LESSON 1
1. ECONOMIC DEVELOPMENT: A GLOBAL PERSPECTIVE
1.1 TRADITIONAL ECONOMICS. The efficient allocation of scarce resources to produce more resources.
1.2 POLITICAL ECONOMICS. The political elites influence the allocation of scarce resources for the benefit of everyone.
1.3 DEVELOPMENT ECONOMICS. Deals with the economic, social, political, and institutional mechanisms as factors influencing
the allocation of scarce resources to bring about rapid development.
2. WHAT IS DEVELOPMENT?
2.1 TRADITIONAL VIEW. Enable to expand its output at a rate faster than the growth rate of its population.
2.2 NEW ECONOMIC VIEW. Acceleration of economic growth, reduction of inequality, and eradication of poverty.
2.3 THE CAPABILITY APPROACH VIEW. The extent of freedom people have to promote as well as achieving functions they value
3. CORE VALUES OF DEVELOPMENT
3.1 SUSTENANCE: The Ability to Meet Basic Needs. Overcoming the misery from a lack of food, shelter, health, & protection.
3.2 SELF-ESTEEM: To Be a Person. A sense of worth and self-respect.
3.3 FREEDOM FROM SERVITUDE: To Be Able to Choose. Expanded range of choices for society.
4. OBJECTIVES OF DEVELOPMENT
4.1 Increase the availability and widen the distribution of basic needs. physical reality
4.2 Raise levels of living (higher income, more jobs, better education, greater attention to cultural and human values) physical reality
4.3 Expand the range of economic and social choices available to individuals and nations. state of mind
5. MDGs & SDGs
5.1 Millennium Development Goals (MDGs). Eight goals agreed upon by 191 UN members to achieve by 2015, signed in September
2000.
1.) Eradicate Extreme Poverty & Hunger
5.) Improve Maternal Health
2.) Achieve Universal Primary Education
6.) Combat HIV/Aids, Malaria, & Other Diseases
3.) Promote Gender Equality & Empower Women
7.) Ensure Environmental Sustainability
4.) Reduce Child Mortality
8.) Global Partnership for Development
5.2 Sustainable Development Goals (SDGs). replaced the MDGs; composed of 17 goals aimed to achieve each goal by 2030.
1.) No Poverty
10.) Reduced Inequalities
2.) Zero Hunger
11.) Sustainable Cities & Communities
3.) Good Health & Well-being
12.) Responsible Consumption & Production
4.) Quality Education
13.) Climate Action
5.) Gender Equality
14.) Life Below Water
6.) Clean Water & Sanitation
15.) Life on Land
7.) Affordable & Clean Energy
16.) Peace, Justice & Strong Institutions
8.) Decent Work & Economic Growth
17.) Partnerships for the Goals
9.) Industry, Innovation, & Infrastructure
TERMS TO REMEMBER!!!
Absolute Poverty- being unable to meet the bare
minimum level of living
Capabilities- the freedom that people have
Developing Countries- less developed countries
Development- the process of improving
Freedom- a situation in which individuals enjoy real
choices
Functioning- what people do or can do with the
commodities they possess
Gross Domestic Product (GDP)- total final product
produced within a particular country
Gross National Income (GNI)- total domestic and
foreign output claimed by residents of a particular country
Self-esteem- worthiness
Social System- organizational and institutional structure
of a society
Sustenance- basic goods and services
LESSON 2
1. Measuring Development
1.1 Base on World Bank’s Per Capita GNI
Low Income
- $875 or less
Lower-Middle Income - $876 - $3,465
Upper-Middle Income - $3,466 - $10,725
High Income
- $10,726 or more
1.3 Base on UNDP’s Level of HDI
Very High HD
- 0.80 - 1.00
High HD
- 0.712 – 0.799
1.2 Base on World Bank’s Degree of International
Indebtedness
Severely Indebted - > 80% of GNI
Moderately Indebted - 60% > 80% of GNI
Less Indebted
- < 60% of GNI
Medium HD
Low HD
- 0.536 – 0.711
- 0 – 0.535
2. Basic Indicators of Development
2.1 Total nominal Gross Domestic Product. Total economic value of domestic & foreign output by residents of a country.
2.2 Gross National Income per capita (PPP). Calculation of GNI using a common set of international prices for all goods
& services.
2.3 Human Development Index Score. Measuring average achievement in 3 basic dimensions (health, education, income)
2.4 School enrollment ratios. Number of students enrolled as a percentage of the school-age population.
2.5 The infant mortality rate. Number of deaths per 1,000 live births under 1 year of age.
2.6 Healthy life expectancy. Expected number of remaining lifespan.
2.7 Gender Inequality Index (GII). Reproductive health, empowerment, & labor market.
2.8 Global Peace Index (GPI). Measures peacefulness conducted by Institutes for Economics & Peace (IEP)
2.9 Corruption Perception Index (CPI). Scores countries on the perceived levels of government corruption by country.
2.10 Happiness Index. Ranking of national happiness based on respondents; ratings of their lives
3. Characteristics of the Developing World
3.1 Lower Levels of Living & Productivity.
3.2 Lower Levels of Human Capital.
3.3 Higher Levels of Inequality & Absolute Poverty.
3.4 Higher Population Growth Rates.
3.5 Greater Social Fractionalization
3.6 Larger Rural Population but Rapid Rural-to-Urban
Migration
4. Commonality Among Developed & Developing World
4.1 Physical & Human Resource Endowments
4.2 Per capita incomes & levels of GDP in relation to the
rest of the world.
4.3 Climate
4.4 Population size, distribution, & growth
3.7 Lower Levels of Industrialization & Manufactured
Exports
3.8 Adverse Geography
3.9 Underdeveloped Markets
3.10 Lingering Colonial Impacts & Unequal International
Relations
4.5 Historical role of international migration
4.6 International trade benefits
4.7 Basin scientific & technological research &
development capabilities
4.8 Efficacy of domestic institutions
TERMS TO REMEMBER!!!
Brain Drain- emigration of professionals
Dependency Burden- not counted in the labor force (015 & 65+ yrs. old)
Fractionalization- social divisions within a country
Free Trade- trading without any barriers
Human Capital- health, education, skills
Imperfect Market- violates the theory of a perfect market
Incomplete Information- absence of information
needed in decision-making
Infrastructure- facilities that enable economic activity
Least Developed Countries- low income, low human
capital, & high economic vulnerability
Research & Development (R&D)- scientific
investigation with a view toward improving
Resource Endowment- nation’s supply of usable factors
of production
World Bank- international financial institution