Economic Development And Human Development Essay

1. INTRODUCTION:

“ The care of human life and the happiness and not their destruction is the only legitimate object of good government”
- Thomas Jefferson
(To Maryland Republicans, 1809) From philosophers to political economists several great minds have taken cognizance of the fact that the people and their well-being are the ends any government should aim at and not income or GDP, which acts just as a means and not the end itself. This approach was formalized as the “Human Development Approach” with the creation of Human Development Reports in order to sensitize, orient and guide nations to a path of people-centric development.

However in the process, most nations tend to be growth-centric, than development-centric hoping that one will lead to the other. “Economic growth is indeed important, not for itself, but for what it allows a country to do with the resources that are generated, expanding both individual incomes and public revenue that can be used to meet social commitments” (Amartya Sen, 2013).

A cross-country regression study by Gustav Ranis et al 2000, demonstrates that both economic growth and human development positively reinforce each other when human development is held as the central objective and the economic growth is used as an instrument to aid development. At the same time, when the concentration is only on economic growth and the human development paradigm is neglected, it negatively affects the economic growth itself in the long term; they thus form virtuous and vicious cycles respectively. Hence human development is required to be prioritized. “Evidence over time has strong sequencing implications: countries initially favoring economic growth lapse into the vicious category, while those with good HD and poor EG sometimes move into the virtuous category. Where choice is necessary human development should be given sequencing priority.”