Economic Development (Term Paper Sample)

ECO 370: International Economic Development
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a. What exactly do you mean by “economic development”? Describe the standard economic development metrics and the New Economic development perspective. In your own words, what are the Millennium Development Goals (MDG)?
“Economic development” typically means wealth creation. To equate economic progress with social improvement is a fatal miscalculation because unrelenting growth may stifle economic wealth creation. A solely resource-based economy would lead to unemployment, lack of education, and skill development (coal, wood, fisheries, etc.). Global economic shifts or technological developments may devalue a community’s only source of money. Economic growth based on exploiting workers with limited options is immoral and criminal (Sachs, 2012). Sustainable and equitable economic development is ideal for both traditional and modern economies.
A traditional economy is based on long-held beliefs and customs, and the distinction impacts distribution. Besides, traditional economies rely heavily on food sales since they trade instead of purchasing. Several established economies are also throughout Africa, Asia, and Latin America. Several emerging economies are traditional with average economic measures. It measures the typical person’s wealth because GPD only captures official (legal) activity and ignores many crucial factors (education, health, inequality, etc.) (Sachs, 2012). Education, life expectancy, and GDP/cap, in short, redefine economic developments.
In the new growth paradigm, human desires drive economic advancements. As long as people seek profit, actual GDP per person will expand (Deb, 2015). Critics claim it overlooks economic inequity (environment). Both indices may predict economic growth in the new development. One of the numerous economic indicators available will suffice. It better captures income disparities than GDP or HDI. GDP, GNP, or GNI are often used to gauge modern economic growth (Deb, 2015). However, GDP applies in contemporary and traditional measures to address other factors like poverty eradication and mental and physical wellness.
Lastly, the eight MDGs aim to help the world’s poorest societies and economies. One hundred eighty-nine countries signed the Millennium Declaration in 2000 to accomplish these goals and eradicate poverty (Oleribe & Taylor-Robinson, 2016). Therefore, these included universal primary education and avoiding mother and infant deaths. The MDGs aim to reduce extreme poverty and achieve the MDGs. In addition to discussing climate change and poverty, additional program topics relate to MDG achievements (Oleribe & Taylor-Robinson, 2016). Since the Millennium Declaration emphasized development rights, it concentrates on historically marginalized groups such as ethnic minorities, indigenous peoples, and women.
b. The Human Development Index is used to compare nations throughout the globe. Distinguish between the new HDI and the classic (old) HDI. Which is superior? Why? What would you change if you were to redesign the HDI? Why?
The Human Development Index (HDI) assesses educational attainment, life expectancy, and family income are evaluated by the Human Development Index (HDI). The life expectancy index is used to quantify HDI’s health component; there is a 20-year minimum and 83.5-year maximum age limit for this indication (Ranis, Stewart, & Samman, 2006). Statistics on malnutrition levels have supplemented life expectancy; however, they are uneven between nations. The new HDI is better because it assesses an adult’s educational attainment based on school years. Literacy is rare, yet it is more effective at distinguishing across groups than other forms of communication; a well-known formula was used to arrive at this result (Ranis, Stewart, & Samman, 2006). It was decided that to take into account children’s educational achievements, the updated HDI would replace the gross enrollment ratio with a measure of expected years of schooling (Ranis, Stewart, & Samman, 2006). If current attendance rates hold steady, it’s safe to assume that today’s school-age children may look forward to a long and healthy life.
Economists increasingly focus on Gross National Income (GNI) instead of GDP per capita, GNP minus the primary income delivered to non-resident units and the primary income received from non-resident units (Kummu, Taka, & Guillaume, 2018). Since the new HDI addressed the issues raised by the previous HDI, the new HDI is now a more acceptable and valuable statistic. As social and economic conditions evolved, so did the indicators. The Human Development Index (HDI) is the basis for the UN Development Program’s strategies. Human development may be divided into low, medium, and high. Not much would be done to better the current HDI because a country is considered low if its Human Development Index (HDI) is less than 0.5, whereas its HDI is over 0.5, but less than 0.8 is deemed to be medium (Kummu, Taka, & Guillaume, 2018). Human development in less developed nations is either weak or mediocre. Educational achievement, life expectancy, and GDP per capita make up the three components of the current HDI.
c. What are the traditional economic development theories? Consider this statement from Rostow’s Stages of Growth: “It is possible to identify all societies, in their economic dimensions, as belonging to one of the five categories: traditional society, preconditions for takeoff into self-sustaining growth, takeoff, drive to maturity, and age of mass consumption.” Do you concur? Why? Can you identify a nation that falls into each of these categories?
A typical theory of classical philosophy emphasizes the organization above its members. In classical theory, the organization is seen as a machine, with people serving as different pieces. There are four classical theories of economic development, namely the free-market counterrevolution, neo-classical, and patterns of structural change, all included in this (Goulet, 2003). However, the classical theories align with Rostow’s growth stages.
Society traditions: Primitive pre-Newtonian science, technology, and physical principles underpin traditional civilization because they believed the external world was predictable and influencing (Parr, 2001). However, not all cultures are traditional. Improving irrigation systems or finding new crops may enhance agricultural output. Ancient societies regulated individual production, yet poor science and technology caused this problem. Because of this, classic tales spoke about perpetual transformation (Parr, 2001). The boom and bust phases were heavily influenced by political and social instability, central government efficiency, and road upkeep (Parr, 2001). Agriculture was hampered by the lack of modern science, technology, and mindset. Pre-Newtonian societies from China, the Middle East, the Mediterranean, and Europe exist. It has no impact on post-Newtonian civilization since man can profitably manipulate his surroundings for benefits (Daston, 2017). Due to a typical economic constraint, it’s ludicrous to put these diverse and quickly expanding civilizations together. Post-traditional civilizations diverge from traditional cultures in terms of politics, social organization, and morality.
Takeoff conditions: To benefit from modern research, avoid declining returns as compounded interest requires time (KesgiМ‡ngц & Dilek, 2016). Increasing worldwide markets and international competition had set the stage for takeoff in the late 17th and early 18th century in Western Europe. The end of the middle ages also provides a strong foundation for Western Europe’s ascent. The British government established the first flight plan in Western Europe. The engagement of advanced civilizations ushered in the period of preconditions. So they encouraged the formation of a modern alternative to traditional society.
Takeoff: The third phase, takeoff, is a historical turning point. A long-standing challenge has been overcome. The forces that drove economic growth have taken over majority control, and now change is expected (KesgiМ‡ngц & Dilek, 2016). An example is that compound interest is ingrained in American culture. The necessity for takeoff in the UK and other wealthy British nations was primarily technological. Economic modernization was as significant as the rapid increase of social overhead capital, industrial, and agricultural technology. Large social overhead capital expenditures were required in the 1880s in Canada and the early 1900s in Argentina, yet the investment rate may have topped 5% (Engerman & Sokoloff, 2000). Capital imports were necessary during the Russian and Canadian booms too.
Drive to Mature: After takeoff, modern technology fuels global economic growth. Investing 10-20% of national GDP generally outpaces population growth as businesses struggle to stay up with fast technological advancement (Pasaoglu et al., 2016). Produced in America, previously imported commodities create fresh imports and exports. Therefore, the latter showed that society must reconsider basic concepts and institutional structures to improve contemporary industrial efficiency; humans live around 60 years or about forty years after takeoff ended (Pasaoglu et al., 2016). These things have become increasingly common in an economy with fewer industries and technology. For example, in late-19th/early-20th century, Europe and America experienced a drastic drive to maturity.
Mass Consumption Age: Unlike Western Europe and Japan, the Soviet society was wary of significant mass consumerism....