Main Differences Between Economic Growth And Development
It has not been many years since we emerged from the last major economic crisis, the euro crisis of 2008. In fact, although the situation is no longer as critical as it once was, the consequences of this are still valid in part of the globe. , so we still could not speak of a total recovery.
However, fortunately it seems that little by little the different countries are improving their situation and it is observed in comparison with the first years of crisis. some economic growth and development Regarding these last two terms, they are often considered practically identical synonyms.
But although they have a certain relationship with each other, the truth is that they actually refer to different concepts. That is why throughout this article we are going to carry out a brief explanation of the differences between economic development and economic growth
Economic growth is understood as that economic situation or reality in which The set of goods and services produced per year exceed those of the previous period In other words, we consider that we are in a situation of economic growth when the production of a country or territory is greater than during the immediately preceding period (generally year), with a greater volume of income.
This growth is perceived per capita, that is, it is derived from the increase in the value of the production of each worker.
This growth can lead to an increase in the well-being of the population as a whole, as there is greater economic capacity on the part of the territory to seek the benefit of citizens. Now, although we are talking about something that usually leads to said improvement, it does not always necessarily imply it, since it is not necessary for economic growth to exist that the increase in capital be reflected in the quality of life of the population as a whole.
And economic growth is defined as a purely quantitative factor and directly measurable through existing capital figures. It can be assessed based on different statistical indicators, among which the Gross Domestic Product or GDP stands out as the main one
What is economic development?
With regard to economic development, this concept is referring to the socio-economic situation in which there is an increase in the quality of life of the inhabitants of a country, which increases the conditions of the citizens and their prosperity. a generalized form.
Economic development happens when the growth of the economy translates into progress for the entire community that inhabits the country or territory, equitably and affecting various areas.
On the other hand, economic development implies, for example, the improvement of health and education systems, infrastructure, life expectancy or economic capacity of each of the members of society. It also includes the development of more egalitarian and inclusive social policies as well as the increase in freedoms and rights (also in addition to their duties) and citizen participation in political and community life.
The concept of economic development, unlike that of growth, It is not quantitative but qualitative: development is difficult to measure directly, and different mechanisms must be used such as satisfaction indices, measurement of the different aspects that influence the quality of life, literacy or access to employment or training.
Main differences between economic growth and development
Observing the previous definitions of development and economic growth indirectly allow us to glimpse some of the main differences between both concepts. However, to make them more evident, below we are going to delve into what aspects allow us to differentiate between economic growth and economic development.
1. What it applies to
To begin with, one of the main and most important differences is that while economic growth It only implies the existence of a higher level of capital within the territory development implies that this growth or the economic situation of the country in question will be applied to improve the well-being of each of its inhabitants.
2. Economic development requires growth
They also differ in that while economic development generally requires economic growth to be effective, the latter does not have to require or lead to development. Likewise, for the economic development of a country to occur, growth may be necessary, but it is not sufficient to generate it: requires correct application of benefits Furthermore, while economic growth refers mainly to economic growth, in the case of development we tend to focus rather on the structural and social changes that can arise from it.
Another difference occurs in the way in which the indicator for each of them is obtained. While growth is a quantitative measure that is obtained from relatively simple mathematical calculations, calculating the level of economic development involves making a qualitative and not totally precise assessment of the general situation of the population.
4. Degree of stability
Finally, it should be taken into account that while economic growth is can easily see cut and go into a decreasing situation In the case of economic development, this tends to be more stable in terms of most of its advances, although it can also be deeply influenced by changes in the economy.
