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Lecture 2: What is Development?

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International Development
INTD 200
Warren Allmand

Lecture 2: What is Development? 12/16/12 9:22 AM There is a “universal” scale of developed à 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 à 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 Kuznet’s Curve • Reverse U-shaped curve • Inequality will increase at the beginning of industrialization, but will decrease over time • Trickle down effect à 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 à people groups etc… Beyond Economic Growth – Human Wellbeing Dudley Seers: 1979 • Development as realization of the potential of human personality 6 conditions
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