4-1

Administration of Economic

Development

DPA 314

Development

Concepts

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Seers (1969) marked the change

needed in setting development

objectives. The goal of

development during the period was

thus not limited to economic growth

but to concentrate on the reduction

of poverty, inequality and

unemployment.

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Countries' income inequality (2014) according to their Gini coefficients measured

in percent: red = high, green = low inequality

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In the 1990s, economists

increasingly recognized that it

was the quality of life that

determines whether people are

from developing countries or not.

Diseases, malnourishment and

death that happen in the

everyday lives of those from the

developing countries changed

the view of development goals

dramatically

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The 2014 Global AgeWatch Index ranks 96 nations on

the quality of life for the over 60s. Norway, Sweden and

Canada are currently the best countries to grow old in. At

the opposite end of the scale is Afghanistan,

Mozambique and West Bank and Gaza. The US is in 8th

place, the UK is in 11th and Australia is in 13th

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By then, like many scholars around the world,

Stiglitz (1998) contributed to shift the development

goals set by governments in developing countries

to wider objectives, including improvements in

income distribution, environment, health and

education. A broader perspective of development

goals is hence necessary as reflected in the World

Bank’s Development Report (1991, p. 4) as “to

improve the quality of life. Especially, in the world’s

poor countries, a better quality of life generally calls

for higher incomes— but it involves much more.

It encompasses as ends in themselves

better education, higher standards of health

and nutrition, less poverty, a cleaner

environment, more equality of opportunity,

greater individual freedom, and a richer

cultural life.”

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The capability approach is a

framework pioneered and

advocated primarily by Amartya

Sen and Martha Nussbaum

(1985). It arose from the need to

measure progress in development,

and the dissatisfaction with

existing methods in the field of

economy (Robeyns 2011).

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Sen’s (1985, 1992, 1999) work

perhaps has brought about the broadest

perspective of development goals.

According to Sen (1985), the

ultimate goal of development is to

enhance human capabilities, which is

defined as “the freedom that a person

has in terms of the choice of

functionings, given his personal features

(conversion of characteristics into

functionings) and his command over

commodities.

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Higher income is necessary

but not sufficient in terms of

quality of life. Under his

approach, goals of economic

development change from

promotion of growth to

promotion of well-being (Sen

1985, p. 13).

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These changes in the definition of

development goals posed the need to

construct alternative composite indices to

reflect quality of life. These indices should

take into account not only money

indicators but also non-monetary

indicators to reflect the development levels

achieved. There have been attempts to

build indicators that measure the standard

of living and quality of life, which focus on

the quantitative and qualitative aspects:

health, education, environment and

material well-being (Berenger and Verdier-

Chouchane 2007).

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The Human Rights

approaches come closer to the

philosophy behind the capability

approach. They aim to secure

the freedoms that are central for

human beings (Alexander

2004). The Universal

Declaration of Human Rights is

a good example of this

approach in practice

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Using Sen’s (1985) approach,

the Human Development Index

(HDI) has been published

annually since 1990 by the

United Nations Development

Programme as an attempt to

provide an aggregate measure

of life expectancy, education and

income (Elkan 1995)

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* Life expectancy at birth, as an index

of population health and longevity

* Knowledge and education, as

measured by the adult literacy rate

(with two-thirds weighting) and the

combined primary, secondary, and

tertiary gross enrollment ratio (with one-

third weighting).

* Standard of living, as measured by the

natural logarithm of gross domestic

product per capita at purchasing power

parity

The HDI combines three dimensions:

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17

Increasingly, academics and societies realize the

effects of human actions on the environment. On the

way to achieve rapid economic growth, countries

around the world have been exploiting their natural

resource reserves at alarming rates. Although early

economists included the natural environment in their

economic analysis, environmentalism only drew

international attention in the 1960s (Pearce and

Turner 1990).

Sustainable Development Concept

The relationship between development and

environment has given birth to the sustainable

development concept. The central idea of

sustainable development is that global ecosystems

and humanity itself can be threatened by neglecting

the environment.

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Environmental economists are

concerned that the long-term neglect of the

environmental assets is likely to jeopardize

the durability of economic growth

(Thampapillai 2002).

Sustainable development therefore

“involves maximizing the net benefits of

economic development, subject to

maintaining the services and quality of

natural resources over time” (Pearce and

Turner 1990, p. 24). Its concern is about

balancing the objectives of economic

growth and attending to environmental

considerations.

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In a broader sense, sustainable

development is defined by the Brundtland

Commission, formally the World

Commission on Environment and

Development, as “progress that meets the

needs of the present without

compromising the ability of future

generations to meet their own needs”

(World Commission on Environment and

Development 1987, p. 8). Although this

standard definition brings the term

“sustainable development” into common

use, it has created ambiguity in application

(Redclift 1992; Daly 1996; Payne and

Raiborn 2001).

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Although this standard definition

brings the term “sustainable

development” into common use, it

has created ambiguity in application

(Redclift 1992; Daly 1996; Payne

and Raiborn 2001). Much of the

debate around the definition seeks to

answer the two questions “What

should be sustained” and “What

should be developed” (Kates et al.

2008)

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Today, sustainable

development aims to improve the

quality of life in a comprehensive

manner, including economic

prosperity, social equity and

environmental protection.

Economic, social, environmental

and cultural aspects must be

integrated in a harmonious manner

to enhance the intergenerational

well-being (World Bank 2003).

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The Millennium Development Goals Eight

Millennium Development Goals (MDGs) were

adopted by member countries of the United

Nations in September 2000. The MDGs were

developed to address the most pressing problems

in developing countries, including poverty and

hunger, primary universal education, gender

equality, child health, maternal health, HIV/AIDS,

environmental sustainability and global

partnership. Member countries of the United

Nations have committed themselves to end

poverty and achieve other development goals by

2015. Quantitative targets of these goals were then

assigned based on rates of international

development achievements (United Nations 2011).

The Millennium Development Goals

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However, the MDGs were criticized for failing

to include other critical objectives of

development, such as improving legal and

human rights of the poor, slowing global

warming and leveraging the contributions of

the private sector. Critics also argued that the

MDG targets were not ambitious enough and

were not prioritized (Todaro and Smith 2009).

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The latest 2012 report showed

a remarkable progress made

by countries, including those in

sub-Saharan Africa. The

review maintained that the

MDGs are still achievable.

Increased supports from

national governments, the

international community, civil

society and the private sector

are considered necessary to

meet the MDGs (United

Nations ,2012).

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1. Eradicate extreme poverty and hunger

• The global economic crisis has slowed progress, but the world is still on

track to meet the poverty reduction target

2. Achieve universal primary education

• Hope dims for universal education by 2015, even as many poor countries

make tremendous strides

3. Promote gender equality and empower women

• For girls in some regions, education remains elusive

4 Reduce child mortality

• Child deaths are falling, but not quickly enough to reach the target

5 Improve maternal health

• Reduce by three quarters, between 1990 and 2015, the maternal mortality

ratio

6 Combat HIV/AIDS, malaria & other diseases

• The spread of HIV appears to have stabilized in most regions, and more

people are surviving longer

7 Ensure environmental sustainability

• The rate of deforestation shows signs of decreasing, but is still alarmingly

high

8 Develop a global partnership for development

• Aid continues to rise despite the financial crisis, but Africa is shortchanged

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