Difference Between Economic Growth and Development

Distinction Between Economic Growth and Development

Many people among us sometimes confuse over the term economic growth and economic development and say it one for the other. Well it’s actually difficult to segment them and so we are here to discuss about the difference between economic growth and development. In a general sense we can say that Economic Growth has a distinct concept than economic development.

Economic Growth could be because of any number of reason and its root form it can be referred as increment in the national output level. The various reasons include high quality education that is now provided in the nation, technological improvement or we can say as increase in the valuation of the various goods and the services that are provided to the citizen of a country by various sectors. The best way to measure an economic growth is to see the country’s Gross Domestic Product or as we say it GDP. Economic Growth is not needed but alone it will not be able to justify economic development as for that few other conditions are necessary.

Coming to economic development, defining this is no easy task as it totally depends on an individual’s point of view and their take on morality. People are now free to think whether something is good, bad, right or wrong; it’s their own perspective. Now many people have tried giving definition for economic growth but the best one comes from Michael Todaro who said economic development was an increase in living standards, improvement in self-esteem needs and freedom from oppression as well as a greater choice. For general purpose we can refer to something known as the Human Development Index (HDI) to predict economic development. Now HDI takes care of various parameters such as literacy rate and the mortality rates, these factors affect the productivity and are responsible for economic growth.

Now we will see a few basic differences between economic growth and economic development. Economic Growth is all about increasing national income and development while Economic Development is all about increasing national income and people’s morality toward good by improving them. A well organized and structured organization is a must for having Economic Development while it’s not necessary for the latter. Even the approach is different among the two, as said by the economists, Economic Growth needs as quantitative approach while economic development needs a qualitative approach. The importance of Economic Development is far more then Growth as it tells us about the state of economy in a much wider form as compared to the growth. Experts focus more of their attention over economic development than growth.

One of the other approaches to look them is their duration, we can easily find out Economic Growth by looking at data monthly, yearly or per decade thus making it able to be distinguish in short term such as a year. In case of economic development we have to look for large duration of time which could include few decades together as it takes a large amount of time to change people’s view and the organizational set-ups. Also many a time’s economic growth relates to the problems faced by the developed nations while problems of development are a cause of concern for developing countries. While political scenario plays a major role in Economic Development, it has no effects on Growth.

Many scholars have related countries of their power to become self-sufficient with the Economic Growth and Development and postulated that Economic growth is not enough for a country to become self-reliant but Development offers a balanced growth and thus makes a country self-sufficient by reducing the dependency from foreign nations.

To sum it up we can surely say that Economic development aims for uplifting society by making it move in a forward direction in national income, savings and the entire organizational structure. Economic Growth only measures the Gross National Product (GNP) or by measuring the per capita income of the population. One can argue that Economic growth is not important as compared to economic development but the thing to observe here is that we can’t effectively measure economic development without referring Economic growth also the policy makers refer to the GNP values so as to find the economic growth seeing which they design various policies that run a nation.

Click here for government certification in Accounting, Banking & Finance

5 Comments. Leave new

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.

The falling US Savings Rate..
What is the Happiness Index?

Get industry recognized certification – Contact us

Categories

Menu