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CHAPTER ONE: INTRODUCTION AND MEANINGS OF DEVELOPMENT

1.1. Defining Development

There is no single agreed-upon definition of development, as development theoreticians, scholars, or

organizations would each have their own definition and ways of representing and interpreting the
related concepts into a “model”, and that there is close connection between “definitions” of
development and the “models” of development.

Early definition of development is based on the classical economic growth or “diffusionist” model
of development, which focuses entirely on macroeconomic indicators of progress in terms of
overall and per capita Growth Net Product (GNP). Development in the classical “diffusionist”
perspective purely means economic growth. But as to where the economic growth is invested or
utilized is largely unclear in this early definition so that while there has been substantial growth in
terms of aid, capital, technology and investments, there hasn’t however been substantial reduction
in poverty incidence and increase in the economic conditions of the poor and underprivileged
sectors of society.

The failure of the First Development Decade to bring about qualitative changes in the human
welfare and improve the levels of living of the masses of people brought about a rethinking of the
concept of development. Notable scholars provided the initiatives and influence to redefine what
development is. Among those who are considered to have a profound influence in redefining
development are Seers, Dag Hammarskjold Foundation and Todaro whose ideas on development
emphasized social dimensions and espoused the centrality of man not only as recipient but as active
participant in development.

Dudley Seers (1969) averred that “development” is the “realization of the potential of human
personality” which necessitates substantial improvements in eradicating: poverty, unemployment,
and inequality. Based on this point of view development must somehow be able to justify that there
is dramatic decline in poverty incidents, should be able to provide adequate opportunities for
productive employment and that unemployment rates are substantially down historical levels, and
that there isn’t much disparity between levels of income of the rich and the poor. Apparently, Seers
definition is a complete departure from the classical-economic growth view of development, which
only points to the centrality of growth in income of a country.

The model or perspective advanced by Seers can be lamped into what Khan characterized as “Basic
Needs Model” of development as it puts forward the significance of developing human capital
through provision of basic needs to address poverty, unemployment and inequality.

Michael Todaro (1977), on the other hand, stressed that development must be regarded as “multi-
dimensional process involving major changes in social structures, popular attitudes, institutions,

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as well as the acceleration of economic growth, the reduction of inequality, and the eradication of
absolute poverty.” He further explained that development must represent the whole gamut of
change by which the entire social system, tuned to the diverse basic needs and desires of
individuals and social groups within that system, moves away from a condition greatly perceived
to be unsatisfactory toward a situation or condition of life regarded as materially and spiritually
“better”. Todaro emphasized the “good life” that individuals and societies ought to pursue as based
on three (3) core values: 1) life sustenance, 2) self-esteem, and 3) freedom from servitude.

Todaro here, thus provide a normative philosophical and humanistic dimension to development
but taking on a much holistic integrative perspective by emphasizing the need for accelerated
economic growth along with social and institutional component. By this, he points out that the
problem of underdevelopment and inequality is largely structural in nature and proliferated by
existing institutions in society the promotes rather than prevents inequality, inadequate
redistribution of wealth, blocks access to basic services, and are the very cause of deprivation
thereby impeding attainment of development objectives on top of efforts and interventions being
done. Thus, he defines development as a holistic cultural, social and institutional transformations
(multi-dimensional) largely brought about by substantial changes in existing institutions into ones
that takes cognizance of the importance of the human person and thereby provides adequate
services to support life-sustaining, basic human needs, promotes self-respect and dignity thru the
entire society’s and the government’s respect of rights and liberties of individuals and thereby
changing the attitudes and culture of a mass of people, rendering them free and capable to live
productive meaningful lives or what he refers to as the “good life”.

The same theme of improved quality of life is carried by the Dag Hammarskjold Foundation’s
(DHF) “Another Development”. ‘Another Development’ ‘is people-centered, geared to the
satisfaction of basic human needs for all – both material and, in its broadest sense, political; it is
self-reliant, endogenous, ecologically sound and based on democratic, political, social and
economic transformations which alone will make possible the attainment of the other goals.
Another development also encompasses the search for societies overcoming discrimination of any
kind – be they social, sexual, ethnic or economic. It is a participatory and pluralistic process. The
definition provides a wider more integrative and holistic meaning than earlier proposed but on the
other hand build from these earlier conception especially on the social and humanistic component
of development thereby putting the human person and the human condition as the primary gauge
of whether development is attained or not. It departs from the classical and “diffusionist” definition
which supports massive importation of technology capital and cultural elements from developed
to non-developed countries even as “Another Development” gives importance to “self-reliant” or
“endogenous” change—that is, harnessing the core of the country’s rich cultural heritage,
resources, and human energies and creativity. Most importantly, this definition of development
mainstreams the importance of the environment (which is not present in previous definitions) as it
advocates for sustainable utilization of existing natural resources such that society does not
transgress the regenerative limits or “carrying capacity” of the environment. The definition of

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development advanced by DHF builds from Todaro’s institutional perspective by grounding

development on democratic, political and social transformation. Meaning, it also advocates
substantial change and restructuring the way existing institutions operate to serve developmental
aims and thus also calls for dramatic change in popular attitudes guided by democratic principles
of participation and political and social transformations based on human rights. These various
elements of the definitions apparently flows thru current conceptions of rights-based approach to
development as well as sustainable human development and also informed the various “models”
of development that have emerged in last couple of decades.

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.

1.1. 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 three objectives and the reaming:

✓ To increase the availability and widen the distribution of basic life-sustaining goods such as
food, shelter, clothing, and other services to members of the society. Satisfying the basic needs
of human being should be the core objectives of development process;

✓ To raise levels of living, including, in addition to higher incomes, the provision of more jobs,
better education, and greater attention to cultural and human values, all of which will serve not
only to enhance material wellbeing but also to generate greater individual and national self-
esteem.

✓ To expand the range of economic and social choices available to individuals and nations by
freeing them from servitude and dependence not only in relation to other people and nation-
states but also to the forces of ignorance and human misery;

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✓ Improving family income of an adequate level for subsistence package of basic human needs
and other expenditures;

✓ Providing or opening opportunities to people to participate in governances at all and grassroots

levels;

✓ Providing more employment opportunities to society. In addition to its roles of distribution of

income to ensure consumption, job or employment plays an important roles in developing
personality of individuals;

✓ Enhancing access to better education that also serves to increase material wellbeing and
generate greater individual and national self-esteem;

✓ Promoting cultural and humanistic values and social discipline (positive attitude to work),
improving conditions of work and production.

1.2.Development Versus Underdevelopment

In the above sessions we addressed in detail about development; hence we see about
underdevelopment.

Underdevelopment

Underdevelopment, in the context of international development, reflects a broad condition or

phenomena defined and critiqued by theorists in fields such as economics, development studies,
and postcolonial studies. Used primarily to distinguish states along benchmarks concerning human
development—such as macro-economic growth, health, education, and standards of living—an
"underdeveloped" state is framed as the antithesis of a "developed", modern, or industrialized state.

• In the post-war period, there have been several contrasting perceptions of development.

• In the 1940s, the less affluent countries, located in Africa, Asia, and Latin America, were
usually described as backward.

• By the 1950s, the term backward, with its pejorative connotations, had been generally
discarded in favour of the term underdeveloped, which implied the existence of a potential
that could be realized and did not suggest directly, at least, an attitude of superiority on the part
of the industrialized nations.

• In the 1960s, these countries began to be referred to as less developed, which was an even
more acceptable term, since the countries in question were somehow to be regarded as
developed but only less so than some others.

• At the same time, the expression Third world became prominent and was used to distinguish
these nations from the Western industrialized countries (First World), on the one hand, and the
Eastern socialist nations (Second World), on the other.

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• In the 1970s, several new terms came to be commonly used. One was the expression
developing nations, which seemed to have removed all implications of inferiority.

• A distinction was also made between the oil producing and non-oil-producing nations. In the
1980s, the term newly industrializing countries emerged, referring primarily to four Asian
nations - Hong Kong, Korea, Singapore and Taiwan - that were experiencing sustained
industrial growth and economic development. At the present time, the appellations less
developed nations, developing countries, and Third World countries are the most widely used
and are usually employed interchangeably.

Characteristics of Underdevelopment

❖ Extreme poverty;
❖ Disparity in delivery of social services including formalized education systems,
medical facilities, and safe drinking water;
❖ Poor or lacking infrastructures;
❖ Poor or lacking governance capacity and
❖ An environment of physical insecurity.
❖ All of these factors can collectively lead to a poverty trap, in which poverty is
widespread, cyclical, and intractable. The combination of these challenges contributes
to a vicious circle of underdevelopment and fragility, which can overwhelm a state’s
operational capacity to deliver services and hinder long-term economic growth.

1.3.Growth, Development, and Productivity

A major goal of poor countries is economic development or economic growth. The two terms are
not identical. Growth may be necessary but not sufficient for development.

Growth means an increase in numbers or size such as more jobs, businesses, population, housing
or higher levels of income and profits. It is generally associated with quantitative changes.

Economic growth refers to increases in a country’s production or income per capita. Production is
usually measured by gross national product (GNP) or gross national income (GNI), used
interchangeably, an economy’s total output of goods and services.

Three components of economic growth are of prime importance:

1. Capital accumulation, including all new investments in land, physical equipment, and human
resources through improvements in health, education, and job skills.

2. Growth in population and hence eventual growth in the labor force.

3. Technological progress—new ways of accomplishing tasks.

Development is a sustained process of progressive change to attain individual and group interests.
It is also means using the resources of the community differently to enhance human welfare or
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quality of life. It is important to note that development can include concepts related to growth, but
the reverse is not necessarily true.

Economic development refers to economic growth accompanied by changes in output distribution

and economic structure. These changes may include an improvement in the material well-being of
the poorer half of the population; a decline in agriculture’s share of GNP and a corresponding
increase in the GNP share of industry and services; an increase in the education and skills of the
labor force; and substantial technical advances originating within the country. Development draws
attention to changes in capacities (such as physical coordination and learning ability, or the
economy’s ability to adapt to shifts in tastes and technology).

Key differences between Economic Growth versus Economic Development

• Economic Growth is the increase in the real output of the country in a particular span of time.
Whereas, Economic Development is the increase in the level of production in an economy
along with enrichment of living standards and the advancement of technology. Economic
growth does not consider the Income from the Informal Economy. The Informal economy is
unrecorded economic activity. Whereas, Economic Development takes consideration of all
activities, whether formal or informal, and eases people with low standards of living a suitable
shelter and with proper employment.

• Economic Growth does not reflect the depletion of natural resources. Depletion of resources
such as pollution, congestion and disease. Governments are under pressure due to the
environmental issues, majorly the problem is due to Global warming. However, Economic
Development is concerned with Sustainability, which means meeting the needs of the present
without compromising. Economic growth is the subset of economic development.

• Economic growth indicates the expansion of the Gross Domestic Product (GDP) of the
country and the concept of Economic Growth is basically related to the developed countries.
Economic Development is a broader concept than Economic Growth. Economic Development
refers to the increase of the Real National Income of the economic and socio-economic
structure of any country over a long period of time. Economic Development is related to
underdeveloped or developing countries of the world.

• Unlike economic development, Economic growth is an automatic process. Meanwhile,

economic development is the outcome of planned and result-oriented activities. Economic
Growth refers to the rise in the value of all the products produced in the economy. It indicates
the yearly increase in the country’s GDP or GNP, in percentage terms. It alludes to a
considerable rise in the per-capita national product, over a period, i.e. the growth rate of
increase in total output should be greater than the population growth rate. Economic growth
is necessary but not enough to achieve economic development.

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• Both Economic Growth vs Economic Development have different indicators for their
measurement. Economic Growth can be measured through an increase in the GDP, per capita
income, etc. However, Economic Development can be measured through improvement in the
life expectancy rate, infant mortality rate, literacy rate, and poverty rates.

• Economic Growth is a subset of Economic development. Economic Development is a bigger

concept than economic growth. Economic Growth is often contrasted with Economic
Development, which can be defined as the increase in the economic wealth of an economy or
nation, for the welfare of its residents. Here, you should know that economic growth is
essential but not the only condition for economic development.

Economic Growth versus Economic Development Comparison

Basis of Comparison Economic Development Economic Growth

Concept Economic development is a much broader concept Economic Growth is a narrower

than economic growth. concept than economic
development.
Economic development = Economic Growth +
Standard of Living

Scope Economic Development is considered as a Economic Growth is considered

Multidimensional phenomenon because it focuses as a single-dimensional in nature
on the income of the people and on the as it only focuses on the income
improvement of the living standards of the people of the people of the country.
of the country.

Term Long-term process Short term process

Measurement Both Qualitative & Quantitative Terms: Quantitative Terms:

HDI (Human Development Index), gender-related Increases in real GDP.
index, Human poverty index, infant mortality,
literacy rate etc.

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Related To Economic Development is related to Economic Growth is related to

Underdeveloped and developing countries of the developed countries of the world.
world.

Effect Qualitative and Quantitative Impact on the Brings a quantitative impact on

economy. Improvement in life expectancy rate, the economy. Increase in the
infant, literacy rate, poverty rates, and mortality indicators like per capita income
rate. and GDP, etc.

Process Tenor Continuous process In a certain period

Productivity is a measure that gauges the efficiency of the production process, i.e. in transforming
inputs such as raw material, labour, capital, etc. into the output of finished goods. It can be
expressed in terms of the ratio of outputs produced to inputs consumed, in the given period. It
tends to determine the overall production performance of the firms by ascertaining how efficiently
the firm utilized its resources in the production of goods and services, with minimum wastage.
Productivity can be enhanced by controlling factors of production, improving process and
technology.

Productivity means an economic measure of output per unit of input. Output refers to the total
production in terms of units or in terms of revenues while input refers to all the factors of
production used like capital, labor, equipment, etc.

Output implies total production while input means land, labor, capital, management, etc.
Productivity measures the efficiency of the production system. The efficiency with which
resources are utilized is called productive efficiency. Higher productivity means producing more
from a given amount of inputs or producing a given amount with lesser inputs.

The Importance of Productivity

❖ Productivity has become almost synonymous for progress. The resources of a country are
generally limited. Therefore, higher productivity is essential for improving living standards
and for the prosperity of a nation.

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❖ Higher productivity requires elimination of waste in all forms. Higher productivity leads to
economic growth and social progress.
❖ It is only by improving productivity that employees can get better wages and working
conditions and more employment opportunities.
❖ Higher productivity brings lower prices for consumers and higher dividend for shareholders.
It improves the exports and foreign exchange reserves of a country. Thus, productivity is the
key to prosperity.
❖ Higher productivity has a special significance in underdeveloped countries. Mass poverty and
unemployment cannot be eliminated without increasing productivity in agriculture, industry
and all other areas of human activity.

Factors Affecting Productivity

Productivity is the outcome of several factors. These factors are so interrelated that it is difficult
to identify the effect of any one factor on productivity.

These factors may broadly be divided as follows:

1. Human:

Human nature and human behaviours are the most significant determinants of productivity.

Human factors may further be classified into two categories as given below:

(a) Ability to work – Productivity of an organization depends upon the competence and caliber of
its people—both workers and managers. Ability to work is governed by education, training,
experience, aptitude, etc. of the employees.

(b) Willingness to work – Motivation and morale of people is the second important group of human
factors that determine productivity. Wage incentive schemes, labour participation in management,
communication system, informal group relations, promotion policy, union management relations,
quality of leadership, etc., are the main factors governing employees’ willingness to work.
Working conditions like working hours, sanitation, ventilation, schools, clubs, libraries, subsidized
canteen, company transport, etc., also influence the motivation and morale of employees.

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2. Technological:

Technological factors exercise significant influence on the level of productivity.

The main technological factors are as follows:

➢ Size and capacity of plant;

➢ Product design and standardization;
➢ Timely supply of materials and fuel;
➢ Rationalization and automation measures;
➢ Repairs and maintenance;
➢ Production planning and control;
➢ Plant layout and location;
➢ Materials handling system;
➢ Inspection and quality control;
➢ Machinery and equipment used;
➢ Research and development;
➢ Inventory control;
➢ Reduction and utilization of waste and scrap, etc.

3. Managerial:

The competence and attitudes of managers have an important bearing on productivity. In many
organizations, productivity is low despite latest technology and trained manpower. This is due to
inefficient and indifferent management. Competent and dedicated managers can obtain
extraordinary results from ordinary people.

Job performance of employees depends on their ability and willingness to work. Management is
the catalyst to create both. Advanced technology requires knowledge workers who in turn work
productively under professionally qualified managers. No ideology can win a greater output with
less effort. It is only through sound management that optimum utilization of human and technical
resources can be secured.

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4. Natural:

Natural factors such as physical, geological, geographical and climatic conditions exert
considerable influence on productivity, particularly in extractive industries. For example,
productivity of labour in extreme climates (too cold or too hot) tends to be comparatively low.
Natural resources like water, fuel and minerals influence productivity.

5. Sociological:

Social customs, traditions and institutions influence attitudes towards work and job. For instance,
bias on the basis of caste, religion, etc., inhibited the growth of modern industry in some countries.

6. Political:

Law and order, stability of government, harmony between States, etc. are essential for high
productivity in industries. Taxation policies of the government influence willingness to work,
capital formation, modernization and expansion of plants, etc. Industrial policy affects the size,
and capacity of plants. Tariff policies influence competition. Elimination of sick and inefficient
units helps to improve productivity.

7. Economic:

Size of the market, banking and credit facilities, transport and communication systems, etc. is
important factors influencing productivity.

1.5 Concepts of Sustainable Development

❖ Sustainable development is the organizing principle for meeting human development goals
while at the same time sustaining the ability of natural systems to provide the natural resources
and ecosystem services upon which the economy and society depend.

❖ The desired result is a state of society where living and conditions and resource use continue
to meet human needs without undermining the integrity and stability of the natural systems.

❖ While the modern concept of sustainable development is derived mostly from the 1987
Brundtland Report, it is also rooted in earlier ideas about sustainable forest management and
twentieth century environmental concerns.

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❖ As the concept developed, it has shifted to focus more on economic development, social
development and environmental protection for future generations.

❖ Sustainability can be defined as the practice of maintaining processes of productivity

indefinitely-natural or human made-by replacing resources used with resources of equal or
greater value without degrading or endangering natural biotic systems.

❖ Sustainable development ties together concern for the carrying capacity of natural systems
with the social, political, and economic challenges faced by humanity.

❖ Sustainability science is the study of the concepts of sustainable development and

environmental science.

❖ There is an additional focus on the present generations' responsibility to regenerate, maintain

and improve planetary resources for use by future generations.

❖ In 1987 the United Nations World Commission on Environment and Development released
the report Our Common Future, commonly called the Brundtland Report.

❖ The report included what is now one of the most widely recognized definitions of sustainable
development.

 “Sustainable development is development that meets the needs of the present without
compromising the ability of future generations to meet their own needs. It contains within it
two key concepts:

-The concept of 'needs', in particular, the essential needs of the world's poor, to which

overriding priority should be given; and

-The idea of limitations imposed by the state of technology and social organization on the

environment's ability to meet present and future needs.

❖ Since the Brundtland Report, the concept of sustainable development has developed beyond
the initial intergenerational framework to focus more on the goal of "socially inclusive and
environmentally sustainable economic growth.

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❖ It emphasizes that in sustainable development everyone is a user and provider of information.

It stresses the need to change from old sector-centered ways of doing business to new
approaches that involve cross-sectorial co-ordination and the integration of environmental
and social concerns into all development processes.
❖ Furthermore, Agenda 21 emphasizes that broad public participation in decision making is a
fundamental prerequisite for achieving sustainable development.

❖ Under the principles of the United Nations Charter the Millennium Declaration identified
principles and treaties on sustainable development, including economic development, social
development and environmental protection.

❖ Broadly defined, sustainable development is a systems approach to growth and development

and to manage natural, produced, and social capital for the welfare of their own and future
generations.

❖ The term sustainable development as used by the United Nations incorporates both issues
associated with land development and broader issues of human development such as
education, public health, and standard of living.

❖ Sustainable development, or sustainability, has been described in terms of three spheres,

dimensions, domains or pillars, i.e. the environment, the economy and society.

1.6 Measurements of Development

➢ Gross Domestic Product (GDP) is measures the total value for final use of output produced by
an economy, by both residents and nonresidents.
➢ Gross National Product (GNP) means the value of output produced within a country plus net
property income from abroad.
➢ Growth Rate it is a value (GDP, turnover, wages, etc.) measures its change from one period to
another (month, quarter, year). It is very generally expressed as a percentage.
➢ Human Development Index (HDI) an index measuring national socioeconomic development,
based on combining measures of education, health, and adjusted real income per capita.
➢ HDI which attempts to rank all countries on a scale of 0 (lowest human development) to 1
(highest human development) based on three goals or end products of development: longevity
as measured by life expectancy at birth, knowledge as measured by a weighted average of adult

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literacy (two-thirds) and gross school enrollment ratio (one-third), and standard of living as
measured by real per capita gross domestic product adjusted for the differing purchasing power
parity (PPP) of each country’s currency to reflect cost of living and for the assumption of
diminishing marginal utility of income.

1.7 Dimensions of Development

Development is a complex process that is not limited to economic elements, but encompasses all
sociological, psychological and political aspects of society. In other words, the concept of
development does not only cover economic development and it should be considered in a broader
way.

There are three dimensions of development: economic, socio-cultural and political.

The Economic Dimensions of development deals with the use of limited resources. An
economically sustainable system enables continues output of goods and services, avoiding
sectorial inequalities that threaten agriculture and industrial production, and ensuring sustainability
in the effective management of a country’s internal and external debt. Economic development that
focus about in terms of economic growth and aware of non-economic factors.

The Socio-cultural Dimensions focuses on development of peoples. A socially a sustainable

system can ensure an adequate and equal distribution of social services such as education and
health care, gender equality. Social development is process of growth and development of the
capacities of the people and the improvement of society in which they live in order to obtain better
life for all.

Political Dimensions means process of increasing rationality, participation and secularization in

the political system.

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