Development Economics: Differences between Economic Growth and Economic Development

Running head: DEVELOPMENT ECONOMICS
Development Economics
Name of the Student
Name of the University
Author Note

1DEVELOPMENT ECONOMICS
Table of Contents
Part A.........................................................................................................................................2
Introduction............................................................................................................................2
Economic Development.........................................................................................................2
Difference between Economic Development and Economic Growth...................................3
Differences in measurement of Poverty.................................................................................7
Economic Growth and Poverty..........................................................................................7
Economic Development and Poverty.................................................................................7
Conclusion..............................................................................................................................8
Part B..........................................................................................................................................8
Differences in Paths of Development....................................................................................9
Reasons behind these differences.........................................................................................10
Theoretical Linkages............................................................................................................11
References................................................................................................................................13

2DEVELOPMENT ECONOMICS
Part A
Introduction
Over the years, the global economic scenario has developed immensely and has
experienced immense dynamics in due course of time. This in turn has contributed in
expanding the theoretical and conceptual framework of economics as a discipline and newer
theories have emerged over the years, much of which can be attributed to the modifications
and changes which have occurred in the global economic scenario, with time (Ray 1998).
Two such aspects of immense importance of the theoretical framework of economics
are that of economic growth and economic development. In the initial periods, although both
were used to refer to similar notions of economic progress of regions, however, with time,
there arose differences in the meaning of the two economic concepts (Pearce and Warford
1993).
Keeping this into consideration, the concerned assignment tries to discuss the concept
of economic development and its differences with that of economic growth, addressing the
various opinions and debates existing in these aspects. The assignment also tries to analyse
the implications of the differences between these two terms on the measurement of poverty in
a generalised framework.
Economic Development
As discussed in the above section, the term economic development has existed in the
conceptual framework of economics over the years. However, its meanings and implications
have been differently interpreted by different schools of thoughts at different points of time.
The Classical school of thought, founded under Adam Smith, in general used both the terms
interchangeably, to denote more or less the same phenomenon of economic progress of a
country with time. The same trend also remained in the Neo-Classical school of thought.

3DEVELOPMENT ECONOMICS
Some economists tried to interpret this phenomenon with the help of comparative-static
analysis while some others asserted that economic development is a dynamic process
(Brinkman 1995).
However, with time and especially after the Second World War, the notion of
economic development changed with the conditions faced by major sections of the global
population. The conditions not only showed acute economic scarcity but also the presence of
evils like lack of food, presence of high disease burdens, acute poverty, stagnancy of life and
destruction of economic activities (Seers 1969). This, to some extent, gave rise to the need for
a wholesome improvement in the human life, which is not just comprised of economic
progress, but also improvements in the social, political and other aspects of human lives.
From this need, originated the concept of economic development, as it can be seen to be in
the contemporary period (Gillis et al. 1992).
One of the most comprehensive definitions of the concept of economic development,
in the recent periods, is that of a wholesome and all-inclusive process of improvement of the
economic, structural, political as well as social aspects of a country, thereby affecting the
lives of the population of the country positively, from all aspects of well-being (Meier 1994).
Thus, the concept of economic development can be found to be a much broader concept than
only the progress of industries, commerce and economic aspects of a country and involves
the general welfare of the population of the same.
Difference between Economic Development and Economic Growth
The term “Economic Growth”, in general, refers to the increase in the money value of
goods and services which are produced by the different sectors of the economies within a
particular period of time. In the contemporary period, many economists also view economic
growth as the increase in capital formation and industrial growth of the countries with time.