1. Fundamentals of Development https://www. youtube. com/watch

2. Development and Underdevelopment
Development refers to a state of human well-being or the actual process of changing or making a progress toward some sort of expansion, improvement and completeness in terms of economic productivity, social well-being, quality of life, and political structure.
Underdevelopment is mainly used in the sense of a group of nations being underdeveloped by some outside forces, as the result of the historical process of global capitalist development, as well as referred to as a state of dependency and marginality in the periphery nations which creates obstacles for the development of these countries.

3. Problems of Development
Politically marginalized: these countries lack the political and economic power to play an active role in global and regional affairs, largely rely upon foreign aid and official development assistance, and are largely forced to react to global changes rather than play significant part in influencing those changes;
Economically marginalized: they are usually in a disadvantageous position when they trade with the industrially developed countries, with a limited economic base and financial resources, rely heavily on agriculture, on one or two major exports, such as coffee, oil, copper, fruit, and on imported manufactured goods and machinery;

4. Problems of Development
Problems of economic development: these countries seek economic development and modernization, but suffer from political instability, economic underdevelopment or stagnation, and other social problems;
Problems of political development: these countries seek political development, facing such fundamental challenges as nation-building, state-building, participation, and distribution.

5. Problems of Development
Political regimes and institutions: most of these countries have weak and unstable civilian political institutions, with low levels of legitimacy and public acceptance, primarily dominated by personal rule, military dictatorships, and one-party rule; (India, Sri Lanka, Venezuela, Colombia, and Jamaica are a few exceptions) Most are undemocratic, while many are making transitions to democracy.
Historical legacies: most of these countries were for a considerable period of time colonies of one of European nations, and one of colonial legacies is a weak sense of national identity among the inhabitants within a given territory, in terms of their ethnic, tribal, religious, or linguistic differences. This is mainly because their borders were laid down by competing European powers, with little regard for local differences. National identity is the minimum prerequisite for political stability and development in a country.

6. Contending Theories Modernization Theory Dependency Theory
World-system Theory

7. Modernization (liberal) Theory
Linear stages of development

8. Modernization Theory
divides all societies into traditional and modern;
emphasizes that economic development is prerequisite for democracy;
emphasizes the need to enhance the capacity of political system;
emphasizes the role of political culture in the transformation of traditional societies into modern societies;

9. Modernization Theory
5. emphasizes the effects of economic growth in the transformation of traditional societies into modern societies;
6. assumes that all societies will travel from tradition to modernity, and that industrial and democratic Western countries are the model for the latecomers to emulate;
7. assumes that modernization will inevitably dissolve the traditional traits of the Third World countries, and traditional values and structures must be replaced by a set of modern ones;

10. Modernization Theory
8. defines the nature of the relations between the North and the South as interdependence based upon the principles of comparative advantages and free trade;
9. the solution or policy implication the modernization theory suggests is that the traditional and backward Third World societies should look to the modern and developed Western societies for guidance, while the Western countries should transmit more modern values, institutions, technology, financial investment to the Third World countries.

11. Major critics
modernization theory is criticized as biased and ethnocentric, that is, the development categories, stages, and processes involved are all derived from the Western experience rather than from the developing countries. There are other paths available to the Third World countries, and these alternatives neither have to use democratic institutions nor do LDCs need to reach a Western level of development to be considered successful.

12. Major critics
modernization theory misinterprets the role of traditional values and institutions in the economic development, social coherence, and political stability. It was often possible for a Third World country to retain their own traditional cultural attributes along with a modern economy;

13. Major Critics
some radical critics even charge that modernization theory is a political ideology that is tended to promote the Western values and used to justify Western dominance and to keep the Third World in control or “in chains” by which they could resist communist appeals.

14. Dependency Theory
1. divides the world into core and periphery countries;
2. dependency is seen as a general process applicable to all Third World countries;
3. dependency is understood to be an external condition, imposed by the historical experience of colonialism and the perpetuation of the unequal international division of labor;
4. dependency is largely a result of the flow of economic surplus from Third World countries to Western capitalist countries;

15. Dependency Theory
Core vs. Periphery

16. Dependency Theory
5. the political economy of the periphery had been totally restructured by Western colonialism to meet the needs of the core countries, thereby leading to the underdevelopment;
6. dependency is regional polarization of the global economy -- underdevelopment in the periphery countries and development in the core countries are two aspects of a single process of capital accumulation;
7. dependency is seen as incompatible with the development, although minor development can occur during periods of the de-association with the core capitalist world;

17. Dependency Theory
8. defines the nature of the relations between the North and the South as dependency based upon political/economic/cultural/technological dominance of the core countries and inequality exchange between periphery and core countries;
9. the solution or policy implication the dependency theory suggests is that peripheral countries should sever their ties with core countries and adopt a self-reliance model -- relying upon their own resources and planning their own paths of development so as to achieve independence and autonomous national development.

18. World-system Theory
1. divides the world into core, periphery, and semi-periphery countries – the central core of industrially advanced capitalist states, a periphery of industrially undeveloped countries, and a semi-periphery of a mixture in between those of core and periphery;
2. the world economy is not composed of individual independent national economies that happen to trade with each other, but tied together by a complex network of the capitalist world economy;
3. the uneven development of the world capitalist system leads to an unequal international economic division of labor;
4. the relations among core, periphery and semi-periphery countries are conditioned and shaped by an integrated single capitalist world-system.

19. World-system Theory
5. defines the nature of the relations between the North and the South as the dominance-dependence and the inequality in industrial capacity and state power. That is to say, the core countries control or dominate the economic, political and cultural life of the periphery countries on one side, while the periphery countries are subjected to the development and expansion of the core countries in the global system and lack the internal dynamic which could enable them to function as independent and autonomous entities on the other side.
6. Therefore, the solution to the problem of economic underdevelopment can only be found in the reform of the world-system -- “an equalitarian world-system.”

20. Major Critics
The above discussion has shown that both world-system and dependency theorists, while somewhat different from each other, share the same methodology – “looking outward” and attributing underdevelopment to its external relations in the world market and international system that are governed by the interests of dominant nations and of certain classes and groups in them. However, both dependency and world-system theorists overlook the impact of the internal constraints of the underdeveloped countries -- the economic, political, social, and cultural characteristics and structures of these countries -- upon the development of the underdeveloped areas and countries.

21. Who is right?
Three theories have provided three solutions to the Third World development:
- Increase of modernity
- Independence and de-linking from the world economy
- Reform of the world system
Q: Which side do you think has more power for explaining the Third World development in the last several decades?

22. The World Bank

23. The World Bank (WB) https://www.youtube.com/watch?v=F59fF-xu-bY
The World Bank is a vital source of financial and technical assistance to developing countries around the world.
WB is not a bank in the common sense.
WB is made up of two unique development institutions owned by 189 member countries
the International Bank for Reconstruction and Development (IBRD) and,
The International Development Association (IDA).
Each institution plays a different but supportive role

24. The World Bank (WB) WB mission is to
Reduce poverty in the globe
Improve the living standard
The IBRD focuses on middle income and creditworthy poor countries.
IDA focuses on the poorest countries in the world.
WB provides low-interest loans, interest-free credit and grants to developing countries
These loans are for education, health, infrastructure, communications and many other purposes.

25. The World Bank (WB)
WB focuses on achievement of the Millennium (now » Sustainable) Development Goals that call for the elimination of poverty and sustained development.
The goals provide us with targets and yardsticks for measuring results.
WB mission is to help developing countries and their people reach the goals by working with Bank partners to alleviate poverty.

26. The World Bank (WB) This is done by This will help economies to grow
concentrating on building the climate for investment,
jobs and
sustainable growth.
This will help economies to grow
By investing in and empowering poor people to participate in development.

27. Helping Developing Economies To Grow
Building Capacity
Strengthen their governments and educate their government officials
Create Infrastructure
Implement legal and judicial systems that encourage business, protect individual and property rights, and honor contracts
Develop financial systems
Support small business from micro credit to financing larger corporate ventures
Combat corruptions
There is not much that can be done that is effective
If these can be achieved, businesses will be attracted, jobs created and economy will grow.

28. How is World Bank Run?
The World Bank is like a cooperative, where its 184 member countries are shareholders. The shareholders are represented by a Board of Governors, who are the ultimate policy makers at the World Bank.
The governors are member countries' ministers of finance or ministers of development.
They meet once a year at the Annual Meetings of the Boards of Governors of the World Bank Group and the International Monetary Fund.
Because the governors only meet annually, they delegate specific duties to 24 Executive Directors, who work on-site at the bank.

29. How is World Bank Run?
The five largest shareholders, France, Germany, Japan, the United Kingdom and the United States appoint an executive director,
The other member countries are represented by 19 executive directors.
By tradition, the bank president is national of and is nominated by the largest shareholder in the bank, the United States.
The President is elected by the Board of Governors for a five-year, renewable term.

30. How is World Bank Run?
The Executive Directors make up the Boards of Directors of the World Bank.
They normally meet at least twice a week to oversee the bank's business,
including approval of loans and
Approve guarantees,
new policies,
the administrative budget,
country assistance strategies and
borrowing and financial decisions.
The World Bank operates day-to-day under the leadership and direction of the president (Jim Yong Kim), management and senior staff, and the vice presidents in charge of regions, sectors, networks and functions

31. Other Associations
In addition to the International Bank for Reconstruction and Development and the International Development Association, three other institutions are closely associated with the World Bank:
the International Finance Corporation (IFC),
the Multilateral Investment Guarantee Agency (MIGA), and
the International Centre for Settlement of Investment Disputes (ICSID).
All five of these institutions together make up the World Bank Group.

32. Where Does the Money Come from to Operate the World Bank
IBRD lending to developing countries is primarily financed by selling AAA-rated bonds in the world's financial markets.
The greater proportion of its income comes from lending out its own capital.
This capital consists of reserves built up over the years and money paid in from the bank's 184 member country shareholders.
IBRD’s income also pays for World Bank operating expenses and has contributed to IDA and debt relief.

33. Where Does the Money Come from to Operate the World Bank
IDA is the world's largest source of interest-free loans and grant assistance to the poorest countries.
This source is replenished every three years by 40 donor countries.
Additional funds are regenerated through repayments of
loan principal on 35-to-40-year,
no-interest loans, which are then available for re-lending.
IDA accounts for nearly 40% of lending

34. How are Funds used to Carry out its Mission
Types of Loans
LoansThrough the IBRD and IDA, offer two basic types of loans and credits:
investment loans
Investment loans are made to countries for goods, works and services in support of economic and social development projects in a broad range of economic and social sectors.
development policy loans.
Development policy loans (formerly known as adjustment loans) provide quick-disbursing financing to support countries’ policy and institutional reforms.
Each borrower’s project proposal is assessed to ensure that the project is economically, financially, socially and environmentally sound. During loan negotiations, the bank and borrower agree on the development objectives, outputs, performance indicators and implementation plan, as well as a loan disbursement schedule.

35. How are the Funds used to Carry out its Mission
WB staff supervise the implementation of each loan and evaluate its results, the borrower implements the project or program according to the agreed terms.
Nearly 30% of staff is based in some 100 country offices worldwide,
Three-fourths of outstanding loans are managed by country directors located away from the World Bank offices in Washington.
IDA long term loans (credits) are interest free but do carry a small service charge of 0.75 percent on funds paid out. IDA commitment fees range from zero to 0.5 percent on un-disbursed credit balances; for FY06 commitment fees have been set at 0.30 percent. For complete information about IBRD financial products, services, lending rates and charges, please visit the World Bank Treasury . Treasury is at the heart of IBRD's borrowing and lending operations and also performs treasury functions for other members of the World Bank Group.

36. Grants
Grants are designed to facilitate development projects by encouraging innovation, co-operation between organizations and local stakeholders’ participation in projects.

37. IDA grants have been used to:
Relieve the debt burden of heavily indebted poor countries
Improve sanitation and water supplies
Support vaccination and immunization programs to reduce the incidence of communicable diseases like malaria
Combat the HIV/AIDS pandemic
Support civil society organizations
Create initiatives to cut the emission of greenhouse gasses

38. Analytical and Advisory Services
WB’s roles is to provide analysis, advice and information to our member countries
This is done to make sure each country can deliver the lasting economic and social improvements their people need.
This is done by
through economic research on broad issues such as the environment, poverty, trade and globalization and
through country-specific economic and sector work,
evaluate a country's economic prospects by examining its banking systems and financial markets,
By also examining trade, infrastructure, poverty and social safety net issues.

39. Analytical and Advisory Services
WB draws upon the resources of its knowledge bank to educate clients.
This will help them to equip themselves to solve their development problems and promote economic growth.
By knowledge bank we mean the wealth of contacts, knowledge, information and experience we've acquired over the years, country by country and project by project, in our development work.
Ultimate aim is to encourage the knowledge revolution in developing countries.

40. Capacity Building
Another core bank function is to increase the capabilities of:
Its own staff
WB partners
People in developig countries
This is done to help them to acquire the knowledge and skills to:
they need to provide technical assistance,
improve government performance and delivery of services,
sustain poverty reduction programs.

41. Capacity Building
Linkages to knowledge-sharing networks such as these have been set up by the bank to address the vast needs for information and dialogue about development:
Advisory Services and Ask Us help desks make information available by topic via telephone, fax, and the web. There are more than 25 advisory services at the bank.
Staff members who respond to inquiries add value to the work of our own staff, clients and partners by responding quickly to their knowledge needs. Often, they are the first and possibly the only contact the public at large and the people in developing countries have with the World Bank.

42. Capacity Building
Global Development Learning Network: is an extensive network of distance learning centers that uses advanced information and communications technologies to connect people working in development around the world.
World Bank Institute Global and Regional Programs bring together leading development practitioners online and face-to-face to exchange experiences and to develop skills.
B-SPAN webcasting service is an Internet-based broadcasting station that presents World Bank seminars, workshops and conferences on sustainable development and poverty reduction.

43. What is the World Bank Now?
At any given moment in locations around the globe, people are engaged in development projects designed to improve living standards and reduce poverty.
Last year, the World Bank provided $23.6 billion for 279 projects in developing countries worldwide, with its financial and/or technical expertise aimed at helping those countries reduce poverty.
The bank is currently involved in more than 1,800 projects in virtually every sector and developing country.

44. What is the World Bank Now?
The projects are as diverse as
providing micro-credit in Bosnia and Herzegovina,
raising AIDS-prevention awareness in Guinea,
supporting education of girls in Bangladesh, improving health care delivery in Mexico, and
helping East Timor rebuild upon independence and
India rebuild Gujarat after a devastating earthquake.

45. What is the World Bank Now?
There are more than 63,000 donor-funded development projects worldwide, each governed by countless demands, guidelines and procedures designed to protect the project and ensure that aid gets to the poor.
Experience shows that capacity in developing countries can be improved and strengthened quickly when donors better coordinate their activities and harmonize their procedures. The World Bank works with other
international institutions and donors,
the private sector,
civil society and
professional and academic associations
to improve the coordination of aid policies and practices in countries, at the regional level and at the global level.

46. Summary
Since inception in 1944, the World Bank has expanded from a single institution to a closely associated group of five development institutions. Its mission evolved from the International Bank for Reconstruction and Development (IBRD) as facilitator of post-war reconstruction and development to the present day mandate of worldwide poverty alleviation in conjunction with its affiliate, the International Development Association.
In the beginning it had a homogeneous staff of engineers and financial analysts, based solely in Washington, DC. Today, it has a multidisciplinary and diverse staff that includes economists, public policy experts, sector experts and social scientists, and 30% of its staff is now based in country offices.

47. Summary
Reconstruction remains an important focus of its work, given the natural disasters and post conflict rehabilitation needs that affect developing and transition economies. It has, however, broadened its portfolio's focus to include social sector lending projects, poverty alleviation, debt relief and good governance. At today's World Bank, they have sharpened their focus on poverty reduction as the overarching goal of all its work.
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