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DevelopmentTodaro dan Smith: Economic Development, 9th edition, CHAPTERS 1-2; 4-10; 12; 14 Sadono Sukirno. Ekonomi Pembangunan: Proses, Masalah dan Dasar KebijakanMubyarto. Sistem dan Moral Ekonomi IndonesiaKindleberger, P. et al. Economic Development
• Overview– Global Differences in Standard of Living– Nature of Development Economics– What is Development Economics– Purpose of Development Economics– Values in Development Economics– Economies as social systems– The Meaning of Development– New Economic View of Development
economic calculations dominated by political and social priorities; family, clan, religious, or tribal considerations may take precedence over private, self-interested utility or profit-maximizing calculations
The economics of the contemporary poor, underdeveloped nations with varying ideological orientations, diverse cultural backgrounds, and very complex yet similar economic problems that usually demand new ideas and novel approaches.
Neither the same with economics of advanced capitalist nations nor to centrally planned economies.
Social system: interdependent relationship between economic and noneconomic factors.Noneconomic factors:attitudes toward life, work, and authority; patterns and kinship and religion; cultural traditions; the authority and integrity of government agencies; levels of political participation; public and private bureaucratic, legal, and administrative structures; systems of land tenure; flexibility/rigidity of economic and social classes.
• Traditional Measures– The capacity of a once relatively stagnant national
economy to generate and sustain significant economic growth
• Annual increases of 5% or higher in gross national product. Alternative measures include income per capita and real income per capita (‘real’ – accounting for inflation).
– Changes in the structure of production – shifts from agriculture towards manufacturing and services (i.e. industrialization)
include the reduction of poverty, unemployment and inequality within the context of a growing economy
– Multidimensional: No longer be just higher incomes, must also include e.g., better education, health and nutrition, equal opportunities, individual rights and freedoms, and clean environment
“Economic growth cannot 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.”
-Amartya Sen, Development as Freedom1998 Nobel Laureate in Economics
Five Sources of Disparity between (measured) real incomes and actual
advantages
• Sen’s Five Sources:– Personal heterogeneities– Environmental diversities– Variations in social climate– Differences in relational perspectives– Distribution within households
• Sen argues that changes in functions and capabilities are better measures of development
“the freedom an individual possesses with respect to choice of functionings, given his/her personal features/traits (conversion of characteristics into functionings) and his command/control over commodities”
3. Freedom from Servitude: to be able to choose human freedom; emancipation from alienating material
conditions of life and from social servitude to nature, ignorance, other people, misery, institutions, dogmatic beliefs, especially that poverty is predestination.
‘the advantage of economic growth is not that wealth increases happiness, but that it increases the range of human choice” (W.A. Lewis).
1. Eradicate Extreme Hunger and Poverty2. Achieve Universal Primary Education3. Promote Gender Equality and Empower Women4. Reduce Child Mortality5. Improve Maternal Health6. Combat HIV/AIDS, Malaria and other diseases7. Ensure Environmental Stability8. Develop a Global Partnership for Development