Introducing Economic Development:

A Global Perspective
Development can be seen as a process of expanding the
real freedoms that people enjoy

Amartya Sen, Nobel laureate

Economics and development studies
The nature of Development Economics
Traditional Economics
Political Economics
Development Economics
Development

economics
It must also deal with the economic, social, political
and institutional mechanisms, both public and
private, necessary to bring about rapid and large scale
improvements in levels of living for the masses of
poverty-stricken, malnourished and illiterate peoples
of Africa, Asia and Latin America and the formerly
socialist transition economies.
 The important role of values
To recognize from the outset that ethical or
normative value premises about what is or is not
desirable are central features of the economic
discipline in general and of development economics
Value premises are an inherent component of both
economic analysis and economic policy
The need to go beyond simple economics
Economics and Economic System must be analyzed
within the context of the overall social system of a
country and indeed, within an international, global
context
What do we mean by development
Traditional Economic Measures
To generate and sustain an annual increase in its
gross national product at rate of perhaps 5% to 7%
or more
Expand its output at a rate faster than the growth
rate of its population
Development strategies have therefore usually
focused on rapid industrialization, often at the
expense of agriculture and rural development
What do we mean by development
The New Economic View of Development
 During the 1970s, economic development came to be
redefined in terms of the reduction or elimination of
poverty, inequality, and unemployment within the
context of growing economy
Development must therefore be conceived of as a
multidimensional process involving major changes in
social structures, popular attitudes and national
institutions, as well as the acceleration of economic
growth, the reduction of inequality and the
eradication of poverty
Sen’s “capabilities” approach
Amartya Sen argues that the ‘capability to function’ is
what really matters for status as a poor or non-poor
person
Development has to be more concerned with
enhancing the lives we lead and the freedoms we
enjoy
Poverty cannot be properly measured by income or
even by utility as conventionally understood.
Sen’s “capabilities” approach
What matters is not the things a person has but what a
person is, or can be and does, or can do. What matters
for well-being is not just the characteristics of
commodities consumed, as in the utility approach, but
what use the consumer can and does make of
commodities.
Defines capabilities as the freedom that a person has in
terms of the choice of functioning’s, given his personal
features and his command over commodities
The concept of functioning’s reflects the various things
a person may value doing or being
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
Three core values of development
Sustenance: the Ability to Meet Basic Needs –
All people have certain basic needs without which life
would be impossible.
These life-sustaining basic human needs include food,
shelter, health and protection.
When any of these is absent or in critically short supply, a
condition of ‘absolute underdevelopment’ exists.
A basic function of all economic activity, therefore, is to
provide as many people as possible with the means of
overcoming the helplessness and misery arising from a
lack of food, shelter, health and protection.
Three core values of development
Self-Esteem: To be a Person –
A sense of worth and self-respect, of not being used as a
tool by others for their own ends.
All peoples and societies seek some basic form of self-
esteem, although they may call it authenticity, identity,
dignity, respect, honor or recognition.
The nature and form of this self-esteem may vary from
society to society and from culture to culture.
Three core values of development
Self-Esteem: To be a Person –
However, with the proliferation of the ‘modernizing
values’ of developed nations, many societies in developing
countries that have had a profound sense of their own
worth suffer from serious cultural confusion when they
come in contact with economically and technologically
advanced societies.
This is because national prosperity has become an almost
universal measure of worth.
Three core values of development
Freedom from Servitude: To be able to choose –
Freedom here is to be understood in the sense of
emancipation from alienating material conditions of
life and from social servitude to nature, ignorance,
other people, misery, institutions and dogmatic beliefs,
especially that one’s poverty is one’s predestination.
Three core values of development
Freedom from Servitude: To be able to choose –
Freedom involves an expanded range of choices for
societies and their members together with a
minimization of external constraints in the pursuit of
some social goal we call development.
Wealth can enable people to gain greater control over
nature and the physical environment than they would
have if they remained poor.
The Three objectives of development
To increase the availability and widen the distribution
of basic life-sustaining goods such as food, shelter,
health and protection
The raise levels of living, in addition to higher incomes,
the provision of more jobs, better education and greater
attention to cultural and human values
To expand the range of economic and social choices
available to individuals and nations by freeing them
from servitude and dependence
The Millennium Development Goals
In September 2000, the 189 member countries of the
United Nations at that time adopted eight
Millennium Development Goals (MDGs). They are –
 Goal 1: Eradicate Extreme Hunger and Poverty
 Goal 2: Achieve Universal Primary Education
 Goal 3: Promote Gender Equality and Empower Women
 Goal 4: Reduce Child Mortality
 Goal 5: Improve Maternal Health
 Goal 6: Combat HIV/AIDS, Malaria and other diseases
 Goal 7: Ensure Environmental Sustainability
 Goal 8: Develop a Global Partnership for Development