8. The future of development

‘The future of development’ considers some of the key challenges facing all countries: the sequencing of different policy reforms and investment efforts; the role of private investment and foreign aid; the coherence of aid policies; the provision of global public goods; and the role of the international community in the protection and restoration of the global commons. As individuals get wealthier and escape poverty, the choices they make increasingly impact other people. More than ever the futures of advanced and developing countries are intertwined. The term ‘development’ is less and less about a geographic place and more and more about our collective ability to cooperate in harvesting global opportunities and managing the associated global risks.

3. Why are some countries rich and others poor?

‘Why are some countries rich and others poor?’ considers various theories of economic growth, including Robert Solow’s widely used 1956 model, and charts the uneven development of countries around the world from the late nineteenth century, through the twentieth century, and into the twenty-first century. Some countries, such as Japan and South Korea, have seen miraculous economic growth, whereas countries such as Argentina and Uruguay have not experienced expected levels of growth. The factors that affect development trajectories include natural resource endowments, geography, history, institutions, politics, and power. While overall levels of poverty have declined, levels of inequality are rising in almost all countries.

6. Sustainable development

The environment and development are intimately related yet this relationship has only recently come to the centre of development concerns. The 1987 Brundtland Report from the World Commission for the Environment and Development recognized that while economic growth has contributed to improved living standards and life expectancy, it has adversely affected the environment by depleting (or irreversibly damaging) the natural resource base, which in the longer term undermines future growth prospects and living standards. ‘Sustainable development’ considers the limits to growth and our planetary boundaries, concluding that given the scale and urgency of the need for new ideas, technologies, and finance to address the needs of sustainable development, much greater investment in environmental awareness and protection is required.

5. The evolution of development aid

Foreign aid is any kind of official development assistance, concessionary loan, or financial grant given to developing countries mainly for the purpose of economic development or welfare provision. ‘The evolution of development aid’ describes the improved aspects of aid since the end of the Cold War with greater aid effectiveness achieved by targeting poverty reduction efforts more directly. It also outlines the eight Millennium Development Goals and the subsequent seventeen Sustainable Development Goals proposed in 2015; describes the range of development finance institutions and their response to the debt crisis; and explains the higher levels of investment in global public goods that are required to prevent global catastrophes.

4. What can be done to accelerate development?

The extraordinary diversity of development experiences reveals the many different available pathways that countries have chosen in order to develop. Each requires a determination to succeed and the sacrifice of short-term benefits for longer-term and societal goals. It is hard to accelerate development and the gains can be easily reversed. ‘What can be done to accelerate development?’ looks at key areas that can affect and improve development prospects. These include literacy and education; health; reducing gender inequality; agriculture and improved food nutrition; investment in infrastructure; legal frameworks and equity; global trade; and peace and stability.

7. Globalization and development

The relationship between globalization and development is contested. For some, globalization is a powerful force for poverty reduction and has led to leaps in life expectancy and other key dimensions of development. For others, globalization has negative implications and is seen as a source of growing inequality, poverty, unemployment, and environmental destruction. ‘Globalization and development’ considers the important aspects of globalization that have an impact on development: global financial flows and different types of financial investment; the promotion of equitable trade for developing countries; technological progress; international regulation and cooperation to prevent transfer pricing and tax avoidance; and the impact of international migration and the rise of refugees due to civil war and genocide.

1. What is development?

Progress in tackling poverty over the past twenty-five years has been remarkable, but significant numbers of people remain in poverty and suffer severe deprivation despite the overall progress. ‘What is development?’ explains that there are many definitions of development and the concept itself has evolved rapidly since the Second World War. The concept now brings together economic, psychological, and environmental notions of development to meet physical, emotional, and social needs. Different development indicators are explained and the new challenges facing development progress are outlined, including climate change and health issues such as obesity and antibiotic resistance.

2. How does development happen?

‘How does development happen?’ looks at how our understanding of how development happens has evolved. It first considers the evolution of post-war development theory that was strongly influenced by classical writings on political economy. It then outlines Modernization Theory of the 1950s and 1960s, followed by planning for economic development and Dependency Theory. By the late 1970s and early 1980s a range of factors led to the pendulum swinging sharply to the right, away from a statist approach to development, with neo-classical market-led development. In the 1990s, the growing recognition that markets alone cannot deliver development engendered a rich debate on the role of the state and market.