Module 11-13b What is Human Development?

At the end of this module, you are expected to:

1. Learn and understand the history of human development
2. Know the roles of trade, industrialization, global governance, aid and
philanthropy in human development
3. Learn what are the global flatteners and unflatteners

History

Improving people’s well-being and enlarging their freedoms and opportunities is the process of
Human Development. It is about having true freedom to choose and decide on who we want to
be, what to do and how to live our lives.
The concept of Human Development was developed by Dr. Mahbub ul Haq, a Pakistani
Economist during the 1970s at the World Bank. He posited that the true purpose of
development is to improve people’s lives. He believed that the measure of GDP or Gross
Domestic Product failed to measure true human progress or well-being. He worked with Nobel
Laureate Amartya Sen and other great economists, and in 1990 he published the first Human
Development Report, commissioned by the United Nations Development Programme.
Central to human development is the Capability Approach where the concept of capabilities are
the equipment one has to strive for and pursue to have a life of value. Capabilities are the things
that people can do and what they can become, these are what they value to a fulfilling life.
Virtually everyone values good health, access to knowledge, and a decent standard of living.
Other capabilities are being able to participate in decision making that affects people’s lives, a
certain control in one’s living environment, freedom from violence, to be respected, and ti have
time to relax and have fun. Societal conditions and institutions aside from our own doing either
expands or constrains our capabilities.

Certain aspects of the Capability Approach may be linked to Aristotle and Adam Smith but more
recently it is Martha Nussbaum and Amartya Sen who are credited for its development and
proliferation. At the core of this approach is that “ well-being should be defined by people’s real
and actual opportunities to undertake the pursuits that they desire (often referred to as
‘capabilities to function’) – and through these freedoms, be whom they would like to be.”

In contrast with other theories of well-being that focus on subjective measures or material
things and means such as income, the capability approach prioritizes the actual opportunity of
the ability of “beings and doings”.

A new approach in the advance of human wellbeing was introduced in the first Human
Development Report of Dr. Mahbub ul Haq. He stated that “The basic objective of development
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 is to create an enabling environment for people to enjoy long, healthy and creative lives.” It also
defined human development as “a process of enlarging people’s choices”, “and strengthen
human capabilities” that enables people to lead fuller, healthier, and longer lives. The approach
focused on people, their opportunities, and their choices. It is in this same report that Dr. Mahbub
ul Haq presented the concept of the Human Development Index. It was developed as an
alternative to money metrics like the GDP. It has since then become one of the most widely used
metrics that measures well-being around the world than just indices confined to income. And in
some countries the Human Development Index is being used as an official government statistic.

True Development is people-centered unlike traditional development economics where

development is growth of per capita real income. Human Development encompasses all aspects
of development, it is holistic in its approach. In it, economic growth only becomes a subset of the
whole human development paradigm.

Trade and Industrialization

Foreign trade actually came ahead industrialization by thousands of years. Nations or people from
communities or islands travelled far and wide just to trade as evidenced by the travels of the early
explorers.

Industrialization began around the middle of the eighteenth century in Great Britain. It involved
innovations in iron smelting, the invention of the steam engine, production of steel and railways,
steamships, and other transport among others. Industrialization boosted trade and the trade
spread the industrialization to other nations. From the start, industrialization has involved the
interaction of three things technology, specialization, and trade. This interaction is the catalyst of
structural change within economies.

Trade and Industrialization are integral to human development even if it is mainly related to
economic growth, the ensuing opportunities coming from them enlarge people’s opportunities and
choices for a better well-being. Economists and policymakers agree that governments in
developing countries need to provide the infrastructure, promote market efficiency, and foster a
stable macroeconomic environment to ensure that trade and industrialization happens in and
outside their country.

Global Governance
The UN Millennium Summit held last September of the year 2000 adopted 8 Millennium
Development Goals or MDGs. It is a set of time-bound and measurable goals. It did not list
economic growth, which means that it is only a means to achieve targets of development and not
an end in itself.
 World leaders adopted the Millennium Declaration and agreed on a set of ambitious development
goals and targets to be achieved by 2015. The Millennium Development Goals (MDGs), involve 8
goals and represent a holistic approach to development with targets in the areas of economic,
social, health, education, gender and the environment.

These are:

1 Eradicate extreme poverty and hunger

2 Achieve universal primary education
3 Promote gender equality and empowering women
4 Reduce child mortality
5 Improve maternal health
6 Combat HIV/AIDS, malaria and other diseases
7 Ensure environmental sustainability
8 Develop a global partnership for development

Aid and Philantrophy

Love of humanity is the broad definition of Philanthropy. It is where private resources are
voluntarily mobilized to meet human needs, alleviate suffering and take on the systemic
challenges that hinder human development. Through the institutions of civil society, philanthropy
becomes a contributor to social change and advancement. These institutions range from small
community foundations to large private and professional grant-makers. These grant-makers and
social investors respond in a relatively quick manner and provide a source of funds for new ideas.
An appropriate scale of support to community development can be realized.

In order for aid and philanthropy to succeed it needs an infrastructure or an environment that
possess 5 main features:

1) a legal framework that empowers

2) a tax structure that provides incentives
3) an accountability system that builds confidence in philanthropy and civil society
4) sufficient institutional capacity to implement effective activities
5) enough resources to undertake activities

Previously seen as a marginal player in international cooperation discourse, philanthropy now

plays a growing role. Philanthropy flows or aid is ever increasing as a proportion of overall
financial flows. Grant-making combined with new forms of social investing attracts the interest
of development agents. Philanthropy has much to contribute to development.

As an expression of human generosity, the culture of giving is present in every culture, and is
reflective of the world’s cultures and religions. Global philanthropy is central to the
sustainability of global civil society.

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Global Flatteners and Unflatteners

‘The World is Flat: A Brief History of the Twenty-First Century’, a book by Thomas Friedman
(2007) where he proposes and emphasizes that due to certain events and developments the
world is becoming flat. This is metaphorical in nature where he meant that the world is
becoming more of a level playing field when it comes to business for every country or company.
Equal opportunities to compete are given to each. Flatteners is what Friedman calls these
events and developments. For Friedman, ten flatteners made the business field into the way it is
today wherein geography and history are marred.

The coming down of the Berlin Wall on 11th September 1989 (Beck, 2000) is the first flattener
is. The Cold War has ended and countries, companies and individuals are able to join the
economic mainstream - capitalism. Countries that allows connections and trades to prosper
showed an increase in interdependence. Friedman called the period of the 90s ‘The New Age of
Creativity’ because of the opportunity of each individual to access and share information
through computers.

The second flattener is Netscape going public (Beck, 2000) and introducing new tools such as
web browsers and the Internet. The world became smaller because physical barriers are
eliminated by the Internet. Communication and transfer information through long distances is
made faster and easier.

The third flattener is “the existence of a wide range of software standards that allows every
individual to do more using their computers (Boudreaux, 2008)”. This work flow software of
codes is the language of computers that makes it possible for the said computers to send,
receive, and read data anywhere in the world.

The ability to upload information and content from the computer onto a network is the fourth
force is (Boudreaux, 2008). Through open source software like Wikipedia and YouTube every
individual can be an actual contributor or creator of new information. However according to
Friedman (2007) the ability to create and upload information can be very disruptive. Nobody
really knows if the information is true or false. It may also lead to the of downfall of many
companies.

Outsourcing (Eriksen, 2007) is the fifth flattener. Third party sub-contracting to cut costs and
increase efficiency have been the trend for more and more companies. Whether it be
distribution of services or manufacturing products outsourcing is chosen to be the way to go for
companies to perform better and save money. This endeavor is made easier through the
installation of fiber optics cable worldwide which makes information and data transfer faster.
 The sixth flattener is offshoring (Eriksen, 2007). When the production plant of a company is
moved from one country to another it is called offshoring. This happens because of several
reasons like lower taxes or cheaper labor.

Supply chaining is the 7th flattener (Holmes, 2008). Supply chaining is increasing the connection
between suppliers to retailers to consumers. Coupled with the use of advanced technology,
supply chaining is found to be one of the best methods to promote efficiency. Boundaries
between consumers and manufacturers are virtually eliminated or minimized.

The 8th flattener is insourcing (Holmes, 2008). This happen when one company hires another
company to handle their supply chain.

The 9th flattener is informing (Scholte, 2005). It deals with the easy access of obtaining
information specifically provided by the World Wide Web through its various search engines. A
lot of power is placed into the people’s hands all with just a click of the mouse.

The 10th and final flattener is called the steroids (Waters, 2001). According to Friedman there
are three types of steroids. The ever-changing trends in computer technology are digital
steroids, mobile steroids allow users to work from anywhere such as wireless internet, and
personal steroids is when inventions are cheap and small enough to be utilized by individuals.

But many experts believe that Friedman’s ten flatteners are somewhat lopsided because he has
only concentrated on the effects of globalization in the economic field. In order to provide a
thorough conclusion on the ways globalization affect a country political and social sectors
should also be taken into account.

According to experts, there are also 7 unflatteners which does not make the word flat or that
which creates an imbalance. These are:

Poverty – main cause of global inequality, as long as it exists there will be no flat world

USA vs. World Economy – the world is generally dependent on the US Dollar creating an
imbalance in world economy

Half flat world – this is when local governments fail which could be due to corrupt officials or
mismanaged governments

Middle East – the never-ending wars in the Middle East and the threat of terrorism worldwide
could set-up walls in different countries

Digital Divide – people are either connected to the internet or not, and this creates the division
and imbalance

Suppression – suppression from within the family, culture, or governments

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 Tribalization – a strong cultural and personal identity could lead to misunderstanding and when
taken to the extreme could lead to wars. An example could be the ongoing tensions in the South
China Sea, territorial disputes of countries could trigger wars and there is a definite imbalance as
to who is more technologically advance in weaponry

References and Supplementary Materials

Online Supplementary Reading Materials

About Human Development;

 http://www.measureofamerica.org/human-development/
About Human Development;
http://hdr.undp.org/en/humandev
Human Development: Meaning and Objectives
http://www.economicsdiscussion.net/human-development/human-development-
meaning-objectives-and-components/11754

https://openknowledge.worldbank.org/bitstream/handle/10986/5970/9780195205633_c
h01.pdf

https://www.wto.org/english/res_e/booksp_e/anrep_e/wtr03_chap2a_e.pdf

http://civicus.org/images/SOCS2015_ESSAY19_PhilanthropyInfrastructure.pdf

Friedman’s Ten Flatteners and their influence on Asian Countries;

https://ncys82.wordpress.com/2013/03/15/friedmans-ten-flatteners-and-their-influence-
on-asian-countries/; March 15, 2013

How Flat is Flat?;

http://slideplayer.com/slide/10749553/

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