast number of people.

 For a long time it was assumed that economic growth would be an engine
that will lead naturally towards development.
 Consequently, little or no attention was paid to the question of distributive
justice.
 If the agricultural sector doesn’t grow there may be sharp increase in the prices
of food-grains.
 On the other hand, industrial stagnation will mean that surplus labor from the
agricultural sector can’t be usefully employed.
 Therefore, both agriculture and industry will have to grow so that the pace of
development is fast enough to improve the living conditions of the people.
 Labor intensive technologies have the advantage of being able to absorb
the surplus labor in a developing country
 Sophisticated technology, when it uses less labor, is termed “labor
displacing technology”.
 On the other hand, an improvement in technology can also be made
without displacing labor and also less expensively
 It is hoped that decentralization of the development process would also
lead to greater accountability to those who are actually involved in the
decision making process. Devolution of power is very vital for development
 While a certain degree of centralization is necessary to coordinate the efforts
towards development, too much of centralization in the case of decision
making powers can weaken the process of popular participation.
 It also leads to the formulation of programs and projects, which have limited
local relevance.
 The vast majority of the population in Ethiopia and other developing
countries live in rural areas.
 There is a continuing invasion of people into the cities looking for jobs as the
rural economy is not been able to provide employment to them.
 It needs to be pointed out that the problem of poverty, poor health and
illiteracy is widespread in both rural as well as urban areas of developing
countries.
 The problem of rural poverty and unemployment is the root of the problem,
without solving it, there cannot be genuine development. Hence, rural
development has come to acquire critical importance.
 Sustained improvement in the quality of life in rural areas is likely to slacken
the pace of large-scale migration of villagers to cities in search of jobs.
 One of the most contentious issues in Economics has been the scope and
extent of government intervention in the economy of the country.
 During the immediate post WWII era, there was a near consensus among
economists, for a variety of reasons, such as important developments in
economic theory around the idea of ‘market failure’ (which had several
dimensions) that governments have to play major roles in the economic
sphere.
 It is not only defining ‘development’ which is
contested, the way that development, regardless
of definition is measured is also problematic.
 Measuring ‘development’ requires proxy
measures to be agreed.
 We may conclude that development is both a
physical reality and a state of mind in which
society secured the means for obtaining a better
life.

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THE END

THANKS

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