ECO 2117 Lecture Notes - Lecture 1: Amartya Sen, Compulsory Education, Capability Approach
20 Aug 2016
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ECO2117
January 14th 2016
Development Defined
-time series: series of time management in a graph
-correlation does not equal causality
-look for other variables
-e.g.: more people are wearing sunglasses and drinking water (they do not cause one
another, the sun (the invisible or implicit variable) is causing both
-development economics: study of how economies are transformed from stagnation to
growth, from low income to high income and how they overcome absolute poverty
-characteristics of developing countries
-public goods are horrible
-many people are working in agriculture
-in developing countries typically the:
-commodity and resource markets are highly imperfect
-consumers and producers have limited information
-multiple equilibria rather than a single equilibrium are common
-disequilibrium prices prevail (prices don’t equate supply and demand)
-in a developed world there is market competition
-there are few externalities (environmental, etc)
-value premises are an inherent component of both economic analysis and economic policy
-prevalent in developed countries, not so much developing
-development goals (example: banning child labour) do not arise out of an objective empirical
or positive analysis of what is, but ultimately from a subjective or normative value judgement
about what should be
-when there is agreement over subjective values, corresponding public policies (compulsory
education) based on “objective” theoretical and quantitative analyses, can be pursued
-social systems: interdependent relationships between economic and non economic factors
-success of failure of development policy:
-importance of taking account of institutional and structural variables along with more
traditional economic variables
-non-quantifiable does not mean irrelevant
-there is a need to go beyond simple economics
-traditional economic measures:
-GNI
-income per capita
-focus on industrialization
-new economic view of development:
-development as a multidimensional process
-Stiglitz-Sen-Fitoussi Commission
-focus on redistribution of wealth obtained from economic growth
-focus on education, health, and funding of other social services
-capabilities approach (Amartya Sen)
-development is the expansion of people’s capabilities
-refers to giving people the freedom to make choices that they value and find meaning in
-resources have characteristics
-is about enlarging choices and allowing people the freedom to make their own decisions
about what they want to do, when, etc
-related to economics because choices come from having more employment opportunities
-money increases freedom
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Document Summary
Time series: series of time management in a graph. E. g. : more people are wearing sunglasses and drinking water (they do not cause one another, the sun (the invisible or implicit variable) is causing both. Development economics: study of how economies are transformed from stagnation to growth, from low income to high income and how they overcome absolute poverty. Commodity and resource markets are highly imperfect. Multiple equilibria rather than a single equilibrium are common. Disequilibrium prices prevail (prices don"t equate supply and demand) In a developed world there is market competition. Value premises are an inherent component of both economic analysis and economic policy. Prevalent in developed countries, not so much developing. Development goals (example: banning child labour) do not arise out of an objective empirical or positive analysis of what is, but ultimately from a subjective or normative value judgement about what should be.
