This research examines the concepts of economic growth and development. Further, the experiences of selected countries with respect to economic growth and development are described.
Economic Growth and Development Defined
Economic growth is defined in positive terms as the rate of change in gross national product GNP (Gwartney, Stroup, and Studenmund, 1990, p. 793). Within this definition, a decline in GNP would be referred to as negative growth. There are two general types of economic growth. Extensive economic growth refers to an expansion of the total output of goods and services, regardless of the change in per capita output. Intensive economic growth refers to an increase in per capita output.
Development is a normative concept that encompasses economic growth, but which also includes structural and distributional changes which should lead to improvements in the living standard for a majority of an economy's population (Todaro, 1987, p. 87). Thus, if economic growth occurs but most of the benefits of such growth accrue to a relatively small economic elite, then positive development in that society has not occurred.
Factors Involved in Economic Growth
Three theories of development are widely accepted in the early 1990s. These three theories are the (1) diffusion model, (2) structuralist model, and (3) the dependency model (Wallerstein, 1985, pp. 101 154).
The diffusion model holds that progress is a function of the spread of modernism to backward, archaic, and traditional
economies, and that the principal factors leading to development are (1) advanced technology and (2) an infusion of foreign capital. In this model, development is equated with industrialization and increased economic diversification. The diffusion model views development as a gradual process.
The structuralist model of economic development attributes under development to structural deficiencies in a country's economy...