Economics of Development

1. Unit-I: Introduction
-Anjali Kewalramani

2. Economic Growth V/S Development
 Economic Growth:
 Increase in a country's output (GDP)
over time.
 Economic Development:
 Improvement in living standards,
income, education, and health.
 Key Difference:
 Growth = Quantitative
 Development = Qualitative &
Quantitative

3. Economic Growth V/S Development
Aspect Economic Growth Economic Development
Nature Quantitative Qualitative + Quantitative
Measurement GDP, GNP, Output
HDI, Literacy, Life Expectancy,
etc.
Focus Income, Production Well-being, Sustainability

4. Transition of Economies
Service
Sector
Stage
Industrial
Stage
Agricultural
Stage
1. Agricultural Stage:
 Reliance on farming, low
productivity.
2. Industrial Stage:
 Rise of manufacturing,
urbanization, and technology.
3. Service Sector Stage:
 Focus on services like IT,
healthcare, finance.

5. Transition of Economies
Economic Development Path:
1. Agriculture → Focus on productivity
improvements.
2. Manufacturing → Industrialization
boosts growth.
3. Services → Innovation and knowledge-
based industries.
Factors Enabling Transition:
 Investments in education and skills
 Technological advancements
 Infrastructure development

6. Classification of Countries based on
levels of developments

7. Features of Developed Countries
 Also called ‘high-income’ countries.
 Economic prosperity: A high GDP per capita,
or average amount of money earned per
person
 Technological advancement: Advanced
infrastructure and technological infrastructure
 Social well-being: High literacy rates, access
to education and healthcare, and low child
mortality rates
 Political stability: A stable political system
 High life expectancy: A high life expectancy
due to good nutrition and health services
 Examples: USA, Germany, Japan

8. Features of Developing Countries
 Also called ‘middle-income’ countries or ‘emerging economies’
 Moderate GDP and per capita income
 Transitioning economies (agriculture → industry)
 Emerging industrial and service sectors
 Moderate HDI: Challenges in health, education, and poverty
 Higher unemployment and inequality
 Examples: India, Brazil, Vietnam

9. Features of Least Developed Countries (LDCs)
• Also called ‘Low-income’ countries.
• Low socio-economic development: LDCs have low
levels of income, which are distributed unequally.
They also have low economic management capacity
and a scarcity of domestic financial resources.
• Weak development capacity: LDCs have weak
human and institutional capacities. They often
experience political instability and governance crises.
• Rapid population growth: LDCs have high birth rates,
which can contribute to rapid population growth.
• Low literacy and school enrollment rates
• Unskilled labor force: LDCs have an unskilled labor
force.
• Child well-being: Children in LDCs face hunger,
homelessness, and a lack of water. They also have
little or no access to medical care or immunizations.
• Gender inequality: In many LDCs, culture frowns upon
women working outside of the home
• Examples: Chad, Haiti, Afghanistan

10. Thank You
-Any Questions?