Oxford professor emeritus charts human development
Tori Roeck | Wednesday, February 19, 2014
In a talk Tuesday at the Hesburgh Center for International Studies, Frances Stewart, professor emeritus of development economics at the University of Oxford, described the history of human development from the 1950s onward.
Thinkers from developed countries created the concept of foreign aid in the 1950s, and this aid promoted industrialization and an increase in developing countries’ gross domestic product (GDP), Stewart said.
“There were indeed a growth increase and an investment increase, so the objective in that sense was fulfilled,” she said. “But it threw up its own problems and that’s the next process in the cycle. The problems were that unemployment began to increase and it hadn’t been an issue before. … Poverty began to be recognized that it wasn’t automatically going away.”
In the 1970s, movements came about that questioned the objectives and process of this early form of aid, Stewart said. Some economists argued that GDP per capita is not a good indicator for development because it does not take into account other important aspects of life, she said.
“It neglected income distribution, so you could find that countries with similar growth had very different income distributions,” she said. “… It neglected public goods and externalities. It neglected employment, and it ignored important features of life beyond income, like health, education, food and so forth.”
The dependencia movement also began in Latin America to fight the dependency that results in underdeveloped countries after receiving such aid, which led to the formation of the Organization of the Petroleum Exporting Countries (OPEC), Stewart said.
“The biggest impact was the dependencia movement because it influenced OPEC in particular and because of the big oil cost rise that resulted, first in 1973 and then again in the early 80s,” she said. “This in turn is the source of the debt problem of many developing countries because of the big rising oil prices in the early 70s. Countries immediately went into deficit.”
Stewart said the two major movements that influence development today — the basic needs approach and economist Amartya Sen’s capabilities approach — began in the 1970s in response to questions about the objectives and process of GDP-focused development.
“The basic needs approach was in part a sort of political reaction that seemed to speak more to politics to say to people, ‘Surely, everybody should have their basic needs met, their fundamental needs,’ rather than say that they should have redistribution of growth,” she said. “ … [Sen’s] argument is that the law of development is to enhance people’s potential to be and do, and beings and doings are capabilities — only the ones they have reason to value, and the reason to value is a very important phrase.”
In 1990, Sen helped create the Human Development Index (HDI) that judges health, education and income to rank countries into tiers of human development, Stewart said.
“What are the characteristics of success?” she said. “There aren’t that many universal characteristics. Some do it through good growth, like Singapore and South Korea. Some have very good distribution of income. Some have well-spent social expenditures.
“But there are some general traits, and one is giving priority to girls and women. That is the one factor that does seem to be universally shared by successful countries. … In general, having a high share of social expenditures seems to be a main correlation of success.”
Even still, Stewart said the HDI does not solve the problem of quantifying human development.
“I said I was going to measure human development in terms of the human development index, but one major issue is that it’s not a good measure of human development because it’s got those three components,” she said. “… The components of a full life are much bigger than that.”