Concepts and Theories

of Development
AR452:Planning 3
Introduction to
Urban and
Regional Planning

Arch. Eduardo F. Bober, Jr.

Special Industry Lecturer
Core Values and Objectives of Development

CORE VALUES:
 Sustenance : ability to meet basic needs
Self-Fulfillment
 Self-esteem : to be a person
 Freedom from servitude: to be able to choose

OBJECTIVES: Psychological
 To increase the availability and widen the
distribution of basic life-sustaining goods (food,
shelter, health, and protection)
 To raise level of living
 Toexpand the range of economic and social choices
available to individuals and nations Basic Needs

Maslow’s Hierarchy of Needs

Indicators of Development
 SOCIAL INDICATORS
 Show level of human
 ECONOMIC development, welfare
INDICATORS and quality of life
% of population living
 Showhow well-off in urban areas
(wealthy) a country is  Education levels and
economically level of literacy
 Availability of services
 GNP, GDP, GNI
such as water,
electricity, health
care
 Food and nutrition
 DEMOGRAPHIC INDICATORS
 statistics
of a country’s population
(normally obtained
through a census –an official
counting of a country’s
population usually done every
ten
years)quality of life
 Birth rate
 Death rate
 Infant mortality rate
 Life expectancy
 Fertility rate
 Maternal mortality
 Population growth rate
Measurement of Development

[1] Development as an Economic

Process
 Gross Domestic Product (GDP) – the total
value of goods and services produced by a
country in a year.
 Gross National Product (GNP) – the total
value of goods and services produced by a
country in one year including foreign
earnings; same as GNI.
 GNP/GDP is used to measure economic
wealth; with greater wealth comes other
benefits such as improved health, education,
QOL.
5 Richest Countries in the World
 Luxemburg – GDP per capita is US$131,782.
 Switzerland - GDP per capita is US$ 94,696.
 Ireland – GDP per capita is US$ 94,556.
 Norway – GDP per capita is US$ 81,995.
 USA - GDP per capita is US$ 68,309.
https://urbanaffairskerala.org/worlds-richest-
country/#Top_5_Richest_Country_in_The_World

 GNP/GDP per capita is used to divide

countries of the world into development
categories.
Measurement of Development
[2] Human Development (UNDP) A descent
Long and
 Human Development is more than just DIMENSIONS Knowledge
economic development measured at the Healthy
standard of
national scale. Life
living
 Itincorporates 3 dimensions of INDICATORS Life Expected GNI per
development in relation to human well- Expectancy Years of capita
being. at Birth Schooling

DIMENSION LE Index Education GNI Index

Index Index

Human Development Index

[3] MDGs (2000-2015) and Sustainable Development Goals (2015-2030)

Eradicate
Poverty
 Goal 11 Facts and Figures
 By 2050:
 Two-thirdsof all humanity—6.5 billion people—will
be urban.
 Sustainable development cannot be achieved
without significantly transforming the way we
build and manage our urban spaces.
 The rapid growth of cities—a result of rising
populations and increasing migration—has led to a
boom in mega-cities, especially in the developing
world, and slums are becoming a more significant
feature of urban life.
 Making cities sustainable means:
 creating career and business opportunities
 safe and affordable housing
 building resilient societies and economies
 Itinvolves investment in public transport,
creating green public spaces, and improving
urban planning and management in participatory
and inclusive ways.
Goal 11 Targets
 By 2030:
 ensure access for all to adequate, safe and
affordable housing and basic services and upgrade
slums.
 provide access to safe, affordable, accessible
and
sustainable transport systems for all, improving
transport,
road safety,with special
notably by attention
expandingtopublic
the needs of
those in vulnerable situations, women, children,
persons with disabilities and older persons.
 enhance inclusive and sustainable urbanization
and capacity for participatory, integrated and
sustainable human settlement planning and
management in all countries
 Strengthen efforts to protect and safeguard the
world’s cultural and natural heritage
 significantly reduce the number of deaths and the
number of people affected and substantially
decrease the direct economic losses relative to
global gross domestic product caused by disasters,
including water-related disasters, with a focus on
protecting the poor and people in vulnerable
situations.
Measurement of Development
Income Distribution
[4] Use of Scales
(0.20 – 0.35) (0.50 – 0.70)
 Consider distribution issues. (0) Relatively Highly (1)
Perfect Equitable Unequal Perfect
 Gini Coefficient – a measure of
Equality Income Income Inequality
inequality (even with high HDI Distribution Distribution
and GNP per capita) not everyone
will have access to that level of
income or standard of living.
 GC varies from 0 (perfect
inequality) to 0.5 to 0.7 (highly
unequal income distribution) to
0.2 – 0.35 (relatively equitable
distribution
Indicators of Development (in a nutshell)
Developed Developing
INDICATORS Countries Countries
(MEDCs) (LEDCs)

GNP per capita (GDP/GNI) High Low

HDI High (~ 1) Low (~ 0)  ECONOMIC INDICATORS

Tends to be Tends to be
Gini-coefficient lower (closer higher (closer
to 0) to 1)
 DEMOGRAPHIC INDICATORS
Birth rate Low High-Medium

Death rate Low High-Medium

Infant Mortality Rate (IMR) Low High-Medium

 SOCIAL INDICATORS
Life expectancy High Medium-Low

Adult literacy High Medium

Urbanization rate High Low-Medium

Population Structure Older Younger

% working in tertiary and quaternary activities High Low

Daily calorie intake High Low-Medium

Classical Development Theories
Adam Smith
 Consider distribution issues.
 Trade(mercantilism) was the
major force of economic growth
 Smith argued greater attention
should be focused on production,
and division of labor (break
production processes into stages
(skilled labor, competitive) to
improve productivity, economic
growth and wealth creation.
 Market-centered approach to
economic development or ‘laissez-
faire’ economics.
David Ricado
 Comparative advantage (‘situation
theory’)
 Countries should concentrate on
producing and then selling goods
that they had an advantage in
producing because of their assets
such as land, mineral resources,
labor, technical or scientific
expertise (global division of labor.
 Specialization in production
means
efficiency, greater capacity for
growth and scarce resources could
be used more effectively.
Classical Development Theories
Walt Rostow Stage of High-
(Linear Stages of Growth) Mass
Consumption
 Theory that tries to explain the
long-term process of economic
development from the point of Drive to
Maturity
view of economic history by
describing five (5) ideal types
of stages through which all
Take-Off
society pass. Stage

 Rostow made distinction

Transitional between “more developed”
Stage
amd “less developed” areas
and his stages of economic
Traditional
growth were route to
Society
“more developed” status.

Time
Classical Development Theories
Classical Development Theories
Features of Industrialized
Democracies
 Representative systems of
government based on regular,
fair, secret, and competitive
elections
 Well-defined, consistent, and
predictable political institutions
and processes.
 A high-degree of public loyalty
to
the state
 Protection of individual
rights
under the law
Classical Development Theories
W. Arthur Lewis
(Structural Change Model)
 Dualistic Economy of underdeveloped
countries – “traditional” (largely
subsistence agriculture and “modern”
(made up of commercial agriculture,
foundations, manufacturing, and
mining)
 Development – when surplus labor
moves from traditional (rural) to
capitalist (urban) sector
 Government should encourage
foreign companies to invest into
domestic industrial development
through a process termed
“industrialization” by invitation.
Albert Hirschman
(Spatial Dimensions)
 Spatiallyunbalanced growth was a
desirable part of the development
process.
 Industrialization would be spatially
concentrated.
 “Growth Poles” would act as a foci of
economic development, but that over
time, the benefits of such processes
would spread and the degree of
polarization would reduce.
Classical Development Theories
Francois Perroux
(Spatial Dimensions)
 Economic development, or growth, is not
uniform over an entire region but takes
place around a specific pole (or cluster).
 Thispole is often characterized by core
industries around which linked industries
develop, mainly through direct and indirect
effects, i.e. automotive, agribusiness,
electronics, steel, etc.
 Assumptions:
 Leading (core) industries creates “multiplier
effects”.
 Creating a series of complex links
(backward/forward) between the industries of
the pole
 Based on economies of agglomeration that can
be considered the summation of the linkages and
the proximity of the firms within the pole.

 Direct effects = “backward”

(upstream-
(downstream linked
linked industries andindustries)
“forward”
 Indirect effects = demands for
goods
and services by people employed by the
core and linked industries, i.e retail,
housing, real estate.
Classical Development
(Spatial Dimensions)
Theories
Gunnar Myrdal
(Spatial Dimensions)
 Spatialinequalities are inherent in a
free-market economies.
 “Cumulative Causation” – once the
region started to grow economically,
people, resources, and finance would be
drawn to the area so contributing to
further growth.
International Aid
 Backwash effects – these flows
would have the other areas depleted
of dynamic resources and people to
contribute to development.
 Spread effects – benefits would be
realized by neighboring regions.
 Exacerbation of spatial
inequalities
could be reduced through state
intervention.
Albert Hirschman
 Spatially unbalanced growth was a desirable
part of the development process.
 Industrialization would be spatially
concentrated.
 “Growth Poles” would act as a foci of
economic development, but that over time,
the benefits of such processes would spread
and the degree of polarization would reduce.
 Part of a policy response to modernization
theory
 Large transfer of money, technology, and
expertise expected to fill the gaps and help
the economic development process .
 AID – a transfer of resources on concessional
terms (more generous or “softer” than loans
obtainable in the world’s capital market),
grants, loans technical, advice, transfer of
resources.
End of presentation. Thank you.