ECONOMIC DEVELOPMENT

Economic development, a process in which a simple, low-income world economy is transformed into a modern industrial economy. Although the term is sometimes used as a synonym for economic growth, it is often used to describe changes in a country’s economy that include quality and quantity development. The concept of economic development – how old and poor economies can transform into high-income and prosperous one – is very important in less developed countries, and the issue of economic development is often discussed in this regard.

Economic development became a major concern after World War II. At the end of the era of European colonialism, many former colonies and other low-income countries were called developed countries, comparing their economies with developed countries, formerly known as Canada, the United States, and those in western Europe, most of eastern Europe, the Soviet Union. , Japan, South Africa, Australia, and New Zealand. As living standards in many poor countries began to rise in the decades that followed, they were renamed developing lands.

There is no universally accepted definition of what a developing country is; none of that is a process of economic development. Developing countries are often subdivided into individual income terms, and economic development is often thought to take place as individual income increases. The income of each country (roughly the same as the individual’s output) is the most significant amount of the goods and services available, per person, per community per year. Although there are a few problems with measuring each individual’s income and growth rate, these two indicators are the best available to provide estimates of the country’s economic well-being and economic growth.

It is good to look at some of the mathematical difficulties and the concept of using the standard method of underdevelopment before analyzing the causes of underdevelopment. The mathematical complexity is well known. First, there are unwelcome border cases. Although the analysis is not limited to the developing and developing countries of Asia, Africa, and Latin America, there are oil-rich countries with individual income above all but some other less developed in their general economic aspects. Second, there are many technical problems that make the income of each individual in many developed countries (expressed in international currencies, such as the US dollar) a very unrealistic measure of their actual individual income. These difficulties include the lack of basic national income and demographics, the inadequacy of official exchange rates in which national revenue in volatile domestic currencies are converted into the standard US dollar denominator, and the problems of estimating non-monetary items in developing countries. Finally, there are psychological problems in interpreting the meanings of different countries with individual income levels.

Although the complexity of the financial system is well established, individual income measures are well aligned with other economic well-being measures, such as life expectancy, infant mortality rates, and literacy rates. Other indicators, such as the level of healthy eating and the individual availability of hospital beds, doctors, and teachers, are also closely related to individual income levels. While the difference, he says, 10 percent of the individual’s income between the two countries will not be taken as an indication of the difference in living standards between them, the actual difference seen is very large. In India, for example, per capita income was estimated at $ 270 (US) in 1985. In contrast, Brazil was priced at $ 1,640, while in Italy it was priced at $ 6,520. While economists cited a number of reasons why the claim that Italy’s standard of living was 24 times higher than India’s maybe more discriminatory, no one can doubt that Italy’s standard of living was significantly higher than that of Brazil, which was also higher than India’s.

Interpretation of the level of personal income as an indicator of poverty in a material sense can be accepted by two degrees. First, material quality does not depend on the income of an individual but on the function of each individual. The two can be very different when a large portion of the national revenue is diverted from use to other purposes; for example, with compulsory savings policy. Second, world poverty is a reflection of the quality of life that most people enjoy. This could be far below the simplest rate of individual income or spending where national income is distributed unequally and there is a wide gap in the standard of living between rich and poor.

The general definition of a developing country is that adopted by the World Bank: “low-income developing countries” in 1985 are defined as those earning less than $ 400 per person; “Medium-sized developing countries” are defined as those earning between $ 400 and $ 4,000 per capita. Indeed, countries with the same individual income may be different in some ways: some countries can get most of their income from big business, such as oil extraction, while other countries with the same individual earnings may have more and more productive use of their workers to compensate for the lack of resources in services. Kuwait, for example, was estimated to have a net worth of $ 14,480 in 1985, but only 50 percent of that money came from oil. In particular, Kuwait’s economic and social indicators are significantly lower than other countries with similar incomes. The middle-class economies are also considered to be separate, although China and North Korea are considered developing countries around the world. The main problem is that prices are less effective as indicators of equity shortages in the medium-sized economy and therefore less reliable as indicators of individual access to goods and services than in market-based economies.

The percentage increase in the actual per capita income is less than the minimum error limit than the average income level. While the annual change in per capita income is largely influenced by factors such as climate change (affecting agricultural output, a large portion of income in many developing countries), national trade policies, etc., growth rates Capita income over a decade or more strongly reflects the level of well-being economic growth in the country.

Economic development as a policy objective

Motive for development

The developmental economic sector addresses the root causes of underdevelopment and policies that can accelerate the growth rate of individual income. Although these two concerns are related, it is possible that policies could be developed that could accelerate growth (by, for example, an analysis of the experience of other developing countries) without fully understanding the causes of underdevelopment.

Research into both causes of underdevelopment and policies and actions that could accelerate development was undertaken for a variety of reasons. There are those who are concerned with developing countries for charitable purposes; that is, with the problem of helping the people of these countries achieve certain levels of health in terms of such things as food, clothing, shelter, and nutrition. For them, personal income is a measure of the problem of poverty in a material sense. The purpose of economic development is to improve living standards by increasing the overall income of each individual. Raising individual income is also the stated goal of the policy of all developing countries. For policymakers and economists who are trying to achieve the goals of their government, therefore, an understanding of economic development, especially in its policy frameworks, is essential. Finally, there are those who are concerned about economic development or because they believe that this is what the people in developing countries want or because they believe that political stability can only be guaranteed by satisfactory levels of economic growth. These goals are not mutually exclusive. Since World War II many industrialized nations have extended foreign aid to developing countries for a combination of humanitarian and political causes.

Those who care about political stability often see the low income of each person in developing countries equally; that is, in relation to the higher per capita income of the developed world. For them, even if a developing country is able to improve its living standards by increasing the income level of each individual, it is still possible to face the serious problem of dissatisfaction created by the growing gap in related levels between rich and poor countries. (This result is due to the performance of growth statistics in the first major gap between developed and developed countries. For example, an underdeveloped country with a per capita income of $ 100 and a developed country with a per capita income of $ 1,000. is $ 900. Let the income of both countries grow by 5 percent. After one year, the income of a less developed country is $ 105, and the income of a developed country is $ 1,050. well it will have to grow by 50 percent to maintain the same total gap of $ 900.) Although there was once a developmental economy the argument that raising living standards or reducing the corresponding gap in living standards was a real policy desideratum, experience during 1960-80 convinced I mean that developing countries, with appropriate policies, can achieve unimaginably high growth rates to raise their living standards more quickly and begin to close the gap.

Impact of dissatisfaction

Although concern over the question of dissatisfaction among developing and developing countries has diminished and diminished, it has never completely disappeared. The feeling of dissatisfaction and grievances of developing countries comes not only from measurable differences in national wages but also from things that cannot be easily measured, such as their response to the colonial past and their complex campaigns to elevate their national dignity and achieve greater equality of understanding with developed countries. Therefore, it is not uncommon for governments to use much of their resources on prominent projects, from steel mills, power dams, universities, and defense costs to international athletics. These modern indicators may contribute to the nationally shared satisfaction and pride but may or may not contribute to the increase in the national average. Second, it is possible to argue that in many cases the internal income gap within developed countries can be a stronger source of dissatisfaction than the global income gap. Rapid economic growth can help to reduce internal economic inequality in a less painful way, but it should be borne in mind that rapid economic growth also often brings great disruption and the need to make major adjustments to the old ways of life and thus increase self-esteem and frustration. Lastly, it is difficult to predict that the default problem of dissatisfaction will carry a simple and straightforward relationship with the size of the international income gap. Some seemingly insignificant countries are found in Latin America, where per capita income is generally higher than in Asia and Africa. A skeptic can turn the whole way into a reductio ad absurdum by pointing out that even the most developed and high-income countries of each individual have not been able to solve the automatic problem of dissatisfaction and frustration among the various sections of their people.

Two conclusions can be drawn from the above points. First, the automatic problem of dissatisfaction in less developed countries is a real and important problem in international relations. But an economically viable economic policy can only play a small part in solving what is a major international political crisis. Second, for the small purpose of economic policy, there is nothing they can do but go back and define the individual incomes of less developed countries as an indication of their material poverty. This can be protected by explicitly recognizing the value of the assistance that developed countries should prioritize in improving the living standards of the majority of their people. However, even if this price decision is not accepted, the normal rate of economic growth by per capita income remains valid. Governments in less developed countries may wish to pursue other goals, which are not trivial, but they can make informed decisions if they know the economic costs of their decisions. The most important measure of these economic costs can be expressed in terms of the opportunity to increase the income level of each individual.

The hypothesis of underdevelopment

If the developing world is a low-income country, why do you call them developing countries? The use of the term underdevelopment is actually based on common sense based on the whole issue of economic development. According to this view, the differences in individual income levels between developed and developed countries cannot be calculated according to the diversity of natural resources beyond human capacity and society. That is, less developed countries have developed because, in a sense, they have not yet been able to make full use of their economic growth potential. This could be due to the underdevelopment of their natural resources, or to their staff, or from the “space of technology.” In many cases, it can result from the underdevelopment of economic organizations and institutions, including the network system market and government administrative equipment. The common view is that the development of this organizational structure will enable the developing world to make full use of not only its domestic resources but also its foreign economic opportunities, in the form of international trade, foreign investment, and organizational technology.

Progress thought after World War II

After World War II, many developing countries gained independence from their former rulers. One of the most common claims made by leaders of NGOs is that colonialism was responsible for the continued poor living conditions in the colonies. Post-independence economic development was therefore a policy objective not only because of the human desire to raise living standards but also because political promises were made, and the failure to make progress in development was feared, interpreted as a failure of the liberation movement. Developing countries in Latin America and elsewhere, which have never been, or have in the past, adopted the same belief that the industrialization of industrialized nations had hampered their development, and they, in turn, joined the campaign for rapid growth.

At that early stage, development education, as well as development policies, adopted the view that the policies of industrialized nations should be blamed for the poverty of developing countries. Reminders of the Great Depression, when the commercial policies of developing countries had deteriorated dramatically, producing a sharp decline in per capita income, affected many policymakers. Finally, even in developed countries, the Kynnesia legacy has given great value to the investment.

In this case, it was thought that “lack of funding” was the cause of underdevelopment. It follows that the policy should aim at a faster rate of investment. Since many low-income countries were also heavily cultivated (and many commercial countries were consumed internally), it was thought that accelerating investment in the industrial sector and the development of manufacturing industries to buy inland by “incoming income” was the way to development. In addition, there was a fundamental mistrust of the markets, and therefore a major role was given to the government in the allocation of funds. Market uncertainty has increased especially in the global economy.

Economic growth and economic development

Development economies can be compared to another field of study, called growth economics, which deals with the study of long, or sustainable, ways of growing equality in developed countries, which have long been overcoming the problem of starting development.

Growth theory assumes that there is a fully developed capitalist economy with sufficient support for entrepreneurs who respond to a well-defined system of economic incentives to drive the growth process. Typically, it focuses on macroeconomic relationships, particularly the rate of total output savings and the amount of output-output (i.e., the number of extra units needed to produce an additional unit of product). Mathematically, this can be expressed (Harrod growth rate – Domar) as follows: total output growth (g) will be equal to the savings ratios separated by the capital-output ratio (k); that is, g =s/k. Therefore, suppose 12 percent of total production is saved annually and that three capital units are needed to produce an additional unit of product: then the growth rate of output 12/3% = 4% per annum. This result is based on the fundamental assumption that any reserve will be automatically invested and converted into an increase in output on the basis of a given amount of revenue. Since a given portion of this increase in productivity will be maintained and invested in the same way, a continuous growth process is maintained.

The concept of growth, especially the growth rate of Harrod – Domar, has been widely used or misused in the economic planning of a developing country. The planner starts from the desired growth rate of maybe 4 percent. Considering the total output, say, 3, then it is said that the developing country will be able to achieve this growth rate if it can increase its savings to 3 × 4 percent = 12 percent of total production. The weakness of this type of exercise stems from the assumption of a fixed rate – all-encompassing, which removes all the important problems affecting the developing world’s ability to receive funding and invest its savings in a productive way. These issues include the central problem of the efficient allocation of available savings among other investment opportunities and the problems associated with the organization and institutions to promote the growth of adequate access to entrepreneurship; the provision of appropriate economic incentives through a market system that properly reflects the shortage of goods and services; and the creation of an organizational structure that can effectively implement investment decisions in the private and public sectors. Such problems, which often affect the capacity to absorb money and other inputs, are fundamental to the developmental economy. Development economics is clearly needed because the ideas of a growth economy, based on the existence of a fully developed and efficient capitalist economy, do not work.

Developing and developed countries are very complex groups of countries. They vary widely in location, population, and natural resources. They are also at various stages in the development of the market and financial institutions and an effective management framework. These differences are sufficient to warn of the general prevalence of the causes of underdevelopment and of all forms of economic development. But when the development economy began to emerge in the 1950s, there was a great deal of political and political power that shifted the issue from the general models of development and non-development. First of all, many writers made the story so popularly popular with the desire to persuade developed countries to provide more economic assistance to less developed countries, for reasons ranging from social concerns to a cold war strategy. Second, there has been a reaction of developing countries to less developed economies in terms of their colonial economic system, which they see through free trade and basic production in the export market. These countries are eager to embrace common ideas of economic development that offer an adjustment to their deep desire to do industrialization faster. Thirdly, there has been a similar reaction, at the level of education, against the old economic vision, with its emphasis on effective resource allocation and trying new and “powerful” ways of economic development.

All of these forces are combined to produce a harvest of theoretical processes that have evolved into an established doctrine by focusing on the “crash” of investment in material and human resources, local industrialization, and government economic planning as the standard components of development policy. These new ideas have continued to play a major role in the common sense of developmental economics, although in hindsight most of them have become partial ideas. A comprehensive study of these ideas, under three main headings, is given below. It applies especially to the debate over whether developed countries should seek economic development through domestic industry or international trade. The limitations of these new ideas – and how they have led to a gradual resurgence of tangible development problems, a further reversal of the old economic theory of resource allocation – are followed later.

EDUCATION AND HUMAN DEVELOPMENT CAPITAL

As it became clear that fundraising was not the key to the development itself, many analysts turned to the lack of education and skills for the people as key factors in underdevelopment. If education and skills are defined as all that is needed to increase the productivity of the people in developing countries by improving their skills, business, initiative, adaptability, and attitudes, this proposal is realistic but an empty teaching method. However, the need for skills and training began to be met in terms of specific skills and qualifications that can be provided by crash programs in formal education. The traditional way of organizing the workforce began that way from the growth of labor productivity and attempted to estimate the numbers of different types of skilled workers who would be required to maintain this targeted growth rate on the basis of a projected relationship between skills inflation and outputs.

This approach was widely believed in many developing countries soon after their political independence, where there were obvious gaps in various branches of administrative and technical services. But many countries have passed this stage very quickly. Meanwhile, as a result of education expansion programs, their schools and colleges have begun to produce a large number of newly graduated students at rates much faster than normal economic growth rates that can provide suitable new jobs. This has created a growing problem of unemployment among educated people. An important factor in the rapid growth of education was the expectation that after graduation students would be able to find well-paying jobs with a white-collar at the highest salary per capita income in their home countries. Thus, the inability of developed countries to create jobs to absorb their growing ranks creates an explosion in a so-called change of prospects.

It is possible to see a close resemblance between a small industrial concept as an extension of the manufacturing sector and a small concept of education as academic and technical degrees that can be offered through the expansion of the formal education system. If a comprehensive concept of education, relevant to economic development, is needed, it is necessary to find it in the full educational impact of the economic environment entirely on the learning process of the people of the less developed countries. This is a complex process that depends, among other things, on easily analyzed, economic incentives and indicators that can shape the economic character of people in less developed countries and affect their ability to make sound economic decisions and their willingness to introduce or adapt to economic change. Unfortunately, the economic situation in many developed countries is controlled by a network of government regulators who often do not comply with these goals.

REFERENCE

Economic Development-The Missing Component Approach