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What Is Economic Development In Economy;What Does It Do

Economic development is a process by which a population increases the efficiency with which it provides desired goods and services, thereby increasing per capital levels of living and general well-being. The process is a dynamic one, involving constant change in the structure and procedures of the economy. In relatively high-income countries, where a large and complex administrative structure and a high rate of capital formation are more readily available, growth tends to proceed more rapidly than in low-income countries.

What Is Economic Development In Economy;What Does It Do

In recent years, concern for economic development has largely focused on problems of the low-income nations of the world, because of their large size and the increasing political importance which has accompanied their recently achieved independent status. Growing awareness in the richer nations has also expanded humanitarian concern for the welfare of the world’s low-income persons, and although humanitarianism is by no means the only basis for the panoply Of economic and technical aid programs, it should and does provide much of the popular support for such programs. Social scientists probably face a no more intellectually challenging problem than that of discovering the sources of self-generating economic growth and the means by which these sources may be nurtured and stimulated.

The general objective of economic development is to raise the average level of living of the human population. Level of living is a per capita concept rather than one of the aggregate economy. Hence, increasing the level of living requires that total production of goods and services in a society expand more rapidly than the population. Although level of living is basically a material concept, it certainly includes consideration of improved health, education, and communication, and perhaps may also include increased leisure derived from more efficient use of labor resources in production Of material goods.

Nearly one third of the world’s population lives in nations in which annual per capita incomes average over $500. These nations, the prosperous nations of the world, lie largely in Europe, North America, and Oceania. The remaining two billion people occupy much of Asia, Africa, and Latin America. Most of these people are ill clothed, ill housed, ill fed, ill educated, and in ill health—by the standards of what man has been able to accomplish in the prosperous nations. Indeed, nearly half the world’s population lives in countries with average per capita incomes under $100 per year; most of these nations lie in Asia and in parts of Africa. China and India, the two largest countries in this group, with populations, respectively, of over 700 million and 450 million, include over one third of the world’s total population.

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