A Global Perspective

• The study of economic development is one of the newest,

most exciting, and most challenging branches of the
broader discipline of economics and political economy.
• Development economics is not the same as the economics of
advanced capitalist nation (modern “neoclassical”
economics).
• Nor is it similar to the economics of centralized socialist
society (“Marxist” or “command” economics)
• It is nothing more or less than the economics of
contemporary poor, underdeveloped, third-world nations
with varying ideological orientation, diverse natural
background, and very complex yet similar economic
problem that usually demand new ideas and novel
approach.
• Traditional economics is concerned with efficient, least cost allocation of
scare productivity resource and with the optimal growth of these
resource over time.
• Political economy goes beyond traditional economics to study, among
other thing, the social and institutional processes through which certain
groups of economic and politic elite influence the allocation of scare
productive resource now and future, either exclusively for their own
benefit or for that of larger population as well.
• Development economics has an even greater scope. In addition to
being concerned with the efficient allocation of existing scare (or idle)
productive resource and their sustained growth over time, it must also
deal with the economic, social, political, and institutional mechanism,
both public and private, necessary to bring about rapid and large
scale improvement in levels of living for the masses of poverty-stricken,
malnourished, and illiterate people in less developed countries.
• Economics development is concerned with human being and the
social systems by which they organize their activities to satisfy
basic materials needs and nonmaterial wants (education,
knowledge, spiritual fulfilment)
• Realization of the human potential is a concepts or goals such
as economic and social equality, the elimination of poverty,
universal education, rising level of living, national independence,
modernization of institution, political and economic
participation, grass-roots democracy, self-reliance, and
personal fulfilment all derive from subjective value judgment
about what is good and desirable and what is not.
• Traditional economic measure
 Development has traditionally meant the capacity of national
economy, whose initial economic condition has been more or
less static for a long time, to generate and sustain an annual
increase on its GNP at rate perhaps 5% - 7%.
 Development strategic therefore usually focused on rapid
industrialization.
• The new economic view of development
Development must therefore be conceived of as multidimensional
process involving major change 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.
• Sustenance: the ability to meet basic needs.
Without sustained and continuous economic progress at
individual as well as the societal level, the realization of human
potential would not be possible.
• Self esteem: To be a person.
• Freedom for servitude: to be able to choose. i.e: emancipation
from alienating material condition of life and from social
servitude to nature, ignorance , other people, misery, institution,
and dogmatic beliefs. Arthur Lewis stressed the relationship
between economic growth and freedom from servitude: the
advantage of economic growth is not that wealth increase
happiness, but that it increase the range of human choice.
• To increase the availability and widen the distribution of basic
life-sustaining goods such as food, shelter, health, and
protection.
• To rise levels of living, in addition to higher income, the provision
of more jobs, better education, and greater attention to cultural
and humanistic values, all of which will serve not only to
enhance materials well-being but also generate greater
individual and national self-esteem.
• To expand the range of economic and social choices available
to individuals and nations by freeing them from servitude and
dependence not only in relation to other people and nation-
states but also to the force of ignorance and human misery .