The development economics is a branch of economics that applies modern techniques of analyzing macroeconomic and micro-economic study of the economic, social, environmental and institutional facing so-called developing. It is interested in the determinants of poverty and underdevelopment and to implement policies to lift developing countries in their development.
Development economics is a set of public and private practices encouraging the economic development of a country or region, promoting the propensity to invest, innovate, initiate, train, work.
Development economics as a full-fledged branch of the economy, from the end of World War II. Earlier studies on poor countries were part of the analysis of growth. There were no specific theories for these countries. It was only in the fifties that economists will seek to develop tools specific to developing countries.
The early work of pioneers in the development did not distinguish between economic development and economic growth. Development necessarily means obtaining economic growth over a long period. And conversely any growth would improve the well-being of the population and reducing poverty. The work is therefore interested in the determinants of growth. The first focused on policies advocated a massive investment to overcome under-development and implementation of a virtuous circle. Thereafter development economists have introduced the separation between development and growth. Development cannot occur without growth, but development policy should focus also on reducing inequalities, basic needs…
Means of Development
Practices that foster development can be located at the legal provisions, the adaptation of infrastructure and education, and even some financial incentives. Solow closely examined these aspects, as well as government agencies (World Bank) or private (Soros Foundation) responsible for promoting development.
The transition between an underdeveloped economy and a developing economy requires a sufficient accumulation exceeding a critical initiative, adaptation cultural, educational, and legislative and material resources. In particular, examples of emerging countries , including the largest in population, such as China , the India and Brazil have shown that the economic takeoff was facilitated by the introduction of measures falling within the economic framework Keynesianism such as infant industry protection, enhanced export credit and investment, structural maintenance of an exchange rate much lower than the purchasing power parity of their currencies, the existence of a public sector and the relatively high level of social investment and human voluntary policies of agrarian reform especially in East Asia, education, health, improving the status of women and the possibility of access to contraception. These interventionist measures were completed mainly from the years 1970 to 1980 by a liberalization of private initiatives under the economic liberalism.
Initiation of development: places and sectors
Concerning the nature and location of projects primer can be distinguished:
- development from the bottom up, from micro-projects very localized, involving people and trusting his initiative,
- And development from major investment projects which, although necessary and, for some, indispensable, can affect more random and less “catchy” for the rest of the economy.
Modern theories of development (Michael Porter) also insist on the notion of competence center geographically, which include know-how providing excellence source of competitive advantage. The pivot can be a university with a research center renowned and highly motivated by cooperation with economic and financial entities. Two examples:
- The Silicon Valley includes three competencies: academic (Stanford, Berkeley, Santa Clara), technology companies (the first was Hewlett-Packard) and fund capital risk.
- Emerging countries such as India (Bangalore, Mumbai for outsourcing software and active ingredients for generic drugs), China (space industry) and Brazil (agricultural genetic) play a number of activities over conventional unskilled labor, this role in the field of advanced technology.
The Millennium Development
In September 2000 at the Millennium Summit, the political leaders of the world, under the auspices of the United Nations agreed to a set of measurable objectives called the Millennium Development, to be achieved by in 2015. These objectives are: Halving extreme poverty and hunger Reduce by three quarters the maternal mortality Achieve universal primary education for all; Fight diseases, especially HIV / AIDS and malaria; Promote gender equality and empower women; Ensure environmental sustainability: Reduce by two thirds the mortality of children under 5 years Develop a global partnership for development. These objectives require a strong social commitment.
Changing patterns of development
Some advocate sustainable development or sustainable growth, managing of sparingly everything natural resources, some of which may dry or deteriorate.
Management is certainly necessary. The modern economy, called post-industrial economy has become more sophisticated. It comes from the knowledge economy, which is one of the determinants of the education, the information, expertise and innovation.
In fact, despite the advent of the knowledge economy, it is the developed countries continue to be dependent on natural resources. Emerging countries will in turn pass through an industrial phase, and consume more resources. Studies show that the activities of services and high-tech sectors (software, telecommunications networks) also consume raw materials and energy.
In any case, the sustainable development is seen as a goal for humanity and it determines the living conditions of future generations.
The Issue Of Model Development
When President Harry Truman presented his program to help countries “underdeveloped” in his inaugural speech in 1949, he proposed to make the technical knowledge of the United States and other developed areas of the world less advanced. This implicitly assumed that the lifestyle of the United States and other Western countries could inspire the development of the rest of the world, he was a model. These designs have ensured the triumph of a vision econometric development, in which the level of States’ progress was measured by a single indicator, the GDP per capita.
Since the 2000s, NGOs, headed by the WWF, advanced the idea that the environmental impact of the activities of the most “developed” (North America, Europe), measured by the ecological footprint was very than the biological capacity of the planet. For these organizations, the Western type of development cannot be generalized as such to the whole world. Experts such as Jean-Marc Jancovici also think it is unrealistic to propose to the world a model such as that inherited from the Industrial Revolution, the use of fossil fuels in particular with a much too strong impact on climate.
Alternatives are proposed since the 1990s. With the emergence of the concept of sustainable development, it seeks to balance the effect of economic, environmental, and social development. However, to say that sustainable development provides one model would be presumptuous. First, because it is so far above a target and actions are struggling to keep the good words. Secondly, because the development assistance must comply with the cultural specificities of the countries assisted, as UNESCO pointed at the Earth Summit in Johannesburg in 2002.