CONCEPT AND THEORIES OF DEVELOPMENT (ECN814)

PREPARED BY:
OKETOBO ADEKUNLE SAMUEL

MATRIC NO;
219081007

DEPARTMENT OF ECONOMICS.

UNIVERSITY OF LAGOS
Create a one-statement definition of Economic Development
 (QUESTION 2)

Read and Review Chapter 1 and 2 (page 1 -108

CHAPTER 1

1: Introducing Economic Development: A Global Perspective

Perspectives on the meaning of development:

Traditional Economic Measures (1)

Development has traditionally meant achieving sustained rates of growth of
income per capita. Focused on increasing output (GDP).
Seen as a purely economic phenomenon.
Countries managed to reach higher GNI levels, but the majority of people was still living in
poverty.

Income per capita = Total gross national income of a country divided by

total population.

Gross national income (GNI) = The total domestic and foreign output claimed by residents of a
country. It comprises gross domestic product (GDP) plus factor incomes accruing to residents
from abroad, less the income earned in the domestic economy accruing to persons abroad.

Gross domestic product (GDP) = The total final output of goods and services produced by the
country’s economy, within the country’s territory, by residents and nonresidents, regardless of its
allocation between domestic and foreign claims.

The New Economic View of Development (2)

With economic growth targets reached but with the levels of living of the masses remaining
unchanged a new view developed. Economic development was redefined: The reduction or
elimination of poverty, inequality, and unemployment within the context of a growing economy.
 “redistribution form growth” became the new slogan.

Amartya Sen’s ‘Capability” Approach

Amartya Sen:
 Nobel price winner economics 1998
 Leading thinker on the meaning of development
 Main publication: Development as Freedom

How dos Amartya Sen define development?

Amartya Sen defines development as the “capability to function” from a poor to a
non- poor person. Sen argues that poverty cannot be properly measured by
income, but should be measured by what a person is, or can be, and does, or can
do. This also means looking not only at the characteristics of the commodities
consumed, but also how they are consumed. (Called = Functionings)

Book: Development as Freedom

 Development is the process of expanding freedoms that people enjoy;
 Growth of GNI can be very important as a means to expanding freedoms enjoyed;
 But freedom also depends on other determinants, such as social and economic
arrangements (e.g., facilities for education and health care) as well as political and
civil rights.
 Development requires the removal of major sources of unfreedom (tyranny, poverty,
social deprivation, neglect of public facilities etc.).
 Despite unprecedented increases in overall wealth, the modern world denies
elementary freedoms to vast numbers, perhaps even the majority, of people.

Three Core Values of Development

• Sustenance: The Ability to Meet Basic Needs
• Self-Esteem: To Be a Person
• Freedom from Servitude: To Be Able to Choose

The Three Objectives of Development

1. Increase availability of life-sustaining goods
 Food
 Shelter
 Health
 Protection
2. Raise levels of living
 Higher incomes
 More jobs
 Better education
 Greater attention to cultural and human values
3. Expand range of economic and social choices
 By freeing individuals and nations from servitude and dependence

The Millennium Development Goals

Millennium Development Goals (MDGs) A set of eight goals adopted by the United
Nations in 2000: to eradicate extreme poverty and hunger; achieve universal primary
education; promote gender equality and empower women; reduce child mortality; improve
maternal health; combat HIV/AIDS, malaria, and other diseases; ensure environmental
sustainability; and develop a globalpartnership for development. The goals are assigned
specific targets to be achieved by 2015.

The millennium development goals for 2015:

1. Eradicate extreme poverty and hunger
 2. Achieve universal primary education
3. Promote gender equality and empower woman
4. Reduce chill mortality
5. Improve maternal health
6. Combat HIV/AIDS, malaria and other diseases
7. Ensure environmental sustainability
8. Develop a global partnership for development

Critique, Recommendation and Conclusions

Development economics is an extension of both traditional economics and political
economy, with the focus on the economic, social and situational mechanisms needed to
bring about rapid and large-scale improvements in standards of living. Furthermore the
formulation of public policies is needed to decrease the gap between ambitions and reality.
This is why the new role of development economics has been defined much broader than
the traditional neoclassical economic analysis.

Case study: Brazil, “growth without development