Pokhara UniversityNepal Engineering College

Centre for Postgraduate Studies

Discuss the economic, social, cultural, and environmental factors that may be used to define the level of development of a country, with reference to latest factors used by different international institutes defining level of development.

Santosh SapkotaRoll No.-1026

When there remains poverty, inequality unemployment among us, it would be strange to call the development even if per capita income is doubled. -Dudley Seers (1969)

Development concerns not only man’s material needs, but also the improvement of social conditions of his life. Development is, therefore, not only economic growth but growth plus change-social, cultural and institutional as well as economic.-UNO

The systematic use of scientific and technical knowledge to meet specific objectives or requirements. (Source : CMDC notes, Prof. Dr. Hari Krishna Shrestha)

The process of economic and social transformation that is based on

complex cultural and environmental factors and their interactions.(Source : CMDC notes, Prof. Dr. Hari Krishna Shrestha)

What is Development

Sustainable Development

Economic factor determining level of development

Capital Formation:

Natural Resources

Marketable Surplus of Agriculture:

Conditions in Foreign Trade:

Economic System:

Globalization and the free market economy

Debt cycle

Human Resources:

Technical Know-How and General Education:

Social Organization:

Corruption:

Desire to Develop:

Economic Factor Non-Economic Factor

Capital Formation:

• Save a high ratio-of its income, with the objective of raising the level of investment.

• Great reliance on foreign aid is highly risky.

• Lack of capital is the principal obstacle to growth and no developmental plan will succeed

• To achieve economic progress a certain minimum rate of capital accumulation is realized.

Economic factor determining level of development

Natural Resources:• In fact, natural resources are a necessary condition

for economic growth but not a sufficient one. Japan and India are the two contradictory examples.

• According to Professor Lewis, “A country which is considered to be poor in resources may be considered very rich in resources some later time, not merely because unknown resources are discovered, but equally because new methods are discovered for the known resources”.

• Japan is one such country which is deficient in natural resources but it is one of the advanced countries of the world because it has been able to discover new use for limited resources.

Economic factor determining level of development

  Marketable Surplus of Agriculture:• Excess of agriculture output over what is needed

for subsistence of rural population is marketable surplus

• Food shortage would force a country to import food grains which in turn would affect the economy.

• Indian government was compelled to import huge quantities of food grains till 1976-77 (The Indian Agricultural Research Institute (IARI)

Economic factor determining level of development

Conditions in Foreign Trade:• Foreign trade is exchange of capital, goods, and

services across international borders or territories.

• In most countries, it represents a significant share of gross domestic product (GDP).

• According to Anatol Marad, “International trade is a trade between nations”.

Economic factor determining level of development

The debt cycle• While these loans initially came

attached with low interest rates, over time the banks which lent out the money have increased the interest rates on repayments.

• In most cases, interest rates have been increased to levels which are nearly impossible for developing countries to meet.

• In this way, debts continue to accumulate, and the money which could be spent by governments on such things as infrastructure and healthcare is spent on repaying debts.

• EXAMPLE: Recent Case in Greece

Economic factor determining level of development

Economic System:• Free market economy: Production of goods and

services is in private ownership

• Command Economy: Decision on what to produce, how much, done by the government

• Mixed Economy: Certain economic sectors controlled by private business, others are government controlled.

Economic factor determining level of development

(Source: www.slidesshare.net

• Human Resources:

The productivity of illiterate, unskilled, disease ridden and superstitious people is gener ally low and they do not provide any hope to developmental work in a country.

• Technical Know-How and General Education:

As the scientific and technological knowledge advances, man discovers more and more sophisticated techniques of production which steadily raise the productivity levels.

Robert M. Solow has observed that the contribution of education to the increase in output per man hour in the United States between 1909 and 1949 was more than that of any other factor.

Factor determining level of development

Political Freedom:• Economic development needs conducive and stable environment.

• Freedom can be dangerous if misunderstood by wrong and  unqualified people, and can threaten economic development.

• Economic development usually means higher literacy, access to better education, development of infrastructure, legislation, law and order etc... Which should give a good base for political freedom and rules for politicians to enjoy their freedom.

Factor determining level of development

Corruption:• Corruption is rampant in developing

countries at various levels and it operates as a negative factor in their growth process.

• Until and unless these countries root-out corruption in their administrative system, it is most natural that the capitalists, traders and other powerful economic classes will continue to exploit national resources in their personal interests.

Factor determining level of development

Desire to Develop:• Development activity is not a mechanical

process. The pace of economic growth in any country depends to a great extent on people’s desire to develop.

• If in some country level of consciousness is low and the general mass of people has accepted poverty as its fate, then there will be little hope for development.

Factor determining level of development

Climate related disease – Many tropical countries unfortunately suffer from diseases that thrive in hot humid conditions, such as Dengue Fever, and Malaria.  People who get these diseases are incapacitated and cannot work or may even die, limiting development.

  A lack of natural resources – Countries with few natural resources start off at a very low economic base and find it hard to create products that can sell on world markets.

Natural resource curse theory – this is a theory that states if a country has one very valuable resource all efforts of the country are put into the exploitation of that resource.  That limits the POTENTIAL development of other industries.

Being landlocked with bad neighbours –countries that have no access to the sea are at the mercy of their neighbors.  If they are “bad neighbors” this can severely limit development.

 Climatic hazards Such as hurricanes and drought are more likely to strike some countries than others. The 2011 to 2012 Horn of Africa famine that affected Ethiopia, Eritrea, Kenya and Somalia had a long term impact. Many of these countries had to deal with a refugee crisis, diverting valuable resources away from other development objectives.

Environmental factor determining level of development

Culture

Clifford Geertz states that, in general, ‘culture is a historical system of inherited Conceptions, symbolically expressed, through which people communicate, perpetuate and develop their knowledge and approaches to life’.

• Culture influences society’s ability not only to design but also to operate institutions.

• The development process largely depends on attitudes, norms, values and institutions existing in the society.

• Values and attitudes motivate the social behavior.• Discrimination affects the country’s overall

productivity.• The role of women in a society. e.g.. role of women in

Arab world.• Cultural or religious norms may block the role of

women

Cultural factor determining level of development

Social Factor• There are many social factors that can affect the

level of development of a place.  Things like lack of drive of social motivation for betterment, unproductive social functions such as war or having very large family sizes, negative social cultures such as gambling and drinking, and lack of skills due to poor training and education.

•  Education is particularly important, as many countries cannot afford to send all children to school even at a basic level.

• UNICEF claim that in 2006 93 million children of primary school age were not in school!

Social factor determining level of development

(Source: www.slidesshare.net

There are a whole range of indicators which give us some idea about people’s quality of life. Access to safe water Crime levelsAccess to broadband internet connection Subjective life satisfactionMale and female literacy rates ObesityNumber of people per car Corruption perception indexPop per doc Number in higher educationFood consumption Energy consumptionMortality rates for diseases Pollution levels air/water

Social factor determining level of development

Political Factor• Unstable or bad government affects the country’s development.• Governments need to do lots of things to encourage development such as to build

and maintain infrastructure, and raise and spend finance wisely on the right projects.

• Encourages investment and initiative that protect businesses and individuals legally.

• Governments have the power to take actions which direct a country's social and economic development.

• Government corruption and greed have caused problems which have hindered the country’s progress.

• Foreign intervention play a key role in the reformation of a government.• Political leaders take the situation in their own hand and decide themselves.

Historical Factor• Country's history will provide explanations for many of the political, economic,

social and environmental factors that also contribute to its level of development.• Most significant historical factors that have hindered development is colonization.• Underdeveloped countries are essentially dependant on agriculture; they have a

rural or agrarian economy.

Political and Historical factor determining level of development

References

• Do cultural factor influence Economic Development, Ana Iolanda Voda, Academic research journals(india),17-25• http://web.uvic.ca/~kumara/econ420/characteristics-dev.pdf• Todaro, M. P. (1994). Economic Development (5th ed.). New York, London: Longman.• http://www.economicsconcepts.com/common_characteristics_of_developing_countries.htm• Types of Determinants (Factors) Which Influence the Economic Development of a Country ; Retrieved from

http://www.yourarticlelibrary.com/economics/factors-that-influence-the-economic-development-of-a-country/5942/• Shrestha, H.K. 2015, Class Notes, M.Sc.CM, Nec-CPS.• International Institute for Sustainable Development, http://www.iisd.org, Nov,2014.

Thank you