Many scholars have come up with a lot of definitions about Economic Development. In this paper I will focus much on Michael P Todaro and Stephen C Smith’s definition of Economic Development. I will give my side “agree” with their understanding of Economic Development before introducing Amartya Sen. I will give Amartya Sen.’s view or his understanding of Economic Development and then compare and contrast with Todaro and Smith before writing the conclusion.
If you need assistance with writing your essay, our professional essay writing service is here to help!
TODARO AND SMITH
Traditionally development meant the capacity of a national economy, whose initial economic condition has been more or less static for a long time, to generate and sustain an annual increase in its gross national income (GNI) at rates of 5% to 7% or more. A common alternative economic index of development has been the use of rates of growth of income per capital to take into account the ability of a nation to expand its output at a rate faster than the growth rate of its population.
The experience of the 1950s and 1960s, when many developing nations did reach their economic growth targets but the levels of living of the masses of people remained for the most part unchanged, signaled that something was very wrong with this narrow definition of development.
In short, during the 1970s economic development came to be redefined in terms of the reduction or elimination of poverty, inequality, and unemployment within the context of a growing economy. (Todaro and Smith, 2009; 18)
Michael P. Todaro was a professor of Economics at New York University for eighteen years and senior Associate at the population council for thirty years. He lived and taught in Africa for six years. Professor Todaro ‘s five years of living and teaching in Africa as well as two decades of extensive travel throughout Latin America and Asia, first as a director of the Rockefeller Foundation and then as a professor of economics at New York University.
Stephen C. Smith is a professor of Economics and international Affairs, Director Research program in poverty Development and globalization chair at the George Washington University. He is also a member of a technical advisory committee, GW African center for Health and Security. His work focuses on Economic development with a special focus on solutions to extreme poverty. He also does research on Economic development strategies and the economics of participation.
Todaro and Smith both have the same background of being Professors in Economics. Their varsity experiences for example, Todaro teaching in Africa and Smith being a member of the Technical Committee for African center for health and security and also their focus on development helped them to define Economic Development contrary to the Tradition definition. They define Economic Development 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, turned to the diverse basic needs and desires 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.
MY VIEWS ON ECONOMIC DEVELOPMENT
I totally agree with Todaro and Smith’s definition on Economic Development because it teachers economic development within the context of a major set of problems. These problems are poverty, inequality, unemployment, population growth, environmental decay and rural stagnation
Even though this definition fits well the developing nations, my agreement to Todaro and Smith’s definition is based on the Zambian context. Majority of the Zambians live on less than a dollar per day, meaning that they live in poverty. Many cannot afford basic needs such as education, proper healthy care and above all at least three meals per day. For Economic Development to have a meaningful impact there should be programs with the aim of eradicating poverty.
AMARTYA SEN’S VIEW ON ECONOMIC DEVELOPMENT
Amartya Kumar Sen was born in India in 1933 and grew in Bangladesh. Following his Indian college level education, Sen undertook postgraduate studies at Cambridge University, and following an international academic teaching and research career in the UK, the US and India. He is the only Asian recipient of the Nobel Peace Prize in Economics. He is particularly recognized for empirical research on poverty, inequality, and the causes of famine and also for defining the field of development studies to include technical analysis. Most of his research focuses on South Asia and Africa. (Amartya Sen; Web Source)
Amartya Sen coming from the background of being an economist and a philosopher at the same time defines development as “the enhancement of freedoms that allow people to lead lives that they have reason to value”. He believes that economists have put a misplaced emphasis on GDP as the golden measure of development, and thus his definition goes far beyond that of simply maximizing per capital income. Sen argues that if increased incomes in a country are not accompanied by other factors that define a high standard of living (such as political freedom, the availability of “social goods,” including education, health care for all citizens, and protection from hunger and premature death) then the country is only getting richer. It is not truly “development.”
Sen then defines capabilities as “the freedom that a person has in terms of the choice of functionings, given his personal features (conversion of characteristics into functions) and his command over commodities.” Sens perspective helps explain why development economists have placed so much emphasis on health and education and more recently on social inclusion and empowerment and have referred to countries with high levels of income but poor health and education standards as cases of “growth without development.”
Apart from defining Economic Development as capabilities, Sen also define as “well-being” which means being well, in the basic sense of health, well nourished, or highly literate and more broadly, having freedom of choice in what one can become and can do. Happiness is part of human well being, and greater happiness may well be included in the list of some important functions relevant to a person’s well being. (Todaro and Smith, 2009; 18)
SIMILARITIES AND DIFFERENCES
Todaro and Smith’s definition of Economic Development agree with Amartya Sen’s definition in some points. For example on poverty, they all agree that there should be need to eradicate it. Meaning that for Economic Development to have a proper meaningful definition, poverty eradication has to be involved. They all talk about raising stands of people in the community. Now Amartya Sen’s definition of development is extremely rational. He talks of development as “opportunities” and “capabilities” instead of satisfaction, happiness and commodities. His approach looks at the potentiality of a nation or a community of people instead of the actuality. His definition looks as if it is actually political. Todaro and Smith’s approach is more of individual based or community centered. That is the reason why it focuses on satisfaction, happiness and commodities.
Todaro and Smith put acceleration of economic growth as part of Economic Development while Sen agues that economic growth cannot be sensibly treated as an end in itself. He said development has to be more concerned with enhancing the lives we lead and the freedoms we enjoy.
Many scholars have tried to define Economic Development in different ways basing on their background such as education and the way of life. Todaro and Smith together with Amartya Sen have played a major roll in the study of economic development. Their background of being economist helped them to define Economic Development in the modern way.