Determinants

of Economic
Development
Determinants of
Economic Development
Corruption in
Capital Public
Technology Administration
Market Religion
Social
Population
Structure
Family System Geography
Cultural Value
Political
Conditions
 - refers to finished goods which are
being used to produce other goods.

Capit Example:

Machines

al Buildings
Tools
Physical Capital
Equipment

Money Financial
Capital
People Human Capital
 - accelerate the production and distribution
of goods. Work can be done in lesser time,
effort and unit cost.

Countries that uses modern machines:

MACHINE  United States

S  Japan
 Western Europe

They use modern machines in agriculture,

industry, and service organizations and
they have become efficient in their
economic activities because of this.
 ?
WHAT ABOUT THE
LESS DEVELOPED
COUNTRIES?
 Less developed countries
depend on FOREIGN
LOANS AND
INVESTMENTS.
EXAMPLE:
 Philippines
 Sao Paulo
 Latin
America
 - refers to better techniques or methods
of production.

Research contributes to the

development of
Technolog technology.
Invention is the discovery of new
y techniques,
according to Schumpeter.
Schumpeter also pointed out that the
practical application of an invention to
Production for the market is called
“innovation”.
This is why other countries give
high priorities to research and
development since their future
economy depends on them.

On the other hand, less

developed countries don’t give
priority to research and
development and spared with
spending millions of money for
researchers, scientists,
laboratories, buildings, and
equipment.
Technology for the less developed
countries
 Importation of technologies from other countries is not wrong
but the following aspects should be considerated:
 Economic Aspect
 Social Aspect
 Cultural Aspect
 Political Aspect
 Managerial Aspect
Technology for the less developed
countries
 According to Prime Minister Cesar Virata when he visited a
village in Cavite that a technology that is expensive and
imported is called “cadillac technology”, which is what he
referred to a farmer who complained and suggested about the
bad condition of his crops.

 Schumacher on the other hand suggested a new type of

technology which is more efficient that primitive technology
and less expensive than modern technology, this is what he
called “labor-intensive technology”
 Growth of markets reflects an
expanding economic development.

Mark Transportation, communication and

electricity are great help in the growth
et of the market.

Machine and other physical facilities

are needed to accelerate production,
processing and distribution.
 A market becomes bigger when more

Mark people buy more goods.

If there are no taxes and tariffs, the

et less developed countries are excellent
markets for their products.
 A society which has more equitable
distribution of wealth and income, and
Social
economic freedoms, provides a more
fertile environment for economic
development.
Structu
 Members of society are induced to
pursue their own individual interest;
re
economic, social, cultural, political.

 Being an open society, even the

humblest citizen can aspire to be rich
and to be the leader of his country.
 Opportunities for improvement are open
to all members of the society.
Social
 If it is a close society, people who
belong to the lowest social class cannot
Structu
move to higher social structure because
it is the written law. re
 The poor have no more desire to work
hard and study.
Family Member

In Western societies like the United Family

States, family members are more
individualistic and self-reliant. System
While most family members from less
developed countries are dependent.
Family
Obligations
Considering the security of the parents
Family
in the highly developed countries, their
family obligations are minimized. System
The governments take care of the aged
and the jobless. Thus, children of poor
families are relieved of the burden of
supporting their close relatives.
Family
Obligations
Unlike in the less developed countries,
Family
especially among Asians, the children
have to take personal care of their poor System
old parents.

It has become part of the culture. Such

responsibilities restrict the economic
opportunities of the older children.
Extended Family
System
-a family that extends Family
beyond the nuclear family,
including grandparents, aunts, System
uncles, and other relatives, who
all live nearby or in one
household
Extended Family
System Advantages
- unity exists.
Family
- the welfare of the
old and young
System
members are
protected by
stronger adult
members, usually
the eldest sons.
 Such
as:

Bahala na
Cultural
Mañana Habit
Value
Ningas Cogon
 According to Professor
Myrdal, industrialization
requires:

Efficiency
Cultural
Mobility
Value
Discipline
Punctuality
 Comparison of Characteristics:
Wester
Asian n
Cultural Filipino time Efficient
Value Saying "Yes" Punctual
even if they not Responsible
really mean it.
 The desire to imitate

Less developed countries admire the

Cultural consumption habits of Americans and
European
Value
"Colonial mentality, pure & simple"
 Stability
Fair Policies

Major role of Government

to provide a high standard of living to it's
people
Employment and production
Political
Equitable distribution of wealth and income Conditio
n
Tools of economic development
Plans
Policies
Political
Program Conditio
n
 -according to an economics professor in
Singapore, Government Corruption is the
primary hindrance towards to economic
development and stated that the most
precious scarce resources are not properly
Corruption in utilized due graft and corruption.
Public
Administration Corruptio
n
-dishonest and fraudulent conduct by
those in power.
 Government
Corruption

-Government Corruption or also known

as Political Corruption is the use of powers
by Governments officials or their networks
Corruption in contacts for illegitimate private gain.
Public -present to any society. However, based
Administration on observations, such corruptions are more
rampant in the less developed countries
specifically those in Southeast Asia.
 Form of Political / Government
Corruption

Bribery -the offering, giving, receiving, or

soliciting of any item of value to influence
Corruption in the actions of an official, or other person, in
Public charge of a public or legal duty.
Administration Extortion -the practice of obtaining
something, especially money, through force
or threats.
 Form of Political / Government
Corruption

Cronyism -the appointment of friends and

associates to positions of authority, without
Corruption in proper regard to their qualifications.
Public Nepotism -the practice among those with
Administration power or influence of favoring relatives or
friends, especially by giving them jobs.

Parochialism -a limited or narrow outlook.

 Form of Political / Government
Corruption

Patronage -the power to control

appointments to office or the right to
Corruption in privileges.
Public Influence Peddling -the use of position or
Administration political influence on someone’s behalf in
exchange for money or favors.

Graft -use of politician’s authority for

personal gain.
 Form of Political / Government
Corruption

Embezzlement- theft or misappropriation of

funds in one’s trust or belonging to one’s
employer.
Corruption in
Public
Administration
 Political Corruption by Professor
Gunner Myrdal

-is a Swedish sociologist and economist.

He stated that corruption has reached higher
Corruption in level of Government Officials and Politicians.
Public
Administration
 He cited the various government
offices which have been corrupted
such as:
•Public works department
•Government purchasing agencies

Corruption in And those involve in…

•Collection of taxes
Public •Custom duties
Administration •Export and import licenses

And even the

•Courts of justice
•And Universities
 Bribery has been a common practice to
Corruption in expedite applications or approvals. Myrdal
further observed that through the use of
Public middlemen, businessmen have bribed high
Administration government officials.
 Corruption has become an ordinary practice.
Their low pay encourages them to commit petty
corruption.
Task of cleaning the Government is a long and
difficult process, Considering our Oriental Values
and depressed economic conditions. Therefore
Corruption in corruption has become and institution. It can’t be
Public eradicated overnight. Laws and punishment are
not enough to remove corruption.
Administration It is more important that economic conditions
of minor employees be improved, and the moral
values of government officials be changed.
Moreover, the honesty and integrity of top
Government officials can serve as a good example
for their subordinates.
 During the Biblical times, materialism
and the pursuit of wealth were despised and
discouraged.

In fact, the Bible contains many

statements against wealth and materialism.
Religion
For instance, Matthew 5:3, the poor are
blessed for they shall inherit the kingdom of
heaven. Moreover, it is harder for a rich man
to enter the gate of heaven than for a camel
to through the eye of a needle.
 Such religious concepts and teachings
against materialism are not favorable to
economic development. When people shy
away from the pursuit of wealth, economic
growth tends to be slow and primitive.
Religion
However, it depends on the values of
people. Many hate economic progress
because of its bad effects, such as pollution,
traffic congestion, and the destruction of the
natural beauty of the environment.
Max
Weber
Author of the Protestant Ethics and The
Spirit of Capitalism

He claimed that the Protestant countries

are more progressive. He proved his theory
by pointing out the presence of dominant Religion
values like thrift, industry, and
entrepreneurial spirit among Protestant
nations. He pinpointed the rise of
Protestantism as the cause of growth of the
capitalist order in Europe.
Max
Weber

 There are several Catholic practices which

are not consistent with the principles of
economic development. Such as fiestas
and expensive celebrations including
marriages, baptisms, etc. They always say Religion
it is once in a lifetime. However, for the rich
to splurge, is not a problem. But for the
poor, it is different. They become poorer
and incur more debts insisting to comply
with such religious traditions.
 - all the inhabitants of a particular town,
area, or country.
Population It is an advantage if people are productive
and creative. They can support themselves by
harnessing the resources of the environment
and by manufacturing their raw materials for
commerce.

Developed countries that have insufficient

number of people encourage immigration of
aliens to increase production.
 On the other hand, population is a
disadvantage or a great burden if the rate of
population growth is higher than the rate of
production growth. Such situation is more

Population
serious if the resources of the economy are
not equitably distributed.

Poor countries with high birth rates are

advised to adopt family planning programs.
On the other hand, there are many countries
with abundant natural resources and with few
people, but they are poor.

Even if a country is overpopulated, if it has

a very high productivity, there is progress.
  Climate
Geograp  Soil
hy  Natural Resources
 Topography
 Structure of the land
 Transportation and Communication
THANKS!
Does anyone have any
questions?