Concepts of Human

Development and Economic

Development
Shamini Sivakumar
Department of Interdisciplinary Studies
Faculty of Engineering

LECTURE 2
Learning Outcomes
You should be able to explain….
• Meaning of Economic Development
• The difference between Economic Development and Economic
Growth
• Meaning of Human Development
• Three critical issues in Human Development
• Components of Human Development
• Connection between EG & HD

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Introduction to Economic Development
emagin

• Initial Period Economists - “Economic Development is a process whereby

digu kalayak pura
an economy’s real national income increases over a long period of time”.

• It was believed that growth once achieved will trickledown and will result
in better quality of life.

• Later it was realised that growth has not “trickle down” and has not
resulted in the better quality of life as claimed by laissez-faire economists.

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Introduction to Economic Development
eeka pudgala adayama
• Economic development means not just increase in the real per capita income but
nuugathkama wirakiyawa
also reduction in economic-divide, poverty, illiteracy and unemployment. Thus,
economic development includes both economic growth as well as social welfare.

• Nutritional level, health, sanitation, drinking water, vaccination, education and

other such indicators which makes quality of life better. Thus we can say
economic development is both quantitative as well as qualitative progress.

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Economic Growth Vs Economic Development
• Economic development differs from economic growth.
• Economic development is a policy intervention endeavor with aims of
economic and social well-being of people, economic growth is a
phenomenon
sansiddiya
of market productivity and rise in GDP.
• Economic growth is a measure of the value of output of goods and
services within a time period

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Economic development
• Inequality between the world’s rich and poor
• Developed vs Developing/ Underdeveloped Economy

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 People eating Mud in Haiti

• https://www.youtube.com/watch?v=
DymkAsjNtv0
It might not be pleasant, but what he finds among
the refuse could be all he has. (Sierra Leone)
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Economic development
• Economic Development is a process by which a nation improves the
economic, political, and social well being of its people.
• Improve the quality of LIFE
• Determinants of Economic Development arthika sanwardanaye nirnayaka
• Economic Growth
• Economic Development
• Sustainable Development

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Economic Growth
• Increase in physical output / Production
• Increase in per capita real income
• Per capita income = National Income
Population

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Economic growth vs Economic Development
• Economic Growth – Increase in outputs / Production
• Economic Development - more outputs and changes in technical and
institutional arrangements
Economic Growth:

Definition: Economic growth refers to the increase in the quantity of

goods and services produced by an economy over time.

Economic Development:

Definition: Economic development is a broader concept that not only

considers the growth of the economy but also the improvement in the
quality of life for people.

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 Economic Development of a Country
• Increases in outputs/ production has to be sustained over a long period of
time
• Changes in economic structure would spread out in the entire economy
• Growth has to be accompanied by an increase in efficiency
• GDP – Not an indicator for economic development
Gross domestic product (GDP) dala desheeya nishpadanaya

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Sustainable Economy

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Difference between Economic Growth , Economic
Development, Sustainable development
• Activity – 10 mins

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Human Development?

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Human Development
• The term ‘human development’ is defined as an expansion of human
pulul kireema theereem wadi diyunu kireema
capabilities, a widening of choices, ‘an enhancement of freedom, and a
fulfilment of human rights.
sankalpaya athulath wee
• At the beginning, the notion of human development incorporates the need
for income expansion. However, income growth should consider expansion
of human capabilities. Hence development cannot be equated solely to
income expansion.

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Human Development
• Income is not the sum-total of human life. As income growth is essential,
so are health, education, physical environment, and freedom.

• Human development should embrace human rights, socio-eco-politico

freedoms.

• Based on the notion of human development Human Development Index

(HDI) is constructed. It serves as a more humane measure of development
than a strictly income-based benchmark of per capita GNP.

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Human Development

• The first UNDP Human Development Report published in 1990 stated

that: “The basic objective of development is to create an enabling
environment for people to enjoy long, healthy and creative lives.”

• It also defined human development as “a process of enlarging

people’s choices”, “and strengthen human capabilities” in a way
which enables them to lead longer, healthier and fuller lives.

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Three critical issues of Human Development
1. to lead a long and healthy life,
2. to be educated, and
3. to enjoy a decent standard of living.
yahapath

• Barring these three crucial parameters of human development as a process enlarging

people’s choices, there are additional choices that include political freedoms, other
guaranteed human rights, and various ingredients of self-respect.
sankyana sanyuktha darshakayak aayu apekshawa
• Human Development Index (HDI) is a statistic composite index of life expectancy,
education, and per capita income indicators.

• HDI - A socio-economic measure

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Components of Human Development
• i. Equality
• ii. Sustainability
• iii. Productivity
• iv. Empowerment balaganweema
Equality
• If development is viewed in terms of enhancing people’s basic
capabilities, people must enjoy equitable access to
opportunities. Such may be called equality-related capabilities.

• To ensure equality-related capabilities or access to opportunities

what is essential is that the societal institutional structure needs
Equality:
to be more favourable or progressive. Simple Explanation: Treating everyone fairly and
giving them equal opportunities.

Example: Ensuring that all children, regardless of their

background, have access to good education.
samanathmathawaya sadaranathwaya
Sustainability
• Another important facet of human development is that
digatama pawathiya uthuya digu kal pawathiya uthuya

development should ‘keep going’, should ‘last long’.

• The concept of sustainable development focuses on the need to

jaiwalokaya

maintain the long term protective capacity of the biosphere. This

then suggests that growth cannot go on indefinitely; there are
Sustainability:
‘limits to growth.’
Simple Explanation: Doing things in a way that doesn't harm the environment and can
continue for a long time.

Example: Using renewable energy sources like solar power to generate electricity.
Productivity
• Another component of human development is productivity which
requires investment in people.
ayojanaya

• This is commonly called investment in human capital. Investment in

human capital—in addition to physical capital—can add more
productivity.
Productivity:

Simple Explanation: Being efficient and making things that are useful.

Example: Using technology to create products faster and better,

which can benefit society.
 Empowerment:

Simple Explanation: Giving people the tools and confidence to take control of
Empowerment their own lives.

Example: Providing training and resources to help individuals start and run
their own businesses.
• The empowerment of people—particularly women—is another component of
human development. In other words, genuine human development requires
empowerment in all aspects of life.

• Empowerment implies a political democracy in which people themselves make the

civil nidahasa
decisions about their lives. Under it, people enjoy greater political and civil liberties
nidahas krnna adika palanayan
and remain free from excessive controls and regulations.

• Empowerment refers to decentralisation of power so that the benefits of

governance are reaped by all peoples.
Connection between EG & HD

• There exists a strong connection between economic growth (EG) and

human development (HD).

• Studies have shown a significant relationship between economic

growth and human development but in two chains.

• Chain A, economic growth leads to human development and Chain B,

human development leads to economic growth
Chain A: Economic growth to HD
rajya wiyadam
• In this relation due to good economic growth, public expenditures on health

and education especially on female would be result in human development.

• When cash income is under control of female, we can see more

expenditures on human inputs i.e. food and education etc.

• Example, Ghana, India, Indonesia, Pakistan, Philippines, Malaysia and Peru

indicates that positive effects of family income to change on child schooling.

Chain B: Human development to EG
wada hoda pooshanaya

• It is evident that as people become healthier, better nourished and

educated, they contribute more to economic growth. Higher human
development leads to enhanced productivity of labor.

• Example: In Cali, Colombia found that a health and nutrition program

increased the lifetime earnings of individuals from 2.5 to 8.9 times
those of an illiterate worker.
Chain B: Human development to EG
• In agriculture, evidence show that educated farmers are more likely to
use technology and use latest methods which lead to more
productivity.

• For example, in Nepal, the completion of at least seven years of

schooling increased productivity in wheat by over a quarter, and in rice
by 13%.
Activity
• Get into 17 groups
• Discuss SDGs based on following points
• Importance of Goals
• How can we achieve it?
• Challenges in implementation
• Targets and indicators
• Prepare slides / Word document – 4 Slides maximum / 2 page in word
doc
• Present it to the class
• Upload it to the teams as “SDG_X”

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