DIFFERENCE BETWEEN ECONOMIC GROWTH AND ECONOMIC DEVELOPMENT

QUESTION:
What is the difference between growth and development? Can a country experience economic growth without development?

ANSWER:
It is possible to have economic growth without development. i.e. an increase in GDP, but most people don’t see any actual improvements in living standards.
This could occur due to:

1. Economic growth may only benefit a small percentage the population. For example, if a country produces more oil, it will see an increase in GDP. However, it is possible, that this oil is only owned by one firm, and therefore, the average worker doesn’t really benefit.

2. Corruption. A country may see higher GDP, but the benefits of growth may be syphoned into the bank accounts of politicians.

The Key Difference
Economic growth means an increase in real national income / national output.
Economic development means an improvement in the quality of life and living standards, e.g. measures of literacy, life-expectancy and health care.

Economic growth measures an increase in Real GDP (real output). GDP is a measure of the national income / national output and national expenditure. It basically measures the total volume of goods and services produced in an economy.

Economic development looks at a wider range of statistics than just GDP per capita. Development is concerned with how people are actually affected. It looks at their actual living standards and the freedom they have to enjoy a good standard of living.

Lord Atta Quaisie
Pastor/Author/Speaker. Columnist/Professional Reporter - Ghanaweb. Blogger @ loratta.blogspot.com
Call OR Whatsapp +233 240752033

Credit: Economics Help