University of Gondar

College of Business and Economics

School of Economics

Assefa Tilahun (PhD)

January, 2025
 RURAL DEVELOPMENT

INTRODUCTION TO RURAL DEVELOPMENT

 Meaning of Development
 Development is not purely an economic phenomenon but rather a multi-dimensional
process involving reorganization and reorientation of entire economic and social system

 Development is process of improving the quality of all human lives with three equally
important aspects. These are:
1. Raising peoples’ living levels, i.e. incomes and consumption, levels of food, medical
services, education through relevant growth processes
2. Creating conditions conducive to the growth of peoples’ self-esteem through the
establishment of social, political and economic systems and institutions which promote
human dignity and respect

3. Increasing peoples’ freedom to choose by enlarging the range of their choice variables
 Meaning of Development
Development as Distributive Justice-

 View development as improving basic needs

 Interest in social justice which has raised three issues:

1.Nature of goods and services provided by governments

2. Matter of access of these public goods to different social classes

3. How burden of development can be shared among these classes

Target groups include small farmers, landless, urban under-employed and unemployed
 Meaning of Development
Development as Modernization-

 emphasizes process of social change which is required to produce economic advancement;

examines changes in social, psychological and political processes;

 How to develop wealth oriented behavior and values in individuals; profit seeking rather
than subsistence and self sufficiency

 Shift from commodity to human approach with investment in education and skill training

**Development is a process that creates growth, progress, positive change in economic,

environmental, social and demographic component without damaging the resources of the
environment
 Sustainable Development
 Defined as development that is likely to achieve lasting satisfaction of human needs and
improvement of the quality of life and encompasses:

 Help for the very poorest who are left with no option but to destroy their environment to
survive

 Idea of self-reliant development with natural resource constraints

 Cost effective development using different economic criteria to the traditional –i.e.
development should not degrade environment

 Important issues of health control, appropriate technologies, food self-reliance, clean water
and shelter for all

 People centered activities are necessary- human beings are the resources in the concept
 Concepts of Development
 In 1950s & 60s development was conceived in terms of growth targets such as: GNP (An
economic statistic that includes GDP, plus any income earned by residents from overseas
investments, minus income earned within the domestic economy by overseas residents)
and GDP (Gross domestic product (GDP) is the monetary value of all the finished goods
and services produced within a country's borders in a specific time period).

 The concept of development involves something more than economic growth. Growth in
GDP is not an end in itself.

 It is a means to improve living standards and better society with less poverty, better
health and improved educational level.

 Increased GDP per capita should be accompanied by reduction in poverty.

 Cont...
 During the 1970s development came to be redefined in - terms of multidimensional
concept such as:

 Reduction/elimination of poverty,

 Reduction of inequality, and

 Reduction/elimination of unemployment,
 Cont...
 The argument about this definition based on the principle that development is not something
that can be measured by GNP statistics because it is a progress of change, dealing with broad
concepts such as, human factors that include people's satisfaction, knowledge and skill for
achieving their goals. Some of the definitions of development include:
 Development is a complex process which involves socio-economic, political and cultural
betterment.
 Development refers to continuity of growth, increasing people's living that changes with time.
 Development involves the introduction of new ideas into a social system in order to produce
higher per capita incomes and levels of living through modern production methods and
improved social organization
 Development implies a total transformation of a traditional society into types of technology and
associated social organization that characterize the advanced stable nations of the Western
world.
 Core Values of Development
 According to Todaro, Development must, therefore, be conceived of as a multi-
dimensional process, at least three basic components as core values should serve as a
conceptual basis and practical guidelines for understanding the "inner" meaning of
development.

 These core values - sustenance, self-esteem, and freedom - represent common goals
sought by all individuals and societies'?

 They relate to fundamental human needs that find their expression in almost all societies
and cultures at all times
 Core Values of Development
Sustenance: The Ability to Meet Basic Needs
 This refers to the capacity to meet basic necessities such as food, clothing, and shelter. Lack of even one of
these means that a person's life is not progressive.
 A country develops if its citizens have enough or more than enough for their basic necessities, there is
growth of income, extreme poverty is addressed, and there is equality among members of society.

Self-esteem: to be a person
 The quality of life is good when there is respect, trust, and self-value.
 Each person has needs which can be achieved through the presence of respect, dignity, and a good
reputation in society.
 A person's worth as an individual cannot simply be measured by the ownership of material things which is
often given emphasis by progressive capitalist countries such as the United States.
 In the Philippines, material wealth is not the only important thing but the love for one's family, the family's
reputation, and a person's dignity and self-esteem. A country is developed if this unique need of the people
is addressed.
 Core Values of Development
 Freedom from Servitude: to be able to choose

 This freedom is drawn from liberation from oppressive systems in society, poverty and
abuse, slavery, ignorance, and the absence of the freedom to choose one's culture or religion.

 This freedom can be seen in the range of choices in a society.

 What is good about development is not only the joy of being free from poverty but also the
availability of a wide range of choices.

 In general, freedom prevails if people live a comfortable life, if they have the freedom to
choose their religion, to vote and to express their opinion about administration and
governance, and if they enjoy equal opportunities for education and employment
 Human Development
 Human development is the process of enlarging people‟s choices.
 The concept of human development has two sides.
1. Formation of human capacity such as improved health, knowledge and skills.
2. How people make use of these acquired capabilities for productive purpose, for leisure and
for being active in cultural, social and political affairs.
 Human development brings together the production and distribution of commodities and the
expansion and use of human capabilities.
 Human Development
There are four major elements in the concept of human development
1. Productivity 2. Equity 3. Sustainability 4. Empowerment
 Indicators of Human Develipment
1. Life expectancy: representing a long and healthy life
2. Educational attainment: representing knowledge
3. Gross domestic product: representing a decent standard of living
 The Concept of Development Studies
 Development studies are a systematic study of problems and processes of development.
 It emerged as a discipline in early 1960s as a branch of economic and political economy.
 It draws on certain principles and concepts of economics and political economy.
 Nevertheless, it is a field of study that is evolving its own theoretical and methodological structure.
Economics, Political Economy and Development Studies,
Traditional Economics (Micro and Macro)
 Economics is concerned with efficient allocation of scarce productive resources and their sustained
growth overtime.
Political Economy
 It studies social and institutional processes that affect decision-making in allocation of scarce
productive resources.

 In other words it is concerned with the relationship between politics and economics with special
emphasize on the role of power in economic decision-making.
 The Concept of Development Studies
Development Studies

 Development studies, while considering efficient allocation of scarce productive resources

and their sustained growth overtime and the role of power in economic decision making

 It primarily deals with social, economic, political and institutional mechanisms necessary
to bring about rapid and large scale improvement in the levels of living of the poor people
of Africa, Asia and Latin America.

 Today, development of the Third World, i.e. eradication of poverty with its correlates, is
regarded as one of the greatest social and economic challenges facing mankind
 The Concept of Development Studies

The New International Economic Order

 Poor nations’ are increasing awareness of their inferior economic and political status in the
world and the desire for material improvement and great political recognition through
economic strength.

 These poor nations have also called for new international economic order realizing that the
existing world economic system is biased in favor of countries already developed.

This new international economic order call for:

 improved terms of trade for the export of poor countries
 greater access to the market of developing countries for manufactured goods
 Reform of IMF and greater say in international bodies concerned with trade and development
issues.
 an international food program and greater technical cooperation
 greater financial assistance and alleviation of the past debt
 The Concept of Development Studies
Definitions

1. Rural: Rural areas are parts of the world with small human settlement & infrastructure.
In rural areas, most people spend their time on farms; land is abundant & cheap;
transaction costs are high; and political conditions are very difficult

2. Rural areas or the country or countryside are areas of land that are not urbanized, though
when large areas are described, country towns and smaller cities will be included.

3. They have a low population density, and typically much of the land is devoted to
agriculture and there may be less air and water pollution than in an urban area
 The Concept of Development Studies
 Rural development is a strategy designed to improve the economic and social life of a specific
group of people in the rural area.

 It involves extending the benefit of development to the poorest among those who seek a livelihood
in the rural areas.

 The groups include small-scale farmers, tenants, and the landless.

 Rural development generally refers to the process of improving the quality of life and economic
wellbeing of people living in relatively isolated and sparsely populated areas.

 Rural development has traditionally centered on the exploitation of land-intensive natural resources
such as agriculture and forestry
 Objectives of Rural Development
 Based on the characteristics of rural areas and the need raised for a new emphasis rural
development strategy has the following objectives:

i) To improve the living standard or “well-being” of the mass of the people by ensuring that they
have security and that their basic needs such as food, clothing, shelter, employment are met.
2) To make rural areas more productive and less vulnerable to natural hazards, poverty and
exploitation and to give them a mutually beneficial relationship with other parts of the
regional, national & international economy.
3) To ensure that any development is self sustaining and involves the mass of the people
4) To ensure as much local autonomy and as little disruption to traditional customs as possible.
The former usually means promoting administrative decentralization and political self-
government.
 Theories of Development
Keynesian growth theory (1940-50s)

 Process of capital of formation is determined by savings and investment

 Domestic savings are chanelled to productive investments such as manufacturing which

result –usually-in high productivity

 Growth is market driven as income levels rise, savings rises and frees capital for
alternative investment
 Theories of Development
Modernization theory

 As noted previously this theory suggests that economic dimension alone is insufficient
and adds theories on institutional and social change

 Incorporates non-economic elements such as social practices, beliefs, values and customs
(McClelland, Achieving Society)

 Diffusion and speed of change is critical as is removal of various cultural and social
barriers

 Backward internal structures-rather than external factors-cause underdevelopment

 Theories of Development
Neo liberal development theory

 Grew in the 1970s and designed to counteract impact of Keynesianism

 New emphasis on supply side factors in development- private initiatives and market led
growth

 Move away from demand stimulation (interest rate manipulation), import substitution,
state intervention and centralized planning

 Gradual industrialization with ‘trickle down’ of benefits to all social classes

 Different Contexts of Rural Development

The term Rural Development is used in different ways and in different contexts.

1. As a phenomenon: is the end result of the interactions between various physical,

technological, economic, socio-cultural and institutional factors.

2. As a discipline: It involves; agricultural, social sciences, behavioural science,

management, political sciences and also engineering sciences.

3. As a strategy: designed to improve the economic and social wellbeing of a specific group
of people especially of the rural poor. As a process: leading to a sustainable improvement
in the quality of life of rural people, especially the poorest of the poor
Sustainable Development
 Sustainable development refers to that process of economic development which aims
at maintaining the quality of life of both present and future generations.

 Sustainable development emphasizes development without environmental

degradation.

 Environmental degradation includes Environmental pollution and Exploitation of

natural resources

 The concept of sustainable development stresses on the minimum possible

environmental pollution as well as minimum possible exploitation of natural
resources
Features of Sustainable Development

 Efficient use of Natural Resources

 No Reduction in the Quality of Life of the Future Generation

 No Increase in Pollution

 Does not Delimit the concept of Development

 Distributional equity

 Preservation of Three Types of Capital

Need of Sustainable Development

 The importance and need for sustainable development is mainly due to the following
reasons.
 Poverty declining but still a challenge
 Inequality Widening
 Conflict – Devastating
 Air Pollution
 Fresh water increasingly scarce
 Soil being degraded
 Forests being destroyed
 Biodiversity disappearing
 Fisheries declining
Condition for Sustainable Development

Main conditions of sustainable development are

1. Increase in Per Capita income and Quality of Life.

2. Conservation of Natural Capital Stock

3. Reduction in Industrial Pollution

4. Reduction in Agricultural pollution

5. Comprehensive Rural development

Indicators of Sustainable Development

 Total production growth rate

 Population control

 Water supply and its uses

 The availability of fresh water and pure air

 Human resources development

 Energy
Strategies for Sustainable Development
 Possible strategies for achieving sustainable development are
 Input Efficient Technology
 Use of Environment-friendly Sources of Energy
 Integrated Rural Development
 Convert Sunlight into Solar Energy into Electricity
 Shift to Organic Farming
 Recycle the Wastes
 Stringent Laws on the Disposal of Chemical Effluents
 Awareness to conserve Natural Assets for Inter-generational Equity
 Public Means of Transport
Participatory Development

 Participatory development is seen as community driven.

 It gets people involved in the decision making and the implementation of projects.

 It is seen as instrumental in poverty alleviation and empowerment of the poor.

 It is also viewed as an effective tool in building democracy and accountability and for
achieving inclusive and sustainable socioeconomic change.

 Participatory development is based on the assumption that communities have better

knowledge of their local conditions and

 problems and of the form of social capital available locally.

 Sustainable Rural Development

 Sustainable development as “development that meets the needs of the present generation
without compromising the ability of the future generation to meet their own needs .

 Economic dimension: - This dimension focuses on optimum resource utilization and

management. It is concerned about maximizing net benefits of economic development
subject to maintaining the services and quality of natural resources.
 Environmental Dimension: - this necessitates protecting the natural resources needed
for food production and other sectors while expanding production to meet the needs of
growing population
Technological dimension: - this dimension is about shifting to new technologies that are
efficient, cleaner and effective in using natural resources in order to reduce pollution and
accommodate growth in population and economic activity.
The goals of sustainable development according to this dimension should be processes of
technological systems that create few wastes and able to recycle the wastes.
Human dimension: - this one focuses on progress towards stable population.
 It also focuses on distribution of population and rural development in order to minimize
the environmental consequence of urbanization.
 It entails making full use of human resources by improving the educational and health
services through social welfare and protecting cultural diversity and also by considering
human as partners of development and promoting participation in development.
Social Significance
1. Innumerable Rural Problems: A large number of farmers and rural poor are suffering
from all sorts of problems regarding finance, agricultural inputs, production,
marketing, employment and income. The rural development programmes provide a
composite package to solve all these problems.
2. Social Change: People, residing in rural areas, are too much traditional in agricultural
practices. Rural development programme educates the rural poor in such a way that
they may be appreciable social changes rather than oppose them.
3. Infrastructural facilities for Social Development: In rural areas, by and large, the
basic amenities such as road, primary school, health center and drinking water
facilities are very essential items which require immediate solutions. Therefore, rural
development programmes are of great significance in rural areas.
Economic Significance
1. National Income: Agriculture sector provides a considerable contribution in the national income.
2. Employment and Source of Livelihood: Employment and source of livelihood from the agricultural sector
is significant.
3. Food and Fodder: The agriculture meets almost the entire food needs of the people. It also provides fodder
to sustain livestock and poultry.
4. Industrial development: Agriculture has been source of raw materials to the industries. There are many other
industries which depend on agriculture indirectly. There is a close interdependence between agriculture and
industry. This relates to:
a) The supply of raw materials and inputs from agriculture to industry and vice versa;
b) The supply of wage goods to industrial sector;
c) The supply of basic consumption goods to the agricultural population; and
d) The supply of materials for the building up of economic and social overheads in the agricultural
Political Significance
Political stability- Growing disparity between the urban elite and rural poor may lead to political instability.
Stable and developing rural areas can help in political stability which is equally important for economic
 Obstacles to Rural Development

 Unpredictable weather condition

 Soil erosion and land degradation
 Deforestation
 Land fragmentation (small size land holding)
 Lack of effective land property right
 Low agricultural productivity
 Lack of infrastructure facilities
 Lack of agricultural inputs and backward technology
 Underdeveloped rural financial markets
 Obstacles to Rural Development
 Lack of good governance
 Absence of strong institutions
 Large number of illiterate
 Population growth
 Excessive dependence on nature
 Lack of diversification
 High incidence of poverty and food insecured
 Low human capital endowment
 Problems in technology transfer
 Gender inequality
 Inadequate research extension linkage
 Excessive dependence on relief food aid
 Political Instability and Civil Strife
 Economic policies that exclude the rural poor from the development process
THANK YOU