BBE 4303

ECONOMIC DEVELOPMENT

Hariette Nicole B. Victoria

BSA 2D

ECONOMICS
 A branch of Social Science that deals with the study of the efficient allocation and
utilization of limited resources for production, distribution, and consumption of goods and
services to satisfy the unlimited needs and wants of people.
 Economics is the study of choice, since our resources are limited, people are compelled
to make a choice.

DEVELOPMENT
 It is the process of expanding people’s living, self esteem and freedom in order to improve
the quality of all human lives.
 It is "the enhancement of freedoms that allow people to lead lives that they have reason
to live". Hence "development requires the removal of major sources of unfreedom: poverty
as well as tyranny, poor economic opportunities as well as systematic social deprivation,
neglect of public facilities as well as intolerance or overactivity of repressive states". -Prof.
Amartya Sen 1998 (Indian economist, a University Professor of Economics and
Philosophy at Harvard University)

ECONOMIC DEVELOPMENT
There are various definitions of Economic Development. We’ll tackle some of the definitions
regarding the mentioned topic.
 It refers to economic growth accompanied by changes in output distribution and economic
structure. (Wayne Nafziger, an American economist, distinguished University Professor of
Economics at Kansas State University
 It is the process by which emerging economies become advanced economies. In other
words, the process by which countries with low living standards become nations with high
living standards. Economic development also refers to the process by which the overall
health, well-being, and academic level the general population improves. (market
businessnews.com)
 It is "the process in which an economy grows or changes and becomes more advanced,
especially when both economic and social conditions are improved." (The Cambridge
Dictionary).
 It is "the process by which a nation improves the economic, political, and social well-being
of its people." (Wikipedia)
 Simply put, Economic development is all about improving living standards. 'Improved living
standards' refers to higher levels of education and literacy, workers' income, health, and
lifespans.
EXAMPLES/INDICATORS OF ECONOMIC DEVELOPMENT
 Steady accumulation of physical and human capital
 Change in consumer demands
 Increased urbanization
 Constant power supply
 Improved transport and communication networks
 Shift from agriculture to industrial production
 Demographic transition
 Decline in family size

ECONOMIC GROWTH
- A major goal of poor countries is economic development or economic growth. The two
terms although cover similar concepts, are not identical. Growth may be necessary but
not sufficient for development.
- Economic growth is a crucial condition for development however, growth is not enough as
it cannot guarantee development

ECONOMIC GROWTH VS ECONOMIC DEVELOPMENT

(ECONOMIC GROWTH)
 Economic growth can be defined as the increase or improvement in the inflation-adjusted
market value of the goods and services produced by an economy in a financial year.
Commonly measured by expansion of estimates of Gross Domestic Product (GDP).
 One-dimensional -> focuses only on income

(ECONOMIC DEVELOPMENT)
 Economic development is the growth of the standard of living of a nation's people from a
low-income (poor) economy to a high-income (rich) economy.
 When the local quality of life is improved, there is more economic development.
 Multi-dimensional