Economic Development & Economic Growth: Concepts & Determinants

1. Economic Development & Economic Growth: Concepts & Determinants

2. Introduction: • World Economy is generally classified into: • Poor /Underdeveloped Countries • Developing Economies • Developed Economies • Earlier ,some theorists were classifying the world on the basis of some theoretical idealogies and the allignment of the nations with the leaders of these countries as: • First World • Second World • Third World

3. Economic Development – Concept Various definitions of economic Development are based on the following: A – Economic Development in terms of Real National Income B – Economic Developemnt in terms of Real Per capita Income C – Economic Development in terms of Economic Welfare D – Economic Development – Modern Interpretations

4. Economic Development as a Multi-dimensional Process: • Micheal P. Todaro • Economic development is the process of • “improving quality of human lives” • This process involves: • Raising People’s Living Levels • Creating conditions conducive to the Growth of People’s Self-esteem • Increasing People’s Freedom to Choose • Todaro says, • “ Deve;opment must, therefore, be concieved of as a multi-dimensional process involving major changes in social structures , popular attitudes and national institutions, as well as the acceleration of economic growth, the reduction of inequality and the eradication of poverty”

5. Tests of Economic Development: • Prof. Walter Krause - • Three Tests of Economic Development: • Cumulative Increase in Income for considerable period • Benefits for Whole Population • Cumulative Increase in Per-Capita Income

6. Features of Economic Development: • Dynamic Process • Long Term Process • Increase in Real Income • Increase in Per-capita Income • Multi-dimensional Process • Improvement of Quantitative & Qualitativ Variables

7. Economic Growth – Concept: • Different Terms: • Economic Development , Economic Growth, Secular Change, Economic Progress, Economic Welfare - • connote the same meaning • All terms interchangeable with Economic Development and Economic Growth • Economic Growth referes to the Increase in Production • Economic Development refers to Increase in Production along with Institutional Changes

8. Economic Development & Economic Growth – The Differences Basis of Difference Economic Development Economic Growth Type of Change Discontinuous & Spontaneous Change Gradual & Steady Change Pattern of Economy Regulated & Controlled Economy Advanced & Free Enterprise Economy Nature of Process Increase in Output & Structural Changes More Output

9. Economic Development & Economic Growth – The Differences Nature of Country Problems of Under-developed Countries Problems of Developed Countries Use of Resources Development of Unused Resources Use of known & Developed Resourceas Increase in Income General Increase in Income in Poor Countries General Increase in Income in Rich Countries Level of Income Achievement of Higher Income & Output Maintenance of Already Achieved Income & Output

10. Economic Development & Economic Growth – The Differences Stage of Change First Stage of Transitional Process Second Stage of Transitional Process • Difference is Imaginary • Both are generally Synonyms • Difference does not serve any economic interest • All concepts denote the process of change

11. Determinants of Economic Development Economic Determinants Non-Economic Determinants

12. Economic Determinants: • Natural Resources • Population or Human Resources • Capital Formation • Technical Progress • Financial Institutions • Size of the market • Structural Changes 8.Quantity and Quality of Enterprise 9.Internatiional Factors 10.Technical Coefficients(COR) 11.Financial Stability 12.Skill Formation 13.Development Planning

13. Non-Economic Determinants: • Political Factors • Religious Factors • Social Factors • Hope For Development • Freedom from Corruption

14. Thanks & Have A Good Day