Population, Environment and

Development
GaDS 516
 Course Content
1. Theories in population and environment and
development;
2. Debates: Population, environment and development;
3. Global trends in population and development,
Environmental movements, gender and environment,
development and displacement (policy and practical
dimensions);
4. Poverty, migration, environment, and development
5. Environmental degradation, environmental protection
and resource management,
6. Indigenous knowledge on environmental conservation,
7. Environmental Impact Assessment
 Modes of Evaluation
• Article/Book review and presentation…20%
• Term paper and presentation…………..20%
• Policy review/ field work/ group work…20%
• Final Examination ……………………...40%
• Total…………………………………..100%
 CHAPTER ONE

POPULATION
 Basic Issues of population Study
• Distribution-space/time • Every of the issue has
• Fertility implications on economic
• Mortality development and
environment
• Migration
• Growth
• Life expectancy
• Population composition
• Population theories and
policy
• Demographic transition
• Others
 Current Population Trends and Distribution
• Population is rarely distributed evenly in any
region or state –Why?
• Population distribution reflects resource base,
soil fertility and the urban pattern
• Mountainous terrain or severe slope repels
population
• River valleys often draw high density of
population as result of alluvial deposits and
accessibility
• Historical factors also explain the unevenness
of population distributions
• Until the Middle Ages, human populations
were held in check by diseases, famines and
wars, and thus grew very slowly.
– It took all of human history to reach 1 billion, 1827
– 150 years to reach 3 billion
– 12 years to go from 5 to 6 billion (1999)
– What can we generalize from this change in
population number?
 nnn

Rate = 80 new
people/year
+ NeRate = 80 million new
people/year
+ New York City every
month
+ Germany every year
+ United States every 3.7
years
w York City every month
+ Germany every year
History
Estimated Growth: compare regional
differences
1B 1804
2B 1927 123 years later
3B 1960 33 years later
4B 1974 14 years later
5B 1987 13
6B 1999 12
7B 2012 13
8B 2026 14
9B 2043 17
Growth in the World’s
Population
Population over time
• The annual increment to world population
during 2000-2005 has been estimated at 76
million persons.
• Six countries account for nearly half of that
amount: India (22 per cent); China (11 per
cent); and Pakistan, Nigeria, the United States
of America and Bangladesh (about 4 per cent
each).
• As a result of India’s relatively rapid growth, it
is expected to overtake China as the most
populous country in the world by 2030.
• An additional 16 countries account for a quarter
of the annual growth of the world’s population
• Among the 22 countries that together account
for 75 per cent of the current world population
growth, there is only one developed country,
namely, the United States.
• USA, 4 million each year, 40% as a result of
international migration(1.6 million)
• No country shows this much
increment/percentage due to international
migration
• Ethiopia’s population increases 1.8 million (9 th )
every year.
Ranks of population size-2004/2025
• In 2025-India, china,
USA, Indonesia,
• Pakistan, Brazil, Nigeria,
Bangladesh, Russia,
Japan
• Nigeria in 2025
becomes the 7th
populous country next
to Brazil
 Population Trend Comparisons
Developed Countries Developing Countries
– Low infant mortality rate – High infant mortality rate
– Life expectancy 77 years – Life expectancy 52 years
– Total fertility rate = 2.0 – Total fertility rate = 5.7
– 21% population <15 – 44% population <15
– 12% population >65 – 3% population >65
– Per capita GDP = $36,110 – Per capita GDP = $800
The fertility rates
have significantly
fallen since 1950.
 Factors Affecting Birth Rates and Total Fertility
Rates
• Children in Labor Force: needed to work in the
field
• Cost of raising and educating children
• Availability of pension systems
• Urbanization
• Education and employment for women
• Infant mortality rate
• Average marrying age
• Abortion: such laws reduce TF/GR
• Availability of birth control
Major social factor determining family size is the
role of women in society.
• Early marriages foster high fertility rates.
• Lack of education opportunities for women
reduces their options.
• When level of education increases, fertility
rates fall.
• The most important factor is the ability of
women to control the size of their family.
• Access to birth control is key.
 Cutting Global Population Growth

• Family planning
• Improve health care
• Raise the status of women
• Increase education
• Involve men in parenting
• Reduce poverty
• Sustainability
 Optimum, Under and Over population
Optimum population
•By optimum population is meant the ideal number of
the population that a country should have,
considering its resources.
•It is the best and the most desirable size of a
country’s population consistent with its resources. It
is the right number.
•When a country’s population is neither too big nor
too small, but just that much which the country ought
to have, it is called the optimum population.
• Given a certain amount of resources, state
of technical knowledge and a certain stock
of capital, there will be a definite size of the
population at which real income of goods
and services per capita will be the highest.
• This is the optimum size. The optimum
number can, therefore, be defined as the
one at which per capita income is the
highest.
• Over-population- where people are so large
above the available resources.
• Under-population- where people are so few
that they cannot develop their resources
effectively to better their conditions of life
• Carrying capacity- population that can be
supported by available natural resources.
• This is the ability an environment with
marginal problems not the optimum number.
• For example, Carrying capacity of farmland
• Thus, low standard of living, unemployment,
and food problem are all signs of over-
population.
• It is clear that both under-population and over-
population-have disadvantages. In both cases,
the per capita income is lower than it would be
in the case of optimum population.
• It is the optimum population with the highest per
capita output which is the best for a country to
aim at.
Does it remain equal over
time/technology/regions/
resources?
 Demographic transition
• The demographic transition: the change of a
population from high birth and high death
rates to low birth and low death rates. 
• It shows clearly a major transformation of
human reproduction. The demographic
transition generally occurs in four stages.
• The "Demographic Transition" is a model that describes
population change over time. It  is based on an
interpretation begun in 1929 by the American
demographer Warren Thompson, of the observed changes,
or transitions, in birth and death rates in industrialized
societies over the past two hundred years or so.
• By "model" we mean that it is an idealized, composite
picture of population change in these countries. The model
is a generalization that applies to these countries as a
group and may not accurately describe all individual cases.
Whether or not it applies to less developed societies today
remains to be seen.
Demographic transition
 Demographic transition with
development
• Stage 1( pre-industrial cultures) that have both high
birth (above 35 per 1000) and death rates (above 22
per 1000). During this phase the population size
doesn't increase very fast at all.
High stationary Stage: with high fertility (births) and
high mortality (deaths) and variable population, but
little long term growth.
• Stage 2 (Transitional) is the also called the "mortality
transition". Death rates drop due to improved health
the population, including infants.
• Early expanding stage: with high fertility and declining
mortality.
• Stage 3 is also called either the "industrial" stage or the
"fertility transition". This phase represents the decrease in
births that can be correlated to many factors.
• Late expanding stage: with declining fertility but, as a result
of already -low mortality, continuing significant growth.
• Stage 4 represents post-industrial stage. Populations in this
phase have low net growth rates again, leading to net zero
population growth, and in some cases negative net growth
rate.
• Low stationary Stage: with low fertility and low mortality, &
a very low growth rate.
• Developed countries
– Took 250 years for most developed economies to go through their
own demographic transition (from 1750 to 2000).
– Population growth never surpassed the capacity of these economies
to accommodate it.
• Developing countries
– Demographic transition started in the 20th century:--High death to low
– Very few have went trough stage 3
– Most of them have a type II demographic transition.
– By the time they reach type IV, a huge amount a population will be
added to their populations. Big in popu size
 Demographic Transition Model

Points for discussion

• Can a country skip stages?

• Can a country move backwards?

• Have all countries gone through this process?

• Can all countries go though this process?
Population Composition/structure
• Population composition- the composition of
population, or the population structure, refers
to those aspects of population which may be
measured: age sex, marital status, size and
composition of families and households,
economic activities, nationality, language and
religion.
 Structure
Three generalized profiles are often cited at the level of national
population studies. These are:
1. Expansive type with large numbers of people in the younger
ages. Today this is representative of many of the high-birth
rate countries of the developing world. In this case, each
succeeding cohort is larger than the one before it.
2. Constrictive type with a smaller number of people in the
younger- age cohorts than the older-age cohorts. This situation
usually results from a recent drop in prevailing birth rates.
3. Stationary type with age cohort sizes that are nearly equal until
the old age die-off takes its toll (duty/charge).
• Sweden is the typical example of this case.
• The proportion of people found in various age
groups determines much of a population’s
economic and social behavior.
• Many factors determine the age structure of a
population of a national population, but the
primary variable is the birth rate.
 Population theory
• These are theories to explain the patterns of population
growth in different countries of the world. Are divided
into three:
1. Biological theories : this theory states that man is like any other
living thing. He is incapable of controlling his growth in number
2. Cultural theories: this theory states that man is rational and
uses his intellect to control his growth in numbers.
For example the one child policy in China.
• 3. Economic theory: based on Marxist theories it
supposes that growth in population is as a result
of demand for labour.
 Population policy
definitions
• Population Policy is an official government
document guide specifically designed to affect
the size, distribution, growth and composition
of a population.
• Measures initiated by governments to
influence in a targeted direction, the size, rate
of growth, etc
• Every deliberate state actions to change size,
growth, distribution, migration,
• An intentional undertakings by a national or
local govt. to influence the components of
population change-fertility, mortality and
migration.
• Are guidelines which targeting to balance the
relationship b/n pop. With envt., economic
growth, politics/security
What type of policy?
 Types of population policy
• Pronatalist policies: are pop. Policies designed to encourage
population growth
• Military strength
• National pride
• Lack of working force
Example: Kuwait, Israel, Palestine, Jordan, Netherlands
• Anti natalist: policy that discourage growth/birth
– To balance resource with popn number
– To harmonize human relationship
– Supply basic social services
Example : many 3rd World countries—India, China, Ethiopia, RSA
 2009

• 36 countries have pro-natalist policies

• 67 countries have anti-natalist policies

• 33 countries have maintenance/stationary policies

*Why would a country want a pro-natalist policy ?

• replaces those lost in war and civil unrest

• build up the military

• replace retiring people in the workforce

• support the increasing number of seniors

• occupy parts of a country that are virtually empty

• help develop the resources of a state

• lead to economic growth

• increase majority/minority percentages

• gain more influence internationally

Why would a country want an anti-natalist policy ?
• cannot afford to provide for them

• overpopulation concerns - limited available resources

local, national, international SCALE

• allow more women in the workforce and boost economy

• repress a group of people

separate policy for certain groups
or
different applications of the policy (see 2nd last slide)
 One Child Policy 1979

- rewards start once 1 child contract is signed

Rewards

• free medical care

• free daycare and schooling Penalties

• must repay financial benefits

• guaranteed job for child
• educational, medical benefits, &
• bonuses for parents
guaranteed jobs are withdrawn
• extra maternity leave
• parents’ wages reduced
• better housing

• bigger old age pension

 Population policy of developed
countries
• Although birth control measures are
universally practiced in more developed
countries, yet very few countries have
formulated explicit national population policy
on population growth, apart from enacting
laws regulating international migrations.
 Developing countries
• Since most of the less developed countries are
experiencing ‘population explosion’, family
planning programs have been officially
adopted by these governments.
• Most of the less developed countries which
have adopted population policies have aimed
at a growth rate of around one per cent.
 Effects of Population Growth on
Economic Growth: Pessimists
• Negative consequences of population growth
on:
– Economic growth
– Poverty and Inequality
– Education
– Health
– Food
– Environment
– International migration
 Effects of Population Growth on
Economic Growth: Optimists
• Population is not the problem but the following are:
– Underdevelopment
– Resource depletion and environmental degradation
– Population distribution
– Subordination of women
 Effects of Population Growth on
Economic Growth: Neutralists
• No statistical relationship between population
and economic growth.
• Developing countries can take advantage of
the demographic dividend.
Only countries with over
5 million people
 Dependency ratio
• Calculated:
(Pop. <15) + (65+) divided by
working-age population (those aged 15-64)
• Dependency ratio tells us how strained/stressed
working pop. is
– Ex. Dependency ratio of 0.9 means there are 9
dependants for every 10 working-age people
• Keep in mind:
– Negative correlation b/t dependency ratio and the
ability to take care of dependents. What dose it mean?
 ENVIRONMENT

• Environmental issues are complex and

interdisciplinary.
•
A community decides to use coal for
electricity, as it is the cheapest source
available. (Economics)
The coal must be mined from under
the soil. (Geology)
The coal must be transported to the
population center by road or rail.
(Engineering)
When it is burned at a power plant, air
pollution is released. Some of that
pollution is converted to acid in the
atmosphere. (Chemistry)
This falls as acid rain somewhere
downwind. (Meteorology)
The distribution is uneven.
(Geography)
Laws are passed requiring the plant to
install pollution scrubbers.59(Politics)
 ENVIRONMENT
Definition
• 1)Environment can be defined as the natural
surroundings of that organism which directly or
indirectly influences the growth and development of
the organism.
• 2) It is the surroundings in which an organization
operates including air, water, land and natural
resources, flora, fauna, humans and their inter
relations”
• 3) Environment is the sum total of all living and non
living factors that compose the surroundings of man
 Segments of the Environment

• Our environment can be broadly classified

into
• 1. natural and
• 2. man-made environment.
• Components of Environment as per American
literature are listed as
• 1. Hydrosphere(Water) Atmosphere(Air)
• 2. Lithosphere(Land)
• 3. Biosphere(Flora/Fauna/Microbes)
• 4. Anthrosphere (man made things)
• Components of Environment as per British
literature Components as: BIOTIC, ABIOTIC
PRODUCERS, CONSUMERS DECOMPOSERS
and CLIMATIC FACTORS
• Environment refers to the living and non-living
components of the natural world, and to the
interactions between them, that support life
on earth.
• The environment is a provider of goods and
services and is also a recipient of waste
products
1. The non-living or abiotic component, which
includes:
– Climatic factors such as solar radiation,
temperature, wind, water current, and rainfall.
– Physical factors such as light, air, pressure and
geomagnetism.
– Clinical factors such as oxygen, carbon dioxide,
acidity, salinity, availability of inorganic nutrients
and so on.
2. Living or biotic factors such as microbes,
plants, animals and all living organisms
 Environmental degradation
Definition
• What is meant by environmental
degradation?
• Reduction in the quality of resources
• Depletion of resources
• Extinction–complete disappearance
 What are the main
Environmental Problems?

• Resource depletion
• Pollution
• Loss of Biodivesity
 Major Environmental Problems
• Resource Depletion
– A great deal of resources are needed to support
the human population (~7 billion).
– Renewable resources can be replenished within a
human lifetime.
• Timber, water.
– The supply of nonrenewable resources is
replenished extremely slowly, if at all. These can
be used up.
• Coal, oil, minerals.

68
 Major Environmental Problems
• Pollution
– Pollution is an
undesired change in
air, water, or soil that
affects the health of
living things.

69
Pollution, whether in air or water, can move
and affect ecosystems far away from the
source.
This map shows the areas with the highest
concentrations of air pollution.

70
 Major Environmental Problems
• Loss of Biodiversity
– The number of species on the Earth is unknown,
but estimated to be in the tens of millions.
– Biodiversity is the number of different species
present in one specific ecosystem.
– Extinction, or the complete loss of a species, is a
natural event that can be accelerated by human
actions.

71
 The “ecological footprint”
• The environmental impact
of a person or population
– Amount of biologically
productive land + water
– for raw materials and to
dispose/recycle waste
• Overshoot: humans have
surpassed the Earth’s
capacity

We are using 30% more of the planet’s resources than are available on a sustainable
basis!
 Ecological footprints are not all equal
• The ecological footprints
of countries vary greatly
– The U.S. footprint is
almost 5 times greater
than the world’s average
– Developing countries have
much smaller footprints
than developed countries
 Population & consumption
• Human population growth exacerbates all
environmental problems
– The growth rate has slowed, but we still add more
than 200,000 people to the planet each day
• Our consumption of resources has risen even
faster than our population growth.
– Life has become more pleasant for us so far
– However, rising consumption amplifies the demands
we make on our environment.
 Tragedy of the Commons
• “Tragedy of the Commons”----Described by
Garrett Hardin
• Addressed the question, “How do we decide
how to share common resources.
• Conflict between short term interest of
individuals and long term welfare of society
• “Commons”—are overused/overgrazed if not
protected
What situations lead to the tragedy of the
commons?
• Common limited resource
• Lack of communication between users
• Short term attachment to the resource.
• No agreement upon tragedy of resource use.
 ENVIRONMENTAL DEGRADATION
Environmental degradation can be summarized in nine
major categories;
1. Greenhouse-Induced Global Warming
The great majority of scientists who have studied the
problem of “global warming” believe that human
activities, particularly those involved with the burning of
fossil fuels, are altering the world’s climate.
Greenhouse gases (such as carbon-dioxide and other
substances released from burning fossil fuels) prevent
atmosphere to reflect excessive energy coming from the
outer space, especially from the sun. Automatically,
energy that is trapped within the atmosphere warms up
the earth.
•The Earth’s surface is warming
• Melting glaciers
• Rising sea levels
• Impacted wildlife and crops
• Increasingly destructive weather

Since the Industrial Revolution, atmospheric

carbon dioxide concentrations have risen by
37%, to the highest level in 650,000 years
 Impacts
Rising Sea Levels
• One of the significant impacts of global
warming is its impact on rising sea levels.
• Such a rise in world’s oceans could be
devastating to many of the world’s countries,
particularly hard hit would be island states.
• Thirty-five countries have formed the
“Alliance of Small Island States” to call
5
attention to the Global Warming.
 ENVIRONMENTAL DEGRADATION
2. Ozone Depletion
Next to the earth’s atmosphere, ozone layer acts as a
filter for harmful ultraviolet radiation from the sun. A
second layer of ozone has been created by the
industrial revolution.
Chemicals called chlorofluorocarbons (CFCs), used in
manufacturing furnitures, refrigerators, and air
conditioners, are entering the atmosphere and will
remain there for decades.
In 1985, scientists discovered a hole in the ozone layer
over Antarctica. In 1987, 154 states signed Montreal
Protocol calling for the elimination of the production
 ENVIRONMENTAL DEGRADATION
3. Atmospheric Pollution

Poor air quality in many of the world’s cities affects

people’s health. The Pollutions Standards Index is
used to measure the pollutants in the air.

The World Health Organization and the World Bank

estimate that 2.7 million people die each year as a
result of air pollution.
 ENVIRONMENTAL DEGRADATION
4. Loss of Agricultural Land, Desertification, and
Erosion
the carrying capacity of the earth could be increased
to feed the world’s people. Unfortunately,
agricultural land is finite, and it is decreasing due to
both natural and human-made causes.
5. Deforestation: why?
Economic development indirectly creates some
implications on forests. Local owners of forest
resources want to capitalize on their holdings, and
they sometimes ignore the future effects (i.e. 15%
of Brazilian rain forests vanished).
 ENVIRONMENTAL DEGRADATION
6. Depletion of Fresh Water Supplies
At present, access to clean water is a problem for 40
percent of the world’s population. A number of
experts believe that access to and control of water
supplies will constitute a cause of war in the future.
7. Depletion of Fisheries
Since 1989, the world’s marine catch has stopped
increasing even though the capacity of the fishing
fleets around the world had increased.
8. Acid Deposition
Sulfur dioxide and nitrogen emitted by industrial
factories and automobiles turn into diluted sulfuric
and nitric acid when they come into contact with
moisture.
When these chemicals go into the atmosphere, they
mix with water molecules and then rain on earth in
the form of acid rain.
9. Loss of Biodiversity: Many species and plant species
are threatened by extinction today. Biodiversity is a
global issue that concerns many states and non-
state actors (eg. World Conservation Union).
Table 10.1
 Table 10.1 (cont’d)

Copyright © 2006 Pearson

Addison-Wesley. All rights 10-86
reserved.
• In the 1970s and early 1980s, many people,
including economists, argued that
environmental quality was a luxury that only the
rich nations could afford.
• However, in the latter 1980s it became apparent
that deteriorating environmental quality was
interfering with economic development and
that economic development could not take
place without environmental improvement.
 Why Do We Have Environmental
Problems?
Major causes of environmental problems are :
• population growth,
• wasteful and unsustainable resource use, --policy
• Poverty and development
• excluding the environmental costs of resource use
from the market prices of goods and services, and
• trying to manage nature with insufficient
knowledge.
 Past emphasis Current emphasis
Pollution cleanup Pollution prevention

Waste disposal
Waste prevention
(bury or burn)

Protecting species Protecting habitat

Environmental Environmental restoration

degradation

Increasing resource use Less resource waste

Population growth Population stabilization

Depleting and degrading Protecting natural capital

natural capital
 The Millennium Environmental
•
Assessment
The most comprehensive scientific assessment of
the condition of the world’s ecological systems
• Major findings:
• Humans have drastically altered environment
• These changes have contributed to human well-
being and economic development, but at a cost
• Environmental degradation could get much
worse
• Degradation can be reversed, but it requires work
 Links between the Environment and Millennium
Development Goals
Goal Links to environment
Eradicate extreme Livelihood strategies & food security
poverty and hunger depend on healthy environment
Achieve universal Time spent colleting fuel wood and water by
primary education children
Reduce child Water-related diseases kill 3 M people in
mortality developing countries
Improve maternal Indoor air pollution and carrying heavy
health loads
Combat major 1/5th of the total burden of disease in
diseases developing countries may be associated
with environmental risk factors
Ensure environ Environ degradation must be reversed
sustainability
• How can humans live within the planet’s
means?
– Humans cannot exist without functioning natural
systems

• Environmental Sustainability
– Leaves future generations with a rich and full Earth
– Conserves the Earth’s natural resources
– Maintains fully functioning ecological systems
ECONOMIC DEVELOPMENT
 Economic development
Basic Questions
• What is meant by economic development?
• What makes it different from economic growth?
• How do we measure it?
• Is there one comprehensive definition for
economic development?
• What is the implication of economic
development on environment and population?
• Other questions
• For almost every writer a different
definition of development exists
• Important to first distinguish between:
– a. Development as a state or
condition-static
– b. Development as a process or course
of change- dynamic
Definitions of Economic Development
• The term 'economic development' is
generally used in many other synonymous
terms such as:
economic growth, economic welfare,
secular /worldly/material change, social
justice and economic progress.
• As such, it is not easy to give any precise and
clear definition of economic development.
 1. Prof. Meier and Baldwin

• According to Prof. Meier and Baldwin;

"Economic development is a process whereby
an economy's real national income increases
over a long period of time".
• This definition explains three ingredients of
economic development.
• a) process, b) real national income, c) long
period.
 2. Okun and Richardson
According to Benard Okun and Richard W,
Richardson,
• "Economic development may be defined as a
sustained secular improvement in well being,
which may be considered to be reflected in an
increasing flow of goods and services“.
• According to this definition, economic
development implies continuous material
increase in national output for promoting
material welfare of the society. It stresses on
three important aspects of development;
• a) Economic development is a dynamic and long
term phenomenon;
• b) It implies improvement in material welfare and
• c) National output is the measuring unit of
material welfare.
 Prof. Colin Clark
Prof. Colin Clark defines economic development
from the angle of economic welfare.
• "Economic progress can be defined simply as
an improvement in economic welfare."
• Economic welfare, can be defined as an
abundance of all those goods and services
which are normally exchanged for money.
 United Nations Expert Committee
According to this Committee,
• "Development concerns not only man's
material needs but also the improvement of
the social condition of his life.
• Development is, therefore, not only economic
growth, but growth plus change– social,
cultural and institutional as well as economic".
• This definition encompasses economic and
non-economic aspects of development.
• Not only the increased quantity of capital is
needed but the improvement in its
productivity is also required for development.
• The central point of this definition is that
quantitative and qualitative changes in
development variables are considered
essential ingredients of economic
development.
 Michael Todaro
• Development, according Todaro, it is a
process by which members a society increase
their personal and institutional capacities to
mobilize and manage resources to produce
sustainable improvements in the quality of
life.
• Thus it has to be seen as a complex
multidimensional concept involving
improvements in human wellbeing.
• Michael Todaro (1995) sees three objectives
of development. These are:
– Producing more life sustaining necessities
such as food, shelter, and health care and
broadening their spatial coverage.
– Raising standard of living and individual self
esteem
– Expanding economic and social choice.
• From the above definition we can
conclude that development is a complex
concept that encompasses economic,
social and political dealings that are
manifested in an improvement in the
standard of life, stable social, political
and political systems and in creating
enabling democratic institutions allowing
citizens to exercise human and
democratic rights.
 Characteristics of a Developed
Economy
A developed economy is the characterised by
a. increase in capital resources,
b. improvement in efficiency of labour,
c. better organisation of production in all spheres,
d. development of means of transport and communication,
e. Growth of banks and other financial institutions,
f. urbanisation and a rise in the level of living,
g. improvement in the standards of education and
expectation of life,
h. Greater leisure and more recreation facilities and
i. the widening of the mental horizon of the people, and so
on
 Distinction Between Developed and
Underdeveloped Economies
• We may now distinguish between the features
of an underdeveloped economy from that of
developed one as follows;
• 1. Underdeveloped economies are
distinguished from developed economies on
the basis of per capita income. In general,
those countries which have real per capita
incomes less than 5000 dollars per year, are
categorised as under-developed countries.
• 2. An underdeveloped economy, compared
with an advanced economy, is underequipped
with capital in relation to its population and
natural resources.
• The rate of growth of employment and
investment in such an economy lags behind
the rate of growth of population.
• 3. High rate of growth of population is an
important characteristic of most of the
underdeveloped economies.
• Population growth in underdeveloped
countries neutralises economic growth.
• 4. The central problem of underdeveloped
economies is the prevalence of mass poverty
which is the cause as well as the consequence
of their low level of development.
• 5. A vast majority of people in an
underdeveloped country are ill-clothed,
undernourished and without adequate
shelter.
• On the other hand, most of the developed
countries at present enjoy a high rate of mass-
consumption.
•
• 6. Capital deficiency is the main cause of poverty of
a poor country
• 7. In an underdeveloped economy, the problem of
under-employment is more important than that of
unemployment, whereas a developed economy
may have a cyclical unemployment problem.
• There is chronic unemployment in an
underdeveloped economy.
• An advanced economy may have unemployment
occasionally due to business failure
• 8. Poor countries are poor in technology, advanced
countries are advanced in technology.
 Economic Growth
• Economic Growth is a narrower concept than
economic development.
• it is the change in national income over time,
usually measured over one year. National income
is the amount produced by a country in one year
• An increase in Gross National Product (GNP) or
GDP
• Is a quantity based concept - not quality based
• A direct measure of changes in the size of the
economy
 Factors Affecting Economic Growth

• The process of economic growth is a highly

complex phenomenon and is influenced by
numerous and varied factors such as political,
social and cultural factors.
 Obstacles to Economic Development

ECONOMIC FACTORS NON-ECONOMIC FACTORS

1. Vicious Circle of Poverty 1. Undeveloped Human

2. Deficiency of Capital Resources
3. Market Imperfections 2. Political Instability.
4. International Forces 3. Socio-cultural Contraints
5. Difficulty of Technology 4. Religious Factors
6. Low Agricultural
Productivity
7. Lack of Entrepreneurship
Comparison of economic growth
and economic development
Economic growth Economic development
 It is a narrow concept •It is a broad concept
 Increase in national •Multidimensional
income is a sufficient
indicator
 Sectoral economic change •Structural change
 It comes with a particular •It is a continuous process
time period(quarter/year)
 Quantitative change is •Qualitative
more important
•Simple •complex
theories and indicatirs of development 116
 Sustainable development
• Sustainable development is the
development that meets the
needs of the present with out
compromising the ability of future
generation to meet their own
needs.
• Does it mean only environment?
What are the other components?
Source: Sustainable Development Commission
 The Effect of Environmental
Quality on Economic Productivity
• Environmental quality can affect economic productivity in
two major ways.
• First, environmental degradation can drastically affect
human health, which can affect the productivity of labor
and redirect resources to deal with the adverse health
affects.
– Intestinal disorders (such as cholera and dysentery) from
contaminated drinking water are the leading causes of
death of young children in many developing countries.
• Second, the environmental resources are a direct input into
many production processes and environmental
degradation interferes with the production activities.
 The Effect of Poverty on the
Environment
• Much of the environmental degradation is due to the low
standard of living that currently exists in developing
countries.
• Current low income makes it very difficult to meet
current consumption needs, so environmental resources
are unwisely exploited to produce current income.
• Forests are destroyed to produce temporary bursts of
income to meet current consumption needs.
• Similarly, agriculture is cultivated too intensively in order
to produce food for the short run, which leads to soil
erosion and declines in its fertility.
• In many developing countries, high levels of pollution are
produced from industrial activity because the government
does not wish to redirect much needed resources from
production to environmental improvement.
• Unfortunately, high levels of air and water pollution
degrade public health, reduce the productivity of
agriculture, industry, fisheries, and forestry, and generate
other social costs that reduce the future production
capability of the country.
• 300,000 deaths annually in China are attributed to
respiratory diseases arising from air pollution
• The addition of declining environmental conditions to the
“vicious cycle of poverty” (lack of investment) assures a
further decline in income as the decline in environmental
quality reduces productivity of labor.
The Impact of the Economy on the
Environment
• One perspective on poverty versus environment argues that, as
the economy grows and per capita income increases,
environmental quality will increase because demand for
environmental quality will increase.
• An “Environmental Kuznets Curve” (EKC) has been
hypothesized, based on the Kuznets Curve from development
literature, which argues that low-income countries have little
detrimental impact on the environment because of their
relatively low level of economic activity.
• This impact increases with a rise in income and then, as the
economy grows beyond a certain point, policies are enacted to
protect the environment.
Environment Kuznets Curve (EKC)

124
Is there evidence of an EKC?
•Growth in income will lead to
improved environmental quality.
•Development policy focus should be
income growth and stuff the
environment??
• As incomes rise, the demand for better
environmental quality also rises. Thus rising
incomes can be linked to declines in pollution.
 Policy opportunities to reduce poverty
and improve environment
• Improve governance
– Integrate poverty-environment issues into national
development frameworks
– Strengthen decentralization
– Empower poor and marginalized groups
– Address gender dimensions
– Strengthen anti-corruption measures
– Reduce environment-related conflict
– Improve poverty-environment monitoring and
assessment
 Policy opportunities to reduce poverty
and improve environment
• Enhance the assets of the poor
– Strengthen resource rights of the poor
– Enhance poor’s capacity to manage
environment
– Expand access to environmentally-sound
and locally appropriate technology
– Reduce environmental vulnerability of the
poor
 Policy opportunities to reduce poverty
and improve environment
• Improve the quality of growth
– Integrate poverty-environment issues into
economic policy reforms
– Increase the use of environmental valuation
– Encourage private sector involvement in
environmental management
– Implement pro-poor environmental fiscal
reform
 Policy opportunities to reduce poverty
and improve environment
• Reform domestic, international and industrial
policies
– Industrial emissions abatement/reduction policies
– Reform trade policies
– Make FDI more pro-poor
– Enhance the contribution of multilateral
environmental agreements to poverty reduction
– Encourage sustainable consumption and production
– Enhance the effectiveness of development
cooperation and debt relief
 Population

Social and Economic

Environment
Development
CHAPTER TWO
THEORIES and DEBATES
OF
POPULATION
 2.2 Population theory
Definition: These are theories to explain the patterns of
population growth in different countries of the world.
Are divided into three:
1. Biological theories : this theory states that man is like
any other living thing. He is incapable of controlling his growth
in number
2. Cultural theories: this theory states that man is rational
and uses his intellect to control his growth in numbers.
For example : the one child policy in China.
• 3. Economic theory: based on Marxist theories it supposes
that growth in population is as a result of demand for labour.
 The Relevance of population theory
• Human Population is a key driver in any given
economy because it is source of labor which that
pushes all economic responsibilities.
• National and World population is growing fast
• Entails examination of its growth vis-a-vis available
resources and production capacity
• How is the relationship of population growth and
production System of politics/economy changes
Globalization
• How to handle/cope up with all these changes
 Demographic Transition Theory
• “Developed for explaining demographic
behavior”

• Demographic transition = model of economic

and cultural change to explain declining death
rates, declining birth rates, and rising life
expectancies in Western nations as they
became industrialized
Demographic transition: Stages

Figure 7.18
 Demographic transition: Stages
The demographic transition consists of several stages:
Pre-industrial stage: high death rates and high birth rates
Transitional stage: death rates fall due to rising food
production and better medical care. Birth rates remain high,
so population surges.
Industrial stage: birth rates fall, as women are employed and
as children become less economically useful in an urban
setting. Population growth rate declines.
Post-industrial stage: birth and death rates remain low and
stable; society enjoys fruits of industrialization without threat
of runaway population growth.
 Criticisms of Demographic Transition
Theory
• Based on the experience of Western societies
(Europe, North America, Japan)
• Not predictable that there will be a fall in
fertility rates in less developed countries-
before reaching stage 3
• We cannot predict the length of time it will
take these countries to move from Stages 2
and 3 to Stage 4
 Malthusian Law Of Population
1766-1834
• Thomas Malthus is a mathematician, a
clergyman, and Britain’s first professor of
political economy
• Also remembered as “father of demography”
& population theory
• One of the most influential thinkers of his
day, which was a period of hectic social
change: Industrial Revolution, political
changes
 The Core Principles of Malthus:

• Food is necessary for human

existence
• Human population tends to grow
faster than the power in the earth to
produce subsistence
• The effects of these two unequal
powers must be kept equal
 Basic idea
In his book “The Principle of Population”, Malthus
proposes that (1798)
1. human populations grow geometrically(i.e., doubling
with each cycle) : 1, 2, 4, 8, 16, 32, 64, 128, 256
2. while food production grows at an arithmetic rate (i.e.
by the repeated addition of a uniform increment in
each uniform interval of time): 1,2,3
• This result in populations can double every 25 years
•  This scenario of arithmetic food growth with
simultaneous geometric human population growth
predicted a future when humans would have no
resources to survive on. 
 ???
• First, though, lets look
at linear/arthimetic
growth
• Constant rate of growth
whereby two new
individuals are added
each generation
• Arithmetic, Equal
difference
 ??
• Exponential growth,
whereby the population
doubles each generation
• Equal division result(8/4;
16/8; 32/16=2
• Compare 5th generations
– Linear = 12
– Exponential = 64
Q. Which one if food
production/population
growth?
???
• Thomas Malthus warned that population growth
would exceed resource growth, leading to
catastrophic checks on overpopulation. This would
occur because population grew exponentially while
food supply grew arithmetically.
• Without population control, the population would
be reduced by catastrophes such as famine
disease, or war according to Malthusian theory.
• He generalized, the means of availability of
subsistence will determine population growth
• Food is the primary resource; food scarcity
increases mortality, reduces population
• Law of diminishing returns: cultivating
new land, or more intensely, adds smaller
increment to production for each unit of
labor/land
• Productivity gains from innovation
cancelled out by more pop growth
• As population increases, food prices rise
(excess demand), wages fall (excess
supply), mortality increases
• Food is the primary resource; food scarcity
increases mortality, reduces population
• Law of diminishing returns: cultivating
new land, or more intensely, adds smaller
increment to production for each unit of
labor/land
• Productivity gains from innovation
cancelled out by more pop growth
• As population increases, food prices rise
(excess demand), wages fall (excess
supply), mortality increases
 Pessimistic or optimistic view?
• Malthus's view is a pessimistic theory that
predicted that population growth would surpass
the rate of creation of main consumer goods
leading to conflict
• Negative perception on population growth
• His view that the principle of population was
inflexible, unchangeable, and inescapable, and
that no exercise of reason could remove its
effects
 Measures proposed by Malthus
He said population would press against the means
of subsistence, unless it was prevented by some
very powerful and obvious checks
1. Preventive Checks—affecting birth rate
Example: Moral restraint ---postponing of marriage,
Abstain, birth control—(he did not recommend
contraception, Why?
2. positive checks--------affecting death rate.
Malthusian catastrophes: naturally occurring
checks on population growth
Example: Disease, Famine, war
Overconsumption
India—effect of OP
Population grows
geometrically….

Population exceeds
carrying capacity…
Strength and weakness
Strength
• It is remarkable that, despite many new developments
over the past 50 years, one fact looks very much the
same: populations are growing most rapidly where
such growth can be afforded the least — where
pollution, resource shortages, and environmental
damage create additional stresses on the ability of
governments to meet the basic food, clothing, and
shelter needs of their populations.
• He identified the fast rate of population growth and its
implication on food supply and resources; burden on
governements, families and individuals too.
Criticisms:
• Too much focus on land as a limiting variable in food
production; didn’t foresee use of large scale
mechanization, fertilizers, better seeds, etc
• Food is not our only necessity; industrialization and
technological advancement soon to alleviate shortages
in all areas of human needs
• Didn’t foresee changes in transportation and trade
• Didn’t foresee the revolutionary role of contraceptives;
not even the possibility that couples would decide to
limit the sizes of their families in response to changing
socioeconomic conditions --development
• He didn’t foresee the massive emigration out of Europe
to new lands in the West and East---burden reduced
• Generally, population has failed to grow as
rapidly as predicted by Malthus and
production has increased tremendously
because of the rapid advances in technology.
As a result, living standards of the people have
risen instead of falling as was predicted by
Malthus.
 Conclusion
• Though it has many problems his theory has
enabled to be cautious about the rapid rate of
population growth and its impact on food
supply/income/environment
• To develop ways to control growth
 Neo-Malthusian
• Over the two hundred years following
Malthus's projections, famine has overtaken
numerous individual regions.
• Proponents of this theory, Neo-Malthusians,
state that these famines were examples of
Malthusian catastrophes.
• Are proponents of Malthus
• Neo-Malthusian Concepts
– How can the Malthusian theory be adapted to the
current situation?
• The Commons
– In which way common resources are used?
• Carrying capacity
– Issue linked with the carrying capacity of land.
– Limits to absorb ever-greater numbers of people.
– Population growth has environmental impacts.
– Support of family planning, contraception and abortion.
– Population problems cannot be addressed through
technology beyond the short term.
• Overpopulation
– A multidimensional issue linked with the carrying
capacity.
– Numbers should be linked with level of consumption.
– The United States would be more overpopulated than
China.
• The tragedy of the commons
– Freedom in a commons brings ruin to all.
– All the resources will be used.
• Solutions
– Private property:
• Removes some of the Commons from access.
• Encourages conservation and wise management.
• Vested interest in maintaining it for future use.
– Collective property:
• Parts of the Commons not possible to divide into private
segments - atmosphere, oceans, etc.
• Collective (global) ownership.
• Taxation and coercive laws as the primary means of
preservation.
Boserup
• Born: May 18, 1910
Copenhagen, Denmark
• Died: September 24, 1999
(aged 89)
• Nationality: Danish
 Boserup theory
• Boserup theory is known as an optimistic theory. It states
that agricultural methods and productivity of food depend
on the size of the population.
Indications:
1. if population increases, larger workforce so more food
produced.
2. if population increases, mechanization occurs, more food
produced as more effective means found of producing
high yields of food through use of machinery.
3:.if population increases, increased use of fertilizers results,
so as to produce more food for the growing population.
• She assumed closed economy
 Example: Agricultural systems
• Low yield, low labor intensity: Slash and burn agriculture:
Trees cut and burned; ash fertilizes the soil; pointed stick
used for planting; land cultivated for 1-2 years, left fallow for
20 years. Productivity per hour worked is high, but only feeds
small pop. w/in fixed area.
• High yield, high labor intensity: Land cleared, plowed,
fertilized, weeded, irrigated; livestock maintained; annual
cultivation, with crop rotation. Productivity per hour worked
is low, more hours worked, but feeds a larger pop. w/in fixed
area.
• System adopted depends on population pressure, may revert
back to less labor intensive (Europe after Black Plague)
Example: From hunting and gathering
to cultivation (Cohen)
• Agriculture consists of practices and techniques
known to hunter-gatherers, but usually not practiced
because unnecessary
• Hunting and gathering supplies more varied, possibly
more nutritious diet, with few hours of labor/day
• Agricultural techniques adopted due to population
pressure; more monotonous, possibly less nutritious
diet, with longer work hours—but feeds more people
in a given area (10-100 times more people per acre)
• Population is not the dependent variable. It is
the independent variable determining
agricultural developments.
• When a population is over-crowded, it evolves
new forms of agriculture
• High density of population is neutral, neither
good nor bad, but usually needed for
development of new techniques
• With historical change, humankind has moved
through a series of increasingly intensive
agricultural systems
• Each requires & supports more people
 Boserup's agricultural
intensification theory
• Definition- Boserup’s agricultural intensification
theory states that the agricultural means
employed in a given area are dependent on the
population density.
• Example- This theory is more applicable to
developing countries since although
unsustainable agriculture is often practiced,
changes in agricultural technology arise and
often coincide with population fluctuations. 
– Her basic premise/idea/principle is
that extra people do more work and
bring more thought to bear on human
problems.
– Mankind’s limitless inventiveness is
brought to bear, solving problems as
they arise.
• Boserup gave a different opinion when she
observed in 1965 that, population increase
would stimulate technological advances to
keep food production at check.
• She observed that population growth should
therefore be seen as an incentive for
technology development from agrarian to
modern cutting edge technology.
• Contrary to this, Boserup believed ‘necessity is
the mother of invention´. She asserted that an
increase in population pressure acts as an
incentive to develop new technology and
produce more food. Her theory concluded
that population growth naturally leads to
development.
• According to Malthusian theory, the size and
growth of the population depends on the food
supply
• In Boserup’s theory agricultural methods depend
on the size of the population.
• In the Malthusian view, in times when food is not
sufficient for everyone, the excess population will
die.
• However, Boserup argued that in those times of
pressure, people will find ways to increase the
production of food by increasing workforce,
machinery, fertilizers.
• This graph shows how the
rate of food supply may
vary but never reaches its
carrying capacity because
every time it is getting
near, there is an
invention or development
that causes the food
supply to increase
• farmers generally have to do more
subsistence work than hunter-gatherers; work
further increases with intensification of
agriculture (labour/fertilizer)
• Is there such kind of practices that support
Boserup’s in Ethiopia
• Where do we have more intensification of
land/farming? Why?
• How is it manifested?
• What will happen if such measure were not
taken?
 Advantages of larger population
• Encourages division of labor, leading to more
efficient production of goods
• Allows economies of scale, development of
infrastructure (e.g., irrigation systems,
transportation networks)
• Supports the growth of cities, more complex
societies
• More people =s more potential inventors of
new technology (Simon)
• Labour intensive
• Fertilizers/insecticides, etc
• Improved seeds
• Environmental protection
• No fallow period
• Water harvesting and irrigation
• Capacity building
• Change in the ways of sawing/harvesting and food
storage
• Extension service
• Market based production, etc
 Weakneses of Boserup
• The theory was based on an ideal closed
economy. Thus, it is irrelevant due to
globalization
• Boserup never saw the impacts of immigration
and emigration that can either lead to increase
or decrease in population growth of a local area.
• Job outsourcing is now a common practice that
makes closed economy totally out of place.
Question: What are the similarities and
differences of Malthusian and Bosrupian
theories of population?
• Similarities
• Differences
 Similarities and differences
between Malthus and Bosrup
Malthus Bosrup
Population growth is decided by food Food growth/methods depends on
production population

in times when food is not sufficient for in those times of pressure, people will
everyone, the excess population will die find ways to increase the production of
food
Population is a dependent variable Food production is a dependent variable
Agricultural production is an independent Population is independent variable
variable
carrying capacity reached Carrying capacity not reached
Overpopulation No overpopulation
Malthus vs. Boserup
 Karl Marx's Theory of Population

• Karl Marx (1818-1883) is regarded as the

Father of Communism. He did not separately
propose any theory of population, but his
surplus population theory has been deduced
from his theory of communism.  
• Marx opposed and criticized the Malthusian
theory of population. Why did not comment
Bosrup?
• Marx dismiss Malthusian notion that the rising
world population, rather than capitalism, was
the cause of ills.
•  Marx's argued that when society is well
ordered, increases in the population should
lead to greater wealth, not hunger and
misery.
 Marxist population theory, cont.
• Assumes different law of population under socialism;
centralizing the mean of production for the general good does
away with “surplus population” and poverty
• In practice, later, Communist regimes saw population
planning (like economic planning) an appropriate task for the
State (e.g., China, Romania)
• Marx’s general contribution: Distribution of resources among
the population matters, not just total population and
production levels
 Marxist population theory, cont.
• Assumes different law of population under socialism;
centralizing the mean of production for the general good does
away with “surplus population” and poverty
• After English Industrial Revolution, so more optimistic about
“science, the progress of which is just as limitless and at least
as rapid as that of population”
• In practice, later, Communist regimes saw population
planning (like economic planning) an appropriate task for the
State (e.g., China, Romania)
• Marx’s general contribution: Distribution of resources among
the population matters, not just total population and
production levels
• There is no such thing as overpopulation.
• Marx thought that “Malthus was a bourgeois
chauvinist clergyman who upheld the
established order of social inequality”
• “If poor people were given control over the
means of subsistence – equipment,
knowledge(chance to education), land, and an
adequate share of the wealth – their
production of goods and services would far
surpass the growth of population”
• Population growth, according to Marx, is
therefore not related to the alleged/supposed
ignorance or moral inferiority of the poor, but
is a consequence of the capitalist economic
system. 
• Marx points out that landlordism, unfavorable
and high man-land ratio, uncertainty regarding
land tenure system and the like are responsible
for low food production in a country. 
 The Demographic Transition
Theory
• Based on the experiences of Western European
countries/populations
• Focuses on historical changes in gaps between
birth rates and death rates
• The changes show “…a transition from a
relatively stable demographic regime with high
birth rates and death rates to a similarly stable
regime with low birth rates and death rates….”
• This is known as the demographic transition
• The transition took places in STAGES
 Population theories p.27
• Question : what is the link between
demographic transition model
development/modernization?
• “If we accept the demographic transition
model and believe that there is a casual link
between modernization and a decline in both
vital rates, then the obvious solution to rapid
population growth is to modernize the world
as rapidly as possible
• Remember the growth rate of population at
different stages vis-à-vis development level
 Geographical Variations
Developed countries
– Took 250 years for most developed economies to go through their own
demographic transition (from 1750 to 2000).
– Population growth never surpassed the capacity of these economies to
accommodate it.
Developing countries
– Demographic transition started in the 20th century:
• The most advanced segment after WWI.
• The least advanced segment after WWII.
– Very few have went trough the transitory mutation.
– Most of them have a type II demographic transition.
– By the time they reach type IV, a huge amount a population will be
added to their populations.
 CHAPTER THREE

MIGRATION, ENVIRONMENT
AND
DEVELOPMENT
 What is Human Migration?
• Migration (human) is the movement of people from
one place in the world to another with permanent
or semi permanent change of residence.
• Thus, it is the relocation of an individual, household,
or group of people to a new location outside the
community of origin.
• the movement could be either long or short distance
• Temporal/seasonal or permanent
• Forced or voluntary
• Internal or external/international
• Urban/rural
 Examples
• Internal or external
• Rural to urban---permanent/seasonal/off-farm
job
• Rural to rural---permanent/seasonal
• Urban to urban---diverse reasons
• Urban to rural
• Country to country
• Etc.
 Contd----
• Obviously, people have been migrating for a long
time, otherwise we'd all still be living in Africa
• Migrations have occurred throughout human
history, beginning with the movements of the first
human groups from their origins in East Africa to
their current location in the world.
• But human migration wasn't just a phenomenon of
the past. Migrations are still an important part of
modern society
• What determines ancient migration from
current/contemporary migration?
 Origin and dispersion of human
Broadly speaking, there are two competing
hypotheses/theories/naration on the origin of
modern humans:
1.Out of African Theory:-Homo Erectus
(quadrupedal-bipedal) evolved in Africa and
dispersed into the rest of the world
2.Multiple Origin theory: Homo Erectus
dispersed from Africa and evolved into Homo
Sapiens (modern man) in many parts of the
world and dispersed into other parts.
Paleolithic Era: Migration
• Migration occurs at a variety of scales:
intercontinental (between continents),
Intra continental (between countries on
a given continent), and interregional
(within regions of a country)
• A modern day migrant faces a difficult
obstacle: International border.
• Our ancestors who first migrated from Africa
had to face natural obstacles, such as, rivers,
mountains, forests. So did the explorers of
the 14th , 15th and 16th century, who came
to the Americas and Africa, Australia. There
were no borders, no state in these
continents.
• There was no visa, passport requirements in
those days.
•
 Contemporary migration
• Individuals who move in geographic space
– For different reasons
– Different distances
– Different administrative boundaries
– Different periods of time
 Why do people migrate?: Push and pull
factors of migration
• Pull Factor: Perceived circumstances that effectively
attract people to certain locations from other places.
• Reasons for immigrating (moving into a place)
because of something desirable (such as a nicer
climate, income, social cohesion, better food supply,
freedom, etc.).
• Push Factors: Reasons for emigrating (leaving a
place) because of a difficulty (such as food
shortage, war, flood, etc.).
 Why People Migrate? Specific
breakdowns
It is often difficult to isolate the single most
important factor that lead to a decision to move;
usually, a combination of circumstances is
responsible.
1. Economic Factor: the perceived opportunity to
enhance one’s material circumstances by earning
more money.
2. Political Factor: Expulsion and escape from fear
of execution
3. Armed Conflict: Civil war and international
armed conflicts also generate migration streams.
 Contd----
4. Factors of Traditions: Cultural tradition made 15 million
people to migrate to India from Pakistan following the
independence in 1947; Russian Jews to Israel in 1990s;
Jews from Ethiopia were airlifted to Israel in 1991.
5. Technological/developmental factors:
  a) Transportation and easy communication facilitated
Migration.
b) Dam construction like Narmada Dam (India), the
three gorges in China and other dam construction
displaces people
c) urban expansion/industralization: forced farmers/to
cities or retreat back
 Contd----
6. Environmental Factors :natural disasters,
such as flooding, earthquake, climate change,
etc
In general factors of migration can be grouped
into two. These are:
a. pull factors
b. push factors
 TYPES OF MIGRATION
1.Internal Migration: Moving to a new home within a state,
country, or continent.
• People who move but relocate within their national
boundaries. All countries experienced rural to urban
migration, which became prominent in the 18th and 19th
century Industrial revolution.
2. External (international) Migration: Moving to a new home in
a different state, country, or continent
This changed ethnic mosaic (composition) substantially.
Traders and entrepreneurs from Asia linked the East African
Coast. Chinese immigrants to Southeast Asia is another
significant example: Malaysia 32% Chinese; Thailand14%;
Singapore 76%, Indonesia 2% (4 million Chinese among 200
million Indonesians)
 Contd----
BUT it is the external migrants who
 
a) change countries vital statistics,
b) affects economies, and often
c) influence politics, e.g., law of multiculturalism in
Canada, employment equity etc. Because it is a diverse
community originated from all parts of the world
• Emigration: Leaving one country to move to
another (e.g., the Pilgrims emigrated from
England).
• Immigration: Moving into a new country (e.g.,
the Pilgrims immigrated to America).
• Population Transfer: When a government
forces a large group of people out of a region,
usually based on ethnicity or religion. Usually
it is involuntary or forced migration.
• Impelled Migration (also called "reluctant" or
"imposed" migration): Individuals are not
forced out of their country, but leave because
of unfavorable situations such as warfare,
political problems, or religious persecution.
Take the case of Syria today
• Step Migration: A series of shorter, less extreme migrations
from a person's place of origin to final destination—such as
moving from a farm, to a village, to a town, and finally to a
city.
• Chain Migration: A series of migrations within a
family or defined group of people. A chain
migration often begins with one family member
who sends money to bring other family
members to the new location. Chain migration
results in migration fields—the clustering of
people from a specific region into certain
neighborhoods or small towns.
• Return Migration: The voluntary/expelled
movements of immigrants back to their place of
origin. This is also known as circular migration.
• Seasonal Migration: The process of moving for
a period of time in response to labor or climate
conditions (e.g., farm workers following crop
harvests or working in cities off-season.
 Facts
• Today 192 million people live outside their
place of birth - it is about 3% of the world's
population;
• 1 of every 35 persons in the world is a migrant;
• Current annual growth rate of international
migrants is about 2,9%;
 Net migration rate( +, -, 0?)

Net migration rate is the difference of immigrants and emigrants of an area in a period of time.
 Migration Theories & Models
• This is also a population theory: As Malthusian,
Bosrupian, demographic transition theory
• These are theories and models that explains the
level, direction and composition of migrants;
• There is no comprehensive theories of
population that explain all details---birth, death,
growth, migration
• Different perspectives: spatial/geographical,
economic, sociological and others
 1. Ravenstein’s Laws
Geographer E.G. Ravenstein developed a series of migration 'laws' in
the 1880s that form the basis for modern migration theory. In
simple language, these principles state:
1. Most migrants move only short distances
2. Most People who move long distances are largely
unaware of the opportunities available at their
destination – so move to large urban centres
3. Migration occurs in stages/steps
4. People in rural areas more likely to migrate than
those in urban centres
5. A typical migrant
I. Women more likely to migrate within their
country than men
II. Men are more likely to emigrate than women
III. Most migrants are adult
 2. Zipf’s Gravity Model
• The volume of migration is inversely
proportional to the distance travelled and
directly proportional to the relative sizes of
the origin and destination places.
 Zipf’s contd
• This model postulates that people are drawn towards the
place of destination by gravitational force, which reduces with
distance.
• In other words, the volume of migration at a particular place
of destination from a particular place of origin is directly
proportional to the product of the two populations and
inversely proportional to the distance between them. So
V= Po Pd
Dod2
• Where V = Volume of migration
• Po = Population at place of origin
• Pd = Population at place of destination
• Dab= distance between origin and destination
• Distance Decay – interaction between two
places decreases as the distance increases.
• Gravity Model – predicts the interaction
between two bodies as a function of their
population size and distance
• On the next map see Arizona and
Maryland=5m, and
• Migration flow from North and South Carolina
Migration to California
 Example
Given: Two cities are far apart for 400 kms. City
A has a total population of 100,000 while in
city B 50,000 people resides.
1. Calculate the expected volume of migration
between the two cities. Interpret your
answer.
2. What will happen to migration volume as
population of both towns rises and their
distance reach to infinitive?
 Criticisms to Gravity model
• Doesn't specifically show immigration and
emigration size to the origins and destinations
separately.
• Consider only population size and distance, no
other intervening factors
• Which place attracts/pushes more is unknown
• The population size assumed static
• Except distance other intervening/interfering
factors are ignored.
 3. Stouffer’s Intervening Opportunity
Model
• Although Zipf’s model is simple, it does not take into
account the characteristics of both the place of origin
and destination, which could help to explain both the
volume and the direction of migration.
• Push-pull factors
• Therefore, Stouffer states that the level of
movement of people between two places is
dependent upon the type and number of
intervening opportunities.
• So he says, the nature of places is more important
than the distance.
4. Stepwise Migration Model
 Contd--
• Behavioral Model that
migration occur in stages
with a ‘wave-like’ motion.
Major settlements
(metropolis) tend to attract
migrants from smaller
cities, which attract
migrants from smaller
towns and villages
 5. Lee’s Migration Model
His theory is the general form of Ravenstein’s law of
migration.
Lee describes factors, which attract individuals
towards a particular place as ‘pluses’ or pull factors,
and those which drive them away as ‘minuses’ or
push factors.
Factors that are more or less evenly distributed, in
other words they counter balance each other, he
described as zero factors. Broadly Lee classified the
factors into four groups as follows:
Lee divided migration decision making
into four
1. Factors associated with the area of origin
2. Factors associated with the area of
destination
3. Intervening obstacles and
4. Personal factors.
Negative and positive things in the two places
plus What is in between the two places
• Lee concludes that migration is always
selective and influenced by pull- push
factors.
• Areas having plus factors are first
selected for migration.
• It is generally the pull factors which lead
to migration to urban areas rather than
push factors, even though intervening
obstacles do influence migration.
Characteristics of migrants (LEE)
•(1) Migration is selective.
•(2) Migrants who respond primarily to plus factors at destination tend
to be positively selective.
•(3) Migrants who respond primarily to minus factors at origin tend to
be negatively selective
•(4) When all migrants are considered together selection for migration
tends to be bi-model.
•(5) The degree of positive selection decreases with the difficulties of
intervening obstacles.
•(6) The characteristics of migrants tend to be intermediate between
the characteristics of the population of the place of origin and those of
place of destination.
•(7) The higher propensity to migrate at certain stages of the life-cycle is
important in the selection of migrants.
Volume of Migration:
•The volume of migration is determined by the following
factors:
•(1) The volume of migration within a territory changes
with the degree of areas included in it.
•(2) It varies with the diversity of the people.
•(3) It is related to the difficulty of overcoming the
intervening variables.
•(4) It varies with fluctuations in the economy.
•(5) It varies with the state of progress in a country or area.
•(6) Unless severe checks are imposed, both the volume
and rate of migration tend to increase with time.
6. Zelinsky’s Model of Migration
Transition
 Zelinsky’s Theory of Migration
• Phase one
– (“Premodern traditional society”):
– This is before the onset of the urbanization, and there is very little
migration. RURAL TO RURAL
– Natural increase rates are about zero.---no transition
• Phase two ----RURAL TO URBAN
– (“Early transitional society”):
– There is “massive movement from countryside to cities... as a
community experiences the process of modernization”.
– There is “rapid rate of natural increase”.
• Phase three ----URBAN TO URBAN DOMINANT
– (“Late transitional society”):
– This phase corresponds to the “critical rung...of the mobility
transition” where urban-to-urban migration surpasses the rural to-
urban migration, where rural-to-urban migration “continues
 Zelinsky’s Migration Theory (con’t)
• Phase four
– (“Advanced society”): CITY TO CITY
– The “movement from countryside to city continues but is
further reduced in absolute and relative terms,
vigorous/STRONG movement of migrants from city to city
and within individual urban agglomerations...especially
within a highly elaborated lattice/setting of major and minor
metropolises” is observed.
– There is “slight to moderate rate of natural increase or
none at all”.
• Phase five
– (“Future super-advanced society”):
– “Nearly all residential migration may be of the interurban
and intraurban variety….No plausible/exact predictions of
fertility behavior,...
– a stable mortality pattern slightly below present levels”.
• The essential feature of Zelinsky’s model is
based on Rostow’s stages of economic
growth. As modernization proceeds different
patterns of migration emerge.
• Do you find relationship between Zelinsky’s
model and the DTM?
 Individual Assignment
The following are term paper topics (30%)
1.The current situation of migration and its
implication on development
2.Poverty and inequality in the developing world
3.Environmental degradation and its impact on
economic development
4.The population policy of Ethiopia: rational,
plans and Results
Population displacement and refugees
• Migration is the spatial process of relocation. It
results from a complex set of push-pull factors that
involve PERCEPTION of source and destination,
distance, intervening opportunity and more.
• The great majority of migrants move voluntarily, but
a large number of people do not have the luxury of
choice. These are the people who find themselves
on the move due to somebody else’s action or will.
• They are called refugees. Refugee problem has
become a global issue today.
• Refugee: A person who is residing outside the
country of his or her origin due to fear of
persecution/harassment for reasons of race, religion,
nationality, membership in a particular social group,
or political opinion.
• Crosses national boundary
• The number of refugees has grown enormously in
recent decades. Everywhere, people have been
driven from their homes by War; social and Political
pressures.
 CONTD----

• Often they end up in refugee camps. These

camps are in miserable condition:
1) Food scarcity,
2) Medical services are minimal or non-
existent,
3) Accommodations are basic, many sleep in
the open.
 Contd----
Refugees tend to be distinguishable in the field from
legal migrants in several ways:
 
• 1) Most refugees move without any more tangible
property than they can carry or transport with them.
• 2) Most refugees make their first move on foot, by
bicycles, or open boats.

• 3) Refugees move without official documents.

(Identifying papers, authorization or Passport).
 Conditions to qualify for refugee
status
– Political /cultural persecution must be
demonstrated.
– An international boundary must be crossed:
• Domestically displaced persons do not qualify.
– Protection by one’s own government is not seen
an alternative, so you leave b/c:
• The government may be the persecutor/ oppressor.
• Could be incapable of protecting its citizens from
persecution.---other individuals/groups
 Pre-WW II and during WW II
– Primarily political elites:
• Fleeing oppression from the new government, which
overthrew them.
• Usually small in number and often had substantial
resources available to them.
– War-driven refugees:
• About 12% of the European population displaced.
• Usually could be expected to repatriate after the war
ended.
 Post WW II
– Change in the patterns of refugee flows:
• The majority of refugees are now coming from the
developing world.
– De-colonization in Asia, Africa, and the Caribbean:
• Political unrest in many newly independent states.
• Multi-ethnic nature of those states.
• The result of the drawing of colonial boundary lines by
Europeans.
– The Cold War also increased political instability in
a number of countries.
– Political instability in Latin America increased due
to the vast social inequalities existing in that
region. To the USA
– New kind of refugee flow:
• Large and of long (or permanent) duration.
 Global Migration Patterns(2005)
– Most people migrate
for economic
reasons.
– Cultural and
environmental
factors also induce
migration, although
not as frequently as
economic factors.
– DO you see the
arrows to Africa?

The major flows of migration are from less developed to

more developed countries.
 Globalization and migration
GLOBALIZATION will tend to increase int’l migration:
• Freer movement of information, images, ideas,
toward “one culture’;
• Improvement and Reduced costs of
transport/communications;
• International capital seeks competent, cheap &
flexible labor force (skilled & unskilled, brain drain);
• Collapse of restrictive regimes, e.g. Soviet Union,
E.europe
• Government policies--liberalized
But int’l migration may be slowed by:
• Creation of “free trade/out-sourced” jobs in LDCs;
• Increased costs of illegal immigration;
• Anti-immigration sentiment/policies (in response to
negative impacts on national cohesion, welfare state
(Europe);
• Post 9/11 – xenophobia, visa restrictions, security issues;
• Other reasons??
Future of int’l migration:
• Uncertain numbers, but as population ages in Europe,
Japan and U.S., societies will need to increase labor
supply via immigration.
• Policies need to work on full integration of immigrant
populations to reduce tensions, anger.
• Constructive means to reduce int’l migration would be
increased capital flows and investment to reduce poverty
in sending countries.
 Impacts of migration
• Human migration affects population patterns
and characteristics, social and cultural
patterns and processes, economies, and
natural environments.
• As people move, their cultural traits and ideas
diffuse along with them, creating and
modifying cultural landscapes.
• Demographic impact
• Economic impact
• Social impact—language assimilation
• Political impact: conflic, election
• Environmental
• These impacts prevail differently at the origin
and place of destination
 Impacts on host countries
Positive Negative
 Job vacancies and skills gaps can be filled.• DReduction of wages may occur but this seems to
Economic growth can be sustained. be temporary.
 Services to an ageing population can be • Having workers willing to work for relatively low
pay may allow employers to ignore productivity,
maintained when there are insufficient
training and innovation.
young people locally. house servants
• Migrants may be exploited.
 The pension gap can be filled by the • Increases in population can put pressure on public
contributions of new young workers and services.
they also pay taxes. Replacement • Unemployment may rise if there are unrestricted
 Immigrants bring energy and innovation. numbers of incomers.
 Host countries are enriched by cultural • There may be integration difficulties and friction
diversity. with local people.
• Large movements of people lead to more security
 Failing schools (and those with falling
monitoring.
numbers) can be transformed. b/c some
• Ease of movement may facilitate organised crime
migrants are young/ in school age
and people trafficking.
 Impacts on origion
Positive Negative
• Developing countries • Economic disadvantage
benefit from remittances through the loss of young
(payments sent home by workers
migrants) that now often
outstrip foreign aid. • Loss of highly trained
• Unemployment is reduced people, especially health
and young migrants workers
enhance their life prospects. • Social problems for children
• Returning migrants bring left behind or growing up
savings, skills and without a wider family
international contacts. circle
 Environment and migration
• People move for reasons of environment
• Migrant influence also the natural environment
IOM 2007
“Environmental migrants are persons or groups of
persons who, for compelling reasons of sudden or
progressive change in the environment that adversely
affects their lives or living conditions, are obliged to leave
their habitual homes, or choose to do so, either
temporarily or permanently, and who move either within
their country or abroad.”
 Environmentally induced migration
Kinds of disasters
• deforestation,
• desertification,
• land/natural resources degradation
• climate change,
• drought,
• soil erosion,
• floods,
• natural disasters, LIKE EARTHQUAKE
• Conflicts for resource,
• water, air and ground water pollution /shortage
 International migration impact on
environment
On “host” countries:
– Increased water demand/consumption;
– Increased energy consumption – so air pollution,
– Urban sprawl/build-up – loss of green spaces;
– Deforestation due to urbanization/settlement

On “sending countries:
– Reduced deforestation, erosion;
– Remittances support increased consumption and/or “green”
investment back home;
– Brain drain of professionals, scientists to work on complex
environmental problems in countries of origin;
– Impact on population/fertility back home can be “up” or
“down” (demonstration effect or “social” remittances”).
Multi causality, not environment alone
• People migrate for reasons of poverty, poor
living conditions, cultural, religious underlying
factors
• Controversial--placing environmental migrants
in the voluntary-forced migration continuum
unresolved.
• unexplored agenda: most people impacted by
environmental degradation do not migrate.
Example many degraded places in Sub-Saharan
Africa
– People can therefore, migrate for environmental
reasons, pulled toward physically attractive
regions and pushed from hazardous ones.
– Attractive environments for migrants include
mountains, seasides, and warm climates.
– Migrants are also pushed from their homes by
adverse physical conditions.
• Water—either too much or too little—poses the most
common environmental threat.
 Climate change and migration
• Climate change is expected to affect the movement of people
in at least four ways:
• 1) the intensification of natural disasters – both sudden and
slow-onset - leading to increased displacement and migration;
• 2) the adverse consequences of increased warming, climate
variability and of other effects of climate change for
livelihoods, public health, food security and water availability;
• 3) rising sea levels that make coastal areas uninhabitable; and
• 4) competition over scarce natural resources potentially
leading to growing tensions and even conflict and, in turn,
displacement.
• The consequences of climate change (including
its effects on migration) will be most severe for
the developing world.
• Particular areas – including the Asian
megadeltas - have been identified as 'hotspots'
where greater exposure and sensitivity to
climate change combine with limited adaptive
capacity to suggest that impacts will be most
significant.
 Migration can create new
vulnerabilities
– Risks incurred during the movement phase
– Displacement onto more marginal lands /
into hazardous and insecure conditions (e.g.
urban slums)
– Prolonged displacement (e.g. in camps)
– Protection challenges (uncertainty of
status)
– Challenges for those who stay behind
Responses to Environmental Migration
Vulnerability
Migratory responses:

First: Prevent forced migration resulting from

environmental factors to the extent possible.
Second: Provide assistance and protection to affected
populations where forced migration does occur,
and to seek durable solution to their situation.
Third: Facilitate migration as an adaptation strategy to
climate change. --resettlement
 Summary
• Environmental migration, like all migration, is a multi-causal
phenomenon. There are no simple causal relationships
between the environment and migration.
• • While the empirical evidence base remains thin and needs
reinforcement, it is recognized that environmental drivers
play a significant and increasingly determinative role in
migration phenomena.
• Environmental migration is multifaceted: it can be internal,
regional or international, temporary or permanent, forced,
voluntary or a mix of those characteristics
Migration and development
Migration transition and Development
MIGRATION POLICY
Definition: It is an official government document
that guides immigration and emigration for
reasons of:
• safeguarding citizens
• maintaining peace and security
• regulate the economy, employment
• Exercising democratic right
• Maintain Population composition
• Provision of social services
• etc
 Immigration policy
• An immigration policy is any policy of a state
that deals with the transit of persons across its
borders into the country, but especially those
that intend to work and stay in the country.
• Immigration policies can range from
allowing no migration at all to allowing
most types of migration, such as free
immigration.
• Often, racial or religious bias is tied to
immigration policy (for example, a
country might only allow commonwealth
citizens admission).
 Differences
• It is not uniform, it varies among governments
perception towards migration
• Encourage selective migration(DV)
• Discourage / highly controlled immigration,
Russian Federation
• Encourage outmigration, considering as one
source inflow of foreign currency, India
• Some has no migration policy, most 3rd world
 CHAPTER FOUR

ECONOMIC DEVELOPMENT
THEORIES AND STRATEGIES

theories and indicatirs of development 274

 Questions

• Why is the world so much richer today than it

was fifty or a hundred years ago?
• What are the prospects for increasing riches in
the future?
• And why is the world today so unequal as we
look across countries?

theories and indicatirs of development 275

 What do theories and models of
development tries to explain?

Economic development theories and models

seek to explain and predict how:
1.Economies develop(or not) over time
2.Barriers to growth can be identified and
overcome
3.Government can induce, sustain and
accelerate growth with appropriate
development policies
theories and indicatirs of development 276
• There is no one agreed model of development
applicable to all countries
• Though LDCs share similarities, every country has
unique economic, social cultural and historical
experience. Means the implication of a given
theory vary widely from country to country.
• Each theory gives an insight into one/two
dimensions of the complex process of
development
• For instance Harrod-Domar model explain the
importance of adequate savings for development
process theories and indicatirs of development 277
• it is widely agreed that preservation of
human dignity and fulfillment of basic needs
are the foremost duties of every society.
• While there is a wide agreement on this
goal, differences of opinion exist on the
question of the degree to which these basic
should be supplied and as well, how they
should be supplied
• These differences allow for different paths
of development.

theories and indicatirs of development 278

For the common denominator of “basic needs” one can
deduct goals of development as:
Economic growth: to secure food and other requirements
for the population;
Social justice: to reduce inequality;
Employment: as means of earning, and because of its
ethical and social value;
Participation: as political involvement and social sharing
Independence: freedom from external domination
While individual societies have different opinion on the
priorities of these goals, in the absence of a general theory of
devt.
One can use the criterion of fulfillment of these goals as a
yardstick in development. Development is then understood
as a simultaneous progress
theories and towards these five goals
indicatirs of development 279
 Economic development theory-
Definition
• Economic Theory is a systematic explanation
of interrelationships among economic
variables.
Why theory?
• Purpose – to explain causal relationships
among variables, to understand world better
and provide basis for policy
• Production, Saving, investment, growth

theories and indicatirs of development 280

• Theories of development have been motivated by
the need to explain mass poverty/
underdevelopment. Interest in development issues is
of rather recent origin, dating back not much earlier
than the nineteen fifties and early sixties.
• As represented by their more influential proponents,
the development schools of thought reflect roughly
the following chronological order of appearance:

theories and indicatirs of development 281

• Theories are generalizations. While Less Developed
Countries (LDCs) share similarities, every country’s
unique economic, social, cultural, and historical
experience means the implications of a given theory
vary widely from country to country.

There is no one agreed “model of development”.

Each theory gives an insight into one or two
dimensions of the complex process of development.
For example, the Rostow model helps us to think
about the stages of development LDCs might take,
while the Harrod-Domar model explains the
importance of adequate savings in that process.

theories and indicatirs of development 282

 Attention

• Development is not a final state of things but a

process
• Development is a social, political and economic
issue not simply the provision of material goods
• It is a continuous process
• But In many theories, it is understood as
something static, to be achieved, as a ‘final’
state
theories and indicatirs of development 283
Evolution of Development
Theories
 Modern Theories & models of
Development
 Early years of Post WWII is considered as the birth
of ‘modern’ thinking of development
 Here, we broadly classify theories development in
to two broader categories:
1. Classic Theories of Economic Development
2. Contemporary Models of Development & Under-
Development
 1. Classic Theories of Ec.
Dev’t:
Four Approaches
 Literature dominated by the following four
strands of thought:
 Linear-stages-of-growth model: 1950s and
1960s
 Theories and patterns of structural change:
1970s
 International-dependence revolution: 1970s
 Neo-classical, free-market counterrevolution:
1980s and 1990s
 A. Linear-stages theory
• Viewed the process of development as a
series of successive stages of economic
growth
• Mixture of saving, investment, and
foreign aid was necessary for economic
development
• Emphasized the role of accelerated
capital accumulation in economic
development
287
 Rostow’s Stages of Growth
 Rostow identified 5 stages of growth:
1. The traditional society
2. The pre-conditions for take-off
3. The take-off
4. The drive to maturity
5. The age of high mass consumption
 All advanced economies have passed the stage of
take-off into self sustaining growth
 Developing countries are still in the traditional
society or the pre-conditions stage.
 Different countries are at different stages of
development.
288
 ROSTOW, Walt W.(1969-2003)
This is a linear theory of development. Economies can be
divided into primary secondary and tertiary sectors. The
history of developed countries suggests a common pattern of
structural change: The Stages of Economic Growth: An Anti-
Communist Manifesto (1960)
Stage 1: The Traditional Society
Characterized by subsistence economic activity i.e. output is
consumed by producers rather than traded, but is consumed
by those who produce it; trade by barter where goods are
exchanged they are 'swapped';
Agriculture is the most important industry and production is
labor intensive, using only limited quantities of capital.
289
Stage 2 :The Pre-condition for Take-
Off/Transitional Stage
 Surpluses emerge supported by an emerging
transport infrastructure.
 Savings and investment grow.
 Entrepreneurs emerge

theories and indicatirs of development 290

Stage 3 :Take Off
Industrialization increases, with workers switching from the
land to manufacturing.
Growth is concentrated in a few regions of the country and
in one or two industries.
New political and social institutions are evolving to support
industrialization.
Stage 4 :Drive to Maturity:
Growth is now diverse supported by technological
innovation.
Reliance on exports and imports may start decreasing
Stage 5: High Mass Consumption
Domestic Agg. Demand is the major determinant of Business
.
Consumer durable industries; Service sector
291
 Implications of Rostow's theory
Development requires substantial investment in capital equipment (K) ; to
foster growth in developing nations, the right conditions for such investment
would have to be created i.e. the economy needs to have reached Stage 2.
For Rostow:
1. Savings and capital formation (accumulation) are central to the process of
growth, hence development
2. The key to development is to mobilize savings to generate the investment to set
in train self generating economic growth.
3. Development can stall at Stage 3 for lack of savings. Suppose the deficiency in
savings is on the order of 15-20% of GDP. If S = 5% then foreign aid/loans of
about 10-15% plugs this ‘savings gap’. Resultant investment means a move to
Stage 4-Drive to Maturity and self generating economic grow. virtuous cycles
(e.g. Botswana)and not vicious cycles (e.g. Argentina).
4. Once Stage 5(High Mass Consumption th, i.e) is achieved, this society continues to
have high consumption and maintains such by incentives to savings plus
additional key ingredients (good governance, property rights, human capital and
functioning institutions)
292
 Limitations of Rostow's Model
1. Rostow's model is limited. The determinants of a country's stage of
economic development are usually seen in broader terms i.e.
dependent on:
(a) the quality and quantity of resources
(b) a country's technologies
(c) a countries institutional structures e.g. law of contract
2. Rostow explains the development experience of Western countries,
well. However, Rostow does not explain the experience of
countries with different
cultures and traditions
Comment: Rostow’s Stages of Economic Development was essentially a
statement repudiating The Communist Manifesto!

293
 Friedman, M.

• Pre-industrial (isolated settlements, spatial equi-

librium, no competition)
• Transitional (industrialization, spatial inequali-
ties, primary cities as growth poles, dependent
and exploited peripheries, competition)
• Industrial (urban networks, more growth poles,
less peripheries, competition)
• Post-industrial (functional interdependence,
equilibrium situation, less competition)
theories and indicatirs of development 294
 K. Marx
stages based on changes in technology, property
rights, and ideology
•Primitive society
•Slave society
•Feudalism
•Capitalism
•Socialism/communism

theories and indicatirs of development 295

 Harrod-Domar Model:
The Harrod-Domar model developed in the l930s suggests
savings provide the funds which are borrowed for
investment purposes by firms (entrepreneurs).
•The economy's rate of growth (g)depends on:
a.the level of saving (S) and the savings ratio (s =S/Y)
b.the productivity of investment i.e. economy's capital-
output ratio (K/Y =θ).
Example: if £8 (=K) worth of capital equipment produces
each £1 of annual output (=Y), a capital-output ratio
(θ=8/1=8)of 8 to 1 exists. A 3 to 1 ratio indicates that only
£3 of capital is required to produce each £1 of output
annually.
296
 Harrod-Domar model (1950)
• Savings leads to economic growth
• Output per unit of capital up leads to
economic growth
Led policymakers to focus on capital-led
industrial growth

The H-D model: g=s/k where:

g = rate of growth in national income
s = savings rate
k = ratio of capital to output
 Implications of the Harrod-Domar
Model
 Economic growth depends on the amount of labor and
capital i.e. Y = f(K,L)
(a) Developing countries have an abundant supply of labor (L).
So it is a lack of physical capital (K) that holds back economic
growth hence economic development.
(b) Net investment (i.e. investment over and above that needed
to replace worn out capital (deprecation) leads to more
producer goods (capital appreciation) which generates higher
output and income. Higher income allows higher levels of
saving

298
 Criticisms contd---
c. Economic growth requires policies that encourage
saving and/or generate technological advances ( no
explanation as to how to promote this
d. It is difficult to stimulate the desired level of
domestic savings
e. Meeting a savings gap by borrowing from overseas
causes debt repayment problems
f. Economic growth is a necessary but not sufficient
condition for development
g. Sector structure of the economy important (i.e.
agriculture v industry v services) 299
 B. Structural Change Models

Focuses on the mechanism by which

underdeveloped economies transform their
domestic economic structures from traditional to
an industrial economy

Representative examples of this strand of thought

ais The Lewis theory of development

300
 Lewis Theory of Development
• Also known as the two-sector surplus labor model
• The model explains the “structural transformation” of
subsistence/agricultural economy to a
modern/industrial economy.
• The basic model features the following key
assumptions:
– Economy consists of two sectors- traditional and modern.
Traditional – labor surplus economy that co-exists with
modern/industrial sector – there is an “economic dualism”.
– Traditional sector has surplus labor (MPL=0). Much of this is
unskilled.
– Model focuses on the process of transfer of surplus labor and
the growth of output in the modern sector
– The model implies employment will expand until surplus labor is
absorbed in the modern/industrial sector.

301
 Lewis Theory ….

•The process of self-sustaining growth

and employment expansion continues in
the modern sector until all of the surplus
labor is absorbed
•Structural transformation of the
economy has taken place with the
growth of the modern industry

302
theories and indicatirs of development 303
Critics on Lewis
The ability of the modern sector to absorb surplus works depends
on the speed of investment and accumulation of capital. Where
firms invest in new labor saving capital equipment, surplus workers
are not taken on by the formal sector. Recently arrived rural
migrants join the informal economy and live in shanty towns
Given urban growth drives economic growth it can lead to the
neglect of agriculture by government
Neglect of Agriculture – yet most people live in rural areas where
incomes are relatively low
Increased profits may be invested in labor saving capital rather
than taking on newly arrived workers
For many LDC's, rural urban migration levels have been far greater
than the formal industrial sector’s ability to provide jobs. Urban
poverty has replaced rural poverty.
 Food prices increase from more demand from urban sector
theories and indicatirs of development 304
 Criticisms of the model
• Capitalist profits are invested in labor saving
technology
• Existence of capital flight & lack of re-investing
• May not have excess labor in some countries
• Assumes profits reinvested in labor-intensive
industries (what if not invested or invested in
capital-intensive industries due to subsidies)?
• Ignores international trade
 C. The International Dependence
Revolution (IDR)
• The IDR models reject the exclusive emphasis on
GNP growth rate as the principal index of
development
• Instead they place emphasis on international power
balances and on fundamental reforms world-wide.
• The IDR models argue that developing countries
are up in a dependence and dominance
relationship with rich countries

306
 Dependency theory (Dependencia)
– The Situation where the economic
development in one country is conditioned
by economic changes in another country.
The latter country is self-sustaining, while the
former is dependent.

 Key arguments: terms of trade and investments are

in favour of the industrialized world

theories and indicatirs of development 307

Dependency theory uses political and economic
theory to explain how the process of international
trade and domestic development makes some
LDC's ever more economically dependent on
developed countries ("DC's").
Dependency theory refers to relationships and
links between developed and developing
economies and regions.
The theory sees underdevelopment as the result of
unequal power relationships between rich
developed capitalist countries and poor developing
ones.

theories and indicatirs of development 308

Powerful developed countries dominate dependent
powerless LDC's via the capitalist system. In the
Dependency model under development is externally
induced (i.e. DC not LDC’s fault) system. Growth can
only be achieved in a closed economy and pursue self-
reliance through planning.
Dominant DC's have a technological and industrial
advantage that they can ensure the ‘rules of the game’
(as set out by World Bank and IMF) works in their own
self-interest.
In this model under development is externally induced
(i.e. DC not LDC’s fault) and only a break up of the
world capitalist system and a redistribution of assets
(e.g. elimination of world debt) will ‘free’ LDC's
theories and indicatirs of development 309
 CLASSIFICATION
The international dependence revolution includes
1. Neo colonial dependence model,
2. The false paradigm model, and
3. The dualistic development thesis/argument/idea
 Neo colonial dependence model,
The Neo Colonial Dependence argues that
unequal power relations between the
developed and developing countries
have made it difficult for developing countries
to blossom/flourish/develop.
2. the False Paradigm theory: ties the failure of
development efforts in developing countries, to use
of models and approaches that are suitable and
workable to the west and not meaningful to
developing countries.
3. Dualistic Development theory :looks at
coexistence of various groups in the society. It
argues that inter-relations of these groups most of
the time widens the gap rather than reducing it
 D. The Neoclassical Counter-revolution:
Market Fundamentalism
• Market fundamentalism gained resurgence in the 1980s.
• It dominated economic policies of the US, Britain, Canada &
Germany, as well as the thinking of International
Development agencies such as the World Bank & the IMF.
• There are three variations or approaches:
1. Free Markets,
2. Public-Choice or New Political Economy,
3. Market-friendly Approach.
These are all challenges to the Statist Models of the 1950s-
70’s.

313
 1. The Free Market Approach

Assumes:
 markets are efficient.
 Competition is effective.
 The state or Government intervention is
ineffective.
 Given the efficiency of markets, any
imperfections in markets are of little
significance.

314
 2. Public-Choice or New Political
Economy Approach
• Argues that governments can not solve economic
problems, since the state itself is dominated by politicians,
bureaucrats, that use power for selfish ends.
• State officials extract “rents”, taking bribes, and confiscate
or nationalize property, and reduce freedom of citizens.
Therefore, it is best to minimize the role of governments.
• Big corporations also suffer from similar problems but
market and public policy desciplines them.

315
 3. The Market-friendly Approach
• This is the most recent variant of Neo-Classical Theory. It is
an
approach used by World Bank & IMF economists.
• This approach recognizes market imperfections, missing
markets, and externalities. Therefore, there is a need for
government role in areas such as providing public goods,
developing market supporting institutions or rules, and
defining and protecting property rights.
• The state or the government has a necessary role of being
an “impartial” referee in the economic game.

316
 The Neoclassical Growth Theory –
The Solow Growth Model
• The Solow model expanded the Harrod-Domar Model, that
stressed the critical role of savings, Investment & capital
accumulation.
• It formalized & expanded the Harrod Model by adding labor,
capital, and technology.
• Technology is assumed to explain the “residual” factor, and
was assumed to be determined exogenously
• Solow’s model differs from Harrod-Domar model in the
following respects:
– Allows for substitution between labor and capital
– Assumes that there exist diminishing returns to these inputs
– Introduces technology in the growth equation

317
 Development Policy Implications of the
Solow Model for African
economies

• Output (GDP) grows as a result of 3 factors:

increase in labor quantity and quality, increase
in capital (by saving & investment), and by
technological progress.
• Closed economies grow more slowly than Open
economies. Impeding free trade and foreign
investment will slow economic growth.

318
 2. Contemporary Models of
Development & Under-Development

•The new models of economic development

have broadened the scope for modeling a
market in a developing country

•Departs from neoclassical economics in its

assumptions of perfect information, the relative
insignificance of externalities, and the
uniqueness and optimality of equilibria
319
 A. Endogenous Growth Model
….

• The models imply that a country’s growth

rate depends on its rate of savings and
investment, not only on exogenous
productivity growth
• Every region and every country has a
certain potential of its own

320
 Requirements
Endogenous development requires to be
compatible with a number of factors
• These factors can be seen in isolation, but in
reality they are all interrelated
• They comprise space (environment, local and
regional activity space) and society (social
organization, economic needs and cultural
life)

theories and indicatirs of development 321

Compatibilities of endogenous
development

local/regional social
compatibility compatibility

Endogenous
development

cultural ecological
compatibility compatibility
economic
compatibility

theories and indicatirs of development 322

The internal matters

theories and indicatirs of development 323

B. Underdevelopment as a Coordination
Failure
• A newer school of thought on problems of economic
development
• Coordination failures occur when agents’ inability to
coordinate their actions leads to an outcome that
makes all agents worse off.
• This can occur when actions are complementary, i.e.,
Actions taken by one agent reinforces incentives for
others to take similar actions
• Coordination failures results in (bad) equilibrium in
which agents are worse-off than in alternative
(situation of) equilibrium
• Deep interventions by the government can move an
economy to a preferred equilibrium
324
 c. Big-push theory
Paul Rosenstein-Rodan

• There is hidden potential in developing

economies---natural and human resources
• Large-scale industrialization and
infrastructural development is key
• more investment is needed in many places
at one time
• But this cannot be left to the market due to
information and appropriation failures
• the big push needs to come from the state
to escape the low-level equilibrium trap
theories and indicatirs of development 325
 Government intervention in the form of a
coordinated investment body alleviates poverty:
coordinating complementary industries; viewing
externalities as profits; and gathering sufficient
information to correctly calculate risk
 Once a threshold level of industrialisation has
been achieved, normal private incentives may
operate successfully and investment can be left
to the market.
 Thus, a big push breaks an economy out of a
vicious circle and permits the possibility of
achieving a virtuous/worthy circle of growth
theories and indicatirs of development 326
 D. Unbalanced Growth
Alfred Hirschman
 Unbalanced growth theorists argue that sufficient resources cannot
be mobilized by government to promote widespread, coordinated
investments in all industries.
 Resource constraints in developing countries necessitate prioritization
as to where to invest first;
 only for a limited number of industries, hence initially unbalanced
growth;
 this will initially result in unbalanced growth such that inducing
development in key sectors first will create overcapacity here;
cheapening their output due to economies of scale;
 this will stimulate upstream investments:
eg. oversupply electric power; as electricity becomes cheaper this will
stimulate investments in those sectors that use electric power in big
amounts.
 The key sectors for initial investment should be determined on the
basis of industrial backward and forward linkages.
theories and indicatirs of development 327
• They share analysis with balanced growth
theorists that free markets, alone, cannot
generate development but differ in that
government planning or market
intervention is required just in strategic
industries.
• Those with the greatest number of
backward and forward links are prioritized.

theories and indicatirs of development 328

• A country lacks resources to finance
balanced growth. Resources are therefore
concentrated on strategic industries with:
• - Significant forward linkages i.e. firms
creating essential inputs for other key firms
in the economy
• - Significant backward linkages i.e. key firms
buy industrial inputs from a large number of
domestic firms
• - Import substitution. Developing domestic
industries replaces imports and so improves
the balance of payments.
theories and indicatirs of development 329
Advantage of Theory of Balanced Growth
 Large size of Market
 External Economies
 Horizontal Economies
 Vertical Economies
 Better Division of Labour
 Better Use of Capital
 Rapid Rate of Development
 Encouragement of Private Enterprises
 Breaking of Vicious Circle of Poverty
 Encouragement of International
Specialization
 Development of Social Overhead Costs
 Criticism of Theory of
Balanced Growth
This theory Criticized by Fleming, Singer,
Hirschman and Kurihara.
• Unrealistic or Ignores Scarcity of Resources
• Ignores the Need of Planning
• External Diseconomies
• Development from Scratch
• Not a Theory of Development
• Same Policy for Developed and
Underdeveloped countries
• Not supported by History
• Scarcity of Factors of Production
• Inflation
• Contrary to the Theory of Comparative Costs
 Balanced Growth Theory Vs.
Unbalanced Growth Theory
(Dissimilarities)
Balanced Unbalaced Growth
GrowthTheory: Theory:
1. Simultaneous growth 1. Focuses is on the
of all sectors of the growth of certain key
economy. sectors of the
2. Seeks to accelerate economy
the process of gowth 2. The process of growth
through simultaneous through Imbalances in
investment across all the system.
sectors of the
economy
 Continued ….
3. Requires lot of capital 3. Requires relatively
investment right from much less investment.
the beginning of growth 4. A Short period strategy
process. of growth.
4. A long period of 5. It is decision making
strategy of growth and entrepreneurial
5. Size of the market is the skill
principal limiting factor.
 Neoclassicism’s Washington
consensus/neoliberalism
• Price decontrol/free market
• Fiscal /money discipline
• Reduce public spending
• Tax reform
• Financial liberalization, Competitive exchange rates
• Trade liberalization
• Domestic savings
• Foreign direct investment
• Privatization
• Deregulation
• Property rights

theories and indicatirs of development 334

 Criticism of neoclassicism

• Neoclassicism concerned with operation of

markets, not with how markets develop or with
policies to induce development
• Stiglitz – Washington Consensus benefits few at
expense of many, rich relative to poor.
• Assumption of perfect competition, technological
change exogenous (outside model), technology
same throughout world, does not incorporate
decisions by people, firms, & governments.
theories and indicatirs of development 335
 What causes underdevelopment?

Very easy to focus on characteristics of

development
• For example we know that underdevelopment
is usually characterized by: low per capita
incomes, low literacy and educational
attainment, lack of basic services- water and
power
• But how do we EXPLAIN underdevelopment?
 Some Common ‘Theories”

• Old view that absence/low level of development

caused by certain physical environments, particular
cultural traditions and value systems-environmental
and cultural determinism
• Lack of natural resources certainly impediment to
development but not impossible- example of Japan
• Why has Japan succeeded?
 Reasons for Japanese Success

• Strong cooperation between government and

business
• Able to adapt to spatial-physical situation and
acquire a maritime prowess/abilities
• Early development of transport and banking
systems
• Highly literate population
• Niche/place technology driven development
 Other Common Explanations of
Underdevelopment
• Instability and other adverse internal
situations- political factors
• Some truth to this as extended periods of
turbulence/instability/turmoil are not
conducive to development
• Poor physical environment- lack of rainfall,
poor soils also may pose barriers to
development
 Another Common Explanation
• Colonialism:
• Need to view development in historical
perspective as sequence of dynamic events-
explore roots
• Colonialism viewed as the cause of
disintegration and decline- how?
 What to Say About Development Theory ?
• Underdevelopment must be seen as a
product of an array of complex and
continuously changing interactions between:
1. Past and Present
2. Natural and Human Environments
3. External and Internal Conditions
• Multitude of obstacles to development vary
with place and time
MEASURES OF DEVELOPMENT

theories and indicatirs of development 342

 INTRODUCTION: Dimensions of
development
• Development is a multi-dimensional concept
in its nature, because any improvement of
complex systems, as indeed actual socio-
economic systems are, can occur in different
parts or ways, at different speeds and driven
by different forces.

theories and indicatirs of development 343

• Economic development: i.e., improvement of the
way endowments and goods and services are used
by the system to generate new goods and services in
order to provide additional consumption and/or
investment possibilities to the members of the
system.
• Production, GDP/CAPITA; saving; investment; etc
• Human development: people-centred development,
where the focus is put on the improvement of the
various dimensions affecting the well-being of
individuals and their relationships with the society
(health, education, entitlements/rights, capabilities,
empowerment etc.)

theories and indicatirs of development 344

• Territorial development: development of a specific
region (space-Region/country) achievable by
exploiting the specific socio-economic,
environmental and institutional potential of the
area, and its relationships with external subjects.
• Sustainable development: development which
considers the long term perspectives of the socio-
economic system, to ensure that improvements
occurring in the short term will not be
detrimental /harful to the future status or
development potential of the system
• i.e. development will be “sustainable” on
environmental, social, financial and other grounds.

theories and indicatirs of development 345

• meets the needs of the present without
compromising the ability of future generations
to meet their own needs”.
• Sustainable development implies minimising
the use of exhaustible resources. Land
degradation, due to soil erosion and
salinisation, persistent water and air pollution,
depletion of fish stock and deforestation are
all examples of consequences of non-
sustainable activities.

theories and indicatirs of development 346

 MEASURING DEVELOPMENT LEVEL
What is the criterion for development?
1. The economic growth / income criterion:
GNP, GDP, rate of growth
• Simple and easy to use
• Yet does it really capture development?

2. The indicators criterion:

e.g. Human Development Index (HDI),
• More comprehensive and realistic
• Yet difficult to measure and use for
international comparisons
theories and indicatirs of development 347
• The most common criterion used as an indicator of development:
income per capita – as a substitute or proxy for evaluating the
overall level of national development and welfare.

• The level of income (or per capita income) is then be used to judge
the progress a nation makes over time.

• While using this criterion, actually economists/researchers/policy

makers are quite aware that the development of a nation actually
incorporates much more than average income per person and the
growth rate of that income.
• Yet the common criterion of income per capita is continued to be
used as a substitute or proxy for evaluating the overall level of
national development and welfare BECAUSE it is so SIMPLE and
therefore CONVENIENT.

348
 The economic growth or income
criteria
Gross National Product (GNP) is the total value of
all income (= value of final output) accruing to
residents of a country, regardless of the sources
of that income earned by citizens living inside and
abroad.

Gross Domestic Product (GDP) is the total value of

all income (= value of final output) created within
the borders of a country, regardless of citizenship
These are the two most commonly used measures
for international comparisons :GDP and GNP.

theories and indicatirs of development 349

 IDENTIFY GDP & GNP
1. The total income earned by an Ethiopian
national working in USA
GDP:???????????????
GNP:??????????????
2. Income earned by an Indian citizens working
in Ethiopia.
GDP:
GNP:
theories and indicatirs of development 350
GNP per capita = GNP
total population

GDP per capita = GDP

total population

% change GNI per capita = % (total GNI/total population)

= % total GNI > %  population = for an economy to grow
Per capita GNP/GDP: is the per-head value of final goods and
services produced by permanent residents of a country in a
given period of time. It is converted to USD using the current
exchange rate.

• Caution: this an identity/incidntal, no causal relation

– not correct to infer from this equation that slow
population growth causes a faster rate of growth of
income per person or that rapid population growth causes
slower growth in income per person.

theories and indicatirs of development 351

GDP (gross domestic product) vs. GNP (gross national
product) – common measures of the output of an
economy:
• GDP is defined as the sum of the value of finished goods and services
produced by a society in a given year
• note that the definition of GDP excludes intermediate goods (for example,
the steel used to produce a car is not included by itself in GDP because it
will be counted as part of the car)
• GDP considers all output produced within the borders of a country,
regardless of the citizenship of the producers
• GNP is similar to GDP but counts only the income of the citizens of the
country – thus, GNP does not include the income of foreign citizens within
the country but does include the income of its citizens working outside the
country
• although GDP is more commonly used to refer to the value of what is
produced while GNP is often refers to the value of what is earned, we will
use them interchangeably

theories and indicatirs of development 352

Total nominal GDP = i1n PiQi
n :the no. goods and services produced;
P the price of each good (current market price)
Q the quantity of each good
Real GDP at base year’s prices
2008 GDP at 1992 prices = i1n Pi,1992 Qi,2008; i.e (the price of 1992 * the
total quantity of 2008)

Example: Nominal GDP = US$3,337 million (2008)

Real GDp= 1,006
Alternatively:
Real GDP = nominal GDP / GDP deflator
total nominal GDP in 2008 = US$3,337 million,
the price index for 2008 (deflator)= 331.7% ==3.317
1992, the base year deflator = 100
Then 2008 total GDP x 100 = US$3,337 million x 100
2008 Price Index 331.7
Or US$3,337 million /3.317 = US$1,006 million
theories and indicatirs of development 353
• This implies 1 USD in 1992, due to inflation
becomes 3.317 USD in 2008
• That is 1 USD in 1992 = mean 3.317 USD in
2008
• What happened to the purchasing power of
money? Increased or decreased?
• To buy X item in 1992 you need only 1 USD ,
but for the same commodity, in 2008 you
need 3.317 USD.
theories and indicatirs of development 354
Example 2. In a country GDP has increased
due to inflation (or rise in prices) from
1049.2 thousand dollars in 1993 to 1426.7
thousand dollars in 2000. Considering
1993 as base year, what is the GDP
deflator of this country? Interpret your
answer.
Interpretation: The rate of deflation/the average
increase of price of goods and services in the
country was about 135.9% Or 1.359=1.4

theories and indicatirs of development 356

 GDP does not include:
• Intermediate goods which are sold from
one firm to another for immediate
transformation into other goods.
• financial transactions like buying stocks.
• purchases of used goods which have been
sold before.
• goods produced overseas by domestic
firms.
 Three Methods for Calculating GDP
1. Production Method - The value added
created in all the sectors of the economy.
2. Expenditure Method - The sum of the
domestic spending on final goods (less
domestic demand satisfied by imports).
3. Income Method – a method of calculating
GDP by adding together all incomes in the
economy
The Wage, Rent, Interest and Profit Income
generated by the domestic economy.
 1. Income Method
• Survey domestic residents and calculate their
wage income, interest income, rental income
plus the income of proprietors/owners of
small firms plus the profits & depreciation of
the corporate sector.
– Subtract net international income flows.
 2. Expenditure Method
C Consumption Consumer durables, non-
+ durables, services
I Investment Structures (incl. Residential),
+ Equipment, and Inventory
G Government Government Spending on
+ Consumption Goods, Services, and Salaries.
X EXports Goods & Services Shipped
- Abroad
IM IMports Goods & Services from Abroad

= GDP (C + I + G) + (X – IM)
• GDP found using this approach is the sum of
purchases in the product markets
• There are two types of excluded purchases:
financial exchanges and second-hand
purchases
• These are excluded because they are not
related to current production
 3. Production Method
• At the plant level, Value added =
Sales + Change in inventories - materials, intermediate inputs
and energy costs.
• Value Added: the extra worth of product at each stage in its
production
• GDP is the sum of VA across establishments.
• The value of a final good is equal to the value added at each stage
of production.
• In order to prevent double counting, the concept of value added is
applied to the GDP
 Purchasing Power Parity
• If exchange rates are used to compare the size
if these countries to developed countries will
make them seem smaller than the really are.
• Should use PPP to compare size of economies
across countries
– Calculated by taking a basket of goods and finding
how much it costs in different countries
 How much difference does it make?
• For Ghana in 2009
• GDP in official exchange rate was 14.76 billion
dollars
• GDP in PPP was 36.58 billion dollars
 Rate of economic growth
• GDP Growth rate = Y2-Y1 * 100
• NY1
Where:Y1= year one;
Y2 =year two; and
N is the number of years between Y1 & Y2.

theories and indicatirs of development 365

 Growth Calculations
• Growth rate for a year is calculated by
(GDPt+1 –GDPt )/GDPt

• Size of GDP over N years is calculated by

GDPt+N=GDPt(1+g)N
Where: tis initial year
N is number of years
g: growth rate
 Examples
• Nominal GDP for Ghana was 16.7 billion
dollars in 2008 and 14.9 billion in 2007. What
was the rate of growth?
• (16.7-14.9) /14.9 = .12 or 12%
 Example
• An economy was having a total GDP of 150
billion. Five years after the economy has
grown to 200 billion. What is the average
annual rate of growth of the economy?
• Assuming the rate remains unchanged, when
will this economy reach to 400 billion?

theories and indicatirs of development 368

 GDP/GNP
Problems of GDP/GNP
• Reliability of data?
– How accurate is the data that is collected?
• Distribution of income?
– How is the income distributed – does a small proportion of the population
earn a high percentage of the income or is income more evenly spread?
• Quality of life?
– Can changes in economic growth measure changes in the quality of life?
– Does additional earnings power bring with it additional stress, increases in
working hours, increased health and family problems?
• Impact of exchange rate?
– Difference in exchange rates can distort the comparisons – need to
express in one currency, but which one and at what value?

theories and indicatirs of development 369

• Black/informal economy?
• Some economic activity not recorded –
subsistence farming and barter activity, for
example Some economic activity is carried out
illegally – building work ‘cash in hand’, drug
dealing, etc.
• Work of the non-paid may not be considered
but may contribute to welfare – charity work,
housework, etc.

theories and indicatirs of development 370

Accounting for value of home or non-market
production
– Non-market activities left out:
• Home-baked cake vs. market bought cake
• Kindergarten care vs. home care
• Cleaning lady vs. self-cleaning
– Mostly women’s work –invisible work
– Yet very important
• Women’s unpaid activities estimated around 50% of global GDP
• they account for an important share of a population’s
consumption contributing to higher life standards.
• After all isn’t this what development is all about? Higher life
standards.
• Satellite GDP accounts

theories and indicatirs of development 371

• Accounting for environmental destruction:
• A number of productive activities that distract from quality of life,
– production of military weapons
– operations that cause environmental destruction of forests,
– production processes that
• emit toxic wastes into the air and water and then force society to
pay for their clean-up or
• which create health problems requiring remediation
These are still counted as positive contributions to the measured
level of GNP and GDP.
• Rather than adding to welfare, actually these are negative
externalities of the production process.

theories and indicators of development 372

UNDP, Report

theories and indicatirs of development 373

UNDP, Report

theories and indicatirs of development 374

 HDI
• HDI – A socio-economic measure
• Focus on three dimensions of human welfare:
• Longevity – Life expectancy
• Knowledge – Access to education, literacy
rates
• Standard of living – GDP per capita:
Purchasing Power Parity (PPP)

theories and indicatirs of development 375

• HDI, the Human Development Index, was
developed by Mahbub ul Haq and 
Amartya Sen, in 1990, and was also developed
by the UNDP. It is calculated as the geometric
mean of the normalized indices of the three
dimensions of human development it takes
into account: health, education and standard
of living.
 HD Indices
• The HDI (Human Development Index)
- a summary measure of human development

• The GDI (Gender-related Development Index)

- the HDI adjusted for gender inequality

• The GEM (Gender Empowerment Measure)

- Measures gender equality in economic and political participation and
decision making

• The HPI (Human Poverty Index)

- Captures the level of human poverty

theories and indicatirs of development 377

Why the Human Development Index?
• It does not rely solely on wealth, it gives an
indicator of quality of life by including health
and education.
• By including education it gives an indication of
the country’s future development potential. It
reveals how a country uses its wealth. For
example, if a country has a high GNP, but
spends little on education, it will have a low
HDI.

theories and indicatirs of development 378

 HDI = 1/3 L + 1/3 E + 1/3 Y
E = Educational attainment
L = Life Expectancy /longevity
I = Income/GDP/capita
xi = E, L, I

xi = actual value of xi – minimum value of xi

maximum value of xi – minimum value of xi

E = 2/3 adult literacy rate (A) + 1/3 combined enrollment ratio (C)
Example:
max E = 100%; min E = 0%;
min L= 25 yrs; max L = 85 yrs
Max I=40000; min I 100
I= log (GDP per capita) – log (100)
log (40,000) – log (100)

theories and indicatirs of development 379

Indicators Maximum Minimum Actual
1. Education
-Adult literacy 100 0 0.85
-Combined enrolment 100 0 0.69

2. GDP/Capita 40000 100 3680

3. Life expectancy 85 25 73

theories and indicatirs of development 380

 HDI Calculation example
L = 73 – 25 = 0.807
85 – 25
(Education) Adult = 85.3 – 0 = 0.853, A max=100; actual=85.3
100 – 0
C = 69 – 0 = 0.690
100-0
E = 2/3(0.853) + 1/3 (0.690) = 0.798

I = log(3680) – log(100) = 0.602

log(40,000) – log (100)

HDI = 1/3 L + 1/3 E + 1/3 Y = L + E + I

3
= 1/3 (0.807) + 1/3 (0.798) + 1/3 (0.602)
= 0.735

theories and indicatirs of development 381

 Criticisms Against HDI
• It is not a comprehensive measure of human development, only
focus on three basic dimensions
• The index is composed of long-term human development outcomes
• Masks a series of disparities and inequalities within countries
• Does not focus on ecological considerations while ranking countries
• Not based on global perspectives, instead, examines each country
independently
• Measure those aspects of development which have been studied
world-wide
• Both HDI has been criticized by economists such as Ratan Lal Basu
for not taking "moral/emotional/spiritual dimensions" of poverty
into consideration. It has been attempted to capture these
additional factors by the "Global Happiness Index".
• The HDI is an index just as crude as GDP but it
stands for better things like health and education
• 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

theories and indicatirs of development 383

• It puts emphasis again on economics , rather
than spiritual and moral development-
happiness- should suicide rates be used?
• It doesn’t include ecological concerns or the
quality of the living environment.
• Due to the calculation between 0-1, ‘ rich’
countries can do little to improve their ranking
in certain categories- despite developments.
• Despite being a composite, it adds little to
just using the individual statistics.

theories and indicatirs of development 384

 HDI World
HDI Africa
• The top five countries based on 2013 HDI were:
1) Norway
2) Australia
3) United States
4) Netherlands
5) Germany
• The category of “Very High Human Development" includes places like
Bahrain, Israel, Estonia and Poland.
• There is a category called "Medium Human Development" which includes
Jordan, Honduras, and South Africa.
• Countries with “Low Human Development” include Togo, Malawi and
Benin.

theories and indicatirs of development 385

 Adjustments to the HDI-Inequality
adjusted HD
• The gender-related development index: GDI
– takes into account the differences between women and
men on the values of the indicators that enter the HDI.
• The human poverty index: HPI
– corrects for another weakness of HDI in that it does not
show what’s happening to the poorest members of
society.
– slightly different variables in the index – e.g. % of people
not using improved water sources; % of children under
five who are underweight, etc.

theories and indicatirs of development 386

 Differences
• As HDI measures average achievement, the HPI measures
deprivations
• HDI and GDI focus on national averages
• HPI focuses on the worst off (deprivational
aspect)

theories and indicatirs of development 387

Four new indices of human development:
•The Inequality-adjusted HDI discounts the HDI
according to the extent of inequality.
•The Gender Development Index compares female
and male HDI values.
•The Gender Inequality Index highlights women’s
empowerment.
•The Multidimensional Poverty Index measures
non-income dimensions of poverty.
 Critical Questions (Home take
exam)
• Are rapid economic growth and more equal income
distribution compatible or conflicting objectives?: Is rapid
growth achievable only at a cost of greater income
inequality or can lessening income disparities contribute to
higher growth rates?
• What is the extent of relative inequality in developing
countries; how is this related to the extent of poverty?
• What might be done to help the poor benefit more?
• What is so bad about extreme inequality?
• What kinds of policies are required to reduce the magnitude
and extent of absolute poverty?
CHAPTER FIVE
POVERTY AND
INEQUALITY
 Poverty
• Poor quality of life is much more than just material
poverty . Poverty has many dimensions, and they
combine to create and sustain powerlessness, lack
of voice, and a lack of freedom of choice and
action.”
• Mostly, they analyse poverty on the basis of levels
of income, consumption and other indicators such
as illiteracy level, lack of job opportunities, lack of
general resistance because of malnutrition, lack of
access to healthcare, safe drinking water and
sanitation
 Types of Poverty.
• There are six main types of poverty according
to Eric Jensen's (2009).
• These are situational, generational, absolute,
relative, urban, and rural.
• Situational poverty is a period wherein an
individual falls below the poverty line because
of a sudden event. It can be caused by a range
of factors, such as: a divorce, death of the
family head, illness, a n
• Generational Poverty is defined as a family
having lived in poverty for at least two
generations natural disaster or loss of job
• Families living in this type of poverty are not
equipped with the tools to move out of their
situations such as, financial capital, education,
or connections
 Poverty lines:
Relative versus absolute indicators
• Relative measure of poverty
(inequality)
– Deviation from mean income (Gini
coefficient)

• Absolute measure of poverty (survival):

– Food intake method
– Basic needs method
– Capabilities to functionings--schooling
– $1 and $2 (PPP,1985)
• UNDP’s Human Poverty Index:
– Probability of not surviving to ages 40
– Share of adults who are illiterate
– Share of population w/o access improved water
source,
and share of children under weight for age
 Conclusion:
Key questions in poverty analysis
• What’s the appropriate focus?
– Relative or absolute poverty
• What’s the appropriate measure?
– Human versus monetary
• What’s the appropriate monetary measure?
– Household income or household consumption
• What’s the appropriate data?
– Household survey or national accounts?
1. Measuring Inequality
 Criterion for Measuring
Inequality
• Anonymity Principle: states that it does not matter who
earns the income.
• Population Principle: states that the absolute population
size does not matter; Proportions of the population that
earns different levels of income matters.
• Relative Income Principle: states that relative incomes
should matter, not the absolute levels of these incomes.
• The Dalton Principle: states that in an income /welfare
distribution, a regressive transfer will lead to increased
inequality.
•
• It says that, all other things being equal, a 
social welfare function should prefer
allocations that are more equitable.
• In other words, a transfer of utility/useful
service from the rich to the poor is desired, as
long as it does not bring the rich to a poorer
situation than the poor.

theories and indicatirs of development 399

 The Lorenz Curve
• Diagrammatic way to depict the distribution of income
in any society
• Horizontal axis depicts cumulative percentages of
population arranged in increasing order of income;
Vertical axis depicts percentage of national income
accruing to any fraction of population
• Slope at any point gives the contribution of the person
at that point to the cumulative share of national
income
2. Measures of Poverty
 Multi-Dimensional Poverty Index
• The index uses the same three dimensions as
the Human Development Index: health,
education, and standard of living. These are
measured using ten indicators
 Dimension Indicators

Child Mortality
Health 
Nutrition

Years of schooling
Education 
School attendance

Cooking fuel

Sanitation

Drinking Water
Living Standards 
Electricity

Housing

Assets
The following indicators are used to calculate the MPI:
1. Education (each indicator is weighted equally at 1/6)
• Years of schooling: deprived if no household member has completed
six years of schooling
• school attendance: deprived if any school-aged child is not attending
school up to class 8
2. Health (each indicator is weighted equally at 1/6)
• Child mortality: deprived if any child has died in the family in past 5
years
• Nutrition: deprived if any adult or child, for whom there is nutritional
information, is stunted[5]
3. Living Standards (each indicator is weighted equally at 1/18)
• Electricity: deprived if the household has no electricity
• Sanitation: deprived if the household’s sanitation facility is
not improved (according to MDG guidelines), or it is improved
but shared with other households
• Drinking water: deprived if the household does not have
access to safe drinking water (according to MDG guidelines)
or safe drinking water is more than a 30-minute walk from
home roundtrip
• Housing: deprived if the household has a dirt, sand or dung
floor
• Cooking fuel: deprived if the household cooks with dung,
wood or charcoal
4. Assets ownership: deprived if the household does not own
more than one of: radio, TV, telephone, bike, motorbike or
refrigerator and does not own a car or truck
• A person is considered poor if they are deprived in at least a
third of the weighted indicators. The intensity of poverty
denotes the proportion of indicators in which they are
deprived.
Total Population in 109 MPI countries
Half of the world’s MPI
poor people live in
South Asia, and 29% in
Sub-Saharan Africa
MPI poor people by region
Intensity is highest in the poorest countries.
DISPARITIES
But there is variety…H in High-income countries 1-7%
H in High- and Upper Middle-income countries 1-40%
H in Middle- and High-income Countries 1-77%
H in Low-income Countries ranges from 5-92%
Ghana, Nigeria, and Ethiopia
Ethiopia’s Regional Disparities

Ethiopia
Ethiopia’s Regional Disparities

Afar

Somali
Dire
Harari Dawa

Addis Ababa
A sub-regional MPI within South Asia is as large and as high as Sub-Saharan Africa’s

473 mill. 519mill.

0.366

26 poorest
regions of South
Asia
420
CHANGES OVER TIME
 Changes over time in MPI
Multidimensional Poverty Index (MPI)

• MPI fell for all countries

• All have 10 indicators
• Survey intervals: 3 to 6 years.
Ghana, Nigeria, and Ethiopia
Let us Take a Step Back in Time
Ethiopia
2000

Nigeria
2003

Ghana
2003
Ethiopia: 2000-2005 (Reduced A more than H)
Ethiopia
2000

Ethiopia
2005
Nigeria
Nigeria
2003
2008

Ghana
2003
Ghana
2008
Nigeria 2003-2008 (Reduced H more than A)
Ethiopia
2000

Ethiopia
2005
Nigeria
Nigeria
2003
2008

Ghana
2003
Ghana
2008
Ghana 2003-2008 (Reduced A and H Uniformly)
Ethiopia
2000

Ethiopia
2005
Nigeria
Nigeria
2003
2008

Ghana
2003
Ghana
2008
How did poverty decrease?
Performance of Sub-national Regions
Ethiopia’s Regional Changes Over Time

Harari

Addis Ababa
Nigeria’s Regional Changes Over Time

North Central

South South
 Uses of an MPI
 Complements $1.25/day poverty measures
 Gives a ‘high resolution’ lens on poor people’s lives
 An overview and a ‘dashboard’
 Changes over time – can change relatively quickly
 Provides incentives to reduce intensity and incidence.
 Can be used to identify the poorest
 Adaptable for National Poverty Measures
 Research and Policy: agenda is ongoing
Lorenz curve

theories and indicatirs of development 433

Development and Income Inequality Kuznet’s
Curve

theories and indicatirs of development 434

 ENVIRONMENTAL IMPACT
ASSESSMENT: Overview
DEFINITION
• Environmental assessment "the process of
identifying, predicting, evaluating and mitigating
the biophysical, social, and other relevant effects
of development proposals prior to major
decisions being taken and commitments made
• EIA is the term used for the assessment of the
environmental consequences (positive and
negative) of a plan, policy, program, or project
prior to the decision to move forward with the
proposed action
 Purpose
• The purpose of the assessment is to ensure that
decision makers consider the environmental
impacts when deciding whether or not to proceed
with a project.
• WHO IS CONDUCTING EIA? Composed of different
professionals
• Different companies conduct or approve EIA done
by institutions/Governments
• An EIA is an interdisciplinary study and, therefore, a
team of EIA experts with various backgrounds
covering the social, physical, and ecological areas is
essential
 Steps/Components of EIA
• The way in which an EIA is carried out is not
rigid: it is a process comprising a series of
steps. The main steps in the EIA process are:
• screening
• scoping
• prediction and mitigation
• management and monitoring
• auditing
• Screening Every project not necessary requires to conduct EIA
often results in a categorization of the project and from this a
decision is made on whether or not a full EIA is to be carried out.
• Scoping is the process of determining which are the most critical
issues to study and will involve community participation to some
degree. It is at this early stage that EIA can most strongly influence
the outline proposal.
• Prediction and mitigation studies follow scoping and are carried
out in parallel with feasibility studies.
• The main output report is called an Environmental Impact
Statement, and contains a detailed plan for managing and
monitoring environmental impacts both during and after
implementation of the project.
• Finally, an audit of the EIA process is carried out some time after
implementation. The audit serves a useful feedback and learning
function