ECONOMIC GROWTH &

DEVELOPMENT
LECTURE - 1

DevelopmentWHAT?
Indicators

of wealth => failed =>

resource allocation => needs rule
of Equity
Free health & education services
History => countries with same
income=> vary in quality of life
Access to education, health care,
employment opportunities,
pollution free environment, &
freedom

Development (policy)
Goals
Growth

in
GDP; Wellbeing; Freedom; Economic
Security
UNO=> human development
Life expectancy; adult literacy;
access to 3-level of edu. ; critical
minimum income (more freedom of choice)
Issue

poverty & social

problems

Cost of Economic growth

High levels of
Income inequality; unemployment; weaken
democracy; loss of cultural identity;
overconsumption of resources (intra-generation cost)
=> Outcome => unsustainable growth
Requisites of SUSTAINABLE Growth
Econ growth => human development
Rise in
Worker knowledge & Skills (magnitude &
opportunities to use efficiently) ; opp. For job
& expand business ; democratic decision
making

Pollutionintergenerational
justice

Concept under
construction
objectives
Stock of
knowledge

Value
system

Sustainable
Developme
nt

Social Infrastructure

Definition (1987)
Development

is sustainable if it, meets the

needs of the present generation
without compromising the abilities of
the future generations to meet their
own needs
Social justice => intergenerational justice
Eg; deforestation of Amazon basin=> extinct
plants species=> cure AIDS
Eg; emission of green house gases=>global
warming=> cause flood=>
displacement/impoverishment

Comparing the level of

Development
Historically
Dev = f(natural capital)
sources
Imports:
Artificial soil
amelioration
Fossil fuels

Endowed:
Fertile agri soil
Oil/Gas deposits
Minerals

Comparing the level of

Development
Recently
Dev = f [productivity = f(physical; human;
natural capital)]
Productivity => GDP or GNP per capita

(income/expenditure approach)

Unable to record:
Value of leisure & freedom
Income distribution
Pollution & environment degradation
Resource depletion
Shadow economy (home vegetation/repair)
Commodity impact: good (medicines) vs. Bad
(weapons)

Countries Grouped
PER CAPITA INCOME (Conventional way)
High > $ 9386 => 16% population
(Israel, Kuwait, Singapore & UAE NOT consider them developed)

$9385

> Upper Middle > $3036 28%

populati
$3035 > Lower Middle > $776
on
$775 > Low => 56% population
TRANSITIONAL ECONOMIES: industrialized
but formerly planned now in transition
towards market economy.

Human capital potentials

Health

Per Capita GDP - 1960

Per Capita GDP 40 yrs later

Which countries changed it position/group

Share of World Trade: Trade Blocks

ASSIGNMENT - 1
Reference

: CASE STUDY 1

(Todaro, pp.28-33)

DEVELOPMENT STRUGGLE IN
BRAZIL
Evaluate the efforts made by
Brazil to achieve economic
growth.
ONLY ONE PAGE SUMMARY
WITH CONCLUSION IN
BULLETS