What is Development Economics?
Development Economics is a branch of economics that deals with fiscal, economic, and social conditions in developing countries. It is generally applied to the economies of the developing world. Development economics includes health, education, working conditions, and domestic and international policies as the focus area that helps a nation make social and economic progress.
Development Economics
Concept of Development
Development is a multidimensional process that deals with transformation in structure, acceleration of economic growth, reduction of inequality and eradication of poverty. It is used as a measure of human welfare. Amartya Sen defined the Capability Approach of development which contributed to the development of the Human Development Index which is used to measure the economic development of societies.
Economic and Social Development
Economic development deals with economic growth, and non-economic factors are also considered in the process. Social development connotes moving towards a better social living. The features of economic development include improvement in the quality of life, equitable distribution of resources, equal participation in decision making and the freedom to take part in various events of life. With the help of the development economics pdf, social and economic development can be understood in detail. Economic development examples are employment generation, new startups creation etc.
Socio-economic Development
Economic and Social Development
Theories of Development
Dependency Theory
This theory asserts that the historical exploitation of poor nations by rich ones is the cause of global inequality. This theory states that the situations of rich and poor nations are linked together by the global economy. Andre Gunder Frank is a renowned proponent of this theory.
Gandhian Theory of Development
Gandhiji emphasised agrarian structure and a self-sufficient village economy. He believed in an economy of limited wants, i.e., a trusteeship economy. He was against large-scale industrialisation, whether the economy is capitalist or socialist.
Models of Development
Western Liberal Model of Development
This model considers political development as the condition for socio-economic development. It focuses on rapid industrialization, technological advancement, modernisation, full employment and social, economic and political liberalisation.
Welfare Model of Development
This model promotes the role of the state in the economic and social development of society. It advocates for a welfare state and believes that state planning is necessary for rapid industrialisation and economic growth.
Socialist/ Marxist Model of Development
This model advocated for socialisation of means of production and distribution. This model focused on the right to equality and social justice.
Democratic Socialist Model of Development
This model focuses on adopting socialist goals by democratic means. India and other third world countries adopted this model.
Gandhian Model of Development
This model primarily focussed on moral development and the ethical domain of socio-economic-political development.
Sustainable Development
This model focuses on securing social sustainability, economic sustainability, and environmental sustainability.
Concept of Economic Development
Economic Development occurs when economic growth results in deeper changes in the society. Changes in the social domain occur gradually. Economic growth alone cannot result in social changes. Social changes happen when the relative significance of ascribed status is reduced and that of achieved status is enhanced in the social hierarchy through the spread of education, urbanisation and industrialisation.
Social transformation or development occurs in society when there is the upgradation of people belonging to the lowest category to the higher category through merit. When this social transformation happens, the status of an individual is recognised by his own capability and not by the status of his caste, class or any other ascribed status attribute.
Various Stages of Indian Economic Development
This paragraph will explain various stages of Indian Economic Development. Indian Economic Development has gone through three broad phases since Independence. These three phases are Public Infrastructure, Industrial Control and Reforms and De - control. These phases also saw two policies, one which supported the public sector to fill the gaps in physical infrastructure and the second policy of the private sector.
Summary
Development refers to the positive changes in societies that lead to better human living in terms of education, healthcare, employment opportunities, and freedom of decision-making. Economic development deals with growth in terms of the economy, whereas social development deals with the well-being of the people in terms of education, health, etc.
FAQs on Development Economics - A Branch of Economics
1. How is development measured?
Human Development Index (HDI) measures the development. HDI is developed by the United Nations. HDI measures the average life expectancy, level of education and income for each country in the world. This index is a tool used to follow changes in development levels over time and compare the development levels of different countries. The Human Development Index is considered the best measure of development as it includes both social and economic factors. There are various other measures also to measure development such as Gross National Income, People per doctor etc.
2. What are the factors that affect development?
Following are the factors that affect development:
Natural resources.
Power and energy resources.
Capital accumulation.
Technological resources.
Available labour force.
Transportation and communications.
Education and training.
A nation's Natural Resources can improve the development of the people and economy as a whole since we humans depend on natural resources for most of our needs. Power and energy resources decide the economic activities taking place in a nation and are also useful in generating employment opportunities. Technological Advancement also helps a nation make progress at a faster pace. Education is the most basic and important human resource which is the foundation of a nation's development.
3. What is the difference between growth and development?
Growth is a quantitative phenomenon whereas development is a qualitative phenomenon. Growth connotes getting bigger, whereas development refers to improvement. Economic growth is the increment in the amount of goods and services produced by an economy whereas economic development is the reduction and elimination of poverty, unemployment and inequality within the context of a growing economy. The example of growth can be the increase in the GDP or national income of a country. It only gives an idea about the numeric progress which the nation has achieved and does not give an idea about the social and economic conditions of the people, their living status and many other things.