economic growth and economic development are often thought to be synonymous but although the two are closely linked, there are crucial differences in their meanings. Economic growth is defined as ‘a rise in the total output (goods or services) produced by a country’. It is measured by the percent rate of increase in the gross domestic product (GDP).
Economic development as defined by Todaro is “not purely an economic phenomenon but rather a multidimensional process involving reorganization and reorientation of entire economic and social system”.
Economic growth measures growth in monetary terms and looks at no other aspects of development. Economic development looks at increase in productivity while taking into account factors like economic, social and political issues. Very often economic growth in a nation does not bring about economic development. Economic growth of a nation can also be accompanied by increase in poverty and growing levels of unemployment. This type of growth if not accompanied by economic development in the long term is bound to have adverse affects on society. Not only does it affect people, it also has a negative impact, as to maximize profits, the environment is callously polluted. Economic growth can take place if there is efficient use of people’s knowledge and capability and good government policies.
The Essay on India, China Economic Growth
... economy began in 1978, after economic reform China experienced rapid economic and social development. GDP growth about 10% a year has ... accumulation etc. India’s growth miracle is in the race of development because private business is increasing rapidly. There are lots ... poverty reduction (Sudip, 2009). China’s early growth was triggered by agriculture growth which increased rate from 2. 9 per cent ...
Development is a long-term process. It looks into all aspects of growth, taking into account factors like the environment and human needs. Economic growth can only take place in the long run if there is development simultaneously. Sustainable development is defined as the world bank as “development that meets the needs of the present without comprising the ability of future generations to meet their own needs”. This sort of development is important as it means the best possible use of our available resources without jeopardizing the future generations ability to produce goods/services and live life comfortably. Development concerns itself with environmental objectives, which are a healthy environment for humans, rational use of renewable resources and conservation of non-renewable resources, and social objectives like justice for all.
Thus, the statement economic growth is an essential but not sufficient condition of economic development is entirely true. Economic development and economic growth are closely related. Without economic growth, there cannot be any economic development.
DOES ECONOMIC DEVELOPMENT ALWAYS LEAD TO IMPROVEMENTS IN LIVING STANDARDS?
As discussed above economic development is “The process of raising the level of prosperity and material living in a society through increasing the productivity and efficiency of its economy”. While some economists have the opinion that economic development would definitely lead to an improvement in living standards, others strongly disagree. This is a highly debatable issue and depends on the perspective from which it is viewed.
The obvious assumption that one comes to is that economic development in the country would lead to an improvement in the standard of living of the nation but that is not always the case. There are several reasons for that. It depends to a great extent on the government policies. Several countries have a high GDP but are ranked comparatively lower down on the human development Index published by the UNDP. This is because although they have the funds, they are not utilizing them on improvement in the living standards. This is mainly noticed in the sub Saharan and middle eastern countries like Botswana, U.A.E, Qatar, Saudi Arabia, Iran, Equatorial Guinea and so on.
The Essay on Composite Indicators of Poverty and Living Standards:
Development is more than simply increasing economic output i.e.GDP per capita. It is a wider concept than economic growth. Even if a country's economy experiences real growth of GDP it does not mean that economic development is taking place. Nevertheless, wider more meaningful indicators of development are often correlated with GDP per capita.The Physical Quality of Life Index (PQLI)In this index ...
Many countries are following a free market policy today, which means minimum government intervention. In this kind of an economy, foreign investment increases and there is a greater flow of goods into the country. Some economists believe that when there is more investment and money is flowing into the economy leading to development there is bound to be an increase in the income of the entire nation, leading to better standards of living. However, although there is economic development, the rich get to cash in on the opportunities while the poor get even more impoverished. A large disparity in wealth can be observed in these nations, and although economic development has increased phenomenally, living standards continue to remain disastrous.
However, economic development is essential for a better quality of life. It can be stated that an improvement in living standards is only possible if there is economic development but economic development does not always lead to better living conditions. Often increase in development also leads to an increase in the standard of living and an improvement in the quality of life. Examples of such developing countries that have a comparatively high HDI ranking although the GDP may not be very high are Croatia, Latvia, Cuba, Belarus, Ukraine, Tajikistan and so on.
Therefore, it can be clearly seen that economic development does not always lead to improvement in living standards. All countries must place emphasis on balanced and sustainable development that also takes into account human needs centred development. Improvements in human standards are very important and it is for that reason that that development is no longer measured only in terms of monetary wealth but also in terms of quality of life enjoyed by the citizens of the country (by the human development index).
The Essay on Living Standards And Standard Of Living
The American life style has been very much shaped by their economy. Nearly all aspects of American, and for that matter the rest of the world s, life have been changed by their economy s in some way, shape or form. Everything from the beds we sleep on, to the food we eat, to the jobs we aquire to make ends meet is continuously shaped by the different economies each respective country has. So what ...
Todaro has given a comprehensive definition of development, which takes into account an economic approach and a human needs approach, which is the ideal way of development.
