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    ECO-321 Development Economics: Instructor Name: Syeda Nida Raza

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    Laiba Malik
    1. Development economics studies how low-income economies transform to become high-income by overcoming poverty. It focuses on mechanisms that trap families and nations in poverty across generations and strategies to break these traps. A larger government role and coordinated economic planning are viewed as important. 2. Economics must be viewed within the social system of a country and global context. A social system includes economic and non-economic factors like values, attitudes, power structures, and traditions. 3. Traditionally, development meant achieving sustained income growth per person. However, experience showed this did not improve living standards for most. Development is now defined as reducing poverty, inequality, and unemployment alongside economic growth.

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    ECO-321 Development Economics: Instructor Name: Syeda Nida Raza

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    Laiba Malik
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    1. Development economics studies how low-income economies transform to become high-income by overcoming poverty. It focuses on mechanisms that trap families and nations in poverty across generations and strategies to break these traps. A larger government role and coordinated economic planning are viewed as important. 2. Economics must be viewed within the social system of a country and global context. A social system includes economic and non-economic factors like values, attitudes, power structures, and traditions. 3. Traditionally, development meant achieving sustained income growth per person. However, experience showed this did not improve living standards for most. Development is now defined as reducing poverty, inequality, and unemployment alongside economic growth.

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    1. Development economics studies how low-income economies transform to become high-income by overcoming poverty. It focuses on mechanisms that trap families and nations in poverty across generations and strategies to break these traps. A larger government role and coordinated economic planning are viewed as important. 2. Economics must be viewed within the social system of a country and global context. A social system includes economic and non-economic factors like values, attitudes, power structures, and traditions. 3. Traditionally, development meant achieving sustained income growth per person. However, experience showed this did not improve living standards for most. Development is now defined as reducing poverty, inequality, and unemployment alongside economic growth.

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    39 views12 pages

    ECO-321 Development Economics: Instructor Name: Syeda Nida Raza

    Uploaded by

    Laiba Malik
    1. Development economics studies how low-income economies transform to become high-income by overcoming poverty. It focuses on mechanisms that trap families and nations in poverty across generations and strategies to break these traps. A larger government role and coordinated economic planning are viewed as important. 2. Economics must be viewed within the social system of a country and global context. A social system includes economic and non-economic factors like values, attitudes, power structures, and traditions. 3. Traditionally, development meant achieving sustained income growth per person. However, experience showed this did not improve living standards for most. Development is now defined as reducing poverty, inequality, and unemployment alongside economic growth.

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    of 12

    ECO-321 Development

    Economics
    Instructor name: Syeda Nida Raza
    Chapter 1: Introducing Economic
    Development: A Global Perspective
    Book Name: Economic Development
    Author Name: Michael Todaro
    1.2 Economics and Development Studies

    Development economics is the study of how economies are transformed


    from stagnation to growth and from low-income to high-income status
    and overcome problems of absolute poverty.

    • Development economics, to a greater extent than traditional neoclassical


    economics or even political economy, is concerned with the economic,
    cultural, and political requirements for effecting rapid structural and
    institutional transformations of entire societies in a manner that will most
    efficiently bring the fruits of economic progress to the broadest segments
    of their populations.
    1.2 Economics and Development Studies

    • It focuses on the mechanisms that keep families, regions, and even entire
    nations in poverty traps, in which past poverty causes future poverty, and
    on the most effective strategies for breaking out of these traps.

    • Consequently, a larger government role and some degree of coordinated


    economic decision making directed toward transforming the economy are
    usually viewed as essential components of development economics.
    The Important Role of Values in
    Development Economics
    • Economics is a social science. It is concerned with human beings and the
    social systems by which they organize their activities to satisfy basic
    material needs (e.g., food, shelter, clothing) and nonmaterial wants (e.g.,
    education, knowledge, spiritual fulfillment).

    • It is necessary to recognize from the outset that ethical or normative value


    premises about what is or is not desirable are central features of the
    economic discipline in general and of development economics in particular.
    The Important Role of Values in
    Development Economics
    • Economics cannot be value-free. Thus, the validity of economic analysis
    and the correctness of economic prescriptions should always be evaluated in
    light of the underlying assumptions or value premises.

    • Once these subjective values have been agreed on by a nation or, more
    specifically, by those who are responsible for national decision making,
    specific development goals and corresponding public policies based on
    “objective” theoretical and quantitative analyses can be pursued.
    The Important Role of Values in
    Development Economics
    • However, where serious value conflicts and disagreements exist among
    decision makers, the possibility of a consensus about desirable goals or
    appropriate policies is considerably diminished.

    • In either case, it is essential, especially in the field of development


    economics, that one’s value premises always be made clear.
    1.2 Economics and Development Studies
     Economies as Social Systems: The Need to Go Beyond
    Simple Economics:

    • Economics and economic systems, especially in the developing


    world, must be viewed in a broader perspective than that postulated
    by traditional economics.

    • They must be analyzed within the context of the overall social


    system of a country and, indeed, within an international, global
    context as well.
    • By “social system” we mean the interdependent
    relationships between economic and noneconomic
    factors.

    Social system is the organizational and


    institutional structure of a society, including its
    values, attitudes, power structure, and
    traditions
    1.3 What Do We Mean by Development?
     Traditional Economic Measures:
    • In strictly economic terms, development has traditionally meant
    achieving sustained rates of growth of income per capita to enable a
    nation to expand its output at a rate faster than the growth rate of its
    population.

    • Levels and rates of growth of “real” per capita gross national income
    (GNI) are then used to measure the overall economic well-being of a
    population that is how much of real goods and services is available to the
    average citizen for consumption and investment.
    1.3 What Do We Mean by Development?
    • Development was until recently nearly always seen as an economic
    phenomenon in which rapid gains in overall and per capita GNI growth
    would either “trickle down” to the masses in the form of jobs and other
    economic opportunities or create the necessary conditions for the wider
    distribution of the economic and social benefits of growth.

    • Problems of poverty, discrimination, unemployment, and income


    distribution were of secondary importance to “getting the growth job
    done.”

    • Indeed, the emphasis is often on increased output, measured by Gross


    Domestic Product (GDP).
    1.3 What Do We Mean by Development?
     The New Economic View of Development:
    • The experience of the first decades of post–World War II and postcolonial
    development in the 1950s, 1960s, and early 1970s, when many developing
    nations did reach their economic growth targets but the levels of living of the
    masses of people remained for the most part unchanged, signaled that something
    was very wrong with this narrow definition of development.

    • In short, during the 1970s, economic development came to be redefined in terms


    of the reduction or elimination of poverty, inequality, and unemployment within
    the context of a growing economy.

    “Redistribution from growth” became a common slogan.

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