Free Economics essays. Economic development is a fairly new idea that arose during the early twentieth century. Many theorists attempted to define economic development and to differentiate it from the concept of economic blogger.coming to economists, Gerald Meier and Dudley Seers, these two concepts are different from each other and they stressed that economic development cannot be equated with economic In this essay we will discuss about the Economic Development of a Country. After reading this essay you will learn about: 1. Economic Growth and Economic Development 2. Determinants of Economic Development 3. Obstacles or Constraints 4. Pre-Requisites or Need 5. Structural Changes. Contents: Essay on the Meaning of Economic DevelopmentEstimated Reading Time: 9 mins · Economic development involves the use of policies to bring changes to the country’s economy and to make sure that the country’s economy is aligned with the international development criteria. This is aimed at enhancing the competitiveness of the country’s economy
importance of economic development essay
No distinction was drawn between economic growth and development in the beginning of the evolution of economics of development. However, since the seventies it has been thought necessary to distinguish between economic growth and economic development.
There are two views even about the concept of economic development. The traditional view has been to interpret it in terms of essay on economic development changes in the structure of national product and the occupational pattern of labour force and also the institutional and technological changes that bring about such changes or accompany such changes. It may be noted that Kuznets in his study of Modern Economic Growth interpreted the process of modern economic growth which involves these structural changes.
In this view during the process of economic growth share of agriculture in both national product and employment of labour force declines and that of industries and services increases. For this purpose appropriate institutional and technological changes were recommended to bring about such structural changes, essay on economic development. Thus C. Kindleberger writes, Economic growth means more output and economic development implies both more output and changes in the technical and institutional arrangements by which it is produced.
Thus, according to traditional view, economic development implies growth plus structural change. Structural change refers to changes in technological and institutional factors which cause shift of labour from agriculture to modern manufacturing and services sectors and also generate self-sustaining growth of output.
An aspect of structural change which is of special mention is that during the process of economic development there occurs a shift of working population from low productivity employment in agriculture to the modern industrial and services sectors having higher levels of productivity of labour. That is, during the process of economic development percentage share of working population in agriculture sharply falls whereas percentage shares of working population employed in modern industrial and services sectors substantially increase.
Along with this change in sectoral distribution of labour force there occurs a change in sectoral composition of national income in which percentage contribution of agriculture to national income and declines and percentage contributions to national income of industrial and services sectors increase.
It is worth mentioning that in this view causal references were made to the role of some social factors such as growth of literacy, education and good health in economic development but they were considered to be of secondary importance.
On the whole, in this view of economic development which generally prevailed till seventies, development was considered to be an economic phenomenon in which benefits from growth in overall GNP or per capita GNP and the structural changes accompanying it would trickle down essay on economic development the poor and unemployed.
No separate or special attention was paid to eliminate mass poverty and unemployment and to reduce inequalities in income distribution. Essay 2. The Concept of Economic Development Modern View : The experience of the developing countries during the sixties and seventies showed that whereas target rates of economic growth were in fact achieved trickle-down effect in the form of creation of more employment essay on economic development, rise in wages and improvement in income distribution did not operate.
The problems of poverty, unemployment and income inequality further worsened instead of getting reduced during the process of growth in the nineteen fifties and sixties essay on economic development the developing countries. For instance, in India, Dandekar and Rath found that 40 per cent of rural population in India lived below the poverty line in Using somewhat different approach, B. Minhas estimated that 37 per cent of rural population in India lived below the poverty line in Similarly, the magnitude of poverty and unemployment and the extent of income inequalities also increased in many other developing countries.
Thus, due to the failure of traditional strategies of development in solving the problems of poverty, unemployment and inequality, it was realised in the seventies that the concept of development should be broadened so that it should signify that well-being of the people has increased.
This led to the view that economic development should not be judged on the basis of growth in GNP alone. Therefore, when we regard the well-being of the masses as the ultimate objective of development, we have to see whether poverty and unemployment are decreasing and how the increases in gross national product or national income are being distributed among the population.
Economic essay on economic development will take place in true terms only if the poor people are raised above the poverty line, essay on economic development. Late Prof. It is worth mentioning that there is no guarantee that when there is increase in GNP, employment will also increase. It can happen that with the use of more capital-intensive technique while production may be increasing at a rapid rate, employment may be falling instead of rising. According to the modern perception of economic development, rapid increase in GNP secured through displacing labour by machines and thus causing rise in unemployment and underemployment cannot be called true economic development.
What has been happening to unemployment? What has been happening to inequality? If all three of these have declined from high levels, then beyond doubt this has been a period of development for the country concerned. If one or two of these central problems have been growing worse, especially if all three have, it would be strange to call the result development even if per capita income doubled.
Recently, essay on economic development, the concept of economic development has been further widened so that it now involves not only reduction in poverty, inequality and unemployment but also requires improvement in quality of life which includes cleaner environment, better education, good health and nutrition.
It encompasses as ends in themselves better education, higher standards of health and nutrition, less poverty, essay on economic development, a cleaner environment, more equality of opportunity. Thus the concept of economic development has been greatly broadened. Today economic development is interpreted as not only in more growth in Gross Domestic Product Essay on economic development but also in terms of good quality of life which, according to Prof.
This new concept of development includes achievement of freedom from servitude to ignorance and illiteracy. It also includes enjoyment of human rights. The purpose of development is to create an environment in which all people can expand their capabilities, and opportunities can be enlarged for both present and future generations. Wealth is important for human life, but to concentrate on it exclusively is wrong for two reasons.
First, accumulating wealth is not necessary for the fulfillment of some important human choices. Second, human choices extend far beyond economic well-being, essay on economic development. On the basis of various ingredients of good quality of life and other criteria such as enlargement of human choices and freedom a human development index is prepared by United Nations Development Programme UNDP, essay on economic development. This human development index is considered as a better indicator of economic development index, essay on economic development.
Essay 3. The basic objective of development is broad-based improvement in the economic and social conditions of our people so as to achieve better quality of life for them. The first and foremost objective of development is to achieve a higher rate of GDP growth so as to raise the living standards of our people.
Rapid growth of total GDP or per capita income is considered necessary because it ensures an expansion in the productive capacity of the economy without which broad based improvement in living standards of the people is not possible, essay on economic development. However, it should be recognized that faster economic growth, though necessary, essay on economic development, is not a sufficient condition for raising the living standards of our teeming millions, essay on economic development.
This is because one can easily imagine a growth process which may not be sufficiently inclusive to ensure a spread of benefits to the mass of our population. There are three reasons why GDP growth is necessary for raising the living standards of the population. First, rapid growth of Essay on economic development ensures a higher expansion in total income and production which, if growth process is sufficiently inclusive, will make available a larger output of goods and services to be consumed by the people and thus raise their living standards.
Secondly, rapid economic growth generates more employment opportunities and essay on economic development enhancing activities of the people, provided labour-saving technologies are not used for production of goods both in the industrial and agricultural sectors, essay on economic development. Third, higher GDP growth is important because it generates higher revenues for government which help to finance anti-poverty programmes started by the government.
The second important objective of development is to eradicate poverty. Though economic growth is necessary for elimination of poverty but is not essay on economic development sufficient condition for it because it is related to income distribution in a society as well. Related to issue of poverty is the question of unemployment which exists on a large scale in developing countries, especially in labour-surplus countries such as ours.
Chronic and long-term unemployment exists in the developing economies because due to higher population growth relative to capital formation it has not been possible to absorb essay on economic development increasing number of workers in productive employment resulting in large-scale unemployment in developing countries, essay on economic development.
Gainful employment is the means of livelihood for the masses of the population. The growth of employment opportunities needs to be accelerated both in manufacturing and services sectors to provide employment to increasingly educated population which has high expectations and aspirations. Unemployment leads to the feelings of worthlessness and frustration among the youth leading to the increase in incidence of crime in the society.
Growth of GDP or of individual incomes or industrialization or technological progress are merely means to expanding human freedoms but freedoms depend on other factors as well, essay on economic development.
As Sen Stresses viewing development as expansion of substantive freedoms directs attention to end or objective of development rather than means such as GDP growth or industrialization which play an important role in the process of development, essay on economic development.
If the objective of expansion of freedoms is to be achieved, the various sources of unfreedom such as essay on economic development of public facilities of education and healthcare, denial of political liberty and basic civil rights such as liberty to participate in public discussion and denial of equal rights to women in the society have to be removed.
It is worth mentioning here that some have supported the denial of political liberty and basic civil rights to the people on the ground that they promote economic growth. However, Amartya Sen has rightly pointed out that there is little evidence that authoritarian politics actually helps economic growth. Indeed, empirical evidence very strongly suggests that economic growth is more a matter of friendly economic climate than of a harsher political system.
Essay 4. Evolution of Economic Development: The study of development economics as a separate discipline is relatively new as about 65 years ago in s the study of the problem of economic development of poor developing countries did not constitute an important distinct branch of economics. This is despite the fact that classical economists such as Adam Smith, Ricardo, Malthus, and Marx extensively dealt with the study of development of the economies.
However, with the appearance of neoclassical economics propounded among others by Alfred Marshall and A. Pigou who were mainly concerned with explaining efficient allocation of resources in a free market economy, development economics dealing with the developing economies found no place in their works. It was generally believed that neoclassical economics applied to developed and developing countries alike.
Therefore the need for a special theory to explain economic growth and development for developing countries was not felt. In the s and s, the economists led by J.
Keynes remained occupied with the problem of involuntary unemployment and depression as severe depression causing huge unemployment took place in in the industrialized countries. The renewed interest and public concern with the development of poor countries began only after the Second World War when the poverty of the underdeveloped countries of Asia, Africa and Latin America posed a great essay on economic development to the peace and progress of the world as a whole and also many underdeveloped countries essay on economic development freedom from the colonial rule.
It was felt that Keynesian economics which was concerned with the short-run problem of depression caused by fall in aggregate effective demand did not apply to the underdeveloped economies which faced a long-run and chronic problem of unemployment and mass poverty due to deficiency of cooperating factors such as capital and low productivity of resources.
It was therefore felt that there was need for a distinct and separate branch of special economic theory which explains perpetuation of underdevelopment and general poverty and also the adoption of appropriate development strategies to initiate and accelerate economic growth in the developing countries.
It was pointed out that the problems of poverty, underemployment of underdeveloped economies were quite different and required special analysis. Therefore, development economics which is concerned with the economic growth, capital accumulation and underemployment in the developing countries became a special and distinct discipline.
During s and s development policies in underdeveloped countries required acceleration of economic growth and eradication of essay on economic development and chronic underemployment. For this, economists laid stress on capital accumulation, mobilization of surplus labour for growth and industrialization based on import-substitution through economic planning and with active role of the government.
It was thought that due to market failures, development through free market, as emphasized by neoclassical economics, would neither achieve efficient allocation of scarce resources nor brings about desired GDP growth rate to remove poverty and employment. Since rate of domestic saving in these underdeveloped countries was inadequate to bring about a desired rate of growth, the need for foreign aid to supplement domestic saving was emphasized in early approaches to development based on application of Harrod-Domar growth model.
Furthermore, it was suggested in the early approaches to development in the s and s that since demand for primary products was inelastic by advanced industrialized countries, as explained by Prebisch, Singer and Myrdal, to accelerate growth through expansion of primary exports by developing countries would cause deterioration of terms of trade.
This led to export pessimism, that is, little prospects of acceleration of growth through promotion of exports. Therefore, those economists who laid stress on limitations of development based on expansion of primary exports, advocated for import-substituting industrialization to promote economic growth and solve the problems of poverty and unemployment in developing countries.
Besides, essay on economic development, Arthur Lewis proposed a model of growth of a dual economy with surplus labour in which he emphasized industrialization of underdeveloped countries by mobilizing disguisedly unemployed labour in agriculture or subsistence sector and ploughing back of profits so earned for further capital accumulation and industrial growth. In India Mahalanobis growth model on which Second Five Year and Third Five Year Plans were based gave a high priority to basic heavy industries producing fixed capital goods i.
Harrod-Domar model of growth based on Keynesian framework which dealt with the problem of steady growth was applied to the growth problem of developing countries. Unlike the neoclassical economics which assumes smoothly working market mechanism, the early development economists adopted a more structural approach to development.
They emphasise rigidities, lags, shortages and surpluses and low elasticities of demand and supply in developing countries. Prebisch and Singer have been prominent economists who laid stress on the limitations of development based on expansion of primary exports because of the adverse effects on terms of trade.
In the essay on economic development s there was realisation by economists that growth in terms of GDP, though a necessary condition is not a sufficient condition for the reduction of poverty, inequality and unemployment.
What is Economic Development?
, time: 3:33Essay on Economic Development in India
Economic development is a process where we improve the over all life of people and try to overcome absolute poverty. Economic development is about increasing income and health care of the individuals. Economic growth is part of economic development it focus on the increase of economic Essay # 5. Obstacles to Economic Development: 1. Lack of Infrastructure: Economic growth in the developing countries has been impeded by inadequate availability of infrastructure. Infrastructure includes power, irrigation, transport and blogger.comted Reading Time: 12 mins · Economic development is a key element of growth and sustainability of a country, as well as of equity, prosperity and well-being of its population
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