Literature Globalization II
Lecture 1: Introduction, Human development, welfare and wellbeing
M. Nussbaum (2011), Creating Capabilities: The Human Development Approach, Chapter 3
Theories of development [what people in every na4on are striving for: a decent life]
- The GDP Approach
o For many years, the GDP approach have been the reigning model in development
economics to measure a country’s prosperity. The GDP approach measure
economic growth by GDP per capita.
o Advantages:
GDP is relatively easy to measure: the monetary value of goods and services
makes it possible to compare quantities of different types.
GDP has attractive transparency: it is difficult for countries to fudge the data
to make themselves look better.
Economic growth is at least a step in the right direction. It seems reasonable
to look at it as at least a one indication of a nation or region’s relative
achievement.
o Trickle-down theory: very common in the 1980s and 1990s. It suggests that the
benefits of economic growth are bound to improve the lot of the poor, even if no
direct action is taken in that direction.
o Disadvantages GDP
Does not look at distribution
GDP does not take into account groups in the population that are
particularly marginalized and deprived
Number does not take into account the whole quality of life
- Utilitarian approach
o another common economic approach that measures the quality of life by looking at
either total or average utility. Utility is understood as the satisfaction of
preferences. The utilitarian approach has the merit of caring about people: it
measures the quality of life according to people’s reported feelings about their
lives.
o Problems
It aggregates across lives, people at the bottom of the ladder are suffering
whilst nation has high average
It aggregates across components of life, suggesting singleness and
commensurability
Preferences are not hard-wired. People learn what to want, they form
adaptive preferences
Focuses on satisfaction as a goal
It undermines freedom
- Resource-based approaches
o Urges equal allocation of basic resources, understanding wealth and income to be
such all-purpose resources
o Problems
Income and wealth are not good proxies for what people are actually able to
do and be
Some people/groups need extra expense
The resource-based approach does not tell us enough about how people are
really doing
, - Capabilities and the measurement question
o What are people really able to do and to be? What real opportunities for activity
and choice has society given them? This approach insists on the heterogeneity and
incommensurability of all the important opportunities or capabilities, the salience
of distribution, and the unreliability of preferences as indices of what is really worth
pursuing.
- Human rights approach
o The Capabilities Approach is closely allied with the international human rights
movement. There is a close link between human rights and capabilities. The
common ground between the Capabilities Approach and the human rights
approach lies in the idea that all people have some core entitlements just by virtue
of humanity, and that it is a basic duty of society to respect and support these
entitlements.
o Critiques
Human rights approach is insufficiently attentive to issues of gender, race
and so on
M. Nussbaum (2011), Creating Capabilities: The Human Development Approach, Chapter 4
- Capability security is the security that some important fundamental rights are written
down in the constitution and cannot easily be changed by an impatient majority
- Some key elements of the Capabilities Approach: ‘The idea of equal human dignity, the
idea that practical reason is a very important capability, the idea that
- people should not have the right to remove the fundamental entitlements of others.’
- A consequentialist starts from the perception of what is good and define right choices in
terms of that. A deontologist starts from the perception of what is right or a duty, and
permit the pursuit of the good within the constraints of the right. The Capabilities
Approach has strong links with deontology (and it holds that social welfare should never be
pursued in a way that violates people’s fundamental entitlements.)
M. Nussbaum (2011), Creating Capabilities: The Human Development Approach, Chapter 5
- Objection to human rights movement/capabilities approach: these movements are
Western in origin. The endorsement of international human rights norms as major human
goals reinforces the subordination of non-Western cultures to a Western ideology
- But
o Even if these rights are western, doesn’t make it unsuitable for other nations
immediately
o Are these rights Western?
o The architects of the international human rights movement came from a wide
range of nations
, Lecture 2: Human development, democracy and capabilities
Sen A. Development as Freedom, Oxford: Oxford University Press, chapter 2
- Development as a process of expanding the real freedoms that people enjoy.
- Expansion of freedom is viewed as both the primary (constitutive role) end and the
principal means (instrumental role) of development
- Constitutive role of freedom
o Importance of substantive freedom in enriching human life. Removal of deprivation
- Instrumental role of freedom
o Concerns the way different kinds of rights, opportunities and entitlements
contribute to the expansion of human freedom in general.
- Two roles are linked, relating freedom of one kind to freedom of other kinds
- 5 types of instrumental freedoms
1. Political freedoms
2. Economic facilities
3. Social opportunities
4. Transparency guarantees
5. Protective secularity (social safety net)
these supplement each other, and reinforce one another
- Famines
o Famines do not occur in democracies since they are easy to prevent.
o This indicates that political freedom in the form of democratic arrangements helps
to safeguard economic freedom and freedom to survive
D. Acemoglu and J. Robinson (2013), Why Nations Fail: the Origins of Power, Chapter 2
- There is a very persistent divide between poor and rich over time
- Three theories describing and explaining the differences in prosperity and growth of
countries around the world
1. The geography hypothesis
Claims that the great divide between rich and poor is created by
geographical differences due to tropical diseases & tropical soil
But: disease is largely is consequence of poverty, agricultural output has
little to do with soil quality, but consequence of the ownership structure
2. The culture hypothesis
Prosperity can be linked back to culture
But: aspects of culture that are usually emphasized are not important for
understanding how we got here and why inequalities persist. There are of
course cultural differences, but these differences are a consequence of the
places’ different institutions and institutional histories
3. The ignorance hypothesis
World inequality exists because we or our rulers do not know how to make
poor countries rich
o This is lecture 1 of today: https://www.youtube.com/watch?
v=WcUKP1sAto8
o This is lecture 2 of today: https://www.youtube.com/watch?v=-
6A7k6peWRM
D. Acemoglu and J. Robinson (2013), Why Nations Fail: the Origins of Power, Chapter 3
Lecture 1: Introduction, Human development, welfare and wellbeing
M. Nussbaum (2011), Creating Capabilities: The Human Development Approach, Chapter 3
Theories of development [what people in every na4on are striving for: a decent life]
- The GDP Approach
o For many years, the GDP approach have been the reigning model in development
economics to measure a country’s prosperity. The GDP approach measure
economic growth by GDP per capita.
o Advantages:
GDP is relatively easy to measure: the monetary value of goods and services
makes it possible to compare quantities of different types.
GDP has attractive transparency: it is difficult for countries to fudge the data
to make themselves look better.
Economic growth is at least a step in the right direction. It seems reasonable
to look at it as at least a one indication of a nation or region’s relative
achievement.
o Trickle-down theory: very common in the 1980s and 1990s. It suggests that the
benefits of economic growth are bound to improve the lot of the poor, even if no
direct action is taken in that direction.
o Disadvantages GDP
Does not look at distribution
GDP does not take into account groups in the population that are
particularly marginalized and deprived
Number does not take into account the whole quality of life
- Utilitarian approach
o another common economic approach that measures the quality of life by looking at
either total or average utility. Utility is understood as the satisfaction of
preferences. The utilitarian approach has the merit of caring about people: it
measures the quality of life according to people’s reported feelings about their
lives.
o Problems
It aggregates across lives, people at the bottom of the ladder are suffering
whilst nation has high average
It aggregates across components of life, suggesting singleness and
commensurability
Preferences are not hard-wired. People learn what to want, they form
adaptive preferences
Focuses on satisfaction as a goal
It undermines freedom
- Resource-based approaches
o Urges equal allocation of basic resources, understanding wealth and income to be
such all-purpose resources
o Problems
Income and wealth are not good proxies for what people are actually able to
do and be
Some people/groups need extra expense
The resource-based approach does not tell us enough about how people are
really doing
, - Capabilities and the measurement question
o What are people really able to do and to be? What real opportunities for activity
and choice has society given them? This approach insists on the heterogeneity and
incommensurability of all the important opportunities or capabilities, the salience
of distribution, and the unreliability of preferences as indices of what is really worth
pursuing.
- Human rights approach
o The Capabilities Approach is closely allied with the international human rights
movement. There is a close link between human rights and capabilities. The
common ground between the Capabilities Approach and the human rights
approach lies in the idea that all people have some core entitlements just by virtue
of humanity, and that it is a basic duty of society to respect and support these
entitlements.
o Critiques
Human rights approach is insufficiently attentive to issues of gender, race
and so on
M. Nussbaum (2011), Creating Capabilities: The Human Development Approach, Chapter 4
- Capability security is the security that some important fundamental rights are written
down in the constitution and cannot easily be changed by an impatient majority
- Some key elements of the Capabilities Approach: ‘The idea of equal human dignity, the
idea that practical reason is a very important capability, the idea that
- people should not have the right to remove the fundamental entitlements of others.’
- A consequentialist starts from the perception of what is good and define right choices in
terms of that. A deontologist starts from the perception of what is right or a duty, and
permit the pursuit of the good within the constraints of the right. The Capabilities
Approach has strong links with deontology (and it holds that social welfare should never be
pursued in a way that violates people’s fundamental entitlements.)
M. Nussbaum (2011), Creating Capabilities: The Human Development Approach, Chapter 5
- Objection to human rights movement/capabilities approach: these movements are
Western in origin. The endorsement of international human rights norms as major human
goals reinforces the subordination of non-Western cultures to a Western ideology
- But
o Even if these rights are western, doesn’t make it unsuitable for other nations
immediately
o Are these rights Western?
o The architects of the international human rights movement came from a wide
range of nations
, Lecture 2: Human development, democracy and capabilities
Sen A. Development as Freedom, Oxford: Oxford University Press, chapter 2
- Development as a process of expanding the real freedoms that people enjoy.
- Expansion of freedom is viewed as both the primary (constitutive role) end and the
principal means (instrumental role) of development
- Constitutive role of freedom
o Importance of substantive freedom in enriching human life. Removal of deprivation
- Instrumental role of freedom
o Concerns the way different kinds of rights, opportunities and entitlements
contribute to the expansion of human freedom in general.
- Two roles are linked, relating freedom of one kind to freedom of other kinds
- 5 types of instrumental freedoms
1. Political freedoms
2. Economic facilities
3. Social opportunities
4. Transparency guarantees
5. Protective secularity (social safety net)
these supplement each other, and reinforce one another
- Famines
o Famines do not occur in democracies since they are easy to prevent.
o This indicates that political freedom in the form of democratic arrangements helps
to safeguard economic freedom and freedom to survive
D. Acemoglu and J. Robinson (2013), Why Nations Fail: the Origins of Power, Chapter 2
- There is a very persistent divide between poor and rich over time
- Three theories describing and explaining the differences in prosperity and growth of
countries around the world
1. The geography hypothesis
Claims that the great divide between rich and poor is created by
geographical differences due to tropical diseases & tropical soil
But: disease is largely is consequence of poverty, agricultural output has
little to do with soil quality, but consequence of the ownership structure
2. The culture hypothesis
Prosperity can be linked back to culture
But: aspects of culture that are usually emphasized are not important for
understanding how we got here and why inequalities persist. There are of
course cultural differences, but these differences are a consequence of the
places’ different institutions and institutional histories
3. The ignorance hypothesis
World inequality exists because we or our rulers do not know how to make
poor countries rich
o This is lecture 1 of today: https://www.youtube.com/watch?
v=WcUKP1sAto8
o This is lecture 2 of today: https://www.youtube.com/watch?v=-
6A7k6peWRM
D. Acemoglu and J. Robinson (2013), Why Nations Fail: the Origins of Power, Chapter 3
