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The terms dynamic equivalence and formal equivalence, coined by Eugene Nida, are associated with two dissimilar translation approaches that are employed to achieve different levels of literalness between the source text and the target text, as evidenced in biblical translation.
The two have been understood basically, with dynamic equivalence as sense-for-sense translation (translating the meanings of phrases or whole sentences) with readability in mind, and with formal equivalence as word-for-word translation (translating the meanings of words and phrases in a more literal way), keeping literal fidelity.
Formal equivalence approach tends to emphasize fidelity to the lexical details and grammatical structure of the original language, whereas dynamic equivalence tends to employ a more natural rendering but with less literal accuracy.
According to Eugene Nida, dynamic equivalence, the term as he originally coined, is the "quality of a translation in which the message of the original text has been so transported into the receptor language that the response of the receptor is essentially like that of the original receptors." The desire is that the reader of both languages would understand the meanings of the text in a similar fashion.
In later years, Nida distanced himself from the term "dynamic equivalence" and preferred the term "functional equivalence". What the term "functional equivalence" suggests is not just that the equivalence is between the function of the source text in the source culture and the function of the target text (translation) in the target culture, but that "function" can be thought of as a property of the text. It is possible to associate functional equivalence with how people interact in cultures.
Because functional equivalence approach eschews strict adherence to the grammatical structure of the original text in favor of a more natural rendering in the target language, it is sometimes used when the readability of the translation is more important than the preservation of the original grammatical structure.
Formal equivalence is often more goal than reality, if only because one language may contain a word for a concept which has no direct equivalent in another language. In such cases, a more dynamic translation may be used or a neologism may be created in the target language to represent the concept (sometimes by borrowing a word from the source language).
The more the source language differs from the target language, the more difficult it may be to understand a literal translation without modifying or rearranging the words in the target language. On the other hand, formal equivalence can allow readers familiar with the source language to analyze how meaning was expressed in the original text, preserving untranslated idioms, rhetorical devices (such as chiastic structures in the Hebrew Bible) and diction in order to preserve original information and highlight finer shades of meaning.
According to Ghil'ad Zuckermann, a major problem lies in the fact that there are completely overlooked semantic differences between a lexical item in the source language and its alleged equivalent in the target language.: 216
Zuckermann provides the example of the lexical item for "angels" in three different languages: English (angels), Arabic (malāʾika) and Hebrew (מלאכים malakhím). These three terms are used to translate each other interchangeably, as if they meant exactly the same thing. As Zuckermann puts it, "for the non-sophisticated layman, an angel is an angel is angel.": 216 However, employing Natural Semantic Metalanguage to discover in depth the exact, complex meaning of each of the three lexical items, Zuckermann points out numerous differences that were identified by Sandy Habib, as following:: 216
Translators of the Bible have taken various approaches in rendering it into English, ranging from an extreme use of formal equivalence, to extreme use of dynamic equivalence.