What is the difference between economic growth and economic development? comparison table

The concepts of "economic growth" and "economicdevelopment "are quite close in meaning, but not at all identical in nature. What do these terms mean? What is the difference between economic growth and economic development?

The essence of economic development

Economic development is a long process,which is characterized by a wide range of factors, covering not only the economy of the state itself, but also the social sphere and other areas. The term is applicable to states with developing economies (the difference between economic growth and economic development is that the first term describes changes in advanced economies).

the difference between economic growth and economic development

Economic development is manifested in the generalimproving the welfare of the state, involves the growth of real incomes of citizens, raising the level in many social indicators: the quality of education, cultural development. Other important points of economic development are the attractiveness of the state in terms of investment, a stable exchange rate (or a rise in the price of the national currency).

The index of dynamism of economic development

According to the study of international auditGrant Thornton and the authoritative Economic Research Center of The Economist Intelligence Unit, Australia's fastest-growing economy led by sixty-six points. The top three also included Chile and China. The rating score is determined by the expert assessment of the state's economy by twenty-two indicators, which are combined into several control groups.

Country groups by level of economic development

By the level of general economic development, several groups of states are singled out:

  • Developed states, to which one can rankcountries with innovative economies and a high standard of living. They are Japan, USA, Germany, Australia, Finland and many others. The states of this group are characterized by high-quality human capital, leadership positions in science, technology, medicine, education and other industries, and high quality of life for citizens.

than economic growth differs from economic development

  • Developing countries that set their ownthe main goal is to catch up with the developed by the level of economy and quality of life of citizens. These countries include China, Chile, Mexico, Pakistan, Latvia, the Czech Republic, Croatia, Kazakhstan and others.
  • Underdeveloped countries that are in decline. This is the majority of African countries, island states, as well as Mongolia, Afghanistan, Yemen, Bangladesh and the like.

Economic growth: the concept of

Than the economic growth differs fromeconomic development? Growth in the economy is a concept with a narrower concept. It is a short-term process and is characterized by a change in the volume of production in a positive direction. The more economic growth is different from economic development, it is a manifestation: the term "growth" in the economy can be expressed by the concepts of "gross domestic product" and "gross national product", while economic development is linked, among other things, to the living standard or social sphere.

According to the rates of economic growth, these types of phenomena are distinguished:

  • Uniform, which is observed in the European Union or the United States.
  • The so-called economic miracle, which characterizes the economies of South Korea, Hong Kong or Japan.
  • The tragedy of growth is the decline of the economy, accompanied by a decline in the standard of living of the population. The situation is typical for Central African countries.
  • Absence of growth that does not affect the social sphere. Such a process is observed in Zimbabwe.

than economic growth is different from the economic development response

Factors affecting the growth of the economy

Among the factors that affect the growth of the economy in developing countries, you can list the following:

  • level of development of transport and other infrastructure (economy, communications);
  • transition from agriculture to productive production (labor mobility);
  • inflow of financial assistance and investments from other states;
  • educational standards and literacy levels, which can be defined as the further productivity of the workforce;
  • the amount of available savings;
  • the level of corruption.

comparison table

What is the difference between economic growth and economic development? The main differences are clearly reflected in the table below.

Indicator for comparing terms

The economic growth

Economic development

Duration of the process

Short

Prolonged

Concept

Narrow

Broad

Application of the concept

To countries with developed economies

To emerging economies

Quantitative expression

Increase in GDP and GNP

Real positive changes, increase in life expectancy, level of education of citizens, reduction of infant mortality and so on

Type of changes

Quantitative changes

Both qualitative and quantitative changes

The common thing between these concepts is that the economicgrowth is among the possible components that make up economic development, but it is not always its consequence or determines economic development in the short term.

The difference between economic growth andeconomic development? The essential difference between such concepts is most clearly understood by the example. So, a person's growth means an increase in body weight and growth, that is, those indicators that can be measured, compared, analyzed. Development is determined by a number of not only physical factors (age, height and body weight), but also abstract aspects - culture, behavior, maturity level, communication skills, intelligence, habits.

Economic growth without development

Economic growth without development occurs when, with an increase in quantitative indicators, there is no real growth in the standard of living of the population. This situation can be the result of such reasons:

  • A high level of corruption, when all the improvements in the form of additional funding go to the top manager.
  • Ecological problems. Removing measures to ensure environmental safety will almost certainly increase production, but the same step will provoke a deterioration in public health. So, along with economic growth, the quality of life of citizens of the state will fall.
  • Congestion of transport infrastructure. Collapse on the roads, which may be the result of a jump in economic growth, will worsen the quality of life of the population, which will have to spend considerable time in traffic jams.

The difference between economic growth and economic development

  • Financing of the military sector. The country can increase its GDP by developing the defense industry, while in other areas (education, healthcare, culture) there will be no progress.
  • Lack of sales markets. The increase in output, expressed in quantitative terms, will lead to economic growth, but in the absence of sales markets, there will be no real improvement in the living standards of citizens.

Brief explanation of differences

Briefly (but this is no less complete) explaineddifference in the concepts of Schumper. How does economic growth differ from economic development? The author gives an accessible answer: growth is a change in the quantitative plan (increase in production and consumption), and development - qualitative characteristics (improving the standard of living of the population, innovation in the production sector, foreign investment, and so on).

So, how does economic growth differ fromeconomic development? Development should be understood as a broad concept, which includes economic growth. It can be evaluated by a number of different indicators that indicate progress in the economy of the state as a whole. Growth is only characterized by specific indicators in numerical terms.