Economic growth and development Flashcards
Difference between economic growth and development
growth = increases in national income development = dependent on criteria eg income / availiability of resources / freedom of individuals to make choices on a social and economic level
Characterstics of LEDC
- low levels of real GDP per capita
- dependence on primary products for export revenue
- fast population growth
- poor infrastructure
HDI
- Life expectancy
- GDP per capita
- mean years of schooling
Difference between GDP and GNP
GDP = measures value of goods and services produced within a country's borders, by citizens and non citizens GNP = measures value of goods and services produced by only a country's citizens but both domestically and abroad
why are GDP AND GNP INADEQUATE
Fails to include other characteristics of development eg equality and externalties
Factors affecting growth in development
investment in infrastructure
education and training
barriers to economic growth and development
1) poor infrastructure
2) inadequate human capital - lack of investment in ed and training
3) primary product dependency - prices fall in real terms as they are income inelastic products
Market based strategies to promote economic growth and development
1) trade liberalisation = removing trade barriers
2) removal of subsidies- found on import substitutes
3) policies to attract inward investment (remove legal barriers to foreign ownership
Interventionist strategies to promote economic growth and development
1) infrastructure investment
2) education and training investment
3) investment in tourism
Aid
invoves financial assistance from one country to another
trade
helps development because countries benefit from specialisation in industries where they have comparative advantage
benefits of aid
can fund capital investment in infrastructure or social programmes
Disadvantages of aid
- money may get chanelled into benefitting a small group of people CORRUPTION
- systems for distributing aid esp if goods and services may not be present
