Understanding the Concept of Development
Dr. Siby Kollappallil Joseph
Director, International Online Fellowship Program on Nonviolence and Peace (IFPNP)
Sevagram Ashram Pratishthan, Wardha, Maharashtra, India
Part I: The Historical Evolution of Mainstream
Development
1. Introduction
One of the modules of the International Fellowship Program
on Nonviolence and Peace (IFPNP) is "Global Sustainability Challenges and
Responses: An Analysis." Understanding the concept of development is
imperative for analysing global sustainability challenges and their responses.
The term development is widely used across governments, academia, NGOs,
UN agencies, and grassroots movements. It carries multidisciplinary
connotations and holds different meanings in fields ranging from management to
health sciences. Due to my background in economics and the fact that my
doctoral studies focused on the broad gamut of development studies, my attempt
will be to explore the concept of development from mainstream economic
perspectives.
Classical Foundations (18th Century – Mid-20th Century)
Although the specific term "development economics"
originated and became popular in the mid-20th century, the core subject of
economic development was a primary concern for economists starting with Adam
Smith, who is widely considered the Father of Modern Economics. Adam Smith was
an 18th-century Scottish economist and philosopher who popularized the economic
policy of a laissez-faire economy. His most famous 1776 book, The
Wealth of Nations (An Inquiry into the Nature and Causes of the Wealth
of Nations), discusses—according to Nobel laureate economist Amartya
Sen—the basic issues of development economics. As Amartya Sen wrote:
“‘An Inquiry into the Nature and Causes of the Wealth of
Nations’ was, in fact, also an inquiry into the basic issues of development
economics. … Interest in development problems has, traditionally, provided one
of the deepest motivations for the pursuit of economics in general, and this
broad basis of development economics has to be borne in mind when investigating
the details of the concept of development. … It is not hard to see why the
concept of development is so essential to economics in general. … The
enhancement of living conditions must clearly be an essential—if not the
essential—object of the entire economic exercise, and that enhancement is an
integral part of the concept of development.”
— Amartya Sen, "The Concept of Development," Chapter 1 in Handbook
of Development Economics, Vol. 1, edited by Hollis Chenery and T. N.
Srinivasan (Netherlands: Elsevier, 1988).
Even though the concept entered mainstream discourse in the
mid-20th century, we are still grappling in the dark over what the term exactly
means. While preparing for this session, I had a brief discussion with someone
who has been working in the development sector for a long time. I asked him
what keywords come to mind when we talk about the concept of development, and
he shared the following:
- Development
- Progress
- Growth
- Sustainability
- Evolution
- Balancing
While analysing the concept of development, these keywords
may provide valuable insights, as they depict the shifting priorities of
development over time and in accordance with the realities of each particular
period. Although I am familiar with all of these terms, the significance of the
word evolution was not entirely clear to me at first. He explained:
"Every process has a natural ability to adjust itself and transform into a
new form. Every living system has an inner adaptive capacity so that it can absorb
shocks, learn from experience, and adjust itself."
This insight sparked new thoughts on how to look at
development. That is the reason I am viewing the concept of development as an
evolutionary process—one that responds to the challenges of the time and the
realization of the inadequacies of existing notions. Just like a living system,
development thinking evolves in response to crises and shortcomings, giving
rise to various frameworks. We will trace this thread of evolution and
orientation through different stages in chronological order.
2. Origins of Modern Development Economics
Post-WWII Context and the Birth of the Discipline
Looking at the historical context of its origin, modern
development economics emerged primarily out of the large-scale devastation of
World War II. Industrial facilities across Europe were heavily destroyed by
aerial bombardment, and severe damage to transportation infrastructure—such as
railways, bridges, and docks—disrupted trade flows and caused widespread
economic isolation. In contrast, the infrastructure of two major nations, the
United States and Canada, remained unaffected, resulting in a rapid economic
boom in North America.
In the immediate aftermath of the war, there was an urgent
need for theories and policies to rebuild war-torn Europe and Japan. Key
international financial institutions were established—most notably the
International Monetary Fund (IMF) and the World Bank (created at the 1944
Bretton Woods Conference)—to promote global economic stability and
reconstruction. Against this backdrop, the post-war period witnessed the
emergence of development economics as an independent academic discipline, with
the United States serving as the prime mover in the post-war economic revival.
3.Orientations in Different Stages
1940s–1960s: Development as Growth
Let us look at the orientations in the process of evolution
of the concept of development.
In mainstream economic thought, economic growth is a
narrower, strictly quantitative concept, whereas economic development is a
broader, multidimensional concept encompassing qualitative improvements in a society's
overall well-being:
- Economic
Growth: Quantifies the increase in a nation's production of goods and
services, typically measured by Gross Domestic Product (GDP) or per capita
income.
- Economic
Development: Refers to the structural transformation of an economy
from a low-income, agrarian system to a modern, industrialized, and
service-oriented one, accompanied by improvements in living standards,
education, healthcare, and human well-being.
- Progress:
While often used synonymously with development, progress generally implies
forward movement toward a more advanced state, historically linked to
technological innovation, increased productivity, and improved living
standards.
What is significant about the 1940s–1960s is that economic
development and economic growth became virtually synonymous. The primary policy
concern was the rapid expansion of wealth in terms of GDP and per capita
income, and the pursuit of growth became the ruling ideology dominating the
global economy. Although mainstream economists long viewed continuous growth as
the primary engine for poverty reduction, heavy reliance on capital-intensive
and automated industries has increasingly resulted in "jobless
growth"—a phenomenon that has reached new heights over the course of time.
European Recovery Programme (ERP)
One of the major initiatives to rebuild European economies
after the Second World War was the European Recovery Programme (ERP), popularly
known as the Marshall Plan (1948–1951). This was named after United States
Secretary of State George C. Marshall, who gave an outline of the plan in a
speech delivered at Harvard University on June 5, 1947. This American
initiative, enacted in 1948, aimed to provide foreign aid to Western Europe.
Harry Truman's Address and Four-Point Foreign Policy Goals:
Harry Truman—re-elected to the office of President of the
United States for a second term—outlined a strategy for global recovery and
peace in his inaugural address delivered on January 20, 1949. He argued that
the resources of the world should be pooled to achieve "peace, plenty, and
freedom".
Four-Point Foreign Policy Goals
- Greater
production is the key to prosperity and peace. Furthermore, the key to
greater production is a wider and more vigorous application of modern
scientific and technical knowledge.
- Only
by helping the least fortunate of its members to help themselves can
the human family achieve the decent, satisfying life that is the right of
all people.
- Democracy
alone can supply the vitalizing force to stir the peoples of the world
into triumphant action—not only against their human oppressors, but also
against their ancient enemies: hunger, misery, and despair.
- On
the basis of these four major courses of action, we hope to help
create the conditions that will lead eventually to personal freedom and
happiness for all mankind.
The Golden Age of Capitalism
A major chunk of the European Recovery Programme (ERP) aid
was used by European nations to buy manufactured goods and raw materials from
the United States and Canada. As a result, the United States economy witnessed
a phenomenal surge in economic growth. This post-war economic boom, widely
described as the Golden Age of Capitalism, spanned from the end of the
Second World War in 1945 to the early 1970s.
It was a period of unprecedented economic prosperity
characterized by high, sustained levels of productivity and industrial growth,
particularly in many countries that had been badly devastated by the war.
However, while this era brought high employment rates and rising consumerism,
it also accelerated the polarization of society, deepening the divide between
the rich and the poor, and between capitalists and labourers.
W.W. Rostow: The Five Stages of Economic Growth
In 1960, the American economist and government official Walt
Whitman Rostow enunciated his influential model, the Stages of Economic
Growth. He presented five distinct steps through which all countries must
pass to achieve fully developed status:
- The
Traditional Society: An agrarian, labour-intensive economy with low
levels of trading and limited technology.
- Preconditions
for Take-off: The development of manufacturing, industrial growth, and
the initiation of an international trade outlook.
- The
Take-off: A period of intensive industrialization where economic
growth becomes self-sustaining.
- The
Drive to Maturity: A stage marked by a rising standard of living,
technological advancement, economic diversification, and reduced
dependence on imports.
- The
Age of High Mass Consumption: A capitalist system characterized by
high production levels, widespread consumerism, and substantial
discretionary income.
This "Non-Communist Manifesto" of Rostow
became the ruling paradigm of development across both developed and developing
nations, including India. It aimed to transform traditional agrarian societies
into advanced consumer economies through the exponential growth of Gross
Domestic Product (GDP) and per capita income.
Ultimately, this structural pattern resulted in a stark North-South
divide, wherein the developed nations of the Global North exploited a
lion's share of the world’s resources and pocketed the major chunk of
development benefits. Even within developing countries like India, this model
led to the concentration of wealth in the hands of a few, unbridled
exploitation of renewable and non-renewable resources, widespread social
disparity, environmental degradation, and the escalation of violent movements
rooted in poverty and unemployment.
The United States under the Marshall Plan, deployed over $13
billion between 1948 and 1952 to revive Western Europe. The immediate success
of the Marshall Plan prompted economists in the 1950s and 1960s to shift their
attention toward the struggling economies of Africa, Asia, and Latin America.
However, researchers quickly realized that the deep structural challenges faced
by historically impoverished countries were fundamentally different from those
of post-war Europe, thereby requiring unique, tailored policies rather than a
copy-paste approach.
4.1970s: Development as Basic Needs
By the late 1960s and early 1970s, it became glaringly
evident that the "trickle-down" theory—the assumption that
aggregate economic growth would naturally filter down to the poorest
sectors—had failed. In response to this crisis, the International Labour
Organization (ILO) Director-General David Morse launched the World
Employment Programme at the 1969 International Labour Conference.
Later, the Programme of Action adopted at the 1976 ILO World
Employment Conference highlighted employment as the primary vehicle for
generating output and income, establishing the foundational "basic-needs"
strategy. During this same decade, the World Bank, under the leadership of
President Robert McNamara, shifted its institutional focus to emphasize that
development must prioritize meeting core human needs: food, shelter,
healthcare, education, and employment.
Despite its progressive goals, the fatal flaw of the
basic-needs era was that it treated impoverished populations merely as passive
beneficiaries rather than active partners in their own advancement. This
top-down paternalism ultimately reinforced the structural dependency between
the Global North and the Global South.
5.1980s–90s: Development as Freedom
During this period, we see a profound shift in emphasis due
to the contributions of economists like Amartya Sen. Development began to be
viewed through the dimension of human freedom, linking it directly to the
expansion of people's capabilities—what they can be and what they can do. This
framework expands the definition of development beyond material wealth to
include human freedoms, healthcare, education, and overall well-being.
Amartya Sen viewed development as a process of expanding
human freedom, which necessitates removing the sources of
"unfreedom." He argued that freedom is both the primary means and the
ultimate end of development. True development involves removing constraints
such as poverty and lack of opportunity—specifically the lack of economic
facilities, social opportunities, political freedom, transparency, and protective
security. As a result, the focus of development shifted from being
economy-centric to human-centric.
The UNDP Human Development Report adopted this approach and
introduced the Human Development Index (HDI), measuring life expectancy,
education, and income. For the first time, a country could be recognized as
rich in GDP yet poor in human development.
The HDI was developed by Mahbub ul Haq, an economist at the
World Bank in the 1970s who later served as Pakistan's Minister of Finance, and
was further fine-tuned with inputs from Amartya Sen and Martha Nussbaum. As the
founder of the Human Development Report, Haq explained the core purpose of
development in the following words:
“The basic purpose of development is to enlarge people’s
choices. In principle, these choices can be infinite and can change over time.
People often value achievements that do not show up at all, or not immediately,
in income or growth figures: greater access to knowledge, better nutrition and
health services, more secure livelihoods, security against crime and physical
violence, satisfying leisure hours, political and cultural freedoms and sense
of participation in community activities. The objective of development is to
create an enabling environment for people to enjoy long, healthy and creative
lives.”
This index is considered a major advancement over the
narrow, growth-centred notion of development. In 1990, Haq published the first
Human Development Report, which was commissioned by the United Nations
Development Programme (UNDP). The Human Development Index is a summary measure
of average achievement in three key dimensions of human development: a long and
healthy life, being knowledgeable, and having a decent standard of living.
6. Late 1980s–2015: Development as Sustainability
The publication of the UN’s Brundtland Report (Our Common
Future) in 1987 brought the concept of sustainable development into
mainstream discourses. The UN followed it through landmark summits including
Rio 1992, the 1995 World Summit for Social Development, and Rio+20 in 2012.
This culminated on September 25, 2015, when all 193 UN Member States adopted
"Transforming Our World: the 2030 Agenda for Sustainable
Development," committing to 17 Sustainable Development Goals (SDGs) over a
span of 15 years. We will be devoting a separate session to sustainable
development. Here it is described only to give the orientation of the concept
of development during this period.
Part II
Evolution of Alternative Concepts of Development
Alternative development thinking evolved from time to time
within and outside mainstream economics in response to crises and shortcomings,
giving way to new ideas. I think these ideas are significant from the point of
view of two key words which I brought into notice: sustainability and balancing.
Let us examine some of the key alternatives in the field of development to gain
knowledge of these frameworks and their significance.
7.Gross National Happiness
As early as 1972, the Fourth King of Bhutan, Jigme Singye
Wangchuck, stated that Gross National Happiness is more important
than Gross National Product. It later became part and parcel of Bhutan’s
policy of development. It comprises an index which is used to measure the
collective happiness and well-being of a population. Gross National Happiness
is instituted as the goal of the government of Bhutan in the Constitution
enacted on 18 July 2008. Article 9 ‘Principles of State Policy’ reads as
follows. “The State shall strive to promote those conditions that will enable
the pursuit of Gross National Happiness.” The concept of GNH has four
pillars: good governance, sustainable socio-economic development, cultural
preservation, and environmental conservation. Later the four pillars have been
further classified into nine domains to depict GNH values. The nine domains
are: psychological wellbeing, health, education, time use, cultural diversity
and resilience, good governance, community vitality, ecological diversity and
resilience, and living standards. Thirty-three indicators categorized under
nine domains of GNH Index. In 2011, The United Nations General Assembly
passed a Resolution "Happiness: towards a holistic approach to
development" urging member nations to follow the example of Bhutan and
measure happiness and well-being and calling happiness a "fundamental
human goal”. Many countries of the world accepted it as a policy of their
respective governments.
8. Institutional Economics (1980s–1990s)
The role of the state is a crucial determinant of the entire
development process. During the Thatcherite era of the 1980s, the role of the
state in development was downgraded and sidelined. Later, in the 1990s,
international agencies such as the World Bank gave renewed recognition to the
vital role of the state and its institutions. This shift was partly driven by
the rise of New Institutional Economics, pioneered and propounded by
Nobel laureate Douglass North. In his seminal 1993 essay, "The New
Institutional Economics and Development," North skillfully summarized
the essential characteristics of institutional economics, how it differs from
neoclassical theory, and how it applies to the challenges of development. As he
wrote:
“It is polities that shape economic performance because
they define and enforce the economic rules of the game. Therefore, the heart of
development policy must be the creation of polities that will create and
enforce efficient property rights.”
9. Measuring Well-Being Beyond GDP: The
Stiglitz-Sen-Fitoussi Commission (2008–2009)
By the turn of the century, the conventional approach to
development was increasingly questioned by leaders and economists across many
countries, leading to the emergence of new ways of development thinking and
practice. These alternative approaches have been gaining ground globally,
enriching the very idea of development. This shift in thinking is clearly
evident in the findings of the Stiglitz-Sen-Fitoussi Commission.
In February 2008, the then-President of the French Republic,
Nicolas Sarkozy, dissatisfied with existing statistical measures of the economy
and society, approached Joseph Stiglitz (Columbia University, Chair of the
Commission), Amartya Sen (Harvard University, Chair Adviser), and Jean-Paul
Fitoussi (French economist, Coordinator) to establish a commission to identify
the limits of GDP as an indicator of economic performance and social progress.
This body became formally known as the Commission on the Measurement of
Economic Performance and Social Progress (CMEPSP), or the Stiglitz-Sen-Fitoussi
Commission.
In its landmark 2009 report, the Commission observed:
“The time is ripe for our measurement system to shift
emphasis from measuring economic production to measuring people’s well-being.
And measures of well-being should be put in a context of sustainability...
Emphasizing well-being is important because there appears to be an increasing
gap between the information contained in aggregate GDP data and what counts for
common people’s well-being.”
— J. Stiglitz, A. Sen, and J.-P. Fitoussi, Report by the Commission
on the Measurement of Economic Performance and Social Progress (2009).
10. Inclusive Growth & The Inclusive Development
Index (2015–2017)
In the context of growing disparity and division between the
countries of the Global North and Global South, the idea of inclusive growth
became a prominent concept in development discourse during the 2000s and 2010s.
The Inclusive Development Index (IDI) is an economic index introduced by
the World Economic Forum (WEF) in 2017 (following a preliminary policy
framework released in 2015) as an alternative to GDP for measuring a country's economic
growth and development. Through this index, a country's economic performance is
evaluated on the basis of twelve indicators of economic progress alongside GDP,
structured around three core pillars: growth and development; inclusion;
and intergenerational equity and sustainable stewardship of natural and
financial resources. It aims to inform and enable sustained, inclusive
economic progress through deepened public-private cooperation—driven by thought
leadership, analysis, strategic dialogue, and concrete collaboration, including
accelerating social impact through corporate action.
11. Doughnut Economics (2012–2017)
The concept of Doughnut Economics was developed by
British economist Kate Raworth in a 2012 Oxfam paper and later expanded in her
2017 book, Doughnut Economics: Seven Ways to Think Like a 21st-Century
Economist. According to Raworth, mainstream economics measures progress
almost exclusively through endless GDP growth, ignoring the finite nature of
Earth’s resources and the ecological consequences of human activity. To address
this, she sought to create an economic model fit for the 21st century, built on
the core premise that "Humanity’s 21st-century challenge is to meet the
needs of all within the means of the planet."
The seven chapters in her book outline seven transformative
ways to think like a 21st-century economist:
- Change
the goal — from GDP to the Doughnut.
- See
the big picture — from a self-contained market to an embedded economy.
- Nurture
human nature — from rational economic man to social, adaptable humans.
- Get
savvy with systems — from mechanical equilibrium to dynamic
complexity.
- Design
to distribute — from "growth will even it up again"
to distributive by design.
- Create
to regenerate — from "growth will clean it up again"
to regenerative by design.
- Be
agnostic about growth — from growth-addicted to growth-agnostic.
12. Specific Diseconomy & Institutional Critique
(1970s)
There is also a stream of scholars who envision a form of
development that relies neither on the government nor on the market; instead,
they argue it should be centred on the people and their own wisdom. Among them
was Ivan Illich, a Croatian-Austrian philosopher, who severely criticized the
institutions of contemporary Western civilization, as well as modern policies
and practices in education, health, work, and the very idea of economic
development. In his influential 1970s works—such as Deschooling Society
(1971), Tools for Conviviality (1973), and Medical Nemesis
(1975)—he coined the term “specific disutility” (or “specific
diseconomy”) to measure the degree of institutional counterproductivity and
inefficiency across various sectors. Illich cited examples such as the medical
industry inducing illness (iatrogenesis), educational institutions
contributing to the ignorance of pupils, and the judicial system perpetuating
injustice. When specific diseconomy increases, it signifies that an institution
or industry is progressively becoming counterproductive—defeating the very
goals for which it was established. His analysis became a guiding light for
later critics of colonialism and post-colonialism, as well as post-development
theorists such as Arturo Escobar and Gustavo Esteva.
13. Post-Development Theory (Late 1980s–1990s)
Emerging prominently in the late 1980s and 1990s, post-development
theory is essentially an anti-development critique based on the premise
that the entire concept and practice of conventional "development" is
a reflection of Western-Northern hegemony over the rest of the world.
Post-development theorists like Arturo Escobar (notably in his 1995 book Encountering
Development) and Gustavo Esteva have challenged the very goal and purpose
of development, arguing that it has always been unjust, never worked, and was
an utter failure. Wolfgang Sachs, a leading figure of the post-development
school, wrote in his introduction to the 1992 edited volume The Development
Dictionary: A Guide to Knowledge as Power:
“The idea of development stands like a ruin in the
intellectual landscape. Delusion and disappointment, failures and crimes, have
been the steady companions of development and they tell a common story: it did
not work.”
He further declared: “It is time to dismantle this mental
structure.”
The earth-centric approach to development gained
momentum from the 1970s onward in response to the severe environmental damage
caused by industrial development, introducing several new concepts into
development discourse. One prominent example is the Gaia hypothesis,
formulated by chemist James Lovelock and co-developed with microbiologist Lynn
Margulis in the 1970s, which places Mother Earth and ecological sustainability
at the centre of development concerns. Etymologically, the word Gaia is
derived from the Greek Gaîa—the primordial Earth goddess in Greek
mythology—and literally means "Earth." The hypothesis proposes that
the biotic (living) and abiotic (non-living) components of Earth function as a
single, self-regulating organism that maintains conditions conducive to life.
Alongside the Gaia concept, ideas such as deep ecology (coined by Arne
Næss in 1973) and ecofeminism (introduced by Françoise d'Eaubonne in
1974) have also gained prominence in development debates. Notably, many of
these contemporary alternative frameworks carry a deep imprint of Gandhian
ideas and ideals.
Note: This module text is based on a presentation
delivered by Dr. Siby K. Joseph, Director of the Online International
Fellowship Program on Nonviolence and Peace (IFPNP), Sevagram Ashram
Pratishthan, Wardha, Maharashtra, India.

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