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Monday , April 24 2017

Development Economics vs Economics Development

There are different economic schools of thought that gives different thoughts to understand Economics. Under this, Article we will discuss the difference between economic growth and economic development.

For the study of the difference between economic growth and economic development we first look at the basic economic concepts. That belongs to the difference between economic growth and economic development

As the Development Economics is the branch of economics that studies developing countries.kofi annan difference between economic growth and economic development in points

On The Other Hand

There is no generally accepted definition of “developing countries,“.

The expression refers to relatively poor countries or countries where standards of living are relatively low on average.

Kofi Annan, the former Secretary-General of the United Nations, defined a developed country as follows. “A developed country is one that allows all its citizens to enjoy a free and healthy life in a safe environment”

The World Bank Classifies Countries into Four Income Groups

 

growth and development

 

  • Low-income countries GNIpc $4,036 and $12,476 or less.
  • Lower middle-income countries GNIpc between $1,026 and $4,036.
  • Upper middle-income countries GNIpc between $4,036 and $12,476.
  • High-income countries GNIpc above US$12,476.

Economic Growth

 

A positive change in the level of production of goods and services by a country over a certain period of time

The increase over a period of time in the production of goods and services and the capacity to produce goods and services is called economic growth

Economic growth may well involve not only more output derived from greater amounts of inputs but also greater efficiency.

Economic Development

  • Sen as “economic development is the process of expanding the real freedoms that people enjoy“
  • Mahbub ul Haq “the objective of development, is to create an enabling environment for people to enjoy long, healthy and creative lives“

In short, there is more to economic development than growth in incomes

Economic Development is a process whereby the national income of a country increases over a long period of time when income growth rate must be greater than population growth rate.

Economic development is a dynamic process extent over a long period of time. Which enables an underdeveloped economy to break a vicious circle of poverty. That use to attains a higher level of income, output, and employment, secure better level of living through the introduction of economic and non-economic changes.

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Short Video tutorial on Difference Between Economic Growth and Economic Development

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Difference Between Economic Growth and Economic Development

difference between economic growth and economic development in points

 

Following are the difference between economic growth and economic development in points. You can study all the difference between economic growth and economic development with detail

  • “According to Hicks” economic development deals with the problems of underdeveloped countries like Pakistan whereas Economic growth deals with the problems of developed countries. 

The objective of economic development is to increase output level while the objective of economic growth is to maintain the level of output which they have already achieved.

  • According to Myrdal, growth is related to quantitative changes i.e. increase in Labor force, consumption, trade, and capital, While

Development is concerned with qualitative changes. Fr example development in economic wants, goods, incentives, institutions, productivity or the upward moment of the entire social system.

Economic development is wider because

Economic development = Economic growth + structural changes

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Approach is different

difference between economic growth and economic development in points approches

Economic development deals with education and health facilities, infrastructure, refined institutions.It also deals law and order conditions, political stability, technological progress.

On the other hand, economic growth deals with increase in overall output of a country

Difference in Scope

The scope of economics development is far broader than the economic growth. Because an increase is economic growth rate is just one reason that increases economic development in a country.

But there are many other variables which are responsible for the economic development of a country.

Further More

ED = Eco growth + Structural changes

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Vary from Country to Country

difference between economic growth and economic development COUNTRY TO COUNTRY

Economic Development is not a problem of developed countries because they have already achieved economic development. DCs have their focus on increasing their growth rate. On the other hand economic development is a problem of underdeveloped countries (UDCs). They want to enhance their level of infrastructure, technology, human capital

Time Span of both approaches

Economic growth can be achieved in a very small period of just one year. But the economic development requires a large time

Political stability

Economic development cannot achieve without political stability. For the development of a country, there must have stable political conditions. On the other hand, economic growth may compatible with political instability

Importance of each concept

The concept of Economic Development has greater importance than economic growth. Because growth does not ensure the increase in the welfare of people of the country.

Economic growth could result from an increase in the welfare of selected people. On the other hand, after achieving economic development, fruits will be for all people of the economy. And so The welfare of all people will increase

Social Impact

The economic growth does not ensure a better and positive social impact on the economy. Because it is possible that economic growth is the result of an increase in output of only a few industries in the country.

On the other hand economic development ensures a positive social impact on the economy. Because after achieving economic development the financial and social life of people enhances

Structural and Institutional Changes

relationship between economic growth and economic development

Economic growth does not require structural and institutional changes. Economic growth incompatible with a traditional mechanism of institutions and structure of the economy. This is because institutions must adopt modern techniques and technology for economic development

Dependence of others

After economic growth, the country still depends on other developed countries. As growth rate of Pakistan is positive but we are still dependent on other countries. On the other hand, after economic development, the country develops self-sufficiency and becomes independent

Quantitative and qualitative variables

Economic growth is associated with an increase in Labor force, consumption, trade, and capital. While economic development is concerned with qualitative changes. Such as in economic wants, goods, incentives, institutions, productivity or the upward moment of entire social system

Measurement

economics growth and development notes

There are different measures of economic development that is use all over the world. For example Physical Quality of Life Index, Human Development Index etc. On the other hand, we just compare output of current year and with output of previous year to get economic growth rate

Scope or Need for Economic Development

According to Thrilwall

After the great depression and in the aftermath of WWII, there was renewed academic interest among professional economist in the growth and development process

  • Poor countries themselves aware of their own backwardness
  • Absolute number of poor people are considerably greater now than before
  • Interdependence between countries in the world

 

Concept of Economic Development

If we want to know the exact meaning and different channels of economic development and realize the fruits which come with it. If we want to know how economic development can affect our standard of living, then we have to study the subject of economic development

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About My Aktion

Aksa Sahi I am a web developer and SEO expert and also an Economist, I earned the degree of B.sc (Hons) in Agricultural and resource Economics from the University of Agriculture Faisalabad in 2013. Exploring the World of Technology and traveling the adventure place is my passion working as a teacher and as a freelance web developer. I love to explore the world of IT. www.myaktion.com

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