1.

Economics is a social science concerned with human beings and social systems to which they
efficiently allocate their available resources to satisfy their basic needs and nonmaterial wants.
In economics, is it vital for us to recognize ethical or normative value premises to what is or
what is not desirable. Concepts or goals such as economic and social equality, the elimination of
poverty, universal education, rising levels of living, national independence, modernization of
institutions, rule of law and due process, access to opportunity, political and economic
participation, grassroots democracy, self-reliance, and personal fulfillment all derive from
subjective value judgments about what is good and desirable and what is not. In the book, it was
stated that the major issues of development are poverty, inequality, population growth, rural
stagnation, and environmental decay.
Economics cannot be value-free in the same sense as, say, physics or chemistry. Thus, the
validity of economic analysis and the correctness of economic prescriptions should always be
evaluated in light of the underlying assumptions or value premises. Once these subjective values
have been agreed on by a nation or, more specifically, by those who are responsible for national
decision making, specific development goals (e.g., greater income equality) and corresponding
public policies (e.g., taxing higher incomes at higher rates) based on “objective” theoretical and
quantitative analyses can be pursued. However, where serious value conflicts and
disagreements exist among decision makers, the possibility of a consensus about desirable goals
or appropriate policies is considerably diminished. In either case, it is essential, especially in the
field of development economics, that one’s value premises always be made clear
2. Developing nations constitute these “many parts” of the global organism. The nature and
character of their future development should therefore be a major concern of all nations
irrespective of political, ideological, or economic orientation. There can no longer be two
futures, one for the few rich and the other for the very many poor. In the words of a poet,
“There will be only one future—or none at all.”
A more fitting expression for the twenty-first century would perhaps be that “the world is like
the human body: If one part aches, the rest will feel it; if many parts hurt, the whole will suffer.”
3. Why is an understanding of development crucial to policy formulation in developing nations?
Do you think it is possible for a nation to agree on a rough definition of development and
orient its strategies accordingly?
development has traditionally meant achieving sustained rates of growth of income per capita
to enable a nation to expand its output at a rate faster than the growth rate of its population.
Economic development in the past has also been typically seen in terms of the planned
alteration of the structure of production and employment so that agriculture’s share of both
declines and that of the manufacturing and service industries increases. Development strategies
have therefore usually focused on rapid industrialization, often at the expense of agriculture and
rural development. development was until recently nearly always seen as an economic
phenomenon in Values Principles, standards, or qualities that a society or groups within it
considers worthwhile or desirable. Attitudes The states of mind or feelings of an individual,
group, or society regarding issues such as material gain, hard work, saving for the future, and
sharing wealth. Institutions Norms, rules of conduct, and generally accepted ways of doing
things. Economic institutions are humanly devised constraints that shape human interactions,
including both informal and formal “rules of the game” of economic life in the widely used
framework of Douglass North. Income per capita Total gross national income of a country
divided by its total population. Gross national income (GNI) The total domestic and foreign
output claimed by residents of a country. It comprises gross domestic product (GDP) plus factor
incomes accruing to residents from abroad, less the income earned in the domestic economy
accruing to persons abroad. Find more at http://www.downloadslide.com CHAPTER 1
Introducing Economic Development: A Global Perspective 17 which rapid gains in overall and
per capita GNI growth would either “trickle down” to the masses in the form of jobs and other
economic opportunities or create the necessary conditions for the wider distribution of the
economic and social benefits of growth. Problems of poverty, discrimination, unemployment,
and income distribution were of secondary importance to “getting the growth job done.”
Indeed, the emphasis is often on increased output, measured by gross domestic product (GDP).
Development must therefore be conceived of as a multidimensional process involving major
changes in social structures, popular attitudes, and national institutions, as well as the
acceleration of economic growth, the reduction of inequality, and the eradication of poverty.
Development, in its essence, must represent the whole gamut of change by which an entire
social system, tuned to the diverse basic needs and evolving aspirations of individuals and social
groups within that system, moves away from a condition of life widely perceived as
unsatisfactory toward a situation or condition of life regarded as materially and spiritually
better. No one has identified the human goals of economic development as well as Amartya Sen,
perhaps the leading thinker on the meaning of development.

The objective of economic development is expanded human capabilities.