Economic development focuses on how to improve the economies of developing countries. It measures the quantitative and qualitative changes in an economy. Economic development incorporates both private and public sectors because governments try to promote growth in private sectors and their investments. As a subject, economic development encompasses business, public administration, and sociology, along with economics.
Development economists see the improvement of healthcare, education, domestic and international policies, and market conditions as ways to create economic growth in poor countries. This branch of economics looks at microeconomic and macroeconomic factors when assessing the structure of the developing country and how its economy can create international and domestic growth. It strives to improve quality of life through economic processes.
A goal of development economists is to create a larger range of economic decisions and social choices for individuals and nations. By improving the economic conditions of a country, individuals have more freedom in their economic choices and are able to receive more life-sustaining goods like protection and food. Economic development is different from economic growth because economic growth is the increase of a measure of an economy, such as gross domestic product. Economic development encompasses the improvements of welfare, such as education and the environment. The main difference is that economic development looks at the progress of economic welfare overall, whereas economic growth only looks at particular variables. Economic growth is therefore a branch of economic development.
Gross domestic product (GDP), gross national product (GNP), and purchasing power parity (PPP) are some measures of economic development. There are some inconsistencies in these types of measurement because negative externalities of economic growth are not accounted for, such as environmental factors. Social indices, which as easily measured features of a country, are used to measure economic development. These types of social indices include life expectancy, infant mortality, and fertility rate.© BrainMass Inc. brainmass.com May 18, 2021, 2:06 pm ad1c9bdddf