CMD 401: Lecture Series 1

The Concept of Development

• The concept of development has, over the years, been
changing in scope and meaning as well as in the manner of
attaining it.
• Various definitions of development have emerged along
with so-called models or theories of development that
explain conditions of underdevelopment and prescribe
perspectives on development and the ways of attaining
development objectives with some specific criteria and
parameters for measuring the same UN Department of
Economic and Social Affairs (UNDESA 2003).
Development as a process or course of change- dynamic:

• Long-term process of structural societal transformation

• Short-to-medium-term outcome of desirable targets
• Dominant discourse of western modernity

Definition of Economic Development

• It must be emphasized that there is no single agreed-upon
definition of development.
• In general, refer to programs, policies or activities that
seek to improve the economic well-being and quality of
life for a community.
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 • Though economic development priorities vary, 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
The Term Development
Michael Todaro (1977) defines “Development as a multi-
dimensional process involving changes in social structures,
popular attitudes, and national institutions, as well as the
acceleration of economic growth, the reduction of inequality, and
the eradication of poverty.” (Todaro and Smith)

Todaro emphasized the “good life” that individuals and societies

ought to pursue as based on three (3) core values :

1) Life sustenance,
2) Self-esteem, and,
3) Freedom from servitude.

Sustenance: Sustenance is the ability to meet basic needs of

people. All people have certain basic needs without which life
would be impossible. These basic needs include food, shelter,

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health, and protection. People should have access to these basic
needs.
Self-Esteem: Sense of worth and self-respect and feeling of not
being marginalized are extremely important for individual’s well
being. All peoples and societies seek some form of self-esteem
(identity, dignity, respect, honor etc.). The nature and form of
self-esteem may vary from on culture to another and from time to
time. Self-esteem may be based on material values: higher income
or wealth may be equated with higher worthiness. One may
consider individuals worthy based on their intellect or public
service.
Freedom from Servitude: Human freedom, the ability to choose,
is essential for the well-being of individuals. Freedom involves
an expanded range of choices for societies: economic and
political. It involves freedom from bondage, serfdom, and other
exploitative economic, social, and political relationships.

Amartya Sen on development as freedom

Defines Development as freedom. According to Amartya Sen,
perhaps the greatest development thinker of our times. According
to 1998 Nobel prize winner, Amartya Sen, freedom is both the
primary objective of development and the principal means of
development. The human being is an engine of change.
According to Sen, development is enhanced by democracy and
the protection of human rights. Such rights, especially freedom of

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the press, speech, assembly, and so forth increase the likelihood
of honest, clean, good government.
Development is the process of expanding human freedom. It is
“the enhancement of freedoms that allow people to lead lives that
they have reason to live”. Hence “development requires the
removal of major sources of unfreedom: poverty as well as
tyranny, poor economic opportunities as well as systemic social
deprivation, neglect of public facilities as well as intolerance or
overactivity of repressive states”.
• Sen argues that there are five types of interrelated freedoms,
namely, political freedom, economic facilities, social
opportunities, transparency and security. The state has a role
in supporting freedoms by providing public education,
health care, social safety nets, good macroeconomic policies,
productivity and protecting the environment.
• Freedom implies not just doing something, but the
capabilities to make it happen. What people can achieve
(their capabilities) is influenced by “economic opportunities,
political liberties, social powers, and the enabling condition
of good health, basic education, and the encouragement and
cultivation of initiatives”.
• Sen calculates that if women in Asia and North Africa were
given the same health care and attention, the world would
have 100 million more women.

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Three Objectives of Development:
⚫ Increase availability and distribution of basic goods
⚫ Raise levels of living
⚫ Expand range of social and economic choices available
to individuals

Underdevelopment VS. Development of Developing

Countries

What is under-development in a country?

Underdeveloped countries have very low per capita income,

and many residents live in very poor conditions with little
access to education or health care. Additionally,
underdeveloped countries tend to rely upon obsolete methods of
production and social organization.

The debate concerning the underdevelopment and development

of the African continent and other equally poor parts of the world
is not a new phenomenon in the development discourse but can
be traced back to antiquity. There exist a number of reasons
deduced to the present condition of Africa which might be termed
as a development crisis. This is because the continent has
remained largely underdeveloped regardless of the presence of
huge natural resources (gold, cocoa, bauxite, oil, diamond,
timber) and human resources based. Several decades after the end
of colonialism, most parts of Africa is still fighting with problems
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such as high poverty rate, corruption, lack of basic infrastructural
facilities in all sectors of the economy, unemployment, high
mortality rate, political instability, and insecurity of lives and
property. The development discourse is made up of a web of key
concepts. ‘It is impossible to talk about development without
referring to concepts such as poverty, production, the notion of
the state, or equality.
Features of Underdeveloped Countries:
Low Level of Income: Underdeveloped countries are
maintaining a very low level of income in comparison to those
developed countries. The per capita incomes of these groups of
countries are extremely low if we compare them with that of
developed countries. Moreover, inequality in the distribution of
income along with this low level of income worsens the situation
in these economies to a disastrous level.
Mass Poverty: The existence of chronic mass poverty is another
characteristic of underdeveloped economies. This problem of
poverty arises not due to any temporary economic maladjustment
but arises mainly due to the existence of orthodox methods of
production and social institutions. The degree of poverty in these
economies gradually increases due to an increase in the size of the
population, growing inequality in income, and increasing price
levels.
Nearly 76.8 percent of the world population are living in those
underdeveloped or developing countries of the world, enjoying
only 15.6 percent of total world GNP.’ In these countries, the
majority of the population are living below the poverty line.

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Lack of Capital Formation: Developing or underdeveloped
countries of the world are suffering from a poor rate of capital
formation. As the level of per capita income in these countries is
very low thus their volume and rate of savings are also very poor.
This has resulted in a lack of capital formation and which is again
responsible for the low rate of investment in these countries.
For example, the rate of investment in countries like India and
Pakistan is lower than even 10 percent but, on the other hand, the
same rate is ranging between 15 to 30 percent in developed
countries like the U.S.A., Canada, etc. Thus, this poor rate of
capital formation is one of the major obstacles to the path of
development of these underdeveloped countries of the world.
Heavy Population Pressure: Underdeveloped countries are also
characterized by heavy population pressure. The natural growth
rate of the population in these countries is very high due to its
prevailing high birth rate and falling death rate. This excessive
population pressure has been creating the problem of a low
standard of living and a reduction in the average size of the
holding.
This has also resulted in a low rate of capital formation in these
countries. The population in these countries is increasing by 2 to
3 percent per annum which has created various problems like
scarcity of agricultural land, the small size of holding, the
problem of unemployment, food crisis, poverty, etc.
Agricultural Backwardness: The underdeveloped countries are
also suffering from agricultural backwardness. Although being
the most important sector, the agricultural sector in these

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countries remains totally underdeveloped. But what is more
peculiar is that these countries are depending too much on this
agricultural sector.
Nearly 60 to 70 percent of the total population of these countries
is depending on agriculture and about 30 to 40 percent of the total
GNP of these countries is generated from agricultural production.
Agricultural productivity in these countries remained still very
poor in spite of its great importance.
In these underdeveloped countries, agriculturists are still
following traditional methods and are applying modernized
techniques on a very limited scale.
Unemployment Problem: Excessive population pressure and
lack of alternative occupations have resulted in huge
unemployment and underemployment problem in these
underdeveloped countries. In the absence of growth of alternative
occupations both in the secondary and tertiary sectors of these
countries, this increasing population is being thrown on land to
eke out their living from the agricultural sector.
This sort of increasing dependence on the agricultural sector leads
to disguised unemployment or under-employment in these
economies on a large scale. Moreover, the problem of educated
unemployment in these economies is also increasing gradually
day by day due to a lack of industrial development.
Unexploited Natural Resources: For maintaining a rapid pace
of economic growth in these underdeveloped countries,
possession of different types of natural resources in sufficient
quantity and their utilization are very important. But under-
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developed countries are either suffering from scarcity of raw
materials or from unexploited natural resources of their own.
If we look at the endowment position of these countries then we
can see that some of the underdeveloped countries are having
natural resources like land, water, minerals, forest, etc. in
sufficient quantity but these resources remain largely under-
utilized or even untapped due to various difficulties faced by these
countries.
These difficulties include inaccessibility of the region, shortage
of capital, lack of proper attention, primitive technology,
transport bottlenecks, and small extent of the market. Thus by
utilizing its natural resources, underdeveloped countries can
develop their economies with the minimum initiative of their
own.
Shortage of Technology and Skills: Underdeveloped countries
are facing low levels of technology and an acute shortage of
skilled manpower. Poor technology and lower skills are
responsible for inefficient and insufficient production which leads
to poverty of the masses. The pace of economic growth in these
countries is very slow due to the application of poor technologies.
But the application of modern sophisticated technology both in
the agricultural and industrial sectors is of utmost need in these
countries. This requires a sufficient amount of capital,
technological advancement, and training.
Lack of Infrastructural Development: Lack of infrastructural
development is a common feature of underdeveloped countries.
In respect of transportation, communication, generation and
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distribution of electricity, credit facilities, social overheads, etc.
these countries are very much backward than most developed
countries. Thus, due to inadequate infrastructural facilities, the
pace of economic development in these countries is very slow.
Lack of Industrialization: Underdeveloped countries are
characterized by a lack of industrial development. The pace of
industrialization in these countries is very slow due to a lack of
capital formation, paucity in the supply of machinery and tools,
and also due to a lack of initiative and enterprise on the part of the
people of these countries.
In spite of having huge potential for industrial development, these
countries could not develop the industrial sector on a sound
footing. Moreover, whatever industrial development that has been
achieved by these countries is very much restricted only to some
limited areas.
Lack of Proper Market: Underdeveloped countries are also
suffering from a lack of properly developed markets. Whatever
market these countries have developed, these are suffering from
a number of limitations viz. lack of market information, lack of
diversification, lack of proper relation or connection between
markets, lack of adequate demand, etc.
Mass Illiteracy: Underdeveloped countries are mostly
characterized by the existence of mass illiteracy. Due to illiteracy,
the people in these countries are very much superstitious and
conservative which is again responsible for the lack of initiative
and enterprise on the part of the people of these countries.

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Poor Socio-Economic Condition: Underdeveloped countries are
also suffering from totally poor socio-economic conditions. The
path of economic development in these countries is being
obstructed by various socio-economic factors like-joint family
system, universal marriage, costly social customs, and the law of
inheritance.
Inefficient Administrative Set Up: Underdeveloped countries
are also suffering from their existing inefficient administrative
setup. In the absence of an efficient and sound administrative
setup, these countries are suffering from a lack of proper
economic organization, lack of investments, and lack of
appropriate decisions leading to total mismanagement of these
economies.

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