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Home Economic Development Different Definitions of Economic Development

 

Different Definitions of Economic Development:

 

According to Prof. Winston:

 

"Economic Development shows the excess of consumption and production of a country as compared with increase in population. This increase in population is due to better combination and increase in the productivity of the factors of production".

 

According to Prof. Williamson:

 

"Economic Development is a process whereby the people of a country utilize the available resources in such a way that the per capita income of the country increases".

 

According to Prof. Higgins:

 

"Economic Development is the increase in per capita and national income (NI) of a country".

 

According to Prof. Arthur Lewis:

 

"Economic Development represents the per capita increase in the production of a country".

 

According to Prof. Meir and Baldwin:

 

"Economic Development is a process whereby the real NI of a country increases over a long period of time. If the increase in the real NI is more than the population increase then the per capita real income of the country will also increase".

 

It is expressed Mathematically as:

 

If Y/P represents real national income (NI) and P represents population, then economic development will take place if d(Y/P) > 0.

               dt

 

In case d(Y/P) = dP , it would represent economic stagnation.

               dt       dt

 

While if d(Y/P) < dP or dP > d(Y/P) , it will represent backwardness.

               dt       dt      dt         dt

 

If we analyze Meir and Baldwin's definition we find the following important features of economic development:

 

(i) Process, (ii) Increase in Real NI and (iii) Long Period of Time.

 

(i) Process: The process indicates the interaction of different technical and administrative forces which result in increase of production and changes on demand side as well as on supply side.

 

The changes on supply side are as:

 

(a) Discovery of new Resources, (b) Capital Accumulation, (c) Changes in Population, (d) Introduction of Better Techniques of Production, (e) Improvement in Skill, (e) Social and Institutional Changes.

 

The changes on demand side are as:

 

(a) Changes in Size and Nature of Tastes of the People, (b) Changes in the Level and Distribution of NI, (c) Changes in Tastes of the people, (d) Changes in Social and Institutional life.

 

(ii) Increase in Real Gross National Product (GNP): Economic development will take place when the real GNP of a country increases. To get the real GNP of the country, the GNP must be corrected by some index number. Sometimes it happens that the GNP of a country increases due to inflation, such will not represent economic development. Therefore, to know development we will have to deduct the price rise from the increase in GNP. Moreover, we will have to deduct depreciation allowance from GNP to get NI.

 

(iii) Long Period of Time: To assess economic development, a period of 25 years must be kept in view. That is, if real GNP rises till the period of 25 years it will be accorded as economic development.

Relevant Articles:

Why Economic Development

Lorenz Curve and GINI-Coefficient

Economic Development Vs Economic Growth
Different Definitions of Economic Development
Measurement of Economic Development By Traditional Approach
Approaches to Economic Development/Measurement of Economic Development in Terms of Quality of Life
Physical Quantity of Life Index (PQLI)
Growth of GNP Versus Basic Needs Approach
Human Development Index (HDI)
Good Governance and Humane Governance Index
Measurement of Humane Governance/Good Governance
Measurement of Economic Development with Combining GDP and Life Expectancy
Growth Versus Distribution
Re-Distribution with Growth (RWG)
International Inequalities
New/Modern Economic View of Development
Human Poverty Index (HPI) as a Measure of Economic Growth
 

Principles and Theories of Micro Economics
Definition and Explanation of Economics
Theory of Consumer Behavior
Indifference Curve Analysis of Consumer's Equilibrium
Theory of Demand
Theory of Supply
Elasticity of Demand
Elasticity of Supply
Equilibrium of Demand and Supply
Economic Resources
Scale of Production
Laws of Returns
Production Function
Cost Analysis
Various Revenue Concepts
Price and output Determination Under Perfect Competition
Price and Output Determination Under Monopoly
Price and Output Determination Under Monopolistic/Imperfect Competition
Theory of Factor Pricing OR Theory of Distribution
Rent
Wages
Interest
Profits
Principles and Theories of Macro Economics
National Income and Its Measurement
Principles of Public Finance
Public Revenue and Taxation
National Debt and Income Determination
Fiscal Policy
Determinants of the Level of National Income and Employment
Determination of National Income
Theories of Employment
Theory of International Trade
Balance of Payments
Commercial Policy
Development and Planning Economics
Introduction to Development Economics
Features of Developing Countries
Economic Development and Economic Growth
Theories of Under Development
Theories of Economic Growth
Agriculture and Economic Development
Monetary Economics and Public Finance

History of Money
 

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