Law and Development 2022

No.2 The definitions and determinants of development
Goal:This session aims to understand diverse concepts of "development" and their relationship.
As explained in the previous session, a law is made to transform people's repetitive behavior by
imposing normative language ("if you do A, then it shall cause B"). In the law and development
context, the transformation directs to "development." Therefore, if it is not clear whatdevelopment is, the direction is also unclear. In other words, if the definition of "development" isdifferent, the law to achieve it is also different.
1． Introduction
What is the development? This question can be paraphrased to " say the development has achievedor progressed, what is to be accomplished?" In this regard, at least, there are two different ideas:
namely, at first, "the increase in wealth is development, " and secondly, "the increase in othervalues brought about by the increase in wealth is the development."
Question:(1) What is the problem with the definition of development that states, "the increase in wealth isdevelopment"?
(2) If we say that "increase in other value is development," what is the "other value"?
2. Development as the increase in wealth: Economic development- Amount of wealth: GDP, GDP per capita (GDP/p), and GDP PPP
The concept of development as the increase in wealth is called "economic development."
Economic development evaluates the level of development with economic growth. GDP is themost famous indicator to measure economic growth. GDP represents the scale of production of acountry. It is a helpful indicator to compare the economic scale of nations. However, the scale ofproduction depends on both productivity and the amount of labor force. In other words, a country
that has a large low productive labor force can have large GDP. Therefore, GDP is not enough toclassify countries as developing or developed. The most popular development indicator is GDP
per capita, which divide GDP by population, thus representing a simple average income of each
person. However, it must be noted that GDP per capita ignores the distribution of wealth. GDP
PPP is intended to represent the actual purchasing capacity of a country. In a country where goods
prices are low, people can enjoy more significant consumption than people in a country where
goods are expensive. "PPP" stands for the "Purchasing Power Parity." GDP PPP is adjusted GDP9Law and Development 2022

by a relative price level of countries. Many economic statistics of the World Bank and the United
Nations organizations uses GDP PPP than simple GDP.
Question:
Please consider what legislative policies are effective to increase GDP per capita.
- Distribution of wealth
As mentioned above, GDP per capita (either adjusted by PPP or not) does not explain how wealthis distributed in a country. If we consider the level of wealth at the sub-national level, thedistribution of wealth is significant. It is the equality problem.
There are several methods to evaluate equality in wealth (equality other than wealth shall bediscussed later). The Gini coefficient is often used to explain economic inequality within acountry. When each people have the same income, the Gini coefficient becomes zero (perfectequality). When only one person occupies all the country's income, the Gini coefficient becomesone (or 100%, perfect inequality). For further information on the Gini coefficient, please refer to:https://www.youtube.com/watch?v=BwSB__Ugo1s
Question:
The table below compares countries with the highest/lowest GDP per capita and Gini coefficient4.
Please discuss the economic situation of people in those countries.

4

Gini’s coefficient(worst 10)

GDP/p (worst 10)

GDP/p (top 10)

Gini’s coefficient (top10)

S. Africa (63.0)

BurundiLuxembourg

Slovenia (24.2)

Namibia (59.1)

Somalia

Switzerland

Czech (24.9)

Suriname (57.6)

Malawi

NorwayBelarus (25.2)

Zambia (57.1)

Niger

Macau

Slovakia (25.2)

S.Tome & Principe (56.3)

C. Africa

Ireland

Moldova (25.7)

C. Africa (56.3)

Mozambique

IcelandUkraine (26.1)

Swaziland (54.6)

Afghanistan

Qatar

Azerbaijan (26.6)

Mozambique (54.0)

Madagascar

USA

Iceland (26.8)

Brazil (53.9)

Sierra Leone

Denmark

Norway (27.0)

Belize (53.3)

D.R. Congo

Singapore

Belgium (27.4)

Modified from https://data.worldbank.org/indicator/SI.POV.GINI?most_recent_value_desc=false10Law and Development 2022

However, evaluating equality is not so simple as evaluating GDP per capita. People in a country
with zero Gini coefficient is not necessarily happier than people in a country with higher Gini
coefficient (Guess, people in Pol Pot's Cambodia or in China under the Great Cultural Revolutionis happier than now?)
While the equality implies philosophical political question, it seems obvious that we should
address the people who earn income far less to maintain life with dignity as a human being or live
under the unjustifiable inequality. In the context of development goal, this can be defined as thedevelopment as lack of poverty (see Trebilcock and Prado pp.6-8).
In terms of economic development, the most popular criteria to categorize people in poverty is
the individual income per day. The World Bank uses 1.90 USD per day as a threshold of poverty.
However, individual income is usually calculated from a household income. Therefore, thisnumber does not reflect inequality in a household. To correct the weakness of the individual
income indicator, the Multi-dimensional Poverty Index (MPI) has been developed. MPI isdesigned to catch the information about whether one or more family members fall into poverty.
The table below shows indicators to measure MPI.
Dimensionsof Poverty

Indicator
Nutrition

1/6

Child mortality

Any child has died in the family in the five-year period preceding
the survey.

1/6

Years ofschoolingNo household member aged 10 years or older has completed six
years of schooling.

1/6

Schoolattendance

Any school-aged child is not attending school up to the age at
which he/she would complete class 8.

1/6

Cooking Fuel

The household cooks with dung, wood, charcoal or coal.

1/18

Sanitation

Drinking Water
Standard ofliving

WeightAn adult under 70 years of age or a child is undernourished.

Health

Education

Deprived if living in the household where…

The household’s sanitation facility is not improved (according toSDG guidelines) or it is improved but shared with otherhouseholds.
The household does not have access to improved drinking water(according to SDG guidelines) or safe drinking water is at least
a 30-minute walk from home, round trip.

1/18

1/18

Electricity

The household has no electricity.

1/18

Housing

Housing materials for at least one of roof, walls and floor are
inadequate: the floor is of natural materials and/or the roof and/orwalls are of natural or rudimentary materials.

1/18

Assets

The household does not own more than one of these assets:
radio, TV, telephone, computer, animal cart, bicycle, motorbikeor refrigerator, and does not own a car or truck.

1/18

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Law and Development 2022

In terms of development policy, to reduce poverty, there are two strategies: firstly, increasing
GDP to elevate the income of people, including those at the lowest level, and, secondly, revising
the distribution of wealth in a country to increase the income of those in the lowest level.
3. Development other than "the increase in wealth"
Question:
Why is economic development a good concept as a development?
Why is economic development not sufficient?
Among various ideas of development other than "the increase in wealth," the most influential idea
is the Human Development inspired by Amartya Sen's theory of the development as freedom, inwhich Sen views that " the ends of development should be focused on promoting individual
freedom, in the sense of enhancing the ability of individuals to choose to live lives that they havereason to value." (Trebilcock and Prado, p.8). Those values are not only having a better life inmaterial but also having an opportunity to participate in society.
UNDP has published the "Human Development Report" since 1990. According to UNDP,"human development is a process of enlarging people's choices" (Human Development Report
1990, p.10), and "Human development is about enlarging freedoms so that all human beings canpursue choices that they value." (Human Development Report 2018, p.1) "Choice" means that aperson can have the capability to do something valued even if the person chooses not to do that.
For example, a person with higher education has more choices of jobs than a person withouteducation. If a person can participate in social activities, one can have more chances to alternate
its life.
To conduct a cross-country comparison of human development, UNDP proposed the HumanDevelopment Index (HDI). HDI aggregates several indicators: life expectancy at birth, schoolingyears (expected years of schooling and mean years of schooling), and GNI per capita (see figure
below5).

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Human development report 201612Law and Development 2022

Question:
Why those indicators (life expectancy at birth, schooling years (expected years of schooling andmean years of schooling), and GNI per capita) are selected to calculate HDI?
As Trebilcock and Prado (p.9) say, "while there is a strong positive correlation between per capita
income and health and education status, this correlation is not perfect or tight," it is interesting tocompare the different levels of achievement in the economic development (GDP per capita) andthe human development (HDI). The table below compares GDP per capita and HDI of several
developing countries6.
Ranking inHDI

6Ranking inGDP/p101

Tonga

134

102

Libya

77

103

Belize

89

104

Samoa

117

105

Maldives

97

105

Uzbekistan

126

107

Moldova

138

108

Botswana

75

109

Gabon

63110

Paraguay

113

Modified from Human development report 201613

Law and Development 2022

4. The concept of development skeptical toward "growth."
Sustainable development and cultural relativism are arguments that criticize current growthoriented development.
In the original context, sustainable development means restricting the current generation's growthto protect the basic sustenance of future generations. In other words, sustainable development is"development that meets the needs of the present without compromising the ability of future
generations to meet their own needs" (Trebilcock and Prado, p.11).
Some theories aim to preserve the environment while maintaining economic growth (decoupling
environment and economy). Those theories propose introducing legal mechanisms such as carbon
taxing or carbon pricing. However, some scholars question the effectiveness of those legal
mechanisms.
Conclusion
Economic growth
Increasing wealth
Lack of poverty

Raising theentire economy

Development

Equality
Education/health

Increasing values
other than wealth

Human development

Skepticism toward
growthSustainable development/
Cultural relativism

Political rights/
Participation

Moderate
RadicalThe definitions of development are pretty diverse (see figure above) and have varied from timeto time. In this lecture, I categorized the definitions of development into two, namely,development as the increase in wealth and development as the increase in values other than wealth.
Economic development is a development concept that represents the former. Human development
is one of the development concepts included in the latter.
Economic development is further divided into the development strategy pursuing economic
growth and the development strategy to reduce poverty.
Human development implies not only the improvement of health and education but also politicalreform.
If we pursue economic development, the legal policy to achieve development would be to increase
investment or increase production and consumption. In contrast, if development means the lackof poverty, it will imply a legal policy of equal distribution of wealth (e.g., progressive taxation).

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Law and Development 2022

In the human development concept, allocation of financial resources for the non-economic sector(e.g., education and health) shall be a task of policymakers. Furthermore, if, as Sen says, theremoval of social impediments and the guarantee of participation increase human capability, thendemocracy and the guarantee of political and civil rights shall be the subject of law anddevelopment. There are skeptical attitudes toward development, too. Trebilcock and Prado referto sustainable development and cultural relativism in this regard. Nevertheless, the moderate idea
among this group might be compatible with growth. For example, as for environmental
sustainability, some insitutional tools have been proposed to incorporate the environment into themarket (carbon tax, carbon trading).

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