Saturday, 7 February 2015

CONCEPT AND MEASUREMENT OF ECONOMIC DEVELOPMENT

Introduction;

during the last 60 years more than 150 countries of the world achieved independence. In these countries, millions of people are still living in absolute poverty with inadequate food, shelter, educations and health care facilities and are also facing low income, high birth rate and unemployment; whereas in the industrial countries of the west, people are living with high luxurious facilities. The question arises , why the former are living in such poverty and how can the barriers of poverty be broken? The answer lies only in economic development.so,what is economic development and how can we clearly understand it?

Definition of economic development:

           There are a large number of definitions given by different economists .These are as follows:

W.ELKAN says,"Economic development means a process which makes people, in general, better off by increasing their command over goods and services and by increasing the choice open to them"

kindlebergerdefines" Economic development implies both more output and changes in the technical and institutional arrangements by which it is a produced and distributed.

Friedmandefines Development as "an innovative process leading to the structural transformation of social systems.

W.F.Williamson says Economic development it is the process through which a country’s people increase their per capita income by utilizing all the resources.

Paul Alpert says '' Economic development is the process through which a country increases its national income by utilizing all the productive resources within the country.

Meier and baldwin defined economic development as ''The process whereby an economy's real national income increase over a long period of time, and if the rate of development is greater then the rate of growth of population, then per capita real income will increase.

               This definition of economic development consists of five important points.

(1).A process Economic development is a process through which a country utilizes its resources in a better way, valuable changes appear during this process,. Which results in a growth in real national income and per capita income?

(2), Increase in real national income; during the process of economic development real national income increases, which is the basic objective of this process. Due to increase in national income, per capita income also increases which causes high consumption and better living standard. Thus, it would be suffice to says that target of economic development is achieved. It is because of continuous increase in real national income.

(3). Growth rate of population: Due to the availability of basic health facilities, death rate decreases, which causes an increase in population. If the rate of economic growth or the growth rate of real G.N.P, is greater than the rate of growth of population, per capita income will increase and hence there will be economic development in real sense.

(4). Increase in real per capita income: Increase in real per capita income is essential for economic development. If a country's real per capita income increases for a long time, than the country moves towards economic developments.

(5). Long period of time: Process of economic development requires a long period of time. This period of consists of twenty years or more than because during the process whole of the infrastructure of the economy is changed. Thus economic development is a long period process.



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