Development Economics
Development economics is a branch of economics which deals with economic aspects of the development process in less developed countries (LDCs). Its focus is not only on methods of promoting economic growth but also on improving the general well-being of common people through health, education, workplace conditions, and other aspects of human development. Development economics involves the creation of theories and methods that aid in the determination of policies and practices for economic and social security of the population at large.
The purpose of economic activities going around is to produce goods and services to satisfy the wants of people. How well and to what extent these wants are satisfied is the basic issue in development economics. Traditionally, economic growth is defined as sustained increase in per capita real income of a country. However, economic growth in numbers alone, without improvement in living standards and overall quality of life, is not enough. Hence, economists insist on economic development which is a much wider term as compared to economic growth. Economic development emphasizes that everyone should enjoy a minimum level of economic security. The ultimate objective of all economic efforts is human development which encompasses quality of life, the level of well-being and access to basic social services. Thus, development today is no longer confined to growth in national income alone.
Inclusive growth is the new paradigm that is related essentially to equality and opportunity for all and sundry for productive and meaningful life with freedom and equality. In other words, it means inter-group, inter-sector as well as inter-regional equity. Growth is inclusive when it creates economic opportunities along with ensuring equal access to them.
The concept of development is inextricably linked with environment protection. Sustainable development is a strategy for improving the quality of human life, while living within the carrying capacity of supporting eco-system. Sustainable development is that which meets the needs of the present without compromising on the ability of future generations.
The study of development economics raises awareness regarding economic policies and practices being followed in a country. It also helps in gaining a better understanding of the dynamics of development process, both at the international and domestic levels.
This book explains various aspects of development economics. It would help teachers and students of the subject to understand the basic concepts, components and processes of development economics.
The book contains 30 chapters which have been organized into 2 parts.
Part I (chapters 1 to 15) is titled Underdeveloped Countries and Growth Models. It explains and examines the following models of economic growth propounded by economists from time to time: W.W. Rostow’s stages of economic growth, economic growth model of Robert Solow, Harrod-Domar growth model, big push model of Paul Rosenstein-Rodan, critical minimum effort theory of Harvey Leibenstein, Ragnar Nurkse’s balanced growth theory, Albert Hirschman’s theory of unbalanced growth, and Simon Kuznets inverted U hypothesis. Other topics included in this part, among others, are location of industry, infrastructure and logistics, agriculture and economic development, and public goods and the problem of free-riding.
Part II (chapters 16 to 30) is titled Aspects and Approaches to Economic Development. It includes, among others, the following topics: Demographic transition theory and demographic dividend hypothesis, Harris-Todaro model of rural-urban migration, dualism and economic development, entrepreneurship and start-ups, financial inclusion and financial literacy, urbanization policies and issues, foreign trade and economic development, sustainable economic development and globalization.
