1. Economic Development & Economic Growth: Concepts & Determinants Economic Development & Economic Growth: Concepts & Determinants

2. Introduction: World Economy is generally classified into: 1.Poor /Underdeveloped Countries 2.Developing Economies 3.Developed Economies Earlier,some theorists were classifying the world on the basis of some theoretical idealogies and the allignment of the nations with the leaders of these countries as: 1.First World 2.Second World 3.Third World

3. Economic Development – Concept Various definitions of economic Development are based on the following: A – Economic Development in terms of Real National Income B – Economic Developemnt in terms of Real Per capita Income C – Economic Development in terms of Economic Welfare D – Economic Development – Modern Interpretations

4. Economic Development as a Multi-dimensional Process: Micheal P. Todaro Economic development is the process of “improving quality of human lives” This process involves: 1.Raising People’s Living Levels 2.Creating conditions conducive to the Growth of People’s Self-esteem 3.Increasing People’s Freedom to Choose Todaro says, “ Deve;opment must, therefore, be concieved of as a multi-dimensional process involving major changes in social structures, popular attitudes and national institutions, as well as the acceleration of economic growth, the reduction of inequality and the eradication of poverty”

5. Tests of Economic Development: Prof. Walter Krause - Three Tests of Economic Development: 1.Cumulative Increase in Income for considerable period 2.Benefits for Whole Population 3.Cumulative Increase in Per-Capita Income

6. Features of Economic Development: 1.Dynamic Process 2.Long Term Process 3.Increase in Real Income 4.Increase in Per-capita Income 5.Multi-dimensional Process 6.Improvement of Quantitative & Qualitativ Variables

7. Economic Growth – Concept: Different Terms: Economic Development, Economic Growth, Secular Change, Economic Progress, Economic Welfare - connote the same meaning All terms interchangeable with Economic Development and Economic Growth Economic Growth referes to the Increase in Production Economic Development refers to Increase in Production along with Institutional Changes

8. Economic Development & Economic Growth – The Differences Basis of Difference Type of Change Pattern of Economy Nature of Process Discontinuous & Spontaneous Change Regulated & Controlled Economy Increase in Output & Structural Changes More Output Advanced & Free Enterprise Economy Gradual & Steady Change Economic Growth Economic Development

9. Economic Development & Economic Growth – The Differences Nature of Country Use of Resources Increase in Income Level of Income Problems of Under-developed Countries Development of Unused Resources General Increase in Income in Poor Countries Achievement of Higher Income & Output Maintenance of Already Achieved Income & Output General Increase in Income in Rich Countries Use of known & Developed Resourceas Problems of Developed Countries

10. Economic Development & Economic Growth – The Differences Stage of Change First Stage of Transitional Process Second Stage of Transitional Process Difference is Imaginary Both are generally Synonyms Difference does not serve any economic interest All concepts denote the process of change

11. Determinants of Economic Development Economic Determinants Non-Economic Determinants

12. Economic Determinants: 1.Natural Resources 2.Population or Human Resources 3.Capital Formation 4.Technical Progress 5.Financial Institutions 6.Size of the market 7.Structural Changes 8.Quantity and Quality of Enterprise 9.Internatiional Factors 10.Technical Coefficients(COR) 11.Financial Stability 12.Skill Formation 13.Development Planning

13. Non-Economic Determinants: 1.Political Factors 2.Religious Factors 3.Social Factors 4.Hope For Development 5.Freedom from Corruption