Cultural and economic frameworks of
ECONOMIC DEVELOPMENT
BS ACCOUNTANCY - ACT 232
1ST TERM | SEPT 2023
ECONOMIC DEVELOPMENT OVERVIEW
ECONOMIC DEVELOPMENT MEANS:
● Focuses on improving the standard of
living of the individuals of an economy
through the implementation of policies,
programs and socio economic goals.​
● Development economics considers
factors such as health, education,
working conditions, domestic and
international policies, and market
conditions with a focus on improving
conditions in the world's poorest
countries.
● ​It is more than a jobs program, it’s an
investment in growing your economy
and enhancing the prosperity and
quality of life for all residents.​
● Economic development is a concerted
effort on the part of the responsible
governing body in a city or county to
influence the direction of private sector
investment toward opportunities that
can lead to sustained economic
growth.​
UNDERSTAND ECONOMIC DEVELOPMENT
● Development economics studies the
transformation of emerging nations
into more prosperous nations.​
● Strategies for transforming a
developing economy tend to be unique
because the social and political
backgrounds of countries can vary
dramatically. ​
●
every nation are different, such as
women's rights and child labor laws.
● Rapid population helps or hinders
development.​
● Structural Transformation of
economies and the role of Education
and healthcare also plays part in
development.
TYPES OF DEVELOPMENT ECONOMICS
1. MERCANTILISM
- A form of economic nationalism that
sought to increase the prosperity and
power of a nation through restrictive
trade practices. ​
- Its goal was to increase the supply of a
state's gold and silver with exports
rather than to deplete it through
Imports. It also sought to support
domestic employment.
2. ECONOMIC NATIONALISM
- is an ideology that prioritizes state
intervention in the economy, including
policies like domestic control and the
use of tariffs and restrictions on labor,
goods, and capital movement.​
3. LINEAR STAGE OF GROWTH MODEL
- This model states that economic
growth can only stem from
industrialization. The model also agrees
that local institutions and social
attitudes can restrict growth if these
factors influence people's savings rate
and investments​.
4. STRUCTURAL-CHANGE THEORY​
- The structural-change theory focuses
on changing the overall economic
structure of a nation, which aims to shift
society from being a primarily agrarian
one to a primarily industrial one.​
*ੈ✩>>Rods✿˖° 🤍
ECONOMIC DEVELOPMENT PROCESS ● Developed country ​
ROWTOW`S MODEL - The Rostovian - characterized by sustained economic
take-off model (also called "Rostow's Stages growth resulting from per capita GDP,
of Growth") is one of the major historical technological advancements, level of
models of economic growth. It was developed industrialization and an overall greater
by W. W. Rostow. The model postulates that
standard of living.​
economic modernization occurs in five basic
● Developing country ​
stages, of varying length.
- characterized by low income per capita
1. Traditional society - Society is very
or low per capita GDP, with a minimal
primitive, with limited technology and
industrial base and investment, low
reliance on subsistence farming.
People rely on community bartering human capital index and weak or
rather than an advanced banking unstable governing bodies and
system. institutions.​
2. Preconditions for take-off - People see
possibilities for improvement. Growing ECONOMIC INDICATORS
specialization and commercialization ● Real GDP per capita​
of skill and investment in
- is an indicator that provides insights
infrastructure.
into the level of aggregate output
3. Take-off - Economic growth becomes
self-sustaining. Huge technological produced by an economy which also
advancement and development of the equates to the aggregate national
domestic manufacturing sector. The income:​
rapid Increase of regional cities and
service industries.
4. Drive to maturity - Range of domestic
widens, replacement of imports with
domestic production/import
substitution, increasing diversification ● Unemployment rate​

and investment from home to abroad. - is an indicator that provides insights

5. Age of High mass consumption - The regarding the unemployed individuals
economy becomes heavily geared in the labor force who are actively
towards service provision due to looking for employment:​
exploiting comparative adv. in trade &
commerce. High-quality, world- class
infrastructures are in existence.

ECONOMIC DEVELOPMENT INDICATORS

Theses indicators which are ● Inflation​

quantitative measures that are used to - is an indicator that provides insights

distinguish a developed country from a into the changes in the price of goods

developing country.​ and services as a percentage of an

increase in the cost of living. It also

*ੈ✩>>Rods✿˖° 🤍
 provides insight into the purchasing ● Education - measured through literacy
power of the economy's currency:​ rate​
● Longevity- measured through average
life expectancy and infant mortality​​
ECONOMIC DEVELOPMENT EXAMPLES
● Financial ​
establishing a stabilized central bank
● National Debt​
system that can implement and
- is an indicator which provides insights
monitor monetary policies will result in
into the net accumulation of the
economic development.​​
borrowing of the government from
● Healthcare ​
domestic and foreign lenders. The
healthcare reform, accessibility to
national debt can be difficult to pay off
healthcare services and facilities to all
over time due to it accumulating from
members of the economy will result in
one generation to another.
economic development.​
● Education and training ​
● Trade Balance​
funding and access to public education
- An indicator which provides insights
and training services, especially for the
into the net exports of a country.​
minority and low-income population
will result in economic development.​
HUMAN DEVELOPMENT INDEX
● Transportation & Infrastructure ​
The most used indicator for economic
building or repairing highways, bridges,
development. It takes into account three
and roads, alongside the acceptability
dimensions for economic development:​
of public transportation services will
● Standard of living - measured by
result in economic development.​
income per capita​

*ੈ✩>>Rods✿˖° 🤍