BY PAUL ANDREW BOURNE, M.Sc.; B.Sc.(Hon); Dip. Edu.
ABSTRACT
The development discourse continues to unfold from its genesis in economic growth (i.e. growth) to having multi-dimensional tenets outside of the classical growth model and the Keynesian growth theory, which is human capital formation. Westerners, for example, Todaro, United Nations, Haq and Rapley see development completely different from the classical and the Keynesian scholars. The classicalists and Keynesian economists theorize development from the demand side, which are persistent increases in growth. The consensus among developmentalists, on the other hand, is that the phenomenon is based on the expansion of choices. Hence, from the critique of various scholarships on development theories, development is simply not the outcome of a single determinant such as the increase in economic production over one year, as man’s choices are multispatial and temporal, and so the phenomenon must be operationalized beyond the purviews of persistent increases in Gross Domestic Product (GDP). Another scope of development is the supply side: quality, flexibility, the efficiency in combining and utilizing productive resource, the adoption and use of technology, creativity, capacity for the organization and social discipline, savings, and the competency to compete international. With this being said, a fundamental issue in this debate is the discussants, and where they received their training as this will guide their interpretation and research of the observable fact. As economists, for example, Milton Friedman and Michael Todaro, development is equally influenced by non-economic forces. Non-economists, for example, Rostow and some post-modernernist and developmental economists alike believed that various indicators such as educational opportunities, health care status of a group of people and defense influence human development. This research presents a thorough discourse of development, using various scholarships, but is primarily concerned with the relationship between development and particular expenditures by government on education and health care. This project is a quantitative one; therefore, the researcher used secondary survey data collected from different countries across the globe to determine the association between and among variables. The findings show that the relationship between development and public expenditure on health, and development and government expenditure on education are indeed moderate.
Key words: Paul Andrew Bourne, development, economic growth, public expenditure on education, public expenditure on health, human development, economic growth, Michael Todaro, John Rapley, Milton Friedman, Classical and Keynesian theorists, United Nations,
Chapter 1
INTRODUCTION: CONTEXTUAL BACKGROUND
Neither economic growth nor ‘economic and social development’ is an end in itself. Each is a means of improving the living conditions of people, and first of all of people who live under miserable conditions. Development assistance should be looked upon as an instrument to reach this ultimate target.
Economists often express the opinion that economic growth is a necessary, albeit not sufficient, condition of future improvements in the living standard of the masses. This leads to the conclusion that consumption today must be restricted in order to permit higher savings and faster growth. This thinking has created a bias towards ‘productive investments’ and against steps to improve the living conditions of the ordinary man, woman and child. So-called ‘social services’ have been given low priority in the development plans of the developing countries. New ideas are now gradually breaking through. Knowledge and better health are now looked upon as factors which improve the productivity of the individual. For this reason alone more emphasis has been given to education and to health services in recent years (Norbye, 1974, p.13)
Development has taken on a new meaning from earlier times when it was viewed solely as an economic phenomenon (– see Adam Smith’s Wealth of Nations; Lewis 1954, 1955, 1964, 1977; Sunkel 1993; Rapley 2002; Hettne 1995; Marglin and Marglin 1990). Today, development is multi-disciplinary (Norbye, 1974; Todaro, 2000) and is not limited to economic indicators (for example the increase in goods and services produced in a state, and/or changes in capital formation). This phenomenon is of fundamental concern to other non-economists as it speaks to the conditions of existence of people (Norbye, 1974), and therefore extends beyond an economic study.
In the early 1980s, there was a marked difference between social research and theories according to Booth (1994). Booth saw where critical world issues were not being dealt with and was leaving "skeptics" to wonder about the relevance of academic studies on development. However, in this paper, the critical development issues discussed will be base on the views of Booth. In order to give a more comprehensive view in terms of research proposal, Jamaica will be using as reference to highlight health facilities and how these facilities improved or worsened as the population develops. During the 1970s, health facilities were greatly improved and as a result, the Infant Mortality Rate decreased from 32.5 per cent prior to 1970 to 11.3 per cent in 1980.
Development has been treated by economists as if it were nothing more than an exercise in applied economics, unrelated to political ideas, forms of government, and the role of people in society. It is high time we combine political and economic theory to consider not just ways in which societies can become more productive but the quality of the societies which are supposed to become more productive-the development of people rather than the development of things.
(Todaro, 2000)
Despite non-developmental economists’ position on development, in that their definitions lack social coverage and it is biased in keeping with an economic construct, the fact is, we are seeking to comprehend an phenomenon which began from the bowels of economics; and so the issue that must be understood by readers is the trajectory of the construct and its constituent today. The fact is, we need to lay a foundation of development that will aid an evaluation of development over the decades. As such, the phenomenon must be understood for its present construct. Hence, the researcher will broaden the construct of the non-developmental economists’ definition of development to incorporate health, education, leisure, increased social amenities and social expansion of resource to people within the geographic locality defined as Jamaica. This position will concur with the perspective of development economists like Michael P. Todaro. In addition, the new definition seeks to address political ideological changes, forms of government and how those phenomena impact on development.
A development scholar writes that, "in the early 1980s there was a widely shared sense that social research and theorizing about development had reached some kind of impasse" (Booth 1994). He continues that "crucial real-world questions were not being addressed and the gulf between academic inquiry and the various spheres of development policy and practice had widened to the point where practitioners were raising fundamental doubts about the ‘relevance’ of academic development studies." Hence, Booth’s viewpoint highlights a dimension of the development discourse that was intensified since the 1950s: as development is multi-faceted; and so cannot be conceptualized by scholars as a single one-dimensional phenomenon (Todaro, 2000; Hettne, 1995; Haq, 1987).
This discourse has taken on even a new persona in the last two decades. Traditionally, this phenomenon was seen as primarily economic (Kurnets, 1989; Hogendorn, 1987). John Maynard Keynes is considered a pioneer in traditional economic development by many academics (Rapley, 1996) and he forwards a perspective that development is fostered by economic growth. This is a change in the economic activities of a country due to an increase in the production of goods and service when saved over time (Beardshaw, 1992). This is, therefore, the primarily indicator for development. Keynes’ theorizing is adopted from Adam Smith’s early theorizing on development. Their views are that economic development is fostered by a smoothly operated capitalist economy (Rapley, 1996, p. 6-7).
According to Rapley (1996, p.7), "state interventions to relieve poverty would inhibit initiative, and would stifle investment because they would rely on increased taxes." Dr. Rapley’s cites perspective is a clear indication of the stance taken by all traditional economists. This stance sees development as solely an economic growth phenomenon that is driven by the free market but many post World War II economists differ on a theorizing for this construct. Lewis concurred with classicalists like Smith and Keynes that development is primarily economic. Rapley (1996) states that, "Lewis argued that in a Third World economy, the wage rate was set at a constant level as determined by minimum levels of existence in traditional family farming"(p.16). This ensures a virtually unlimited supply of cheap labour, which has an advantageous factor in industrial development (Rapley, 1996 p.16). As a social scientist who is concerned with development, I am cognizant of the different discourse on the matter and so before coming to a consensus on a final perspective on the topic, all the schools of thoughts will be presented herein. This means that the researcher will take a particular theorizing to measure development for this paper.
The Organization of Eastern Caribbean States (OECS, 2002) in one of their reports writes that, "while material poverty affect a large number of households, the Report points to the impending dangers of more widespread and subtle forms of poverty that include poor health, inadequate levels of educational attainment; lack of economic assets or access to markets or jobs that could create the unsafe physical environment; and various forms of social exclusion." This report forwards the core of the post-1950 scholars’ viewpoints on development that is it is broader than the Classicalists’ theorizing that was once the epistemological framework on development. The report points to other non-economic growth theorizing such as health care, education and other psychosocial conditions. Hence, the researcher will not seek to continue in the pre-1950s epistemological mindset as it is a one-sided theorizing but will seek to quantify any validity of the contemporary developmentalists’ perspective on the issue as this include social, political and economic factors. This research surrounds the social aspect to development in the form of expenditure on health care and expenditure on education with the intention of using those two (2) determinants of contemporary development in order to ascertain any causal and/or associational relationship between expenditure on social programmes and their influence on levels of development in Jamaica.
According to Social and Economic Survey of Living Condition, Jamaica had the second lowest infant mortality rate and the second highest life expectancy of the six countries studied. Within the context of the United Nations Development Reports, life expectancy is a determinant of human development. Thus, this speaks to the health status of the populace, and its progression in development indicators.
Professor Rex Nettleford quotes that "Jamaica’s infant mortality and life expectancy levels have improved steadily to the point where the country’s health indicators are considerably above the third world norm moderately better than that for middle income countries and slightly below industrialized countries. In the case of infant mortality improvement, the arte of exchange in Jamaica matches that achieved in the United States of America over the 1938 to 1980 period and is considerably above that achieved in most middle income developing countries. Much of this is due to increased spending on health services as overall public spending increased."
Professor Nettleford states that the health indicators have improved since 1938 and that the social position of Jamaicans has significantly improved. This he says is because of spending on health care services.
When individuals are malnourished, the health of these individuals would affect them in terms of their physical and mental states. A medical practitioner, Dalzell-Ward (1974: 23) commented, "The deprivation of energy foods’ will result in excessive fatigue which will in turn diminish social and work performances and interfere with well-being." There is however, the indication of a level of development, where as if an individual is not in the best of health, this will contribute to fewer hours worked and reduced production. The economist Adam states that this would be an indication of reduced economic growth. Professor Todaro from his perspective, development envelopes social, political and economic changes in peoples lives. Another medical practitioner concurred with Dalzell –Ward (1974) when she said:
"In fact many of today’s problems with students are actually health related. Kids are not able to learn sufficiently if they are hungry, tired, hung-over form alcohol, or worried about violence. We need to eliminate barriers that affect students’ readiness to learn. A variety of physical and mental conditions impact students’ attendance and their ability to pay attention in class anger, and restrain from self-destructive impulses."
CONCEPTUAL FRAMEWORK
The determinants of development and their influence on peoples’ quality of life were examine by Adam Smith and along with others from classical school saw development from an economic point of view. They argued that development is primarily a function of economic point of view. They argued that development is primarily a function of economic growth.
Adam Smith was the chief among many scholars who forwarded a theory on the determinants of development and their influence on peoples’ welfare. Smith and other economists within the Classical School theorized that development was due to persistent economic growth. They argued that development is solely a function of economic growth [the example here is Development = F (Economic Growth)]. The pre-1950 developmental theorists were convinced that development was a single social science factor but Hettne (1995) forwarded a point of view that the fathers of development theory was ‘euro-centric’ (p.21).
Many persons inadvertently and incorrectly interchange economic growth with economic development as though they are synonyms but these are two distinct phenomena. Economists posit that ‘economic growth’ is an increase in the Gross Domestic Product (GDP) of a nation. GDP is the aggregate of all goods that are produced, distributed and consumed in an economy in a given year. As such, an increase entails the employment of more factors of production (land, labour, capital and entrepreneurship). Equally, G.D.P is the aggregate of the factor incomes. Apart from the definitional properties of G.D.P, the reader must understand a thorough understanding of this measurement of production in order that s/he is able to grasp the issues that will be critically presented in this paper.
Gross Domestic Product’s Growth does not automatically disaggregate into a share of production to each sector within the economy. The growth of the economy may entail all sectors getting proportionately more or proportionately less than other sectors. It has been the case on a wide scale that the owners of capital, the entrepreneurs, have been receiving significantly more of the GDP than the other participants. It is this disparity between the wage earners and the owners of capital that must be addressed in order to develop the human capital of the population as a whole. This is especially the case when capital is very unequally distributed. An increase in productive capacity of an economy may not have been for the general good of all peoples therein but may be due largely to small sub-sector of the populace.
Economic development, however, is significantly different from that of economic growth. In that, "Development in human society is a many sided process. At the level of the individual it implies increase in skill and capacity ………… and material well being". Implicit in that definition is the accumulation of the surplus of individual firms. In order for this surplus to be meaningful as a human indicator of development and large enough to ensure the survival of firms and improve the standard of living of those employed by the firm, the surplus cannot be consumed after a day. If this is done, then the standard of living of the workforce will decline and this decline is concomitant with the lack of development in the domestic economy.
Economic growth in some economies can then be associated with immizerization, in that economic growth may result in misery. This occurs when economic growth causes a high proportion of the population to become impoverished while a smaller proportion accumulates substantial wealth. As such, this growth may lead to impoverishment of a sector or some sectors within the economy but this cannot be the case for economic development implies the improvement in human capital that is not important for growth.
From that school of thought, economic growth is the force behind any development of a society. The transformation of any society beyond its past is accounted for by the saving of resources from economic growth. Therefore, economic development is the transformation of the base of an economy. This is attained through physical infrastructural changes in that society. The Classical School believed that economic growth increases standard of living of the people. This is accomplish by the peoples being able to afford more of the same goods and-or better quality items. Furthermore, the Neolassical theorists on the issue of economic development believed merely that this was an extension of conventional economic theory that equated "development" with growth and industrialization. Because of that construct, Latin American, Asian and African countries were seen mostly "underdeveloped" countries that is, "primitive" versions of European nations that could, with time, "develop" the institutions and standards of living of Europe and North America.
On the other hand, the modern economists believe that development is broader than economic growth. Professor Michael Todaro purported that there are three (3) objectives of development. Firstly, they are "increase the availability and widen the distribution of basic life – such as food, shelter, health, and protection. Secondly, to raise the levels of living, including, in addition to higher incomes, the better jobs, better education, and greater attention to cultural and humanistic values, all of which will serve not only to enhance material well-being also to generate greater individual and national self-esteem. Finally, he purported the expansion of social choices." Based on Professor Todaro’s position on development, this includes the improvement in the quality of life of people through social, political and economic determinants.
Sustainable development was defined by the World Commission on Environment and Development as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs." Development in this context refers to societal as well as economic development. Sustainable development encompasses human welfare, economic growth, stability, environmental protection, and conservation. It seeks to meet the needs of the present while conserving resources for future generations.
Economists see economic growth as the creation to build the country’s Gross Domestic Product (GDP) within a specified time, usually twelve months. From that perspective, therefore development is the transformation of the foundation within an economy. In other words, the transformation of any modern society has its own record as to its achievement and utilizing well its limits resources from economic growth.
Classical theorists had the tendency to show a linkage towards conventional economic theory and "development" with growth and industrialization. Latin American however, perceived this idea, Asian and African countries as "underdeveloped countries." It is worthwhile to remember Professor Todaro’s position on development that focuses on improvement in the quality of life of individuals through social, political and economic means.