Development Theories and Strategies

Unit 1: Introduction

Endalew Addis, PhD

March 2019
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 Outline
1. Conceptions of Development
2. Poverty Growth and Development
3. Core Values and Objectives of Development
4. Indicators of Development and Underdevelopment
1.1 Development as Economic Growth

1.2 Development as Structural Transformation

1.3 Human Needs Centered Development

5. Challenges of Development

6. Dynamics of Development
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 1. Conceptions of Development
 There were two condition for the emergence of the
idea/concept/notion of development
 decolonization and political independence after the Second World War, and
 the emergence of bipolar cold war world order (system) of the United States
and Soviet Union.

 The very origin of the idea of the Third World was originally
related to this global, political and ideological division

 To this end, people throughout the world live in very different

circumstances

 Thus, development means different things for different people

 As a result there is no a universally accepted or applicable

definition of development
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 1. Cont…
It is simply a contested/controversial concept because of various
issues/questions raised by different scholars such as:
 Is development primarily an economic concept or should social, political
and cultural aspects be considered as having equal importance?

 Is development a long term process or simply a short term phenomena?

 Is development a micro/small scale or macro scale phenomena?

 However, different scholars provide a working definition as

follows:
 Development is the process of improving the quality of all human
lives
 Three equally important aspects of development are :
 raising people’s living levels- their incomes and consumption levels
 creating conditions conducive to the growth of people’s self-esteem and
 increasing people’s freedom by enlarging the range of their choice varieties of
consumer goods and services
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 1. Cont…
 On the other hand, underdevelopment is an economic situation in
which there are persistent low levels of living in conjunction with:
 absolute poverty
 low income per capita
 low rates of economic growth
 low consumption levels
 poor health services
 high death and birth rates
 dependence on foreign economies
 limited freedom to choose among activities that satisfy human wants

 Thus, to appreciate the above questions/issues, development and

underdevelopment should be conceptualized in different contexts
and their indicators must be critically examined for these contexts.
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 2. Poverty, Growth and Development
 Poverty

 Absolute poverty is a situation of being unable to meet the

minimum levels of income, food, clothing, healthcare, shelter, and
other essentials.

 Relative poverty, on the other hand, refers to a state of human

suffering which results from the inability of a person or group of
persons to meet the needs that other people in society have come to
take for granted. This is primarily a problem of inequality in
society which intensifies as the income gap between the 'haves' and
'have-nots' increases.

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 2. Cont…
 Growth
 The terms ‘growth’ and ‘development’ are usually used to mean the same thing.
 A growth of the per capita income is supposed to contribute to a general rise in
the standard of living of the people in general.
 But growth and development need not be the same.
 For instance, Kuwait’s per capita real income may be the highest in the world
and yet the standard of living of an ‘average’ Kuwaiti may not be the same as
that of an ‘average’ American.
 In other words, per capita real income figures are derived by dividing the total
real national income by the total population to obtain an average figure and these
averages could be misleading.
 Thus, the distribution of income must be taken into account before something
can be said about the general level of development.
 A country’s gross domestic product (GDP) may grow at a very fast rate and yet
only a small proportion of its population could be the beneficiaries of such
growth, while the masses of its population may not experience any improvement
in their standard of living.
 There may be growth but no development.

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 2. Cont…
 Development
 It is the process of improving the quality of all human lives
and capabilities by raising people’s levels of living, self-
esteem, and freedom.
 Economic development: a sustainable increase in living
standards that implies increased per capita income, better
education and health as well as environmental protection.

 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’.
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2. Cont…

 Social development: a process which results in the

transformation of social structures in a manner which improves
the capacity of the society to fulfill its aspirations.

 Political Development: the process of adjusting a political

system, at any historical stage of the overall development, to the
functions required by this system as they arise from the
economic, cultural, social.

 Sustainable development: development that meets the needs of

the present without compromising the ability of future
generations to meet their own needs.

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3. Core Values and objectives of Development
 Core Values of Development
 It is possible, then to define or broadly conceptualize what we
mean when we talk about development as the sustained
elevation of an entire society and social system toward a
“better” or “more humane” life?

 What constitutes the good life is a question as old as

philosophy, one that must be periodically reevaluated and
answered afresh in the changing environment of world society.

 The appropriate answer for developing nations today is not

necessary the same as it would have been in previous decades.

 But at least three basic components or core values serve as a

conceptual basis and practical guideline for understanding the
inner meaning of development.
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3.Cont...
 These core values represent common goals sought by all individuals
and societies.

 They relate to fundamental human needs that find their expression in

almost all societies and cultures at all times. These are:

 Sustenance: The Ability to Meet Basic Needs. All people have certain
basic needs without which life would be impossible.

 Self-Esteem: To Be a Person. This refers to a sense of worth and self

respect, of not being used as a tool by others for their own ends.

 Freedom from Servitude: To Be Able to Choose. Freedom here to be

understood in the sense of emancipation from alienating material
conditions of all life and from social servitude to nature, ignorance,
other people, misery, institutions, and dogmatic belief, especially that
poverty is predestination.

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 3.Cont...
Objectives of Development
 We may conclude that development is both a physical reality and a state of mind
in which society has, through some combination of social, economic, and
institutional processes, secured the means for obtaining a better life.

 Whatever the specific components of this better life, development in all societies
must have at least the following three objectives.

 To increase the availability 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 human values, all of
which will serve not only to enhance material well-being but also to generate
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.
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 4. Indicators of Development
4.1 Development as Economic Growth
 In the past there were different views attached to the meaning of
development
 Traditional view (development is an increase in GNI from 5% to 7%, and
 New economic view of development (development is the reduction or elimination
of poverty, inequality and unemployment)

 Dudley Seers posed the basic questions about the meaning of

development:
 What has been happening to poverty?
 What has been happening to unemployment?
 What has been happening to inequality?

 If all three of these have declined, then beyond doubt this has been a
period of development for the country concerned.

If one or two of these central problems have been growing worse,
especially if all three have, it would be strange to call the result
development even if per capita income doubled.
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 4.1 Cont…
 As it was pointed out by the World Bank, the challenge of
development… is to improve the quality of life
 Especially in the world’s poor countries, a better quality of life generally
calls for higher incomes – but it involves much more

 It encompasses as ends in themselves like

 better education,

 higher standards of health and nutrition,

 less poverty,

 a cleaner environment,

 more equality of opportunity,

 greater individual freedom, and

 a richer cultural life

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 4.1 Cont…
 Hence development can be defined as a multi-dimensional process
that involves major changes in
 social structure,

 popular attitude, and

 national institutions as well as the acceleration of economic growth with

reduction of
 poverty,

 unemployment and

 inequality

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4.1 Cont…
 The most common way of defining developing world is by per
capita income.
 Low-income countries (LICs) with per capita GNI of $975 or less;
 Example: many sub-Saharan countries such as Ethiopia, Kenya, Burundi,
Sudan, etc

 Lower middle income countries (LMCs) with per capita GNI between
$976 and $3, 855;
 example: China, Indonesia, Taiwan, Thailand, South Africa etc

 Upper middle income countries (UMCs) with income between $3, 856 to
$11, 906;
 Example: Malaysia, Croatia, Poland, Saudi Arabia, Seychelles, Gabon,
Botswana etc and,

 High income OECD countries with income of $11, 907 or more in 2008.
 Example: Australia, Belgium, Canada, USA, Japan, France, Germany,
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Korea republic, UK, Netherlands etc 16
 4.1 Cont…
Limitations of Economic Growth and GNP measures as
Indicators of Development
1. GNP measures omits and/or excludes certain activities of economic value

 GNP measures are aggregate figures based on important values of goods and
services, which are exchanged through the market or generally flow through the
formed channel.

 Hence, it tends to exclude or simply fail to take in to account some important

activities because these activities are hidden, informal and difficult to measure or
simply they do not enter to the market exchange system. These are:

 Domestic labor /work

 Subsistence production

 Informal sector activities

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 4.1 Cont…
2. Economic Growth and GNP measures do not show the distribution of
income and wealth
 As quantitative measures of aggregate and average production and income,
GNP measures tell us little or nothing about the distribution of income and
wealth resources among the population in a given country.

 Detail studies of the distribution of income and assets have revealed that
disparities/inequalities among groups, regions, rural-urban sectors and others
is common in developing countries but varies from country to country.

 Here the most important point is that the process of economic growth does
not necessarily mean fair distribution of income and wealth.

 However, the contrary trends tend to be true meaning in most developing

countries, economic growth has tended to be followed/accompanied by over
widening gap in the distribution of income and wealth.

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 4.1 Cont…
3. Economic Growth and GNP measures do not indicate the level of
poverty and human wellbeing
 This is simply to say that GNP measures as such do not tell us about the level of
poverty and wellbeing in different countries; within and between countries.
 This was revealed when GNP measures and GNP per capita were compared with
Human Development Index (HDI).
 During this comparison there might be two situations that are inconsistent and
consistent patterns of development.
 In the inconsistent patterns the two development indicators do not go together.
 For example there are countries such as Cuba and Sire Lanka where their per
capita income was low; they have higher level of wellbeing in terms of HDI.
 On the other hand there are countries such as Brazil, Mexico and oil producing
countries including Saudi Arabia and UAE they have high per capita income but
low scores of HDI.

 In the consistent pattern the two development indicators go together.

 For example there are countries both with low per capita income and HDI such as
Chad and Bangladesh; and high per capita income and HDI like Sweden and USA.
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 4.1 Cont…
 UNDP has developed four alternative indexes to compare the level of development and
the progress of a country –
 Human Development Index (HDI),
 Human Poverty Index (HPI),
 Gender –related Development Index (GDI), and
 Gender Empowerment Measure (GEM).

 These indices give alternative measure of economic well-being of nations that do not
necessarily accord with the usual measure i.e. the level of per capita income (PCI).

 UNDP defined Human Development (HD) as a process of enlarging people’s choices.

Human Development Index (HDI)

 HDI measures the average achievements in a country in three basic dimensions:
 A long and healthy life as measured by life expectancy at birth
 Knowledge as measured by the adult literacy (with two-thirds weight) and the
combined primary, secondary and tertiary GER (with one-third weight), and
 A decent standard of living as measured by GDP per capita in purchasing power
parity (PPP) terms in US dollars.
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 4.1 Cont…
4. Economic Growth and GNP measures do not consider environmental
and social costs
 Modern economic growth is expressed in terms of large scale industrialization
and agricultural modernization which are largely dependent upon extraction
and utilization of massive amount of the resources from the environment.
 Moreover agricultural modernization involves industrial agriculture which is
based on the application of huge quantities of chemical base inputs such as
chemical fertilizers, insecticides and huge energies.
 This involves environmental costs in the form of resource depletion,
environmental degradation, pollution, health hazards and numerous social
costs such as urbanization related problems such as crime.
 The environment and social costs are not included in so called national
accounts and GNP figures as costs to the society and the future generation.
 GNP measures include usually conventional direct costs such as costs of
machinery and material inputs but not include the social and environmental
costs because traditionally there is no price attached to the environmental and
social costs.

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 4.2 Development as Structural Transformation
 Structural transformation is a holistic and multidimensional
process.

 This is viewed as the development involving not only economic

growth but also long term social, cultural, political and economic
transformations.

 Structural transformation goes beyond the issue of poverty,

inequality, etc.

 The issue of development as structural transformation is not

directly concerned with small scale issues, day-to-day activities
and life conditions of individuals, and groups at the micro level.
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 4.2 Cont…
 Structural transformation approach assumes that in the initial stage
of economic growth and structural transformation,

 increased inequality and poverty can be part and parcel of the growth and
transformation processes

 Problems of poverty and inequality are viewed as transitional

problems to be solved though trickledown effect

 which assumes that the fruits of economic growth and structural

transformation will eventually filter down to the lower segments of the
society and gradually tackle the problems of poverty and inequality.

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 4.3 Human Needs Centered Development
 The economic growth and structural transformation approach
dominated the fields of development studies upon the 1970s.

 These view of development assumed that the transfer of capital and

technology from the developed to the developing countries, foreign
aid and international free trade would bring about development in
the third world.

 It was also assumed that poverty, inequality, and issues of

democratic political participation would be achieved
/solved/tackled through economic growth and structural
transformation process itself.

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 4.3 Cont...
 However, by the 1970s things were not working/moving as
smoothly as it was expected,

 for example, in spite of substantial economic growth in many

developing countries in the 1960s and 1970s the fruits of
economic growth was not trickling down,

 on the contrary, it was trickling up and trickling out to foreign

countries that is in many cases economic growth was followed
by the massive kind of inequality between the haves and the
have not and increasing poverty in the society.

 In addition instead of the expected process of participation in

democratic and stable political systems, conflict military and
authoritarian, for instance, one party rule become the order of the
day throughout many Third World countries.
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 4.3 Cont...
 These conditions led to the emergence of other perspectives which are the
critiques of economic growth and structural transformation approaches to
development.
 The new approach focused precisely on those issues which were ignored by
the previous approaches such as the issues of the effects of economic growth
and structural transformation approaches on the life of people.
 Human Needs Centered Development is a term of development in which the
level of satisfaction of various dimensions of human needs is considered to
have improved overtime including
 low levels of material poverty,
 low levels of unemployment,
 relative equality of opportunity,
 democratization of political life,
 true national independence,
 good literacy and educational levels,
 relatively equal status and participation for women, and
 sustainable ability to meet future needs.
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5. Challenges of Development
 Poverty
 Population growth
 The HIV/AIDS pandemic
 Natural disasters and climate change
 The international economic system
 Poor governance
 The dominance of agriculture and petty services
 Low level of capital accumulation
 Export dominated by primary commodities
 The curse of natural resources

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6. Dynamics of Development
 Integrated nature of development
 Development is a function of continuous, dynamic, multidimensional,
and highly integrated progress in all aspects of human living

 Therefore, a single sector/actor can not bring overall

development and achieve improvements in all aspects of human
live

 And so, one-dimensional development efforts can not enable a

nation to alleviate poverty

 Collaboration and integration among different actors of

development and effective coordination of different
development programs and projects is imperative to address the
dynamics of poverty and development
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 6. Cont…
 Rural –Urban dynamics
 Strengthening linkages between urban centers and rural areas is
necessary to ensure that the two remain mutually reinforcing

 Rural-urban dynamics can help to ensure that investments in

services, facilities, infrastructure and productive activities are
located strategically in towns to serve a wide area

 Yet many policies particularly in developing countries have

ignored rural-urban dynamisms and continue to focus exclusively
on rural (rural bias) or urban areas (urban bias) and fail to
address the connections between the two

 An exclusive focus on rural areas would result in an under-

investment in urban areas and vice versa
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 Thank You for Your Attention!

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