Most of us use the terms Economic Growth and Economic Development as synonyms but there exist major differences between these terms and now it’s time to know the differences between these two important terms.
Economic Growth may be defined as a steady and constant rise in the country’s output of goods and services over a period of time. It indicates the expansion of the Gross Domestic Product(GDP) of the country. The concept of Economic Growth is basically related to the developed countries. It is a quantitative measure that reflects the potential increase in the number of business transactions taking place in the economy.
Economic growth is a narrow concept than economic development. It is measured in terms of an increase in the aggregate market value of additional goods and services produced by using economic concepts such as GDP and GNP.
Economic Development is a wider concept than that of Economic Growth. Economic Development refers to the increase of the Real National Income of the economic and socio-economic structure of a country over a long period of time. Economic Development is related to developing countries of the world. It is a qualitative measure that refers to the life of citizens of a country.
The overall development of a country is based on many parameters such as technological advancements, the standard of living, living conditions, per capita income, quality of life, GDP, industrial and infrastructural development etc;
Economic Development= Economic growth+ Standard of living
According to C.P.Kindle Berger, “Economic Growth means more output and Economic Development implies more output and also change in the technological and institutional arrangements by which the output is produced.
According to economist Amartya Sen, “economic growth is one aspect of the process of economic development”.
According to United Nations expert committee, “Economic development concerns not only man’s material needs but also the improvement of the social conditions of his life”.
Now let us see some of the differences between Economic Growth and Economic Development in the below-given table.
|ECONOMIC GROWTH||ECONOMIC DEVELOPMENT|
|Economic Growth refers to the increase in the value of the real output of goods and services in the country.||Economic Development not only refers to the Economic Growth but also to the progressive changes in the socio-economic structure of a county.|
|Economic Growth is related with developed countries of the world.||Economic Development is related with Underdeveloped and developing countries of the world.|
|When will it happen?|
|Economic Growth takes place when the rate of change of Real National Income is higher than the rate of change of population in a country in a certain time period.||Economic Development takes place when there is an increase in the Real per capita income of the people in the country for a long period of time.|
|Economic Growth is a measure for measuring how much money is flowing from one individual to another individual in the economy.||Economic Development focuses on the development of the society and increasing the quality of life of the people of the country.|
|Economic Growth is considered as one of the instruments for achieving Economic Development. On the contrary Economic growth alone can't bring the Economic Development.||Economic Development is a broader concept which includes Economic Growth, Infrastructural, social, and political factors.|
|Economic Growth is considered as a narrow measure and single dimensional in nature as it only focuses on the income of the people of the country.||Economic Development is considered as a whole measure and Multidimensional phenomenon because it focuses on the income of the people and also on the improvement of the living standards of the people of the country.|
|Economic Growth is a short term process as changes in income is calculated every year generally.||Economic Development is a long term process because to develop various facilities to improve the life of the people takes more time.|
|Economic Growth is an automatic process and may not require governmental support or intervention.||Economic Development highly require governmental support and intervention because without developmental policies of the government, Economic Development is not possible.|
|Economic Growth is quantitative in nature because it is concerned with how much of goods and services are produced in the country in a certain period of time.||Economic Development is qualitative in nature because it focuses on improving the quality of life of the people in the country.|
|Economic Growth does not focus on fair distribution of wealth among the people in the country.||Economic Development concentrates on a balanced growth of the economy and fair and equitable distribution of the wealth among the people.|