Ateneo de Zamboanga University

The Jesuit University in Western Mindanao, Philippines Since 1912

Submitted by: Polyyana T. Garcia Submitted to: Ms. Erlinda B. Perez

BUSECO- B

Abstract
This summary paper examines various theories and models of
economic development, along with their criticisms and
strategies to improve a country's development, to understand
their broader applicability and implications. It also explores
the relationship between population growth, poverty,
education, and health, emphasizing how quality education and
healthcare can enhance economic productivity.

Table of Contents
01 Cover Page
(A) Abstract
02 Group 1 - Structures and Characteristics of Developing
Countries
03 Group 2 - Classic Theories of Development
Group 3 - Urbanization and Rural Development
04 Group 4 - Population, Development Growth, Poverty, &
Education and Health
Group 5 - Population Growth & Economic Development:
Causes, Consequences, and Controversies
05 Group 6 -International Trade Theory and Development
Strategy
Group 7 & 8 - Fiscal Policy & Monetary Policy

“Sustainable
development is the
pathway to the future
we want for all.”

Business Economics - B 01
1 3 J UNE 2023 GROUP 1 G A R CIA, P

S T R UCTURES AND C H A R A C T E R I S T I C S O F D E V E L O P I N G C O U N TRIES

The first topic explores the defining features and common challenges
faced by developing countries. It delves into the economic, social, and
political factors that contribute to their underdevelopment and
examines strategies for fostering growth and development.
Understanding these characteristics is crucial for formulating effective
policies and interventions to improve living standards.

Developing Country:
• Lower income levels: Gross National Income (GNI) per capita is
significantly lower compared to developed nations, resulting in
widespread poverty and limited disposable income.
• Less industrialization: Economies primarily based on agriculture
and raw material extraction rather than manufacturing and
services.
• Limited access to education and healthcare: Basic services often
inadequate, with low literacy rates and poor health outcomes.
Economic Challenges:
• High levels of poverty: Significant portion of the population lives Insights
below the poverty line, struggling to meet basic needs. The Philippines, as a developing
• Insufficient healthcare and education systems: Underfunded and country, shares many
inefficient services fail to provide adequate care and education. characteristics outlined in this
• Political instability: Frequent changes in government, presentation. It faces challenges
corruption, and lack of effective governance undermine such as high population growth,
development efforts. low per capita income, and poor
• Foreign debt burdens: Heavy debt repayments to foreign infrastructure. Addressing these
creditors limit the ability to invest in domestic development. issues requires a multifaceted
Strategies for Development: approach, including investment in
human capital, infrastructure
• Investment in education and healthcare: Improving literacy rates development, and economic
and health outcomes to build human capital. diversification. Political stability
• Infrastructure development: Enhancing transportation, energy, and good governance are crucial to
and communication networks to support economic activities. creating an environment
• Political and economic reforms: Implementing policies to reduce conducive to growth and
corruption, improve governance, and create a stable business development. By focusing on these
environment. areas, the Philippines can work
towards reducing poverty and
improving the quality of life for its
citizens.

Business Economics - B 02
19-27 JUNE 2023
GROUP 2-3 B U S ECO B

C L A S SIC THEORI E S O F D E V E L O P M E N T & U R B A N I Z A T I O N A N D RURAL DEVELOPMENT

Classic Theories of Development Urbanization and Rural Development

Stages of Growth Model

Migration and Urbanization Dilemma:
Proponent: W.W. Rostow
• Massive movements of people from rural to urban
Countries develop through five distinct stages:
areas: Driven by the search for better economic
• Traditional Society
opportunities, leading to urban overcrowding.
• Preconditions for Take-off
• People migrate to cities seeking higher wages,
• Take-off
better jobs, and improved living conditions.
• Drive to Maturity
• Age of High Mass Consumption
Challenges of Urbanization:
• Overpopulation in cities: Strain on housing,
Structural-Change Theory
transportation, sanitation, and other public
Proponents: W. Arthur Lewis, John Fei, Gustav
services.
Ranis
• Rural depopulation and neglect: Loss of labor
Economic development is achieved through a shift
force in rural areas, declining agricultural
from traditional agricultural economies to modern
productivity, and neglected rural infrastructure.
industrial economies.
Migration Patterns:
• Economic opportunities vs. quality-of-life trade-
International-Dependence Theory
offs: Migrants may find better economic prospects
Critiques existing development theories and
but face challenges like high living costs and poor
emphasizes the structural inequalities in the global
living conditions in cities.
economic system. It includes:
• Neocolonial Dependence Model: Highlights the
Interviews and Case Studies:
exploitative relationships between developed and
• Reasons for migration: Economic necessity, lack
developing countries, established during colonial
of opportunities in rural areas, better education
times.
and healthcare in cities.
• False-Paradigm Model: Argues that inappropriate
• Challenges faced by migrants: Difficulty in finding
advice and models provided by developed
jobs, inadequate housing, lack of social support,
countries mislead developing nations.
discrimination.
• Dualistic-Development Thesis: Points out the
coexistence of modern and traditional sectors Insights
within developing countries, leading to persistent
Urbanization in the Philippines has led to economic
inequality​​.
growth in cities but also presents significant
Insights challenges such as overpopulation, inadequate
infrastructure, and rural neglect. Balancing urban
The Philippines can achieve sustainable economic
and rural development is essential to ensure
growth by combining market efficiency with
inclusive growth. Policies should aim to create
strategic government intervention. Investing in
economic opportunities in rural areas to reduce the
education and infrastructure is crucial for
push factors driving migration to cities.
supporting industrialization and improving living
Additionally, improving urban infrastructure and
standards. Tailored policies that address the
services can mitigate the negative impacts of rapid
country's unique historical, social, and economic
urbanization.
circumstances are essential. While engaging with
the global economy, the Philippines must also build
domestic capacities for resilience and inclusivity.
These integrated approaches will guide the nation
towards long-term prosperity and social equity.

Business Economics - B 03
0 3 J ULY 2024 GROUP 4-5 B U S ECO B

P O P ULATION, DE V E L O P M E N T G R O W T H , P O V E R T Y , & E D U C A T ION AND HEALTH

& P O PULATION G R O W T H & E C ON O M I C D E V E L O P M E N T : C A U S E S, CONSEQUENCES, AND
C O N TROVERSIE S

Insights
Understanding the dynamics of population growth is
crucial for addressing the economic challenges faced by
developing countries. Implementing policies that focus on
family planning, education, and women's empowerment
can significantly improve quality of life and promote
equitable development. By learning from successful
examples like South Korea and Singapore, and addressing
underlying development issues, countries can mitigate
the adverse effects of rapid population growth and create
a more sustainable future.

Poverty, Inequality, and Social Welfare
• Poverty - Poverty is a range of socioeconomic
dimensions: access to services, social protection,
power to negotiate, social status, decent work, and
opportunities.
Inequality
• Income inequality: the extent to which income is
evenly distributed within a population
• Lifetime inequality: inequality in incomes for an
individual over his or her lifetime.
Social Welfare
• The well-being of the entire society, concerned
with the quality of life
• Programs in the Philippines: Conditional Cash
Transfer (CCT) Program or Pantawid Pamilya
Pilipino Program (4Ps) and The World Bank
provided $505 million for the Social Welfare
Development and Reform Project (SWDRP)
Rural Poverty: Reasons of Rural Poverty
• Primarily engaged in subsistence agriculture
• Petty services
Population Growth & Quality of Life
• Population growth impacts urban society, leading
to issues like poverty, pollution, energy production
problems, food and water shortages, and poor
health.
• Development planners must predict population
trends to address both immediate and long-term
consequences.
The Demographic Transition
• Stage 1: High Fluctuating - High birth and death
rates with stable population.
• Stage 2: Early Expanding - Sharp decline in death
rates, causing rapid population growth.
• Stage 3: Late Expanding - Decline in birth rates due
to better socioeconomic factors, slowing population
growth.
• Stage 4: Low Fluctuating - Low birth and death
rates, stabilizing population.
• Stage 5: Declining - Fertility falls below
replacement level, leading to a declining population.
• Causes of High Fertility in Developing Countries

Business Economics - B 04
0 3 J ULY 2023 GROUP 6,7 -8 B U S ECO B

IN T E RNATIONA L T R A D E T H E O RY A N D D E V E L O P M E N T S T R A T E GY
& F I SCAL POLIC Y A N D M O N E T A R Y P O L I C Y

Economic Globalization:
• Growing interconnectedness of the world:
• Sharing of cultures: Increased cultural exchange and influence across
borders.
• Common goods and services: Availability of products and services from
around the world in local markets.

Positive Effects of Economic Globalization:

• Economic growth: Enhanced trade and investment spur economic
expansion and development.
• Increased opportunities: Access to larger markets, advanced
technologies, and investment capital.
• More trade and investment: Cross-border trade and foreign direct
investment drive industrial growth and job creation.

Fiscal Policy - involves the government changing tax rates and levels
of government spending to influence aggregate demand in the
economy.
Monetary Policy - managed by a country's central bank (e.g., Federal
Reserve in the US), focusing on controlling the money supply and
interest rates.
Informal Finance - provides flexible, unregulated funding through
personal networks but often at higher interest rates and greater risk
due to the lack of formal documentation and oversight.
Microfinance - offers regulated, accessible financial services to low-
income individuals and small businesses with standardized terms,
promoting economic development and financial inclusion while
maintaining transparency and lower interest rates

Insights

The Philippines' participation in international trade has been a significant

driver of its economic growth. However, globalization has also brought
challenges such as economic inequality and environmental degradation.
To maximize the benefits of globalization while minimizing its downsides,
the Philippines must adopt strategies that promote fair trade, protect the
environment, and ensure that economic gains are equitably distributed.

Business Economics - B 05