Type
Essay
Pages
9 pages
Word Count
3121 words
School
Polytechnic University O
Course Code
BS ECONOMICS

Chapter 1

April 28, 2021
Development Economics
Instructional Material
1
ECONOMIC DEVELOPMENT
(ECON 3013)
Course Description
This course covers the concepts and theories of development, major development
problems of the Third World, economic and non-economic analysis of the same; policy
implications and development prospects.
Course Objectives
General Objectives
1. Apply the methodology of economics in the study of its applied fields.
2. Employ tools of mathematics and statistics in the various fields of economics.
Specific Objectives
1. Use important economic concepts especially when explicated in the context of
development problem;
2. Identify contemporary development problems in the Third World within the global
context;
3. Analyze said problems from a combined empirical, theoretical and policy-oriented
perspective; and
4. Formulate independent judgment and policy conclusions about their possible
solutions.
Course Credit: 3 Units Pre-Requisite: Macroeconomics and Microeconomics
Course Grading System
Class Standing 70%
Quizzes
Attendance
Recitation
Projects/Assignments/Seatwork/Special Report
Midterm/Final Examination 30%
100%
Midterm Grade + Final Grade = Final Grade
Development Economics
Instructional Material
2
Table of Contents
I. INTRODUCTION
1. Meaning of development
2. Characteristics of Emerging Economies
3. Measurements of Growth and development
3.1 Inclusive Growth
3.2 Human Development Index
3.3 Economic Freedom Index
3.4 Other Measures
4. Links between growth and human development
5. Case study
4
II. GROWTH AND DEVELOPMENT THEORIES
1. Theories of development
2. Historic growth and contemporary development
3. Case study
14
III. POVERTY, INCOME INEQUALITY AND INCOME
DISTRIBUTION AND MOBILITY
1. Concepts and review of evidence
2. Measurements
2.1 GINI Coefficients
2.2 Lorenz Curves
2.3 Great GATSBY Curve
2.4 Other Measures
3. Issues and Policy Options
3.1 4P’s (Conditional and Unconditional Cash Transfer)
4. Case Study
27
IV. POPULATION
1. Population growth theories, measurements and quality of life
2. Causes and consequences of high fertility
3. Goals, objectives and policy approaches
4. Case study
37
V. UNEMPLOYMENT
1. Basic issues and Theories
2. Dimensions of Least Developed Countries (LDCs) unemployment
3. Economic models and employment determination
4. Case study
45
VI. URBANIZATION AND RURAL-URBAN MIGRATION
1. The migration urbanization problems
2. Migration and development
3. Models, policies and strategies
4. Case study
55
Development Economics
Instructional Material
3
VII. EDUCATION AND HUMAN CAPITAL
1. Education in developing regions
2. Economic analysis and issues
2.1 K-12 Program
2.2 Free Tertiary Education
3. Educational policy options
4. Case study
55
VIII. AGRICULTURAL TRANSFORMATION AND
RURAL DEVELOPMENT
1. Agricultural progress and rural development in the Third World
2. From subsistence agriculture to specialized commercial farming
3. Policies and strategies
4. Case study
69
IX. ENVIRONMENT
1. Environment and development
2. Economic models of the environment
3. Policies and options
4. Case study
79
X. GLOBALIZATION AND THE ASIAN CRISIS
1. Global interdependence
2. Global environmental threat
3. Globalization and international financial reform
4. The Asian crisis
5. Case study
92
XI. TECHNOLOGY AND INNOVATIONS
1. Research and Development
2. Advantages and Issues
98
References
101
Development Economics
Instructional Material
4
I. Introduction
Learning Objectives:
1. To know the meaning of development
2. To identify the different characteristics of developing countries-classification,
Diversity and common characteristics
3. To learn the various measurements of development
4. To determine the links between growth and human development
Traditional Neoclassical Economics is defined as a social science that deals with the
efficient allocation of scarce resources in order to satisfy the infinite needs and wants of men.
Through time, with the advent of technology, economics now explains Consumer Sovereignty,
Private Ownership of Properties, Utility Maximization and Individualistic Self-interested
Orientation toward economic decision making.
The study of economic development is one of the newest and challenging branches of
the broader disciplines of economics and political economy.
Adam Smith considered as the first development economist. His Wealth of Nations
(1776) was considered as the first treatise on economic development that discusses the
systematic study of the problems and processes of economic development in Africa, Asia and
Latin America which only emerged over the past almost half century.
In 1979, two eminen5-7t economists, W. Arthur Lewis of Princeton University and
Theodore Schultz of the University of Chicago were awarded Nobel Prize in economics for
pioneering studies of the development as a separate field within the economics discipline.
Development Economics which is another branch of economics deals with the
efficiency in the allocation of scarce (unproductive) resources and with their sustained growth
overtime. It also concerned with the economic, social, political, and institutional mechanisms,
both public and private, necessary to bring about fast and bigger-scale improvements in levels
of living for the peoples of Africa, Asia, Latin America, and the formerly socialist transition
economies. The ultimate purpose of development economics is to help us understand
developing economies, and help improve the standard of living of the majority of the global
population.
Developmental Economics is the efficient allocation of existing scarce productive
resources with sustained economic growth overtime. It also deals with the economic, social,
political, and institutional mechanisms, both public and private, necessary to bring about rapid
and large-scale improvements in levels of living for the masses of poverty-stricken,
malnourished, and illiterate people of Africa, Asia and Latin America. Basically, the main
Development Economics
Instructional Material
purpose of development deals with how third world economies improve their material lives in
general.
Reasons why there is a need to study Development Economics?
1. What is the meaning of development?
2. Is rapid population growth harms economic progress of developing nations?
3. Do third world educational systems really promote economic development, or is the
access for education be equitably distributed?
4. What is the good/harm of foreign economic aid from rich countries?
5. Are free markets and economic privatization the answer to development problems, or do
third world governments still have major roles to play in their economies?
Traditional Definition of Development:
Capacity of a national economy to generate and sustain an annual increase in its
GDP/GNI at rates of 5-7% or more. A common alternative economic index of

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