Economic Growth Vs Economic Development

Economic Growth Vs Economic Development

1. State of Development

Generally speaking, economic development refers to the problems of underdeveloped countries and economic growth to those of developed countries.

2. Nature and Level of Change

Development is a discontinuous and spontaneous change while growth is a gradual and steady change in the long run.

3. Scope of Change

Growth simply means more output. But development refers to efficiency in production i.e. output per unit of input. It also implies changes in composition of output and in allocation of resources, reduction of poverty, inequality and unemployment.

4. Extent of change

Economic development (wider concept than economic growth) is taken to mean growth plus structural change.

Differences between Economic Growth and Economic Development

Economic Growth

i. Deals with the problems of Developed countries

ii. Change is gradual and steady

iii. Means more output

iv. Concerns Quantitative aspects i.e. increase in per capita income

v. Narrow

Economic Development

i. Deals with the problems of UDCs

ii. Change is discontinuous and spontaneous

iii. Means not only more output but also its composition

iv. Quantitative as well as Qualitative

v. Wider concept Development = Growth + Change