REVIEWER IN ECONOMIC DEVELOPMENT o Government

o Education
CHAPTER ONE
Non-economic factors have stronger influence on the
Primary Target of Reformers (Owen, Marx, Bentham,
economic development of nations.
Rousseau, and Fourier): abuses of capitalists and
landlords, great disparities in income and wealth. 3 Stages of Economic Growth and Development
1) A structural transformation of the economy
BASIC ECONOMIC PROBLEMS
2) A demographic transition
Why it exists? 1) sources are limited, 2) human wants are 3) A process of urbanization
unlimited.
Three Classifications of Countries
3 Basic Economic Problems: 1) Highly Developed Countries are the rich countries
1) What goods to produce and in what quantities that have advanced, industrial, or developed economies
2) How to produce the goods like US, Japan, France, Denmark, Australia, Russia,
3) For whom to produce the goods Sweden, West Germany, Canada, Israel, Switzerland,
Economic Systems China, UAE, Qatar, Netherlands, Britain, Norway, Italy,
Capitalism: goods with highest price are produced first South Korea, etc.
Communism: goods according to the needs of people are 2) Intermediate Countries are the countries near the
produced first; a classless society = equality. GNP of the rich countries. Their economies are between
Socialism: combination of capitalism and communism the highly developed and less developed like Argentina,
Cuba, Libya, Spain, South Africa, Austria, Saudi Arabia,
* The distribution of goods is determined by the Singapore, Poland, Venezuela, etc.
economic system.
3) Less Developed Countries (3rd World Countries) are
Economic Development countries far below the GNP or the per capita income of
- Programs, policies, or activities that seek to the rich ones like Kenya, Somalia, Tanzania, Uganda, El
improve the economic well-being and quality of Salvador, Cambodia, Myanmar, Pakistan, Bangladesh,
life for a community. Philippines, Peru, Honduras, India, Vietnam,
- Through efforts that entail job creation, job Afghanistan, Nepal, Bhutan, Morocco, etc.
retention, tax base enhancements, and quality of Also called backward nations in the past.
life. How is economy being measured?
- It is a progressive process of improving human
conditions, like: Ø Gross National Product - this is the per capita income
o INequality of a country. It includes the GDP and income earned by
o Reduction or elimination of poverty residents from overseas investments, minus income
o Unemployment earned by foreign residents. An example is the
o Disease international operations, trade, or production of Jollibee
o Illiteracy Foods Corporation.
o Exploitations
Ø Gross Domestic Product - this is the standard measure
- It involves economic factors:
of the value added created through the production of
o Capital
goods and services in a country during a certain period.
o Technology
An example of this is the personal consumption
o Market
expenditures.
o People
o Globalization Ø Unemployment - it measures the number of people
o Infrastructure who are willing and able to work and do not have a job
o Transportation but are actively seeking one, as a percent of the labor
- It involves non-economic factors: force, which greatly affects the economy.
o Culture
Ø Inflation - when all prices in the market is increasing.
o Religion
Differentiate GDP and GNP.
As long as it is manufactured by a country's residents,
regardless of the production location, it is a GNP.
However, GDP are the final goods or services generated
within the borders of a country.
Middle East – underdeveloped but not poor. There is a
rapid economic growth due to oil industry, but no
development since only the foreigners and landlords are
prospering. No institutional changes in education, public
administration. and health. Cultural lags are dominant in
their society.
Development – a process of maturing, evolving from
one level to another. It is a progressive and dynamic
process. It means more than imposing buildings, houses.
It includes fundamental changes in society, ways of life,
values and institutions.
Growth – the result of the development process; a
product of development. It is also the material
possessions.
Economic Growth - visible and measurable. We can
see it because it is tangible and measured through
market value.
* The total market value of development products is the
GNP of the country.
* Economic development embraces a series of economic
growth.
* England was only a pastoral economy, but with the
help of technology and machinery, it became a factory
system, then became an industrial economy.
* Development without growth is inconceivable.
Whenever there is real development, there will always
be growth because growth is a natural consequence of
development.
Objectives of Development
1) To increase gross national product, but only the
landlords, gov’t officials and business tycoons benefit in
this growth.
2) Main focus is social factors like mass poverty,
economic servitude, unemployment, and unjust
distribution of income.
3) Socially-oriented programs appear to dominate
national development objectives.
4) geez
Philippine Development Objectives
> The attainment of economic stability
> The equitable distribution of the fruits of economic
development
> The achievement of total human development for
every Filipino
Obstacles to Development
1. Capital deficiency, particularly for the poor
nations.
2. Inadequate management and manpower skills.
3. Massive unemployment due to foreign technology.
4. Population explosion.
5. Man -- his attitudes and values. (Greatest obstacle)
6. Political Context (corruption, political dynasty,
bribery, fake news, palakasan system, political
stability)
Stages of Economic Growth
* There are still countries who remained primitive in
their economic, social, and political institutions.
Stages of Economic Growth – a theory that describes
the natural economic evolution that all nations will
undergo; it is based on the exchange systems. From the
barter of economy to the money economy, to credit
economy.
Colin Clark – British economist; 3 stages involved:
1) AGRICULTURE is the principal source of
employment and income in the agricultural countries;
labor-extensive.
2) MANUFACTURING industry becomes the major
economic activity as a country develops; advent of
machines or modern technology.
3) SERVICE industry grow to be the dominant feature of
the economy as a country develops further; Shopee, etc.
Doctrine of Rostow
Professor Walt Whitman Rostow: American economic
historian; author of Stages of Economic Growth.
Transition of the economy passes through the ff. stages:
1) Traditional Society
- lack of communication, roads, etc.
2) Pre-conditions for take-off
- Political
- Social-Culture = development of resources, etc.
- Economic = improve our way of production
3) Take-off
- Increase in capital formation and technological needs
- Rich countries (U.S, Germany, Canada, etc)
- Factors:
> A rise in the rate of productive investment (high GNP)
> Development of 1 or more manufacturing
industries/sectors with high growth rates. (steel industry)
> Existence of rapid immergence of political, social, and
institutional framework.
4) Drive to maturity
- Applying modern technology and entrepreneurial
skills; more inventions.
Goals of National Economy
1) Equitable distribution of opportunities, income, and
wealth
2) Sustained increase in the amount of goods/services
produced by the nation for the benefit of the people
3) an expanding productivity as the key to raising the
quality of life for all, especially the underprivileged.

5) Age of high mass consumption

- produces a high volume of goods/services.

Two Different Worlds

Reason: unfair distribution of global wealth and income
North – rich world; 90% of the manufacturing industry
are here like USA, Japan, Spain, China, Russia, etc.
South – poor world; economically dependent on the
North; feed factories of the North with their raw
materials and labor; consumers of finished products of
the North; colonies of the North; Asian countries.

Problems in the South (Africa, Asia, Latin America)

1) War (bloody revolutions of France, Mexico, Russia,
China)
2) Ignorance
3) Diseases
4) Hunger
4) Squalor
5) Poverty – a product of defective man-made
institutions: social, economic, and political institutions.

* Death and hunger in Africa

* Merciless government in Vietnam
* Caste system in India

Superiority of the Whites

~ Group Arca’s Act: divided the country’s residential
areas into racial enclaves (White, Black, Colored, and
Indian)
~ Race Classification Board: determines the places
where people can reside and work. (Wally Venter life)
~ The separation of the Whites from the Blacks is not
written in any law or policy, but this practice has become
an institution.
~ Due to White’s superiority, laws or constitutions are
not effective in humanizing the values of people. It is
only through the long and gradual process of education
that can improve the attitudes and values of people.

Concept of Just Society

- provides a safe working condition and healthcare
- acknowledges the value of immigrants to our
communities