Economic growth vs development

UNDERSTANDING THE DIFFERENCE

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Economic Growth and Economic Development are two terms which are often used interchangeably to express Economic Progress. However, the truth is that there is an enormous difference; that of quantity and quality.

The comprehensive knowledge, pertaining to the difference in meaning of these two terms, aids in the in-depth analyses of the economic journey undertaken by different nations. Economic Development refers to an increase in the volume of goods and services produced and consumed along with improved living circumstances, with equitable distribution, improved healthcare service outcomes, by making education accessible to all, by enhancing the overall quality of personal, social and professional conditions and most importantly without environmental degradation.

Economic Growth refers to an increase in size evident through physical change. Economic Development, on the other hand, refers to a process of gradual transformation and improvement in the level of functioning of an economy based on the acquisition of quality abilities.

EXAMPLE 1 when the human body grows into its adult form with fully grown limbs, with increase in height and weight but lacks functional strength and cognitive abilities then such a body would be referred to as a Fully Grown Body but not as a Fully Developed Body because it lacks quality and functionality.

MEASURES OF GROWTH AND DEVELOPMENT

Measure of Economic Growth include the percentage increase in; Gross domestic product (GDP), Real GDP, GDP per capita and Real GDP per capita. Some Measures of Economic Development are; equitable distribution of wealth and income, equality of opportunity, the protection of human rights, reduced poverty, food and housing for all.

Therefore, one can say that Economic Development is the wider term and Economic Growth is the narrower term.

EXAMPLE 2 A road accident caused as a result of drunken driving creates opportunities for increasing volume of goods and services therefore adding to the GDP growth. New car parts need to be produced to replace the damaged car parts, hospital and insurance services will need to be accessed post such an incident but the truth remains that such an accident has negative impacts on the welfare of the people. Such GDP growth is at the cost of someone’s health, such GDP growth is at the cost of environmental degradation, such GDP growth is at the cost of unhealthy habits and practices, therefore this kind of growth does not and should not qualify as Economic Development.

Kadambari Rana, the writer is an independent educationist currently working on documenting her observations on children’s play and learning experiences.