Can You Distinguish Between Economic Growth And Economic Development?
I also need to make an analysis of how development economics has evolved
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The distinction is a subtle one. Economic growth means simply an increase in income. Economic development, on the other hand, refers to deeper structural changes in a society.
Perhaps it is best illustrated with an example. Let's say that the only economic activity in an underdeveloped country other than subsistence agriculture is banana-growing for export. And let's say that the price of bananas on the world market increases. Well, the country has more income now so it has experienced economic growth. But its only significant economic activity is still banana export so it has not really experienced economic development.
Signs of real economic development would be such things as the development of a middle class, a sophisticated banking system, improving literacy levels, a domestic manufacturing industry and the like.
Perhaps it is best illustrated with an example. Let's say that the only economic activity in an underdeveloped country other than subsistence agriculture is banana-growing for export. And let's say that the price of bananas on the world market increases. Well, the country has more income now so it has experienced economic growth. But its only significant economic activity is still banana export so it has not really experienced economic development.
Signs of real economic development would be such things as the development of a middle class, a sophisticated banking system, improving literacy levels, a domestic manufacturing industry and the like.
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EG = more output; ED = more output and positive changes
ED = Growth + Change
- Dr. V B Hans (India)
ED = Growth + Change
- Dr. V B Hans (India)
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