Examines the challenges facing development in

1. Challenges of Development

2. What is Development? Development – Significant and measurable economic growth. The emergence of social, economic, and political institutions. What is the difference between Development and Growth? Growth – Quantitative increases in economic activities. Infrastructure How do we measure Growth? GNP and GDP Easy to do? UN’s – HDI Index

3. GNP & GDP of states around world 1. United States: 12.970 billion 2. Japan: 4.988 billion 203. Guinea Bissau: .28 billion Global GDP (in millions) World: 58,133,309 USA: 14,256,300 Japan: 5,067,526 China: 4,909,280 Kiribati: 130

5. Most countries/economists use GDP to measure economic performance. Not always easy to measure in developing countries What to include?

6. GDP is not enough… Economic development does not equal social development. How to measure human development? Human Development Index Access to health care, housing, education, proper nutrition, safe environment an overall improved quality of life, enjoyment of freedoms.

7. Human Development Index Measures the quality of life people experience Developed by United Nations Development Program (UNDP) Formula includes: life expectancy at birth, income, literacy, and access to education. Gender development index: concentrates on inequalities between women and men

9. Role of Government Governments may promoted or impede development. Close relationship between economic development and political development. Government Institutions: provide the essential framework within which development occurs; Determine the rules of the game Many societies fail to make economic progress because of weak institutions

10. Theories of Development Theory: predicts how humans behave or how things work in the world under certain circumstances Development Theory: Attempts to explain how countries achieve specific economic and political improvements

11. Modernization Theory All societies go through similar stages of development Embraces Free-market capitalism Dominant theory in 1950’s and 1960’s Western Europe and US as model Treated Africa, Asia and Latin America as homogenous mass

12. Types of Societies Traditional Society: self-sufficiency, loyalty to family, strong kinship, weak institutions, low literacy levels and tech. widespread superstition. Transitional: traditional and modern characteristics. Political institutions emerge, literacy increases, less focus on agriculture Modern: Westernized, achievement oriented, urban, literate, high quality of life

13. Marxist Theory History of society is history of struggle between those who control wealth (Bourgeoisie and Proletariat) Economic development is determined and controlled by the govt. After economy is developed, state will wither away since no need for govt.

14. Dependency Theory Influenced by Marxist emphasis on class conflict. Three classes of countries Core Semi-Peripherey Periphery Capitalism reinforces dependency and economic inequalities Advocates cooperation among poor countries and import substitution.

16. Other Theories Third World and African Socialism Opposes Marxism and Capitalism draw upon African traditions of communalism and humanism Community and Grassroots Development Bottom up approach (Grameen Bank). Traditional values used to promote economic growth & equity. Feminist Theory Focus on women’s empowerment, active participation in economic development and improved social, economic and political conditions

17. What influences development? Values of Leaders and Citizens Why would this matter? Iran Asia: Confucianism Natural Resources Are natural resources enough? Why is an “agricultural revolution” important? Natural Disasters Impede or reverse development

18. Population

19. Population Small population can discourage investments and prevent realization of economies of scale Overpopulated countries are generally poor Population of India grows by 48,000 a day Rate of population change threatens earths carrying capacity

20. Education and Health Care Education challenges traditional values and social arrangements, empowers women, helps farmers. Poverty reinforces health problems Loss of workforce to AIDS

21. Political Instability Forces best educated and most talented to leave Increases risks for investors, destroys property, disrupts agriculture and industrial activities. Destroys infrastructure Biafra in Nigeria

22. Corruption Drains resources away from public services and infrastructure projects Bureaucratic Corruption Makes everything more expensive institutions are weakened

23. Why is Corruption so Pervasive? No accountability and lack of good governance Employment in govt. is about personal gain Economic hardship Average persons use officials corruption to justify personal corruption Values Government Control of Economy

24. Debt & Foreign Aid Trapped in Debt from foreign aid and loans. Reliance on International Monetary Fund IMF determines state’s economic policies. Despite substantial aid, most recipients fail to develop