Waiting on the World to

Change
OLS 1 Development Economics | April 2022 updated Dec 2022
On Development and Poverty
 development is the process of improving the quality of all
definitions & ideas

human lives and capabilities by raising people’s levels of

living, self-esteem, and freedom (Todaro & Smith, 2015:7)

development in traditional economics: utility, profit

maximization and market efficiency to induce economic
growth, which then trickles down to the benefit of
individuals and households
 in political economy: merging economic analysis with practical
definitions & ideas

politics, viewing econ problems in its political context, with the

goal of producing policies that harmonize economic and
political incentives

DEVELOPMENT ECONOMICS: study of how economies are

transformed from stagnation to growth, and from low-income
to high-income status, and overcome problems of absolute
poverty
 gain in an overall and per capita GNI growth trickle down to the
Deveon in eras

masses in the form of jobs and other economic opportunities or

Before 1970s
creating a wider distribution of the economic and social benefits
of growth

redefined in terms of the reduction or elimination of poverty,

inequality, and unemployment within the context of a growing
During 1970s
economy. Thus, redistribution from growth became a common
slogan

the challenge of development is to improve the quality of life

1991 World Bank especially in the world’s poor countries, a better quality of life
generally calls for higher incomes-but it involves much more
 Dudley Seers = “redistribution from growth” while poverty,
Rethinking devt

inequality & unemployment worsens

Denis Goulet = emotions of underdevelopment (i.e. hopelessness,

servility, impotence, confusion & ignorance)

Amartya Sen = freedom as a means and an end of development

 1. Increase the availability and widen the distribution of
Objectives of devt

basic life-sustaining goods;

2. Raise levels of living not only to enhance material
well-being but also to generate greater individual and
national self-esteem ; and,
3. Expand the range of economic and social choices
available to individuals and nations by freeing them
from servitude and dependence.
Devt Core values

1. SUSTENANCE = ability to meet basic human needs

2. SELF- ESTEEM = given dignity as a person with a
sense of self-worth & respect
3. FREEDOM FROM SERVITUDE = enabled to choose;
allowed to make informed decisions & choices
 Cold War categories = First, Second, and Third World
Categories of

Post- Cold War = Global North & Global South

countries

Post- Cold War = Developed, developing, least developed

countries/ economies

Points of comparison: levels of income & productivity;

human development index
 • low levels of standard of living & productivity
Developing
countries

• low levels of human capital

• high levels of income inequality & absolute poverty
• high population growth rates
• greater social fractionalization
 • large rural populations but rapid rural-to-urban
migration
Developing
countries

• low levels of industrialization & manufactured exports

• adverse geography
• underdeveloped financial & other markets
• lingering colonial impacts such as poor institutions &
varying degrees of external dependence
“Why are we so rich and they, so poor?”
• “One says that we are so rich and they so poor because we are
so good and they so bad; that is, we are hardworking,
knowledgeable, educated, well governed, efficacious, and
productive, and they are the reverse. The other says that we
are so rich and they so poor because we are so bad and they so
good: we are greedy, ruthless, exploitative, aggressive, while
they are weak, innocent, virtuous, abused, and vulnerable.” –
David Landes
An alternative perspective?
• Countries differ in the effectiveness of their institutions and
government policy: not all capitalist economies have
experienced sustained growth. Today, there are huge income
inequalities between countries, and between the richest and
poorest within countries. And the rise in production has been
accompanied by depletion of natural resources and
environmental damage, including climate change. (CORE-
ECON, 2018)