ECON-2220 Chapter Notes - Chapter Todaro 1: Subsistence Economy, Sustainable Development Goals, Millennium Development Goals
15 May 2018
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Todaro Chapter 1
Introducing Economic Development: A Global Perspective
1. How the other half live
a. About two fifths of the wor“d’s popu“ation “ives on “ess than $2 per day,
part of a condition of absolute poverty
b. Against econo”ic benefits there are a“ways nonecono”ic costs
i. Mental strain and physical pressure of trying to provide for a family
at levels that the community regards as desirable can take its toll on
the health of both parents
ii. Environmental decay
c. Street violence
d. Major cities in Latin America, Asia and Africa are all very disparate in terms
of wealth and quality of living
e. Subsistence economy: most food, clothing, shelter, and worldly goods are
made and consumed by the people themselves
i. Poor cities aren’t as psycho“ogica““y troub“ing because the co”parison
to wea“th isn’t present
f. Throughout the world, remote subsistence villages such as this one are being
linked up with modern civilization in an increasing number of ways
2. Economics and development studies
a. One could claim Adam Smith was the first development economist
b. Nature of developmental economics
i. Traditional economics is concerned primarily with the efficient, least-
cost allocation of scarce productive resources and with the optimal
growth of these resources over time so as to produce an ever-
expanding range of goods and services
ii. Political economy goes beyond traditional economics to study the
social and institutional processes through which certain groups of
economic and political elites influence the allocation of scarce
productive resources now and in the future, either for their own
benefit exclusively or for that of the larger population as well
1. Political economy is therefore concerned with the relationship
between politics and economics.
iii. Development economics has an even greater scope. In addition to
being concerned with the efficient allocation of existing scarce
productive resources and with their sustained growth over time, it
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Document Summary
Traditional economics is concerned primarily with the efficient, least- cost allocation of scarce productive resources and with the optimal growth of these resources over time so as to produce an ever- expanding range of goods and services. Subjective value judgements about what is good and desirable and what is not a reaction to an objective empirical or positive analysis of what is but also ultimately from a subjective or normative value judgement about what should be. It is essentia that one"s va ue pre ises a ways be ade clear: economies as social systems: the need to go beyond simple economics. A social system is the interdependent relationships between economic and noneconomic factors. Sometimes economists dismiss noneconomic variables as (cid:335)nonquantifiab e(cid:336) and therefore of dubious importance. Argu ents for (cid:335)gross nationa happiness(cid:336: three core values of development. Self esteem: freedom from servitude, central role of women, three objectives of development. Increase the availability of life-sustaining goods: raise levels of living.
