Ethiopian Civil Service

University

Chuol R. Kompuok (Ph.D)

Africa Institute of Governance and Development
 1.1 Introduction to growth and development

• A major goal of poor countries is economic development

or economic growth. The two terms are not identical
• Growth may be necessary but not sufficient for
development
• Economic growth refers to increases in a country’s
production or income per capita
• Production is usually measured by gross national
product(GNP) or gross national income(GNI), used
interchangeably, an economy’s total output of goods and
services
• Economic development refers to economic growth
accompanied by changes in output distribution and
economic structure
• These changes may include:
 an improvement in the material well-being of the poorer half of the
population;
 a decline in agriculture’s share of GNP and a corresponding increase in
the GNP share of industry and services;
 an increase in the education and skills of the labor force; and
 substantial technical advances originating within the country.
• As with children, growth involves a stress on
quantitative measures (height or GNP), whereas
development draws attention to changes in
capacities (such as physical coordination and learning
ability, or the economy’s ability to adapt to shifts in
tastes and technology)
• The pendulum has swung between growth
and development
• A major shift came near the end of the UN’s
first development decade (1960–70), which
had stressed economic growth in poor
countries
• Because the benefits of growth did not often
spread to the poorer half of the population,
disillusionment with the decade’s progress
was widespread, even though economic
growth exceeded the UN target
• In 1969, Dudley Seers signaled this shift by asking
the following questions about a country’s
development:
 What has been happening to poverty?
 What has been happening to unemployment?
 What has been happening to inequality?
• If all three of these have become less severe, then
beyond doubt this has been a period of
development for the country concerned.
• If one or two of these central problems have been
growing worse, especially if all three have, it would
be strange to call the result “development,” even if
per capita income has soared.
• At the U.N. Millennium Summit in September 2000,
world leaders adopted the Millennium Development
Goals (MDGs), setting “targets for;
 reducing poverty,
hunger, disease,
illiteracy,
environmental degradation, and
discrimination against women” (U.N.
Development Program 2000).
• The MDGs, using 1990 as a benchmark, set targets for 2015. The
targets include;
1. reducing the people suffering from hunger and living on less than a
dollar a day from one of six billion (17 percent) to half that proportion;
2. ensuring that all boys and girls complete primary school (at present,
113 million children do not attend school);
3. promoting gender equality and empowering women by eliminating
gender disparities in primary and secondary education by 2005, and at
all levels by 2015 (at present, two-thirds of illiterates are women);
4. reducing by two-thirds mortality among children under five years
(presently 11 million children die before their fifth birthday, mainly from
preventable illnesses);
5. reducing the percentage of women dying in childbirth by three-fourths
(now one in 48 die in childbirth, despite the fact that virtually all
countries have safe programs for mothers);
6. halting and reversing the spread of HIV/AIDS, malaria, tuberculosis, and
other diseases (at present, 40 million people live with HIV, including five
million newly infected in 2001, despite the fact that Brazil, Senegal,
Thailand, and Uganda show that the spread of HIV can be stemmed);
7. ensuring environmental sustainability, by reversing the loss
of environmental resources, reducing by half the proportion
of people without access to safe drinking water by 2015, and
achieving significant improvement in the lives of at least 100
million slum dwellers (now “more than one billion people
lack access to safe drinking water and more than two billion
lack sanitation”); and
8. developing a global partnership for development, including
an open trading and financial system, a commitment to good
governance, reducing the debt burden of developing
countries, reducing the poverty of least developed countries,
providing productive employment for youth, providing
access to affordable essential drugs in developing countries,
and making available the benefits of new technologies,
especially in telecommunications (U.N. Development
Program 2002b).
• The United Nations points out development
goals achieved in the past: eradicating
smallpox (1977), reducing diarrhoeal deaths
by half (during the 1990s), and cutting infant
mortality rates (the annual number of deaths
of infants under one year of age per 1,000 live
births) to less than 120 (in all but 12 LDCs by
2000) (U.N. Development Program 2003:31).
• Thus, although most MDG goals appear
daunting, we can expect some progress.
• Timothy Besley and Robin Burgess (2003:3–22)
estimate that in LDCs, the elasticity of poverty with
respect to income per capita (percentage change in
poverty/percentage change in income per capita)
is−0.73, meaning that a doubling in average income
will reduce poverty rates by 73 percent.
• The annual growth rate in per capita income needed
to halve world poverty by 2015 is 3.9 percent.
• If you assume that world regions continue their
1960–90 growth, only the growths of East Asia and
the Middle East will exceed the rates needed to
halve regional poverty by 2015.
• However, Africa’s prospect is not as bright as
that of the remaining LDCs.
• David Sahn and David Stifel (2003:23–52) use
African demographic and health surveys to
examine likely progress in achieving MDG
goals.
• African countries are not on target to achieve
any of the first six goals tested (numbers 5 and
6 include proxies), with rural areas, where
most African reside, faring worse than cities.
• The international community has especially
focused upon Africa.
• The Economic Commission for Africa (1985:3)
described Africa’s economic situation in 1984
as the worst since the Great Depression, and
Africa as “the very sick child of the
international economy.”
• ECA’s 1983 25th anniversary projection of previous
trends to 2008 envisioned the following nightmare
of explosive population growth pressing on
physical resources and social services:
 The socio-economic conditions would be characterized
by a degradation of the very essence of human dignity,
 The rural population, which would have to survive on
intolerable toil, will face an almost disastrous situation
of land scarcity whereby whole families would have to
subsist on a mere hectare of land.
 Poverty would reach unimaginable dimensions, since
rural incomes would become almost negligible relative
to the cost of physical goods and services.
The conditions in the urban centers would also
worsen with more shanty towns, more congested
roads, more beggars and more delinquents.
The level of the unemployed searching
desperately for the means to survive would imply
increased crime rates and misery.
Alongside the misery, there would continue to be
those very few who, unashamedly, would
demonstrate an even higher degree of
conspicuous consumption.
• Unfortunately, the projection of the ECA is
proving correct
 Africa’s GDP per capita was lower in the 1990s than it
was at the end of the 1960s (World Bank 2000a:1).
 When expressed in purchasing-power parity dollars
(discussed later), Africa’s average GDP is the lowest in
the world, even lower than South Asia’s (India,
Pakistan, Bangladesh, and Sri Lanka).
 Moreover, life expectancy in sub-Saharan Africa,
reversing the global trend, has declined to the level of
1975, 46 years (inside front cover table), primarily
because of the high adult prevalence of HIV/AIDS.
 Africa’s political milieu, authoritarian and predatory
rule and widespread civil wars, militate against
economic growth
• In 1988, only 5 (Botswana, Gambia, Mauritius,
Senegal, Zimbabwe) of 47 sub-Saharan countries
were multiparty democracies (Bratton and van
de Walle 1997; Ndulu and O’Connell 1999:51).
• By 2004, the number of democracies had not
increased much.
• Indeed, a majority of the democratically elected
regimes in Africa contrive to hold elections to
satisfy international norms of
“presentability,”and ignore political liberties, the
rule of law, and separation of power (Nafziger
and Auvinen 2003:114–31).
• Claude Ake (1996:18, 42) writes:
 “With independence African leaders were in no position
to pursue development;
 they were too engrossed in the struggle for survival....
[Indeed] instead of being a public force, the state in Africa
tends to be privatized, that is, appropriated to the service
of private interests by the dominant faction of the elite.”
• Political elites extract immediate rents and transfers
rather than providing incentives for economic
growth.
• Clientelism or patrimonialism, the dominant pattern
in Africa, is a personalized relationship between
patrons and clients, commanding unequal wealth,
status, or influence, based on conditional loyalties
and involving mutual benefits.
• Corruption is endemic to political life at all levels in
Nigeria and many LDCs.
• Political leaders use funds at the disposal of the state
for systematic corruption, from petty survival
venality at the lower echelons of government to
kleptocracy at the top.
• In Nigeria, Ethiopia, and Zambia, neither growth nor
development took place in the last quarter of the
20th century.
• In Kenya and Malawi, growth took place without
much development.
• Economic development can refer not only to the rate
of change in economic wellbeing but also to its level.
Thank You!!