Chapter 1 • Greater scope than traditional neoclassical economics

and political economy.

Introducing Economic Development: A Global – Why Study Development Economics? Some Critical
Perspective Questions
– The Important Role of Values in Development
1.1 How the Other Half Live Economics

When one is poor, she has no say in public, she feels

inferior. She has no food, so there is famine in her
house; no clothing, and no progress in her family. Figure 1.1 World Income Distribution
—A poor woman from Uganda

For a poor person everything is terrible—illness,

humiliation, shame. We are cripples; we are afraid of
everything; we depend on everyone. No one needs us.
We are like garbage that everyone wants to get rid of.
—A blind woman from Tiraspol, Moldova

Life in the area is so precarious that the youth and

every able person have to migrate to the towns or join
the army at the war front in order to escape the hazards
of hunger escalating over here.
—Participant in a discussion group in rural Ethiopia

• When food was in abundance, relatives used to share

it. These days of hunger, however not even relatives
would help you by giving you some food. 1.2 Economics and Development Studies
—Young man in Nichimishi, Zambia
• We have to line up for hours before it is our turn to • Economies as Social Systems: The Need to Go Beyond
draw water. Simple Economics
—Mbwadzulu Village (Mangochi), Malawi • Social Systems
• [Poverty is] . . . low salaries and lack of jobs. And it’s – Interdependent relationships between economic
also not having medicine, food, and clothes. and non-economic factors
--Discussion group, Brazil • Success or failure of development policy
• Don’t ask me what poverty is because you have met it – Importance of taking account of institutional and
outside my house. Look at the house and count the structural variables along with more traditional
number of holes. Look at the utensils and economic variables
the clothes I am wearing. Look at everything and write
what you see. What you see is poverty. —Poor man in 1.3 What Do We Mean by Development?
Kenya
• A universal theme reflected in these seven • Traditional Economic Measures
quotes is that poverty is more than lack of income – Gross National Income (GNI)
– it is inherently multidimensional, as is economic – Income per capita
development. – Utility of that income?
• The New Economic View of Development
– Leads to improvement in wellbeing, more broadly
understood
1.2 Economics and Development Studies
– The Nature of Development Economics • Amartya Sen’s “Capability” Approach
●​ Functionings as an achievement
 ●​ Capabilities as freedoms enjoyed in terms of – To make the biggest impact on development,
functionings societies must empower and invest in women
●​ Development and happiness • The Three Objectives of Development
●​ Well being in terms of being well and having – Increase availability of life-sustaining goods
freedoms of choice – Raise levels of living
●​ “Beings and Doings”: – Expand range of economic and social choices

Some Key “Capabilities” 1.4 The Millennium Development Goals

• Some Important “Beings” and “Doings” in Capability • Millennium Development goals (MDGs)
to Function: – Eight goals adopted by the United Nations in
– Being able to live long 2000
– Being well-nourished • Eradicate extreme poverty and hunger
– Being healthy • Achieve universal primary education
– Being literate • Promote gender equality and empower
– Being well-clothed women
– Being mobile • Reduce child mortality
– Being able to take part in the life of the community • Improve maternal health
– Being happy – as a state of being - may be valued as a • Combat HIV/AIDS, malaria, and other diseases
functioning • Ensure environmental sustainability
• Develop a global partnership for development
1.3 What Do We Mean by Development? (cont’d)

• Three Core Values of Development Table 1.1 Millennium Development Goals and
– Sustenance: The Ability to Meet Basic Targets for
Needs
– Self-Esteem: To Be a Person
– Freedom from Servitude: To Be Able to
Choose

Figure 1.2 Income and Happiness: Comparing

Countries

Table 1.1 Millennium Development Goals and

Targets for 2015 (cont’d)

1.5 Conclusions

1.3 What Do We Mean by Development? (cont’d)

• The importance of Development Economics
• Inclusion of non-economic variables in
• The Central Role of Women
designing development strategies
• Achieving the Millennium Development ●​ More developed countries(MDCs)
Goals Nations with high income, advanced
• “…One future-or none at all” infrastructure, and industrialization.
●​ Globalization
Concepts for Review The interconnectedness of economies
through trade, investment, and information
●​ Absolute Poverty exchange.
The condition where individuals lack basic ●​ Gross domestic product
necessities such as food, water, and shelter. The total value of goods and services
●​ Gross national income(GNI) produced within a country’s borders.
The total income earned by a country's ●​ Political economy
residents and businesses, including foreign The analysis of how political structures and
investments. policies influence economic outcomes.
●​ Attitudes ●​ Self-esteem
Societal beliefs and behaviors influencing A measure of personal value, linked to
economic progress and decision-making. motivation and productivity in economic
●​ Capabilities settings.
A person’s ability to achieve goals based on ●​ Social system
resources and opportunities available. The organized patterns of relationships
●​ Income per capita influencing economic behavior and
The average income earned per person in a development.
country, used to measure economic ●​ Subsistence economy
performance. An economy where individuals produce only
●​ Developing countries what is needed for basic survival.
Nations with lower industrialization, income ●​ Sustenance
levels, and living standards. Basic resources (food, shelter, etc.) necessary
●​ Institutions for survival and economic participation.
Structures (e.g., legal, financial, social ●​ Traditional economics
systems) guiding economic activities and Economic practices rooted in customs,
development. culture, and traditional methods.
●​ Development ●​ Values
Improvement in living standards and Principles and norms guiding economic
economic conditions over time. choices and societal progress.
●​ Less developed countries(LDCs)
Nations with extreme poverty, weak
infrastructure, and slow industrialization.
●​ Development economics
The study of economic growth and policies to
improve welfare in developing regions.
●​ Freedom
The ability of individuals and communities to
make choices that impact their economic and
social well-being.
●​ Millennium Development Goals (MDGs)
UN targets aimed at reducing poverty and
promoting development globally by 2015.
●​ Functionings
The actual achievements or states of being a
person has (e.g., good health, education).