Transcript Chapter 1

Chapter 1
Patterns of
Development
What is Development?
What is Development?
“Development” … al Biology?
– A natural, desirable, inescapable process of
improvement/maturation/fulfillment.
“Development” as in “Fundraising”?
– A planned process of intervention to achieve
certain goals for the benefit of something else.
What is Development?
Historical and ahistorical definitions.
– Evaluative, a-historical definitions are the focus of DE.
Positive (i.e., neutral) versus normative (i.e.,
evaluative) meanings.
– Positive and evaluative meanings are intertwined.
– Although the line is blurry, but either we identify our
values, or we adopt hidden values (or someone else’s
values).
What is Development?
Definitions: achievement a particular
goal or the opportunity to achieve your
own goals?
– Is having means but no clear ends
development?
– Being or having? How do we define these
terms and make them concrete?
Are the criteria for development
universal or are they relative to
particular contexts?
A-Historical Definitions
Elaboration, improvement, evolution;
Unveiling and fulfillment of potential.
A. Neutral usages of development:
1. Structural change
2. Intervention, action.
B. Evaluative usages:
1. Improvement, good change
2. Pre-conditions for improvement
A-Historical Definitions
A. Neutral usages of development:
1. Structural change
– “To develop” as an intransitive verb. An
endogenous process
– Economic growth, GDP per capita.
– Modernization (industrialization,
urbanization, globalization, transformation
of relations of production).
– Marxism; Rostow’s Stages of Economic
Growth.
A-Historical Definitions
A. Neutral usages of development:
2. Intervention, action.
– “To develop” as a transitive verb.
– A group (the government, the NGOs, the
UN, the IFIs, the universities)
understands the means of development
and modernization better; it knows the
ends are desirable.
– It plans the development process and
imposes it onto society or encourages
society to follow it.
A-Historical Definitions
A. Evaluative usages:
1. Improvement, good change
– Desirable growth and modernization; fulfillment
of good potentials, especially that of increased
material welfare in the South.
Keeping the end in sight prevents turning the means
(growth, modernization) into ends.
–
“The people are the only deciders of what is
development”
But how did the people come to this decision?
Are there any universal preconditions for selfdetermination?
A-Historical Definitions
A. Evaluative usages:
2. Pre-conditions for improvement
– Goulet: D is what leads to improvement.
So D depends on values (what is improvement?)
and theory (what causes improvement?)
Being able to self-define D is also an
improvement, maybe also part of D.
So D is the change; D is the opportunity change
creates; and D is the actual improvement.
Or D is what automatically creates improvement.
Definitions of Development
Neutral
Evaluative
A-Historical
Rise in GDP per
capita
Increase in
universally
specified
capabilities
Historical
Expansion of
Western Civ;
copying of
Northern models
Fulfillment of a
group’s preferences
at a particular time.
Historical Meanings of
Development
“Fourth, we must embark on a bold new program for making the
benefits of our scientific advances and industrial progress
available for the improvement and growth of underdeveloped
areas.
More than half the people of the world are living in conditions
approaching misery. Their food is inadequate. They are
victims of disease. Their economic life is primitive and stagnant.
Their poverty is a handicap and a threat both to them and to
more prosperous areas.
Greater production is the key to prosperity and peace. And the
key to greater production is a wider and more vigorous
application of modern scientific and technical knowledge.
Only by helping the least fortunate of its members to help
themselves can the human family achieve the decent, satisfying
life that is the right of all people.”
– Harry Truman, 1949 Inaugural Address
Historical Meanings of D
The idea of development became popular
after WWII,
– Fostered by USA (and Europe) and USSR.
But it had started in the early XIXc:
– Saint-Simon, Comte: change can be
destructive, but guided change can lead to
improvement or to the opportunity for
improvement.
History of Development
Rise of Europe:
– XVI to XVIIIc, globalization, markets, Kist
institutions;
– XIX to mid-XX, technology in production,
social management.
Liberalism and utilitarianism arose to justify/foster
the ordering of a commercial society.
History of Development
Post-WWII
– Post-colonialism
– Awareness of tech and income gap;
– West versus USSR
Imposed their models as “conscious major state-led
intervention for national economic advance.”
– Societal improvement and (or?) catching up.
– Globalization, inter- and intra-country polarization.
How ought a society to exist and
move into the future?
Is social improvement the same for
everyone or should it be defined case by
case?
– Many societies may agree on some values;
– Development is to increase the range of
opportunities for doing what one chooses; the
preconditions for this may be universal.
Opportunities to be or to have?
How ought a society to exist and
move into the future?
GDP per capita
… plus manufacturing share and literacy
Human Development Index
– It’s objective, so it’s comparable across countries and
time.
– “A process of change in social structures, physical
infrastructure, technology and skills, culture and moral
and spiritual values which creates conditions and an
environment for a happier and more contented
humanity.” Nkomo, qtd. p. 37.
How ought a society to exist and
move into the future?
Development as enlarging people’s choices
(Arthur Lewis and Amartya Sen)
– Valuable options are what matter, not just a large
number of options.
No choices may even be better than a thousand distractions.
People prefer to know they are acting independently.
Being is better than having; and outcomes as
better than opportunities.
– But, given the lack of data, a “having” measure such
as GDP can become a proxy for the “opportunity to
be” and for “being.”
GDP / GNP
GNP is a better measure of welfare than GDP: it focuses
on the country’s people. However,
– GNP includes activities such as waste disposal, pollution
abatement, etc.; investment.
– GNP excludes non-market goods, such as housework or leisure.
– GNP gives more weight to luxury goods and less weight to the
goals of the moneyless.
– GNP doesn’t account for the use of capital; NNP doesn’t include
the use of environmental capital.
But it measures both achievement and opportunity, and
is both universal and contextual.
GDP / GNP
GNP is objective: it’s the same measure
everywhere.
It’s contextual: it reflects what people in that
country wanted to produce.
– Often, what is produced is what foreigners/the
wealthy want: this may reflect
military/political/economic pressure or mutual selfinterest.
– Compare this with Relativist measures that insist that
development is “whatever people define as
development.”
GDP / GNP
Measures of
Well Being
Objectivist
(non-feeling
functionings)
Subjectivist
(feeling-based)
Universalist
Relativist
Life Expectancy Body weight, if
people think it’s
important
GDP per capita Fulfillment of
duty, if people
think so
Commonality
Universal aspirations:
– Freedom from poverty, violence, and
servitude; Being loved and belonging; Control
over one’s life, its details and its direction
(Edwards).
– Life, Knowledge, Play, Aesthetic Experience,
Friendship, Self-determination; Religion
(Finnis – check for basic values).
Growth and Development
Low
income
Lower middle
income
Upper middle
income
High
income
GNI per capita, Atlas method
(current US$)
584.2
1778.0
5053.3
34962.0
GNI per capita, PPP (current
international $)
2463.2
6274.1
9978.0
32839.8
Rural population (% of total
population)
70.0
53.5
25.3
22.6
Energy use (kg of oil equivalent
per capita) 2004
510.4
1159.3
2221.4
5502.4
Life expectancy at birth, total
(years)
59.0
70.6
70.0
79.0
Literacy rate, adult total (% of
people ages 15 and above)
60.8
88.9
93.1
98.7
Literacy rate, youth total (% of
people ages 15-24)
73.4
96.2
97.6
99.3
How do we draw these graphs?
http://mysite.avemaria.edu/gmartinez/Cour
ses/ECON320/table1-1.xls
– Select the data you want to plot.
– Insert | Chart …
– Scatter plot
– Double-click on axes. Change them to
logarithmic scale.
– Double-click on chart area. Erase
background and borders.
How do we draw these graphs?
http://mysite.avemaria.edu/gmartinez/Cour
ses/ECON320/table1-1.xls
– Copy the data onto the Stata Data Editor
Delete row 3 first (what happens when you don’t?)
– Use dialog box, or type
twoway (scatter energy gnippp, sort
mlabel(countryname)) (lfit energy
gnippp), yscale(log) xscale(log)
title(Energy Use compared to GNI per
capita PPP)
1914
http://upload.wikimedia.org/wikipedia/en/2/2a/ColonialAfrica.png
http://www.assumption.edu/users/mcclymer/His130/P-H/burden/asia1914.gif
http://websupport1.citytech.cuny.edu/Faculty/pcatapano/lectures_wc2/triangulartrade.jpg
Differences
Long emphasis on
education, highly
educated elite
Highly developed
institutions (commerce,
finance, transport) run by
locals
Common language,
culture, identity
Nearly universal illiteracy
Controlled by immigrant
from colonizing power
Diversity with little
national identity
Differences
Tradition of selfgovernment
Favorable geography
No experience of selfgovernment
Landlocked, isolated
from major markets,
desert, poor agricultural
soil, adverse climate,
endemic disease
https://publications.worldbank.org/subscriptions/WDI/
https://publications.worldbank.org/subscriptions/WDI/
https://publications.worldbank.org/subscriptions/WDI/
https://publications.worldbank.org/subscriptions/WDI/
https://publications.worldbank.org/subscriptions/WDI/
Poverty gap at $1 a day (PPP) (%)
Albania
0.50
Ukraine
0.50
China
2.10
Paraguay
6.50
Armenia
0.50
Uruguay
0.50
Mongolia
2.23
Burkina Faso
7.26
Belarus
0.50
Uzbekistan
0.50
Brazil
2.40
Mauritania
7.56
Chile
0.50
Dominican Rep
0.51
Philippines
2.94
India
7.88
Croatia
0.50
Bulgaria
0.55
Pakistan
3.06
Benin
8.23
Egypt
0.50
Romania
0.55
Colombia
3.07
El Salvador
8.94
Estonia
0.50
Azerbaijan
0.63
Moldova
3.09
Bangladesh
10.30
Hungary
0.50
Turkey
0.65
Senegal
3.62
Mozambique
11.61
Jamaica
0.50
Sri Lanka
0.84
Cameroon
4.09
Mali
12.24
Jordan
0.50
Russian Federation
0.85
Guatemala
4.10
Bolivia
13.55
Kazakhstan
0.50
Costa Rica
0.92
Cote d'Ivoire
4.14
Nicaragua
16.74
Kyrgyz Republic
0.50
Indonesia
0.97
Honduras
4.39
Tanzania
20.71
Latvia
0.50
Mexico
1.29
Malawi
4.71
Rwanda
25.57
Lithuania
0.50
Tajikistan
1.33
Ethiopia
4.80
Haiti
26.59
Macedonia
0.50
Argentina
1.36
Nepal
5.43
Cambodia
27.24
Poland
0.50
Georgia
1.54
Peru
5.46
Madagascar
27.90
Thailand
0.50
South Africa
1.74
Venezuela
5.78
Zambia
34.48
Tunisia
0.50
Panama
1.95
Lao PDR
6.07
Nigeria
34.52
https://publications.worldbank.org/subscriptions/WDI/
Poverty gap at $2 a day (PPP) (%)
Belarus
0.50
Jamaica
3.45
South Africa
12.59
Nepal
26.79
Croatia
0.50
Romania
4.07
Guatemala
12.74
Mauritania
26.80
Hungary
0.50
Turkey
4.09
Tajikistan
13.01
Ethiopia
29.60
Macedonia
0.50
Dominican Rep.
4.20
Peru
14.63
Lao PDR
30.20
Poland
0.50
Kyrgyz Republic
5.13
Venezuela
14.76
Burkina Faso
30.35
Uzbekistan
0.57
Russian Federation
5.54
Moldova
14.93
Benin
31.70
Ukraine
0.94
Mexico
6.23
Paraguay
14.99
Mali
34.21
Uruguay
1.17
Georgia
6.61
Honduras
15.08
Mozambique
34.90
Latvia
1.24
Argentina
6.73
Mongolia
15.08
India
35.02
Tunisia
1.33
Armenia
7.08
Indonesia
16.03
Bangladesh
38.30
Jordan
1.46
Panama
7.18
Philippines
17.07
Nicaragua
41.17
Lithuania
1.61
Thailand
7.60
El Salvador
18.16
Haiti
47.35
Albania
1.83
Colombia
7.70
Cote d'Ivoire
18.40
Tanzania
49.33
Estonia
1.89
Brazil
8.52
Cameroon
19.35
Rwanda
51.55
Chile
1.92
Azerbaijan
9.11
Senegal
20.85
Madagascar
51.75
Kazakhstan
2.57
Egypt, Arab Rep.
11.33
Bolivia
23.24
Cambodia
54.16
Bulgaria
2.83
Sri Lanka
11.92
Malawi
24.29
Zambia
58.74
Costa Rica
3.14
China
12.51
Pakistan
26.09
Nigeria
59.54
Substitutes
There usually are way around, or
substitutes, for any single barrier or
prerequisite.
But the existence of many of these
barriers or the absence of a wide variety of
desirable preconditions make economic
development more difficult.
Doubling time
If a country’s income today is X and it
grows at a rate of r%, it will reach an
income of 2X in t =70/(r*100) years.
Doubling Time
r
Approximate
0.10%
700
1%
70
2%
35
4%
18
9%
8
Doubling time
If a country’s income today is X and it
grows at a rate of r%, it will reach an
income of 2X in t =70/(r*100) years.
2 X  X 1  r 
t
Doubling Time
r
Exact
Approximate
2  1  r 
t

0.10%
693.5
700
1%
69.7
70
log 2   log 1  r 
2%
35.0
35
4%
17.7
18
log 2   t log 1  r 
9%
8.0
8
log 2 
log 1  r 
t
t

Record
Improvement in
– Life expectancy
– Literacy
Changes and challenges
– Information revolution
– Disease
– Environmental degradation
– Demographic transition and aging
Institutions
How does one create the institutions
(governmental, financial, commercial) that
facilitate development?
– Can we create efficient markets or should the
state take over?
– Is a fully developed financial system
indispensable?
– Land reform?
– Legal reform?