Course Introduction

Dear distance learners! Welcome to the course ‘Development Theories and Practices’
(GaDS ). Throughout this course, you will equip yourself with the basic knowledge of
development issues. This course observes and makes sense of the different theories and
practices of development. It also examines relationship between the different theories of
development and their practices particularly in the Third World like Ethiopia.

There have been continuous debates concerning the underlying causes of

underdevelopment and on the most desirable paths ways to change. These debates elicit
different theoretical responses from social scientist. Thus, there are many theories that
blame the Third World’s political unrest and economic backwardness. On the opposite
pole, there are theories which have condemned western exploitation as the root cause of
underdevelopment. So, you will be exposed to these thinking in this course. Therefore, by
knowing all these and other issues, you will be able to understand what should be made
to solve the development problems of poor countries like Ethiopia.

The major issues covered under this course include the concept of development,
indicators of development, the characteristics of underdeveloped countries, values and
objectives of development, the major issues in development, , the debates and theories
that have aimed at overcoming the development problems of poor economies like
Ethiopia, the recent historical and intellectual evolutions in scholarly thinking about how
and why development does and does not take place, the nexus between population growth
and economic growth and the different policy approaches, and the relationships between
environment and development and the different policy options for states.

The course is a three credit hours course. Thus you need a total of 146 study hours to
complete this course.

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The module is accompanied by activities, self-check exercises questions and check-lists
at appropriate places. This is intended to strengthen your overall study of the course.
Thus, I strongly advise you to read the material and go through each and every exercise.

Course Objectives

After you completed studying this course, you are expected to:
• Define the concept of development
• Explain the indicators of development
• Know the characteristics of underdeveloped countries like Ethiopia
• Identify the values and objectives
• Know the major issues in development
• Explain the two major growth models for developing countries like Ethiopia
• Analyze the different theories of development
• Critically analyze the nexus between population growth and population growth
• Discuss the relationship between environment and development

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 UNIT ONE

DEVELOPMENT: INTRODUCTION

Introduction
Hello dear students! Welcome to studying the course on development theories. The
primary purpose of this unit is to help you understand the concept of development, which
is a multi-faceted and includes a variety of economic as well as non-economic
dimensions. We will describe the leading issues in development as well as specify some
indicators of development by which you can differentiate areas/regions/countries that are
less developed from those that are relatively more developed. The process of
development itself is a complex one, with multiple trajectories, and we have a range of
theories.

Objectives

With the successful completion of this unit, you will be able to;

 Define what development is all about

 List the indicators of development
 Identify the values and objectives of development
 Identify the major issues in development

Pre test questions

1. How do you define development?
2. Can you list the indicators by which it is possible to evaluate
development?
3. Can you identify objectives of development?
4. What are some of the values of development?

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 Section One

The Concept of Development

Section Overview
Dear students! Welcome to the first section of this module and the whole course in
development theories and practices. In this first section of the first unit you will be
introduced with what development is all about and the basic elements it comprises. Dear
students, you might have some clue about what development is because it is a term that is
often used by people especially in academic institutions.

After the completion of this section, you will be able to;

 Define what development is all about

 Identify the basic elements of development

? Dear student, what do we mean by “Development”?

Dear student, because the term development may mean different things to different
people, it is important at the outset that we have some working definition or core
perspective on its meaning.

Dear students, you know that some countries are considered to be more developed than
others. It is not uncommon to come across references to the Less Developed Countries
(LDC) as compared to the Developed Countries (DCs). Similarly, within our own
country, some regions are said to be more developed than others. Clearly, development
,therefore involves making relative comparisons.

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Development implies an overall positive change in the physical quality of life. This
positive change for the better encompasses economic growth as well as social aspects.
Therefore, development not only calls for economic but also the equitable distribution of
the gains made from economic growth. In other words, development implies growth with
justice. It means an improvement in the quality of life through better health, education,
housing and overall material and social welfare.

? What are the basic elements of development?

The basic elements of development are the following:

 Removal of inequality and poverty
 Increase in material welfare of the people
 Increase in social well-being (education, health, housing, etc)
 An equitable distribution of the gains of development among different groups
of people in a region or country
 An enhancement in technology and the capacity to produce a wider range of
goods and services in the economy leading to a better quality of life.
 Building institutional structures which permit participation in decision-making
at all levels, equalization of opportunities for development and removal of
disparities.

Development is a value-laden and subjective concept with different definitions as given

by different professionals. Development means basically unfolding or opening-up
something, which is latent and with people it means opening up or unfolding their
potential powers. It just refers to a change that is desirable.

But since what is desirable at a particular time, place and in a particular culture or context
may not be desirable at other places, or at other times in the same place and in the same
cultural setting, it is impossible to think of a universally acceptable definition of
development. However, at best one can define development in the given societal context
as a set of desirable societal objectives which society seeks to achieve.

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For a long time, it was assumed that development depends primarily on economic growth
and would automatically occur if economic growth took place. This view of development
has, however been criticized on the ground that it ignores the distribution of the gains
from growth, and also how the growth has been achieved and at what costs. An increase
in production in a country doesn’t automatically mean that there has been better
distribution of what has been produced. This has meant that the question of distributive
justice has assumed greater importance.

? Dear student, what is the difference between growth and development?

It is necessary to understand the difference between the concept of economic growth and
development. Economic growth means an increase in the value of all goods and services
produced in an economy. The sum total of all goods and services in an economy is
termed as the Gross Domestic Product (GDP). Growth is, therefore a sustained expansion
in the productive capacity of an economy leading to sustained rise in its GDP.
Development, on the other hand is a sustained improvement in material welfare,
particularly for those who are poor and afflicted by poverty, illiteracy and poor health
conditions. Development is therefore, a qualitative concept involving a qualitative
improvement in the general standard of living in a country or economy.

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  Activity – 1

1. What do you understand by the term development?

_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
2. What are the basic elements of development?
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
3. How do you differentiate between growth and development?
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________

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 Section Two

Indicators of Development

Section Overview
Dear students! in the previous lesson you have learnt about the meaning of development.
As mentioned earlier, development is a relative concept. Some countries may be more
developed than others, but less developed than others. In this lesson you will learn about
the yardsticks by which comparisons between countries can be made.

Objectives

After the successful completion of this section you will be able to;

 List the indicators by which it is possible to evaluate development

 Explain the dissatisfaction with the conventional indicators of development

? As mentioned earlier, development is a relative concept. What are the

yardsticks by which comparisons between one region (country) and another can be
made?

1.1 Characteristics of Underdevelopment

Dear students, the following are some of the most important characteristics of under-
development. Using these, you should be able to roughly differentiate between developed
and developing countries.

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Most developing countries are characterized by the following conditions:
 Mass poverty-The poverty levels are very striking in the developing countries.
 Low levels of income and concentration of incomes in a few hands- Low levels of
income for large sections of the masses and high inequalities in the distribution of
income are very apparent in the developing countries due to the fact that assets are
unequally distributed. This perpetuates the problem of low incomes for the poor.
The existence of mass poverty amidst glaring inequalities is among the most
important symptoms of inadequate development in the low income counties.
 Low levels of productivity and backward technology are the other problems of the
developing countries. Increased productivity is an indication of greater efficiency.
Improvement in technology and better management and organization are
necessary for this purpose. For instance, in the agricultural sector greater use of
fertilizers, improved varieties of seeds, better ploughs, etc can lead to increase in
output from the same unit of land. Generally, crop yields per hectare in the
developed world are far higher than those in developing countries. The need to
improve technology and the overall input package in agriculture is obvious.
 High levels of unemployment and underemployment are characteristics of
developing countries. Since the level of industrialization is low and the
agricultural sector cannot absorb the entire workforce, the problem of
unemployment and underemployment continues to grow. The pressure of
unemployment also perpetuates the problem of low wages as employers take
advantage of surplus labor and pay low wages; workers are not able to bargain
because there are thousands willing to do the same work at the prevailing rates.
 Poor health, nutrition, illiteracy and poor housing are also characteristic features
of developing countries. The low levels of income obviously play a central role in
perpetuating these problems. As earnings are low, people aren’t able to consume a
balanced diet providing the requisite number of calories and nutrients. The most
vulnerable are the children in the developing countries. Compared to standards
prevailing in the developed countries, the death rates are still very high in the
developing countries. Similarly, there are huge gaps between the developed and
developing countries in the field of education. It is particularly striking that the

9
 major problem is with respect to female illiteracy. As mentioned earlier,
inadequate growth and low levels of income are obviously the reasons that
perpetuate such deprivations. It must be stressed; however that public policy has
to play a critical role in addressing these problems.
 Lower status of women- In underdeveloped countries, women are much more
vulnerable than their counterparts in the developed countries. On most
development indicators, they rank lower than their own country. Their health and
nutrition is not at satisfactory levels for large numbers. Female illiteracy is highly
widespread. They also have to put up with both covert and overt forms of
discrimination and the barriers regarding their roles in the society. Women are
often paid lower wages even though they perform the same work. The crudest and
the most gruesome form of discrimination against women in many parts of the
world is reflected in the terrible phenomenon of what has come to be known as
‘missing women’ caused by practices such as female feticide, infanticide, etc
resulting in excessive mortality among them.

1.2 Dissatisfaction with the Conventional Indicators of Development

Traditionally, growth was taken as the most, if not the only, indicator of development.
The use of Gross National Product (GNP) or the Gross Domestic Product (GDP) as the
indicator of development has been criticized on several accounts. Development can be
viewed in terms of progress in (i) Output and income (ii) Conditions of production (iii)
level of living (nutrition, health, housing and education, etc) (iv) attitude to work (v)
proliferation of sound institutions and policies.

 GNP as an average level of income (per capita) ignores the inequality in the
distribution of national income
 It also ignores the availability and utilization of goods and services and has
nothing to say on availability or otherwise of a whole range of basic needs such as
health, education, water, shelter, etc
 It tends to conceal the lower than average condition of the deprived.

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Given these deficiencies of GNP/GDP as an indicator, several alternative contending
indicators of development have been suggested at different juncture by social scientists.

Hence, Human Development Index (HDI) is a recently developed index to measure

development involving both economic and social key indicators. It measures the average
achievements in a country in three basic dimensions of human development.

 A long and healthy life, as measured by life expectancy at birth

 Knowledge, as measured by the adult literacy rate and the combined primary,
secondary and tertiary gross enrollment ratio
 A decent standard of living as measured by GDP per capita in PPP (purchasing
Power Parity) $ USD.

The fundamental criterion of economic development is the total output/products (goods

and services) of the economy. Production function is therefore the keystone of economic
growth structure. Total output rate at a given time is (Yt) is the function of the quantities
of various inputs actually used in production and the major forces conditioning the
productivity of the production factors. Production/ productivity conditioning forces
include technology, institutions and other elements of socio-economic environment.

There are other common socio-economic indicators of development used by many

organizations including UN organizations. Accordingly, the following are identified as
some of the indicators:
 Expectation of life at birth;
 Consumption of animal protein per capita per day;
 Combined primary and secondary school enrolment;
 Average number of persons per room;
 Newspaper circulation per 1000 population;
 Agricultural production per male agricultural worker;
 Percent of adult men labor in agriculture;

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  Percent of economically active population in service sector (gas, electricity, water
etc);
 Percent of GDP derived from manufacturing;
 Electric consumption, kwh. Per capita;
 Steel consumption per capita;
 Percent of population in localities of 20, 000 and over, cities (urbanization level)

The view that income and wealth are not ends in themselves but instruments for other
purposes goes back at least as far as Aristotle. Amartya Sen, the 1998 Nobel laureate in
economics, argues that the “capability to function” is what really matters for status as
poor or non-poor person. As Sen put it, “Economic growth can not be sensibly treated as
an end in itself. Development has to be more concerned with enhancing the lives we lead
and the freedoms we enjoy.

In effect, Sen argues that poverty cannot be properly measured by income or even by
utility as conventionally understood; what matters is not the things a person has-or the
feeling these provide-but what a person is, or can be, and does, or can do. What matters
for well-being is not just the characteristics of commodities consumed, as in the utility
approach, but what use the consumer can and does make of commodities. For example, a
book is of little value to an illiterate person (except perhaps as cooking fuel or as a status
symbol). Or as Sen noted, a person with parasitic disease will be less able to extract
nourishment from a given quantity of food than someone without parasites. Sen’s
approach is valid for more developed countries as well. For example, most of the things
one could do with the personal computer one buys are never understood or even known,
let alone ever used, by anyone other than specialists. Of course, sometimes people want
more “features” just in case they might want to use them. But if we exclude items of this
kind, a computer with unused characteristics is no better than one without these
characteristics. `

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  Activity – 2

1. What are the characteristics of underdevelopment?

_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
2. What is the cause of dissatisfaction with the conventional indicators of
development?
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
3. What is HDI all about?
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________

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 Section Three

Values and Objectives of Development

Section Overview
Dear students, in the previous section you have learnt about the concept of development.
To make the concept of development clear, this section will acquaint you with the
principal values and basic objectives of development.

Section Objectives

After the successful completion of this section you will be able to;
 List down the basic values of development
 Discuss the objectives of development

1.1 Development Values

? What is the meaning of values?

Is it possible to define or broadly conceptualize what we mean when we talk about
development as the sustained elevation of an entire society and social system toward a
“better” or “more humane: life? What constitute the good life is a question as old as
philosophy and humankind, one that must be periodically revalued and answered afresh
in the changing environment of world society.

Values are desired conditions in a society (e.g. health, fame, long life, high income, etc).
There are at least three basic and practical guidelines for understanding the inner meaning

14
of development. These core values are sustenance, self-esteem, and freedom. They
represent common goals sought by all individuals and societies. They related to
fundamental human needs that find their expression in almost all societies and cultures at
all times. Dear students, let us therefore examine each in turn.

1.2 Sustenance: The Ability to Meet Basic Needs

? What are basic needs?

All people have certain basic needs without which life would be impossible. These life
sustaining basic human needs include food, shelter, health and protection. When any of
these is absent or in critically short supply, a condition of “absolute underdevelopment”
exists. A basic function of all economic activity, therefore, is to provide as many people
as possible with the means of overcoming the helplessness and misery arising from a lack
of food, shelter, health and protection. To this extent, we may claim that economic
development is a necessary condition for the improvement in the quality of life that is
development. Without sustained and continuous economic progress at the individual as
well as the societal level, the realization of the human potential wouldn’t be possible. One
clearly has to “have enough in order to be more.” Raising per capita income, elimination
of absolute poverty, greater employment opportunities and lessening income inequalities
therefore constitute the necessary but not the sufficient conditions for development.

Without improving the levels of living (life sustenance) the prospect for development is
non-existent. The first priority of moving from a chronic state of underdevelopment to
one of development must be raising people’s level of living in terms of food, shelter,
clothing, footwear, education, health, employment and social services.

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1.3 Self-esteem: To be a person

? What is self-esteem?
A second universal component of the good life is self-esteem. Self esteem is an inherent
value of human beings. Self-esteem features a sense of worth and self respect, of not
being used as a tool by others for their own ends. It is difficult to feel self-esteem without
development, which includes better material welfare. From this natural value of human
being, development is legitimized as a goal of gaining self-esteem.
All peoples and societies seek some basic form of self-esteem, although they may call it
authenticity, identity, respect, honor, or recognition. The nature and form of this self-
esteem may vary from society to society and from culture to culture. However, with the
proliferation of the “modernizing values” of developed nations, many societies in Third
World countries that have had a profound sense of their own worth suffer from serious
cultural confusion when they come in contact with economically and technologically
advanced societies. This is because national prosperity has become an almost universal
measure of worth. Due to the significance attached to material values in developed
nations, worthiness and esteem are nowadays increasingly conferred only on countries
that possess economic wealth and technological power-those that have “developed.”

The relevant point is that underdevelopment is the lot of the majority of the world’s
population. As long as esteem or respect was dispensed on grounds other than material
achievement, it was possible to resign oneself to poverty without feeling disdained.
Conversely, once the prevailing image of the better life includes material welfare as one
of its essential ingredients it becomes difficult for the materially “underdeveloped” to feel
respected or esteemed. Nowadays the Third World seeks development in order to gain the
esteem which is denied to societies living in a state of disgraceful “underdevelopment.”
Development is legitimized as a goal because it is an important perhaps even an
indispensable, way of gaining esteem.

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1.4 Freedom from Servitude: To be Able to Choose

? What do you mean by freedom from Servitude?

A third and final universal value that constitute the meaning of development is the
concept of human freedom. Freedom here is to be understood in the sense of
emancipation from alienating material conditions of life and from social servitude to
nature, ignorance, other men, misery institutions and dogmatic and harmful beliefs.
Freedom involves an expanded range of choices for societies and their members together
with a minimization of external constraints in the pursuit of some social goal we call
development.

W. Arthur Lewis stressed the relationship between economic growth and freedom from
servitude when he concluded that “the advantage of economic growth is not that wealth
increases happiness, but that it increases the range of human choice.” Wealth can enable
people to gain greater control over nature and the physical environment (e.g. through the
production of food, clothing and shelter) than they would if they remained poor. It also
gives them freedom to choose greater leisure, to have more goods and services, or to
deny the importance of this material wants and live a life of spiritual contemplation. The
concept of human freedom should also encompass various components of political
freedom including, but not limited to personal security, the rule of law, freedom of
expression, political participation, and equality of opportunity. Some of the most notable
economic success stories of the 1970s and 1980s (Saudi Arabia, Chile, South Korea,
Singapore, Malaysia, Thailand, Indonesia, Turkey, and china, among others) did not
score highly on the 1991 Human Freedom Index compiled by the United Nations
Development Program (UNDP). Development is expected to endow people with ability
of choosing. Development in wealth increases happiness, control over nature and
physical environment.

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1.5 Objectives of Development

? What are objectives of development?

We may conclude that development is both a physical reality and a state of mind in which
society has through some combination of social, economic and institutional processes,
secured the means for obtaining a better life. Whatever the specific components of this
better life, development in all societies must have at least the following objectives:

 Increasing availability and widening the distribution of basic life sustaining goods
and services to members of society
 Improved family income of an adequate level for subsistence package of food,
shelter, clothing, footwear and other expenditure
 Providing of more jobs (employment). Job or employment in addition to its role
of distribution of income to assure consumption, it plays an important role in
developing personality of individuals
 Improved conditions of production and work
 Improving access to education that also serves not only to enhance material well
being, but also to generate greater individual and national self-esteem.
 Improving social and economic equality
 Providing or opening opportunities to the people to participate in governance at
all and grassroots level.
 Promoting cultural and humanistic values and social discipline (positive attitude
to work)
 Expanding the range of economic and social choice of individuals and nations by
freeing them from servitude and dependence not only in relation to other people
and nation but also to forces of ignorance and human misery.
 Keeping-up national independence, consolidation and sovereignty without
interference from other foreign governments.

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  Activity – 3

1. What are the major development values?

_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
2. What is the meaning of values?
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
3. What are the major objectives of development?
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________

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 Section Four

Major Issues in Development

Section Overview
Dear students, in the previous section you have learnt about the major values and
objectives of development. In this section you will learn about the prevailing major issues
in development. Dear students, the concept of development have been beset by a host of
debatable issues. Hence, the contentious issues in development will be given due
emphasis

Section Objectives

After the successful completion of this section you will be able to;
 Identify the major issues in development
 Discuss the nature of the contentious issues in development

1.1 Major Issues in Development

It must be emphasized that there cannot be a single well defined path towards
development. Different countries and regions will have their own specificities into
account in order to develop their societies. This is one reason why development has been
a much debated subject. In this section we will highlight some of the major issues, which
have featured in this debate.

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i. Growth versus Distribution

For a long time it was assumed that economic growth would be an engine that will lead
naturally towards development. Consequently, little or no attention was paid to the
question of distributive justice. One of the major outcomes of this situation was the
‘trickle down’ theory, which stated that if there was sufficient growth everybody would
benefit from it. However, growth by itself doesn’t guarantee an improvement in the
quality of life for the vast number of people.

ii. Agricultural Versus Industrial Development

This has been one of the most important issues at stake in the debate on development. If
the agricultural sector doesn’t grow there may be sharp increase in the prices of food-
grains that will affect the poor. On the other hand, industrial stagnation will mean that
surplus labor from the agricultural sector can’t be usefully employed. Therefore, both
agriculture and industry will have to grow so that the pace of development is fast enough
to improve the living conditions of the people.

iii. Capital versus Labor Intensive Technology and Development

? What is technology?

Dear students, you may have heard the term ‘technology’ being used quite often in
debates pertaining to development. Technology is a means by which goods are
manufactured in an economy. Any goods, however crude or sophisticated, can actually be
manufactured by several means. The development in technology is the process by which
the manufacture of goods is made cheaper, faster and more efficient.

? What is the role of technology in development?

21
You may be aware of the fact that tractors, harvesters, etc. are being used on a wider
scale now than a couple of decade’s age. They are now used to perform many of the
agricultural operations, which were hitherto performed manually using ploughs and other
equipments; this change may be termed a technological change.

Now that you are familiar with this concept you must be able to appreciate that at any
given point of time, we may have a number of technologies to choose from in order to
produce the same goods. Cloth can be woven on traditional looms in your village or
town, or it can be manufactured in the factories located in bigger cities. The end product
is more or less the same, but the process of making it is different.

? What are the implications of these facts for the process of development?

An improvement in technology calls for investment to make this change feasible.

Sophisticated technology, when it uses less labor, is termed “labor displacing
technology”. On the other hand, an improvement in technology can also be made without
displacing labor and also less expensively. This is called “labor intensive technology”.
Capital intensive and labor displacing technologies are often expensive and call for large
investments. Labor intensive technologies on the other hand have the advantage of being
able to absorb the surplus labor in a developing country.

During the 196os and the early 1970s, a new trend of thinking on technology suitable to
developing societies became popular. The question raised was that of “Appropriate
Technology”. It was said that developing countries should adopt technologies that are
suitable for their own specific needs, situations and socio-cultural framework rather than
copy the western technologies blindly. Thus it was suggested that countries like Ethiopia
should use technologies that have evolved over many decades and adapt them to make
the best use of their cost-effectiveness.

The choice between these types of technology, however, is not easy for a developing
country. On the one hand, rapid increase in output is necessary to solve the problems of

22
the people and, on the other; the problem of unemployment (thus created) accentuates the
problem of poverty. A balance is, therefore, required so that both technology and living
conditions of the people improve.

iv. Centralization versus Decentralization

This has been another major issue in the debate on development. Generally, it is agreed
that development is a long-term phenomenon and therefore, needs to be planned. While a
certain degree of centralization is necessary to coordinate the efforts towards
development, too much of centralization in the case of decision making powers can
weaken the process of popular participation. It also leads to the formulation of programs
and projects, which have limited local relevance.

It is hoped that decentralization of the development process would also lead to greater
accountability to those who are actually involved in the decision making process.
Devolution of power is very vital for development. This ensures that the administration is
brought closer to the people. Consequently, there is greater accountability of planners
towards those whom programs and policies are meant to reach.

v. Urban versus Rural Development

The vast majority of the population in Ethiopia and other developing countries live in
rural areas. There is a continuing influx of people into the cities looking for jobs as the
rural economy is not been able to provide employment to them. It needs to be pointed
out that the problem of poverty, poor health and illiteracy is widespread in both rural as
well as urban areas of developing countries. The problem of rural poverty and
unemployment is the crux of the problem, without solving it, there can not be genuine
development. Hence, rural development has come to acquire critical importance.
Sustained improvement in the quality of life in rural areas is likely to slacken the pace of
large-scale migration of villagers to cities in search of jobs.

23
vi. Respective roles of the State and the Market

One of the most contentious issues in Economics has been the scope and extent of
government intervention in the economy of the country. During the immediate post
WWII era, there was a near consensus among economists, for a variety of reasons, such
as important developments in economic theory around the idea of ‘market failure’
(which had several dimensions) that governments have to play major roles in the
economic sphere.

 Activity – 4

1. Identify the major development issues

________________________________________________________________
________________________________________________________________
_______________________________________________________
2. Discuss on the principal contentious issues in development
________________________________________________________________
________________________________________________________________
_______________________________________________________

24
 Unit Summary

Dear students, in this unit you have learned that the term development mean different
things to different people. However, there are some working definitions or core
perspective on its meaning. It is this agreed measurement criterion that would enable us
to differentiate the development status of countries. Development is conceived as a
multidimensional process involving major changes in social structure, popular attitude,
and national institutions, as well as the acceleration of economic growth, the reduction of
inequalities, and the eradication of poverty.

Moreover, in order to understand the inner meaning of development, at least three basic
components or core values serve as a conceptual basis and practical guidelines. Hence,
these core values-sustenance (The ability to meet basic needs), Self-esteem (To be a
person), and Freedom (To be able to choose) - represent common goals sought by all
individuals and societies.

Dear students, we have also seen that development in all societies should have such
objectives as increasing the availability and widening the distribution of basic life
sustaining goods, rising levels of living and expanding the range of economic and social
choices.

In order to meet comparison on the development situation among countries, there are a
host of criteria, albeit controversial. The traditional conception of development gives due
emphasis to income per capita of nations. The new economic view of development takes
distribution into account.

25
  Self test exercises
Part I: Choose the best answer from among the given alternatives
1. From among the following which one could not be a definition of development?
A. It implies an economic change
B. It implies an overall positive change
C. It implies a qualitative improvement of well-being
D. it is a qualitative concept involving a qualitative improvement in well-being
E. A and C
2. _________is a sustained expansion in the productive capacity of an economy leading
to sustained rise in its GDP.
A. Development
B. Equality
C. Growth
D. GNP
E. None
3. Which of the following is not considered as development values?
A. Protection
B. Dignity
C. Servitude
D. Freedom
E. None

4. According to Sen’s “capability” approach

A. Economic growth is an end it itself
B. Poverty is properly measured by income
C. What matters for well-being is the characteristic of commodities individual
consumed.
D. What matters for well being is what use the consumer can and does make use
of commodities individuals have.
E. All

26
5. Which of the following doesn’t play a crucial role in the overall development process?
A. Values
B. Attitudes
C. Institutions
D. Income
E. None

6. What is wrong with using income per capita as the principal indicator of well-being?
A. It ignores the inequality in the distribution of national income.
B. It overlooks distributive justice.
C. It doesn’t have any problem
D. A and B
E. None

7. A development value dubbed as “To be a person” is referred to as __

A. Sustenance
B. Self-esteem
C. Freedom
D. Self-concept
E. None

8. Preoccupation with the thought that “poverty is predestination” needs to develop__

A. Self-esteem
B. Sustenance
C. Freedom from Servitude
D. To be a person
E. None

27
Part II. True or False

____________1. Development is legitimized as a goal because it is an important way of

gaining esteem.

____________2.Income is a vital component of Human Development Index (HDI)

____________3. The freedom that a person has in terms of the choice of functioning
-given his personal feature and his command over commodities is
referred to as Capabilities.

_____________4. According to Sen’s Capabilities” approach a book is of little value to

an illiterate person.

_____________5. Labor displacing technologies are all what is needed for developing
countries.

 Check List

Direction: Dear students this is the section in which you confirm your understanding of
the lessons in this unit. Put a tick mark () in the yes column for activities that you have
clear understanding and in the no column for activities that you doubt that you have good
understanding.
I Can: Yes No
 define development
 list indicators of development
 Identify the values and objectives of development

 Identify the major issues in development

28
 UNIT TWO

MODELS/STRATEGIES OF ECONOMIC GROWTH

Unit Introduction
Hello dear learner! Are you enjoying the issues being discussed in this module? Very
good! Welcome to unit three of the module! This is about debates on the different models
of economic growth. These debates and theories have aimed at overcoming the
development problems of poor economies like Ethiopia. Just a suitable strategy is
evolved in the defense authorities for winning a war, in the same way development
strategy is required by the government for solving the problems of poverty,
unemployment and inequality on one hand and accelerating development on the other.
Suitable development strategy aims at effective and optimum use of available resources
(human, material and natural resources). There are two major growth models or
strategies. These are the balanced and unbalanced growth models.

Accordingly, this unit is divided into two major sections. The first section elaborates the
strategy of balanced growth and its theoretical standpoint. It discusses the advantages that
can be achieved if poor countries pursue a balanced growth strategy. The second section
explains the unbalanced growth strategy and its benefits if followed by poor countries.

Objectives

After completing this unit, you are expected to:

 Explain the strategy of balanced growth
 Analyze the benefits of the balanced growth model
 Discuss the unbalanced growth strategy vis-à-vis the balanced growth model
 Know how these growth strategies be implemented by countries like Ethiopia.
 Compare the advantages of both growth models

29

Pre-test Questions
1. What kind of growth strategy is balanced growth model?
2. What are the possible benefits that can be obtained by following the strategy of
balanced growth?
3. What do understand by unbalanced growth strategy?
4. What are the advantages of unbalanced growth model over the balanced growth
strategy?
5. How can these growth models are implemented in poor countries.

30
 Section One

Balanced Growth Model/Strategy

Section Overview
Dear student, welcome to the first section of this unit. It is about balanced growth model
or strategy. In this section the essence and benefits of balanced growth strategy are
discussed by making poor countries like Ethiopia as a reference. It also highlights the
different arguments that support this strategy and how poor countries can implement this
growth strategy. This section is divided into five sub-sections. The essence, essential
conditions and proponents of balanced growth are presented in successive sub-sections.
The advantages and criticisms of the doctrine are also discussed the last two consecutive
sub-sections.

Objectives

Upon the completion of this section, you will be able to:

 Know the essence of balanced growth strategy
 Identify the essential conditions of balanced growth
 Explain the benefits that can be obtained by pursuing this growth model
 Discuss the different arguments propounded to support this growth strategy
 Explain the critiques waged against this growth model
 Analyze the way how this growth model can be implemented

31
1.1 The Essence of Balanced Growth Model/strategy

? Dear learner, what is balanced growth?

Balanced growth is not a static process. It has different interpretations. In one context,
balanced growth may mean investment in the depressed sector of the economy, while in
other context it may imply harmonious development of different sectors. Planning with
balanced growth indicates that all sectors of the economy will expand in the same
proportion so that consumption, investment and income will grow at the same rates.

The development process in underdeveloped countries is very much hindered by vicious

circles of poverty. By vicious circles, Nurkse means a circular assemblage of forces
tending to act and react upon one another in such a way as to keep a country in a state of
poverty. According to Nurkse, vicious circle of poverty adversely affects the
accumulation of capital. The forces responsible for deficiency of capital are small
capacity to save, low level of income and low productivity. Deficiency of capital leads to
the small capacity to save and vise-versa. Thus, the vicious circle is complete. The
underdeveloped countries however would not like to remain for ever in the state of
underdevelopment. The question is how to break the vicious circle. This can be addressed
through a series of capital investment in various industries/ sectors. That is through
balanced growth strategy.

? Dear learner, what does balanced growth involve?

This growth strategy recognizes the significance of economic interdependence. The

growth and development of various sectors is not possible in isolation. Various segments
of the economy should grow and develop in relation to each other. This strategy aims at
doing something everywhere (i.e. in every firm/sector/region). Resources will be thinly
distributed among the different sectors of the economy. The approach is economy wide
growth. It also advocates capital widening. All sectors firms/regions will get more or

32
less the same amount of resources. This is done to maximize equity and social welfare
and minimize social costs.

The balanced growth strategy suggests investment in diversified feeds. To the extent
possible, this investment should be inclusive so as to increase the scope of economic
activities. Moreover, it also suggests labour intensive techniques of production. This is
believed to create employment and social productivity. The strategy envisages that
different firms/sectors/regions grow at different rates, but in a union and in
complementary way. Firms/sectors/regions grow at different rates because the return to
investment is different in different sectors or locations.

The balanced growth strategy also suggests regional or spatial planning for the depressed
regions, and ethnic and economic groups. To this end, the strategy recommends that there
should be social accountability for production, consumption and distribution. The
government is responsible for increasing production, consumption and distribution.

? Dear learner, what are the determinants of balanced growth model?

The implication of balanced growth strategy is generally determined by a variety of

factors such as availability of resources, level of technology, degree of balance
prevailing among the different sectors, socio-economic objectives of development
accepted by the people and other institutional factors. In one situation, balanced growth
may imply correction of sectoral imbalances, while in other context it may refer to
structural changes or rectification imbalance in factor proportion.

Under balanced growth a series of capital investment in different industries is essential

for breaking the vicious circle. The question is which sector or industry should be given
preference in the matter of investment allocation. In this context, it has been suggested
that investment should be made in the growing sector in an economy.

? Dear student, what does this create?

33
This would create external economies which would provide incentive to other productive
activities. The chain of continuous investment would ultimately bring out transformation
in the economy. Growth in one sector generates external economies for other sectors,
with the result that sectors will become complementary. But it should be remembered that
the selection of a growing sector is not an easy task. It is difficult to decide whether
agriculture or industry, human capital or material capital, internal trade or external trade
should be given priority in investment allocation.

? Dear learner, how can Complementarity be achieved in an economy?

Complementarity is an essential and vital feature of balanced development. Now let us

see how it can be achieved by taking agriculture and industry in to consideration.

The economic history of industrialized countries reveals that a prosperous agriculture

forms the basis of industrialization. Agriculture provides necessary raw material for
manufacturing sector. It provides food for the growing urban population. Agricultural
surpluses can be mobilized for investment in non-agricultural sectors. The rising income
of the rural population expands demand for manufactured and durable goods. All these
bring about structural transformation in rural economy. The developing rural economy
becomes capable of exporting farm products and earns foreign exchange to meet the
initial requirement of industrialization. Domestic market expands; new methods of
production, new skills, new investment opportunities and new organizational abilities
develop. All these create a favorable climate for industrial expansion. This is how the
prosperous agriculture supports and sustains the expanding industrial activities. In other
words, development of agricultural sector is an essential pre-requisite for industrial
growth.

? Dear student, how can the industrial sector help the development of agriculture?

It is well-known that underdeveloped countries are overpopulated and this phenomenon

creates a tremendous burden on agriculture. Growth of industrial activities helps in

34
reducing this burden by absorbing surplus rural population. Employment opportunities
expand and income rises which raises the living standard of rural population. Moreover,
the manufacturing sector supplies various agricultural inputs like pumping sets,
harvesters, fertilizer and agricultural machinery which help in development of
agriculture. In nutshell, agricultural improvements are possible through industrial
development, technical base and essential infrastructure. Hence, simultaneous
development of agriculture and industry is an essential pre-requisite for balanced growth.
This development should be ensured by development planning.

? Dear learner, how to ensure balance between agriculture and industry?

Agriculture and industry should be considered as integrated parts of an economy. And

hence, development planners should ensure the balance between agriculture and industry.
It might be difficult to suggest a uniform pattern for balance between agriculture and
industry for all underdeveloped countries. Yet, the following guidelines could serve as
the basis for ensuring balance between the two.
a. The planners should not concentrate resources on the development of one
particular sector. The resources should be allocated among the different sectors in
a manner so as to maximize the social welfare.
b. While drawing up the patterns of priorities, planners should take into account the
local conditions such as availability of resources, level of technological
development, institutional factors, level of development already attained and other
similar factors. The optimum combination of such factors could ensure a balance
between agriculture and industry. The experience of the developed countries
should also be taken into account by planners.
c. It is generally observed that underdeveloped countries have surplus rural
population. The transference of this surplus rural labor to the urban sector would
help in the development of manufacturing industries.
Similar consideration should be made by development planners to ensure balance
between other sectors of the economy.

35
1.2 Essential Conditions for Balanced Growth

? Dear learner, what are the essential conditions for this balance?

In the initial stages of development, it might be difficult to bring out a balance among the
different sectors when they compete for limited resources. Yet, the following conditions
are essential for achieving and maintaining a balance among different sectors of the
economy.
1. State Intervention- The logic of balanced growth cannot be given a practical
shape without state intervention. The state can enforce and maintain law and
order. It can mobilize necessary funds through taxes, borrowing, and deficit
financing to meet financial requirements of balanced growth. State can encourage
and stimulate domestic private investment. It can also regulate the economy
through its fiscal, monetary and other measures. Moreover, state can undertake
and promote welfare activities for the creation of human capital.
2. Formulation and Implementation of plans- Formulation and implementation of
development plans is another pre-requisite for achieving and maintaining
consistency and harmony among the different sectors. Planning is an instrument
of realizing socio-economic objectives of balanced growth.
3. Coordination among different departments of the government- Planning only
suggests the way for implementing the various development programs, but the
actual execution is done by the different government departments. Balanced
growth requires integration among different development policies, so that all
sectors move in balance. This, however requires cooperation, coordination and
proper understanding among various government departments and state agencies.
4. Public cooperation- This is essential not only for political stability but also for
economic advancement. It is both the lubricating oil for planning and the petrol of
economic development; it is a dynamic force that almost makes all things
possible. People should be made partners in development. This is because every
development activity would promote the social and economic welfare of people.

36
Generally, the strategy of balanced growth aims at a direct attack on poverty through
societal support. In view of this, agriculture and rural development receive high priority
in order to benefit the largest section of the society. The entire process of development is
guided by planning machinery. Resources should be distributed fairly. That needs
planning. This implies that balanced growth is impossible without government
intervention.

1.3 Proponents of Balanced Growth

There are numerous economists who support the strategy of balanced growth. These may
include, among others Ranger Nurkse, Arthur Lewis and François Perronx. Let us see
their economic thought turn by turn.

1. Ranger Nurkse

He believes that if countries adopt a strategy of balanced growth and if all people
participate in the growth process, the following benefits can be achieved.

• Total savings and capital accumulation rise

• No gluts (excess supply) and no shortage of goods and services exist in the
economy.
• Backward and forward linkages are fostered.
• Balanced growth can be managed with less resource. It heavily depends on the
mobilization of local resources.
• Balanced growth strategy breaks the vicious circle of poverty; because it aims at
benefiting the largest section of society.
• Development finance is fairly distributed across sectors and regions. This can
lead to widespread employment and spread of the fruits of development.

37
 2. Arthur Lewis

He advocated a balanced growth strategy in a manner that labour is utilized to the

maximum. If the productivity of labour is improved in agriculture, then the same work
can be done with fewer people, because the contribution of each labour is high. Then, it is
only the genuinely redundant labour can more to the modern, i.e. distress migration will
not occur. People migrate to the modern sector up on their own will. Furthermore, he
advocated that all sectors of the economy should grow simultaneously and harmoniously
so as to keep a proper balance between agriculture and industry, between material capital
and human capital, between export and import, etc…

? Dear learner, does this mean all sectors grow equally?

Not necessarily! Balanced growth does not mean equal growth; it rather means
proportionate growth of different sectors dictated by their growth of demand.

3. François Perronx

For him, the following benefits can be achieved in the balanced growth strategy.

• Society is able to generate maximum real output per capita.

• There will be minimum fluctuations in employment and aggregate demand.
• There will be reduction in the disproportion of per capita income between
sectors/firms/regions.
• There will be diminution of tensions between sectors, groups, cities and rural
areas.

38
1.4 Advantages of Balanced Growth Strategy

? Dear learner, what do you think the advantages of balanced growth are?

In addition to the arguments that support the balanced growth model, strategy is of a
mixed blessing. It has both advantages and disadvantages. Let us first see the advantages.
i. Balanced regional development: The doctrine of balanced growth
implies that all sectors of the economy should grow simultaneously
and no sector should be discriminated in the matter of resource
allocation. When development of all sectors is taken up by the
planning authorities, it will pave the way for balanced regional
development. Development of one or two sectors would create tension,
disharmony and disequilibrium in the various segments of the
economy.
ii. Wide extent of market: Simultaneous development of different
sectors would help in the production of various goods, which in turn
would lead to the expansion of demand and the enlargement of market.
Environment of competition would prevail which would result in the
production of quality output.
iii. Division of labor: The strategy of simultaneous investment widens the
extent of market. Wide extent of market leads to a greater division of
labor, higher output and quality product. Division of labor leads to
specialization which is essential for promoting export and earning
foreign exchange.

? Dear student, what does external economies mean?

iv. External economies: Balanced growth helps in the creation of

external economies, which are considered essential for rapid economic
development. External economies arise due to interdependence of

39
 industries. Different industries support and encourage each other
which give rise to complementarity of industries.
v. Creation of social over-head capital: When different industries
develop simultaneously, the governments of less developed countries
would be required to provide basic facilities (transport, credit,
electricity, etc…) to encourage the process of industrialization.
vi. Innovations and researches: Balanced growth strategy encourages
innovations and researches in different sectors of the economy. When
different industries develop simultaneously, competition arises. This
forces industries to undertake innovations and researches for reducing
cost of production and improving the quality of product. Low cost of
production means low price, which in turn raises the purchasing power
and promotes economic and social welfare of society.

1.5 Criticisms against Balanced Growth Doctrine

? Dear student, how do you evaluate balanced growth strategy?

As it is a mixed blessing for underdeveloped countries, the doctrine of balanced growth is

criticized. The following are some of these criticisms.
1. The simultaneous development of different sectors requires the unevenness of
capital and it is difficult for less developed countries to mobilize necessary capital
investment in the early stages of development because of low savings,
unfavorable balance of payment, market imperfections, etc…
2. Not only capital is deficient, but the supply of other resources is also inadequate
for the implementation of balanced growth. The smooth functioning of this
strategy requires availability of cheap labor, cheap electricity, raw materials,
transport facilities, etc… Technocrats, engineers, and professionals are also
required when different industries develop simultaneously. But these factors are
generally in short supply. Under such a situation, all round development is not
possible.

40
3. The doctrine of balanced growth ignores the cost reduction aspect. In the
development process, the minimization of costs is as important as the
maximization of output. The strategy of development which aims at the
maximization of output and ignores the minimization of cost cannot be considered
satisfactory growth model.
4. The doctrine of balanced growth is also criticized that it tends to create inflation
in the initial stages of development. When simultaneous development of different
sectors is launched, capital investment expands and quantity of money increases.
This increase in money supply raises the level of effective demand. Supply of
goods however, lag behind because of structural obstacles and hence inflation is
generated.
5. Balanced growth has a wrong assumption that the doctrine creates
complementarity between industries. But in reality, when new industries get
going, the demand for the products of the old industries would shrink, as the result
instead of complementarity, competition between the new and old industries
would start.
6. Because of the above problems, balanced growth is considered as a luxury for
underdeveloped countries. If an underdeveloped country launches ambitious
program of balanced growth with limited resources, imbalance, tension and
disequilibrium would emerge and it might be difficult to maintain balance among
different sectors.

41
  Activity – 5

1. Discuss the rationale and the essential elements of the doctrine of balanced growth.
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
2. Explain the essential conditions for balanced growth strategy.
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
3. Analyze how complementary development be achieved by balanced growth.
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
4. Discuss the major merit of pursuing a balanced growth strategy.
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
5. Critically examine balanced growth as a strategy of development for
underdeveloped countries.
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________

42
 Section Two

Unbalanced Growth Model/Strategy

Section Overview
Hell dear learner. Welcome to the second section of the unit. It is about the other model
of economic growth, i.e. unbalanced growth strategy. In this section, the meaning and
advantages of this growth strategy will be elaborated. It also discusses the different
arguments given that support the doctrine of unbalanced growth model.

Objectives

Upon the successful completion of this section, you will be able to:
 Know the aspects of unbalanced growth strategy
 Explain the advantages that can be obtained by pursuing this growth model
 Discuss the different arguments propounded to support this growth strategy
 Explain the critiques waged against this model
 Analyze the way how this growth model can be implemented

1.1 Aspects of Unbalanced Growth Model

? Dear learner, how do you explain unbalanced growth strategy?

Historically speaking, western countries have followed the pattern of unbalanced growth.
But the concept of unbalanced growth has been interpreted in a variety of ways.
According to Hirschman, development is a chain of disequilibria that must be kept alive
rather that eliminating the disequilibrium. If the economy is to be kept moving ahead, the
task of development policy is to maintain tensions, disproportions and disequilibria. The

43
best way to create imbalances and tensions is to accord priority to the leading sectors in
the matter of development and investment allocations.

The strategy of unbalanced growth aims at doing everything somewhere in a concentrated

manner. This approach is selective. It also advocates capital deepening, i.e. it advocates
using resources in a concentrated and selective manner according to comparative
advantage. Furthermore, it advocates maximizing profits and gains on the principle of
comparative advantage. Resources will be concentrated in those firms/sectors/regions
where there is a maximum return.

? Dear student, what does unbalanced growth suggest?

This particular growth strategy suggests that there is a need to invest in leading
industries/firms/sectors and locations so as to increase the scale of economic activities. It
also suggests capital intensive techniques of productive. In this case, employment is not
an issue that it should take care of itself. The driving force is higher profit. The strategy
also envisages that different firms/sectors/regions grow at different rates in a competitive
way with the dictates of market. Investors should have an option to invest in those
sectors/firms/regions where the return in higher.

Unlike the balanced growth strategy, unbalanced growth strategy suggests planning at a
project level (i.e. project planning). The concern here is that increasing production,
consumption and distribution will take care of themselves in accordance with the laws of
the market.

Generally, the strategy of unbalanced growth aims at creating a self-financing

development. To that end, individuals and communities should finance themselves. It is
the profit that should go to re-investment. Resource allocation will be effected through
market forces, where profits are higher.

44
1.2 Arguments for unbalanced growth strategy

? Dear learner, which sectors of the economy should priority be given in

unbalanced growth strategy?

Many economists argue that for achieving rapid economic development, the planners
should concentrate on focal areas which could have the promise of rapid growth. The
development of focal areas would set in motion a chain of reactions which would
gradually spread to other segments of the economy. This obviously infers that planners
should make the selection of those sectors which are most productive. The sectors like
power, fuel, transportation, communication, education, etc…, could generate external
economies and facilitate the development process. Such sectors should be given a priority
in the matter of investment allocations.

? Dear student, what are the arguments for unbalanced growth?

The classical economists implicitly advocated for unbalanced growth strategy, because
economic decisions have to be based on market forces. This strategy should ultimately
lead to balanced growth. This strategy is based on the following arguments:
i. It is based on comparative advantage, i.e. the return per unit cost is
higher. The approach promotes efficiency.
ii. It is within the means, i.e. real and monetary resources will be the
basis for decision. In other words, decisions will be made within the
limits of a resource capacity. It is achievable.
iii. If we pursue this strategy, we are investing in leading firms/sectors
with the greatest locational and cost advantage, i.e. average cost is
lower. It enables the societies to be competitive on the domestic and
international market.
iv. If decisions are made on the basis of market forces, real linkages
between sectors and industries will be fostered.

45
In addition to the above arguments, there are proponents of this strategy. Hirschman, W.
W. Rostow, and Hans Singer are the most prominent, among others. Now, let us see the
arguments of these economists turn by turn.

1. Hirschman

? Dear learner, why are deliberate imbalances in the economy important?

He propounded the theory of unbalanced growth as continuation to balanced growth

theory. He is of the opinion that the best way to accelerate economic development is to
create deliberate imbalances in the economy. He believed that underdeveloped countries
are not capable of developing different sectors simultaneously owing to scarcity of
resources and necessary infrastructure. He argues for unbalanced growth strategy,
therefore for the simple reason that resources are scarce. There is serious shortage of
resources, shortage of skilled manpower, infrastructure, etc. He argues that investment
should be not only political, but also based on price signals. He contends that tensions
and disproportions among sectors and groups are growth inducting/stimulating factors.
These tensions and disproportions allow the government to signal investment
opportunities or investment gaps.

Hirschman argues that investment should be made in strategic and leading sectors. The
pattern of investment would create more investment opportunities, and pave the way for
further economic development. He points out that the development of industrialized
countries has been on the pattern unbalanced growth. Development is the result of a
series of investment. The divergent series of investments are influenced by the social
profitability and such investments are undertaken by the public agencies.

46
 2. W.W. Rostow

? Dear learner, what do you mean by growth poles?

Rostow wants growth through leading sectors and industries in specific locations. This
will lead to the emergence of growth poles. Certain area will be concentrated with
industries. Once these growth poles emerge, it will spread out to other areas. Growth
will benefit the surrounding areas. If we construct an infrastructure connecting two
growth poles, other areas will benefit. With the emergence of several growth poles,
supplementary and complementary investments as well as competitive investments will
take place within and outside growth poles. This ultimately leads to balanced growth in
the long run. The development of micro, small and medium enterprises and the provision
of services are instrumental to complement the development of poles so that these growth
poles will have a propelling effect.

? Dear student, what is the advantage of investing in leading sectors?

Furthermore, Rostow argues that the productive investment must be made for the
development of the leading sectors of the economy. The development of the leading
sectors would ensure a higher level of output and profit. The reinvestment of profit would
further stimulate development activities and process of development would gain
momentum.

According to Rostow, if we focus on big industries/sector in certain locations, this

promotes backward and forward linkages. For him, it big industries/sectors develop,
intermediate industries/sectors will emerge by way of using the output of the big
industries/sectors or producing inputs for the big industries/sectors. This will lead to the
emergence of consumer industries. Profitability is the driving force in the whole process.

47
 3. Hans Singer

Unbalanced growth is a better strategy to concentrate available resources on types of

investment which help to make the economic system more elastic, more capable of
expansion under the stimulus of expanded market and expanding demand. He supports
the strategy of unbalanced growth for the following reasons.

i. This strategy respects market principles. It enables one to invest in areas

where there are profits and re-investable funds and in areas where economic
activities are elastic (responsive). But he advises that we should not invest lot
of resources which do not benefit society and which do not generate re-
investable funds. To the extent possible, any project should be profitable.
ii. Singer appreciates the principle of comparative advantages. But he
recommends that developing countries should import capital intensive goods
at the early stage of their development and should start profit earning
industries. They should also focus on producing exportable items. In relation
to this, he believes that capital intensive techniques of production can also be
used in the competitive international market. To that end, external loans can
be used to the extent possible and as long as investments are profitable.

? Dear student, why should agriculture receive the priority in the early stage of
development?

iii. The development of agriculture should receive the priority even if one pursues
unbalanced growth strategy at the early stage of development. This is because
the agricultural sector can serve as market for the industries.

48
1.3 Advantages of Unbalanced Growth Model

? Dear learner, what advantages can be obtained from unbalanced growth

strategy?

The advantages that could follow from pursuing unbalanced growth pattern are discussed
as follow:
1. Creation of Economies- The strategy of unbalanced growth helps in the creation
of external economies. This pattern of development stresses on the expansion of
capital-goods industries and complementarity between them. This strategy is
considered.
2. Self-reliance- The aim of development planning in underdeveloped countries is to
achieve self-reliance in the short run. This development goal can be realized
through the expansion of leading sectors and high rate of capital investment. Both
these conditions are met by the strategy of unbalanced growth.
3. Generation of economic surplus- This strategy aims at the establishment of
capital-goods industries and such industries help in the development of subsidiary
industries. This way a chain of investment takes place and this expand income,
output and employment which result in higher economic surplus. The
reinvestment of economic surplus generates momentum for development process
and induces economic activities.
4. Skill Formation- The strategy of unbalanced growth aims at rapid development
through the expansion of investment. Such an investment helps in creating basic
facilities like elementary and technical education, roads, communication, housing,
public health, etc…This facilities promote skill formation, and improve the
quality of manpower.
5. Short-term strategy- Unbalanced growth is a short-term strategy of
development. The advantage of this approach is that people in underdeveloped
countries get the fruits of their labor and effort in short period.

49
 6. Practical policy- The strategy of unbalanced growth suggests pragmatic approach
of rapid development. This strategy stresses the setting up of those industries,
which have the promise of maximum total linkage.

1.4 Limitations of Unbalanced Growth

? Dear student, what limitations do you observe from unbalanced growth?

Alike the balanced growth strategy, the unbalanced growth model is also a mixed
blessing for underdeveloped countries. Despite its advantages, it suffers from the
following limitations.
i. This growth model does not discuss the degree of imbalance among
the various sectors.
ii. The theory of unbalanced growth suggests the setting up of capital
goods industries for achieving goals of development. But the starting
of capital goods industries in the initial stages of development may not
be an easy task for underdeveloped countries and it might create
economic, social and structural obstacles. The theory does not suggest
the way out.
iii. The implementation of unbalanced growth required the availability of
certain basic facilities like raw materials, expertise, power, developed
means of transport and communication, wide extent of markets,
etc…Such basic facilities are generally lacking in less developed
countries in the initial stages of development. Lack of these facilities
hampers the successful implementation of unbalanced growth strategy.
iv. It is generally observed that heavy industries have a tendency to
concentrate at one place due to availability of external economies. This
creates slums, over-crowding, health problems, and pollutes the
atmosphere of surrounding localities. In this context it has been
suggested that “it is not wise to keep all your eggs in one basket.”

50
 v. The unbalanced growth can generate inflation. The strategy can
succeed when effective measures are taken to control inflation.

1.5 Comparing Balanced and Unbalanced Growth Models

? Dear learner, how do you compare balanced and unbalanced growth?

Having discussed the two strategies, it would be worthwhile to have a comparative study
of balanced and unbalanced growth. The following are some of the differences between
the two growth models.
1. Balanced growth aims at simultaneous development of all the sectors of the
economy, whereas unbalanced growth suggests the development of only leading
and growing sectors of the economy.
2. Balanced growth aims at harmony, consistency and balances in the growth rates
of various sectors, whereas unbalanced growth suggests the creation of
disharmony, inconsistency and imbalance in the growth rates of development
parameters.
3. The implementation of balanced growth requires huge capital investment for
simultaneous development of various sectors. The implementation of unbalanced
growth requires comparatively less capital as only leading sectors are developed
in the first instance.
4. Balanced growth is a long term strategy as the development of different sectors is
possible in the long period. The objectives of balanced growth are difficult to be
realized in the short period because of stress and strain in the early stages of
development. The unbalanced growth is a short term strategy, as the development
of leading sectors is possible in the short period.
5. The doctrine of balanced growth assumes that the bottlenecks in the form of
shortages are fairly widespread in the economy and as such it suggests the policy
of frontal attack for the minimization and elimination of bottlenecks. Unbalanced
growth on the other hand assumes that bottlenecks are not widely spread in the
economy.

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 6. The balanced growth strategy assumes that all sectors generate external
economies, whereas unbalanced growth assumes that some sectors generate
external economies than others.

1.6 Compromising Views of the Debate between Balanced and

Unbalanced Growth Strategies

? Dear student, which growth does strategy provide greater stimulus to

development?

The impartial and unbiased view is that there can be no end to the debate on this issue.
From purely economic point of view, there is really no reason to assume that two
strategies are alternatives. The wise approach for economic growth is to have a
blend/mixture of the two growth strategies. We should be pragmatic. Most agree that it is
good to treat unbalanced growth as a means of achieving the ultimate objective of
balanced growth. The following points may be important to consider:
1. The two growth strategies can be complementary than alternative strategies.
2. Complete balancing is not possible for a number of reasons: resource constraints,
lack of adequate infrastructure, shortage of capital, skilled labour, the unequal
responsiveness of the different sectors, etc... But balancing is important from the
point of view of employment creation, poverty alleviation, income distribution,
human capital development, etc....
3. At the same time, some degree of unbalancing is essential because of resource
constraints, market imperfections etc... So, we need to be selective in the
allocation of scarce resources.
4. Unbalanced growth strategy eventually leads to balanced growth through the
creation of growth poles/centers.
5. Development is not just economic growth. It is also political, social, cultural and
human. So, we can not postpone agricultural and rural development because it is a
market for the industrial sector. Agricultural and rural development should be
made simultaneously with the development of other sectors.

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  Activity – 6

1. Discuss the main elements of unbalanced growth.

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
2. Discuss the major advantages of unbalanced growth.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
3. Explain the differences between the balanced and unbalanced growth strategies?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
4. Critically evaluate unbalanced growth in light of the Ethiopian situation.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
5. Explain how the two growth strategies can be reconciled.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

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 Unit Summary

There has been tremendous debate about how underdeveloped countries like Ethiopia can
achieve rapid economic development. Among these debates, the debate between the
balanced and unbalanced growth strategies was very prominent. In balanced growth
strategy, the economy should be led by development planning to achieve balance in the
economy, i.e. all firms/sectors or regions should be able to grow and develop
simultaneously. Resources should be distributed according to the development plan. This
growth strategy calls for a cross-broad growth. In terms of ensuring equity, the strategy of
balanced growth can be preferred, but the return is so little.

In the case of unbalanced growth strategy, the growth process takes place according to
the market principles or according to the comparative advantage. Investment decisions
should be made by the investors themselves to maximize profits, i.e. investment is made
selectively on the basis of comparative advantage. Resources will be invested on specific
selected firms/sectors or regions on the basis of comparative advantage. But, in the long
ran, the objective of unbalanced growth strategy is a balanced growth. Although both
advocate a different line of growth path, the proponents of both growth models argue that
agriculture and rural development have to be promoted simultaneously with the
promotion of industrial development where the country enjoys comparative advantage.

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 Self-test Questions

Part I. Choose the best answer from among the given alternatives.
1. Which one is wrong as far as balanced growth is concerned?
A. Balanced growth can be managed with less resource.
B. Balanced growth means equal growth
C. No sector should be discriminated in the matter of resource allocation
D. Balanced growth strategy encourages innovations and researches in different
sectors of the economy.
2. “Balanced growth strategy breaks the vicious circle of poverty; because it aims at
benefiting the largest section of society.” This is the argument of ________
A. Ranger Nurkse
B. François Perronx
C. Hirschman
D. Rostow

3. In balanced growth model, resources are distributed to all sectors of the economy to
A. maximize equity
B. maximize social welfare
C. minimize social cost
D. All
4. Which factor does determine the implications of balanced growth strategy?
A. availability of resources
B. socio-economic objectives of development
C. institutional factors
D. All
5. Which one is true about the characteristics of unbalanced growth strategy?
A. is not harmonious and consistence
B. requires comparatively less capital
C. aims at simultaneous development of all the sectors
D. requires huge capital investment

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Part II. Say true for the correct statement and false for the incorrect ones.

1. According to Rostow, if we focus on big industries/sector in certain locations, this

promotes backward and forward linkages.
2. Complementarity is an essential and vital feature of unbalanced development.
The implementation of balanced growth requires huge capital investment for
simultaneous development of various sectors.
3. The logic of balanced growth cannot be given a practical shape without state
intervention.
4. Unbalanced growth advocates capital widening.
5. Complete balancing is not possible because of resource constraints in poor countries
like Ethiopia.

Part III. Fill in the blank spaces with right answer.

1. ______________ a circular assemblage of forces tending to act and react upon one
another in such a way as to keep a country in a state of poverty.
2. ______________ growth strategy aims at creating a self-financing development.
3. ______________ growth strategy recommends the importance of social accountability
for production, consumption and distribution.
4. ______________ propounded the theory of unbalanced growth as continuation to
balanced growth theory.
5. The growth model that argues that no sector should be discriminated in the matter of
resource allocation is ___________________.

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Part IV. Give short answer to the following questions.
1. What are the guidelines in ensuring balance between sectors?
2. Explain the essential conditions for balanced growth.
3. Analyze the similarities and differences between balanced and unbalanced
growth strategies.
4. Which approach can best benefit Ethiopia in its quest for economic
development.

 Unit Checklist

Put an (X) mark in the boxes in front of the ideas you performed well.

I can

1. Explain the strategy of balanced growth

2. Analyze the benefits of the balanced growth model
3. Discuss the unbalanced growth strategy vis-à-vis the balanced growth model
4. Explain how these growth strategies are implemented by countries like Ethiopia.
5. Compare the advantages of both growth models

57
 UNIT THREE

THEORIES OF DEVELOPMENT AND

UNDERDEVELOPMENT

Unit Introduction
Hello, dear learner! Welcome to the fourth unit of the module. It is about exploring the
major theories of development and underdevelopment. In this particular unit you will
learn the recent historical and intellectual evolutions in scholarly thinking about how and
why development does and does not take place.

There have been continuous debates concerning the underlying causes of

underdevelopment and on the most desirable paths ways to change. These debates elicit
different theoretical responses from social scientist. Thus, there are many theories that
blame the Third World’s political unrest and economic backwardness. According to
many of these theories, economic backwardness has occurred because there is a
backward local, traditional and cultural value. In other words, these theories attributed to
the underdeveloped nature of Third World societies in internal factors. Most of these
theories are within the modernization school of thinking. On the opposite pole, there are
theories which have condemned western exploitation as the root cause of
underdevelopment. Dependency theories and other neo-Marxian theories are included in
this thinking.

Accordingly, this unit is divided into five major sections. The first section will have a
discussion on the theoretical discourse of the modernization theory. The Marxian theory
on development will be covered under the second section. The third section will explore
the different strands of the international dependency revolution. The fourth section will
analyze the neo-liberal counterrevolution and its thinking on development. The last

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section is about explaining the concepts of alternative development and post
development.
Objectives

After completing this unit, you are expected to:

 Analyze the different strands of the modernization theory.
 Explain the Marxian view of development.
 Explore the different discourses under the international dependency revolution
on development.
 Discuss the theoretical standpoint of the neo-liberal counterrevolution on
development.
 Explain the concepts of alternative development and post development.

Pre-test Questions
1. What are the major theoretical discourses under the broad modernization school
of thought?
2. What is the major theme of the Marxian theory of development?
3. What similarities and differences can you identify between those theoretical
predispositions found within the international dependency revolution on
development?
4. What is the major concern of the neo-liberal counterrevolution doctrine on
development?
5. How do you explain the concepts of alternative development and post
development?
6. What are the similarities and differences between the different theories of
development and underdevelopment?

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 Section One

The Modernization School of Thought

Section Overview
Dear learners! Welcome to the first section of the unit. This section gives you a bird’s eye
view of the modernization theory and its thinking on development. This section is further
divided into five sub-sections. The first sub-section will discuss the general overview of
the modernization theory. Walter W. Rostow’s stages of economic development are
discussed in the next sub-section. The third sub-section will explain Samuel Huntington’s
political modernization and development. Talcott Parson’s Structural Functionalism will
be the issue to be explored under the fourth sub-section. The last will critically look at the
major critiques against modernization theory.

Objectives

Upon the completion of this section, you will be able to:

 Know the theoretical underpinnings of the modernization theory.
 Explain the position of the modernization theory on development.
 Identify the different stages of economic growth propounded by W. Rostow.
 Describe the political modernization and its relation to development.
 Analyze the relationship between Parson’s structural functionalism and
development.
 Identify the major critiques against the modernization school of thought.

60
1.1 The Modernization Theory: A General Overview

? Dear learner, what is modernization theory all about?

The modernization theory has roots from the historical North-South relations. In the years
since the late 1940’s, two related, but far from identical discourses of development
theories emerged. These were the modernization theory and the neo-liberal development
doctrine (there is s separate section on the neo-liberal doctrine). In the 1950’s and 1960’s,
newly independent states came into existence and hence the conceptualization of
“modernization process” became central. Theories of modernization are based on the
assumption that societal change is a linear process involving the transformation of
traditional, agrarian societies into modern, industrial societies.

Modernization theory was initially optimist about the prospect of development in the
South. It encompassed questions and answers of economic growth, development of social
institutions, political change, and psychological factor in the South. The theory was
believed to be designed as a problem solving theory; it is also policy-oriented towards
social change and economic growth. It offers an explanation of how and why change take
place, but it is based largely on the assumption that the capitalist model is universally
applicable.

? Dear students, according to the modernization school of thought, what factors

can push societies to development?

Modernization theory viewed the process of development as a series of successive stages

of economic growth through which all countries must pass. The right quantity and
mixture of saving, investment and foreign aid were all thought to be necessary to enable
Third World nations to proceed along an economic growth path that had been followed
by the more developed countries. Development thus became synonymous with rapid
economic growth.

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The proponents of modernization theory argue that Third World countries could and
should follow a path of political and economic development parallel to the one traveled
by the advanced western societies. To accomplish this, the theory insisted that societies
of the South should create and acquire modern cultural values and modern political and
economical institutions.

According to this theory, development in developing countries would come about and
would be engineered through the diffusion of innovations, capital, technology, modern
ideas, entrepreneurial ship, democratic institutions, and values from the developed
western societies. For this theory, the diffusion of these modernizing factors faced
barriers that hampered development in the South. These barriers are traditional, cultural
values of the societies of the South. To deal with these barriers, revolution in economic
and social sphere is important.

1.2 W. W. Rostow’s Stages of Economic Growth: A Non-Communist

Manifesto

Walter W. Rostow subscribes some form of evolution. All societies go through the same
stages of economic development. He wanted to come up with a generalization which is
supposed to characterize the history of the industrialization of the developed capitalist
countries. His model was based up on a detailed analysis of the economic history of a
number of major industrialized societies.

? Dear learners, what are the different stages identified by Rostow?

His theory was that all nations pass through the same five stages of economic
development: the traditional society, preconditions for take-off, take-off, the drive to
maturity, and the stage of mass consumption. It is possible to identify all societies, in
their economic dimension, as lying within one of these stages. For him, technology,
saving, entrepreneurialism, and the correct political system were all key motors iin
moving countries along this path.

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He tried to define the various stages of economic growth by certain economic and social
characteristics. This theory of fives stages is practically a theory of the industrial
revolution interpreted in a particular way, in which the first two stages were seen as being
preparatory to the industrial revolution, and the last two as its results, i.e. self-sustained
growth. The fact of the industrial revolution of the take-off however can only be inferred
from its results, from sustained growth. The concept of self-sustained growth is however
a misleading oversimplification. No growth is purely self-sustaining or purely self-
limiting. Now let’s dwell on the different stages proposed by Rostow where by all
societies are excepted to pass.

1. The Traditional Society

? Dear students, how do you characterize the traditional society?

A traditional society is one whose structure is developed within the limited production
function. In this stage, varying degrees of manufacturing developed, but as in agriculture,
the level of productivity was limited by the inaccessibility of modern science and its
application. Because of the limitation of productivity, these societies had to devote a very
high proportion of their resources to agriculture. Flowing from the agriculture system,
there was a hierchical social structure with relatively narrow scope for vertical mobility.
Moreover, family and clan connections played a large role in social organizations.

In terms of history, with the phrase “traditional society”, societies like the dynasties in
China, the civilization of the Middle East and the Mediterranean, the world of the
medieval Europe, and those current societies that remained untouched or unmoved by
man’s new capability for regularly manipulating his environment to his economic
advantages.

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2. Preconditions for Take-off

? Dear students, what differences can be observed in the second stage of growth?

This second stage of growth embraces societies in the process of transition. The major
characteristics of the traditional society began to change such a way as to permit regular
growth; its politics, social structure, ant its values as well as its economy. However it
takes time to transform a traditional society in the ways necessary for it to exploit the
fruits of modern science. This stage initially developed, in a clear marked way, in
Western Europe of the late 17th and early 18th Centuries as the insights of modern science
began to be translated in to new production functions in both agriculture and industry.
Among the western European powers, Britain favored by its geography, natural
resources, trading possibilities, and social and political structure, was the first to develop
fully the preconditions for take-off

? Dear learners, what are the factors that can accelerate this stage?

The factors that accelerated this stage in other societies are not endogenous, but also
external intrusions by some advanced societies. This invasion shocked the traditional
society and set in motion ideas and sentiments which initiated the process by which
modern alternatives to traditional society was constructed out of the old culture. The
ideas spread not merely that economic progress is possible, but that economic progress is
a necessary condition for some other purpose. At this stage, education expanded. New
types of enterprises come forward willing to mobilize savings and to take risks in pursuits
of profit. Banks and other institutions for mobilizing capital appeared. Investment
increases, notably in transport, communication and in raw materials. The scope of
internal and external commerce widens. Here and there, modern manufacturing
enterprises appear that use the new method. But still the society is characterized by
traditional low productivity method, and by the old social structures and values. In any
case, the precondition for take-off is a transition between the traditional society and the
take-off.

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3. The Take-off Stage

? Dear students, what are the characteristics of the take-off stage of development?

This is stage is the interval when the old blocks and resistances to steady growth are
finally overcome. Growth becomes its normal condition. In many societies, the proximate
stimulus for take-off is mainly technological.

During this stage, the rate of effective investment and saving rise. New industries expand
rapidly yielding profits, a large proportion of which are reinvested in a new plant. These
new industries in turn stimulate the service sector and a further expansion of urban areas.
The whole process of expansion in the modern sector yields an increase in income. The
new class of entrepreneurs expands, and it directs the enlarging flows of investment in
the private sector. The economy exploits hitherto unused natural resources and methods
of production. New techniques spread in agriculture and industry, and agriculture is
commercialized. The radical change in agricultural productivity is an essential condition
for successful take-off.

4. The Drive to Maturity

? Dear students, what are the major changes taking place in the stage of the drive
to maturity?

After take-off, there follows a long interval of sustained if fluctuating progress, as the
now regularly growing economy drives to extend modern technology over the whole
front of its economic activity. The economy finds itself in the international economy;
goods formerly imported are produced at home, new import requirements develop, and
new export commodities are produced. The economy becomes increasingly efficient,
adapting rapidly to further technological innovations.

The economy, focused during the take-off around a relatively narrow complex of industry
and technology, has extended its range into a more refined and technologically often

65
more complex processes. This is a stage in which an economy demonstrates that it has the
technological and the entrepreneurial skill to produce not everything, but anything that it
chooses to produce. It may lack the raw material and other supply conditions required to
produce a given type of output economically, but its dependence is a matter of economic
choice or a political priority, rather than a technological or institutional necessity.

5. The Age of High Mass Consumption

At this stage, the leading sectors shift toward durable consumers’ goods and services.
Real income per head rose to a point where a large number of people gained a command
over consumption which transcended basic food, shelter and clothing. The structure of
the working force changed in ways which increased not only the proportion of urban to
total population, but also the proportion of the population working in offices or in skilled
factory job. In addition to these economic changes, the societies ceased to accept the
further expansion of modern technology as an over-riding objective. The emergence of
welfare state is one manifestation of a society’s moving beyond technical maturity.

1.3 Samuel Huntington’s Political Modernization and Development

Modernization theory makes its philosophical tenet in the comparison between modern
and traditional society. The essential difference between the two lies in the greater control
which modern societies have over natural and social environment. This control, in turn, is
based on the expansion of scientific and technological knowledge. These differences
reflect differences in fundamental attitudes towards and expectations from the
environment.

? Dear students, according to Huntington, what are the differences between

modern and traditional societies?

At the intellectual level, modern society is characterized by the tremendous accumulation

of knowledge about man’s environment and by the diffusion of this knowledge through
society by means of education and mass communication. In contrast to traditional society,

66
modern society also involves much better health, longer life expectancy, and higher rates
of occupational and geographical mobility. It is predominantly urban than rural.
Economically, there is diversification of activity as a few simple occupations give way to
many complex ones. Agriculture declines in importance compared to commercial,
industrial and other non agricultural activities; and commercial agriculture replaces
subsistence agriculture. The geographical scope of the economic activity is far greater in
modern society than in traditional society.

? Dear learners! What do you mean by process of modernization? What are its
characteristics?

The bridge across the great dichotomy between modern and traditional societies is the
grand process of modernization. The broad outlines and characteristics of this process are
described as follows:
1. Modernization is a revolutionary process. This follows directly from the contrast
between modern and traditional society. The one differs fundamentally from the
other, and the change from tradition to modernity consequently involves a radical
and total change in pattern of human life.
2. Modernization is a complex process. It involves in changes in virtually all areas
human thought and behavior. At a minimum its components include:
industrialization, urbanization, social mobilization, differentiations,
secularization, media expansion, increasing literacy and education, and expansion
of political participation.
3. Modernization is a systemic process. Changes in one factor are related to and
affect changes in the other factors.
4. Modernization is a global process. Modernization originated in the fifteenth- and
sixteenth-century Europe, but it has now become a worldwide phenomenon. This
is brought about primarily through the diffusion of modern ideas and techniques
from the European center, but also in part through the endogenous development
of non-western societies. In any event, all societies were at one time traditional;
all societies are now either modern or in the process of becoming modern.

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 5. Modernization is a lengthy process. The totality of changes which modernization
involves can only be worked out through time. Consequently, while
modernization is revolutionary in the extent of changes it brings about in
traditional society, it is evolutionally in the amount of time required to bring about
those changes.
6. Modernization is a phased process. It is possible to distinguish different levels of
phases of modernization through which all societies will move. All societies will
move essentially the same stages.
7. Modernization is a homogenizing process. Many different types of traditional
societies exist. They have little in common except their lack of modernity.
Modern societies, on the other hand, share basic similarities. Modernization
produces tendencies toward convergence among societies.
8. Modernization is an irreversible process. A society which has reached certain
levels of urbanization, literacy and industrialization in one decade will not decline
substantially lower levels in the next decade. The rates of change will vary
significantly from one society to another, but the direction of change will not.
9. Modernization is a progressive process. The traumas of modernization are many
and profound, but in the long run modernization is not only inevitable, it is also
desirable. Modernization in the long run enhances human well-being.

Huntington defines development more specifically as the ability of society to cope with
changes caused by modernization, arguing that it was therefore necessary top develop
institutions capable of controlling the modernization process. This would, in certain
circumstances, mean authoritarian or totalitarian regimes are necessary for the Third
World for them to achieve some form of development. He, thus shifted the focus of
development and modernization from a progression toward ‘democracy’ to a concern
with political stability and the role of the government in the modernization process.

68
1.4 Talcott Parsons Structural Functionalism: Pattern Variables

? Dear learner, what do you mean by social evolution?

Modernization theories attempt to identify the social variables which contribute to the
social progress and development of certain societies and seek to explain the details of
social evolution. French philosopher Emile Durkheim, who is considered one of the
founding fathers of sociology, developed the concept of functionalism which stresses the
interdependence of the institutions of a society and their interaction in maintaining
cultural and social unity. His most famous work is The Division of Labour in Society
which described how social order was to be maintained in a society and how "primitive"
societies would make the transition to more economically advanced industrial societies.
Durkheim suggested that in a capitalist society, with the complex division of labour, such
economic regulation would be needed in order to maintain order. He stressed that the
major transition from a primitive social order to a more advanced industrial society could
bring about crisis and disorder. Furthermore, Durkheim developed the idea of social
evolution which indicates how societies and cultures develop over time-much like that of
a living organism, essentially saying that social evolution is just like biological evolution
in reference to the development of its components. Like organisms, societies progress
through several stages generally starting at a simplistic level, and then developing into a
more complex level. Societies adapt to their surrounding environments, but they interact
with other societies which further contribute to their progress and development.

A similar proposition is made by Talcott Parson. Parsons constructed a set of variables

that can be used to analyze the various systems. For him, human behavior follows two
dichotomies. These are the categorization of modes of orientation in personality systems,
the value patterns of culture, and the normative requirements in social systems. These
became a way of describing and classifying different societies, and the values and norms
of that society. All of the norms, values, roles, institutions, subsystems and even the
society as a whole can be classified and examined on the basis of these patterned
variables.

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? Dear student, what are pattern variables?

For Parsons, these were necessary to make the theory of action more explicit and to
develop clearer specifications of what different contingencies and expectations actors
were likely to face. The patterned variables are set up as polar opposites that give the
range of possible decisions and modes of orientation. Any actual role or decision may be
a combination of the two, between the opposites. For Parsons though, these provided an
ideal type of conceptual scheme that allowed analysis of various systems of parts of
systems. The five pattern variables are as follows.

i. Ascription and Achievement.

? Dear learner, what are ascription and achievement variables in societies?

Ascription refers to qualities of individuals, and often inborn qualities such as sex,
ethnicity, race, age, family status, or characteristics of the household of origin. This best
characterizes the traditional societies. Achievement, on the other hand refers to
performance, and emphasizes individual achievement. For example, we might say that
someone has achieved a prestigious position even though their ascribed status was that of
poverty and disadvantage. This is, according to Parson, typically a characteristic of
modern societies.

ii. Functional Diffuseness and Functional Specificity

? Dear student, what differences can you identify between diffuseness and
specificity?

These refer to the nature of social contacts and how extensive or how narrow are the
obligations in any interaction. For example, in a bureaucracy, social relationships are
very specific, where we meet with or contact someone for some very particular reason

70
associated with their status and position, e.g. visiting a physician. Friendships and parent-
child relationships are examples of more diffuse forms of contact. We rely on friends for
a broad range of types of support, conversation, activities, and so on. While there may be
limits on such contacts, these have the potential of dealing with almost any set of interests
and problems. Accordingly, in traditional societies there is functional diffuseness. There
is no strict delimitation of functions. In modern societies, institutions and individuals
have very specific functions.

iii. Affectivity and Affective Neutrality

? Dear student, what is affectivity and affective neutrality?

Neutrality refers to the amount of emotion or affect that is appropriate or expected in any
given form of interaction. Again, particularism and diffuseness might often be associated
with affectivity, whereas contacts with other individuals in a bureaucracy may be devoid
of emotion and characterized by affective neutrality. Affective neutrality may refer to self
discipline and the deferment of gratification. This is a characteristic of modern societies.
In contrast, affectivity can mean the expression of gratification of emotions, which
characterizes traditional societies.

iv. Particularism and Universalism

? Dear learner, what do you mean by particularism and universalism?

These refer to the range of people that are to be considered, whereas diffuseness and
specificity deal with the range of obligations involved. The issue here is whether to react
on the basis of a general norm or reacting on the basis of someone’s particular
relationship to you. A particular relation is one that is with a specific individual. Parent-
child or friendship relationships tend to be of this sort, where the relationship is likely to
be very particular, but at the same time very diffuse. In contrast, a bureaucracy is

71
characterized by universal forms of relationships, where everyone is to be treated
impartially and much the same. No particularism or favoritism is to be extended to
anyone, even to a close friend or family member.

v. Collectivity or Self-oriented

? Dear student, what difference can you identify between collectivity and self?

These emphasize the extent of self interest as opposed to collective or shared interest
associated with any action. Each of our social actions is made within a social context,
with others, and in various types of collectivities. Where individuals pursue a collective
form of action, then the interests of the collectivity may take precedence over that of the
individual. Various forms of action such as altruism, charity, self-sacrifice (in wartime)
can be included here. In contrast, much economics and utilitarianism assumes egoism or
the self seeking individual as the primary basis on which social analysis is to be built. In
general, in modern societies behavior is individualistic (self-oriented), it is collective in
traditional societies.

The pattern variables provide a means of looking at various forms that norms and social
actions can take, and what their orientation is. These can describe the nature of societal
norms, or the basic values that guide, and form the basis for decisions in, the personality
system. Perhaps these pattern variables can be thought of as a way that people do relate to
situations they face, the type of orientation they have, and how they are likely to interpret
meaning in each social action.

? Dear student, what are the expressive and instrumental variables?

These variables can generally be categorized into expressive and instrumental. Parsons
regards the first half of each pair as the expressive types of characteristics and the second
half of the pattern as the instrumental types of characteristics. Expressive aspects refer to

72
the integrative and tension aspects. These are people, roles, and actions concerned with
taking care of the common task culture, how to integrate the group, and how to manage
and resolve internal tensions and conflicts. This may take many different forms but often
is associated with the family, and more specifically with the female role in the family.

The instrumental characteristics refer to the goal attainment and adaptation aspects. These
are the characteristics, people, roles, and actions associated with ideas, problem solving,
getting the task done. These tasks are often associated with male roles, public activities,
the economy, or politics.

These can also be used to refer to the type of society. Social action and interaction in
early forms of society were more likely to be characterized by expressive characteristics.
In contrast, in modern societies, with a more complex division of labour and
differentiation of statuses and roles, much of social action and interaction is characterized
by instrumental characteristics.

1.5 Critiques against the Modernization School of Thought

? Dear student, do you observe some theoretical problems associated with the
modernization school of thought?

Although the modernization thinking has been influential in areas of academics and
policy making, it has been criticized by different theories at different times. Some of the
major criticisms waged against the modernization school are the following.

1. One of the structural problems of the modernization theory was that it has
uncritically accepted the relations between the North and the South. It visualized
the North as culturally, politically and economically modern. As a result, it is
racist.

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2. A related critic argues that modernization theory is Eurocentric. It draws too
heavily on American experience and tends to look at the world from an American
point of view.
3. It was too optimistic and simplistic. The proponents of the modernization theory
expected that countries of the South can easily achieve greater economic growth,
equity, democracy, stability, etc… simultaneously and smoothly. As it is observed
from different experiences, economic growth proved to be no guarantee to
democracy and other elements of political development. This was against the
expectations of the modernization theory proponents.
4. Rostow’s model in particular is ahistorical. Meaning it is not really historical. His
stages of economic growth do not actually reflect the reality of a single developed
capitalist society.
5. Modernization theory made all poorer countries seem the same. But in reality,
there is diversity within this large category.
6. Modernization theory also wrongly assumes that a process of societal change that
was open to one or more societies in the past is open to all societies in the present
or future.
7. It blames only the internal conditions of societies of the South for their lack of
development. It disregarded the external factors that have continued to hamper the
development of these groups of countries.
8. The modernization theory blindly suggested that the western model of
development is the only path of development that the South should adopt. It
ignored other alternative paths to development.
9. The other criticism is related to pattern variables. The critiques argue that there is
no as such strict dichotomy as far as behavior is concerned. There may be
elements of traditional behaviors in modern societies and there may also be
modern behaviors in traditional societies. There is interpenetration of behaviors.

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  Activity-7

1. Explain the major assumptions of the Modernization school of thought.

____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
2. Discuss the different stages propounded by W. Rostow.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________

3. Analyze the major processes associated with the modernization process as explained by
S. Huntington.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
4. Analyze the major link between Parson’s Pattern variables and development.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
5. Explain the major arguments that criticize the modernization school of thought.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________

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 Section Two

The Marxian Concept of Development

Section Overview
Dear student, this is section two of the unit. This section will try to explore the Marxian
conception of development. In this section, you will learn how Karl Marx theorized the
possibilities of development in a society. This section is further divided in two sub-
sections. Giving the general overview about the Marxian theory will be the major task of
the first sub-section. Economic theories of Marx will be elaborated in the next sub-
section.

Objectives

Upon the successful completion of this section, you will be able to:
 Explain the theoretical standpoints of Marx on development
 Analyze the concept of class struggle in societal progress
 Discuss the different economic theories of Marx.

1.1General Overview

? Dear learner, what do you mean by historical dialect?

In 1867 Karl Marx published Das Kapital (The Capital), a work that systematically and
historically analyzed the capitalist system. His theories would provide much of the
material for arguments that have opposed development models based on capitalism and
the laissez faire system. Marxism is the best-known strand of structuralist thought. The
ideology put forward by Karl Marx termed as Communist Ideology advocates that history

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proceeds by means of a historical dialectic or clash of opposing ideas (thesis versus anti-
thesis) with a resulting new order (synthesis). Marxism also holds that the economic
material order determines political and social relationships. Thus, history, the current
situation, and the future are determined by the economic struggle, termed dialectical
materialism. Thus, the material dialectic was transformed from domestic class struggle
into an international struggle between bourgeois and proletariat. According to Marx, the
state is a creation and tool of the rich capitalist class and he holds that the state will no
longer exist once communism is fully realized.

? Dear learner, what does the Marxian view of development focus on?

The Marxian view of development emphasizes the role of classes and class antagonism in
society. In this system, vested class interest can inhibit overall development of society.
The question of poverty in society is seen as the exploitation of the poor working class.
Property relations in the society create and accentuate the problem of poverty and
development. Since land and other productive assets are privately owned and
concentrated in the hands of few, the problem of inequalities remains unsolved. From a
Marxist perspective, development is a process of class struggle.

? Dear student, what makes the bourgeoisie and the proletariat class in continuous
struggle?

Marx believed that just as the bourgeoisie (the capitalist middle class) had relied on
revolutionary movements to wrestle power from the nobility, so, too, could the working
class, called the "proletariat," eventually overthrow the bourgeoisie. For Marx, the
eventual fall of the bourgeoisie was not only desirable, it was inevitable. He reached this
conclusion based on his economic theory of labor. Specifically, he developed the doctrine
of surplus value. At the heart of the doctrine was the conclusion that the worker was
being robbed. The worker received only a fraction of the value of the product which his
labor produced. The remainder was kept by the capitalist class. This theft eventually led
to an economic crisis caused by overproduction-the vast majority of the population could

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not afford to consume the products that the owners of capital produced. The capitalist's
answer to this problem was the continual creation of new markets. According to Marx,
the government was a tool used by capitalists to perpetuate them selves in power.

Marx saw capitalism as an historical necessity because it was the most productive and
flexible economic system in human history. It could move capital and labor to meet
demand faster than any of the previous systems that it had replaced.

? Dear learner, does this mean that Marx accepted capitalism as a system?

Absolutely not! Marx, however, refused to accept capitalism as the ultimate mode of
production (economic system). He believed the system was plagued with internal
contradictions that would inevitably lead to its destruction and replacement by a more
advanced system.

According to Marx, the relations of production (the way people interact in a particular
economic system) create different economic classes. For example, under the feudal
economic system, two classes existed: the nobility and the peasantry. The dominant class,
the nobility, created a system to maintain its position. Religion, government, laws, and
morals reflected the needs of the dominant class and were used to perpetuate its position
of power. As capitalism emerged, a new dominant class, the bourgeoisie, began to
appear. The nobles and the bourgeoisie eventually clashed and the latter was victorious.

? Dear student, how did Marx theorize the inevitable downfall of capitalism?

Marx believed that the advent of capitalism set in motion its own final downfall. He
reasoned as follows. The capitalist system cannot exist without workers. As more
factories are built, more people will be forced to work in them. Thus, under capitalism,
the army of workers will continually expand. With the expansion of capitalism around the
world comes the global creation of a working class.

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This system is ruthless, however. In order to survive, capitalists must continually strive to
out produce one another. But not all capitalists will be able to compete. Capital will
become concentrated in fewer hands. Those bourgeoisies that are unable to compete will
be forced to join the working class or perish. This process will continue until one day the
proletariat masses will be able to take control of the system by overthrowing the
bourgeoisie, resulting in a classless society. No new class will arise because class arises
from economic differences, and capitalism will have eliminated these differences by
making everyone a proletariat.

Since the concepts of state, religion, morality, and laws were mechanisms to maintain
class differences, they, too, will disappear. Government will not be eliminated
immediately, however. A limited form of government (a proletariat dictatorship) will be
put in place to prevent a possible attack by any surviving bourgeoisie. This dictatorship
will eventually become useless, and when it does, it will "wither away." At this point,
socialism will have been achieved.

For Marx economic development was tied to class struggle. Economic development
could only be achieved as a class; individual achievement was not emphasized. Trust in
the government and cooperation with its goals was also viewed as betrayals of the class
struggle. The government's involvement in social reform was nothing more than an
attempt by the bourgeoisie to appease the workers and thereby force them to abandon the
struggle. Since the government reflects the will of the dominant class, it would never
enact any law benefiting the subservient class.

1.2 Economic Theories of Marx

The various economic theories he put forward are 1) The theory of work 2) The theory of
self-alienation 3) The labor theory of value and 4) the Theory of surplus value.

1. The Theory of Work

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? Dear learner, what is work for you?

Marx believed that work is the way in which people might express their creativity. By
interacting with nature or labor individuals develop and change their own character. The
essence of human beings therefore, becomes closely related to work. To Marx, work is a
form of self-creation. In other words, the product of our labor is part of us and something
of us is definitely there in the things we produce through our work. For example, an
academician gradually looks into whatever he or she sees or experiences from an
academic angle. It becomes part of the academician.

2. The theory of self-alienation

? Dear learner, what do you mean by self-alienation and how does it occur?

Human self-alienation occurs because of three factors. First work is a form of self-
creativity it should be enjoyable. Because the capitalists squeeze every cent of profit from
the workers, they make the conditions of work intolerable. Hence instead of enjoying the
work, the members of the proletariat grow to hate the very process by which they could
refine their own work. Consequently they become alienated from their own selves.
Secondly, as capitalists exploit the workers in order to produce profit they force the
workers to sell their product and then use that product against the workers to exploit them
further. This forces the workers to regard their own product as alien and even harmful to
them. Thirdly, the capitalists are criticized for mechanizing production because this
process robs laborers of their skills and reduces them to little more than feeders of
machines. This is the ultimate alienation. In the third factor, Marx claims that socialism
was the coming economic system and that it could produce even more than capitalism
which is paradoxical.

3. The labor theory of value

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? Dear student, what does the labor theory of value state?

This theory is concerned with the intrinsic worth of an object. Value is a complex
concept. The value most modern economists are concerned with is the exchange value of
an item that is the amount of money one can get for an item in the market. Sentimental
value is another kind of worth. Sometimes there is sentiment attached to a product
although the market value of it would be high. Use value is the third measure of worth.
Even if the sentimental value is low and the market value is high, the product serves the
purpose. Esthetic value is yet another measure. The gracefulness of beauty of an old
building may far exceed its commercial value or its usefulness. The labor theory of value
is concerned with establishing a standard for measuring intrinsic value. It assumes that
there are two kinds of value brought to the production process. Resources, machinery,
and finance are one which is termed as constant value. These when applied to the
production of an item cannot add any value greater than their own intrinsic worth. The
labor is the only variable value because only labor produces something of greater worth
than itself. Hence Marx pays tribute to the genius of human creativity. A watch can be
produced by a machine but until human creativity is there the watch will not be a good
one. Therefore, the intrinsic value of an object is determined by the amount of labor or
human creativity needed to produce it. The price of an object is determined by supply and
demand. However, the value of the project is determined by the labor time needed for its
production.

4. Theory of surplus value

? Dear learner, what is surplus value?

This theory is based on the labor theory of value, which is Marx’s most important
discovery. Capitalism enslaves the proletariat because people have to work to survive
while the capitalist has a monopoly on the means of production. Hence the workers must
sell their labor at whatever price the capitalist will pay. The capitalists will pay their

81
workers only subsistence wages just enough to feed themselves and their families
because that much is necessary to bring them back to work the next day. Thus the
capitalists pay only meager wages regardless of how much value they may produce. The
capitalists by this method force workers to produce an excess, or surplus value, and they
keep that sum for themselves as profits. Actually, this surplus value belongs to the labors.
But since it is not given to them, the capitalists are exploitative. They are parasites that
live by sucking the economic lifeblood of the proletariat and must be erased from the
society when the proletariat takes over. Marx did not oppose capital as such but he
rejected the capitalist. He did not condemn profit, he opposed private profit. He knew that
capital was necessary for production, but he rejected the notion that it should be
controlled by private individuals. Capital was created by all and it should be owned by
all.

? Dear learner, does this mean Marx oppose surplus value?

Absolutely not! Marx certainly did not oppose creating surplus value to be used to invest
in increased productivity. What he argued to was that private citizens should not be
allowed to monopolize the means of production and use that power to force workers – the
creators of value – to surrender their goods in order to survive. In other words, no one
should be allowed to profit from the labor of another.

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  Activity – 8
1. Discuss Marx’s argument of dialectical materialism is changing societies.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
2. Explain why Marx believe that capitalism is a ruthless system.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
3. Analyze how economic development is tied to class struggle.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
4. Discuss how surplus value is created and its importance for economic development.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________

Section Three

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 The International Dependency Revolution

Section Overview
Dear learner, welcome to the third section of the unit. This section will discuss the
theories under the international dependence revolution. During the 1970’s, international
dependence model gained increasing support especially among Third World intellectuals
as a result of a growing disappointment with the modernization theories. This is because
these are theories of underdevelopment. Within this general approach, there are three
major streams of thought. Accordingly, this section is further divided in to three sub-
sections. The dependency theory and its theoretical viewpoints on development will be
explained in the first sub-section. The second sub-section is about the false paradigm
model and its views on development. The last part is about the dualistic-development
model.

Objectives

Upon the successful completion of this section, you will be able to:
 Explain the theoretical viewpoints of the dependency theory
 Discuss the false paradigm model in relation to development
 Identify the theoretical standpoints of the dualistic-development model
 Critically analyze the difference between the modernization theory and the
international dependency revolution

1.1 The Dependency Theory

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? Dear student, what do you think the basic difference between the modernization
theory and the dependency theory?

Whereas the modernization sets itself to theorize and explain as to what make the North
rich and what the South has to do to become rich, the task of dependency theory is to give
explanations as to what made the North rich and what kept the South poor. The
dependency theory tries to analyze and explain the extent to which the political
economies of the South have been exploited and by a global economy dominated by the
advanced capitalist countries. The principal tenet of the dependency theory is that
underdevelopment is not a stage on the road to a capitalist society, but a condition or
symptom of capitalist domination.

? Dear learner, what are the focuses of the dependency theory?

The dependency theory focuses on the unequal economic and political exchange that
takes place between the developed capitalist countries (described as the ‘core’) and the
South (described as the ‘periphery’). Proponents of this theory strongly believe that the
economies of the periphery are conditioned by and dependent up on the development and
expansion of the economies of the core. The cause of the backwardness of the periphery
is the dynamics and contradictory growth of the world’s capitalist system. Whenever
there is growth in one part of the world, it is compounded by backwardness of the other.
This is the contradiction in the growth of world capitalist system. Just as development in
one part of the world goes hand in hand with underdevelopment in another, so
underdevelopment in the periphery has contributed to further development of the core.

? Dear student, what are the challenges of dependency theory against the
modernization theory?

The dependency theory challenges the most fundamental assumptions of the

modernization theory. The modernization theory believes that some people are destined
to develop, whereas others are destined to be poor. But this assumption is refuted by

85
dependency theory in the sense that underdevelopment does not result from some original
state of affair. The same world historical process that enabled the North to develop has
also underdeveloped others.

The dependency theory also rejects the claim that the peripheries should follow the same
path of development pursued by the core. It is argued that there were particular political
and economic conditions that enabled the core to industrialize which was based on the
domination and exploitation of natural and human resources in the West colonies.
Whereas, the core development was based up on expanding resource bases in the
colonies, societies of the periphery are confined with very limited resource base for
development. The process of colonialism integrated the periphery into the world division
of labor by which the major function of the South remained in the production of raw
materials for the European industries. This had facilitated industrialization in the core at
the expense of the periphery.

? Dear students, what are the assumptions shared by many dependency theorists?

There are many perspectives that are included in the dependency theory. But certain ideas
that are common to the majority of the proponents of dependency theory are the
following.
 Underdevelopment is closely connected with the expansion of industrialized
capitalist countries.
 Development and underdevelopment are different aspects of the same universal
process. That universal process is the expansion of industrial capitalism and the
creation of the world division of labor. In this division of labor, countries of the
periphery are forced to remain in the production of primary commodities and the
core to remain major producers of manufactured commodities.
 Underdevelopment can not be considered as the original state of affair. It is
something created by the domination and exploitation of the South by the North.

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? Dear learner, what has this created in the relation between the core and the
periphery?

This has created a dependent relationship between the core and the periphery. This
dependence has three major features. These are:
1. The technological dependence: Most of the technologies required for
development are produced in the West. The countries of the North determine the
price and availability of these technologies. But most of these technologies are
capital intensive and expensive. The Third world countries have no option except
to borrow financial capital to obtain these technologies. This makes them
dependent on external economic forces that are beyond their control. This
ultimately weakens the aspiration of development.
2. The South relies up on foreign investment for a number of reasons. This is to
accelerate the development process, to access new technologies and to gain new
markets. These have forced countries of the South to adopt export-led economic
policies and strategies. They are also forced to produce cheap food for export,
cheap raw materials and cheap cash crops.
3. The relation of the core and the periphery in neo-colonialism has created an
international division of labor. In this division, the core remains the major
producer and exporter of manufactured goods and the South to remain in the
production and export of primary goods. As a result, there is unequal exchange
between these groups of countries. The terms of trade, therefore always benefits
the core at the expense of the periphery. This has helped the North to become
richer and richer and has made the South poorer and poorer from time to time.

Generally, the dependency theory attributes the existence and continuance of Third
World underdevelopment primarily to the historical evolution of highly unequal North-

87
South relationships. Underdevelopment is, therefore seen as an externally induced
phenomenon.

? Dear learner, then what should be the solution for Third World societies?

Some dependency theorists also argue that the only way for the Third World societies to
break out of the circle of underdevelopment is to pursue a policy of import substitution
strategy as a means of autonomous capitalist development. This means developing
indigenous industries in order to prevent the need import manufactured goods. However,
efforts to implement a policy of import substitution have not proved to be successful.
Because of this reason, many dependency theorists asserted that only revolutionary
struggles or at least major restructuring of the world capitalist system are therefore
required to free dependent Third World nations from direct and indirect economic control
of Western industrialized nations. Some like Samir Amin advocated a self-reliant
development strategy.

1.2 The False Paradigm Model

? Dear student, what are the attributes of the false paradigm model to the
underdevelopment of the Third World?

This model of development attributes Third World underdevelopment to faulty and

inappropriate advices provided by well-meaning but often uniformed, biased, and
ethnocentric international expert advises from developed country assistance agencies and
multinational donor organizations. These experts offer sophisticated concepts and elegant
theoretical structures that often lead to inappropriate or incorrect policies. While in
government policy discussions too much emphasis is given to such concepts and
theoretical structures, desirable institutional and structural reforms are neglected or given
only cursory attentions.

1.3 The Dualistic-development Thesis

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? Dear student, what are dualism and its elements?

Dualism is a concept that represents the existence and persistence of increasing

divergences between the rich and the poor nations and rich and the poor people on
various levels. Specifically, the concept of dualism embraces four key elements. These
are:
i. Different sets of conditions, of which some are ‘superior’, and others
‘inferior’ can coexist in a given space. Examples of this element of dualism
include the coexistence of modern and traditional methods of production in
urban and rural sectors.
ii. This coexistence is chronic and not merely transitional. The international
coexistence of wealth and poverty is not simply a historical phenomenon that
will be rectified in time.
iii. Not only do the degree of ‘superiority’ or ‘inferiority’ fail to show any signs
of diminishing, but they even have an inherent tendency to increase from time
to time.
iv. The interrelations between the ‘superior’ and the ‘inferior’ elements are such
that the existence of the superior element does little of nothing to pull up the
inferior element, let alone trickle-down to it. In fact, it may actually serve to
push it down to develop its underdevelopment.

1.4 Critical Comments on International Dependency Revolution

? Dear learner, how do you comment theories of the international dependence

school?

The international dependency revolution has been enthusiastically by scholar of Third

World. This school of thought suggested that underdevelopment is not the fault of the
least developed countries. It is rather the problem of foreign domination and exploitation.
The dependency theory in particular helped to the redefinition of the concept of economic

89
development to have a wider perspective. Whereas the modernization theories focused on
economic growth, the dependency theories give emphasis to the importance of the
redistribution of economic wealth and social justice. Important pillars of the western
establishments like the World bank reoriented their focus on growth and redistribution
which has never existed in their activities.

Despite such praises, the different theories of the international dependency school of
thought are criticized. Among the dominant criticisms, the following are the major ones.
1. These theories attributed all the Third World’s problems to the external economic
factors. They have never been in-ward looking.
2. Modernization theories have always been optimists about the possibilities of
development in the South. But theories within the International dependency
theory school of thought have remained pessimists about the possibilities of
development in the South. Actually they have their own reasons. Andre Gunder
Frank, for example argued that Third World nations produce non-industrial goods
and ruled by unrepresentative governments; they are doomed to continue to be
backward.

90

 Activity – 9
Section Four

91
 The Neo-Liberal Counterrevolution

Section Overview
Hello, dear learners, welcome to this section which is about the neo-liberal
counterrevolution. This section will explain and analyze the neo-liberal economic
doctrine and assess its relevance to the situation of the economies of the Third World
countries.

Objectives

After completing this section, you are expected to

 Explain neo-liberal counterrevolution as an economic theory
 Analyze the influence of this theory on economies of Third World countries
 Identify the policy prescriptions provided by this theory to bring about economic
development.

? Dear learner, how the neo-liberal counterrevolution doctrine come about?

The establishment of neo-liberalism as the new development orthodoxy is part of a

profound shift in power in the global political economy. The economic liberalism that
had became the dominant global discourse of development after the industrial revolution
was regarded with great skepticism. The loss of faith in economic liberalism was also a
crisis of capitalist hegemony, in which the fundamentals upon which capitalism depended
were challenged and denied.

After the last quarter of the 20th Century, however, liberal principles were reasserted. The
re-imposition of the liberal principles-or neo-liberal revolution was accompanied by a

92
restructuring of the relationship between capital and the state, and between the state and
society, with the aim of restoring the unregulated operation of the market forces.

? Dear student, what is the major argument of the neo-liberal counterrevolution?

The central argument of the neo-liberal counterrevolution is that underdevelopment

results from poor resource allocation due to incorrect pricing policies and too much
government intervention. Many writers of this school of thought like Peter Bauer Deepak
Lal and Ian Little argue that it is this very state intervention in economic activity that
slows the pace of economic growth. Adopting free market policies will guide efficient
resource allocation and stimulate economic development. Liberalization (opening up) of
national market draws additional domestic and foreign investment and thus increases the
rate of capital accumulation, which is important for economic development. They argue
that by permitting free market to flourish, privatizing state owned enterprises, promoting
free trade and export expansion, attracting investors, and avoiding the plethora of
government intervention and regulation, both economic efficiency and economic growth
will be stimulated.

It was then possible by the 1990 for the World Bank to claim a consensus in favor of
market-friendly policies. This new doctrine overturns the assumptions from which
development studies emerge that domestic and international policies that worked against
market forces were essential to bring about development. It virtually abolishes the idea of
development as a specific concern, in favor of a universal set of prescriptions applied to
developing and developed economies alike.

? Dear learner, what should be the role of the government as envisioned by the
neo-liberal counterrevolution?

This economic doctrine assigns governments (states) having a limited economic role. The
theory argues that the state should provide certain fundamental public goods such as
police protection, national defense, judicial and educational services, and physical

93
infrastructures (road, railways, airports, etc) when only when the private capital is
incapable of providing these services. The state otherwise should have a secondary role.
The theory believes that most Third World governments injured their economies by
moving far beyond these limited roles, i.e. governments excessively intervene in the
economy. Free market forces should determine production decisions, and should set
prices without government intervention. Because of the influence this theory has,
governments of the South have been forced to liberalized their and economies by
deregulating the private sector, removing trade barriers, freeing prices, reducing subsidies
to consumers and privatizing state enterprises.

Moreover, the doctrine of neo-liberal counterrevolution believes in international economy

and international trade. It argues that if Third World countries opt to modernize and
develop, they have to take part in the international economy on the basis of their
comparative advantage. By so doing, this theory advocated the pursuit of open-door
policies towards trade and investment. It is in this way that Third World countries would
receive technology, capital inputs and finance.

 Activity – 10
94

1. Explain the major assumption of the neo-liberal counterrevolution doctrine.

___________________________________________________________________________
 Section Five

Alternative Development and Post-Development

95

Section Overview
Hell dear learner, welcome to the last section of the unit. This section explores the
concepts of alternative development and post-development. It is further divided in two
sub-sections. The first section explains the major issues in alternative development. The
second sub-section examines the concept of post-development.

Objectives

Upon successful completion of this section, you are expected to:

 Define the concept of alternative development
 Explain the issues involved in alternative development
 Know the concept of post-development
 Analyze the concept of post-development and its relevance to the development of
Third World economies

1.2 Alternative Development

? Dear learner, what is the major concern of alternative development?

Development is an economic, social and political process which results in a cumulative

rise in the perceived standard of living for an increasing proportion of a population. The
theory of alternative development is concerned with how the living condition of the poor
be improved. The failure of other major theories of development to address poverty and
improve the living condition of the poor necessitates to develop another thinking. That is
alternative development.

? Dear students, why major theories of development have failed to bring the
desired change?

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Alternative development begins from criticizing mainstream development theories, which
include the modernization theory, the dependency theory, the Marxian theory and the
neo-liberal doctrine. Most of the theories of development have failed to bring the desired
change due to tow major reasons. These are:
 their emphasis on rapid cumulative growth which was not accompanied by equity
 Most of them were urban biased because of their single-minded emphasis on
industrialization. But the majority of the poor live in rural areas.
 Because of their emphasis on industrial growth, they are not environmentally
friendly.
 They emphasize on the quantities aspect of life, not the qualitative aspect of.
 They also focus on reducing the economic gap between the rich and poor
countries. Reducing the gap between the rich and poor people within the society is
ignored.

Alternative development is an attempt to come up with a new humanistic, people

centered and pro-poor development thinking as a response to these failures. Alternative
development places high emphasis on people’s autonomy, empowerment, local self-
reliance, environmental sustainability and direct participatory democracy. By so doing,
alternative development is concerned with improving the quality of living of the poor by
empowering the power. It is also concerned with introducing alternative development
practices and redefining the goals of development so that development is geared toward
improving the qualitative aspect of life.

? Dear student, what are the different approaches that can be included in
alternative development?

Alternative development has a multiplicity of different approaches. These approaches

have been popular in different policy decisions and in different international
organizations. These approaches include:
• Redistribution growth

97
 • Basic needs strategy
• Human development
• Women in development/Gender in development
• Sustainable development
Now let us briefly dwell on these approaches turn by turn.

1. Redistribution Growth

? Dear learner, what does redistribution growth involve?

The World Bank was a key advocator of this approach. The Bank made an assessment
that there had been growth, rise in productivity, higher growth rate per capita GNP in
underdeveloped countries. In spite of this growth, however, poverty and inequality have
not been changed. Those who were poor remained poor and even much poorer. Because
of this, the World Bank began to advocate a redistribution growth strategy.

Redistribution growth strategy involves identification of who are the poor and where are
they, and formulation of policy packages specifically targeting the poor, particularly the
rural poor. The adoption of a policy of integrated rural development package is one
manifestation of the redistribution growth strategy.

Redistribution growth is an incremental approach dictating that resources should be

diverted to the poor by trying to increase their productive capacity so that their income
would rise and by providing socio-economic services which the poor can not afford to
buy like education.

2. Basic Needs Strategy

? Dear student, what is the basic needs strategy?

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The redistribution growth strategy was replaced by a basic needs strategy because it did
not bring about changes as expected. The basic needs approach has the idea that
development has to focus on the satisfaction of basic needs. Institutions like International
Labor Organization (ILO) had been advocating this approach. According to the ILO
classification, basic needs involve two major elements. These are:
 The satisfaction of minimum requirements of food, cloth and shelter
 The satisfaction of essential services like pure drinking water, education, health,
public transport, etc…

In addition to these elements, human rights like civil and political, and socio-economic
rights (like land ownership right) of citizens were included. There was recognition that
there has to be empowerment in decision making of groups who are socially marginalized
like women.

3. Human Development

? Dear learner, what is the argument of human development?

It is an approach developed by a Pakistan economist called Muhbud Ul Haq who was

once the head of the UNDP. This approach argues that development as a practice has to
focus on increasing human capacity (potential). To measure human development, the
proponents of human development approach came up with a measurement called Human
Development Index (HDI). This measurement is based on human development indicators
like life expectancy, literacy rates and purchasing power of the people.

4. Women in Development/Gender in Development

? Dear student, what is the contribution of women in development?

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These approaches focus on the role of gender in socio-economic development. They
argue that the contribution of women in socio-economic development is totally ignored.
Therefore, the contributions of women in development activities have to be added in
development measures. Policy packages have to be implemented that focus on the
contribution of women in development.

5. Sustainable Development

? Dear learner, what do understand by the concept of sustainable development?

There is a realization that development in general and industrialization in particular have

brought about changes in the environment. Production is expensive and consumes a lot.
The accelerated development of countries is damaging the environment in one way or
another. Economic growth is being promoted at the expense of the environment and
thereby affecting the future generation. By definition, sustainable development is a
development that meets the needs of the present generation without compromising the
abilities of future generations to meet their own needs.

Nowadays, many argue that if all countries become industrialized, the planet earth does
not have the capacity to support such development. Therefore, development has to take in
to consideration the environment for future generations. There should not be development
at the expense of future generations.

Generally, the strength of alternative development is its regard for local development and
social agency from grass root groups and social movements to non-governmental
organizations (NGOs). The most important elements of alternative development are
participation and empowerment.

1.2 Post-Development

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? Dear learner, what is post-development?

Post-development is a criticism of development and a development theory arising in the

1980s that holds that all 'development' is a reflection of Western/Northern hegemony
over the rest of the world. It criticizes the idea and discourse of development.

The logic behind post-development refers to development as both on the ground

development and development theory, and follows as such: Development theory is held to
be generated by academia in tandem with political ideology. The academic-political
nature of development theory means it tends to be policy oriented, problem driven, but
efficacious relative to most social theory. On the ground development is initiated by both
governments and NGOs according to the advice of development theory. But development
theory needs to follow framework set in place by government and political culture. There
is then a strong socially constructed aspect to development theory; where Western
interests are guiding how that knowledge is generated. This would mean that
development reflects a pattern of Western hegemony.

? Dear students, does this mean that post-development is anti-development?

Absolutely not! A post-development approach is not anti-development; rather, it is a

political acknowledgement of the injustices and unequal power relationships of the
practice of development, and a view that development cannot offer sufficient tools for
transformation. Instead, it suggests resistance to globalization provided by grassroots
organizations and non-governmental organizations, alternative forms of livelihood, and
local forms of knowledge and practice.

? Dear students, what is development for you? (Just think before knowing the
position of post-development thinking toward development).

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A number of theorists challenged the very meaning of development. According to them,
the way we understand development is rooted in colonial discourse depicting the North as
advanced and progressive and the South as backward, degenerate and primitive. They
point out that a new way of thinking about development began in 1949 when President
Harry Truman declared: “The old imperialism—exploitation for foreign profit—has no
place in our plans. What we envisage is a program of development based on the concepts
of democratic fair dealings.” While claiming that the ‘era of development’ began at this
point, post-development theorists do not suggest that the concept of development was
new. What was new was to define development in terms of escaping from
underdevelopment. Since the latter referred to two-thirds of the world, this meant that the
most of the world had to define themselves as having fallen into an undignified condition
called underdevelopment and to look outside their cultures for salvation. Development,
according to them, was now a euphemism used to refer to United States hegemony, and it
was ideals and programs from the perspective of the United States and its (Western)
European allies which would form the basis of development everywhere.

Leading members of the post-development school argue that development was always
unjust, never worked, and has now clearly failed. The idea of development stands like a
ruin in the intellectual landscape and it is time to dismantle this mental structure.

? Dear leaner, what is this mental structure?

To cite an example, they would point how the concept of global poverty is entirely a
modern construct. The idea that we can measure poverty at the level of entire nations and
hence label certain countries as poor on the basis of their GNP (Gross National Product)
per capita is quite new. While in pre-industrial societies, poverty applied to certain
individuals and generally did not carry any implications of personal inadequacy, with the
advent of modernity entire nations and continents were led to believe that they were poor,
and in need of assistance, only because their per capita income was below a universally
established minimum.

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? Dear student, what is the assumption of the post-development thinking?

Among the starting points and basic assumptions of post-development is the idea that a
middle-class, ‘Western-style’ of life and all that goes with it, is not a realistic or a
desirable goal for the majority of world’s population. In this sense, development is seen
as requiring the loss of indigenous culture, or environmentally and psychologically rich
rewarding modes of life. Formerly satisfactory ways of life become dissatisfying because
development changes the self-perception of people.

Development is also seen as a set of knowledge, interventions and worldviews (in short,
discourses) which are also powers-to intervene, transform and to rule. Related to the
concept of postcolonial criticisms, post-development is, above all, a critique of the
standard assumption about progress as to who possesses the key to it and how it may be
implemented.

Post-developmentism also challenges the notion of a single path to development and

demands acknowledgment of diversity of perspective and priorities. The politics of
defining and satisfying needs is a crucial dimension of development thought, to which the
concept of agency is central. In other words, who voices development concerns, what
power relations are played out, how do development experts’ (World Bank, IMF
officials, etc.) interests rule the development priorities, and which voices gets excluded as
a result? Post-development attempts to overcome the inequality by opening up spaces for
the agency for non-Western peoples.

? Dear learner, do the proponents of post-development deny the need for change?

Absolutely not! Post-developmentism does not deny the need for change. What they
argue is that in order for change to be undertaken differently, it needs to be conceived

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literally in different terms. While social change has probably always been part of the
human experience, it was only within the European modernity that ‘society’, i.e. the
whole way of life of people, was open to empirical analysis and made the subject of
planned change. And while communities in the Third World may find that there is a need
for some sort of organized or directed change-in part to reverse the damage done by
development-this undoubtedly will not take the form of designing life or social
engineering. In this long run, this means that categories and meanings have to be
redefined.

? Dear student, what is to be done directly?

Some admit that it may be true that majority of people whose life has in fact greatly
deteriorated do want change. But the answer they suggest is not development but the
“end of development.’ The end of development should not be seen as an end to the search
for new possibilities of change, for a relational world of friendship, or for genuine
processes of regeneration able to give birth to new forms of solidarity. It should also
mean that the inhumane and the ultimately destructive approach to change is over. It
should represent a call to the good people everywhere to think and work together.”

Critics have complained that post-development is not really beyond or outside of

development discourses. Post-development is merely the latest version of a set of
criticisms that have long been evident within writing and thinking about development.
Development has always been about choices, with losers, and winners.

There are a number of more fundamental objections to post-development school. The

first is that it overstates its case. For, to reject all development, is also seen as rejection of
the possibility for material advancement and transformation. Or it is to ignore the tangible
transformations, in life chances, health and material well-being that has been evident in
parts of the Third World.

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  Activity – 11
1. Explain the major theoretical arguments of alternative development.

__________________________________________________________________________
__________________________________________________________________________
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__________________________________________________________________________

2. Analyze why alternative development become popular at some point in time.

 Unit Summary

The different theories presented in this particular unit are basically divided on the issue of
how to bring development and what causes the underdevelopment of the economies of
Third World countries. Some theories attributed the underdevelopment of these groups of
countries merely to internal factors, while others attributed to external factors. Such
finger pointing on both sides is a common theoretical debate.

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The arguments that support a staged wise and free market based economic growth believe
that these can be a better efficient in resource allocation and economic growth. The
problem is that many Third World economies are so different in structure and
organization from their western counterparts that the behavioral assumptions and policy
percepts of western theories are sometimes questionable and often incorrect. Competitive
market do not simply exist; and given the institutional, cultural and historical context of
many least developed countries, these competitive markets would not necessarily be
desirable for long term economic and social perspective. It is not, therefore simply an
either-or-question to choose appropriate policy action. Rather it is a matter of assessing
each individual country’s situation on a case-by-case basis. In this regard, each of these
theories and approaches to understand development has something to offer.

Self-test Questions

Part I. Choose the best answer from among the given alternatives.
1. According to Rostow, in which stage of economic growth that new techniques spread
in agriculture and industry, and agriculture becomes commercialized.
A. Take-off
B. Pre-condition for take-off

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 C. Drive to maturity
D. Stages of mass consumption
E. Traditional society
2. ________argue that by permitting free market to flourish, privatizing state owned
enterprises, promoting free trade and export expansion, attracting investors, and avoiding
the plethora of government intervention and regulation, both economic efficiency and
economic growth will be stimulated.
A. the dependency theory
B. the Marxian theory
C. the false paradigm model
D. the neo-liberal doctrine
3. According to S. Huntington, modernization is _________
A. a short time process
B. a homogenizing process
C. a simplistic process
D. reversible process
4. For Marx, economic development was tied to:
A. Capitalism
B. The proletariat class
C. Class struggle
D. Socialism

5. According to Talcott Parson, traditional societies are characterized by________

behavior.
A. functional specificity
B. affective neutrality
C. universalism
D. self-oriented

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Part II. Say true for the correct statement and false for the incorrect ones.

1. Modernization theory was initially optimist about the prospect of development in the
South.
2. Marx saw capitalism as an historical necessity because it was the most productive and
flexible economic system in human history.
3. The dependency theory sets itself to theorize and explain as to what make the North
rich and what the South has to do to become rich.
4. Pos-development is an attempt to come up with a new humanistic, people centered and
pro-poor development thinking as a response to these failures.
5. Post-developmentism challenges the notion of a single path to development.

Part III. Fill in the blank spaces with right answer.

1. According to Rostow, __________is a transition between the traditional society and

the take-off stage.
2. _________ is a development that meets the needs of the present generation without
compromising the abilities of future generations to meet their own needs.
3. _________ is a political acknowledgement of the injustices and unequal power
relationships of the practice of development.
4. The theory of functionalism was first developed by ___________________.
5. ___________________is a staged-wise development theory.

Part IV. Match items in column ‘A’ from that of column ‘B’.

‘A’ ‘B’

1. Pattern variables A. Human Development

2. Historical dialectic B. Peter Bauer
3. Social evolution C. K. Marx

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4. Alternative Development D. T. Parson
5. Free market E. Emil Durkheim

Part V. Give short answer to the following questions.

1. What do you mean by the idea that modernization is revolutionary?
2. Explain the Marxian theory of surplus value.
3. Discuss the areas of dependence between the North and South as propounded by
the dependency school of thought.
4. What is the distinction between expressive and instrumental types of behavior of
societies as argued by T. Parson.

 Unit Checklist

Put an (X) mark in the boxes in front of the ideas you performed well.

I can

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1. Analyze the different strands of the modernization theory.
2. Explain the Marxian view of development.
3. Explore the international dependency revolution on development.
4. Discuss the neo-liberal counterrevolution on development.
5. Explain the concepts of alternative development
6. Identify the arguments of post development.

UNIT FOUR

POPULATION GROWTH AND ECONOMIC

DEVELOPMENT

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Introduction
Dear students, according to many scholars the central issue of our time may well turn out
to be how the world addresses the problem of ever-expanding human numbers. The
unprecedented population growth especially in developing countries has already added
fuel to the already burning fire of poverty and inequality. Hence, this unit is about
introducing you with the historical population growth, causes, consequences and policy
issues of population. The first section of this unit highlights you with the historical world
population growth. The second section introduces you with some of the plausible causes
of population growth. Section three of the unit discusses the contentious issues about
consequences of population growth. The final section emphasizes on the major goals, and
policy options of population.

Objectives

With the successful completion of this unit you will be able to;
• Explain the historical world population growth

• Identify the causes of high fertility ion developing countries.

• Identify the consequences of high fertility

• Discuss on the major goals and policy options concerning population

Pre test questions

1. What are the different historical stages of growth of population growth?
2. What are some of the causes of population growth in developing countries?
3. What are the consequences of population growth?
4. What goal/policy is needed to harmonize the ever-rising population with
development?

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 Section One

World Population Growth through History

Section Overview
Dear students, the overall development of a country could be affected by a host of
factors. Among these factors the impact of population growth on the economic
development of a country is worth investigating. At the out set however, it is important
that we give due emphasis on the evolution of world population growth. Hence, this
section will acquaint you with the world population growth through history.

Objectives

With the successful completion of this section you will be able to;

 Define what population is all about

 Explain the population growth through history

1.1 World Population Growth through History

? What is population?

The term population refers to the total human inhabitants of a specified area, such as a
city, country, or continent, at a given time. Population study as a discipline is known as
demography. It is concerned with the size, composition, and distribution of populations;
their patterns of change over time through births, deaths, and migration; and the
determinants and consequences of such changes. Population studies yield knowledge
important for planning, particularly by governments, in fields such as health, education,

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housing, social security, employment, and environmental preservation. Such studies also
provide information needed to formulate government population policies, which seek to
modify demographic trends in order to achieve economic and social objectives.

Every year, more than 93 million people are being added to the world’s population of 5.5
billion. More than 82 million of these additional people per year will be born in Third
World Countries. These increases are unprecedented. But the problem of population
growth is not simply a problem of numbers. It is a problem of human welfare and of
development. Rapid population growth can have serious consequences for the well-being
of humanity world wide. If development entails the improvement in people’s levels of
living-their incomes, health, education, and general well-being-and if it also encompasses
their self-esteem, respect, dignity, and freedom to choose, then the really important
question about population growth is this: How does the contemporary population
situation in many Third World countries contribute to or detract from their chances of
realizing the goals of development, not only for the current generation but also for the
future generations? Conversely, how does development affect population growth?

Throughout most of the more than 2 million years of human existence on earth,
humanity’s numbers have been few. When people first started to cultivate food through
agriculture some 12, 000 years ago, the estimated world was no more than 5 million.

The reason for the sudden change in overall population trends is that for almost all of
recorded history, the rate of population change, whether up or down, had been strongly
influenced by the combined effects of famine, disease, malnutrition, plague, and war-
conditions that resulted in high and fluctuating death rates. In the twentieth century, such
conditions came increasingly under technological and economic control. As a result,
human mortality (the death rate) is currently lower than at any other point in human
existence. It is this decline in mortality resulting from rapid technological advances in
modern medicine and the spread of modern sanitation measures throughout the world,
particularly within the past 50 years, that has resulted in the unprecedented increases in
world population growth, especially in Third World countries. For example, death rates

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in Africa, Asia, and Latin America have fallen by as much as 50% during the past 30 to
40 years, whereas birthrates have only recently begun to decline.

However, the population growth of developed countries is best explained by what is

known as the demographics transition. The demographic transition attempts to explain
why all contemporary developed nations have more or less passed through the same three
stages of modern population history. Before their economic modernization, these
countries for centuries had stable or very low growing populations as a result of a
combination of high birthrates and almost equally high birth rates. This was stage 1.
Stage 2 began when modernization, associated with better public-health methods,
healthier diets, higher incomes, and other improvements, led to a marked reduction in
mortality that gradually raised life expectancy from under 40 years to over 60 years.
However, the decline in death rates was not immediately accompanied by a decline in
fertility. As a result, the growing divergence between high birth rates and falling death
rates led to sharp increases in population growth compared to past centuries. Stage 2 thus
marks the beginning of the demographic transition (the transition from stable or slow-
growing populations first to rapidly increasing numbers and then to declining rates).
Finally, stage 3 was entered when the forces and influences of modernization and
development caused the beginning of a decline in fertility; eventually, falling birthrates
converged with lower death rates, leaving little or no population growth.

In short, population growth today is primarily the result of a rapid transition from a long
historical era characterized by high birth and death rates to one in which death rates have
fallen sharply but birthrates, especially in developing countries, are only just beginning to
fall from their historical high levels.

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  Activity – 12

1. What is population?
________________________________________________________________
________________________________________________________________
_______________________________________________________
2. Discuss on the world population growth through history.
________________________________________________________________
________________________________________________________________
_______________________________________________________

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 Section Two

The Causes of high Fertility in Developing Countries: The

Malthusian Model

Section Overview
Dear students, in the previous section you have learnt about the historical growth of
population. Population growth is apparently caused by a host of factors. Many
explanations were given to date on the causes of over-population. Most probably the most
important of all is the Malthusian model. Thus, this section will address you the principal
insights of Malthusian model and its criticism.

Objectives

With the successful completion of this section you will be able to;

 Explain the basic attributes of Malthusian Model

 Identify the main criticism forwarded against the Malthusian Model

1.1 The Malthusian Model

? Dear students, who is Malthus?

Almost 200 years ago, the British economist Thomas Malthus put forward a theory about
the relationship between population growth and economic development that survives till
today. Robert Malthus raised an alarm about population growth in the late 18th century.

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An Essay on the Principle of Population (1798) is arguably one of the most influential
books ever written. Writing in 1798 in his Essay and drawing on the concept of
diminishing returns, Malthus postulated a universal tendency for the population of a
country, unless checked by dwindling food supplies, to grow at a geometric rate,
doubling every 30 or 40 years. At the same time, because of diminishing returns to the
fixed factors, land, food supplies could expand only at a roughly arithmetic rate. Because
the growth in food supplies could not keep pace with the burgeoning population, per
capita incomes (defined in an agrarian society simply as per capita food production)
would have a tendency to fall so low as to lead to a stable population existing barely at or
slightly above the subsistence level.

Modern economists have given a name to the Malthusian idea of a population inevitably
forced to live at subsistence levels of income. They have called it the low-level
equilibrium population trap or more simply, the Malthusian population-trap.

According to the neo-Malthusians, poor nations will never be able to rise much above
their subsistence levels of per capita income unless they initiate preventive checks (birth
control) on their population growth. In the absence of such preventive checks, Malthusian
positive checks (starvation, disease, wars) on population growth will inevitably provide
the restraining force.

Malthus therefore contended that the only way to avoid this condition of chronic low
levels of living or absolute poverty was for people to engage in ‘moral restraint’ and limit
the number of their children. Hence, we might regard Malthus, indirectly and
inadvertently, as the father of the modern birth control movement.

Malthus' theory of population is his best-known contribution: Passion between the sexes,
unless checked by human misery, leads to a continual growth in population. Positive
checks to population growth include "... war, disease, hunger, and whatever ... contributes
to shorten the duration of human life." Preventative checks include abstinence from
sexual relations, continence within marriage, and/or delay of marriage.

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1.1.1 Criticism of the Malthusian Model

? Dear students, do you agree with Malthus’s assumption about the growth of
population?

The Malthusian population trap provides a simple and in many ways appealing theory of
the relationship between population growth and economic development. Unfortunately, it
is based on a number of simplistic assumptions and hypotheses that do not stand the test
of empirical verification. We can criticize the population trap on two grounds.

First, and most important, the model assumes away or ignores the enormous impact of
technological progress in offsetting the growth-inhibiting forces of rapid population
increases. The history of modern economic growth has been closely associated with rapid
technological progress in the form of a continuous series of scientific, technological, and
social inventions and innovations. While Malthus was basically correct in assuming a
limited supply of land, he did not-and in fairness could not at that time-anticipate the
manner in which technological progress could augment the availability of land by raising
its quality (its productivity) even though its quantity might remain roughly the same.

The second basic criticism of the trap focuses on its assumption that national rates of
population increase are directly (positively) related to the level of national per capita
income. According to this assumption, at relatively low levels of per capita income, we
should expect to find population growth rates increasing with increasing per capita
income. But research on Least Developed Countries (LDCs) indicates that there appears
to be no clear correlation between population growth rates and levels of per capita
income among Third World nations. As a result of modern medicine and public health
programs, death rates have fallen rapidly and have become less dependent on the level of
per capita income. Moreover, birth rates seem to show no definable relationship with per
capita income levels.

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Our conclusion, therefore, is that it is not so much the aggregate level of per capita that
matters for population growth but rather how that income is distributed. It is the level of
household income, not the level of per capita income that seems to matter most. The
social and economic institutions of a nation and its philosophy of development are
probably greater determinants of population growth rates than aggregate economic
variables and simple models of macroeconomic growth.

The Malthusian and neo-Malthusian theories is therefore rejected as applied to

contemporary Third World nations on the following grounds
• They do not take adequate account of the role and impact of technological
progress
• They are based on a hypothesis about a macro relationship between population
growth and levels of per capita income that does not stand up to empirical testing
• They focus on the wrong variable, per capita income, as the principal
determinants of population growth rates. A much better and more valid approach
to the question of population and development centers on the macroeconomics of
family-size decision making in which individual, and not aggregate, levels of
living become the principal determinant of a family’s decision to have more or
fewer children.

 Activity – 13

1. What are the basic attributes of Malthusian Model?

_________________________________________________________________
_________________________________________________________________
_____________________________________________________
2. What are the criticisms forwarded against the Malthusian Model?
_________________________________________________________________
_________________________________________________________________
_____________________________________________________

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 Section Three

The Consequences of High Fertility: Some Conflicting

Opinions

Section Overview
Dear students, so far our world has witnessed the mushrooming of population. Moreover,
the rampant increase of population has become a concern for most developing countries.
However, there have been some conflicting opinions about the consequences of high
fertility. Hence, this section will acquaint you about the contentious issues as to whether
population growth is a real problem or not.

Objectives

With the successful completion of this section you will be able to;

 Explain divergent views on the consequences of population growth

 Identify the consequences of population growth

1. The Consequences of High Fertility

? What are the Consequences of rapid population growth?

For many years, there has been an ongoing and lively debate among development
economists and other social scientists about the seriousness of the consequences of rapid
population growth. The following summarizes some of the main arguments for and
against the idea that the consequences of rapid population growth lead to serious

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development problems. It then informs the basis for considering whether some consensus
can be reached so that specific policy goals and objectives can be postulated.

1.1.1 Population Growth Is Not a Real Problem

We can identify three general lines of argument on the part of people who assert that
population growth is not a cause for concern

 The problem is not population growth but rather other issues

 Population growth is a false issue deliberately created by dominant rich country
agencies and institutions to keep LDCs in their underdeveloped, dependent
condition
 For many developing countries and regions, population growth is in fact desirable

A. Some Other Issues

Many knowledgeable people from both rich and poor nations argue that the real problem
is not population growth per se but one or all of the following four issues:

i. Underdevelopment

If correct strategies are pursued and lead to higher levels of living, greater esteem, and
expanded freedom, population will take care of itself. Eventually, it will disappear as a
problem, as it has in all of the present economically advanced nations. According to this
argument, underdevelopment is the real problem, and development should be the only
goal. With it will come economic progress and social mechanisms that will more or less
automatically regulated population growth and distribution. As long as the vast majority
of people in Third World countries remain impoverished, uneducated and physically and
psychologically weak, the large family will constitute the only real source of social
security (i.e parents will constitute to be denied the freedom to choose a small family if
they so desired). Proponents of the underdevelopment argument then conclude that birth

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control programs will surely fail, as they have in the past, when there is no motivation on
the part of poor families to limit their size.

ii. World Resource Depletion and Environmental Destruction

Population can only be an economic problem in relation to the availability and utilization
of scarce natural and material resources. The fact is that developed countries with less
than one-quarter of the world’s population, consume almost 80% of the world’s
resources. For example, the average North American or European consumer uses up,
directly and indirectly, almost 16 times as much of the world’s food, energy, and material
resources as his or her counterpart in Third World countries. In terms of the depletion of
the world’s limited resources, therefore, the addition of another child in the developed
countries is as significant as the birth of 16 additional children in the underdeveloped
countries. According to this argument, developed nations should curtail their excessively
high consumption standards instead of asking less developed nations to restrict their
population growth. The latter’s high fertility is really due to their low levels of the “over
consumption” of the world’s scarce resources by rich nations. This combination of rising
affluence and extravagant consumption habits in rich countries and among rich people in
poor countries should be the major world concern, not population growth.

iii. Population Distribution

According to this third argument it is not the number of people per se that is causing
population problems, but their distribution in space. Many regions of the world (e.g. parts
of Sub-Saharan Africa) and many regions within countries (e.g. the northeast and
Amazon regions of Brazil) are in fact under-populated in terms of available or potential
resources. Others simply have too many people concentrated in too small an area (e.g.
central Java or most urban concentrations in LDCs). Governments should therefore strive
not to moderate the rate of population growth but rather to reduce rural-urban migration
and to bring about a more natural spatial distribution of the population in terms of
available land and other productive resources.

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iv. Subordination of Women

Women often bear the disproportionate burdens of poverty, poor education, lack of jobs,
and limited social mobility. In many cases, their inferior roles, low status, and restricted
access to birth control is manifested in their high fertility. According to this argument,
population growth is a natural outcome of women’s lack of economic opportunity,

B. Deliberately Contrived False Issue

The second main line of argument denying the significance of population growth as a
major development problem is closely allied to the neocolonial dependence theory of
underdevelopment. Basically, it is argued that the frenetic over-concern in the rich
nations with the population growth of poor nations is really an attempt by the former to
hold down the development of the latter in order to maintain an international status quo
that is favorable to their self-interests. Rich nations are pressuring poor nations to adopt
aggressive population control programs even though they themselves went through a
period of sizable population increase that accelerated their own development processes.

A radical neo-Marxist version of this argument views population control efforts by rich
countries and their allied international agencies as racist or genocidal attempts to reduce
the relative or absolute size of the poor, largely nonwhite populations of the world who
may someday pose a serious threat to the welfare of the rich, predominantly white
societies. Worldwide birth control campaigns are seen as manifestations of the fears of
the developed world in the face of a possible radical challenge to the international order
by the people who are its first victim.

C. Population Growth is Desirable

A more conventional economic argument is that of population growth as an essential

ingredient to stimulate economic development. Larger populations provide the needed
consumer demand to generate favorable economies of scale in production, to lower

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production costs, and to provide a sufficient and low cost labor supply to achieve higher
output levels. Population “revisionist” economists of the 1980s neoclassical
counterrevolution school like Julian Simon and Nicholas Eberstadt argue, for example,
that free markets will always adjust to any scarcities created by population pressures.
Such scarcities will drive up prices and signal the need for new cost-saving production
technologies. In the end, free markets and human ingenuity (Simon’s “genius” as the
“ultimate resource”) will solve any and all problems arising from population growth. This
revisionist view point was clearly in contrast with the traditional “orthodox” argument of
the 1950s to 1970s that rapid population growth had serious economic consequences that,
if left uncorrected, would slow economic development.

At the other end of the political spectrum, it has been argued by some Third World neo-
Marxist pronatalists that many rural regions in developing countries are in reality under-
populated in the sense that much unused but arable land could yield large increases in
agricultural output if only more people were available to cultivate it. Many regions of
tropical Africa and Latin America and even parts of Asia are said to be in this situation.
With respect to Africa, for example, some observers have noted that many regions had
larger populations in the remote past than exist today. Their rural depopulation resulted
not only from the slave trade but also from compulsory military service, confinement to
reservations, and the forced-labor policies of former colonial governments. For example,
the sixteenth-century Congo Kingdom is said to have had a population of approximately
2 million. But by the time of the colonial conquest, which followed 300 years of slave
trade, the population of the region had fallen to less than one third of that figure. Today’s
Zaire has barely caught up to the Sixteen-century numbers. Other regions of Western and
eastern Africa provide similar examples- at least in the eyes of advocates of rapid
population growth in Africa.

In terms of ratios of population to arable land (land under cultivation, fallow land,
pastures, and forests), Africa south of the Sahara is said by these supporters of population
expansion to have a total of 1.4 billion arable hectares. Land, actually being cultivated
amounts to only 170 million hectares, or about 1 hectare per rural inhabitant. Thus only

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12% of all potential arable land is under cultivation, and this very low rural population
density is viewed as a serious drawback to raising agricultural output. Similar arguments
have been expounded with regard to such Latin American countries as Brazil and
Argentina.

Three other non-economic arguments, each found to some degree in a wide range of
developing countries, complete the “population growth is desirable” view points. First,
many countries claim a need for population growth to protect currently under-populated
border regions against the expansionist intentions of neighboring nations. Second, there
are many ethnic, racial, and religious groups within less developed countries whose
attitudes favoring large family size have to be protected for both moral and political
reasons. Finally, military and political powers are often seen as dependent on a large and
youthful population.

Many of these arguments have a certain realism about them-if not in fact, then at least in
the perceptions of vocal and influential individuals in both the developed and the
developing worlds. Clearly, some of the arguments have greater validity for some Third
World countries than others. The important point is that they represent a considerable
range of opinions and viewpoints and therefore need to be seriously weighed against the
counterarguments of theorists who believe that rapid population growth in indeed a real
and important problem for underdeveloped countries. Dear students, let us now look at
some of these counterarguments.

1.1.2 Population Growth is A Real Problem

Positions supporting the need to curtail population growth because of the negative
economic, social and environmental consequences are typically based on one or the other
of the following arguments.

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A. The population “Hawk” Argument

The extreme version of the population-as-a-serious-problem position attempts to attribute

almost all of the world’s economic and social evils to excessive population growth.
Unrestrained population increase is seen as the major crisis facing humankind today. It is
regarded as the principal cause of poverty, low levels of living, malnutrition, ill health,
environmental degradation and a wide array of other social problems. Value-laden and
provocative terms such as “population bomb” or “population explosion” are tossed
around at will. Indeed, dire predictions of world food catastrophes and ecological disaster
are attributed almost entirely to the growth in world numbers. Such an extreme position
leads some of its advocates to assert that “world” (i.e. LDC) population stabilization or
even decline is the most urgent contemporary task even if it requires severe and coercive
measures such as compulsory sterilization to control family size in some of the most
populated Third World countries like India and Bangladesh.

B. The Population-Poverty Cycle Argument and the Need for Family

planning programs.

The population-poverty cycle argument is the main stance among people who hold that
too rapid population growth yields negative economic consequences and thus should be a
real concern of Third World countries. Advocates start from the basic proposition that
population growth intensifies and exacerbates the economic, social and psychological
problems associated with the condition of underdevelopment. Population growth retards
the prospect for a better life for the already born. It also severely draws down limited
government revenues simply to provide the most rudimentary economic, health, and
social services to the additional people. This in turn further reduces the prospects for any
improvement in the levels pf living of the existing generation.

If low incomes induce poor families to have more children as a source of cheap labor and
old age security then we have vicious cycle of cheap in progress. Poor people have large

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families partly to compensate for their poverty, but large families mean greater
population growth, higher dependency burdens, lower savings, less investment, slower
economic growth, and ultimately greater poverty. Population growth is thus seen as both
a cause and a consequence of underdevelopment.

Because widespread absolute poverty and low levels of living are thus seen as a major
cause of large family size, and large families retard economic growth, it follows that a
more egalitarian economic and social development is a necessary condition for bringing
about an eventual slowing or cessation of population growth at low levels of fertility and
mortality. But according to this argument, it is not a sufficient condition-that is
development provides people with the intensives and motivations to limit their family
size, but family planning programs are needed to provide them with the technological
means to avoid unwanted pregnancies. Even though countries like France, Japan, the
United States, Great Britain, and more recently, Taiwan and South Korea were able to
reduce their population growth rates without widespread family planning clinics, it is
argued that the provision of these services will enable other countries desiring to control
excessive population growth to do so more rapidly than if these family planning services
were not available.

1.1.3 The Empirical Argument: Seven Negative Consequences of

Population Growth

According to the latest empirical research, the potential negative consequences of

population growth for economic development can be divided into seven categories: its
impact on economic growth, poverty and inequality, education, health, food, the
environment, and international migration.

Economic Growth: Evidence shows that rapid population growth lowers per capita
income growth in most LDCs, especially those that are already poor, dependent on
agriculture, and experiencing pressures on land and natural resources.

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Poverty and Inequality: Even though aggregate statistical correlations between measures
of poverty and population growth at the national level are often inconclusive, at the
household level the evidence is strong and compelling. The negative consequences of
population growth fall most heavily on the poor because they are the ones who are made
landless, suffer first from cuts in government health and education programs, bear the
brunt of environmental damage, and are the main victims of job cuts due to the slower
growth of the economy. Poor women once again bear the greatest burden of government
austerity programs, and another vicious cycle is set in motion. To the extent that families
perpetuate poverty, they also exacerbate inequality.

Education: Although the data are sometimes ambiguous on this point, it is generally
agreed that large family size and low incomes restrict the opportunities of parents to
educate all their children. At the national level, rapid population growth causes given
educational expenditures to be spread more thinly, lowering quality for the sake of
quantity. This in turn feeds back on economic growth because the stock of human capital
is reduced by rapid population growth.
Health: High fertility harms the health of mothers and children. It increases the health
risks of pregnancy, and closely spaced births have been shown to reduced birth weight
and increase child mortality rates.

Food: Feeding the world’s population is made more difficult by rapid population growth
-over 90% of additional LDC food requirements are caused by population increases. New
technologies of production must be introduced more rapidly, as the best lands have
already been cultivated. International food relief programs become more widespread.

Environment: Rapid population growth contributes to environmental degradation in the

form of forest encroachment, deforestation, fuel-wood depletion, soil erosion, declining
fish and animal stocks, inadequate and unsafe water, air pollution, and urban congestion.

International Migration: Many observers consider the rapid increase in international

migration, both legal and illegal, to be one of the major consequences of developing

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countries’ population growth. Though many factors cause migration, an excess of job
seekers (caused by rapid population growth) over job opportunities in the LDC economy
is surely one of them.

 Activity – 14

1. Is population growth desirable in light of African countries situations? Justify your

answer.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
2. What is the point of departures between those who advocate that population is not a
real problem and those who held that it is a real problem?
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
3. What are the major consequences of population growth?

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________

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 Section Four

Goals, Objectives and Policy Approaches

Section Overview

Dear students, if the current trend of population growth continues unabated, the
development endeavor of many developing countries would be at stake. Care has to be
taken in order to harmonize the economic development and population growth. Hence,
there has to be some consensus, albeit disagreement on some issues, on population
policy. Thus, this section acquaints you with the basic goals and objectives leading
towards consensus, some policy approaches and what the developing countries need to do
to harmonize the ever-rising population with their development.

Objectives

With the successful completion of this section you will be able to;

 Explain the goals and objectives concerning population

 Discuss some policy approaches concerning population
 Recommend what developing countries can do concerning population
growth

1.1 Goals and Objectives: Toward a Consensus

In spite of what may appear to be seriously conflicting arguments about the consequences
of population growth, during the 1970s and 1980s there emerged a common ground that
many people on both sides of the debate could agree on. This position is best

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characterized by Robert Cassen in Population Policy: A New Consensus: After decades
of controversy over the issue of population policy, there is a new international consensus
among and between industrial and developing countries that individuals, countries, and
the world at large would be better off if population were to grow more slowly. The
consequences of rapid population growth should be neither exaggerated nor minimized.
Some past expressions of alarm have been counterproductive, alienating the very
audiences they were intended to persuade: at the same time, claims that population
growth was not all that important have had the effects of diminishing a proper concern
for the subject.

The following four propositions constitute the essential components of this intermediate
or consensus opinion:
 Population growth is not the primary cause of low levels of living, gross
inequalities, or the limited freedom of choices that characterizes much of the
Third World. The fundamental causes of these problems must be sought,
rather, in the “dualistic” nature of the domestic and international economic
and social order, as well as in the failures of many development plans to
create jobs and incomes for poor families, especially women.
 The problem of population is not simply one of numbers but involves the
quality of life and material well-being. Thus, LDC population size must be
viewed in conjunction with developed country affluence in relation to the
quantity, distribution, and utilization of world resources, not just in relation to
indigenous resources of the LDCs.
 But rapid population growth does serve to intensify problems of
underdevelopment and make prospects for development that much more
remote. The momentum of population growth (refers to the tendency of the
population to continue even after birthrates have declined substantially) means
that, barring catastrophe, the population of developing countries will increase
dramatically over the coming decades, no matter what fertility control
measures are adopted now. It follows that high population growth rates,

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 though not the principal cause of underdevelopment are nevertheless
important contributing factors in specific countries and regions of the world.
 Many of the real problems of population arise not from its overall size but
from its concentration, especially in urban areas as a result of accelerated
rural-urban migration. A more rational and efficient spatial distribution of
national populations thus becomes an alternatives in some countries to the
slowdown of overall population growth.

In view of these four propositions, we may conclude that the following three policy goals
and objectives might be included in any realistic approach to the issues of population
growth in developing countries.

 In countries or regions where population size, distribution and growth are

viewed as an existing or potential problem, the primary objective of any
strategy to limit further growth must deal not only with the population
variable per se but also with the underlying social and economic conditions of
underdevelopment. Problems such as absolute poverty, gross inequality, wide
spread unemployment (especially among females), limited female access to
education, malnutrition, and poor health facilities must be given high priority.
Their amelioration is both a necessary concomitant of development and a
fundamental motivational basis for the expanded freedom of the individual to
choose an optimal- and, in many cases, smaller-family size.
 To bring about smaller families through development-induced motivations,
family-planning programs providing both the education and the technological
means to regulate fertility for people who wish to regulate it must be
established.
 Developed countries must assist developing countries to achieve their lowered
fertility and mortality objectives not only by providing contraceptives and
funding family-planning clinics but, more important, (a) by curtailing their
own excessive depletion of nonrenewable world resources through programs
designed to cut back on the unnecessary consumption of products that

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 intensively use such resources, (b) by making genuine commitments to
eradicating poverty, illiteracy, disease, and malnutrition in Third World
countries as well as their own; and (c) by recognizing in both their rhetoric
and their international economic and social dealings that development is the
real issue, not simply population control.

1.2 Some Policy Approaches

In view of these broad goals and objectives, what kind of economic and social policies
might developing and developed country governments and international assistance
agencies consider to bring about long-term reductions in the overall rate of world
population growth? Three areas of policy can have important direct and indirect
influences on the well-being of present and future world populations.

 General and specific policies that developing country governments can initiate
to influence and perhaps even control their population growth and
distribution.
 General and specific policies that developed country governments can initiate
in their own countries to lessen their disproportionate consumption of limited
world resources and promote a more equitable distribution of the benefits of
global economic progress
 General and specific policies that developed country governments and
international assistance agencies can initiate to help developing countries
achieve their population objectives.

1.3 What Developing Countries Can Do?

It is not numbers per se or parental irrationality that is at the root of the LDC “population
problem.” Rather, it is the pervasiveness of absolute poverty and low levels of living that
provides the economic rationale for large families and burgeoning populations.

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Developing country governments can attempt to control fertility in six ways:

1. They can, through the media and the educational process, both formal (school system)
and informal (adult education), try to persuade people to have small families.

2. They can establish family-planning programs to provide health and contraceptive

services to encourage the desired behavior

3. They can deliberately manipulate economic incentives and disincentives for having
children-for example through the elimination or reduction of maternity leaves and
benefits, the reduction or elimination of financial incentives, and /or the imposition of
financial penalties for having children beyond a certain number, the establishment of old
–age social security provisions and minimum age child labor laws, the raising of school
fees and the elimination of heavy public subsidies for secondary and higher education
and the subsidization of smaller families through direct money payments.

4. Countries can attempt to redirect their populations away from the rapidly growing
urban areas by eliminating the current imbalance in economic and social opportunities in
urban versus rural areas.

5. Governments can attempt to coerce people into having smaller families through the
power of state legislation and penalties.

6. Finally, no policy measures will be successful in controlling fertility unless efforts are
made to raise the social and economic status of women and hence, create conditions
favorable to delayed marriage and lower marital fertility. A crucial ingredient in any
program designed to lower fertility rates is the creation of employment for women
outside the home.

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  Activity – 15

1. What is the new intermediate or consensus perspective on population all about?

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
2. What are some of the policy approaches to deal with population growth?
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
3. What should developing countries do to cope up with the ever-rising population?

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________

136
 Unit summary

Dear students, as the twenty-first century began; the world’s population was estimated to
be almost 6.1 billion people. The unprecedented population growth is more pronounced
in developing countries than any other part of the world. The world population has
undergone through a host of historical stages.

Dear students, in this unit you have learnt that there is no as such agreed presupposition
on the causes of high fertility rates, especially in developing countries. However, Thomas
Malthus put forward a theory of the relationship between population growth and
economic development that still survives today, albeit criticisms. The principal insight of
the Malthusian model is that there is a universal tendency for the population of a country,
unless checked by dwindling food supplies, to grow at a geometric rate.

The seriousness of the consequences of rapid population growth has been a debatable
issue to date. Those who argue that population growth is not a real problem assert that,
among other things the problem is not population growth but other issues. On the other
hand, those who argue that population growth is a real problem advocate the need to
curtail population growth because of the negative economic, social and environmental
consequences. However, a new consensus, seemingly a common ground on both sides of
the debate, has emerged.

Thus, developing countries need certain development policies which are particularly
crucial in the transition from a high-growth to al low-growth population.

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  Self test exercises
Part I: Choose the best answer from among the given alternatives

1. The Malthusian model could be criticized mainly in light of developing countries in

that
A. There appears to be no clear correlation between population growth rates and
levels of per capita income
B. The model is totally irrelevant to the existing situation of developing countries
C. Population growth rates increases with increasing per capita income
D. All
A. None

2. Which of the following is true about demographic transition?

A. At stage one, modernization led to a marked reduction in mortality
B. At stage two, stable or very low growing populations
C. At stage three, the influences of modernization and development caused the
beginning of a decline if fertility
D. Stage three marks the beginning of the demographic transition.
E. None
3. Which of the following argument is forwarded by proponents of population growth?
A. Larger population provides the needed consumer demand to generate favorable
economies of scale
B. Many regions in developing countries are in reality under populated.
C. Military and political power are often seen as dependent on a large and
youthful population.
D. The attitudes of some ethnic, racial and religious groups in favoring large
family size.
E. All

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4. Which of the following couldn’t be considered as the most common negative
consequences of population growth in developing countries?
A. Poverty
B. Environmental impact
C. International Migration
D. Dwindling education opportunities
E. Inequality

5. In modern times, the unprecedented lower human mortality is mainly attributed to__
A. Reduction of wars
B. Reduction of famine
C. Technology advance
D. Reduction of plagues
E. Reduction of disease

6. According to a radical neo-Marxist version

A. Population growth is a real problem
B. Effects of rapidly population growth is a deliberately contrived false issue
C. Efforts of controlling population growth is a racist or genocidal attempts of the
whites against the non-whites
D. A and B
E. B and C

7. According to the new intermediate or consensus perspectives of population growth

A. Population is the primary cause of low level of living
B. High population growth rates are important contributing factors in specific
countries of the world
C. The problem of population is the number of people per se
D. B and C
E. None

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 Part II: True or false
___________1. The world’s population is homogonously distributed by geographic
region.
___________2. The demographic transition explains the declining fertility rates in
contemporary developing countries.
___________3. The term population refers to the total human inhabitants of a specified
area, such as a city, country, or continent, at a given time.

___________4. According to the new intermediate perspectives of population growth a

more rational and efficient spatial distribution of national populations is
vital.

___________5. According to the population ‘Hawk’ argument, population is a source of

prosperity.

 Check List
Direction: Dear students this is the section in which you confirm your understanding of
the lessons in this unit. Put a tick mark () in the yes column for activities that you have
clear understanding and in the no column for activities that you doubt that you have good
understanding.
I Can: Yes No
 explain the world population growth through history
 Identify the causes of high fertility in developing countries
 Identify the consequences of population growth

 explain the policy options for developing countries

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 UNIT FIVE

ENVIRONMENT AND DEVELOPMENT

Introduction
Dear distance learner, in the previous unit you have learned on population-development
nexus. But, this unit addresses the inextricable linkage between the environment and
development. The old notion of “development versus environment” has given way a new
view in which better environmental stewardship is essential to sustain development.
Thus, the first section of this unit attempts to explain the relationship between economics
and the environment. The second section addresses the basic issues in environment and
development. Moreover, you will be learning about some of the environmental policy
options in developing countries.

Objectives

With the successful completion of this unit you will be able to;

 Explain the relationship between economics and the environment

 Identify the basic issues concerning the environment and development
 Identify environmental policy options in developing countries

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Pre test questions
1. How do you define the relationship between economics and the
environment?
2. What basic issues need to be given due attention concerning
the environment and development?
3. What environmental policy do you think is appropriate for
developing countries?

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 Section one

Economics and Environment

Section Overview
Dear distance learner, environmental degradation can detract from the pace of economic
development. Developing countries are, until recently, in a state of oblivion about the
impact of environment on the economies. It is therefore worth-investigating the
relationship between economics and the environment. Hence, this section of the unit
introduces you about the relationship between economics and the environment.

Objectives

With the successful completion of this section you will be able to;
 Define what the environment is all about
 Explain the relationship between the environment and economics.

1.1 Economics and Environment

? What do we mean by environment?

Environment refers to all of the external factors affecting an organism. These factors may
be other living organisms (biotic factors) or nonliving variables (abiotic factors), such as
temperature, rainfall, day length, wind, and ocean currents. The interactions of organisms
with biotic and abiotic factors form an ecosystem. Even minute changes in any one factor
in an ecosystem can influence whether or not a particular plant or animal species will be
successful in its environment.

143
Organisms and their environment constantly interact, and both are changed by this
interaction. Like all other living creatures, humans have clearly changed their
environment, but they have done so generally on a grander scale than have all other
species. Some of these human-induced changes—such as the destruction of the world’s
tropical rain forests to create farms or grazing land for cattle—have led to altered climate
patterns.

During the past decades, economists have become increasingly aware of the important
implications of environmental issues for the success of development efforts. We now
understand that the interaction between poverty and environmental degradation can lead
to a self-perpetuating process in which, as a result of ignorance or economic necessity,
communities may inadvertently destroy or exhaust the resources on which they depend
for survival. Rising pressures on increasingly taxed environmental resources in
developing countries can have severe consequences for Third World self-sufficiency,
income distribution, and future growth potential.

Environmental degradation can also detract from the pace of economic development by
imposing high costs on developing countries through health-related expenses and the
reduced productivity of resources. The poorest 20% of the world’s population is the
group that will experience the consequences of environmental ills most acutely. Severe
environmental degradation, due to population pressures on marginal land, has led to
falling farm productivity and per capita food production. Since the cultivation of
marginal land is largely the domain of lower-income groups, the losses are suffered by
those who can least afford them. Similarly, the inaccessibility of sanitation and clean
water mainly affects the poor and is believed to be responsible for 80% of disease
worldwide. Because the solutions to these and many other environmental problems
involve enhancing the productivity of resources and improving living conditions among
the poor, achieving environmentally sustainable growth is synonymous with our
definition of economic development.

144
Though there is considerable dispute concerning the environmental costs associated with
various economic activities, consensus is growing among development economists that
environmental considerations should form an integral part of policy initiatives. Damage
to the soil, water supplies and forests resulting from unsustainable methods of production
can greatly reduce long-term national productivity. It is thus very important that the long-
term implications of environmental quality be considered in economic analysis. Rapid
population growth and expanding economic activity in the developing world are likely to
do extensive environmental damage unless steps are taken to mitigate their negative
consequences.

 Activity – 16
1. What is environment all about?
________________________________________________________________
________________________________________________________________
_______________________________________________________
2. How do you explain the relationship between economic development and the
environment?
________________________________________________________________
________________________________________________________________
_______________________________________________________

145
 Section Two

Basic Issues in Environment and Development

Section Overview
Dear distance learner, in the previous section you have learned about the economics of
the environment. A number of basic issues define the environment of development.
Hence, this section attempts to identify some of the principal issues in the discussion of
environment-development nexus.

Objectives

With the successful completion of this section you will be able to;

 Identify the basic issues concerning the environment and development

 Analyze the relationship between different components of development with the
environment

1.1 Environment and Development: The Basic Issues

Seven basic issues define the environment of development. The seven issues are (1) the
concept of sustainable development, and linkage between the environment (2) population
and resources, (3) poverty, (4) economic growth, (5) rural development, (6) urbanization,
and (7) the global economy. We briefly discuss each in turn.

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i. Sustainable Development

? What do we mean by sustainable development?

Development economists have adopted the term sustainability in an attempt to clarify the
desired balance between economic growth on the one hand and environmental
preservation on the other. Although there are many definitions, basically sustainability
refers to “meeting the needs of the present generation without compromising the needs of
the future generations” Implicit in this statement is the fact that future growth and overall
quality of life are critically dependent on the quality of the environment. The natural
resource base of a country and the quality of its air, water, and land represents a common
heritage for all generations. To destroy that endowment indiscriminately in the pursuit of
short-term economic goals penalizes both present and, especially, future generations. It is
therefore important that development planners incorporate some form of “environmental
accounting” into their policy decisions. For example, the preservation or loss of valuable
environmental resources should be factored into estimates of economic growth and
human well-being. Alternatively, policymakers may set a goal of no net loss of
environmental assets. In other words, if an environmental resource is damaged or
depleted in one area, a resource of equal or greater value should be regenerated
elsewhere.

In light of rising consumption levels worldwide combined with high rates of population
growth, the realization of sustainable development will be a major challenge. We must
ask ourselves the question, what are realistic expectations about sustainable standards of
living? From present information concerning rapid destruction of many of the world’s
resources it is clear that meeting the needs of a world population that is projected to grow
by an additional 3.7 billion in the next 30 years will require radical and early changes in
consumption and production patterns.

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ii. Population, Resources, and the Environment

Much of the concern over environmental issues stems from the perception that we may
reach a limit to the number of people whose needs can be met by the earth’s finite
resources. This may or may not be true, given the potential for new technological
discoveries, but it is clear that continuing on our present path of accelerating
environmental degradation would severely compromise the ability of present and future
generations to meet their needs. A slowing of population growth rates would help ease
the intensification of many environmental problems. However, the rate and timing of
fertility declines, and thus the eventual size of world population, will largely depend on
the commitment of governments to creating economic and institutional conditions that
are conducive to limiting fertility.

Rapidly growing Third World populations have led to land, water, and fuel-wood
shortages in rural areas and to urban health crises stemming from lack of sanitation and
clean water. In many of the poorest regions of the globe, it is clear that increasing
population density has contributed to severe and accelerating degradation of the very
resources that these growing populations depend on for survival. To meet expanding
Third World needs, environmental devastation must be halted and the productivity of
existing resources stretched further so as to benefit more people. If increases in GNP and
food production are slower than population growth, per capita levels of production and
food self-sufficiency will fall. Ironically, the resulting persistence of poverty would be
likely to perpetuate high fertility rates, given that the poor are often dependent on large
families for survival.

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iii. Poverty and the Environment

? What is the relationship between poverty and the environment?

Too often, however, high fertility is blamed for problems that are attributable to poverty
itself. For example, China’s population density per acre of arable land is twice that of
India, yet yields are also twice as high. Though it is not clear that environmental
destruction and high fertility go hand in hand, they are both direct outgrowths of a third
factor, absolute poverty. For environmental policies to succeed in Third World countries,
they must first address the issues of landlessness, poverty, and lack of access to
institutional resources. Insecure land rights, lack of credit and inputs, and absence of
information often prevent the poor from making resource-augmenting investments that
would help preserve the environmental assets from which they derive their livelihood.
Hence, preventing environmental degradation is more often a matter of providing
institutional support to the poor than fighting an inevitable process of decay. For this
reason, many goals on the international environmental agenda are very much in harmony
with some of the objectives of development articulated in chapter one.

iv. Growth versus the Environment

If, in fact, it is possible to reduce environmental degradation by increasing the incomes of

the poor, is it then possible to achieve growth without further damage to the
environment? Evidence indicate that the worst perpetrators of environmental degradation
are the billion richest and billion poorest people on earth. It has even been suggested that
the bottom billion are the more destructive than all 3.2 billion middle-income people
combined. It follows that increasing the economic status of the poorest group would
provide and environmental windfall. However, as the income and consumption levels of
everyone else in the economy also rise, there is likely to be a net increase in
environmental destruction. Meeting increasing consumption demand while keeping
environmental degradation at a minimum will be no small task.

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v. Rural Development and the Environment

To meet the expanded food needs of rapidly growing Third World populations, it is
estimated that food production in developing countries will have to double by the year
2010. Because land in many areas of the Third World is being heavily overtaxed by
existing populations, meeting these output targets will require radical changes in the
distribution, use, and quantity of resources available to the agricultural sector. And
because women are frequently the caretakers of rural resources such as forests and water
supplies and provide much of the agricultural supply of labor, it is of primary importance
that they be integrated into environmental programs. In addition, poverty alleviation
efforts must target women’s economic status in particular to reduce their dependence on
unsustainable methods of production.

The increased accessibility of agricultural inputs to small farmers and the introduction (or
reintroduction) of sustainable methods of farming will help create attractive alternative to
current environmentally destructive patterns of resource use. Land-augmenting
investments can greatly increase the yields from cultivated land and help food self-
sufficiency.

Frequently, 70% to 80% of the poor in LDCs reside in the agricultural sector, where
economic necessity often forces small farmers to use resources in ways that guarantee
short-term survival but reduce the future productivity of environmental assets.
Unsustainable patterns of living may be imposed by economic necessity. In periods of
prolonged and severe food shortages, desperately hungry farmers have been known to eat
the seeds with which they would have planted the next year’s crop, knowingly paving the
way for future disaster. Because it happens more slowly, the tendency of impoverished
peoples to degrade agricultural resources on which they depend for survival is less
dramatic, but is motivated by similar circumstances.

The cause and consequences of rural environmental destruction vary greatly by region.
However, persistent poverty is frequently the root cause. The majority of the poor in

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developing countries survive on the meager yield obtained from cultivation of small plots
of land whose soil may be too shallow, too dry, or too sandy to sustain permanent
cultivation. If the land is not in some way replenished through either shifting cultivation
or the use of manufactured fertilizers, it becomes exhausted, and yields decreased with
successive harvest. But the poor generally do not have the wherewithal to increase the
productivity of the land by allowing it to lay fallow or by making on-farm investments in
irrigation and fertilizer. In addition, where fertility rates are high and children provide a
vital economic contribution through the wages or on-farm labor, population and the
intensity of cultivation are likely to increase over time, speeding the rate at which the soil
becomes exhausted.

One immediate result of this type of environmental pressure is soil erosion. With little
plant over to protect it from wind and water, precious topsoil may be blown or washed
away, further reducing the productivity of the land. This process of environmental
degradation leads to persistent declines in local per capita food production and may
eventually lead to desertification. This phenomenon is likely to spur increases in rural-to-
urban migration and may force the remaining local population onto even less fertile land,
where the same process is repeated.

Another factor in the cycle of rural poverty and environmental destruction is

deforestation. The vast majority of wood cut in the Third World is used as fuel for
cooking. Loss of tree cover has two potentially devastating environmental implications
for predominantly poor rural populations. Deforestation can lead to a number of
environmental problems that, over a period of time, can greatly lower agricultural yields
and increase rural hardships. On a day-to-day basis, however, the increasing scarcity of
firewood means that women must spend large portions of the day in search of fuel,
diverting time from other important activities such as income generation and child care.
In the worst cases, fuel shortages are sufficient to require the burning of biomass or
natural fertilizers, such as manure, which are important on-farm inputs for maintaining
crop yields.

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Environmental degradation that begins on a local scale can quickly escalate into a
regional problem. For example, clearing of vegetation at high elevations may increase the
exposure of cultivated lands at lower altitudes. Soil that has been carried away by heavy
rains may silt rivers and pollute drinking water. Plants help retain rainfall, which
percolate down through the soil into underground reserves called groundwater. The water
is in turn tapped by a variety of plants during dry seasons in arid regions. A loss of
vegetation leads to a decrease in the rate at which groundwater is replenished. The
subsequent drop in the water level leads to the death of plants with shallow root systems,
including young trees. This self-perpetuating process can spread the problem to
previously unaffected regions. Not surprisingly, the increase in natural disaster associate
with environmental degradation, including floods, droughts, mudslides, can have a
devastating impact on both the local and the regional agricultural economy. India and
Bangladesh provide prime examples of this phenomenon.

vi. Urban Development and the Environment

Rapid population increase accompanied by heavy rural-urban migration is leading to

unprecedented rates of urban population growth, sometimes at twice the rate of national
growth. Consequently, few governments are prepared to cope with the vastly increased
strain on existing urban water supplies and sanitation facilities. The resulting
environmental ills pose extreme health hazards for the growing numbers of people
exposed to them. Such conditions threaten to precipitate the collapse of the existing urban
infrastructure and create circumstances ripe for epidemics and national health crises.
These conditions are exacerbated by the fact that under existing legislation, much urban
housing is illegal. This makes private household investments risky and renders portions
of urban populations ineligible for government service.

Congestion, vehicular and industrial emissions, and poorly ventilated household stoves
also inflate the tremendously high environmental costs of urban crowding. Lost
productivity of ills or diseased workers, contamination of existing water sources, and
destruction of infrastructure, in addition to increased fuel expenses incurred by people’s

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having to boil unsafe water, are just a few of the costs associated with poor urban
conditions. Research reveals that the environment appears to worsen at a faster rate than
urban population size increases so that the marginal environmental costs of additional
residents rises over time.

In some ways, life among the poor in urban slums is similar to that of the poor in rural
villages: Families work long hours, income is uncertain, and difficult trade-offs must be
made between expenditures on nutrition, medical care, and education. Though on
average, urban dwellers are likely to have higher incomes, the poorest are frequently at
greater risk of being exposed to dangerous environmental conditions.

The urban centers of the developing world will absorb over 80% of f\future increases in
world population. Much of the intensification of urban congestion, however, will result
from heavy rural –urban migration. It is expected that by 2010, the rural population of
developing countries will stabilize at 2.8 billion, at which point rural-urban migration will
be sufficient to counter any additional population growth. The rapid expansion of urban
centers has placed increasing strain on the resource of developing-country governments
attempting to provide adequate infrastructure and services to their inhabitants.

Though the health implications of environmental degradation are currently highest in

rural areas, due to rapid urbanization the vast bulk of future increases in human exposure
to unsafe conditions will occur in the cities. Unsanitary environmental conditions
exacerbated by rapidly increasing urban congestion and industrial emissions pose severe
health hazards.

vii. The Global Environment

As total world population grows and incomes rise, net global environmental degradation
is likely to worsen. Some trade-offs will be necessary to achieve sustainable world
development. By using resources more efficiently, a number of environmental changes
will actually provide economic savings, and others will be achieved at relatively minor

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expenses. However, because many essential changes will require substantial investments
in pollution abatement technology and resource management, significant trade-offs
between output and environmental improvements will occasionally become necessary.
The poorer a country, the more difficult it will be to absorb these costs. Yet a number of
issues, including biodiversity, rainforest destruction, and population growth, will focus
international attention on some of the most economically strapped countries in the world.
In the absence of substantial assistance to low-income countries, environmental efforts
will necessarily have to be funded at the expense of other social programs, such as
education, health services, and employment schemes, that themselves have important
implications for the preservation of the global environment.

Exactly what sacrifices need to be made and who should make them will continue to be
matters of great controversy. Nowhere was this more evident than at the second United
Nations Conference on Environment and Development (UNCED)-the so called Earth
Summit-held in Rio de Janeiro in June 1992. Most cumulative environmental destruction
to date has been caused by the First World. However, with high fertility rates, rising
average incomes, and increasing inequality in the Third World, this pattern is likely to
reverse sometime in the next century. It is thus unclear how the costs of global reform
should be divided. Apportionment of responsibility for reducing environmental damage
essentially hinges on the manner in which the question is framed. For example, if a limit
is placed globally on levels of per capita pollution emissions, the approach would clearly
favor lower-income countries that have much lower per capita consumption levels.
Conversely, if international pressures try to limit the growth rate of per capita emissions
or even to impose limits on the growth of national emissions, any movement in that
direction would tend to freeze Third World incomes at a small fraction of those of their
First World counterparts.

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  Activity – 18
1. List down the basic issues concerning the environment and development
________________________________________________________________
________________________________________________________________
_______________________________________________________
2. How do you analyze the relationship between various components of development
with the environment?
________________________________________________________________
________________________________________________________________
_______________________________________________________

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 Section Three

Policy Options in Developing Countries

Section Overview
Dear distance learner, insufficient attention has been given to reduce environmental
hazards to date. However, the environmental impacts have been far worse-off in
developing countries amid abject poverty. Appropriate policy is therefore needed to
mitigate the impacts of environmental hazards. Thus, this section addresses some of the
environmental policy options in developing countries.

Objectives

With the successful completion of this section you will be able to;

 List down some of the environmental policy options available in developing

countries
 Analyze the relevance of each policy in light of developing countries situation

1.1 Policy options in Developing Countries

A range of policy options is available for Least Developed Countries (LDC)
governments. Let’s briefly examine them.

• Proper Resource Pricing- The most obvious area for reform is probably
government pricing policy, which can exacerbate resource shortage or encourage
unsustainable methods of production. Often programs that were ostensibly
designed to reduce hardships for the very poor have had little impact on poverty
and have worsened existing inequalities. High income households have frequently

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 been the predominant beneficiaries of energy, water and agricultural subsidies.
The results have often included the wasteful and unsustainable use of resources.

• Community Involvement- programs to improve environmental conditions are

likely to be most effective when they work in tandem with community networks,
ensuring that program design is consistent with both local and national objectives.
The experience of development agencies has demonstrated that grass roots efforts
can be more cost-effective because they generally involve the use of low-cost
alternatives and provide jobs to local populations. When poor communities truly
benefit from public-work programs residents are often willing and able to
contribute much or all of the program costs.

• Clearer property Rights and Resource ownership- Investments in household

sanitation and water and on-farm improvements often represent a large portion of
lifetime savings for the poor, the loss of which can impose harsh economic
consequences on households. Hence, the lack of secure tenure on rural or urban
property can greatly hinder investment in environmental upgrading. Legalization
of tenure can lead to improved living conditions for the poor and increases in
agricultural investments.

• Programs to improve the Economic Alternatives of the poor-Further

environmental devastation in rural areas may be avoidable in many cases through
on-farm investments in irrigation and sustainable farming techniques, the use of
alternatives fuels and the creation of barriers to erosion. However, the economic
costs of each of these alternatives are prohibitive for the vast majority of
impoverished family producers. Ironically, the greater the environmental
devastation, the less likely that a rural population will be able to afford alternative
methods of production. It is therefore important that government programs make
credit and land-augmenting inputs accessible to small farmers. By providing rural
economic opportunities outside the home, governments can also create alternative

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 employment opportunities so that the very poor are not forced to cultivate
marginal lands.

• Raising the Economic Status of Women-Improving the educational attainment

of women and increasing their range of economic alternatives raise the
opportunity cost of their time and may lead to decreases in desired family size.
Education also tends to increase women’s access to information concerning child
nutrition and hygiene, a factor that has been linked to rapid declines in child
mortality. It is important that community based environmental programs work
closely with women because their own day-to-day activities may largely
determine patterns of resource use and their ability to meet the need of their
families is dependent on the sustainable management of water and fuel supplies.

• Industrial Emissions Abatement Policies- A range of policy options is available

to developing country governments for the purpose of limiting industrial
pollution, including the taxation of emissions, tradable emissions permits, quotas,
and standards. There is some evidence to suggest that the first two policies, which
are market-based, are more effective because they tend to reward the more
efficient producers, allow greater flexibility for firms, and are generally easier to
enforce. Regulations should be as simply possible and must be enforceable.
Additional incentives to adopt clean technologies may be provided through tax
credits and subsidies specifically tied to the purchase or development of pollution
abatement technologies.

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 Activity – 19
1. List down some of the environmental policy options in developing countries
______________________________________________________________________
______________________________________________________________________
___________________________________________
2. Explain the relevance of those environmental policies in light of the situation of
developing countries
______________________________________________________________________
______________________________________________________________________
___________________________________________

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 Unit summary

Dear distance learner, in this unit you have learned that environmental degradation can
dampen the pace of economic development by imposing high costs on developing
countries through health-related expenses and reduced productivity of resources. Hence,
the interaction between poverty and environmental degradation can lead to a self-
perpetuating process.

Sustainability should be the guiding principle of development. The other basic issues
defining the environment of development include comprehending the inherent
relationship between and among population, resources and the environment. Interactions
between poverty and the environment, Growth versus the environment, rural
development and the environment, and urban development and the environment are also
worth investigating.

Thus, in order to meet the needs of the present generation without compromising the
needs of the future generations, policy options in developing countries need to include,
among other things proper resource pricing, community involvement, clearer property
rights and resource ownership, programs to improve the economic alternatives of the
poor, raising the economic status of women and policies to abate industrial emissions.

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 Self test exercises
Part I: Choose the best answer from among the given alternatives

1. _____________refers to meeting the needs of the present generations without

compromising the needs of the future generations.
A. Development
B. Growth
C. Urban Development
D. Sustainability
E. Rural development

2. Among the following environmental policy options which one is often criticized by the
governments of developing countries as being ‘irrelevant and premature’?\
A. Raising the economic status of women
B. Industrial emissions abatement
C. Programs to improve the economic alternatives of the poor
D. Community involvement
E. Clearer property rights and resource ownership

3. What is the implication of secured land tenure to the environment?

A. Secured land tenure has nothing to do with the environment
B. Lack of secure land tenure can hinder investment in environmental upgrading.
C. Secured land tenure is a sufficient condition for land-augmenting investments
D. B and C
E. All

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4. Which of the following is true about the interaction between the environment and
economy?

A. There is one way relation between the environment and the economy
B. Environmental degradation can dampen the pace of economic development.
C. Economic growth is a sufficient condition for environmental degradation.
D. There is a two-way relationship between the environment and economic
development
E. B and D

5. According to economists, a development is sustainable if and only if

A. Consumption exceeds saving
B. The stock of overall capita assets remains constant over time
C. The quality of the environment shows no change
D. The stock of overall capita assets rises over time
E. B and D
6. One is true about the relationship between population and the environment?
A. Environmental destruction and high fertility go hand in hand
B. They are both direct outgrowths of absolute poverty
C. High fertility is a sufficient condition for environmental degradation
D. A and B
E. All

7. Increasing the economic status of the poorest____

A. Should be the chief guidelines of countries policy in order to protect the
environment
B. Should be the cornerstone of one’s policy for the poorest are the worst
perpetrators of environmental destruction
C. Would provide an environmental windfall
D. Would augment the consumption levels of the people in the economy
E. C and D

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8. As total world population grows and income rise____
A. environmental sustainability would be assured
B. an increment of income necessarily offset environmental destruction
C. Net global environmental degradation is likely to worsen
D. A and B
E. B and C

Part II: True or False

_____________1. The desired balance between economic growth and environmental

preservation is referred to as sustainability.
______________2. Developed countries are the only culprit of environmental
degradation
______________3. The world’s richest countries, with 20 percent of global population,
accounts for excessive consumption than the poorest, with 80
percent of global population
_______________4. Environmental degradation is deemed to cause vulnerability to men
than women.
_______________5. Environmental damage almost always hits those living in poverty
the hardest

 Check List
Direction: Dear students this is the section in which you confirm your understanding of
the lessons in this unit. Put a tick mark () in the yes column for activities that you have
clear understanding and in the no column for activities that you doubt that you have good
understanding.
I Can: Yes No
 Explain the relationship between economics and the environment
 Identify the basic issues in environment and development
 Identify policy options in developing countries

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