Concept of Economic Development and Economic Growth
Introduction:
Economic development is a dynamic and multi-dimensional concept. The concept of economic development changes along with the changes in human attitudes, behaviours and activities with time. Thus, it is very difficult to give a precise meaning of economic development. Different economists have defined economic development differently. Up to 1970s, economic development was defined as the increase in GNP, PCI, etc. But from 1970s, economic development has been defined as the development of human resource. Recently, the UN has defined economic development as equality, sustainability, productivity, and empowerment of human resource.
Concept of Economic Development:
Economic development refers to the progressive changes in socio-economic structure of a country. In other words, it is a process of changing poor people and nation to an advance stage of economic well-being such as improving living standard of people, better health and education, increase in PCI etc.
Economic development brings social, institutional, and organizational change of a country. It relates with positive changes along with economic growth. Thus,
Economic Development = Economic Growth + Progressive Changes
Thus, economic development refers to not only growth but also distributional and structural changes that leads to an improvement in living standard of people. So, the development in overall aspects of the people is economic development.
Concept of Economic Growth:
Economic growth is defined as the increase in productive capacity of an economy over time. It is the process of transformation of low-income countries into high income ones. Economic growth is related to quantitative change only.
Economic growth means the increase in the capacity of an economy to provide goods and services for final use.
Thus, economic growth refers to an increase in aggregate level such as national income, output and employment over a period of time.