Economic Growth

& Development Essay, Research Paper

To contemplate this question we must first address the accepted definitions of these terms. According to Alan Glanville, economic growth is defined as ‘the increase in a country’s output over time, that is an increase in its national income’,1 whereas economic development is ‘a much broader concept,’ loosely defined as involving ‘involving non-economic and quite often intangible improvements in standards of living’. Clearly, development is, in the economical sense of the word, normative.

Although to a bystander they might give the impression of being similar if not identical, they are in fact completely different things. The principal difference between the two is that a country that has attained economic growth would not necessarily have also attained economic development. A typical country displaying these signs would be somewhere like Chile. In the period 1980-92 Chile succeeded increasing its GDP by a relatively large 4.8%2. Yet while this occurred, its literacy rate and daily calorie supply remained static, in contrast to other developing economics such as Mexico and Venezuela. Primary enrolment in school decreased and vast swathe of the population living in extreme poverty received little attention.

Here we can see where although a country might have had economic growth, in terms of increased GDP and economic success, the actual standard of living incorporating factors such as life expectancy, poverty, literacy and access to basic necessities has remained untouched.