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74 Seiten, Note: 10,00
Chapter I. Development Theories
I.1. Stages of Growth Model of Development
I.2. Structural Change Theories
I.3. International Dependence Theories
I.4. Liberal Theories
I.5. Exogeneous Growth Model
I.6. Human Development Approach
I.7. Development and Sustainability
Chapter II. Romania on the Spectrum of Development
2.1. Applied Approaches
2.4. Society & Culture
Chapter III. Conclusion & Proposals
1. Global Gender Gap Report
2. Social Progress Index
Although Romania is considered one of the fastest growing economies with favourable prospects for the future, the country is lagging far behind other European countries on issues such as the quality of healthcare and education systems, levels of corruption, macroeconomic stability, and environmental safety.
The aim of this thesis is to provide an ensemble view of the factors that actually determine how advanced a country is by analysing the main Development Theories provided in the literature, and determining their significance in Romania’s past and present context.
This is done by first presenting each theory in detail, to ensure an understanding of the various dimensions and factors that should be taken into account in the assessment of any nation’s level of development, followed by an examination – tailored specifically to Romania’s context – of the four domains of sustainable development (economics, politics, society & culture, and ecology) through the consolidation of relevant statistical data and bibliographical information.
The findings of the paper highlight the fact that Romania’s overall development is not equivalent to its economic growth, as the latter does not necessarily reflect the population’s welfare. For the country to be considered advanced from other points of view as well, authorities should not fail to recognize that attracting and retaining foreign investment, encouraging entrepreneurship, increasing the national budgets for education, healthcare, and infrastructure improvement, tackling the serious, ongoing problem of corruption and lack of institutional transparency, and strengthening environmental awareness and independence are all factors that have an important role in defining Romania’s current level of development, and in providing future generations with further opportunities.
Renowned economist and Nobel laureate Joseph Stiglitz once said: “Development is about transforming the lives of people, not just transforming economies.”
Many theorists before him tried to define the concept of development by analysing how nations have evolved over time, which were the changes they had to implement to be deemed more developed in certain periods, what types of factors contributed to this advancement and in what way, and by identifying and/or introducing measurable variables to have a clearer basis for the comparison of different countries’ development levels.
The literature differentiates six main Development Theories, introduced successively over the course of the 20th century. First one is the Stages of Growth Model of Development introduced by Rostow, which presents the five stages that countries must go through in their transition from underdevelopment to development, followed by the Structural Change Theories of Lewis and Chenery, that describe the changes that ought to be implemented in a nation’s internal structure for it to switch from a traditional to a modern economy. In contrast with this, International Development Theories elaborate the way in which external factors might promote – or interfere with – countries’ advancement, while promoters of Liberal Theories argue that it is in fact too much intervention from nations’ internal institutions that might hinder growth. Additionally, in the Exogeneous Growth Model, Rostow specified that factors such as capital and labour inputs are the ones that promote the growth of economies. The similarity between these five theories lies in the fact that in all of them the concept of “development” is considered synonymous with that of “economic growth,” so consequently, countries that produce more and have higher economic outputs are the ones that should be more evolved. This idea was expanded by Sen in the Human Development Approach, which goes beyond the economic dimension of development, arguing that these models fail to address human welfare, which is actually one of the most important factors in the assessment of a nation’s level of development. Thus, he considered that the capabilities and opportunities that people get to enjoy may be a much more accurate reflection of how evolved that society is. Just like in Stiglitz’s definition, in this approach people are placed at the centre of the development process, and the enhancement of their freedoms becomes the ultimate goal, but also a necessary means for development.
A feature considered essential in any country’s advancement process is sustainability, i.e. that nation’s ability to maintain its growth process by recognizing the relations between the economic, political, socio-cultural, and ecological domains. As a result, s ustainable development – generally analysed within this framework – can be defined as “economic growth with social inclusion and respect for the environment” (World Commission on Environment and Development, 1987).
Applying the Development Theories to a specific country’s context might provide a better understanding of the reasons why it is situated where it is on the spectrum of development, and could generate ideas on how to sustain and/or accelerate the nations’ pace of advancement. As a consequence, this thesis will try to identify the factors that have had the greatest influence on Romania’s development progress throughout the years, by considering the aspects proposed in each of the theories listed above.
Although all of them are built on different core ideas, there are certain factors of undisputed importance, highlighted by most development theorists, based on which it can be concluded that if Romania is to remain the path of economic growth and development, it should focus on attracting and retaining foreign investment, encourage entrepreneurship, invest (insistently and efficiently) in education, healthcare, and infrastructure, increase environmental awareness and independence, and continue its’ fight to ensure institutional transparency and diminish the presence of corruption.
In the following, we will try to verify the accuracy of this hypothesis by first presenting each Development Theory in detail and seeing to what extent they can be applied to Romania’s context. Afterwards, we will conduct a detailed analysis of the four domains of sustainable development proposed by scholars – economic, political, socio-cultural, and ecological – to provide a better understanding of the country’s current development status and identify significant trends and features which might influence it – either positively or negatively. Finally, we will determine which approaches have had the highest relevance in Romania’s past and present context, in which direction the country has evolved, and what are its prospects for reaching further development stages.
The first theory is associated with American economic historian W. W. Rostow. In his book, entitled The Stages of Economic Growth: A Non-Communist Manifesto and published in 1960, Rostow formulates the idea that in their transition from underdevelopment to development, each society must proceed through five stages: the traditional society, the preconditions for take-off, the take-off, the drive to maturity, and the age of high mass- consumption.
Traditional societies are characterized by a structure based on pre-Newtonian science, technology and attitude towards the physical world, in which there is a ceiling on the level of attainable output-per-head. Although some technical innovations such as the improvement of irrigation works, or the discovery of new crops could lead to increases in output, the lack of access to modern technology and science or the failure to efficiently and regularly apply them imposes significant limits on productivity and thus, on the possibility for these societies to experience consequential economic growth.
Because of these restrictions most resources are devoted to agriculture, placing those who owned or controlled more land to the top of the hierarchical social structure. The volume of trade is limited, and output such as food and manufactured goods is consumed largely by those who produced them. In this type of social organization family and clan connections have an important role, as the scope for vertical mobility is relatively narrow.
Some examples of pre-Newtonian societies are the dynasties in China, the ancient civilizations of the Middle East and the Mediterranean, and the world of medieval Europe.
The second stage is the one in which traditional societies begin the transition towards a more modern civilization, able to take advantage of the opportunities provided by modern science. As the increased specialization generates surpluses, trade becomes more and more popular. Investments in transport infrastructure and communication widen the scope of commerce, and external trade – mainly of primary products – becomes a more common phenomenon. The entrepreneurial mentality penetrates both the private economy and the government: people are willing to “mobilize savings and take risks in the pursuit of profit or modernization” (Rostow, 1960).
According to Rostow, western Europe experienced adequate preconditions for take-off in the late 17th/early 18th century, when modern science led to the appearance of new production functions in agriculture and industry, and the world markets and competition expanded significantly. In more recent history, however, some underdeveloped countries got to this stage not strictly endogenously, but with the external intrusion of more advanced societies, for instance in the form of colonial powers.
The take-off stage is characterized by extended industrialization: workers switch from the agricultural to the manufacturing sector. New political and social institutions arise which support modernization and encourage investments - mainly in infrastructure, education and healthcare. At this point, the magnitude of this investment reaches over 10% to 12% of a country’s GNP (Todaro & Smith, 2014). Economic growth becomes self-sustaining, which attracts more and more foreign investors. A new class of entrepreneurs emerges as well, but growth remains concentrated in one or two manufacturing industries in a few regions of the country.
Western societies experienced take-off in the 19th century, with the Industrial Revolution. Canada and Russia entered this stage right before the beginning of WWI, while India and China started catching up in the 1950s.
Looking at instances of our history, societies can reach maturity approximately 60 years after beginning the take-off. The sustained progress that started during stage 3 encompasses almost the entire front of the economic activity and the continuously improving techniques and newly discovered, often complex processes enable the development and acceleration of new industries. These innovations provide a wide range of investment opportunities. Because increasing amounts of goods and services are being produced within the economy, the reliance on imports decreases. In fact, by moving beyond the industries that originally drove growth and efficiently applying the most advanced technologies to its’ broad variety of resources, the economy starts exporting some commodities, thus finding its’ place in the international economy.
This process was exemplified by countries such as Germany, Britain, France and the United States around the end of the 19th century as the focus on coal, iron, and heavy engineering industries of the railway phase was replaced by more refined and technologically more complex processes, such as the production and use of machine-tools, chemicals, and electrical equipment.
At this stage, societies are considered to be developed. As a result of increased incomes members of society are no longer merely concerned with acquiring goods and services necessary for their survival, but they actively seek to enhance the quality of their lives through economic activities, demanding more durable goods and higher levels of service. The structure of the working force has a different aspect, with a larger proportion of urban to rural population and an increasing number of people working in offices or in skilled factory jobs.
Promoting modern technology ceases to be the principal objective of society, with an increased amount of resources being allocated, for instance, to social welfare and security.
The United States reached this turning point in 1913-14 with the appearance of Henry Ford’s assembly line, whereas Western Europe and Japan entered this stage in the 1950s.
Although, according to the author, these stages “have an inner logic and continuity (…), an analytic bone-structure, rooted in a dynamic theory of production” and “they are not merely a way of generalizing certain factual observations about the sequence of development of modern societies” (Rostow, 1960), the conversation in literature among professionals highlights some aspects based on which this theory can be subject to criticism.
For instance, Todaro & Smith argue that while savings and investment are necessary conditions for a society to move on to the next stage of its’ development, there are also other requirements that must be fulfilled: Rostow assumes that underdeveloped nations possess the adequate “structural, institutional, and attitudinal conditions (…) to convert new capital effectively into higher levels of output” (Todaro & Smith, 2014), but very often this is not case. The model is ethnocentric, based mainly on American and European history, institutions and attitudes. Additionally, it only considers the removal of internal obstacles, failing to recognize the fact that developing countries are part of a highly integrated international system that may promote – or hinder – their development.
This theory focuses on the process through which the internal structure of an underdeveloped country is developed from a traditional to a modern economy. A traditional economy is based mainly on subsistence agriculture, whereas a modern economy is characterized by more urbanization and more diversity in the manufacturing and service industries. (Todaro & Smith, 2014). The authors who described the structural-change approach were W. A. Lewis – in his “Dual-Sector Theoretical Model” (1954) – and H. B. Chenery, who – along with his co-authors – introduced the “Patterns of Development Analysis” (1979).
Also known as “Two-Sector Surplus Labour” or “Lewis Two-Sector Model” model, this theory depicts an underdeveloped economy which consists of two sectors: “a traditional, overpopulated, rural subsistence sector characterized by zero marginal labour productivity, (…) and a high-productivity modern, urban industrial sector into which labour from the subsistence sector is gradually transferred” (Todaro & Smith, 2014).
As stated by Lewis, the inexistence of marginal labour productivity allows surplus labour to be withdrawn from the traditional agricultural sector with no impact on the size of its’ output. In consequence, the industrial sector – characterized by high labour productivity – will attract workers from rural areas and experience an expansion in produced goods and services. The Lewis model focuses mainly on the flow of workers from the first sector to the second one and on the growth of output and expansion in the latter, explaining the development process through the dynamics of these two sections of an underdeveloped economy.
The level of wages in the modern sector is assumed to be constant and significantly higher than the average rural income. The resulting profits generate investments, the magnitude of which can influence the speed of expansion of the industrial sector (Lewis, 1954).
This theory is also subject to criticism on the grounds that some of its’ presumptions cannot be related to the current situation of most developing countries. First and foremost, the modern sector does not implicitly reinvest all its’ profits in the same type of capital equipment. A large share of these profits might be sent abroad or spent on more sophisticated and innovative machinery that may even replace human labour. Secondly, the model assumes that there is surplus labour in rural areas and full employment in the urban sector. However, the opposite might also be true: in some rural regions the number of unemployed people can be relatively low, while some urban areas can face serious problems from not being able to provide jobs for the large number of migrants from the agricultural sector. Similarly, there is no guarantee that the modern sector is able/willing to provide constant real wages until the supply of rural surplus labour is exhausted.
Based on these circumstances, some experts argue that although the Lewis model serves as a useful portrayal of the development process of some nations in recent history, its assumptions should be considerably revised and modified in order to “fit the reality of most contemporary developing nations” (Todaro & Smith, 2014).
Similarly to the Lewis model, the Patterns-of-Development Analysis focuses on the sequential process through which the structure of a country’s economy develops over time. In addition to the criteria identified by Lewis (accumulation of physical and human capital), however, this model suggests that in order to transition from a traditional economic system to a modern one, developing countries should implement a set of interrelated changes in their structure, which “involve virtually all economic functions, including the transformation of production and changes in the composition of consumer demand, international trade, and resource use as well as changes in socioeconomic factors such as urbanization and the growth and distribution of a country’s population” (Todaro & Smith, 2014). The implementation and maintenance of these changes can be affected by domestic constraints, such as the capacity of a country’s own resources, the size and behaviour of its population, policies implemented by the government and so on, and also by international constraints, for instance the access to external capital, technology and trade. The extent to which some countries are exposed to such constraints influences the speed of their development. For example, the fact that in the present some nations have access to opportunities presented by more developed countries means that they can go through the transition process at a faster pace than industrial countries did during the earlier periods of their economic development.
Economist H. B. Chenery and his colleagues conducted a cross-sectional and time-series empirical study of several developing countries after WW2 – analysing various nations simultaneously at a given point in time, while also looking at their individual evolution over a certain period – which led to the identification of various patterns of the development process. These included switching the focus from agriculture to industrial production, accumulating capital (both physical and human), the “evolution” of consumer demand to diverse manufactured goods and services (not only basic necessities), increased urbanization, and decreased family and overall population size “as children lose their economic value and parents substitute what is traditionally labelled child quality (education) for quantity” (Todaro & Smith, 2014).
One of the main conclusions drawn from this study was that both domestic and international factors can influence the pace and pattern of a nation’s development, several of which might be beyond the control of the individual developing country (Chenery, 1979).
These models view less developed countries caught in a dependence – dominance relationship with more developed countries. The former are seen as relying on the policies of the latter to stimulate their own economic growth, adopting their education, technology, economic and political systems, attitudes, etc. Developed countries have a higher command on international affairs, many of which significantly affect developing nations, for instance on establishing the prices of agricultural goods.
Within this category, the literature distinguishes three different approaches:
This doctrine views underdevelopment as a result of an international capitalist system that is highly unequal, rich countries implementing policies through which they intentionally exploit or unintentionally neglect poor countries. A small elite ruling class in developing nations, comprised of landlords, merchants, public officials, trade union leaders, etc., which serves and is rewarded by international interest groups, aims to perpetuate this international capitalist system of inequality, and thus contributes to the hindrance of growth. In this sense, underdevelopment is considered an externally induced phenomenon, in contrast with the previous theories. The originators of the Neo-Colonial Dependence Model considered that in order to liberate less developed countries from the oppression of first-world nations a major restructuring of the world capitalist system is vital.
In this approach developed countries are seen in a slightly more positive light, although they are still considered somewhat responsible for the persistence of underdevelopment in poor countries. Despite their intentions to help these nations flourish, the advices they give tend to be inappropriate because they fail to take into consideration the particular social, cultural and institutional characteristics of developing countries, such as the continuance of old- fashioned hierarchies within communities, the unequal ownership of land, control by local elites, and so on. Well-meaning as they might be, these proposals – in their uninformed/biased nature – “merely serve the vested interests of existing power groups, both domestic and international” (Todaro & Smith, 2014).
Dualism refers to the steadfast presence of substantial and growing contrast between rich and impoverished nations, and wealthy and poor individuals. The interrelation of superior and inferior elements is characterized by the tendency of the former to do little or nothing to pull up the latter, in fact it might even serve to push it down, leading to the development of underdevelopment (Todaro & Smith, 2014).
Liberal thinkers consider that the best way for a nation to achieve economic growth and development is through the implementation of a market economy. Their argument is justified mainly by the efficiency with which the market can function with no/limited regulatory intervention. These models are the roots of what we today call supply side economics.
Some of the main approaches identified in the literature are:
Nobel laureate Friedrich Hayek of the Austrian School of Economics considered that the only way in which an economy can function adequately is through a decentralized mechanism such as the market, because it is impossible to consolidate all the information needed for the operation and coordination of the economy by one particular central entity.
In his view, the government and/or central banks have the tendency to intervene too much and overstimulate the economy by constantly lowering interest rates, encouraging excessive investment and consumption, and discouraging saving. By allowing the market to organize information and determine prices, the economy can function much more efficiently (Hayek, 1931).
In this theory, also known as New Political Economy Approach, government agents are seen in a more negative light and it is believed that they will never act in accordance with public interest. They will, instead, let self-interest guide their behaviour and use public institutions to pursue their own agendas. As a consequence, the government will operate in a generally inefficient and corrupt manner (Butler, 2012).
Appeared in the 1980s as a result of the increased popularity of liberal theories, this approach attributes a nation’s underdevelopment to internal constraints such as inadequate resource allocation due to incorrect pricing policies and too much government intervention in the economy. In this sense, government failures are considered the cause of market failures.
The first variant of the model is the free-market approach, which states that any government intervention in a developing country’s economy is distortionary and counterproductive, so markets function most efficiently if they are left alone. The second variant, connected to the World Bank’s views and writings, is the market-friendly approach, which recognizes the fact that the government does have a role in the proper functioning of a country’s economy, by having the responsibility to create an environment in which markets can perform efficiently and intervening only with the purpose of correcting certain imperfections or inefficiencies (Todaro & Smith, 2014).
These liberal theories laid the basis of The Washington Consensus, a set of policies formulated by economist John Williamson in 1989 and endorsed by the main economic institutions in Washington at the time. In Europe, they started to be applied after the financial crisis, mainly with the bailout programs of Greece, Ireland, Italy, Portugal, and Spain. In Williamson’s view, the following set of policy instruments should be implemented by developing countries that aim to climb one step higher on the ladder of economic progress (Williamson, 1990).
- Fiscal discipline – keeping fiscal deficits to a minimum in order to avoid excessive inflation and capital flight
- Public expenditure priorities – mainly towards fields such as healthcare, education and infrastructure, which have the potential to improve income distribution and offer high economic returns
- Tax reform – broadening the tax base and bringing marginal rates to a “moderate”
- Interest rate liberalization – allowing domestic financial markets to determine a country’s interest rate with the purpose of discouraging capital flight and increasing savings
- Exchange rate competitiveness – in order for domestic products to be deemed cheaper abroad, thus boosting exports
- Trade liberalization – minimising or eliminating tariffs
- Encouraging Foreign Direct Investment inflows – in the interest of accumulating needed capital, skills and know-how
- Privatization – on the grounds that the private industry operates more efficiently because managers either have a “direct personal stake in the profits of an enterprise or are accountable to those who do”
- Deregulation – as a means to combat the corruption and excessive bureaucracy possibly ensued by too much government regulation
- Secure property rights – to incentivize savings and wealth accumulation
Critics of The Washington Consensus consider that Williamson underemphasized or failed to address some fundamental issues related to development, such as the importance of sound financial regulation and competition policy, and the improvement of technology.
Subsequently, economist Joseph Stiglitz coined the term “Post-Washington Consensus”, which he used to explain the fact that “our understanding of the instruments to promote well-functioning markets” has improved, and that the objectives of development exceed mere economic growth, involving also goals like sustainable, egalitarian, and democratic development (Stiglitz, 1998). Within this “emerging consensus” he formulates two principles:
- Whatever shape this new accord will take, it cannot be based in Washington. Developing countries will need to claim ownership of the policies they are going to implement in order for them to be sustainable. Regulating inflation rates and current account balances is relatively easier than doing the same for the financial sector, which would hardly be advantageous and desirable.
- More humility is necessary in acknowledging the fact that “we do not have all the answers.” To reach our objectives related to development, the whole world needs to engage itself in continued research and discussion.
The Post-Washington Consensus is still to be achieved.
Within the framework of neo-classical economics, this model of growth was developed largely by economist Robert Solow in 1987. It analyses how factors such as capital and labour inputs contribute to the economic growth of different countries.
According to this theory the growth rate can be temporarily increased by a sustained rise in capital investment, because thus, the ratio of labour to capital will also go up. In order for a developing economy to get on a steady-state growth path, output, capital, and labour should all grow at the same rate, so that the output per worker and capital per worker will be constant. As a result, neo-classical economists believe that higher levels of productivity of labour and capital, as well as an increase in the labour supply will lead to a faster growth rate.
The reason why some countries might grow faster than others can be attributed to the differences in the pace of technological change. (Riley)
A slightly different theory than those mentioned thus far is the Human Development Approach, which goes beyond the economic dimension of development and focuses on expanding the richness of human life by providing people with various opportunities and choices (Human Development Report Office).
The United Nations Development Programme defines human development as the process of “enlarging freedoms so that all human beings can pursue choices that they value.” However, human development is also the goal, so the reinforcement of freedoms is both a process and an outcome. “These freedoms have two fundamental aspects: freedom of well- being, represented by functioning and capabilities, and freedom of agency, represented by voice and autonomy.” (United Nations Development Programme, 2016)
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Figure 1.1. Human development - the analytical approach
( Human Development Report Office)
One of the biggest advocates and developers of the Human Development Approach is economist and philosopher Amartya Sen, who first launched the Human Development Report in 1990 along with economist Mahbub ul Haq, with the aim of placing people at the centre of the development process in terms of economic debate, policy and advocacy. Sen’s influential book, entitled “Development as Freedom”, added an important ethical side to development economics. In his view, there are two general attitudes towards development: some people consider it hard and violent, whereas others – including himself – see it as an essentially friendly process. He categorized the types of rights, opportunities, and skills that people may have – which constitute the instrumental role of freedom as a mean for development – into five groups of interrelated “freedoms” (Sen, 1999).
- Political freedoms – refer to citizens’ ability to determine who should govern and on what principles, to scrutinize and criticize authorities, to freely express their political views and to have access to free press. Civil rights fall within this category.
- Economic facilities – constitute individuals’ opportunities to utilize economic resources for consumption, production, or exchange. Economic entitlements are determined by each person’s access to resources and exchange conditions (i.e. relative price or the working of markets). When a country’s economic growth is reflected in its’ increased income and wealth, the economic entitlements of the population are enhanced as well.
- Social opportunities – represent society’s arrangements for education, healthcare, and other essential community facilities, which significantly influence people’s living conditions. Furthermore, they are important for encouraging a more effective participation in economic and political activities.
- Transparency guarantees - have a clear instrumental role in preventing corruption, financial irresponsibility, and underhand dealings. They refer to the basic presumption of trust that society operates on, which – if violated – may adversely affect the lives of people – both directly and indirectly involved.
- Protective security – includes fixed institutional arrangements such as unemployment benefits and statutory income supplements to the indigent, as well as ad-hoc arrangements such as famine relief. It is meant to provide a social safety net for those who are on the verge of vulnerability and succumb to great deprivation, in order to prevent them from being reduced to abject misery, and in some cases even starvation and death.
As mentioned previously, these freedoms directly influence people’s capabilities, and they also supplement and reinforce each other. Taking this link into consideration is especially important when formulating and implementing certain policies, because the mentioned freedoms profoundly affect the development process. The institutional arrangements they depend on include democracy, markets, legal mechanisms, health-, education-, and information services, and several others. They tend to engage private, public, and mixed initiatives.
By being at the centre of the development process, people are not passive recipients of the programs related to it, but active partners in their design and implementation.
A main achievement of this approach has been to popularize the idea that development has more aspects than just economic growth, and thus proving monetary measures – such as GDP per capita – inadequate proxies for development. In the first Human Development Report (United Nations Development Programme, 1990) the Human Development Index (HDI) was introduced “as a measure of achievement in the basic dimensions of human development across countries” (Human Development Report Office).
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Figure 1.2. Human Development Index
(Human Development Report Office)
Although it is a considerably more accurate tool for measuring the population’s level of development than many other indicators, the HDI fails to reflect the welfare level of large groups of people that suffer the negative consequences of unequal concentrations of well- being. As a result, an upgraded version of the HDI, the so-called Inequality-adjusted Human Development Index (IHDI), is used to provide a more precise observation of how evolved a nation is. The IHDI incorporates a country’s average situation in health, education and income with the distribution of achievements in each dimension among the population, by “discounting” each dimension’s average value according to its level of inequality. Thus, the IHDI is the distribution-sensitive average level of HD (Human Development Report Office).
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Figure 1.3. Inequality-adjusted Human Development Index
(Human Development Report Office)
The fundamental definition of sustainability is the “ability to sustain” or, in other words, the capacity of biological systems to endure and remain diverse and productive (Degree Prospects, LLC). It is based on the simple principle that the most important factor on which our survival and well-being depends is our natural environment.
A report released in 1987 by the World Commission on Environment and Development, entitled “Our Common Future” (“The Brundtland Report”) included what has become one of the most recognized explanations of the term sustainable development: “the ability to satisfy the needs of the present without compromising the ability of future generations to meet their own needs.” The report mentions three interconnected dimensions of the concept: economic, social, and environmental. Thus, sustainable development is economic growth with social inclusion and respect for the environment. It is human development for a long period of time (World Commission on Environment and Development, 1987).
A more recent study proposed 4 interconnected domains through which sustainability reporting should be framed: economics, politics, culture and ecology (Magee, et al., 2013).
The United Nations materialized this idea in a set of 17 Sustainable Development Goals, listed in the “2030 Agenda for Sustainable Development” (United Nations General Assembly, 2015). The goals are to be implemented and achieved in every country by 2030 and comprise a total of 169 targets, briefly explained as follows:
- Goal 1: No Poverty – “End poverty in all its forms everywhere.”
- Goal 2: Zero Hunger – “End hunger, achieve food security and improved nutrition and promote sustainable agriculture.”
- Goal 3: Good Health and Well-Being for people – “Ensure healthy lives and promote
well-being for all at all ages.”
- Goal 4: Quality Education – “Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.”
- Goal 5: Gender Equality – “Achieve gender equality and empower all women and girls.”
- Goal 6: Clean Water and Sanitation – “Ensure availability and sustainable management of water and sanitation for all.”
- Goal 7: Affordable and Clean Energy – “Ensure access to affordable, reliable, sustainable and modern energy for all.”
-Goal 8: Decent Work and Economic Growth – “Promote sustained, inclusive andsustainable economic growth, full and productive employment and decent work for all.”
-Goal 9: Industry, Innovation and Infrastructure – “Build resilient infrastructure,promote inclusive and sustainable industrialization and foster innovation.”
-Goal 10: Reduced Inequalities – “Reduce income inequality within and amongcountries.”
-Goal 11: Sustainable Cities and Communities – “Make cities and human settlementsinclusive, safe, resilient and sustainable.”
-Goal 12: Responsible Consumption and Production – “Ensure sustainable consumptionand production patterns.”
-Goal 13: Climate Action – “Take urgent action to combat climate change and itsimpacts by regulating emissions and promoting developments in renewable energy.”
-Goal 14: Life Below Water – “Conserve and sustainably use the oceans, seas andmarine resources for sustainable development.”
-Goal 15: Life on Land – “Protect, restore and promote sustainable use of terrestrialecosystems, sustainably manage forests, combat desertification, and halt and reverseland degradation and halt biodiversity loss.”
-Goal 16: Peace, Justice and Strong Institutions – “Promote peaceful and inclusivesocieties for sustainable development, provide access to justice for all and buildeffective, accountable and inclusive institutions at all levels.”
-Goal 17: Partnerships for the Goals – “Strengthen the means of implementation andrevitalize the global partnership for sustainable development”
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Figure 1.4. Sustainable Development Goals
(United Nations General Assembly, 2015)
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