The Concept of Development

Meaning of Development

Traditional Economic Meaning:

Development is the CAPACITY of the national economy, whose initial economic condition has been more or less static for a long time, to GENERATE and SUSTAIN an annual increase in its GROSS NATIONAL PRODUCT at rates of 5% to 7%.

There is s stress on the industrialization often at the expense of agriculture and rural development. Development is seen as an economic phenomena in which rapid gains in overall growth would either trickle down to the masses in the form of jobs and other economic opportunities. NEW ECONOMIC VIEW

Development is the reduction or the elimination of poverty, inequality and unemployment within the context of a growing economy.

The development of the PEOPLE rather than development of things.

The challenge of development is to IMPROVE the quality of life. Especially in the world’s poor countries.

Development means less poverty, cleaner environment, more equal opportunity, greater individual freedom and a richer cultural life.

Therefore: DEVELOPMENT must be conceived of as a MUTIDIMENSIONAL PROCESS. DEVELOPMENT must involve major changes in social structures, popular attitudes and national institutions as well as acceleration of economic growth, the reduction of inequality and the eradication of poverty.

DEVELOPMENT must represent the WHOLE GAMUT of CHANGE by which an entire social system turned to the diverse basic needs and desires of individuals and social groups within that system, moves away from a condition of life widely perceived as unsatisfactory toward a situation or condition of life regarded as materially and spiritually better.

3 CORE VALUES OF DEVELOPMENT

1. SUSTENANCE: The ability to meet basic needs

When life sustaining basic human needs like food, shelter, health and protection are absent UNDERDEVELOPMENT exists.

One clearly has to “have enough in order to be more.”

Purpose of Development is to create an environment in which all people can expand their capabilities and opportunities can be enlarged for both the present and future generations.

Real foundation of human development is UNIVERSALISM in acknowledging the life claims of everyone.

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2. SELF-ESTEEM: To be a person

Self-esteem is having a sense of worth and self-respect, of not being used as a tool by others for their own needs.

All people and societies seek some basic form of self-esteem although they may call it authenticity, identify, dignity, respect, honor or recognition.

As long as self-esteem or respect was dispensed on the grounds other than material achievement, it was possible to resign oneself to poverty without feeling disdained.

Once the prevailing image of better life includes material welfare as one of essential ingredients it becomes difficult for the materially underdeveloped to feel respected or esteemed.

NOWADAYS, the THIRD WORLD seeks development in order to gain ESTEEM which is denied to societies living in a disgraceful underdevelopment.

DEVELOPMENT is legitimized as a goal because it is an important perhaps even indispensable way of GAINING ESTEEM.

3. FREEDOM FROM SERVITUDE: To be able to choose

FREEDOM 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.

The ADVANTAGE of economic growth is NOT that wealth increases happiness but that it increases range of human choice.

It allows people freedom to choose greater leisure or to have more goods and services.

OBJECTIVES OF DEVELOPMENT

To increase the vailability and widen the distribution of basic life-sustaining goods such as food, shelter, health and protection.

To raise levels of living including in addition to higher incomes, the provision of more jobs, better education and greater attention to cultural and humanistic values, all of which will serve not only to enhance material well-being but also to generate greater individual and national self-esteem.

To expand the range of economic and social choices available to individuals and nations by freeing them from servitude and dependence not only in relation to other people and nation states but also to the forces of ignorance and human misery.

THEORIES OF DEVELOPMENT

Introduction

Every nation strives after development. Economic progress is an essential component but is not the only component. In an ultimate sense, it must encompass more than material and financial side of people’s lives. Development is not purely an economic phenomenon. It should be perceived as a multidimensional process involving the reorganization and reorientation of economic and social systems. It must involve radical changes in institutional, social and administrative structures. Its widespread realization may necessitate

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fundamental modification of the international economic and social system as well.

THEORIES OF DEVELOPMENT: 1. Linear Stage Theory

a. Rostow’s Stage of Growth Modelb. Harrod-Domar Growth Model

2. Structural Changes Model a. Lewis Theory of Development

3. International-Dependence Theory a. Neocolonial Dependence Modelb. False Paradigm Modelc. Dualistic Development Model

4. Neoclassical Counterrevolution Theory a. Free Market Analysis Modelb. Public Choice Modelc. Market-Friendly Model

5. New Growth Theory

Theories of Development

1. Linear Stage Theory Puts a heavy emphasis on logic and simplicity of two strands of thought – the UTILITY OF MASSIVE INJECTIONS OF CAPITAL and the HISTORIAL PATTERN of the now developed countries.

a. Rostow’s Stage of Growth ModelOut of this intellectual environment, fueled by cold war politics in the 1950’s and 1960’s and the resulting competition for the allegiance of newly independent nations, came the stage-of growth model of development

Its most outspoken advocate was the American Economic historian Walt W. Rostow.

The transition from underdevelopment to development can be described in terms of series of steps or stages through which all countries must proceed. It is possible to identify all societies, in their economic dimensions as lying within one of the five categories:

Traditional SocietyPre-conditions for take-off into self-sustaining growthThe Take-offThe Drive to MaturityAge of High Mass Consumption

It was argued that the advanced countries had all passed the stage of take-off into self-sustaining growth and the underdeveloped countries that were still in either the traditional society or the preconditions stage had only to follow a certain set of rules of development to takeoff in their turn into self-sustaining economic growth.

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One of the principal tricks of development necessary for any take-off was the mobilization of domestic and foreign saving in order to generate sufficient investment to accelerate growth.

b. Harrod-Domar Growth Model

Every economy must save certain proportion of its national income if only to replace worn-out or impaired capital goods like buildings and equipment. In order to grow, new investments representing net additions to the capital stock are necessary.

If we assume that there is some direct economic relationship between the size of total capital stock (K) and total GNP (Y), it follows that any net additions to the capital stock in the form of new investment will bring about corresponding increases in the flow of national output, GNP.

The model therefore is simple:

Saving (S) is some proportion (s) of national income (Y)

S = sY

Investment (I) is defined as the change in the capital stock (K)

I = ΔK

But because the total capital stock (K) bears direct relationship to the total national income or output (Y) as expressed by the capital-output ratio, (k) it follows that:

K = k or ΔK = k or ΔK = kΔY Y ΔY

Total national savings (S) must equal total investment (I)

S = I

And since we know that S = sY and that I = ΔK = kΔY, it therefore follows that:

S= sY =kΔY = ΔK = I or simply as sY = kΔY

Dividing both sides of equation by Y and then by k, we obtain the following expression:

ΔY = s Y k

The above equation is the simplified version of the famous equation in Harrod-Domar theory of economic growth, states simple that the rate of growth of GNP is determined jointly by the national savings ration, s, and the national capital-output ration k,

In the absence of government, the growth rate of national income will be positively or directly related to the savings and inversely to the economy’s capital-output ratio. The economic logic of the equation is simple, in order to grow, economies must save and invest a certain proportion of their GNP. The more they can save and invest, the faster they can grow.

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II. Structural Changes Model It focuses on the mechanism by which underdeveloped economies transform their domestic economic structures from a heavy emphasis on tradition subsistence agriculture to a modern, more urbanized and more industrially diverse manufacturing and service economy. It employs the tools of neoclassical price and resource allocation theory and modern econometrics to describe how this transformation process takes place.

Development is an identifiable process of growth and change whose main feature are similar in all countries.

Factors influencing the development process include a country’s resource endowment and size, its government’s policies and objectives, the availability of external capital and technology and international trade environment.

Structural change economists argue that one can identify certain patterns occurring in almost all countries during the development process.

These patterns may be affected by the choice of development policies pursued by the LDC governments as well as the international trade and foreign-assistance policies of developed nations. Hence, such analysts are optimistic that the correct mix of economic policies will generate beneficial patterns of self-sustaining growth.

a. Lewis Theory of Development

The primary focus of the model is on both the process of labor transfer and growth of output and employment in the modern sector. Both labor transfer and modern-sector employment growth are brought about by output expansion in that sector. The speed with which this expansion occurs is determined by the rate of industrial investment and capital accumulation in the modern sector.

Such investment is made possible by the excess of modern-sector profits over wages on the assumption that capitalists reinvest all their profits. Finally, the level of wages in the urban industrial sector is assumed to be constant and determined as a given premium over a fixed average subsistence level of wages in the traditional agricultural sector.

3. International-Dependence Theory

During the 1970’s, international-dependence models gained increasing support especially among Third World intellectuals as a result of growing disenchantment with both the stages and structural-changes model.

These models view developing countries as beset by institutional, political and economic rigidities both domestic and international and caught up in a dependence and dominance relationship with rich countries.

a. Neocolonial Dependence Model

This is an indirect outgrowth of the Marxist thinking which attributes the existence and continuance of underdevelopment primarily to the historical evolution of a highly unequal international capitalist system of rich country-poor country relationships.

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The coexistence of rich and poor nations in an international system dominated by such unequal power relationships between the CENTER (developed countries) and the PERIPHERY (less developed countries) renders attempts by poor nations to be self-reliant and independent difficult and sometimes even impossible.

Certain groups in the developing countries who enjoy high incomes, social status and political power is in perpetuation of the international capitalist system of inequality and conformity by which they are rewarded.

The elites viewpoints and activities serve to inhibit any genuine reform efforts that might benefit the wider population and actually lead to even lower levels of living and perpetuation of UNDERDEVELOPMENT

Neocolonial View of underdevelopment attributes a large part of the 3rd World’s continuing and worsening poverty to the existence and policies of the industrialist capitalist countries of the Northern Hemisphere and their extensions in the form of small but powerful elites in the less developed countries.

UNDERDEVELOPMENT is seen as an externally induced phenomenon, revolutionary struggles or restructuring the world capitalist system are required to free dependent 3rd World nations from direct and indirect economic control of the 1st World and domestic oppressors.

One of the most forceful statements of the international-dependence school of thought was made by Theotonio Dos Santos:

“UNDERDEVELOPMENT, far from constituting a state of backwardness prior to capitalism is rather a consequence and a particular from of capitalist development known as dependent capitalism. DEPENDENCE is a conditioning situation in which the economies of one group of countries are conditioned by the development and expansion of others.”

“Dominant countries are endowed with technological, commercial, capital and socio-political predominance over dependent countries – the form of this predominance varying according to the particular historical moment and can therefore exploit them and extract part of the locally produced surplus. DEPENDENCE then is based upon an international division of labor which allows industrial development to take place in some countries while restricting it in others whose growth is conditioned by and subjected to the power centers of the world.”

b. False Paradigm Model

Attributes underdevelopment to faulty and inappropriate advice provided by well-meaning but often uninformed, biased and ethnocentric international expert advisers from developed-country assistance agencies and multinational donor organizations.

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These experts offer sophisticated concepts, elegant theoretical structures and complex econometric models of development that often lead to inappropriate or incorrect policies.

Having little or no really useful knowledge to enable them to come up to grips in effective way with real development problems, they often tend to become unknowing or reluctant apologists for the existing system of elitist policies and institutional structures.

c. Dualistic Development Model

Notion of a world of dual societies, of rich nations and poor nations and in developing countries, pockets of wealth within broad areas of poverty.

DUALISM is a concept which represents the existence and persistence of increasing divergences between rich and poor nations and rich and poor peoples on various levels.

ELEMENTS:1.Different sets of conditions of which some are ‘superior” and other “inferior”, can coexist in a given space.2. Coexistence is chronic and not merely transitional.3. Degrees of inferiority or superiority have inherent tendency to increase.4. Existence of superior elements does little or nothing to pull up the inferior elements, let alone trickle down to it.

IV. Neoclassical Counterrevolution Theory

This theory favors in developed nations supply-side macroeconomic policies, rational expectations theories and the privatization of public corporations.

In developing countries it called fore freer markets and the dismantling of public ownership, statist planning and government regulation of economic activities.

The central argument of this theory is that underdevelopment results from poor resource allocation due to incorrect pricing policies and too much state intervention by overly active Third World governments.

It is the very state intervention in economic activity that slows the pace of economic growth. By permitting competitive free markets to flourish, privatizing state-owned enterprises, promoting free trade and export expansion, welcoming investors from developed countries and eliminating the plethora of government regulations and price distortions in factor, product and financial markets both economic efficiency and economic growth will be stimulated.

Third World countries are underdeveloped not because of the predatory activities of the First World countries and the international agencies that it controls but rather because of the heavy hand of the state and the corruption, inefficiency and lack of economic incentives that permeate the economies of developing nations.

a. Free Market Analysis Model

This model argues that markets alone are efficient. Product markets provide the best signals for investments in new

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activities, labor markets respond to these new industries in appropriate ways, producers know best what to produce and how to produce it efficiently and the product and factor prices reflect accurate scarcity values of goods and resources now and in the future. Competition is effective, if not perfect, technology is freely available and costless to absorb, information is also perfect and costless to obtain. Any government intervention is by definition distortionary and counterproductive. Third world markets are efficient and that whatever imperfection exist are of little consequence

b. Public Choice Model

This is also know as the New Political economy Approach which argues that governments can do nothing right. This is because this model assumes that bureaucrats, politicians, citizens and states act solely from self-interested perspective using their power and the authority of the government for their own selfish ends.

c. Market-Friendly Model

This is associated primarily with the writings of the World bank and its economists many of whom were more in the free-market and public choice camps in the 1980’s.

This approach recognizes that there are many imperfections in the LDC product and factor markets and that governments do have a key role to play in facilitating the operation of markets through nonselective interventions like investing in physical and social infrastructure, health care facilities and educational institutions and by providing suitable climate for private enterprise. Market failures are more widespread in developing countries in areas such as investment coordination and environmental outcomes.

V. New Growth Theory

The poor performance of neoclassical theories in illuminating the sources of long term economic growth has led to a general dissatisfaction with traditional theory.

According to traditional theory, there is no intrinsic characteristic of economies that causes them to grow over extended periods of time. It is concerned with the dynamic process through which capital-labor ratios approach long-run equilibrium levels.

In the absence of technological change, all economies will converge to zero growth.

Rising per capita GNP is considered a contemporary phenomenon resulting from a change in technology or a short-term equilibrating process in which an economy approaches its long-run equilibrium.

FACTORS OF ECONOMIC GROWTH

1. CAPITAL ACCUMULATION – 2. GROWTH IN POPULATION3. TECHNOLOGICAL PROGRESS

a. Neutral Technological Progress

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b. Capital-Saving Technological Progressc. Labor Saving Technological Progress

FACTORS OF ECONOMIC GROWTH

1. CAPITAL ACCUMULATION including all new investments in land, equipment and human resources –

Capital accumulation results when some proportion of present income is saved and invested in order to augment future output and income. New factories, machinery, equipment and materials increase the physical capital stock of a nation and make it possible for expanded output levels to be achieved.

1. GROWTH IN POPULATION and hence eventual growth in labor force

Population growth has traditionally been considered a positive factor in stimulating economic growth. A larger labor force means productive workers and a large overall population increases the potential size of domestic markets.

However, it is questionable whether rapidly growing supplies of workers in surplus-labor developing countries exert a positive or negative influence on economic progress. It will depend on the ability of the economic system to absorb and productively employ these added workers – an ability largely associated with the rate and kind of capital accumulation and the availability of related factors like managerial and administrative skills.

2. TECHNOLOGICAL PROGRESSTechnological progress results from new and improved ways of accomplishing traditional tasks like building a house or growing crops. There are three basic classifications of technological progress;

a. NEUTRAL TECHNOLOGICAL PROGRESSThis occurs when higher output levels are achieved with the same

quantity and combinations of factor inputs. Simple innovations like those that arise from the division of labor can result in higher total output levels and grater consumption for all individuals.

b. CAPITAL-SAVING TECHNOLOGICAL PROGRESSAlmost all of the world’s scientific and technological research is

conducted in developed countries where the mandate is to save labor not capital. In capital scarce industries, capital-saving technological progress is what is needed most. Such progress results in more efficient labor intensive methods of production.

c. LABOR SAVING TECHNOLOGICAL PROGRESSThis occurs when the quality or skills of the labor force are

upgraded by use of videotapes, televisions and other electronic communications media for classroom instruction.

CHARACTERISTICS OF MODERN ECONOMIC GROWTH

1. High rates of growth per capita output and population2. High rates of increase in total factor productivity3. High rates of structural transformation of the economy4. High rates of social and ideological transformation5. The propensity of economically developed countries to reach out to the rest of the world for markets and raw materials

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6. The limited spread of this economic growth to only a third of the world’s population

TO SUMMARIZE the 6 characteristics:

1. The sustained rise in national output is a manifestation of economic growth and the ability to provide a wide range of goods is a sign of economic maturity.

2. Advancing technology provides the basis for preconditions for continuous economic growth- a necessary but not sufficient condition

3. To realize potential growth inherent in new technology, institutional, attitudinal and ideological adjustments must be made. Technological innovation without concomitant social innovation is like a light bulb without electricity – the potential exists but without the complementary input, nothing will happen.

Modernization Ideals accdg. To Gunnar Myrdal for underdevelopment in Asia

a. RATIONALITY – the substitution of modern methods of thinking, acting, producing, distributing and consuming for age-old, traditional practices. What underdeveloped nations need is a scientific and technological society. It employs new techniques whether in the farm, in the factory or in transport. Modern techniques are not just a matter of getting a tool and using it. The quest for rationality implies that opinions about economic policies should be logically valid inferences rooted as deeply as possible in knowledge of relevant facts.

b. ECONOMIC PLANNING – the search for rationally coordinated system of policy measures that can bring about and accelerate economic growth and development

c. SOCIAL AND ECONOMIC EQUALIZATION – the promotion of more equality in status, opportunities, wealth, incomes and levels of living

d. IMPROVED INSTITUTIONS AND ATTITUDES – necessary to increase labor efficiency and diligence, promote effective competition, social and economic mobility and individual enterprise, permit greater equality of opportunities, make possible higher productivity, raise levels of living and promote development. Among the social institutions needing change are outmoded land tenure systems, social and economic monopolies, educational and religious structures and systems of administration and planning. In the area of attitudes, the concept of modern workers embodies such ideals as efficiency, diligence, orderliness, punctuality, frugality, honesty, rationality, change orientation, integrity and self-reliance, cooperation and willingness to take the long view.

Classifying different countries in the context of development

In attempting to classify some countries, some analysts using the United Nations classification system prefer to distinguish among three groups within the Third World:

LEAST DEVELOPED – pertaining to the 44 POOREST countries DEVELOPING – pertaining to 88 non-oil exporting countries DEVELOPED – pertaining to the 13 petroleum rich members of OPEC

Others follow the classification established by the International Bank for Reconstruction and Development (IBRD) more commonly known as World Bank:

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LOW-INCOME countries (per capita GNP less than $785) MIDDLE-INCOME countries (per capita GNP $786 - $3,125) UPPER MIDDLE INCOME countries (per capita GNP $3,126-$9,655) HIGH INCOME ECONOMIES (per capita GNP of $9,655 or more)

The most recent classification comes from the United Nations Development Program (UNDP). It focuses on the aspects of HUMAN DEVELOPMENT that go beyond the income to include such non-economic variables as life expectancy at birth and educational attainment along with real per capita income. It then constructs a HUMAN DEVELOPMENT INDEX (HDI) in which 174 countries are ranked into three human development aggregates:

HIGH – pertaining to 64 countries including several LDC’s MEDIUM – 65 countries LOW – 45 countries

Another classification is that made by the Organization for Economic Cooperation and Development (OECD) in Paris. It divides the third world into:

61 LOW INCOME countries (per capita income of less than $650 including 29 LDC’s)

73 MIDDLE INCOME countries 11 NEW INDUSTRIALIZING COUNTRIES 13 MEMBERS of the OPEC

STRUCTURAL DIFFERENCES OF DEVELOPING ECONOMIES

A. The size of the country which includes geographic area, population and income

B. Its historical and colonial backgroundC. Its endowments of physical and human resourcesD. Its ethnic and religious compositionE. The relative importance of its public and private sectorsF. The nature of its industrial structureG. Its degree of dependence on external economic and political forcesH. The distribution of power and the institutional and political structure within

the nation

COMMON CHARACTTERISTICS OF DEVELOPING NATIONS

Low levels of living characterized by low incomes, inequality, poor health and inadequate education

Low levels of productivity High rates of population growth and dependency burdens High and rising levels of unemployment and underemployment Susbtantial dependence on agricultural production and primary-product

exports Prevalence of imperfect markets and limited information Dominance, dependence and vulnerability in international relations

The State of Underdevelopment

• Unequal distribution of assets, skewed distribution of income and employment opportunities amongst citizens, inequality in access to social services, high level of illiteracy and social backwardness.

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• Segregated planning approaches and scattered residential and farming settlements without viable economic and social linkages to the more economically active areas of the country.

• Under utilisation and/or unsustainable use of natural resources

• Poor or lack of access to socio-economic infrastructure and services, public amenities and government services (e.g. industrial parks lying idle especially in the former homeland areas)

• Lack of access to water or lack of water sources for both household and agricultural development

• Low literacy, skills levels and migratory labour practices

• Decay of the social fabric (child-headed households, crime, family disputes and lack of Ubuntu)

• Death of cultural progress

• Unresolved restitution and land tenure issues

• Townships not formally established thus hindering service provision and development

• Dependence on social grants and other forms of social security

• Unexploited opportunities in agriculture, tourism, mining and manufacturing

“The contrast between what great things human beings can achieve and what limited lives most women and men end up living is truly remarkable.”

- Amartya Sen

“People are the real wealth of nations.”

“The objective of development is to create an enabling environment for people to enjoy long, healthy and creative lives.”- Mahbub ul Haq

2010: Human development "Human development is the expansion of people’s freedoms to live long, healthy and creative lives; to advance other goals they have reason to value; and to engage actively in shaping development equitably and sustainably on a shared planet. People are both the beneficiaries and drivers of human development, as individuals and in groups.

HUMAN DEVELOPMENT INDEX (HDI)

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Measuring Human Development The origins : GDP vs HDI

• The HDI is “an index just as vulgar as GDP but it stands for better things” (Amartya Sen)

• HDI aggregates health education and income• GDP/HDI:

commodity-centred vs human-centred• Indicators need to be: relevant, internationally comparable,

available for many countries• Neglected dimensions: gender, equity, sustainability...

Inequality-adjusted Human Development Index (IHDI)

Gender Inequality Index (GII)

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Multidimensional Poverty Index (MPI)

HD Indices Sources

HDI• Life expectancy: UNDESA World Population Prospects• Years of Schooling: UNESCO Institute for Statistics and Barro and Lee

(2010) [NBER working paper 15902]• GNI PPP per capita: World Bank’s World Development Indicators

IHDI• Life expectancy: UNDESA World Population Prospects• Years of Schooling: household survey data in international databases

(EUSILC, UNICEF-MICS, USAID-DHS, WHO-WHS)• Household income or consumption: household survey data in international

databases (Luxemburg Income Study, EUSILC, UNICEF-MICS, USAID-DHS, World Bank’s International Income Distribution Database, United Nations University’s Income Inequality Database)

HDI• Life expectancy: UNDESA World Population Prospects• Years of Schooling: UNESCO Institute for Statistics and Barro and Lee

(2010) [NBER working paper 15902]• GNI PPP per capita: World Bank’s World Development Indicators

IHDI• Life expectancy: UNDESA World Population Prospects• Years of Schooling: household survey data in international databases

(EUSILC, UNICEF-MICS, USAID-DHS, WHO-WHS)• Household income or consumption: household survey data in international

databases (Luxemburg Income Study, EUSILC, UNICEF-MICS, USAID-DHS, World Bank’s International Income Distribution Database, United Nations University’s Income Inequality Database)

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2. Contribution to the development debate

Global Reports 1990-2010

HDR 90 - Concept and Measurement HDR 91 - Financing HDR 92 - Global Dimensions HDR 93 - People’s ParticipationHDR 94 - Human SecurityHDR 95 - GenderHDR 96 - Economic GrowthHDR 97 - Eradicate PovertyHDR 98 - ConsumptionHDR 99 - GlobalizationHDR 00 - Human RightsHDR 01 - New technologiesHDR 02 - DemocracyHDR 03 - MDGsHDR 04 - Cultural LibertyHDR 05 - Aid, trade and securityHDR 06 - WaterHDR 07/08 - Climate ChangeHDR 09 - Migration HDR 10 - Pathways to HDHDR 11 - Sustaining equitable progress

HDR Impact: News and academic citations

• HDR continues to outperform its closest competitor (the World Bank’s annual World Development Report) by almost 2:1– The HDI is a key contributor to that success.

• In academic citations, the HDR recently overtook the WDR.– In 2010, HDR’s academic citations = 4,090, compared to the

WDR’s 2,790• Widespread endorsement from policy and academic circles

– “One of the world’s most significant documents.” Gregg Easterbrook, The New Republic

– “Substantially enriches our understanding of the development landscape.” Dani Rodrik, Harvard

Regional, National and Sub-national Reports: More than just Reports Since 1992, more than 600 National and Sub-national HDRs, as well as 30 Regional Reports, have been produced in more then 130 countries.

• Inspired by the global HDR• Tool to tailor development strategies to local realities• Seeing people as the nation’s wealth, end and means of advancing the

development agenda• Provide new research and disaggregated data• Offer innovation in concept, measurement, and policy• Focus on equity, efficiency, empowerment, and sustainability in policies

and the HDR process itself

NHDR Influence Inclusive: youth involvement in each stage of the HDR preparation

process

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Thorough analysis: focus on 5 million youth out of education and employment

Relevance: more than 1,000 news reports, articles and interviews Influence: youth policy and youth NGOs coalition

The importance of an inclusive process

• 216 events to gauge opinions and gather voices, proposals and commitments

• 4,369 people throughout the different territories: community members, local leaders, civil servants, government representatives, academics, businessmen and women, workers, country workers and farmers, displaced people, the disabled, those reinserted into society, women and the elderly, young people, homosexuals, indigenous people and people of African descent.

Measurement Innovation

• Disaggregation (e.g. Roma MDGs)• Comparing subjective and objective data (e.g. human security perceptions

in Latvia)• Qualitative analysis of quantitative data (e.g. Cambodia - the financial

returns to education are higher for women)• Measuring deprivations in the country-context (e.g. social inclusion indices

in BiH)• New indices covering more dimensions (e.g. Dominican Republic on

individual and collective empowerment)

North and South Divide

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1981 – The West German Chancellor Willy Brandt produced the Brandt report. The report identified ‘The Development Gap’

BUT the picture has changed considerably since, with many countries such as Brazil, India and China are developing rapidly.

Accdg. to Brandt:

• The North possess 80% of the world’s wealth• The South only 20%

Positives of Map:• Simplifies data so that it's easy to understand.• GDP is used which is an easy to access data source.Negatives of Map:• Doesn't include some countries which are more economically developed.• Generalised patterns with some countries above the Brandt line

Development Gap

The north–south divide has more recently been named the development continuum gap.

- places greater emphasis on closing the evident gap between RICH (more economically developed - MED) and POOR (less economically developed -LED) countries.

A good measure of on which side of the gap a country is located is the Human Development Index (HDI).

The nearer this is to 1.0, the greater is the country's level of development and the further the country is on its development pathway (closer towards being well developed), exemplified well by Walter Rostow's model of development…

Defining Development

The South (accdg. To

• lacks the right technology, • politically unstable, • their economies are divided, • their foreign exchange earnings depend on primary product exports which

come from the North, • fluctuation of prices.

World map by quartiles of Human Development Index in

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• little control of imports and exports These conditions condemned the South to obey the imperialist system

Defining N-S Development

The lack of the South and the development of the North furthers the inequality and end up putting the South as a source of raw material for the developed countries.

The NORTH = synonymous with economic development and industrialization The SOUTH = represents the previously colonized countries which are in need of help in the form of international aid. In order to understand how this divide occurs, a definition of “development” itself is needed.

Defining Development

Development: “processes of social change or [a change] to class and state projects to transform national economies” - The Dictionary of Human Geography

This definition entails an understanding of economic development which is imperative when trying to understand the north–south divide.

• Economic Development is a measure of progress in a specific economy.

• refers to advancements in technology, • transition from an economy based largely on agriculture to one based on

industry and an improvement in living standards.

• Other factors: life expectancy and the levels of education, poverty and employment in that country

Digital and Technology Divide

The global digital divide is often characterized as corresponding to the north–south divide; however, Internet use, and especially broadband access, is now soaring in Asia compared with other continents.

This phenomenon is partially explained by the ability of many countries in Asia to bypass older Internet technology and infrastructure, coupled with booming economies which allow vastly more people to get online.

The DIGITAL DIVIDEThe digital access index (DAI) measures the gap between countries and their ability to access and use ICT

Theories explaining the divide

Uneven immigration patterns lead to inequality:• in the late 18th and 19th centuries, immigration was very common into

areas previously less populated (North America, Argentina, Brazil, Australia, New Zealand) from already technologically advanced areas (United Kingdom, Spain, Portugal).

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This facilitated an uneven diffusion of technological practices since only areas with high immigration levels benefited. Immigration patterns in the twenty-first century continue to feed this uneven distribution of technological innovation.

• People are eager to leave countries in the South in attempts to better their life standards and get their share in the perceived prosperity of the North. – “South and Central Americans want to live and work in North

America. Africans and Southwest Asians want to live and work in Europe.

– Southeast Asians want to live and work in North America and Europe”.

Future Development

Some economists have argued that international free trade and unhindered capital flows across countries could lead to a contraction in the North–South divide.

In this case more equal trade and flow of capital would allow the possibility for developing countries to further develop economically.

However policymakers in the South are often skeptical of capitalism and have proposed alternative solutions.

In 1974, Southern nations called for a New International Economic Order (NIEO) to restructure the global economy

Demands: included linking prices of commodity exports to manufactured imports

• transferring of technology from North to South, canceling or rescheduling debts of Third World

• improving representation in economic players—World Bank, UN Security Council,

• standardizing prices for raw materials • solving food crises• "opening up of the North’s market for manufactured or semi-processed

goods of the South."

As some countries in the South experience rapid development, there is evidence that those states are developing high levels of South–South aid.

Brazil, in particular, has been noted for its high levels of aid ($1 billion annually—ahead of many traditional donors) and the ability to use its own experiences to provide high levels of expertise and knowledge transfer.

This has been described as a "global model in waiting“.

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United Nations has also established its role in diminishing the divide between North and South through the Millennium Development Goals (2015).

These goals seek 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 global partnership for development.

Sustainable Development Goals

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IMPERIALISM AND COLONIALISM

IMPERIALISM - is the forceful extension of a nation's authority by territorial conquest or by establishing economic and political domination of other nations that are not its colonies.

COLONIALISM– is a practice of domination, which involves the subjugation of one people to another.

Difference between Colonialism and Imperialism

Colonialism comes from the Latin word colonus, meaning farmer.Imperialism comes from the Latin term imperium meaning to command.

Simplest way to distinguish the two is to think of:COLONIALISM as PRACTICE while IMPERIALISM as the IDEA driving the practice.

History

imperialism may be as old as humanity. In the pre historical world (before written history began), clan groups

extended their territory and dominated others, competing against them for food and resources.

both ancient and modern imperialism, tended to regard themselves as spreading order, morality, the true religion and civilization, and have even claimed to occupy the high moral ground.

The term "Imperialism" was coined in the sixteenth century, reflecting the imperial policies of Spain, Portugal, Britain, France, and the Netherlands into Africa and the Americas.

Although the practice dates thousands of years, the nineteenth century is the "Age of Imperialism" and refers to Europeans colonizing other countries.

In the mid-1800s, Britain was the most powerful nation in the world It’s factories produced more goods than those of any other country. British banks loaned the money needed to build factories, mines,

and railroads worldwide.By the late 1800s, however, Germany and the United States were challenging Britain’s economic leadership.Faced with possible decline, Britain looked increasingly to its colonies for markets and resources.And other countries followed Britain’s lead and came to see colonies as necessary for their economic well-being.

NEO-COLONIALISM, GLOBALIZATION & WORLD-SYSTEMS THEORY Neo-colonialism or neo-imperialism - is the geopolitical practice of

using capitalism, business globalization and cultural imperialism to influence a country, in lieu of either direct military control (imperialism) or indirect political control (hegemony)

Globalization - is the process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology.

World Systems Theory – developed by Immanuel Wallerstein, is an approach to world history and social change that suggests there is a world economic system in which some countries benefit while others are exploited.

Core areas Semi-periphery areas

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Periphery areas

Capitalism

Adam Smith - Capitalism’s founding Father coined the terms “invisible hand and division of labor”

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages”

Lenin’s Theory of Imperialism

In Vladimir Lenin’s essay Imperialism, the Highest Stage of Capitalism, he describes the function of financial capital in generating profits from imperialist colonialism, as the final stage of capitalist development to ensure greater profits.

Per Lenin, Imperialism is Capitalism, with five simultaneous features:

(1) Concentration of production and capital led to the creation of national and multinational monopolies—not as in liberal economics, but as de facto power over their markets—while "free competition" remains the domain of local and niche markets:

(2) Finance capital replaces industrial capital (the dominant capital), (reiterating Rudolf Hilferding's point in Finance Capital), as industrial capitalists rely more upon bank-generated finance capital.

(3) Finance capital exportation replaces the exportation of goods (though they continue in production)

(4) The economic division of the world, by multi-national enterprises via international cartels

(5) The political division of the world by the great powers, wherein exporting finance capital to their colonies allows their exploitation for resources and continued investment. This super exploitation of poor countries allows the capitalist industrial nations to keep some of their own workers content with slightly higher living standards (cf. labor aristocracy; globalization).

Marx’s Theory of Imperialism

Marxist imperialism theory, and the related dependency theory, emphasize the economic relationships among countries (and within countries), rather than formal political and military relationships. Thus, imperialism is not necessarily direct formal control of one country by another, but the economic exploitation of one by another. This Marxism contrasts with the popular conception of imperialism, as directly-controlled colonial and neocolonial empires.

Negative legacy of Imperialism

Imperial powers have often regarded themselves as superior to others, especially to those people who live in conquered territory.

Often, the “enemy” or the “vanquished” were depicted as inferior.

Positive Legacy of Imperialism

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Despite all the negative experiences of colonialism, communication and transportation infrastructures built during colonial times have brought more and more people into contact with each other. More and more people understand themselves as citizens of the world and realize that such challenges as the ecological crises, eradicating poverty, combating disease can only be met by global cooperation among the nations. Talk of universal human rights and the insight of many that shared values permeate the cultures and faiths of the world, despite their diversity and variety and some differences too, would be inconceivable but for the imperial enterprises that once crossed the globe.

Marxism

There is a great influence of Karl Marx during his time During the 1980s, Marxist numbered about one half of the planet's

inhabitants Chinese alone account for one billion but the Russian claimed to be the

leading Marxists More Marxists compared to Christians Walter Laquer joked that by the 1980s, there were probably more

believing Marxists in American universities than in the entire Soviet Union Karl Marx was the most influential modern thinker Marx is known to be the founder of the modern study of history, sociology,

and economics Prophet of proletarian revolution

Karl Marx is a son of a well off lawyer in the Rhineland city of Trier He became an intellectual outsider and critic, a professor of revolution He became a teacher of revolutionaries rather than a revolutionary himself Ph.D. from the prestigious University of Berlin in 1836 Rheinische Zeitung European correspondent for Horace Greeley's newspaper, the New York

Tribune Exiled from Germany for radical activities in 1849

A few months later he was asked to leave France After a brief time in Brussels, he settled in London in 1851

Das Kapital

Marxism Refers to the political and economic theories of Karl Marx and Friedrich

Engels Believed that history was largely determined by the struggle between the

ruling classes and the oppressed classes, which had conflicting interests Believed that if workers could overthrow capitalism, they would be able to

build a socialist society Marxists believe that they and they alone have the analytical tools to

understand the process of historical change, as well the key to predicting the future

Marxists also believe that they and they alone have an empirical, scientific approach to human history and society

The Main Ideas of Marxism

1. Materialism Engine that drives society is the economy Economic forces are more complex and pervasive The mode of production in material life determines the general character

of the social, political, and spiritual processes of life It is not the consciousness of men that determines their existence, but on

the contrary their social existence that determines their consciousness

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Marx suggests that individuals really do not think independently at all; rather, the great majority of people simply repeat the dominant ideas of their time in place of thinking

People who control the economy also control the political arena Merely parrot the rhetoric of the ruling class

2. Class Struggle

All of human history can be explained and predicted by the competition between antagonistic economic classes

“The history of all hitherto existing society is the history of class struggles.”

Social classes are competing in essence for control of the state the class that controls the Mode of Production also controls

the State Political life is only veil for the real struggle Fundamental division in every society is that between the exploiters and

the exploited, between the owners of the means of production those who have to sell their labor to the owners to earn a living.

Bourgeoisie vs. Proletariat:

Bourgeoisie: Simply means capitalist, or management. Those who control the means of production.

Proletariat: The industrial working class wage labor. But Marxists look very carefully at who belongs here no artisans, no peasants, no farm laborers. The Proletariat is the factory workers or simply “those who have nothing but their hands“

The key is to seize control of the productive process and to make it work in favor of the exploited masses instead of enriching a tiny minority of capitalists.

The Inevitable Revolution

Rapid expansion of the economy and of the factory system is the most important thing that happened in the human history

The more that production is concentrated into factories, the more the revolutionary working class is strengthened

more acute becomes the competition and antagonism between bourgeoisie and Proletariat, capital and labor

Ownership of capital will become concentrated in few hands Many former capitalists will fail and sink down into the proletarian mass The State too will disappear, or "wither away"

the state is simply an instrument of coercion and coercion will no longer be necessary

Ideas were all expressed in one of the great literary documents of the nineteenth century, the “Communist Manifesto”

DEVELOPMENT DOCTRINESIntentional and Spontaneous Development

Examines development as an idea and practice (early 19th Century to late 20th Century)

“What is Development?”

Implies improvement or positive qualitative change Used to mean greater human freedom and well-being

Prof. Nadarajah Shanmugaratnam

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Development process is uneven and conflict-ridden with mixed consequences

Accumulation of wealth and enhancement of freedom and well-beings Impoverishment Marginalization Reinforcement of power structures Violations of human rights Spread of destructive and internal wars Environmental degradation

Intentional Development Implies subjective policy interventions to manage the economy and to deal

with the socio-political problems Consist of means to compensate negative propensities of capitalism

though the reconstruction of social order

Spontaneous Development Unintended outcome of individuals decisions made in production and

trade

How to create order in society (Adam Smith) Individual self-interest is the driving force of evolution of the social system “Laissez faire as a natural order (Invisible hand)

The state must establish the prior conditions for laissez faire Modern private property rights and their enforcement Public works (infrastructure) Administration of justice Taxation should not interfere with the allocative mechanisms Defense

Model of perfect competition and spontaneous order Division of labor> increased productivity> increased output> higher

wages- Higher per capita income Higher level of consumption> greater wealth of a nation > Increased

capital accumulation > Division of labor

Dynamics of modern societyDouble Movement’ (two organizing principles)

Establish a self-regulating market +

Social protection

Gender and Development

• 1. That, this is not a WAR OF THE SEXES;• 2. That, we are not ANTI-MALE;• 3. That, both WOMEN and MEN are victims, although WOMEN are

usually/oftentimes the victims than MEN;• 4. That, both MEN and WOMEN have a stake in the struggle from Gender

Equality.• Women make up the 70% of individuals living in poverty and in sub-

Saharan Africa 57% of HIV infected individuals are women• disproportionate ratio of women to men in the job market and at leadership

position• low level of education among women• and low socio-economic status among women.

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Difference between sex and gender:

• SEX Is a natural distinguishing variables based on biological characteristics of being a woman or man. It refers to physical

attributes pertaining to a persons body contours, chromosomes and reproductive organs.

GENDER - Refers to the socially differentiated roles, characteristics and expectations attributed by culture to women and men. It is set of characteristics that identifies the social behavior of women and men and the relationships between them.

SEX GENDER*Categorized as male & female *Masculinity & femininity*Biological *Socially, culturally and historically

determined*Fixed at birth *Learned through socialization*Does not change across time and space

*Varies over time and space

Equally valued *Unequally valued (masculinity as the norm)

Welfare Approach

the era of decolonization and political transitioning in most African and Asian countries (1950s – 1970s)response to most of the newly independent countries outcomes of inequalities among the local elites and the common man in each nation.

Most international development agencies applied a very western approach towards helping these nations develop.- modernization theory, and the Malthusian theory (Population vs.

Resources).- These brought about a negative impact and outcome towards most

developing nations development and it also help to further impede on its progress.

Women in development (WID)

It is the integration of women into the global economies by improving their status and assisting in total development. It was originated as a result of three major feminist moments/waves concerning feminine conditions.

First Wave : Women’s Suffrage Movement It originated in the North America back in the late 19th century, when women fought for the equal right to vote and participate in politics. Second Wave : Social and Cultural Inequalities • sexual violence, • reproductive rights, • sexual discrimination and• glass ceilings

Third Moment: Women’s Role in Economic Development A publication Ester Boserup

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“She states and gave empirical results of how increasingly specialized division of labor associated with development undermines or neglects the value of women’s work and status especially in the developing world.”

In 1973, the US congress implemented a bill, which required the USAID to include women in development programs. Criticism Very Western! Fails to acknowledge the collective and cultural concerns of women in the developing world. It ignores the larger social processes that affect women's lives and their reproductive roles.The approach does not address the root causes of gender inequalities.

Women and Developmentoriginated back in 1975 in Mexico city, as it sort to discuss women’s issues from a neo-Marxist and dependency theory perspective. explain the relationship between women and the process of capitalist development in terms of material conditions that contribute to their exploitation”

WAD stresses the relationship between women, and the work that they perform in their societies as economic agents in both the public and domestic spheres. In general, WAD is thought to offer a more critical conceptualization of women’s position in the society.

CRITICISM That their concern is that the women-only development projects would struggle, or ultimately fail, due to their scale, and the marginalized status of these women. WAD fails to fully consider the relationships between patriarchy, modes of production, and the marginalization of women.

What is GAD?

The GAD (or Gender and Development) approach focuses on the socially constructed basis of differences between men and women and emphasizes the need to challenge existing gender roles and relations.

Theory of GADGAD was developed in the 1980’s as an alternative to the Women in Development (WID) approach.

Unlike WID, the GAD approach is not concerned specifically with women, but with the way a society assigns roles, responsibilities and expectations to both men and women.

GAD applies gender analysis to uncover ways in which men and women work together, presenting results in neutral terms of economics and efficiency.

Two Main Goals of GAD: to prove that the unequal relationship between the sexes hinders development and female participation.

to change the structure of power into a long-term goal whereby all decision-making and benefits of development are distributed on equal basis of gender neutrality.

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GAD approach is not just focused on the biological inequalities among sexes: men and women; on how social roles, reproductive roles and economic roles are linked to Gender inequalities of: masculinity and femininity.

Caroline Moser developed the Moser Gender Planning Framework for GAD-orientated development planning in the 1980’s while working at the Development Planning Unit of the University of London. Working with Caren Levy, she expanded it into a methodology for gender policy and planning. The Moser framework follows the Gender and Development approach in emphasizing the importance of gender relations.

Effectiveness Approach- WID- the inequalities women faced and how societies fail to acknowledge the

impact of women in economic development.- Include women in the development projects and reinforce their labor and

productivity in the labor market.

Mainstreaming Gender Equality- Gender mainstreaming: a is an approach to - development that looks more comprehensively - at the relationships between women and men - in their access to and control over resources,- decision making, benefits and rewards in society.- - that all gender issues are address and integrated in all levels of society,

politics, and programs.

• It originated in 1995 at the 4th UN conference on women in Beijing, China. At the forum, 189 state representatives agreed that the inclusion of both women and men in every development project was the only way to succeed and progress in a nation economic growth and development.

• Through MGE organizations like CIDA has to include men and women in their annual development report concerning the allocation of fund’s spent towards education, health care, and employment of both sexes.

In conclusion to all the six main theoretical approaches.

First, It is important to note that no approach can be neutral in terms of its effect on the power relationship between men and women.Second, gender inequality is highly linked with the power struggle that hinders the recognition of women as significant actors and negotiators of the development processes.Finally, the need for including actual fieldwork results into theories of development. Basically, the collective needs of individuals need to be put into consideration when implementing various development theories.

Most Applicable in the global south:Non-Applicable in the global north

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