Economic Development vs. Economic Growth

Economic Development
Economic Growth

Economic Growth is a narrower concept than economic development.It is an increase in a country's real level of national output which can be caused by an increase in the quality of resources (by education etc.), increase in the quantity of resources & improvements in technology or in another way an increase in the value of goods and services produced by every sector of the economy. Economic Growth can be measured by an increase in a country's GDP (gross domestic product).

Economic development is a normative concept i.e. it applies in the context of people's sense of morality (right and wrong, good and bad). The definition of economic development given by Michael Todaro is an increase in living standards, improvement in self-esteem needs and freedom from oppression as well as a greater choice. The most accurate method of measuring development is the Human Development Index which takes into account the literacy rates & life expectancy which affect productivity and could lead to Economic Growth. It also leads to the creation of more opportunities in the sectors of education, healthcare, employment and the conservation of the environment.It implies an increase in the per capita income of every citizen.

Economic Growth does not take into account the size of the informal economy. The informal economy is also known as the black economy which is unrecorded economic activity. Development alleviates people from low standards of living into proper employment with suitable shelter. Economic Growth does not take into account the depletion of natural resources which might lead to pollution, congestion & disease. Development however is concerned with sustainability which means meeting the needs of the present without compromising future needs. These environmental effects are becoming more of a problem for Governments now that the pressure has increased on them due to Global warming.

Economic growth is a necessary but not sufficient condition of economic development.

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Economic Development

Economic Growth

Implications Economic development implies changes in income, savings and investment along with progressive changes in socio-economic structure of country (institutional and technological changes). Economic growth refers to an increase in the real output of goods and services in the country.
Factors Development relates to growth of human capital indexes, a decrease in inequality figures, and structural changes that improve the general population's quality of life. Growth relates to a gradual increase in one of the components of Gross Domestic Product: consumption, government spending, investment, net exports.
Measurement Qualitative.HDI (Human Development Index), gender- related index (GDI), Human poverty index (HPI), infant mortality, literacy rate etc. Quantitative. Increases in real GDP.
Effect Brings qualitative and quantitative changes in the economy Brings quantitative changes in the economy
Relevance Economic development is more relevant to measure progress and quality of life in developing nations. Economic growth is a more relevant metric for progress in developed countries. But it's widely used in all countries because growth is a necessary condition for development.
Scope Concerned with structural changes in the economy Growth is concerned with increase in the economy's output

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In this video, Professor Tiezzi expresses his views on the energy debate within the wider context of his work the study of sustainability.

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Comments: Economic Development vs Economic Growth

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Anonymous comments (28)

June 16, 2014, 9:38am

Thank u very much

— 8.✗.✗.98
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June 12, 2014, 5:00am

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— 49.✗.✗.95
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May 18, 2014, 7:57pm

its wonderful and useful

— 37.✗.✗.12
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May 4, 2014, 2:44pm

very good

— 37.✗.✗.156
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May 2, 2014, 2:11am

its self explanatory, well organized and easy to understand

— 41.✗.✗.4
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April 23, 2014, 2:12pm

it is the best method to diffirentiate econ.growth&econ.development iapritiate it.

— 141.✗.✗.203
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April 12, 2014, 11:29am

thank you so much it's a clear explanations I was looking for. ooooo

— 82.✗.✗.200
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April 1, 2014, 4:13pm

Thanks alot...has some sense to me....

— 41.✗.✗.4
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March 31, 2014, 5:05pm

The maturity of the quality nd quantity of good nd services produced in a country,the transformation of her economy from primary to secondary sectors.

— 37.✗.✗.78
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March 26, 2014, 12:27am

Good work

— 141.✗.✗.94
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March 14, 2014, 5:49pm

Hmmmmmm....i luv it

— 141.✗.✗.65
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March 1, 2014, 10:39pm

Economics Development means that increase living standard,improvement in self- esteem needs and freedom fr oppression as well as a greater choice.

— 197.✗.✗.10
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February 25, 2014, 2:32pm

Growth means output while economic development means both output and changes in technical and institutional arrangement by which the outputs are produced. Growth can be expressd in mathematical models while development is difficult because of its complexity.

— 82.✗.✗.39
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February 25, 2014, 8:55am

Couldn't ask for more that's awesome thanks

— 196.✗.✗.145
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February 14, 2014, 10:01am

Economy

— 141.✗.✗.3
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December 17, 2013, 7:19am

Very nice presetation.thanky you

— 141.✗.✗.62
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December 16, 2013, 10:21am

Well done ... gud job ...:-):-)

— 49.✗.✗.224
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December 11, 2013, 1:38pm

I cannot explain how much i learn from this .It was really helpful for me .
Thankyou very much

— 37.✗.✗.35
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December 11, 2013, 4:56am

thank you

— 41.✗.✗.1
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September 20, 2013, 10:22am

good information, thanx

— 196.✗.✗.130
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May 20, 2013, 6:04pm

great ork ..!!

— 14.✗.✗.114
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July 6, 2012, 7:00am

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— 141.✗.✗.141
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March 23, 2012, 1:34pm

it is really informative.thank you so much.just what i've been looking for

— 41.✗.✗.51
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January 8, 2012, 3:58am

thanks exactly what i was looking for

— 186.✗.✗.111
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December 29, 2011, 1:19pm

thats what i was looking for, thanks a lot . country like Tanzania a lot of government officials and leaders are proud of Economic growth while nothing to do with development of people taking it consideration current floods which happened in Dar es Salaam all people leaving in slum areas affected badly,

— 41.✗.✗.94
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December 20, 2011, 1:14pm

GOOD JOB.................................

— 122.✗.✗.140
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November 26, 2011, 6:43pm

its really helpful

— 110.✗.✗.109
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October 12, 2011, 11:43am

Very informative article.

— 41.✗.✗.4
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