6. Links between growth and development Flashcards
1
Q
What factors indicate Growth?
A
- Just uses GDP
- Measures income growth
- Is exclusively quantitative
- Is narrower
- Is the more commonly used indicator for developed countries
2
Q
What factors indicate Development?
A
- Uses GDP and other measures including life expectancy, adult literacy etc
- Measures quality of life
- Includes more qualitative measures
- Is wider
- Is the more commonly used indicator for developing countries
3
Q
Why is Growth important to Development?
A
Most indicators of human development are highly correlated with GDP, i.e. with economic development.
4
Q
Why does the correlation exist?
A
- Higher demand leads to higher employment levels. More people have more money. They can spend this money on things to better themselves including healthier diets, better housing, sanitation etc; all of this improves quality of life and development indicators.
- More income and spending leads to higher tax revenues for the governments of developing countries. This can be invested into better schools, hospitals, medications and water supply; all of which improves the development indicators.
- Economic growth may mean higher FDI. Many multinationals spend significant sums on improving health and education and infrastructure in their local areas.
5
Q
Why may economic growth not lead to sustainable development?
A
- Depletion of natural resources, particularly by multinationals interested in short term gain
- Again, multinationals exploiting low wages and making vast short –term profits but leaving once wage rates start to rise creating vacuum
- Government failure, particularly corruption based
- Changes in work-life balance, culture etc which might reduce happiness levels
- Inequalities, meaning economic growth benefits the few by a lot and the many not at all
6
Q
What is the ODA?
A
ODA= Official Development Assistance
State aid
E.G UK government donating money to Uganda to pay for improvements in economy and standard of living.
