Economic Development (Research report)

2-DEVELOPMENT  VS GROWTH.

Simply by " Economic Development we mean the continuous increase in real income of a country over a long period of time. Moreover, it is also furnished with technical and industrial changes in tile society". Like development, the economists . Also present the concept of" Economic Growth". The Economic Growth represents increase in the production of goods and services of a country. Moreover, it is’ attached       with the increase in the efficiency of the factors of production.  -           '

From such simple defamations we find that economic development is a qualitative term while economic growth is a qualitative term. As the increase in the quantity or volume ()f a thing denotes its growth. Therefore, if a country's output, national income, per capita income, consumption, savings and investment increase - such phenomenon represents. Growth. Therefore, if the level of national production increases due to better use'. of factors of production, better' techniques of production or better organization, it represents economic growth.       "

In the words of Kindleberger, " Economic Growth means more output .and 'changes in the technical and institutional arrangements. Growth not only ll9-pliesmore output but also more efficiency and more inputs. While "Economic Development is a wider concept and it goes beyond the changes in the structure of output and allocation            of inputs".

In the early stage any econoll1Y that grows is likely \0 develop and that who develops is likely to attain growth. But the countries who have already developed as US, UK, Germany, France and Australia etc. are desirous to keep on growing: While' in the case of UDCs who have low incomes, growth and development go side by side.

Thus we conclude that economic development means a sustained, secular improvement in material well-being which may be, reflected in an increasing flow-of goods and services. 1\s the definition, of development has been presented in material terms. Thus it includes social; cultural; political, moral and economic factors which contribute to material progress. Thus economic development is economic because it aims at growing of the production of material commodities and services. It is social because it implies institutional changes in the society. It is moral because the idea of equality and social justice is involved in it. It is cultural because development policies imply a 'profound revolution. Thus we 'say that Economic Development is wider than Economic Growth.  '

Despite above theoretical difference between Development and Growth, we will use both the terms as alternatives. '"  ­

         .       Now we give-certain definitions of economic development which will explain its meaning.

a-Definition of. Economic Development. According-to:

Prof. Waston, " Economic Development shows the excess of consumption and production of a country as compared with increase in population. This increase in production is due to better' combination and increase in the productivity of the factors of production".

Prof. Williamson, “Economic Development is a process whereby the people of a country utilize the available resources in  'such a way that the per capita income of the    country increases.”"    '

Prof. Higgis “ Economic Development  is the increase' in per capita and NI of a country”. ,'.         '

Pro{. Arthur lewis,” Economic Development represents the per capita increase in the  production of a country".  

      Profs. Meir and Baldwin_ " Economic Development is a process whereby the real NI of a country increases over a long period of time.' If the increase in the real NI is, more than the population increase thei1the per capita real income of the country will also increase". It is expressed Mathematically as            '

If Y/P represents real national income (NI) and P represents population, then economic development will take place if 

D(Y/P)/dt  > 0. In case  d (Y/P)/ dt  = Dp/dt, it world represent economic stagnation. While if d(Y/P)/ dt < Dp/dt or Dp/dt > Dp(Y/P)/dt, it will represent backwardness.

                                                                   ' If we analyze, Meir/Baldwin's definition we find the following important features of Economic Development .      

   ,              1. Process,                2. Increase in Real NI              3. Long period.

1. Process. The process indicates the interaction of different technical and administrative forces, which result in increase pi production and changes on_ demand side as well as on supply side.

     The changes on supply side are as:

1. 'Discovery of new Resources, C_) Capital Accumulation, (3) Changes! Population, (4) Introduction of Better Technique}1es of production, (5) Improvement  in skill, (6) Social and Institutional changes.        .

The-changes on demand side are as : (1) Changes in Size and Nature of Tastes of the people, (2) Changes in, the_ Level and Distribution of NI, (3) Changes in Tastes of the people, (4) Changes in Social and Institutional life.