Difference Between Economic Growth and Development

Difference between economic growth and development.

1. Economic growth and Development

2. Growth And Development Economic Growth: Economic growth is a steady process by which the productive capacity of the economy is increased over time to bring about rising levels of national output and income. Essentials of Economic Growth : Above definition is showing following basics of economic growth : Economic growth is  a long run process;  it includes a period of decades

3. 2. Economic growth shows higher rate of  increase in real per capita income than rate of growth of population. Economic growth is always linked with large  increase in productive ability  of the economy. Economic growth is connected with the fair distribution of  income and wealth. Economic growth is attached with the reduction in  poverty and unemployment .

4. Economic Development: It refers to the process whereby the total supply of goods and services of the society increases leading towards improved living standard . Structural Changes of Economic Development : Economic development represents following structural changes in various sectors of the country :   There is a change in the  occupational structure.  In economic development there is decrease in the share of labor force in primary sector (farming, fishing and mining etc.) and increase in the share of labor force in secondary sector (industry etc ).

5. There is a change in the  structure of national output.  The contribution of primary sector in the national output falls and the share of secondary and tertiary (3 rd ) sector slowly go up . There is a change in the  structure of industrial production.  There is an increase in the production of capital goods and decrease in the production of consumer goods. There is a change in the  structure of foreign trade.  The share of primary goods in exports decreases and the share of capital goods in imports increase. Accordingly, in economic development there is an increase in exports of manufactured and final goods. Similarly, there is decrease in the imports of consumer items.

6. There is a change in the  structure of technology.  In the economic development modern and advanced techniques are used in all the sectors of economy . There is a change in the  social and institutional sector.  Due to economic development there is an increase in the self-esteem and living standard of the population.

7. Economic Growth   = Annual increase in per capita income Economic Development = Economic Growth + Structural Changes

8. Difference between Economic Growth and Economic Development Definition Economic Growth Economic Development The term economic growth is only concerned with  raising income level and volume of production  of goods and services. The basic feature of economic development is to raise income level and improve the  human being. Nature in Economic literature Economic Growth Economic Development Economic growth is the key issue under  traditional economics. According to this approach  “take care of growth and poverty would eliminate automatically.” Economic development is the main issue under  modern economics literature. Accordingly,  “take care of poverty and growth would take care of itself.”

9. Scope Economic Growth Economic Development Scope of economic growth  is narrow because it is concerned with changes in income level only. Scope of economic development  is wide  and comprehensive than economic growth . Its link is not only with income but also with the prosperity of the society and economy. Institutional changes Economic Growth Economic Development In case of economic growth strong and effective institutional set-up  is not necessary. Efficient institutional set-up  is necessary.  Effective and strong institutional revolution is the sign of economic development.

10. Type of Approach Economic Growth Economic Development According to various economists, economic growth is said to be quantitative approach. Economic development refers to the qualitative approach. Importance Economic Growth Economic Development Economic growth is  less important due to the attachment with income level only. The Concept of economic development is  more it discusses an economy in wider sense.

11. Time Span Economic Growth Economic Development Economic growth is a  short-term process.  We can measure income changes yearly. So, its time span may be of one year. Economic development is a  long-term process  about 20 to 25 years. Because it takes years to change social, economic and institutional set-up. National Problem Economic Growth Economic Development Economic growth is the problem of developed countries  of the world. Economic development is the problem of  developing countries.

12. Political Changes Economic Growth Economic Development Economic growth is  not concerned with the political stability. The concept of economic development is  incomplete  without political stability. Dependence and Self-Sufficiency Economic Growth Economic Development Economic growth does not ensure the freedom from the  dependence of foreign countries. In case of economic development our dependence on other countries reduces and country adopts the  self-reliance policy.