Why is a strictly economic definition of development inadequate?

Answer 1

According to the book Economic Development (Todaro & Smith, 2006), the strictly economic view of development has been to generate and sustain increase in GNI at a rate of 5% or more. I believe that this strictly economic definition of development is flawed because of what it is, strictly economical. That is, because it presents a very narrow view of development from only an economic viewpoint, which misses many different aspects of growth. The missed parts would include many economically immeasurable quantities, such as the quality of education imparted or whether some cultural or social position attends to an individual's self-esteem.

Another economic way to measure growth would be to look at the per capita GDP increase verses the growth rate of its population. As is the problem with the earlier GNI approach, it does not encompass the problem entirely, but only looks at growth from a strictly economic point of view. Another problem one faces when we look at a country as a whole is that we tend to categorize together different factions and groups as one, that is, the rural population with the urban population, (where in Pakistan or India's case, is a huge contrast, even in economic terms). Similarly looking at economic incomes of one province that is fertile with another province that is nothing but a desert (and would not be able to sustain as much agriculture) and expecting it to have similar incomes is again wrong.

To me, economical development means something else; it is not just about economics, it is all that, but also about raising an individual's level of happiness, about easing a person's unnecessary burdens such as illnesses like polio or having to walk ten miles just to get fresh water. These are things which I believe would not show up on a marker developed using the strictly economic development definition. Eventually all this might lead to economic growth, economic gain and economic growth, but I do not believe that it should be the target, rather an effect.

The past decade has presented us with many examples of the fact; that economic development does not necessarily mean that there will be real development. Still there are examples that do break the mould, while it also does seem implicitly apparent that, given a high enough and sustainable amount of economic development, real development might eventually follow, if governed and managed properly.

Examples of countries that have had growth by the economic development would be; Pakistan, which has had growth rates at around 7% for a few years, whereas India has had a growth rate of about 9.4% for the 2006-2007 year. Still these countries are greatly underdeveloped and suffer from a lack of education and many other ailments, one reason might be only the development of certain sectors of the economy and the lack of effective allocation of resources by the government.

Similarly, in smaller countries, Ethiopia actually has a growth rate of 11%, but is marred with many problems such as health and hunger, with many problems and features which are distinctive of an underdeveloped country including a high reliance on agriculture.

According to the human development index, these countries rank in either the middle or lower parts of the HDI (134, 126, and 170 respectively), they also rank low in GDP per capital(170,154,and 211 respectively).

As Economic growth is purely economical, using it as an indicator or well being or a marker for standard of living would be an improper usage.

I believe that economic growth would overlook distribution of income, as it would not look at equity or equal distribution of the benefits, but rather count the entire country as a whole.

Secondly also believe that economic development, not paralleled with real growth and real development might actually be detrimental to the economy, it might cause people to develop artificial needs which the economy, a developing economy might not be able to provide.

Development seems to have two parts to it, not only economical development, which is, monetary growth and the growth of systems to support that but also a positive and progressive change in many different sectors of society such that the people benefit. For example, health, education, population decrease, equality of different groups, etc.

I believe that development is the sustainable improvement in the quality of life without bias while at the same time improving the capabilities of the system to handle such growth at a maintainable level and for a longer term, and provide such benefits to its people.