Lecture 15:Development issues

Development questions

• What is the problem?• What are the consequences?• How is the problem interpreted?• What is the solution?

Global inequality

• After 1945, and particularly after decolonisation, it became clear that there was a substantial gap between richer and poorer (developed and developing) states

• Despite worldwide economic growth and some notable success stories (particularly in Asia), most poorer states have failed to catch up

• Most of these developing states are not developing at sufficient rates to close the gap

Designations of inequality

• During the Cold War and decolonisation, it was usual to divide states into the First World (the Western developed economies), the Second World (the communist countries) and the Third World (the developing countries) – the term was first used in 1952

• This division was later simplified as the ‘North-South divide’, with developing countries regarded as the South whatever their location

Patterns of global inequality

Relationship to average GDP PPP per capita, 2010

Consequences of inequality

Poverty

Definitions of poverty

• There are two definitions of poverty:• Relative poverty is calculated for individual

counties, and means having income below a country’s median level (usually below 50%-60% of the national median)

• Absolute poverty means having insufficient access to basic needs (food, shelter, etc.)

• Both definitions can be imprecise and arbitrary

Hunger

Explaining hunger

• Orthodox approaches tend to see hunger as a consequence of absolute numbers – hunger as a Malthusian crisis

• Alternative approaches look at the distribution of food resources – the numbers of people suffering hunger have not decreased despite huge rises in food production

Basic approaches to development

• The mainstream approaches:– Embedded liberalism– Development as modernisation – Neoliberalism

• Alternative approaches– Basic needs– Sustainable development– Human development

Embedded liberalism

• Embedded liberalism - the period of economic policies conducted between 1945 and the late 1970s, attempting to combine the benefits of liberal trade policies and state economic intervention

• The approach fizzled out after the oil shocks of the 1970s

Development as modernisation

Approach owed much to the work of Walt Rostow

Development = economic growth

Industrialisation through investment of capital

Ignored history

Believed in being objective

Written mainly by men in the West

Neoliberalism

• Dominated western economic thought for two decades from around 1980

• This stressed the importance of the free markets and the withdrawal of the state from economic intervention, subsidies and control

• Became World Bank/IMF orthodoxy, unofficially known as the Washington Consensus

The basic needs approach

• Also known as ‘human needs centred development’ – an approach that aimed to put people first

• Most of the idea came from work by the International Labour Organisation, expressed at the World Employment Conference in 1976

• The aim was to increase employment to cover the basic needs of the poor – food, clothing, housing, education and public transport

• The idea was popular for a brief time

Sustainable development

• Promoted by the Bruntland Commission in its 1987 report Our Common Future

• “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs”

The human development approach

• A broader approach• This focuses not just on income but on the

wider concept of choices and how they can be expanded

• Developed by the economist Amartya Sen• Some of the approach has been adopted

by the UN, which uses it in its Human Development Index and the Millennium Development Goals