Economic development

Economic development ideally refers to the sustained, concerted actions of communities and policymakers that improve the standard of living and economic health of a specific locality. The definition of economic development given by Professor Michael Todaro is an increase in living conditions, improvement of the citizens self-esteem needs and free and a just society. He suggests that the most accurate method of measuring economic development is the Human Development Index which takes into account the literacy rates & life expectancy which in-turn has an outright impact on productivity and could lead to Economic Growth. However, economic development can also be measured by taking into account the GDI (gender related index).

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Economic development can also be referred to as the quantitative and qualitative changes in an existing economy. Economic development involves development of human capital, increasing the literacy ratio, improve important infrastructure, improvement of health and safety and others areas that aims at increasing the general welfare of the citizens. The terms economic development and economic growth are used interchangeably but there is a very big difference between the two. Economic growth can be viewed as a sub category of economic development. Economic development is a government policy to increase the economic, social welfare and ensuring a stable political environment. Economic growth on the other hand is the general increase in the country products and services output.

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Economic development will only be successful if the whole nation is willing to give their best efforts towards its achievement. A lot of theories have been forwarded by different schools of thought about how economic development should be achieved. Many economists have suggested that each country should try to achieve modernization and industrialization in order to achieve economic development.

There seems to be a lot of correlation between economic growth and human development. This can be explained by a simple example in an economy. We shall consider economic growth as a prerequisite for economic development. Assume we have a household in an economy that ekes their livelihood from a horticultural firm. Economic growth will bring business opportunities to the country and the effects spills over to all sectors of the economy. The firm will increase its profits which will in turn be used to pay for their generation education, improve the access to health care for that family and will increase the general living standard of the family. If this effect is replicated in each household overall economic development will be achieved.

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Economic development leads to improvements in many sectors of a nation. There are a variety of indicators that economist use to measure the level of economic development in a country. The indicators are: declining poverty rates, increasing literacy rates, declining infant morbidity and increasing life expectancy. Economic development has to be supported by the whole nation from economists, politicians, and also civilians. Thus it can be concluded that, economic development leads to the creation of more opportunities in the sectors of education, health sector, research, human development and environmental  conservation It equally implies an increase in the per capita income of every citizen.

[gic_definition top_text=”Indicators of economic development” mid_text=”The indicators are: declining poverty rates, increasing literacy rates, declining infant morbidity and increasing life expectancy.”]

46 thoughts on “Economic development”

  1. Definately any country that achieve economic development without improving the standard of living of it own citizen, their effort is zero behind a decimal point .

  2. A country can therefore not achieve economic development without attaining economic growth first.
    This therefore means that those minor industries and firms which we find in our countries today are relevant.

  3. this is just the best and very practical explanation of economic develoment and economic growth. please keep it

    1. Economic development is achieved when a country is aligned with the community collaborative in which a plan, organized, and gathering the information of a particular community meet the understadning of the needs and wants within the community.

  4. Apart from any Government effort, also individual need to create his/her own job from the basis of his/her respective area.

  5. Economics Growth have become a major challenge in Liberia, as a result vast majority of the population are living in abject poverty.

  6. i am student who learn economics and i came from somalia we don.t know our aggregate our nation economics i mean we have no a geverment that have a bower to know our price index and humand index how can i know and to learn economics

  7. Sub Saharan Africa mainly consists of countries that are unable to catch up in the long run because of economic and political instability, corruption also hinders growth and development,limit social services and and only improve the life of one person or that group in corruption., which go against a definition of economic development. If one group of people in a single country had improve life’s and can sustain themselves financially and socially,this doesn’t mean that country is developed…(all people must civilized)
    From a dedicated south african

  8. Only Modernization and Industrialization will not help the economical condition to be developed. This makes no sense to me, each country should identify the farmers and cut down the states into different zonal. i understand about modernization but we need food to eat and when a country concentrates on the more export and import concepts, it has other countries money rolling down in the country. Give benefits to farmers, free land and monthly salary for cultivation, buy all the items and start exporting, every government need to think in a broader way. I have done many synopsis in economical condition dilution.

  9. Economic development is not an individual achievement but rather a collective achievement. This means that the failure of one sector of an economy is capable of affects the development of the entire economic system.

  10. Development are usually associated with technological changes, that is why many countries such us Nigeria introduced technical education to their Childrens since they are in primary school level, Because they believed that no Nation can achieved greatness unless she direct her effort in technology.

  11. I attend an Economics Development Semester at the University Of Nairobi in 1969/70 co-lead by Professor Mike Todaro and it whetted my enthusiasm. I have always borrowed from his work [Economic Development]. And I just been reading some date when I decided to look for an update on his definition of ‘economic development’. It makes a lot of sense for many of us still prodding on with issues of economic development in some backward areas of Africa.

  12. But when are we to experiencing economy growth and development in Nigeria when we lack stable govt. and limited numbers of economist in our governmental settings?even the contribution of civilians not that involved.

  13. This piece of script has added some expendable knowledge into me particularly concerning the distinction between economic development and economic growth.

  14. The note is short and nice but make it holistic by tailoring it with economic development theories
    Melkamu Abdissa
    Dilla University
    Socioeconomic development study

  15. To achieve an economic development growth in a nation or local communities, the citizens has to see themselves ad partners in development. All development has to be seen as OURS and not theirs. As soon as we all have that thoughts then we can achieve our desired goal of growth.
    Education is the back born to any economic development process. In transforming a nation from agriculture-base, the human capital has to strengthen. This will help in the facilitation of sustainable economic development growth and hence an increase in the general standard of living of it’s citizens.
    Economic development also has to consider community participation at all levels in terms of decision making and policy formulation. This social capital must also be at the pivot of economic development planning agenda and strategies.

  16. we study economic development in order to champion policy making and sustainable development planning in our diverse countries.
    Economic development planning needs people who are grounded in development issues especially those that will make an impact on the general living standard of the people, not only for current generation but generations yet unborn.

  17. Economic growth is a sub category of economic development then I am saying that there must be economic development for economic growth to be achieved since economic development is a government policy.

  18. this is very helpful definition. the distinction btn economic development and economic growth is well addresssed.. thanks

  19. I honestly admire the above piece because of its pragmatic condensed illustrations. By the way, the economic structure of my dear country(Nigeria)has different matrix relative to the above perceived context which ideally needs to be redefined. My critical scrutiny subscribes to an idea of introducing ” Geo-economic zone” given birth to balance growth which I perceived as a springboard for economic development. To amplify my statement, since the industrialisation leads to economic growth, Nigeria needs constant electricity which one of our major scourge facing our main industries over years back to archive economic growth which is based on increasing the capacity as a nation to produce goods and services.

    1. an economy is a machine that produces economic output as a function of inputs. for a country to be economically develop, every individual and government agencies must contribute their own inputs towards achieving greater outputs.

  20. Very well explained.There shouldn’t be any gray areas in meanings of ”economic development” and ”economics growth”i feel refreshed..!!

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