Economic Development | tutor2u Economics
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Economic Development

  • Levels: AS, A Level
  • Exam boards: AQA, Edexcel, OCR, IB

What does economic development mean?

What is Human Development?

“Human development is the expansion of people’s freedom to live long, healthy and creative lives; to advance other goals they have reason to value; and to engage actively in shaping development equitably and sustainably on a shared planet. People are both the beneficiaries and the drivers of human development, as individuals and in groups”

Source: Human Development Report, November 2010

What does economic development mean?

Michael Todaro specified three objectives of development:

  1. Life sustaining goods and services: To increase the availability and widen the distribution of basic life-sustaining goods such as food, shelter, health and protection.
  2. Higher incomes: To raise levels of living, including, in addition to higher incomes, the provision of more jobs, better education, and greater attention to cultural and human values, all of which will serve not only to enhance material well-being but also to generate greater individual and national self-esteem
  3. Freedom to make economic and social choices: To expand the range of economic and social choices available to individuals and nations by freeing them from servitude and dependence not only in relation to other people and nation-states but also to the forces of ignorance and human misery.

Note the emphasis placed on cultural and human values, self-esteem and freedom from ignorance; it is important to remember that development is about more than advancing economic growth. Many economists believe development should be less about growth, more about inclusive well-being and about building capacities and resilience in a fast-changing and unpredictable world.

The most common measurement of development is the Human Development Index published each year by the United Nations Development Programme

Dudley Sears has defined development as “the reduction and elimination of poverty, inequality and unemployment within a growing economy”

Nobel Economist Amartya Sen writing in “Development as Freedom”, sees development as being concerned with improving the freedoms and capabilities of the disadvantaged, thereby enhancing the overall quality of life - what really matters are the capabilities of people, that is, the extent of their opportunity set and of their freedom to choose among this set, the life they value

Amartya Sen pursues the idea that development provides an opportunity to people to free themselves from deep suffering caused by

  • Early mortality
  • Persecution
  • Starvation / malnutrition
  • Illiteracy

For many, economic development should be about increasing political freedom, cultural and social freedom and not just about raising incomes

Measuring development progress can be difficult not least because of variations in the quality of data produced by different countries and also because of disagreements about which indicators might be given greater weighting when making an assessment. The Human Development Index (HDI) is one such approach.

Amartya Sen on India

In An Uncertain Glory, Sen argues that India’s main problems lie in the lack of attention paid to the essential needs of the people, especially the poor

Despite considerable economic growth and increasing self-confidence as a major global player, modern India is a disaster zone in which millions of lives are wrecked by hunger and by pitiable investment in health and education services. Economic growth without investment in human development is unsustainable and unethical.

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