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The political economy of development
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Human Development Report
Financing Human Development

The lack of political commitment, not of financial resources, is often the real cause of human neglect. This is the main conclusion of Human Development Report 1991- the second in a series of annual reports on the subject. The Report points to an enormous potential for restructuring of both national budgets and international aid allocations in favour of human development.

But the plea for greater allocative efficiency and more effective spending does not mean indifference to the need for economic growth, or for increased resource mobilization. On the contrary. The Report's position is that a more efficient and effective public sector will help strengthen the private role in human development. And the best argument for additional resources is that the existing funds are well spent.

Just as economic growth is necessary for human development, human development is critical to economic growth. This two-way link must be at the heart of any enlightened policy action.

The 1990 Report argued that the developing countries have the resources to meet many of their development goals. This Report takes the debate a stage further by showing the potential for restructuring national budgets and foreign assistance to meet human needs.

The Report suggests that:

  • High levels of human development tend to be achieved with the framework of high levels of human freedom;
  • The main task is to invest in people, liberating their initiative;
  • The human expenditure ratio should become one of the principle guides to public spending policy;
  • Restructuring for human development is likely only with a workable political strategy; and
  • If we can mobilize the political base for action, the future of human development is secure.

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The lack of political commitment not of financial resources, is often the real cause of human neglect.
That is the main conclusion of Human Development Report 1991. The Report is about financing human development. A single powerful idea run through it-that the potential is enormous for restructuring national budgets and international aid in favour of human development. The Report concludes that much current spending is misdirected and inefficiently used. If the priorities are set tight, more money will be available for accelerated human progress.
The concept of human development introduced in the first of these Reports --last year--established that the basic objective of human development is to enlarge the range of people's choices to make development more democratic and participatory. These choices should include access to income and employment opportunities, education and health, and a clean and safe physical environment. Each individual should also have the opportunity to participate fully in community decisions and to enjoy human, economic and political freedom .
People's priorities are not fixed for ever. They change over time as circumstances and aspirations change. And they must all be taken together -with no single dimension pursued at the expense of any other. Many policy makers frequently concentrate on just one dimension -income. But this concentration is at best an oversimplification and at worst a gross distortion of reality.
Men, women and children must be the centre of attention -with development woven around people, not people around development.
Moreover, development must be participatory, and for this, people must have the opportunity to invest in the development of their capabilities-in their health, education and training. They must also have the opportunity to put their capabilities to use to be fully involved in all aspect of life -to express themselves freely and creatively.

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