HOW THE OTHER HALF LIVE
• SOME LIVE IN COMOFORTABLE HOMESTHEY HAVE ENOUGH TO EAT,
WELL CLOTHED, AND HEALTHY, HAVE A REASONABLE DEGREE OF
FINANCIAL SECURITY.
• 7 BILLION PEOPLE ARE LESS FORTUNE
• OVER 40% OF THE WORLD POPULATION LIVES ON ESS THAT $2 PER DAY
PART OF THE CONDITION OF ABSOLUTE POVERTY
• EXAMPLE: Average family in north America; with an income of $50,000,
they would live in a comfortable suburban house, with two cars, have
seprate rooms for each of children, all ppliances used in house were
made of outside the north America. They would always be three meals a
day, both children were healthy and attending school, and live a average
age of 78 (these type of families typically lives in rich nations)
• Now assume a typically “extended” family, in a poor
rural areas of south asia, household consist of eight
or more people incluing parents and several children,
two grand parents and some aunts. They have
combined the real per capital income of $300. poorly
constructed house, uncle, father, mother and aunts
work all day on the land. Younger children attend
school irregularly, and can’tepect to complete the
basic primiary education. No electricity, sanitaiton,
and fresh water. Sickness often occurs, doctor and
medical facility are far away from in he cities.
• Now shifiting toward another part of the world. We were
to visit a large city sitatued along the coast of south
America. There is modern stretch of larege bildings. If we
have to examine two families, let assume In the penthouse
apartment of the wealthy family a servant is setting the
table for dinner. Family eldest son,s is getting higher
education in north America university. Father is surgeon,
they spend their annual vacation in aborad
• A poor family near the sea, no table set, usually very little
to eat, no dinner table for set. Most of four children spend
their time out on the streets begging for money. Father
migrated from Rural to urban area. Govt, assistance has
helped to family keep the children in school longer
• Now imagine you are in rural reas, in the eastern part of Africa.
There is little income here because moset of the food, clothing,
shelter made and consumerd by themseleve there is subsistence
economy. A new road built that will pass near the village. No doubt
it will bring medical facility, information of the other world, modern
civilization. In short development has been such in motion.
• Life in different part of our planet has raised these questions
• Can traditional, low productive, subsistence socieities, be
transformed in to modern, high productivity, and high income
nations?
• To what extent are the development aspirations of poor nations
helped or hindered by the economic activities of rich nations?
• By what process under what conditions, do rural subsistence
farmers become the commercial farmers?
ECONOMICS AND DEVELOPMENT STUDIES
• Most exciting and challenging branch of economics and policits
economy
• ADAM SMITH was the first development economist, wrote his
book WEALTH OF NATION
• nature of development economics:
• traditional economics: an approach to economics that
emphasizes, utility, profit maximization, market efficiency, and
determination of equilibrium
• political economy: the attempt to merge economic analysis
with political practices, to view economic activity in political
context
• Development economics: the study of how economies transformed
from stagnantion to growth and from low income to high income
status and overcome the problems of absolute poverty (allocation of
resources and its sustainability, and large scale improvement in the
standard of living)
• more developed countries: the new economically advanced
capitalist countries, of western Europe., north America,
Australia, New Zealand and japan
• less developed countries: have low advancement, low
information regarding markets
WHAT DO WE MEAN BY DEVELOPMENT
• DEVELOPMENT = GROWTH+CHANGE
• GROWTH: sustained improvement in the level of per capita income
• CHANGE: sustained improvement in institution and organizations that
supports growth
• TRADITIONAL ECONOMIC MEASURE:
Traditional development term as achieving sustain growth rates of income
per capita. to enable nation to expand its output at faster rate growth
rate of its population
• GNI: MEASURE OVERALL ECONOMIC WELL-BEING OF THE NATION,
Amratya sen’s capability approach
• the capability approach (also referred to as the capabilities
approach) is an economic theory conceived in the 1980s as
an alternative approach to welfare economics. In this
approach, Amartya sen’s bring a range of ideas that were
previously excluded from (or inadequately formulated in)
traditional approaches to the economics of welfare. the
core focus of the capability approach is on what individuals
are able to do (i.e., capable of).
• In Amartya Sen’s capability approach development is seen as a
process of expanding the real freedoms of people . The capability to
function is what matters the most and it goes beyond availability of
commodities. In the capability approach, poverty is a situation
where people lack the most basic capabilities to lead a reasonable
life.
• While economic expansion is useful as it adds to the
material comfort people, the human well-being also
depends upon non-material things – after all people are
psychological, social and political beings. Therefore, the
primary focus of development should be people as
human beings, not mere expansion of the economy,
measured as GDP growth. It means shifting from the
narrow
resource
(input)
driven
“economic
development” to a broader well-being (end-result)
based “human development”
HAPPINESS AND DEVELOPMENT
• There is not a perfect correlation between
happiness and per capita income: people could be
poor, but happy; rich, but and unhappy
• Once per capita income increases above $10,000 to
$20,000, the percentage of people who say they are
happy tends to increase
OBJECTIVES OF DEVELOPMENT
• To increase the availability and distribution of basic
human necessities
• To improve the standard of living for the majority of
the people
• To expand the range of economic and social
choices and opportunities
Millennium Development Goals (MDGs):
The United Nations Millennium Development Goals are eight goals that all 191 UN
member states have agreed to try to achieve by the year 2015. The United Nations
Millennium Declaration, signed in September 2000 commits world leaders to
combat poverty, hunger, disease, illiteracy, environmental degradation, and
discrimination against women. The MDGs are derived from this Declaration, and
all have specific targets and indicators.
• The Eight Millennium Development Goals are:
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to eradicate extreme poverty and hunger;
to achieve universal primary education;
to promote gender equality and empower women;
to reduce child mortality;
to improve maternal health;
to combat HIV/AIDS, malaria, and other diseases;
to ensure environmental sustainability; and
to develop a global partnership for development.
The MDGs are inter-dependent; all the MDG influence health, and health
influences all the MDGs. For example, better health enables children to learn
and adults to earn. Gender equality is essential to the achievement of better
health. Reducing poverty, hunger and environmental degradation positively
influences, but also depends on, better health.