1. Introducing Economic Development - A Global Perspective

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Copyright 2012 Pearson Addison-Wesley. All rights reserved.

Chapter 1

IntroducingEconomicDevelopment:

A GlobalPerspective


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Copyright 2012 Pearson Addison-Wesley. All rights reserved.1-2

1.1 How the ther Hal! "ive

When one is poor, she has no say in public, she feels inferior. She hasno food, so there is famine in her house; no clothing, and no progressin her family.

#A poor woman !rom $ganda

For a poor person everything is terribleillness, humiliation, shame.

We are cripples; we are afraid of everything; we depend on everyone.No one needs us. We are like garbage that everyone wants to get ridof.

#A blind woman !rom %iraspol& 'oldova

ife in the area is so precarious that the youth and every able person

have to migrate to the towns or !oin the army at the war front inorder to escape the ha"ards of hunger escalating over here.#Participant in a discussion group in rural Ethiopia


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1.1 How the ther Hal! "ive

When food was in abundance, relatives used to share it. #hese days ofhunger, however not even relatives would help you by giving you somefood. #(oung man in )ichimishi& *ambia

We have to line up for hours before it is our turn to draw water.#'bwad+ulu ,illage -'angochi& 'alawi

$%overty is& . . . low salaries and lack of !obs. 'nd it(s also not havingmedicine, food, and clothes. ))Discussion group& /ra+il

*on(t ask me what poverty is because you have met it outside my house.ook at the house and count the number of holes. ook at the utensils andthe clothes + am wearing. ook at everything and write what you see. Whatyou see is poverty. #Poor man in 0ena

A universal theme reflected in these seven quotes is thatpoverty is more than lack of income it is inherentlymultidimensional, as is economic development.


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1.2 Economics and Development 3tudies

%he )ature o! Development Economics

Greater scope than traditional neoclassical economicsand political economy.

4h 3tud Development Economics5 3ome

Critical 6uestions

%he Important 7ole o! ,alues inDevelopment Economics


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Copyright 2012 Pearson Addison-Wesley. All rights reserved. 1-5

8igure 1.1 World Income Distribution


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1.2 Economics and Development 3tudies

Economies as 3ocial 3stems: %he )eed toGo /eond 3imple Economics

Social Systems

Interdependent relationships between economic and non-

economic factors

Success or failure of development policy

Importance of takin account of institutional and structuralvariables alon with more traditional economic variables


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1.9 4hat Do 4e 'ean b Development5

%raditional Economic 'easures Gross !ational Income "G!I# Income per capita $tility of that income%

%he )ew Economic ,iew o! Development &eads to improvement in wellbein' more broadly understood Amarta 3ens ;Capabilit< Approach

(unctionins as an achievement )apabilities as freedoms en*oyed in terms of functionins Development and happiness Well bein in terms of bein well and havin freedoms of choice +,eins and Doins


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3ome 0e ;Capabilities

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1. Introducing Economic Development - A Global Perspective