Simply by, "Economic Development" we mean the continuous increase in real
income of a country over a long period of time. Moreover, it is also furnished
with technical and industrial changes in the society. Like
development, the economists also present the concept of "Economic Growth".
The economic growth represents increase in the production of goods and services
of a country. Moreover, it is attached with the increase in the efficiency of the factors of production.
From such simple definitions we find that economic development is a
qualitative term while economic growth is a quantitative term. As the increase
in the quantity or volume of a thing denotes its growth. Therefore, if a
country's output, national income, per capita income, consumption, savings and investment increase, such
represents growth. Therefore, if the level of national production increases
due to better use of factors of production, better techniques of production or
better organization, it represent economic growth.
In the words of Kindleberger:
"Economic Growth means more output and
in the technical and institutional arrangements. Growth not only implies more
output but also more efficiency and more inputs. While Economic Development is a wider
concept and it goes beyond the changes in the structure of output and allocation
In the early stage, any economy that grows is likely to develop and that which
develops is likely to attain growth. But the countries who have already
developed as US, UK, Germany, France and Australia etc., are desirous to keep on
growing. While in the case of UDCs which have low incomes, growth and
development go side by side.
Thus we conclude that economic development means a sustained, secular
improvement in material well-being which may be reflected in an increasing flow
of goods and services. As the definition of development has been presented in
material terms. Thus it includes social, cultural, political, moral and economic
factors which contribute to material progress.
Thus economic development is
economic growth because it aims at growing of the production of material commodities
and services. It is social because it implies institutional changes in the
society. It is moral because the idea of equality and social justice is involved
in it. It is cultural because development policies imply a profound revolution.
Thus we say that Economic Development is wider than Economic Growth.