ECONOMIC GROWTH AND DEVELOPMENT
At the end of this chapter, students should be able to:
- Explain the concept of economic development and distinguish between economic growth and development
- Explain the characteristics of an underdeveloped economy.
- Explain the factors which influence economic development.
DEFINITION OF ECONOMIC DEVELOPMENT
Economic development may be defined as the process whereby the level of national production (that is national income) or per capita income increases over a period of time. The main purpose of economic development is to raise the standard of living and the general well-being of the people in an economy.
ECONOMIC GROWTH PROCESS
Definition: Economic growth may be defined as the process by which the productive capacity of an economy increases over a given period, leading to a rise in the level of the national income. When there is economic growth, it shows in the form of an increase in income level, an expansion in the labour force, an increase in the total capital stock of the country, and a higher volume of trade and consumption.
DISTINCTION BETWEEN ECONOMIC GROWTH AND ECONOMIC DEVELOPMENT
There is a greater emphasis on the increase in output and less emphasis on economic welfare in the case of economic growth, whereas economic development lays more emphasis on improvements in the general welfare as a result of more equitable distribution of the increased output of goods and services among individuals.
While economic growth is mainly concerned with the growth of income, economic development reveals all aspects of economic activities and emphasizes a more even distribution of facilities between various areas.
In economic growth, there must be a meaningful increase in real income whereas in economic development, a measure of it can be achieved by a fairer distribution of existing goods and services even if there is no substantial increase in output.
ALTERNATIVE EXPLANATIONS OF ECONOMIC DEVELOPMENT
Many theories have been put forward to explain why some nations are developed and while others are under-developed. The main theories are:
- Sociological Theory: This school of thought believes that economic growth and development is linked to certain characteristics of the people. It emphasized that countries may become under- developed due to some negative characteristics such as lack of inventiveness, laziness, high rate of absenteeism and negative attitude to work. A nation may be classified as being developed if it has positive characteristics mentioned above.
- Colonial background theory: This school of thought believes that nations become under-developed because they were at one time or the other colonized. While the colonial masters prosper, leading to developed nations as a result of continued exploitation, the colonized nations become poorer resulting in under-development.
- Climatic development theory: This school of thought believes that climate has certain influence in the development of a nation. It emphasized that countries associated with temperature climate are cool, give rice to meaningful thinking, resulting in developed nations while those associated with too cold or too hot climate generally lead to underdevelopment.
- Puritanical ethic theory: This theory was propounded by Weber. It believes that puritanical ethic is the brain behind the industrialised nations of the world. It emphasised that self-discipline, abstinence, thriftiness, etc strengthened the incentive to work and save. The absence definitely leads to underdevelopment.
- factors affecting the expansion of industries
- mineral resources and the mining industries
- demand and supply
- types of demand curve and used
- advertising industry
- factors of production
- joint stock company
- RINDER PESTS
148. NEWCASTLE DISEASE
149. BACTERIA DISEASES
153. FUNGAL DISEASES