DEVELOPMENT PERSPECTIVES (DEV501) Lecture 1 Development: Concept and Evolution

Evolving views on the concept of development: Growth of per capita income (early development economists; e.g. Nurkse, Lewis, Prebisch, and others). Growth with equity (Chenery, Jolly and others) Basic Needs Fulfilment (Paul Streeten and others) Expansion of capability, or Development as Freedom (Amartya Sen)

Functioning and Capability: People want to be or to do things they value - e.g. to be free from hunger or to live a healthy active life, etc. ‘Functioning’ refers to the levels of these valuable ‘doings’ and beings’ that people actually achieve.

Given the resources (both private and public) that a person commands, she may be able to achieve many alternative functionings, depending on how she allocates her resources. The set of all possible functionings is called a person’s capability. Capability thus shows the extent of freedom a person has to choose the kind of life she values.

A person may choose to live a life in which she does not suffer from hunger, can be free from avoidable ill-health, is able to participate in the life of her community, and so on. If the person can do or be all these things satisfactorily, then her capability is high. Otherwise, her capability is low. Development should be seen as all-round expansion of everyone’s capabilities.

Difference between basic needs and capability approaches:  Focus on commodities versus focus on capabilities. Why is this difference important - after all we need commodities in order to attain capabilities?  It’s important because people differ in their ability to convert commodities into capabilities.

Human Development Index (HDI): An Application of the Capability Approach United Nations Development Programme (UNDP) introduced HDI, by combining measures of educational achievements, health indicators, and per capita national income. HDI is measured within the range 0 to 100, higher number indicating better achievement in terms of human development.

Adopting the capability approach to development has far-reaching consequences.  Allows more room for public action.  Makes a difference to how we judge the success or failure of development efforts.  Eliminates the apparent conflict between development and environment.  Calls for greater respect for human rights.

Traditional concept of development: Development consists in the growth of per capita national income and the structural changes that accompany it.

Features of structural change: Sectoral shift – industrialisation Higher rates of saving and investment Technological progress Demographic transition

The traditional view is a linear view of development: All societies are destined to go through the same stages of development sooner or later. Main proponents: Adam Smith, Karl Marx, Walter Rostow

Adam Smith’s Stages of Growth: (classical economics) Hunting Pastoral Agricultural Commercial Manufacturing We must now add: Services Limitation: No explanation of how and why a society moves from one stage to another – lack of dynamics.

Marx’s Stages: Marx tried to provide a dynamic theory. The critical concept: mode of production. Mode of production refers to the way a society combines forces of production with the relations of production. Each society is bound to go through different modes of production over time – these are the stages of development.

Marx’s three main stages (after the primitive stage of hunting and gathering): 1.Feudalism 2.Capitalism 3.Communism The dynamic explanation of how a society moves from one stage to another is given by the theory of historical materialism. The concepts of class and class conflicts are crucial here.

Marx’s theory of historical materialism: Relations of production change slowly, relative to forces of production. Relations of production become an obstacle to further improvement in the forces of production. Class conflicts sharpen when forces of production stagnate. Class war destroys the old mode and brings a new one into existence.

Rostow’s stages of growth: Traditional Preconditions for take-off Take-off Drive to maturity Age of high mass consumption ‘Take-off’ is the crucial concept – a decisive phase in a society’s history – usually spanning a period of two to three decades.

Characteristics of Take-off: Rise in the rate of saving and investment from about 5% to over 10% of national income. Emergence of one or two leading manufacturing sectors. Emergence of an entrepreneurial class and a suitable socio-political framework capable of exploiting opportunities for sustained technological progress.

Two aspects of the traditional view of development: 1.Linearity of progress: once development begins, there will be no long-term decline. 2.Universalism: all societies will go through the same route of progress. Both aspects have been criticised – the structuralist critique and the post-modernist critique.

The Structuralist critique: It rejects the universalism aspect, but no so much the linearity aspect. It argues that the existing theories of development apply mainly to the western countries. They don’t apply to the poor countries in the Third World because the socio-economic structures of these countries are very different.

Three Strands of Structuralist critique: Dualism: Boeke, Lewis. Centre-Periphery Relationship: Prebisch, Singer, Economic Commission for Latin America (ECLA). The Dependency School: Frank, Wallerstein, Amin, Sunkel, Cardoso and others.

The Post-Modernist Critique: It rejects both linearity and universalism. The target of criticism is the conventional view that all traditional societies will become ‘modern’ like the western societies. This is called the modernisation theory. Economists, sociologists, political scientists – all contributed to the spread of this theory.

The whole post-war development agenda can be seen as an attempt to implement the modernisation theory in the Third World. The post-modernist critique rejects this theory on the grounds that traditional values and knowledge are not necessarily inferior to the so- called modern values and knowledge. This criticism has come mainly from social anthropologists.