Chapter 1: Principles And Concepts Of Development PDF

CHAPTER 1 PRINCIPLES AND CONCEPTS OF DEVELOPMENT Topic Highlights 1. Economic Development 2. Measures of Economic Development 3. Classification of Rich and Poor Countries 4. Basic Needs Attainment 5. Growth and Basic Needs 6. Basic Needs as a Human Right 7. Cost and Be...

CHAPTER 1 PRINCIPLES AND CONCEPTS OF DEVELOPMENT Topic Highlights 1. Economic Development 2. Measures of Economic Development 3. Classification of Rich and Poor Countries 4. Basic Needs Attainment 5. Growth and Basic Needs 6. Basic Needs as a Human Right 7. Cost and Benefit of Economic Development Economic Development programs, policies, or activities that seek to improve the economic well-being and quality of life of a community. a process of targeted activities and programs that work to improve the economic well-being and quality of life of a community by building local wealth, diversifying the economy, creating and retaining jobs, and building the local tax base. Economic development strategies often aim for common, positive results, such as: Creating more jobs and more job variety Keeping businesses and getting new ones A better quality of life More people and businesses paying taxes More productive use of property Promoting your community’s assets Making and selling more local products Getting more skilled workers living in your community Measures of Economic Development: R.G. Lipsey maintains that there are many possible measures of a country’s degree of development: income per head the percentage of resources unexploited capital per head saving per head, and amount of social capital. Measures of Economic Development: But more commonly used criteria of economic development are: increase in national income per capita real income comparative concept standard of living, and economic welfare of the community etc.  1. National Income as an Index of Development There is a group of certain economists which maintains the growth of national income should be considered most suitable index of economic development. Simon Kuznets Meier and Baldwin Hicks D. Samuelson, Pigon and Kuznets According to Prof. Meier and Baldwin, “If an increase in per capita income is taken as the measure of economic development.” 2. Per Capita Real Income economic development is defined as a process by which the real per capita income increases over a long period of time. Harvey Lieberstein, Rostow, Baran, Buchanan, and many others favor the use of per capita output as an index of economic development. Charles P. Kindleberger also suggested the same method with proper precautions in computing the national income data 3. Economic Welfare as an Index of Economic Development Suggested economic welfare as the measure of economic development. Coline Clark, Kindleberger, D. Bright Singh, Hersick etc. The term economic welfare can be understood in two ways: (a) When there is equal distribution of national income among all the sections of the society. It raises economic welfare. (b) When the purchasing power of money goes up, even then there is an increase in the level of economic welfare. The purchasing power of money can go up when with the increase in national income there is also an increase in the prices of goods. That means economic welfare can increase if price stability is ensured. ** The higher the level of economic welfare, the higher will be the extent of economic development and vice- versa. 4. Comparative Concept from a comparative concept, we can ascertain how much economic development has been attained in a country. Comparison within the country. Comparison with other countries. 5. Measurement through Occupational Pattern changes in the occupational structure According to Colin Clark, there is deep relation between occupational structure and economic development. Occupational Structure (1) Primary Sector: It includes agriculture, fisheries, forestry, mining etc. (2) Secondary Sector: It consists of manufacturing, trade, construction, etc. (3) Tertiary Sector: It includes services, banking, transport, etc. In under-developed countries, the majority of the working population is engaged in the primary sector. x Standard of Living Criterion increase in the average consumption level of the individual Human Development Index (HDI) HUMAN DEVELOPMENT INDEX (HDI) A. Physical Quality of Life Index (PQLI) of Morris most serious challenge to GNP per capita as the index of development. M.D. Morris in 1979, combined three component indicators of infant mortality, life expectancy at age one and basic literacy at age 15 to measure performance in meeting the most basic needs of the people. B. Human Development Index (HDI) as developed by the United Nations Development Program (UNDP) “Each indicator of the three components is placed on a scale of zero to 100 where zero represents an absolutely defined worst performance and 100 represents an absolutely defined best performance. The PQLI index is calculated by averaging the three indicators giving equal weight to each and the index is also scaled from 0 to 100” For infant mortality rate – negative/positive variables (best indicator is shown as the minimum and the worst as the maximum)  Infant Mortality (negative variable) Life Expectancy at Age One (positive variable) Basic Literacy at Age One (positive variable) Infant Mortality, Achievement Level: = (AcVal-MinVal) / (MaxVal-MinVal) = (120-9)/(229-9) = 111/220 = 50.45% Life Expectancy at Age One, Achievement Level: Negative =(MaxVal-AcVal) / (MaxVal-MinVal) variable =(77-75) / (77-38) = 2/39 = 5.1% Basic Literacy at Age One, Achievement Level: Positive =(MaxVal-AcVal) / (MaxVal-MinVal) variable =(180-185) / (180-0) = -5/180 = -2.7% Thank you