Human Development

Lecture 2: Introduction to Human Development

Prepared by,
Mohammad Saeed Islam
Lecturer
Department of Development Studies
Bangladesh University of Professionals (BUP)
The Dimensions of Development Studies
• Economics of Development
• Politics of Development
• Sociology of Development
• Anthropology of Development
What is Economic Growth?
• Economic output of a country refers to ‘the total value of all goods and
services produced in the country’ – which is commonly known as GDP (Gross
Domestic Product).
• So, GDP growth (at constant market price) is the measurement of growth in
economic output.
• The growth in economic output is commonly termed as economic growth.
Economic Growth and Standard of Living
• Standard of Living refers to the economic well-being of people. In Economics,
we measure Standard of Living in “value of all goods and services consumed
per capita” (per capita = per person), in other word GDP per capita.
• Increase in GDP = Produce more, Consume more
• So, living standard rises with increase in GDP. However, not all evenly benefit
from increase in GDP. So, inequality in income is an important component in
standard of living.
The Difference between EG and ED

Economic Development = Economic Growth + Equality (in terms of

standard of living) + Equal Opportunity
A snapshot on How economic output increased since the beginning of
human history?

• Hunting and gathering

• Domestication of animals and Agriculture
• Group mode
• Private property mode
• Slave mode
• Serf mode
• Colonialism and Mercantilism
• Industrialization
• Capitalism
• Communism
Economic Model: The Circular-Flow Diagram
 Economic Model: The Production Possibilities Frontier

If the resources required

for car production
Car increase, the PPF will
Car Car Car If the total stock of
Impossible using shift outwards
currently available If the resources required resources required for
resources: Factor for garment production production increases, the
Endowments and increase, the PPF will PPF will shift outwards
Technology shift outwards

Efficient

Inefficient

Garment Garment Garment Garment

The Sources of Growth

• Stock of Factor Endowment

• Land
• Remains fixed
• Labor
• Productivity
• Skills
• Capital
• Production of Technology
• Capital Deepening
"Man is born free, and everywhere he is in chains.
One man thinks himself the master of others, but
remains more of a slave than they are."
Missing link

• Economic development is necessary condition (a mean) but it is not sufficient

to define development holistically
• Human development approach - is about expanding the richness of human
life, rather than simply the richness of the economy in which human beings
live
• It, alternatively, defines people’s wellbeing as the end of development
The missing people

• “People are both the means and the end of development or economic
development”

• Economists in discussing the means of development often talk about

investment capital:
• Physical capital has taken the center stage of production hence development
• Human capital is missing

• Historically, it is found that, societies with similar natural resource

endowments often have developed very differently because of differences in
their human capabilities
The human dimension in development planning

• It must be start with a “human balance sheet”

• Plan targets must “first be expressed in basic human needs” and only later
translated into physical targets for production and consumption

• Both “production and distribution” objectives should be integrated and

given equal emphasis

• A human development strategy must be decentralized to “involve

community participation and self-reliance”
The human dimension in adjustment process

• Adjustment requires short-term demand management

• Growth requires long-term supply expansion

• Regulative authority vs. less government intervention

• Setting social priority

• Regional discrimination in allocation of fund to be removed
• Easing regulation
• Lowering subsidies
• Reducing public expenditure on inefficient industries
The human dimension in international decision

• Annual review of national development plan and coordinated advice on

economic planning
• Designing of conditionality for loans must be change
• Role of civil society
• A realistic plan and national, regional and multilateral cooperation