Economy of the development

The economy of the development is a branch of the economy which applies modern technologies of the macroeconomic analysis and microeconomic to the study of the economic problems, social, environmental and institutional that the countries called under development meet. It is interested in the determinants of the Pauvreté and the Sous-développement like to the policies being implemented to leave the Developing country their underdevelopment.

Definition, objectives

The economy of the development is a whole of public and private practices encouraging the Economic development of a country or an area, by supporting propensity to invest, innovate, undertake, to be formed, work.

The objective is to join together a Critical mass factors of production to reach a sufficient Economic growth, in particular resulting in an marked improvement of the Standard of living of the inhabitants of the zone concerned.

Economy of the development, as a branch with whole share of the economy, completion date of the Second world war. Previously the relative studies with the poor countries belonged to the analysis of the growth. There were no theories specific to these countries. It is only in the Fifties that the economists will endeavor to develop tools specific to the Developing country. Among the pioneers of the development one can quote Paul NR. Rosenstein-Rodan, Albert O. Hirschman, Arthur Lewis, Ragnar Nurkse, Gunnar Myrdal and Raúl Prebisch. The first work of the pioneers of the development did not distinguish economic development and economic growth. The development meant obligatorily obtaining an economic growth over one long period. And conversely any growth créérait an improvement of the wellbeing of the population and a reduction in poverty. Work was thus interested in the determinants of the growth. The first recommended policies related to an massive investment in order to leave the underdevelopment and to implement a virtuous circle. Thereafter the economists of the development introduced separation between development and growth. The development cannot be done without growth but a development policy must also stick to reduce the inequalities, satisafaire the fundamental needs…

The evolution of the economic thinking of the development is generally cut out in three phases.

Pioneers of the development (1945 - beginning of the year 60)

In the context according to war marked by the Decolonization in Asia and Africa, of the development of the institutions of Bretton Woods and during the Cold war the fight against poverty was seen like a means of keeping these countries in the Western camp, the economy of the development is worked out. Principal work attempts to show specificities structural of the developing countries: vicious circles of poverty (Nurkse), the dualism (Lewis 1955), the balanced Growth (Rosenstein-Rodan, Nurkse), the unbalanced Growth (Hirschmann), stages of the economic growth (Rostow)…

The feeling which prevailed was a great hope, the underdevelopment could be solved quickly. At this period, the development was synonymous with growth of the national revenue. The lack of capital being the main obstacle with the development, the development policies were directed towards a government aid with the development inspired by the Marshall plan. Being given the lack of capital, the question of the best allowance, than it is investment, was posed with acuity.

The key sector of the pioneers of the development was industry. The development policies preached during this time according to hardly were évertuaient with launching the industrialization of the DEVELOPING COUNTRIES on the example of the industrialization of the advanced countries.

The model of Harrod-Domar clarified the need for capital of the DEVELOPING COUNTRIES. Growth rate depended on rate of saving; the bottom grade of this last in the DEVELOPING COUNTRIES was to be compensated by foreign aid. Rosenstein-Rodan went in the same direction. Because of indivisibility of certain investments, a great push (big push) was necessary.

The allowance of the capital remained a discussed subject, between the partisans of an investment limited to certain sectors (balanced growth, Nurkse) and the partisans of a broader investment (unbalanced growth, Hirschman).

The phase of toughening (beginning of the year 60 - end of the year 70)

The economy of the development was radicalized during the Sixties. The underdevelopment is then seen like the resultant of external causes. Several theories go in this direction: Theory of the dependence, theory of exchange unequal, analyzes center-periphery.

The period of the management of the crisis (end of the year 70 - 1995)

The economic relationship between the center and the periphery is marked by the paradigm of the dependence. The economy world is a system maintained by the consequences these reports/ratios. The underdevelopment is the perpetuation of the neo-colonial state, in which the old colonies were involved with the independence, but on which the economies remain strongly dependant on the developed economies. The management of the crisis is conceded at the institutions of Bretton Woods (the IMF, the World Bank) through the plans of structural adjustment. The objective is to make adhere the countries of the South to the deregulation, the liberalism and the opening of the markets, by the means of measurements of budgetary orthodoxy, denationalization…

Means of the development

The practices supporting the development can be at the level of the legal tendencies, of the adaptation of the infrastructures and education, even of certain financial incentives. Robert Solow examined closely these aspects, as well heard as the public agencies (the World Bank) or deprived (Fondation Soros) charged to promote the development.

The transition between an underdeveloped economy and an economy under development supposes a sufficient office plurality, exceeding a Seuil criticizes initiative, of cultural adaptation, educational, and legislative, and average materials. In particular, the examples of the emergent Countries, including more important in population such as the China, the India and the Brazil, showed that economic starting was supported by the introduction of measurements of liberalization of private initiatives concerned with the Economic liberalism.

Development starts: places and sectors

Concerning the nature and the localization of the projects of starter, one distinguishes:

the development on the basis of the base, starting from very localized Microphone-projects , associating the population and making confidence with her initiative,
and the development starting from large investment plans, which although necessary and, for some, essential, can have more random effects and less “involving” for the remainder of the economy.

The modern theories of development (Michael Porter) insist in addition on the concept of geographical Pôle of competence , where know-how bringing gathers an exclusive excellence, source of competitive Avantage. The pivot can be a university equipped with a research center of reputation and very moved by the co-operation with the economic and financial entities. Two examples:

the Silicon Valley gathers these three competences: academic (Stanford, Berkeley, Santa Clara), technological companies (the first was Hewlett-Packard) and funds of Capital risk.
Of the emergent countries, like India (Bangalore, Bombay for the subcontracting of computer software and the active ingredients for generic medicines), China (space industry) and Brazil (genetic agricultural), plays, in addition to more traditional activities with not qualified labor, this role in the field of technological advance.

Objectives of the millenium for the development

Joined together in September 2000 at the time of the Summit of the Millenium, the political directors of the whole world fixed a whole of measurable objectives called the Objectives of the millenium for the development, to reach from here at 2015. These objectives are the following: To reduce half extreme poverty and hunger; To reduce by three quarters maternal death; To ensure primary education for all; To fight the diseases, in particular VIH/sida and paludism; To promote the equality of the sexes and the autonomisation of the women; To ensure a durable environment; To reduce two thirds the mortality of the children by less than 5 years; To set up a world partnership for the development.

Types of country compared to the development

A distinction can be made between

developed Pays,
emergent countries (Pays in the process of development/Developing country),
and underdeveloped Pays.

The sociétaux aspects differ from/to each other and their study is the subject of the Sociologie of the development.

It should be noted that there can be economic Déclin countries up to that point developed (for example, the Argentine was an economic power at the beginning of the 20th century). It can come independently of internal or external unforeseeable circumstances,

either of economic errors and lack of foresights,
or of a relaxation of the attitude vis-a-vis the efforts and adaptations necessary to maintain the development, which is never assured.

Evolution of the types of development

Human development

Sustainable development

Some preach the Sustainable development or the durable Croissance, by managing in a parsimonious way all that is Natural resources of which some could be dried up or to degrade itself.

This management is certainly necessary, but the economy modern, known as post-industrial economy concerns the economy of the knowledge, of which the Raw material (and, in parallel, the Factor of production determinant) is education, information, the knowledge to make, the creativity.

There is thus less use of physical resources, except in the emergent countries where it is a question of passing by an industrial phase. For example many lines of business (except for transport) and the sectors of high technology (computer software, telecommunication networks) consume much less matter and of energy that economic sectors more “ripe”, such as the car for example.

In any case, sustainable development is regarded as an objective for humanity and he mortgages the living conditions of the future generations.

Decrease

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