ABSTRACT
Respect for private property rights, free markets, and the rule of law are often do cited as fundamental to economic development. However, many countries well in some of these indicators but still lag behind, development wise. This paper seeks to investigate factors that lead to economic growth without economic development, using Botswana as a case study. From around independence 1966 to 1995, Botswana was the fastest growing country in the world. During those three decades Botswana’s average annual growth rate was 9% percent, and she graduated from being the third poorest nation in the world to being an “upper middle income”.
Key words; economic growth, Economic development,
INTRODUCTION
Economic growth, material prosperity and high
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Today the country boasts of one of the highest per capita incomes in Africa. Real GDP has been just over 5% on average from 1970, and three decades on the country is still exemplary (Frankel 2010). It has low levels of corruption, strong institutional framework, a developed textile industry, baking and services industry and has managed to diversify their economy. As their economy grew over the years, human development indicators tagged along; a true sign of development. Mauritius success story is attributed to the adoption of good policies; competitively valued exchange rate, heavily spending on education, creation of a well-managed export processing zone (Frankel 2010).
Education is a pre-requisite for economic development. Education improves efficiency of the labour force and thereby stimulates economic growth. The use of technology makes it possible to produce quality goods and services at a comparatively lower cost. Benhabib and Spiegel (1994) write that an educated labour force is more creative, able to adopt and implement new technologies. African Economic outlook (2015) reports that despite its status as a middle income country; Botswana has the highest levels of inequality. Wealth distribution is unbalanced, and this can lead to uneven human development
Education is closely tied to socioeconomic status, and effective education for children and lifelong learning for adults are key contributors to health and prosperity for individuals, and for the country. Education contributes to health and prosperity by equipping people with knowledge and skills for problem solving, and helps provide a sense of control and mastery over life circumstances. It increases
looking at education inequality, its relation to poverty and what we can do about it.
Human capital is what makes us work, and working is what establishes are living conditions. That’s why productive countries have had increases in income, which made for increases in education and labor training. This is especially beneficial to third world countries, because as women receive more education, the more they learn about their roles in society, independence, family, and contraceptives - which, in turn, decreases the infant mortality rates. However, in order to be productive for a society’s economy, you need to possess certain skills. Skilled individuals have to work together to achieve success. Those who are talented come to the realization that their skills are more valuable in countries that already have a great amount of skilled workers. Being skilled helps trade, and not practicing trade, or being a closed off economy, has a damaging effect. An open economy will grow
Gary Becker’s and Kevin Murphy’s “The Upside of Income Inequality” analyzes the correlation between overall economic development, the importance of education and the effects it has on increasing income inequality. Becker’s and Murphy’s article presents a study taken in China that shows the increase in income inequality raising at similar rates as economic growth. This ultimately leads to a decrease in the amount of people facing poverty and better living conditions for the poor. During China’s rapid rate of economic development “inequality rose, [but] the number of Chinese who live in poverty fell from 260 million in 1978 to 42 million in 1998. Despite the widening gap in incomes, rapid economic development dramatically improved the lives of China’s poor” (Becker and Murphy 581). The authors also state that income inequality is in fact a natural result of economic development because it “raised the standard of living for both the rich and the poor” (Becker and Murphy 582). Education also effects the average earnings of Americans. The importance of receiving an education has
Our culture is spoon fed the idea that education equals opportunity, yet the education available to the lower-class thwarts growth. On the other hand, education offered to the upper class is rich with freedom
The IMF found that intense income inequality is also accompanied by “resource misallocation, corruption, and nepotism”. Since people will seek favored treatment, income inequality can also oppose civil unity and trust in the future. Moreover, the Economic Cooperation and Development (OECD) expressed that “econometric analysis suggests that income inequality has a sizeable and statistically significant negative impact on growth.” The OECD’s findings were based on a report titled “In It Together: Why Less Inequality Benefits Us All”. John Schmitt, the Research Director for the Washington Center for Economic Growth, summarized the OECD’s findings stating, “The new report finds that between 1990 and 2010 gross domestic product per person in 19 core OECD countries grew by a total of 28 percent, but would have grown by 33 percent over the same period if inequality had not increased after 1985. This estimate is based on an econometric analysis of 31 high- and middle-income OECD countries, which concluded that lowering inequality by just one ‘Gini-point’ (a standard measure of inequality used by economists) would raise the annual growth rate of GDP by 0.15 percentage points”. “Latin America’s new college graduates are inferior to other countries, because they receive poor elementary and high school education, which
What kind of change would occur in one’s life if his or her parents made more or less money? How life would be different for them? Easier/Harder? In the book the “Rich Peoples School” it takes place in Botswana. Botswana is known as a single luxury country. “The Rich People’s School” reveals that money can identify a person and reveal how they are treated from any aspects of life even no matter where one is in the world or story.
Africa is the world's second largest continent in both area and population, only Aisa supersede Africa in this area. Approximately 11,670,000 square miles Africa make up roughly a fifth of the world's land area, Also with a population of 959 million people, with calculates to be a seventh of the world population(1).
1. Agriculture as a key industry in sub-Saharan Africa and Australia is under threat from severe drought, and drought triggers a series of chain-reactions.
The most convincing argument against development is the emergence of an authoritarian government which tries to trade individual freedom for material goods. Easterly shows that there is no evidence that even a benevolent dictatorship can increase growth of the economy. Since freedom is being traded for intangible benefits in a dictatorship, it seems that free development is the best option. As Easterly says, a democracy in which people can influence their outcomes will make a happier and more productive nation. However, this does not preclude the idea of external aid working through a democratic
Education plays a larger component in the lives of people all around the world since it gives them capital, such as human, cultural, and social capital. Furthermore, education provides populations with all sorts of skills that can improve their quality of life. However, there happen to also be inequalities of education and diverse minorities have a grueling time trying to adjust their future. Numerous studies have shown a strong correlation of socioeconomic status and education, including how difficult it is to improve one's quality of life when coming from a low socioeconomic status.
Economic growth, put simply, is “an increase in the amount of goods and services produced per head of the population over a period of time”; development is inextricably linked with this economic growth. By utilising theories of economic growth and development we can see how the Chinese and Sub-Saharan African economies have emerged, but, more notably, we can use these to look at patterns from past and present to show their experience and the implications of this growth for the future.
Education comes with social benefits as well which can improve the situation of the poor, such as lower fertility and improved health care of children ("Poverty and Education"). "Poor people are often unable to obtain access to an adequate education, and without an adequate education people are often constrained to a life of poverty." - Servaas Van Der Berg. The absolutely poor in developing countries have low education levels. Some may not even have access to primary education or may not have completed their primary education, not realizing that it is important to reduce poverty. Education is often poorly measured, and the impacts do not always show up as statistically significant in cross- country growth regressions (Levine & Renelt, 1992). Africa’s education crisis makes media headlines and analysis by the Brookings Center for Universal Education (CUE) explains why this needs to change. Progress towards universal primary education has come to a halt and learning levels of children who are in school are poor as well. Using a Learning Barometer, CUE estimates that 61 million African children will reach adolescence lacking even the most basic literacy and numeracy skills, this will deprive a whole generation of opportunities to develop and escape poverty ("Poverty, Education, & Opportunity").
The questions are raised as what and how the wealth is distributed or allocated among societies. Countries with similar average incomes can differ substantially when it comes to people’s quality of life such as social justice, access to education and health care, job opportunities, availability of clean air and safe drinking water, the threat of crime, freedom of speech, life expectancy, birth-death control, identity, culture, conservation, equal opportunities, environmental change. Development is important as it covers a wide range process involving cultural, economic, environmental, political, social and technological change of a country. Regarding goals and means of development, recent United Nations documents emphasize on human development measured by life expectancy, adult literacy, access to all three levels of education as well as people‘s average income which is a necessary condition of their freedom of choice. In other words, human development incorporates all aspects of individuals’ well -being from their health status to their economic and political freedom. The Human Development Report 1996 of UNDP focuses on development as the end and economic growth a
This research also shows that economic growth, on average, raises incomes for both the rich and the poor. It helps to lift the poorest in society out of absolute poverty and does not automatically increase inequality. More importantly, no country has managed to lift itself out of poverty without integrating into the global economy.