Developing
Countries
Matillano
Maquiliao
Salmorin
Sotacio
Toledo
3 CORE VALUES OF
DEVELOPMENT
At least three basic components or core values
serve as a conceptual basis and practical
guideline for understanding the inner meaning
of development.
These core values— sustenance, self-
esteem, and freedom—represent
common goals sought by all individuals and
societies.They relate to fundamental human
needs that find their expression in almost all
societies and cultures at all times.
Holistic Measures of Living
Levels and Capabilities
Human Development Index (HDI)- An index measuring
national socioeconomic development, based on combining
measures of education, health, and adjusted real income per
capita.
HDI attempts to rank all countries on a scale of 0 (lowest
human development) to 1 (highest human development) based
on three goals or end products of development: longevity as
measured by life expectancy at birth, knowledge as measured
by a weighted average of adult literacy (two-thirds) and gross
school enrollment ratio (onethird), and standard of living as
measured by real per capita gross domestic product adjusted
for the differing purchasing power parity of each country’s
currency to reflect cost of living and for the assumption of
diminishing marginal utility of income
Characteristics of the
Developing World
1. Lower Levels of Living and
Productivity
-At very low income levels, in fact, a vicious
circle may set in, whereby low income leads
to low investment in education and health as
well as plant and equipment and
infrastructure, which in turn leads to low
productivity and economic stagnation. This is
known as a poverty trap or what Nobel
laureate Gunnar Myrdal called “circular and
cumulative causation.”
Characteristics of the
Developing World
2.Lower levels of Human Capital
-Human capital—health, education, and
skills—is vital to economic growth and
human development.
Compared with developed countries, much of
the developing world has lagged in its
average levels of nutrition, health (as
measured, for example, by life expectancy or
undernourishment), and education
(measured by literacy)
Moreover, there are strong synergies
(complementarities) between progress in health and
education. For example, under-5 mortality rates improve
as mothers’ education levels rise, as seen in the country
examples in Figure 2.6
The well-performing developing countries are much
closer to the developed world in health and education
standards than they are to the lowest income countries.
Although health conditions in East Asia are relatively
good, sub-Saharan Africa continues to be plagued by
problems of malnourishment, malaria, tuberculosis,
AIDS, and parasitic infections.
Despite progress, South Asia continues to have high
levels of illiteracy, low schooling attainment, and
undernourishment. Still, in fields such as primary school
completion, low income countries are also making great
progress; for example, enrollments in India are up from
68% in the early 1990s to a reported 94% by 2008
Characteristics of the
Developing World
3. Higher Levels of Inequality and Absolute Poverty
-The incidence of extreme poverty varies widely around
the developing world. The World Bank estimates that
the share of the population living on less than $1.25 per
day is 9.1% in East Asia and the Pacific, 8.6% in Latin
America and the Caribbean, 1.5% in the Middle East and
North Africa, 31.7% in South Asia, and 41.1% in sub-
Saharan Africa.22 The share of world population living
below this level had fallen encouragingly to an
estimated 21% by 2006, but indications are that the
global economic crisis slowed poverty reduction and
that in some countries, poverty has actually increased.
Extreme poverty represents great human
misery, and so redressing it is a top priority
of international development. Development
economists have also increasingly focused
on ways in which poverty and inequality can
lead to slower growth. That is, not only do
poverty and inequality result from distorted
growth, but they can also cause it.
Characteristics of the
Developing World
4. Higher Population Growth Rates
- Rapid population growth began in Europe and
other now developed countries. But in recent
decades, most population growth has been
centered in the developing world. Compared
with the developed countries, which often have
birth rates near or even below replacement
(zero population growth) levels, the low-income
developing countries have very high birth
rates. More than five sixths of all the people in
the world now live in developing countries.
A major implication of high birth rates is
that the active labor force has to support
proportionally almost twice as many
children as it does in richer countries.
Crude birth rate -The number of
children born alive each year per 1,000
population.
The proportion of people over the
age of 65 is much greater in the Dependency
developed nations. Both older burden –
The proportion
people and children are often of the total
referred to as an economic population
aged 0 to 15
dependency burden in the and 65+, which
sense that they must be is considered
economically
supported financially by the unproductive
country’s labor force (usually and therefore
not counted in
defined as citizens between the the labor force
ages of 15 and 64).
But in rich countries, older citizens are supported by their
lifetime savings and by public and private pensions. In
contrast, in developing countries, public support for children
is very limited. So dependency has a further magnified
impact in developing countries
Characteristics of the
Developing World
5. Greater Social Fractionalization Fractionalizatio
- Low-income countries often have ethnic, n-
linguistic, and other forms of social Significant ethnic,
divisions, sometimes known as linguistic, and
fractionalization. other social
divisions within a
country.
- This is sometimes associated with civil strife
and even violent conflict, which can lead
developing societies to divert considerable
energies to working for political
accommodations if not national
consolidation. It is one of a variety of
governance challenges many developing
nations face
Characteristics of the
Developing World
6. Larger Rural Populations but Rapid Rural-to-Urban
Migration
-One of the hallmarks of economic development is a shift
from agriculture to manufacturing and services. In
developing countries, a much higher share of the
population lives in rural areas.
Although modernizing in many regions, rural areas are
poorer and tend to suffer from missing markets, limited
information, and social stratification. A massive population
shift is also under way as hundreds of millions of people are
moving from rural to urban areas, fueling rapid
urbanization, with its own attendant problems
External Dependence-
Relatedly, developing countries have also been
less well organized and influential in international
relations, with sometimes adverse consequences
for development. For example, agreements within
the World Trade Organization (WTO) and its
predecessors concerning matters such as
agricultural subsidies in rich countries that harm
developing country farmers and one-sided
regulation of intellectual property rights have
often been relatively unfavorable to the
developing world
