The literature review aims at developing a background upon which the findings of the study can be discussed and understood. Section 1, the introduction already established that human development and poverty as core topics in economics and development and therefore many studies have been done in the past in the area both in academics and at the policy level. To develop a background upon which the findings can be discussed and understood, therefore requires focus on three key areas; the theory and knowledge of human development and poverty, trends in human development and poverty across the world and policies that have been applied in addressing human development and poverty.
The literature shows that the concepts of human development and poverty are closely related with poverty levels being used in most areas as a subset of the level of human development. However, given the special attention that is given the two concepts in the policies they are evaluated separately. Human development is not a new concept since as early as 1700s there are records of leaders trying to unite people into republics and societies that would be able to guarantee them a better life through productivity and security (Welzel et a., 2003 p. …show more content…
343). However, the modern assessment of human development has been traceable to developmental economics since the end of World War 2 when the reconstruction of societies and restoration of national dignity among countries were critical agendas (Ranis et al., 2006 p. 347). The evaluations of the definition for human development can be divided into two periods, the period before 1990 and the period after 1990 when the UNDP published a report on human development together with measurements (Alkire and Deneulin, 2009 p. 8). During the formation of the United Nations and its constituent agencies the World Bank and IMF, it was critical that frameworks be developed to ensure there was a reliable measurement of the various goals that the agencies had key among them being developed. At the time, Gross Domestic Product (GDP) was a popular concept in measuring the level of development of a country and the per capita GDP consequently became the most important indicator of the level of human development at the time (Alkire and Deneulin, 2009 p. 2). The fact that for most of the modern history development has mainly been represented in economic terms and the concept of utility was prevalent in economics, the economic valuation of human development was entrenched between 1944 and the 1990 (Alkire, 2010 p. 3). Utility describes the level of satisfaction or extent to which one’s desires were met (Stanton 2007, p. 4). The definition of human development as the level of economic resources that they possessed or using the per capita GDP was therefore seen as a proxy for the level of utility than individual enjoyed. Another factor that led to the rapid and widespread adoption of economic value as the definition of human development was the ease with which economic value could be measured. Financial resources or income could easily be measured since in all countries that are part of the UN, there is a currency that is used as a unit of account and that can also be converted into another currency through a
The literature shows that the concepts of human development and poverty are closely related with poverty levels being used in most areas as a subset of the level of human development. However, given the special attention that is given the two concepts in the policies they are evaluated separately. Human development is not a new concept since as early as 1700s there are records of leaders trying to unite people into republics and societies that would be able to guarantee them a better life through productivity and security (Welzel et a., 2003 p. …show more content…
343). However, the modern assessment of human development has been traceable to developmental economics since the end of World War 2 when the reconstruction of societies and restoration of national dignity among countries were critical agendas (Ranis et al., 2006 p. 347). The evaluations of the definition for human development can be divided into two periods, the period before 1990 and the period after 1990 when the UNDP published a report on human development together with measurements (Alkire and Deneulin, 2009 p. 8). During the formation of the United Nations and its constituent agencies the World Bank and IMF, it was critical that frameworks be developed to ensure there was a reliable measurement of the various goals that the agencies had key among them being developed. At the time, Gross Domestic Product (GDP) was a popular concept in measuring the level of development of a country and the per capita GDP consequently became the most important indicator of the level of human development at the time (Alkire and Deneulin, 2009 p. 2). The fact that for most of the modern history development has mainly been represented in economic terms and the concept of utility was prevalent in economics, the economic valuation of human development was entrenched between 1944 and the 1990 (Alkire, 2010 p. 3). Utility describes the level of satisfaction or extent to which one’s desires were met (Stanton 2007, p. 4). The definition of human development as the level of economic resources that they possessed or using the per capita GDP was therefore seen as a proxy for the level of utility than individual enjoyed. Another factor that led to the rapid and widespread adoption of economic value as the definition of human development was the ease with which economic value could be measured. Financial resources or income could easily be measured since in all countries that are part of the UN, there is a currency that is used as a unit of account and that can also be converted into another currency through a