Friday, January 31, 2014

About Socio-Economic Development

I seem to have an unusual view of development. Let me state it again.

The Purpose of Development

I think the purpose of development is that people live better. I tend to believe that a dollar more income does a lot more for someone who has few dollars than for someone who has many dollars. I also tend to believe that relieving hunger, illness, disability is important. Meeting basic human needs is in the realm of human rights, and trumps efforts to allow people to lead more comfortable lives. But living better also involves living a more moral and responsible life, participating more fully in family, community and nation.

Doing Things Better

The process of development is a process of doing many things better and better. It involves increasing productivity -- getting more bang for the buck. That is increasing the productivity of farms, factories, schools, health facilities, government offices, banks and all the other productive units in the society. It involves substituting more efficacious treatments for less efficacious ones, and inventing new products and processes that. It involves achieving more effectiveness in large scale (e.g. it is no use to produce more food if the added production is wasted in the distribution and consumption process).

The process of development on a national level involves doing many things better and better by very many people. It may start with a minority, but eventually lots of people throughout society are going to be doing better things better.

Creating Better People

Central to the process is improving people as development actors. That includes people who are healthier and less afflicted by disabilities accumulated over their lifetimes. It includes people who are better schooled, and able to learn and carry out development tasks better and better. People should be becoming better workers, better managers, better citizens. Indeed, since trust is the glue holding much of society together, people should be becoming more trusting and more trustworthy.

Better Identifying, Managing and Utilizing Resources

Better identifying mineral resources, forest resources, fishery resources, soil resources, water resources, renewable energy resources, and indeed human resources is an important aspect of development. These resources have to be well managed in order not to be wasted. And most importantly they have to be applied effectively to promote the other aspects of development and production.


At an early stage of development, progress is made substituting energy in internal combustion engines and electrical networks for human and animal muscles. In later stages, development involves utilizing energy more and more to achieve the purposes of development and production. We have also discovered that development involves energy efficiency -- using the energy we have better.

Physical Capital Accumulation

Economists have long recognized that capital accumulation is critical to economic development. Here I am not discussin the monetary value of the capital. Development is based on physical capital -- roads, electrical power systems, irrigation systems, ports, railroads, ships, planes and vehicles, buildings, machines, and the increase the productivity of people and resources, and help people to live better. Development involves increasing the stock of such goods, improving the quality of the stock, and managing the stock to maximize its productivity and developmental utility. Better physical capital, better used.

Improving Technology

Here I am speaking of the body of knowledge of productive techniques. That knowledge may be embodied in machines, in supplies (such as drugs, pesticides, lubricants, materials, or coatings), in people or in institutions (that is, diffused in the people and things that make up an institution), these days in software and data banks, or even in disembodied forms such as books. As people get more tools with which to work, the technology for that work must change, and thus the technology embodied in the workers, machines, physical inputs and organization must change as well. Thus development involves managing the body of technological knowledge (acquiring new knowledge and discarding knowledge that is no longer useful; changing how or where knowledge is embodied) in such a way as to increase productivity and the accomplishment of the purposes of development.

Organizing Better

Businesses need to be organized to be more innovative and productive, as do governmental bureaucracies and non-governmental (civil society) organizations. Markets need to work better, as do market like institutions such as those that connect aspiring students to schools, colleges and universities, or job seekers to potential employers. Organizations need to be re-engineered to take better advantage of information and communications technologies, and sectors need to be restructured to allow businesses to function better. Some have termed this institutional development

Planning Better

People make plans at all levels of society. A teacher makes lesson plans for the day's lessons; a farmer makes plans for the years crops; a business makes plans for its yearly operation and its expansion; a government plans fiscal and monetary policy. Plans that once worked fine, no longer function well as development occurs and progress is made; thus planning is a continuous function in development, and the quality of development depends on the quality of the plans. Indeed, it seems likely that planning should get better and better with development -- based on better information, better analytic approaches, and developed in such a way to improve plan implementation.

The Bottom Line

In my view, development is something accomplished by people working to make society function better and better over time. It is rooted in real things -- resources, physical capital, and especially the abilities of people themselves. Fundamentally it involves producing more and more efficacious goods and services. It is based in people becoming better at what they do, in better organizations, and in better plans. To work, it must be pervasive, with improvements spread widely over a culture, society, polity and economy. Ultimately, development depends on cultural change and produces cultural change, ideally in a virtuous cycle.

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