Meaning Of Economic Growth And Development: Problems And Differences

Economics

Topic Economic Growth And Development

Table Of Content

  • Meaning Of Economic Growth
  • Meaning Of Economic Development
  • Differences Between Economic Growth And Economic Development
  • Problems Of Economic Development Or Causes Of Under-development Or Factors That Hinder/Inhabit/Militating Against Development Or Obstacles To Economic Development

Meaning Of Economic Development And Growth

The term “Development and Growth” are two of the most important terms that are widely misused especially when they are used to describe or explain economics, issues, people, sometimes use them interchangeably as if they mean the same thing. We shall start our discussion by explaining each of them.

1. What Is Economic Growth?

Growth is not a special preserve of any particular discipline. It can be used in any field of human behaviour. This is why sometimes we talk about educational growth, human growth, economic growth etc.

However the term does not mean the same thing for all disciplines. When we talk of economic growth, we usually mean an appreciable increase in the output of goods per head.

Economic growth is a rapid and sustained rise in real output per head and attendant shorts in the technological, economic and chemo-graphic characteristic of a society. This occurs whenever there is a quantitative increase in country input and output over a period of time.

It is also the process of sustained increase in the production capacity of the economy to bring about rising levels of National income and real per capital income or output of goods and services over a given period of time. The rate of economic growth is an indicator of the extent to which real national output per head has increased economic growth and development possible if properly managed.

Human society is a complex one that involves a series of economic interactions that sometimes go beyond the realm of economic. It therefore becomes necessary not to create a water-tight compartment as boundaries of economic growth is today considered involves in the technique of production, distribution of goods to changes in the sales of production and in the types of input & outputs.

What Are The Differences Between Economic Growth And Economic Development

1. Economic growth emphasizes increase in output for example, If Nigeria produces two additional table or bicycles, we can say that the Nigerian economy is growing. On the other hand, Economic development emphasizes equitable distribution of produced goods and services.

As casual observer who visits lagos will conclude that Nigeria is developed because of the social and economics amenities that exists there such as good roads, pipe-borne water, industries etc. Such a casual observer will go with the impression that it is how every part in Nigeria is, But Lagos is a mis-representation of Nigeria in development aspect. That is not development in true sense of the word. All we can say is that there are signs of development in the city of Lagos.

2. Economic growth alone cannot lead to improved well being of the people. This is because goods produced may not reach the people who need it because of bottle necks in the system of distribution coupled with inequality of income. This is not surprising as economic growth is not concerned with distribution.

Through Economic development process on the other hand, goods, services and income are equitably distributed, leading to increase in the well-being of the people.

3. Some measure of development can be achieved without applicable increase in output. This is possible through equitable redistribution of existing goods & services.

4. Development as we understand it, is a change from the state of pure underdevelopment to the state of developing economy.

Problems Of Economic Development And Obstacles To Economic Development

There are many obstacles that hinder economic development. These include:

1. Lack Of Planning Discipline

The planning and execution of development programmer is benefit of bribery, corruption, embezzlement, diversion of funds, internal divisions, struggles for power and influencial. This has led to conserving and abandoning of projects halfway. That uncompleted abandoned projects dot every part of the country.

2. Problems Of Social And Cultural Belief

This makes it difficult for people to shift to new things. They find it rather sad to dump their beliefs for innovations/modernization e.g sacrifices made for the land to become more fertile.

3. Mono Economy

Over depending on one particular product for export or mon-cultural economy formally, agriculture and crude petroleum as in Nigeria. This affect our export earning due to the vulnerability of such product to international manipulation and price fluctuation. This affects our developmental efforts.

4. High population rate and dependency burden.

5. Insufficient And Unrealistic Statistical Data

Statistical information on which economic development are not adequate and up-to-date, as such their quality and reliability are in doubt. In this situation, the quality and accuracy of quantitative comprehensive plans are greatly diminished.

6. Political Instability

Frequent military coup d’etat and change of government, holding to power of an unpopular and undemocratic government, bad governance etc leads to changes of policies and projects, violent demonstrations and unrest, capital flight, brain drain, thus an inconducive atmosphere for attracting investors, improper planning and execution of development project.

7. Inadequate Skilled Labour Force

Inadequate technical and managerial experts for planning & execution of development project as many as are away (Brain Drain).

8. High level of illiteracy.

9. Low level of technology.

10. Corruption and mismanagement of resources.