Introduction-8-10 - International economic development and...

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1 8/23/10 International economic development and policy by Alain de Janvry and Elisabeth Sadoulet Introduction 1. Thinking development Achieving universal economic development is likely to be today’s single most important challenge for humanity . With 85% of the world population living in developing countries, 58% of developing countries’ population in poverty, and 26% in extreme poverty, the problem is of massive proportions. Its importance transcends the interests of the developing countries’ population. Continued failure to achieve development for a majority of humanity not only has a huge intrinsic welfare costs for that population but it is also a lost opportunity for the population of the more developed (industrialized) countries and poses serious threats to the survival of the entire human species. Achieving development should thus be an issue of concern not only for the developing countries, but also for the industrialized countries. Yet, as we will see in this book, it is likely to be one of the most difficult issues to address, and we only very incompletely know how to succeed. Development is complex to achieve because it is a multidimensional undertaking. In this book, we characterize it under seven dimensions: Under-development includes divergence in per capita incomes relative to the industrialized countries, extensive poverty accompanied by food insecurity and hunger, vulnerability to shocks, inequality in the distribution of income and inequity in chances to succeed, lack of satisfaction of basic needs in health and education, rising resource scarcity and environmental stress implying lack of inter-generational sustainability in access to resources, and low “quality of life” in a number of dimensions to be defined. Because under-development is so multidimensional, there inevitably exist many trade- offs in outcomes. Under-development is also a dynamic state of affairs, with periods of success followed by periods of crisis, and vice-versa. Reversals of fortune are not uncommon, with some relatively more developed countries at a time becoming part of the developing world at another time. As a consequence, there is considerable heterogeneity in form, space, and time in the development experience. Achieving development and avoiding falling back into under-development are permanent challenges that need to be addressed. From a positive standpoint, heterogeneity means that development diagnostics, and establishing the causal determinants of development outcomes, have to be constantly established and re-established. This is because the context where development unfolds is constantly changing . Major emerging contextual features are economic, political, environmental, and cultural globalization, the development of integrated value chains at a world scale, a rapid pace of technological and institutional innovations, rising resource scarcity, and environmental stress such as global climate change. Hence, there are no
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2 8/23/10 stable descriptive statistics and no permanent causalities that can characterize
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This note was uploaded on 02/09/2011 for the course ECON c171 taught by Professor Alaindejanvry during the Fall '10 term at Berkeley.

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Introduction-8-10 - International economic development and...

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