WHAT ARE THE APPROACHES TO ECONOMIC DEVELOPMENT?

SELECT 3 THEN
EXPLAIN.
 STRUCTURAL CHANGE MODEL
In this model, it demonstrates how underdeveloped countries transform their
economic structures as it develops and grows over time from the traditional
subsistence level which is concerned with agricultural production to a more
advanced industrial diverse economy. The two approaches to furthermore
illustrate the structural change model are: (1) the two-sector surplus labor
theoretical model which was developed by Nobel Laureate W. Arthur Lewis that
focuses on the transfer of labor and growth of output and employment in the
modern sector, and the (2) patterns of development analysis formulated by Hollis
B. Chenery.

 INTERNATIONAL DEPENDENCY REVOLUTION THEORY

During the 1970s, international-dependence theories gained prominence,
especially among Third World intellectuals, as a result of growing
disenchantment with both the stages and structural-change models. Essentially,
developing countries caught in a dependence and dominance relationship with
rich countries because of institutional, political and economic rigidities, both
domestic and international; difficulty for poor nations to be self-reliant and
independent. Within this general approach there are three major streams of
thought: the neocolonial dependence model, the false-paradigm model, and the
dualistic-development thesis.

 NEOCLASSICAL COUNTERREVOLUTION
This counterrevolution favored supply-side macroeconomic policies, rational
expectations theories and privatization of public corporations in developed-
nations, and also called for freer markets, dismantling of public ownership, statist
planning and government regulation of economic activities in developing
countries. The central argument of the neoclassical counterrevolution is that
underdevelopment resulted from poor resource relocation because of incorrect
pricing policies and state intervention in which it slows economic growth such as
corruption, inefficiency, lack of incentives, etc.
 EXPLAIN THE 2 CATEGORIES OF POVERTY.
ABSOLUTE POVERTY – refers to when individuals or households does not have the minimum
amount of income needed and resources are so insufficient that they are unable to meet their
basic human needs, such as food, shelter, clothing, and including access to essential services like
healthcare and education. In other words, it sets an absolute threshold and when an individual
or household goes below this, their survival is threatened and is considered to be in a state of
poverty.
RELATIVE POVERTY - is when an individual or household receives 60% less income than the
average or median income and their living conditions fall significantly in relation to the society
they inhabit. This means that individuals or households are not necessarily lacking the basic
necessities for survival and not living in total poverty, however, they cannot afford anything
above the basics and enjoy the same standard of life as everyone else in the country like
engaging in normal activities and opportunities that average earners have access to known as
an “ordinary pattern”.

WHY POVERTY CONTINUES? WHAT ARE FACTORS TO BE CONSIDERED?

Poverty is an enduring and deeply entrenched issue that continues to plague societies
worldwide, even in this age of technological advancement and economic progress. Despite
remarkable achievements in science, technology, and economic growth, millions of people
across the globe still struggle to meet their basic needs and live in conditions of deprivation.
This essay explores the complex and multifaceted reasons behind the continued existence of
poverty in our contemporary world.
Income Inequality
One of the fundamental drivers of persistent poverty is income inequality. Economic disparities,
where a minority enjoys a disproportionate share of wealth and resources, create a stark
contrast between the haves and the have-nots. This wealth concentration is often fueled by
factors such as unequal access to education and economic opportunities, regressive taxation,
and wage stagnation. As a result, those with limited access to resources remain trapped in
cycles of poverty.
Limited Access to Quality Education
Education is widely recognized as a key pathway out of poverty. However, the unequal
distribution of educational opportunities perpetuates intergenerational poverty. Inadequate
access to quality education, particularly among marginalized communities, limits the potential
for economic mobility and exacerbates income disparities.
Discrimination and Social Exclusion
Discrimination based on race, gender, ethnicity, religion, disability, or other characteristics
perpetuates poverty by restricting individuals' access to opportunities and resources.
Discriminatory practices in the labor market, housing, and education system create barriers that
hinder social and economic advancement, especially among vulnerable populations.
Unemployment and Underemployment
A lack of stable employment opportunities, coupled with underemployment, is a significant
contributor to poverty. Economic instability, job insecurity, and shifts in the labor market can
leave individuals and families struggling to make ends meet. Even when employed, low wages
and precarious employment conditions can keep people in poverty.
Lack of Access to Healthcare
Healthcare costs and limited access to healthcare services can push individuals into poverty.
Medical expenses can quickly deplete savings and push families into financial distress. Without
adequate health insurance and affordable healthcare options, people face increased
vulnerability to poverty due to illness or injury.
Social Safety Nets
The absence of robust social safety nets and welfare programs leaves individuals and families
vulnerable to economic shocks and setbacks. Inadequate support systems can make it
challenging to escape poverty once individuals fall into it.
Cultural Norms and Expectations
Cultural and societal norms can influence economic behavior and choices. In some cases,
cultural factors may discourage individuals from pursuing education or employment
opportunities that could lead to economic advancement, perpetuating a cycle of poverty.
Geographic Disparities
Regional disparities in economic development can result in persistent poverty in certain areas.
Individuals living in economically disadvantaged regions may have limited access to well-paying
jobs and essential services, constraining their economic prospects.
Global Economic Factors
Global economic trends, trade policies, and international economic conditions can impact a
country's economic growth and employment opportunities, influencing poverty rates. Economic
globalization can exacerbate income inequalities within and between countries, leading to
poverty persistence.
In this modern age, poverty remains an enduring challenge that demands urgent attention and
comprehensive solutions. Its persistence can be attributed to a complex web of factors,
including income inequality, limited access to quality education and healthcare, discrimination,
unemployment, and cultural norms. Addressing poverty requires a concerted effort from
governments, civil society organizations, and the private sector to implement policies that
reduce income disparities, expand access to education and healthcare, create job opportunities,
and provide social safety nets. Eradicating poverty is not only a moral imperative but also
essential for achieving sustainable and inclusive economic growth and ensuring a better future
for all.