First Individual Assignment of Development Theory class

Written by Nirma Maima (196030112111006)

Public Administration Master Linkage Program
Brawijaya University
2019

A. Characteristics, meaning and goal of traditional economic development

Traditional view of economic development is primarily concern with the

efficiency, least-cost allocation of scarce productive resources and with the optimal
growth of these resources over time so that it can produce an ever-expanding range of
goods and service. The ultimate goal of this development is to attain a sustainable
growth rate (SGR) of income per-capita in order to enable a country to expand its
output faster than growth rate of population.
Traditional economic development can be distinguished with this certain
characteristic.
 National income as a measure of economic development
Some scholars see national income is a basic measuring in economic
development since it is possible to rank the nation from their national income.
From this view, it can be interpreted that a country is developing when there is
in its national income over long period of time and the rate of increase in
national income seen as national growth
 Real Per-capita Gross National Index (GNI) as a measure of population
well-being.
The objective of development is to provide better life to its people through
improvement of the standard of living. In traditional economic view, the level
and rate growth of GNI can be used to measure overall economic well-being
in a population. It is related to average consumption level of the individual and
the availability of real goods and services to average citizen for consumption
and investment.
 Per-capita income as an Index of Economic Development
Many economists perceived that development is not merely an increase of
aggregate output but also indicate a rising of people’s living standard.
Therefore per-capita output can be used as an index of economic development
B. Characteristic, Meaning and Goal of The New Economic Development.

New economic development view a development was not only based on

aggregate output of economic or based on the measurement of the indicators used in
traditional view ( GNP, GNP) instead of this view perceive that development can be
achieved when there is improvement in material welfare such as equality,
employment decline etc. The goal of new economic development is to improve the
welfare, creating equality and applying a “growth distribution” means that
development touch to everyone and transform to better quality of life by move away
from the perceive of unsatisfactory condition toward better life materially and
spiritually.

New economic development can be distinguished to certain characteristic:

 Development is taking account on various dimensions of welfare that include

necessities of life, education, employment etc
 Grasp the multidimensional process that involves a major transforming of social
culture, popular attitudes, national institutions including the acceleration of
economic growth
 Tried to reduce the economic gap by implementing redistribution growth,
reduction of inequality and eradication of poverty
 Expanding aspirations individual and groups within a comprehensive system
 Indicator used to measure the development not only used GDP but using a socio-
economic factor such as Human Development Index (HDI), physical quality of
life index (PQLI) and other relevant socio-economic factors

C. Analysing of the use of new economic development.

The most basic reason why new economic development is more relevant to
use instead of traditional approach is because the traditional view failed to answer the
phenomena related to social problem happen in society. Back then in 1950 and 1960,
although many countries were seen as having development since from the
measurement of the indicator (GNI, GDP etc) indicate that the economic growth has
been reached by those countries, yet in the change did not socially. There is no
improvement in life of many people, and it seems like most part of social life
 remained unchanged. Therefore, in 1970), when many economist and policy makers
start to bring the topic of poverty, inequality and other social problem, then in 1970
economic development was redefined as an approach underlying social problems
from reduction of poverty, closing the gap of inequality, and reduction of
unemployment within the context of a growing economy. So, these three criteria hold
a power in defining developing countries. Although one country doubled per-capita
income, but these three social problems remained unchanged, then it is hard to stated
that the country is developing. Another reason why new economic development was
used because new economic development can serve a multidimensional process from
major change of social structure, popular attitudes, national institutions and
accelerating economic growth. Thirdly, new economic development’s measurement
us a multidimensional criterion (HDI, PLQI) instead of one-dimensional criteria
(GNI) so it provides a comprehensive answer especially for socio-economics
problem. Here the summarize of some superiority of new economic compare to
traditional one:
 It focuses the attention of the policy makers on the objective development, not
just the means.
 It is more meaningful as a national average than the GNP because there are much
greater extremes in income distribution than in the distribution of life expectancy
and literacy.
 It shows that the human development gaps between nations are more manageable

D. The
E.