DEFINITION OF ECONOMIC DEVELOPMENT | Economic Development | Economic development vs Economic Growth
DEFINITION OF ECONOMIC DEVELOPMENT
Professor Adelman said that, Economic development
is a sustained improvement in the well-being, which may be considered to be
reflected in an increasing flow of goods and services.
Professor Meier and Baldwin said that,
"Economic Development is a process whereby an economy's real national
income increases over a long period of time."
Till 1960's the term economic development was
often used as a synonym of economic growth in the economics literature. Today, economic development is no longer measured equal
with economic growth. Economic
development is considered to mean growth plus progressive changes in certain
crucial variables which determine well-being of the people. There are
qualitative dimensions in development process which may be missing in the
growth of an economy expressed in terms of an increase in national product or
product per capita. Economists are not impressed by growth performance of a
country which gets reflected in the rise in its GDP or GNP. They, nowadays, focus more straightly on the growth and development procedure.
Economic Development implies a sustained annual
increase in GNP or GDP at rates varying from 5% to 7% or more, together with alteration in the structure of
production and employment that the part of agriculture drops in mutually, whereas that of
manufacturing and tertiary subdivisions, increases. Policy measures hence recommended are the ones which tempt
industrialization at the cost of agricultural development.
Determinants of Economic Development
Determinants of economic development are as under:
1-GROSS NATIONAL PRODUCT
One of the methods to measure economic development is in terms of an increase in economy's real national income over a long period of time. Real national income denotes to the country's entire output of final goods and services in real terms instead of in monetary terms. Therefore, price deviations will have to be ruled out while finding out real national income.
2-PER CAPITA INCOME
The second measure relates to an increase in per capita income of the economy over the long period. Economic experts are the one in elaborating economic development in means of an rise in per capita real income or output. This indicator of economic growth purports to emphasize that for economic development the rate of increase in seal income should be higher than growth rate of population.
3-WELFARE
There is, similarly, a inclination to quantify or find economic expansion from
the point of view of economic welfare. Economic development is viewed as a progression whereby there is a surge
in the expenditure of goods and services of individuals. Economic development is a continual,
nonspiritual perfection in material well-being which we might replicate to be
reflected in a growing stream of goods and services.
4-SOCIAL INDICATORS
Health, food, education including literacy and skills,
employment conditions of work, consumption of basic necessities,
transportation, housing, household facilities, clothing, recreation, and social
security etc included in economic development.
Distinguish Between Economic Growth and Economic Development.
Economic Growth and Economic Development
Economic development is a broken, discontinuous and natural change in
the static state which forever changes and shifts the equilibrium state earlier
existing, while Economic Growth is a steady and gradual and stable change in the long run which comes about by aa gradual increase in
the rate of savings and population.
Economic growth represents extra yield, whereas economic development indicates both additional
output and changes in technical and institutional actions by which it is formed
and dispersed. Growth
may well involve not only more output derived from greater amounts of inputs
but also greater efficiency 1.e., an increase in output per unit of input
Development goes ahead to this to imply variations
in the arrangement of output and in the apportionment of inputs by sectors. Growth is an enlargement of
the system in one or more dimensions without a alteration in its structure and
development as an advanced process leading to the organizational transformation of
social systems.
Economic growth is related to a quantitative
sustained increase in country's per capita output or income accompanied by
expansion in its labor force, consumption, capital and volume of trade. On the other side, Economic Development is a broader terminology. It is linked to qualitative deviations
in economic wants, goods, incentives and institutions. It defines the fundamental factors of growth, such as technological and
structural changes.
Development embraces, growth and decline. An economy can nurture and breed but it may not advance because poverty,
unemployment and discriminations may continue to exist because of the lack of modern, technological and
structural changes. But
it is difficult to imagine development without economic growth in the absence
of an increase in output per capita when population is growing rapidly.
Objectives Of Economic Development
Incline in relaxation,
political freedom and equal chances of life for every people.
Growth in capital formation
that is new buildings structures and industries.
Growth in standard of
living of the general people.
Rise of supply of food, wearing, health and safety, and education amenities.
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