Introduction to

Economic Development

Angelica M. Leonida
Department of Agricultural Economics
CBDEM, USM
 1 Explain the scope of development

2
and economic development

Outcomes
Intended
Learning Explain the principles and concepts
of economic development.

3 Distinguished the difference between

economic development and Economic

4
growth.
Discuss the Millennium Development Goals
(MDGs) and Sustainable Development Goals (SDGs)

5 Explain the important common features of

developing countries and differentiate the
classification of countries
Absolute Poverty
A situation of being
unable to meet the
minimum levels of
income, food, clothing,
health care, shelter, and
other essentials

Criteria not changed by

economic growth

Economic Development © 2023

Angelica M. Leonida/DAEc/CBDEM
Subsistence Economy
An economy in which production is mainly for personal
consumption and standard of living yields little more Economic Development © 2023
than necessities of life. Angelica M. Leonida/DAEc/CBDEM
 Evolution of theTodaro
Seers Definition
(1969) of Development
(1977)

“satisfaction of basic
human needs for all”
Dag Hammarskjold
Foundation
(1975)
“realization of the “multi-dimensional process
potential of human involving major changes in social
personality which structure, popular attitudes,
necessitates substantial institutions, as well as acceleration
improvements in of economic growth, the
eradicating (i) poverty, (ii) reduction of inequality, and the
unemployment, (iii) eradication of absolute poverty”
inequality”

Note that in 1950’s economic development is defined based on Economic Development © 2023
Angelica M. Leonida/DAEc/CBDEM
traditional economic principles
 Improvement of the Quality of Life

PIL
LA
RS
Development
The process of improving the
quality of life and capabilities by
raising people’s level of living,
self-esteem, and freedom

Economic Development © 2023

Angelica M. Leonida/DAEc/CBDEM
BASIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH
Definition Economic development implies changes in Economic growth refers to an increase in the real
income, savings and investment along with output of goods and services in the country.
progressive changes in socio- economic
structure of country (institutional and
technological changes).

Factors Development relates to growth of human Growth relates to a gradual increase in one of the
capital indexes, a decrease in inequality components of Gross Domestic Product:
figures, and structural changes that improve consumption, government spending, investment,
the general population's quality of life. net exports.

Measurement Qualitative. HDI (Human Development Quantitative. Increase in real GDP.

Index), gender- related index (GDI),
Human poverty index (HPI), infant
mortality, literacy rate etc.

Concept Normative concept Narrower concept than economic

development
Economic Development © 2023
Romiel Joh P. Basan/DAEc/CBDEM
 Sustenance To increase the availability and widen
The ability to meet Basic Needs the distribution of life-sustaining goods

Self-esteem To raise levels of living

To be a Person

Freedom from Servitude To expand the range of economic and

To be able to Choose social choices

Core values of Development Objectives of Development

Economic Development © 2023

Romiel Joh P. Basan/DAEc/CBDEM
Economic Development © 2023
Angelica M. Leonida/DAEc/CBDEM
Economic Development © 2023
Angelica M. Leonida/DAEc/CBDEM
Economic Development © 2023
Romiel Joh P. Basan/DAEc/CBDEM
ITEMS MDGs SDGs
Number of Goals 8 17
Number of Targets 21 169
Number of
60 232
Indicators
Economic growth,
social inclusion &
General scope/ focus Social
environmental
protection Comparison
Developing countries,
Entire world (rich and
between
Target particularly the
poorest
poor) MGD and SDG
Result of consultation
process among:
Produced by a group -193 UN Member
Formulation
of experts States
-Civil society
-Other stakeholders Economic Development © 2023
Angelica M. Leonida/DAEc/CBDEM
 Developed HDI, political stability, GDP, industrialization , and freedom

Classification of Countries
• sovereign states with a developed economy and technologically advanced
infrastructure compared to other nations

Developing Standard of living, GDP, per capita income, lower HDI

• known as an LMIC, or a low and middle-income countries. It is less
developed than countries classified as developed countries, but these
nations are ranked higher than least developed countries

Least Developed Human assets and economic and environment vulnerability

• low-income countries facing severe structural setbacks to sustainable
development.

Economic Development © 2023

Angelica M. Leonida/DAEc/CBDEM
The Human Development Index was developed by the United
Nations to measure human development in a country. HDI is quantified
by looking at a country's human development, such as education,
health, and life expectancy.
HDI places countries on a scale of 0-1 and
categorizes them into one of four levels of
human development: low human developed Human
(0-.55), medium human development
(.55-.70), high human development (.70-80), Development
and very high human development (.80-1.0) Index (HDI)

Economic Development © 2023

Angelica M. Leonida/DAEc/CBDEM
 TOP

10
DEVELOPED
COUNTRIES*
1.Switzerland — 0.962
2.Norway — 0.961
3.Iceland — 0.959
4.Hong Kong — 0.952
5.Australia — 0.951
6.Denmark — 0.948
7.Sweden — 0.947
8.Ireland — 0.945
9.Germany — 0.942
10.Netherlands —
0.941

Economic Development © 2023

*based on 2021 HDI Angelica M. Leonida/DAEc/CBDEM
Source: https://worldpopulationreview.com/country-rankings/developed-countries
46 LEAST DEVELOPED
COUNTRIES
Source: https://unctad.org/topic/least-developed-countries/list Economic Development © 2023
Angelica M. Leonida/DAEc/CBDEM
 Defining Developing Nations
A nation where the average income is much lower than in
industrial nations, where the economy relies on a few export
crops, and where farming is conducted by primitive methods.

Rapid population growth which threatens the supply of food.

Most of them are in Africa, Asia, and Latin America

Economic Development © 2023

Angelica M. Leonida/DAEc/CBDEM
 Low levels of living
Low levels of productivity
High rates of population growth and dependency
burdens.
Substantial dependence on agricultural production and
primary exports
Prevalence of imperfect markets
Dependence and vulnerability

Common Characteristics of Developing Nations

Economic Development © 2023
Angelica M. Leonida/DAEc/CBDEM
 Introduction to
Economic Development
-wakas-

Angelica M. Leonida
Department of Agricultural Economics
CBDEM, USM