INTD 200 Lecture Notes - Social Capital, Gross National Happiness, Gross National Income

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Lecture 2: What is Development? 12/16/12 9:22 AM
There is a “universal” scale of developed ! Truman speech
Developing vs. Developed?: What’s in a name?
Development/underdevelopment
First, Second, Third and Fourth World
First: Western World, Japan…etc…
Second: Non-aligned movement
Third World: unclear category, negative connotations, hierarchy,
what if a country develops?
Fourth: failed states, areas of particular poverty within countries,
indigenous people, socially marginal communities
Newly Industrialized Countries (NCIs)
Certain countries that economically developed very quickly
Hong Kong, Korea, Malaysia
Emerging Markets
Developing Countries/Developing Economies
Alternatives: Global South, South
Defining and Measuring Development: Development as Economic
Growth
GDP-Gross Domestic Product
Doesn’t look at non-market subsistence goods
Based on statistics which may not be correct
Relatively easy to look at
GNP-Gross National Product
Included money coming from outside the country
Ex. Philippians ! remittances
GDP/Capita
The amount of income per person in the country
Average income of a country
Problem: wealth disparity
GNI (Gross National Income) per capita: term used by the world bank,
essentially GDP
PPP-Purchasing Power Parity
Adjusting GDP/capita
Assesses what can be bought with 1 US dollar in different countries
Adjusts for cost of living
Development and Social Welfare: Inequality
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Kuznet’s Curve
Reverse U-shaped curve
Inequality will increase at the beginning of industrialization, but will
decrease over time
Trickle down effect ! everyone is lifted out of poverty eventually
Measuring Inequality
Dividing population into economic strata
o Quintiles (5), deciles(10)
o How income is distributed in society
Gini coefficient
Social capital and inequality
Social capital: the extent to which people in society cooperate with
each other, trust level
People trust others less in very unequal societies
Less opportunities to work together
Poverty – absolute, moderate, relative
$1.25 absolute poverty line
Moderate: basic need barely met, not threatening survival
o Very tedious, any major changes can shift them out of this
group
Relative: have the income to live, but not the amount to involve
themselves in society
o Social exclusion
Addressing Inequality and Poverty
1970s: Redistribution with growth
Basic Needs Human Approach
Creating opportunities for the very poor to earn income
Income/Consumption
Poverty Line
o Measure by which people defined what the income required
for basic subsistence
o Doesn’t look at poverty gap
o Or where the poverty lies ! people groups etc…
Beyond Economic Growth – Human Wellbeing
Dudley Seers: 1979
Development as realization of the potential of human personality
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