economic development vs economic growth - difference and comparison

8/18/2019 Economic Development vs Economic Growth - Difference and Comparison

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Economic Development vs. EconomicGrowth

Diffen › Economics

Economic Growth is a narrower concept than economic development.It is an

increase in a countryʹs real level of national output which can be caused by an

increase in the quality of resources (by education etc.), increase in the quantity

of resources & improvements in technology or in another way an increase in

the value of goods and services produced by every sector of the economy.

Economic Growth can be measured by an increase in a countryʹs GDP (gross

domestic product).

Economic development is a normative concept i.e. it applies in the context of

peopleʹs sense of morality (right and wrong, good and bad). The definition of

economic development given by Michael Todaro is an increase in living

standards, improvement in self‑esteem needs and freedom from oppression as

well as a greater choice. The most accurate method of measuring development

is the Human Development Index which takes into account the literacy rates &

life expectancy which affect productivity and could lead to Economic Growth.

It also leads to the creation of more opportunities in the sectors of education,

healthcare, employment and the conservation of the environment.It implies an

increase in the per capita income of every citizen.

Economic Growth does not take into account the size of the informal economy.

The informal economy is also known as the black economy which isunrecorded economic activity. Development alleviates people from low

standards of living into proper employment with suitable shelter. Economic

Growth does not take into account the depletion of natural resources which

might lead to pollution, congestion & disease. Development however is

concerned with sustainability which means meeting the needs of the present

without compromising future needs. These environmental effects are becoming

more of a problem for Governments now that the pressure has increased on

them due to Global warming.

Economic growth is a necessary but not sufficient condition of economic

development.

Comparison chart

Economic Development Economic Growth

Implications Economic development implies Economic growth refers to an

Compare Anything ›› vs. GO

http://www.diffen.com/http://www.diffen.com/difference/Activity_vs_Taskhttp://www.diffen.com/difference/Income_vs_Revenuehttp://www.diffen.com/difference/Affect_vs_Effecthttp://en.wikipedia.org/wiki/Human_development_indexhttp://www.diffen.com/difference/Ethics_vs_Moralshttp://www.diffen.com/difference/Category:Peoplehttp://www.diffen.com/difference/GDP_vs_GNPhttp://www.diffen.com/difference/Science_vs_Technologyhttp://www.diffen.com/difference/Category:Educationhttp://www.diffen.com/difference/Category:Economicshttp://www.diffen.com/


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an upward movement of the

entire social system in terms of

income, savings and investment

along with progressive changes

in socioeconomic structure of

country (institutional and

technological changes).

increase over time in a country`s

real output of goods and services

(GNP) or real output per capita

income.

Factors Development relates to growth of

human capital indexes, a

decrease in inequality figures,

and structural changes thatimprove the general populationʹs

quality of life.

Growth relates to a gradual

increase in one of the

components of Gross Domestic

Product: consumption,government spending,

investment, net exports.

Measurement Qualitative.HDI (Human

Development Index), gender‑

related index (GDI), Human

poverty index (HPI), infant

mortality, literacy rate etc.

Quantitative. Increases in real

GDP.

Effect Brings qualitative and

quantitative changes in the

economy

Brings quantitative changes in

the economy

Relevance Economic development is morerelevant to measure progress and

quality of life in developing

nations.

Economic growth is a morerelevant metric for progress in

developed countries. But itʹs

widely used in all countries

because growth is a necessary

condition for development.

Scope Concerned with structural

changes in the economy

Growth is concerned with

increase in the economyʹs output

Video Explaining the Diॐerences

The Social Progress Imperative, which releases a Social Progress Index, was created out

of the need to track both the economic and social opportunities of people and countries

around the world. In the TED Talk below, SPIʹs CEO, Michael Green, discusses the

importance of tracking economic development as well as economic growth, and how

GDP dollars do not necessarily buy social progress, such as basic needs, happiness, and

opportunity.

Michael Green: What the Social Progress Index can reveal about yo

References

Business Economics by Dr.Ch. Mahender

Economics/Society: Markets, Meanings and Social Structure by Bruce G. Carruthers, Sarah L. Babb ‑

2000

Sustainability in a Changing World ‑ YouTube

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Comments: Economic Development vs Economic Growth

Gross Domestic Product

(GDP) vs Gross National

Product (GNP)

Nominal GDP vs Real

GDP

Monetary vs Fiscal

Policy

Foreign Direct

Investment (FDI) vs

Foreign Portfolio

Investment (FPI)

Gross vs Net Macroeconomics vs

Microeconomics

http://www.diffen.com/difference/Macroeconomics_vs_Microeconomicshttp://www.diffen.com/difference/Gross_vs_Nethttp://www.diffen.com/difference/FDI_vs_FPIhttp://www.diffen.com/difference/Fiscal_Policy_vs_Monetary_Policyhttp://www.diffen.com/difference/Nominal_GDP_vs_Real_GDPhttp://www.diffen.com/difference/GDP_vs_GNPhttp://pr.ybp.yahoo.com/cj/cd/ZkWbxzn2ngMZ7gyYmvFzEyf-MCjt7SpO0u5cTznFWBSIGgJW4zAOJOj0fbh4J0FpxOMJ780T2c2x6eBjKpl7H-x1AtE56Z5w1pUqYCwI-hkkKxd0Mtdox2kZ586aAIX27p1a0iGKcVo/rurl/http://www.craftsvilla.com/craftsvilla-deals.html?utm_source=yahoo&utm_medium=cpm&utm_campaign=audience


4/5

May 4, 2014, 2:44pm

very good

— 37.✗.✗.156

December 11, 2013, 1:38pm

I cannot explain how much i learn from this .It was really helpful for

me .

Thankyou very much

— 37.✗.✗.35

January 8, 2012, 3:58am

thanks exactly what i was looking for

— 186.✗.✗.111


thats what i was looking for, thanks a lot . country like Tanzania a lot

of government officials and leaders are proud of Economic growth

while nothing to do with development of people taking it

consideration current floods which happened in Dar es Salaam all

people leaving in slum areas affected badly,

— 41.✗.✗.94

March 14, 2014, 5:49pm

Hmmmmmm....i luv it

— 141.✗.✗.65

December 16, 2013, 10:21am

Well done ... gud job ...:‑):‑)

— 49.✗.✗.224


GOOD JOB.................................

— 122.✗.✗.140

Anonymous comments (7)276 Comments Sort by

Saa Muli · Noise Maker at Kitui County Job Seeker's Corner

Good stuff. Congrats Diffen for being such a good player in the field

of economics

Like · Reply · Mar 8, 2016 5:28am

Md Arshad · Dhaka College

very smart concept

Like · Reply · Feb 11, 2016 10:10pm

Yeye Olabisi Faturoti Salis · Pan-African University

Hmm ! Your article is coherent and explicit .It provides a vivid

similarities and differences between ecomomic growth and

economic development . And I have a clearer perspective of the

discourse . Thanks.

Like · Reply · Dec 14, 2015 8:57pm

Karam Angral · Studying at Jammu University

very clear

Like · Reply · Nov 27, 2015 5:11am

HAwae Ca HAwae · Studying at Student

thanksLike · Reply · Nov 22, 2015 10:34pm

Lidya Oby · Moshi University College of Co-operative and

Business Studies

I l ike the articles and explanation.. Thank you

Like · Reply · Nov 20, 2015 1:31am

Ayitey Gideon · Ghana Institute of Management and Public

Administration (GIMPA)

great artile

Like · Reply · Nov 4, 2015 10:47pm

Mike Jay · Statistician at Central Statistical Office- CSO

awsome article and it is straight on point, i have benefited a lot.

Like · Reply · Nov 2, 2015 12:28pm

Sasto Nepal · Works at Sastonepal.Com

It is really excellent resouces for economics students. Thanks for

sharing this article.

Like · Reply · 1 · Oct 31, 2015 7:04pm

Ajayi Oluwaseun Victoria · Owner, Crafter and Designer at

EMDEE Designs

Excellent explanation

Like · Reply · Oct 28, 2015 10:03am

Dessalew Kassa · Bahir Dar University

A good reference


Mahlon Ebipiri · Niger Delta University, Wilberforce Island.

This great in has been helpfull to me tanks

Like · Reply · Oct 11, 2015 1:43pm

Wamaka Sikwese · Mzuzu

all helpful


Wamaka Sikwese · Mzuzu

all helpful


Ed Macalandag · City Administrator at LGU Tagbilaran City

Very educational

Like · Reply · Aug 3 , 201 5 6:03 pm

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economic development vs economic growth - difference and comparison

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