Chapter 7
Rags and Riches: The Dimensions of Development
A. Logistics
Students’ Time Requirements
Activity 1: Economic Model of Development 20–30 minutes
Activity 2: Human Welfare Model of Development 20–30 minutes
Activity 3: Comparing Economic Development and Human
Welfare Development Models 20–30 minutes
Activity 4: Alternative Indicators of Development 1–2 hours (in library or on Web)
Activity 1 introduces students to the logic and the method of defining development in economic terms. Activity 2 applies the same logic and method to human welfare definitions of development. Activity 3 provides the payoff to Activities 1 and 2 by combining the economic measures with the welfare measures. The mathematical and graphing steps in Activities 1–3 are straightforward, requiring students to rank 20 countries and produce a scatter diagram of economic versus human welfare rankings.
Although the procedures are straightforward, it helps to go over the rules for handling ties (give each country the same ranking and skip the next ranking). It is also useful to remind students that larger numbers do not always connote higher levels of development. For example, a higher infant mortality rate implies a lower level of development and should, therefore, receive a lower rank. Encourage students to think about what the measure of development stands for rather than mechanistically assign higher rankings to higher numbers.
One strategy is to allow students to begin the project in class, working in groups, and instruct them to finish it at home. You can shorten this activity by stopping after Activity 3.
Activity 4 is optional but highly recommended. It involves independent research and critical thinking and requires students to apply the procedure learned in Activities 1–3 to their own measures of development. Before doing Activity 4, discuss the pitfalls in choosing inappropriate development variables. We outline the problems of using mass variables and variables unrelated to a country’s level of welfare in the book.
B. Lesson Plan
I. Defining development
1. Huge global disparities in development and getting larger (The ratio of average incomes between the rich and poor countries has increased from 16:1 in 2000 to 28:1 in 2010. The worldwide recession has hit the less-developed countries much harder than it hit countries like the USA.)
2. No longer defined strictly in economic terms
3. The extent to which a society is making effective use of its human and natural resources
4. Development labels
a. More-developed country (MDC)
b. Less-developed country (LDC)
c. Gap is widening between richest and poorest, although at the same time there are more in-between countries
II. The geography of development
1. 40 years ago, the developed world consisted of those areas populated by people of European ancestry, plus Japan
2. Today, this stereotype no longer applies, and the distinction between MDC and LDC is blurred:
a. Oil-rich Middle East
b. Collapse of Soviet Union
c. Newly industrializing East Asian “tigers”
3. Maps do show, however, a general North-South pattern
III. History of Ideas and Strategies in Development (Table 7.1)
1. Modernization school
a. Structural change
b. Stages of development
c. Substitution of capital for labor
d. Policies based on technology transfer
2. Dependency school focused on the dynamic between MDCs and LDCs
a. Core-periphery model
i. Global scale
ii. Within USA
iii. Within LDCs
b. Spread versus trickle-down effects
c. Circular and cumulative causation
d. Neocolonialism
e. Policies based on import substitution
f. Also emphasis on human welfare
3. Neoliberal counterrevolution school
a. Eschews protectionism
b. Policies based on deregulation and currency devaluation to make products competitive
c. Transition economies, e.g., China
4. Sustainable development
a. Links development to environmental protection
b. Emphasis on renewable technologies
c. Policies based on ecotourism and clean technologies
d. Appropriate technology
e. Social sustainability
f. Gender issues
g. Microcredit
h. Debt crisis
i. Globalization protests: Fears of threats to local, democratic decision making
IV. Economic indicators vs. human welfare indicators
1. Economic indicators measure a country’s economic base:
a. What they produce
b. How much value they create
c. How they produce things (factors of production)
2. Human welfare indicators measure how well a country is able to provide necessary resources for its citizens:
a. Physical needs
b. Health needs
c. Social needs
d. Political needs
V. Give instructions for completing the exercise.
VI. Discussion of results
C. Answer Key
Activity 1: Economic Model of Development (Columns A–F)
Activity 2: Human Welfare Model of Development (Columns G–K)
Table 7.3: Composite Rankings
A / B / C / D / E / F / G / H / I / J / K / LGDP Per Capita
($US) / GDP Per Capita Ranking / Non-Agricultural Employment (%) / Non-Agricultural Employment Ranking / Economic Development Ranking / Infant Mortality Rate
per 1000 / Infant Mortality Rate
Ranking / Female Literacy Rate (%) / Female Literacy Rate Ranking / Human Welfare Ranking / Human Welfare Ranking - Economic Ranking
Singapore / 62,100 / 20 / 100% / 20 / 20.0 / 2.32 / 20 / 90% / 13 / 16.5 / –3.5
United Arab Emirates / 49,600 / 19 / 93% / 14 / 16.5 / 11.94 / 11 / 82% / 8 / 9.5 / –7.0
United States / 47,200 / 18 / 99% / 19 / 18.5 / 6.06 / 15 / 99% / 20 / 17.5 / –1.0
Canada / 39,400 / 17 / 98% / 18 / 17.5 / 4.92 / 17 / 99% / 20 / 18.5 / 1.0
Iceland / 38,300 / 16 / 96% / 17 / 16.5 / 3.2 / 19 / 99% / 20 / 19.5 / 3.0
Taiwan / 35,700 / 15 / 95% / 16 / 15.5 / 5.18 / 16 / 85% / 10 / 13.0 / –2.5
Saudi Arabia / 24,200 / 14 / 93% / 14 / 14.0 / 16.16 / 9 / 71% / 6 / 7.5 / –6.5
Poland / 18,000 / 13 / 83% / 10 / 11.5 / 6.54 / 14 / 99% / 20 / 17.0 / 5.5
Argentina / 14,700 / 12 / 95% / 16 / 14.0 / 10.81 / 12 / 97% / 14 / 13.0 / –1.0
Mexico / 13,900 / 11 / 86% / 11 / 11.0 / 17.29 / 8 / 85% / 10 / 9.0 / –2.0
Turkey / 12,300 / 10 / 70% / 8 / 9.0 / 23.94 / 7 / 80% / 7 / 7.0 / –2.0
South Africa / 10,700 / 9 / 91% / 12 / 10.5 / 43.2 / 5 / 86% / 11 / 8.0 / –2.5
Cuba / 9,900 / 8 / 80% / 9 / 8.5 / 4.9 / 18 / 99% / 20 / 19.0 / 10.5
Sri Lanka / 5,000 / 7 / 67% / 7 / 7.0 / 9.7 / 13 / 89% / 12 / 12.5 / 5.5
Morocco / 4,800 / 6 / 55% / 5 / 5.5 / 27.53 / 6 / 40% / 3 / 4.5 / –1.0
Moldova / 2,500 / 5 / 59% / 6 / 5.5 / 12.43 / 10 / 99% / 20 / 15.0 / 9.5
Cambodia / 2,100 / 4 / 42% / 4 / 4.0 / 55.49 / 4 / 64% / 5 / 4.5 / 0.5
Senegal / 1,900 / 3 / 23% / 2 / 2.5 / 56.42 / 3 / 29% / 2 / 2.5 / 0.0
Afghanistan / 900 / 2 / 21% / 1 / 1.5 / 149.2 / 1 / 13% / 1 / 1.0 / –0.5
Congo, Democratic Republic of / 300 / 1 / 38% / 3 / 2.0 / 78.43 / 2 / 54% / 4 / 3.0 / 1.0
Activity 3: Comparing Economic Development and Human Welfare Development Models
3.1 Cuba, Poland, Sri Lanka, and Moldova are socialist or formerly socialist countries. Poland today has a capitalist system, but much of the economy still is run by the government. These four countries lack the free market mechanisms that historically led to the highest levels of economic development. Their economies are, for the most part, inefficient and noninnovative. Socialist systems are, on the other hand, very successful in providing the basic needs for their citizens. They make an explicit choice to equalize access to food, housing, healthcare, and education. It is not unusual for citizens in socialist countries to get better medical care and education than poor people in more-developed countries.
3.2 High GNP per capita in Saudi Arabia and the United Arab Emirates is based more on oil exports than on across-the-board modernization. They use oil export earnings to import most of their food and thus a low proportion of their labor forces are engaged in agricultural activity. High GNP per capita and a low proportion of the labor force in agriculture give Saudi Arabia and the United Arab Emirates high economic development rankings. Their human welfare rankings, on the other hand, are lower because they are Islamic countries where traditional culture still is strong. Women play very traditional roles, and often they are poorly educated. Also, development and health care are unevenly distributed, with a select few being multimillionaires and many without access to modern education and health services.
3.3 The long-term ramifications of investing heavily in economic production at the expense of human welfare investment are a polarized society with great differences in income, education, health care, and living standards across the population. Those who can afford it can gain access to these benefits, but those who cannot must go without. This can lead to the creation of a permanent underclass, crime, and many other social problems. Emphasis on economic production over human welfare can also lead to environmental degradation, unlivable cities, traffic, and a poorly-educated work force. These problems affect everyone in the society, including the very rich and the business owners, and can undermine the economic strength of the country.
3.4 The long-term ramifications of investing heavily in human welfare at the expense of economic production are an inability to pay for the human welfare benefits the country desires to provide. Without a strong economic engine, the country could fall behind in infrastructure development. The country will lag in technological innovation and adoption in all fields, including health, education, and environment, as well as productive fields such as manufacturing. A country that underemphasizes economic production risks its economy becoming dependent on foreign investment and foreign technology. It also risks losing many of its most talented people, who are attracted to migrate to countries where their talents will be more highly rewarded (the “brain drain” phenomenon). Also, remaining a highly agricultural society increases the likelihood of higher population growth, with its attendant social, economic, and environmental ramifications.
Activity 4: Alternative Indicators of Development
Table 7.4 should look much like Table 7.3, but with different variables.
4.1 There are many possible good variables to choose, as well as some bad ones. The good ones measure real aspects of development. Students should justify them by saying what aspect of development they measure. You must discern whether the variable in question is an effective measure of development. Examples of good development variables include:
· electricity consumption per capita
· energy consumption per capita
· computer ownership per capita
· telephones per capita
· newsprint per 1,000 inhabitants
· individual savings rate
· percent of export earnings derived from a single nonmanufactured commodity
· paved road density (km per sq mile)
· persons per doctor
· persons per hospital bed
· life expectancy
· percentage access to safe water
· female literacy
· primary school enrollment of girls as a percentage of boys
· average years of schooling
· percentage of population with college degree
· some kind of freedom or human rights index
· public expenditure on military (% of GNP)
· energy efficiency index
· percentage of national land area protected
· some measure of environmental protection such as SO2 limits per million BTU of coal
· average fertilizer used per acre
· percentage of income earned by top or bottom 10% or 20% of families, or Gini coefficient
· urbanization
· crime rate
· poverty rate
· hunger rate
· dependency ratio (under 15-yrs-of-age + over 65-yrs-of-age, divided by labor force cohorts)
· calories or protein consumption per person
· percentage of GNP from service sector
Poor development variables are those that do not effectively measure the aspect of development that they purport to measure. Below we attempt to categorize the types of flaws that variables can have:
Mass variables that mostly measure how large a country are:
· total GNP
· total electricity consumption
· total number of doctors
Variables that may be perceived as “good” or “bad” but which are largely independent of development:
· population density
· inflation rate
· exports as a percent of GNP
Production variables that do not account for economic specialization and world trade as alternate sources of the same goods. Consumption variables are superior in most cases:
· energy production
· steel production
· computer manufacturing
Closely related to the above are variables that do not account for different methods to achieve the same end:
· coal consumption per capita