Economic Development vs Economic Growthrev

8/4/2019 Economic Development vs Economic Growthrev

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Economic Development Vs

Economic Growth

Unit 1


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Economic Growth Debate Prior to the 20th century, Economic Development

was synonymous with Economic growth.

Developing nations, the Caribbean included wereclassified as being developed based on thestandards of the industrialized nations of Europe

Countries were classified as a developed nation,if they experienced relative high growth ratemeasured by their GDP levels, material progress,and accumulation of capital stock.


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Economic Growth Debate

The 20th century and beyond brought abouta new thrust to the development growthdebate.

Those nations who were classified as

developed because of the GDP levels andmaterial progress began to experiencedownturn in their economic well being.


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High levels of unemployment and inflationrates began to impact on these economies.

In the Caribbean in the 1970s to 80s themore developed Caribbean nations grappled

with balance of payments problems,currencies devaluation, and what becameknow as the debt crisis.


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What does Economic development

and economic growth entail ?

Economic Development as an intransitive conceptis one where development happensunconsciously.

Growth is not translated to achieve economicdevelopment programmes.

If there are no policy decisions in place geared

towards development.

As a transitive concept, development is willed.


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Economic Growth Debate For example, the national resource policy as part

of its development strategy has to be managed ifone goal is for the accomplishment of sustainablenatural resources.

It has to be a deliberate policy effort.

This is the tenet of this course and it is importantfrom the onset that we begin to distinguishbetween Economic Development and EconomicGrowth.


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Economic Growth Debate To do so, I want to draw form the ideas presented in the

course material by the theorists, G. M. Meier and DudleySeers who identified what they referred to as primary andsecondary or sub goals of Economic development.

They both included economic growth as part of the processto achieve economic development.

Economic development is a process which is morecomplex than economic growth economic growth is one ofthe indicators used to determine economic development.


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G. M Meier primary goal of economic developmentis per capita income. (Per capita income isNational Income divided by the population.)

In unit 2 we will discuss the limitations of thisindicator as a measurement of development.

His secondary goals focused on poverty reduction,income inequality, literacy levels, and lifeexpectancy rates.


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This can be referred to as social variables orsocial indicators.

Therefore his primary indicator to accesseconomic development is income and his

secondary indicators or goals are the socialindicators


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Economic Growth Debate Dudley Seers focused on similar goals in determining economic

development.

However for Seers, income was not a primary goal.

The main focus was placed on access to food and employment and anattack on poverty.

Because of the limitations in using national income as a measurementfor development Seers found that it could not be placed as a primarygoal.

Seers went on to identified other sub goals of development which aswas indicated earlier are part of the social variables.


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Economic Growth Debate Because of the limitations in using national income as a

measurement for development Seers found that it couldnot be placed as a primary goal.

Seers went on to identified other sub goals of developmentwhich as was indicated earlier are part of the socialvariables.

For both theorists, economic growth cannot be equated toeconomic development. Economic Development is a widerprocess of which growth forms a component.


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Economic Growth Debate Sen another theorist in the economic development,

economic growth debate, expressed what he termedEntitlements and Capabilities as an economicdevelopment.

For Sen, the process of economic development has to dowith what people are entitled to and their capacity.

That is people basic rights. This brings the developmentdebate on people focused. Development has to be peoplecentered for it to be meaningful.


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Sen Entitlements are peoples basic rights

goods and services and the ability to be ableto access these goods through access towages and salaries.

People can only earn salaries and wages ifthey are employed.


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The debate continue on peoples capabilities

to be well feed, to have access to healthcare, to an education.

Sen also examine other indicators to

achieve economic development such asliteracy levels, unemployment rates, and %of the population with access to water.


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In light of the above discussion, and taking intoconsideration the views of the theorist, we cantherefore conclude that economic development

and economic growth are not synonymousconcepts.

Economic development is more detailed and

encompasses a series of variables. In facteconomic development is a process which takesplace over time.


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Economic growth is a component of thisprocess.

It is important to the process of economicdevelopment; however the spill off fromeconomic growth has to be translated toaccomplish economic development goals.


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In Unit 2 we will examine some of the indicatorsused to measure economic development andeconomic growth and the limitations of these

indicators.

Which do you think is primary?

The accomplishment of economic development tosustain economic growth or economic growth tosustain economic development.


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END

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