An Introduction to Place-Based Development Economics and Policy

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What is the difference between Economic Growth and Development? We will start by defining Economic growth and development.

Development thought after World War II

Having economic growth without economic development is possible. We can also have a situation where there is growth and development, i. Development alleviates people from low standards of living into proper employment with suitable shelter. Development, however, is concerned with sustainability, which means meeting the needs of the present without compromising future needs.

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Economic Development is an improvement in factors such as health, education, literacy rates, and a decline in poverty levels. Initial low levels of inequality are associated with more negative elasticities of poverty reduction concerning growth. Higher initial inequality results in less effect on poverty with an increase in economic growth.

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Governments pursue poor policies redistribution policies trying to reduce inequality, which results in high inflation, high deficit, and lower growth. Growth Occurs When. There is an increase in the number of people in the workforce or the quality of the workforce improves.

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They differ widely in area, population density, and natural resources. They are also at different stages in the development of market and financial institutions and of an effective administrative framework. These differences are sufficient to warn against wide-sweeping generalizations about the causes of underdevelopment and all-embracing theoretical models of economic development.

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But when development economics first came into prominence in the s, there were powerful intellectual and political forces propelling the subject toward such general theoretical models of development and underdevelopment. First, many writers who popularized the subject were frankly motivated by a desire to persuade the developed countries to give more economic aid to the underdeveloped countries, on grounds ranging from humanitarian considerations to considerations of cold-war strategy. These countries were eager to accept general theories of economic development that provided a rationalization for their deep-seated desire for rapid industrialization.

These new theories have continued to have a considerable influence on the conventional wisdom in development economics, although in retrospect most of them have turned out to be partial theories. A broad survey of these theories, under three main heads, is given below. It is particularly relevant to the debate over whether the underdeveloped countries should seek economic development through domestic industrialization or through international trade. The limitations of these new theories—and how they led to a gradual revival of a more pragmatic approach todevelopment problems, which falls back increasingly on the older economic theory of efficient allocation of resources—are subsequently traced.

Economic development. Article Media.

Economic Development and Institutions

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Submit Feedback. Thank you for your feedback. Introduction Economic development as an objective of policy Motives for development The impact of discontent A survey of development theories The hypothesis of underdevelopment Development thought after World War II Growth economics and development economics The missing-component approach Shortage of savings Foreign-exchange shortage Education and human capital in development Surplus resources and disguised unemployment Role of governments and markets Lessons from development experience The importance of agriculture The role of exports The negative effect of controls The importance of appropriate incentives The role of the international economy Population growth Development of domestic industry Developing countries and debt Development in a broader perspective.

Load Previous Page. Read More on This Topic. Development economics is easy to characterize as one of the three major subfields of economics, along with microeconomics and macroeconomics.

Difference between Economic Growth and Economic Development

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