conclusion on economic development

Before publishing your Articles on this site, please read the following pages: 1. There were certain disequalising forces operating in the world economy which made the gains from trade go mainly to developed countries. Attainment of economic development necessities a suitable environment for initiating, maintaining and accelerating the pace of economic development. Being a technologically backward country, India has decided to permit foreign direct investment in order to imbibe advanced technology for attaining international competitiveness under the present world trade and industrial scenario. Due to lack of adequate number of trained and skilled personnel, the production system remains thoroughly backward. Existence of a stable strong, efficient and honest government machinery is considered another pre-requisite for economic development. Thus in order to achieve fast economic progress, an underdeveloped country must attempt to introduce a rational reorganisation of its entire economy. LEI code 529900F7Y171QF1RSU09. ... use our search form on bottom ↓ . Prof. Meier has rightly said, “We shall define economic development as the process whereby per capita income of a country increases over a long period of time.” Here the word “process” indicates long period changes related to changes in demand side as well as changes in factor supply. Ragnar Nurkse has termed it ‘International Demonstration Effect’. Thus to attain indigenous base in developmental framework is considered as an important pre-requisite for economic development. In these countries, the rate of savings is low due to low per capita income and higher marginal propensity to consume. CONCLUSION: Planning boundaries for roads and assessing associated environmental effects are often based on socioeconomic considerations, resulting in a mismatch between planning scales and spatial scales at which ecological systems operate. Here the problem has to be tackled in two ways. put severe obstacle on the path of economic development and also retards its pace. In an economy, capital accumulation can help to attain faster economic development in the following manner: (a) Capital plays a diversified role in raising the volume of national output through changes in the scale or technology of production; (b) Capital accumulation is quite essential to provide necessary tools and inputs for raising the volume of production and also to increase employment opportunities for the growing number of labour force; (c) Increase in capital accumulation at a faster rate results increased supply of tools and machinery per worker. Thus to attain a high rate of economic development, inter-sectoral transfer of work force is very much necessary. Thus in conclusion it can be observed that availability of natural resources and its proper utilization is still working as an important determinant of economic growth. in driving the country’s development, in addition to providing quality public services to its citizens. Thus in order to attain a higher rate of development, the underdeveloped countries should adapt only that type of technology which can suit their requirements. The underdeveloped nature of certain economic sectors, such as Russia’s renewable energy sector, could provide business professionals with ideas as to what they may best invest in. Natural resources of the country can be properly exploited with manpower resources. Here the consumption level of individual is very much influenced by the standard of living or consumption habits of his neighbours, friends and relatives but not by its income alone. To determine suitable investment criteria is also another major pre-requisite for economic development of underdeveloped countries. Conclusion We have examined a diverse set of mechanisms through which population growth affects economic development. A proper balance between the private and public sector initiatives is considered very important for evolving such an effective economic organisation. (2) Propensity to apply science to economic ends. Cause and consequences of economic development are mostly determined by the time path and velocity of these aforesaid changes. In order to attain a self-generating growth of the economy, the people of the country must have a strong and positive willingness to attain such development. Finally, social system has much impact on the economic phenomenon of the country. Therefore, at certain levels, availability of foreign resources broadly determines the level of economic development in a country. In the absence of public co-operation and participation, this development strategy cannot function properly. This vicious circle operates not only on demand side but also on supply side. : The following conditions must be satisfied for attaining technological advancement in a country: (a) making provision for large investments in research. Basis Economic Development Economic Growth Effect: Brings qualitative and quantitative changes in the economy Brings quantitative changes in the economy Relevance: Economic development is more relevant to measure progress and quality of life in developing nations. It is spirit itself that builds the body.” Prof. Ragnar Nurkse has further observed, “Economic development has much to do with human endowments, social attitudes, political conditions and historical accidents.”. Experimental outlook, necessary for economic development must grow with the spread of education. Share Your PDF File The Conclusion chapter discusses the Sustainable Development Goals (SDGs) in relation to human capability and human security analyses. Economic, environmental and social dimensions of sustainable development. Most of the underdeveloped countries are facing the problem of rapidly growing population which hinders its path of economic development. This requires greater trust between the state, labour and business. Attaining higher level of economic development is a function of level of technology. (c) Utilisation of these savings for the purpose of investment in capital goods. Thus it is quite important to raise the rate of capital formation so as to accumulate a large stock of machines, tools and equipment by the community for gearing up production. In respect of changes in the contribution of services sector, the result is not so marked or consistent among the various countries. ), is the 43rd largest state in the U.S.; 6.9% of the land is owned by the federal government. A SUMMARY OF THE ANALYSIS Our mission is to provide an online platform to help students to discuss anything and everything about Economics. Moreover, the shift away from agriculture to non-agricultural activities has also resulted a significant fall in the share of small business units. In short, resources go to the formation of population not capital.”. The rate of economic development and the level of per capita income increase as more and more work force shift from primary sector to secondary and tertiary sector. Thus the vicious circle of poverty is resulted from various vicious circles related to demand side and supply side of capital. State budget institution, legal entity code 288601650. Thus in order to accelerate the pace of economic development the government must make necessary arrangement for the maintenance of law and order, defence, justice, security in enjoyment in property, testamentary rights, assurance to continue business covenants and contracts, provision for standard weights and measures, currency and formulation of appropriate monetary and fiscal policies of the country. As A.G.B. Underdevelopment countries are facing various socio-political hurdles in the path of economic development. Pre-Requisites or Need for Economic Development: Essay # 5. The production possibility curve AB represents the production frontier which shows the various combinations of commodity A and B that may be produced by the country to its maximum extent through its fuller and best possible allocation of resources. Economic development of a country does not simply require removal of some of its basic obstacles like market imperfections, capital shortage, various circle of poverty etc. Growing population increases the volume of consumption expenditure and thereby fails to increase the rate of savings and investment, so important for attaining higher level of economic growth. Prof. Lewis has rightly observed, “The behaviour of the government plays an important role in stimulating or discouraging economic activity.” Therefore, maintenance of proper administrative set up is a determinant of economic development of a country. Secondly, the production frontier, i.e., the various productive sectors, has to be widened through sizable changes to the maximum extent. Economic growth is defined by, among other things, material capital formation, human capital formation and the creation of innovation. By economic development we mean attainment of higher level of productivity in almost all the sectors and a better level of living for the general masses. Moreover, due to the lack of spirit of experimentation and proper Research and Development (R&D) facilities, these underdeveloped countries fail to transform their production system to the desired level. The process of growth is connected with both fuller use of existing resources and expanding resources. Obstacles or Constraints on Economic Development: Essay # 4. (i) Efforts to economise, either by reducing the cost of any product or by raising the yield from any given input or other resources, (ii) Increase in knowledge and its appropriate application and. Accordingly, Kindleberger further observed, “Growth involves focussing on height or weight, while development draws attention to the change in functional capacity.”, Although some economists have observed slight differences between economic development and economic growth but all these differences are imaginary and unreal and thus have little practical value. Structural Changes. Peoples’ desire for the attainment of economic progress is the most important requirement of economic development. Thus Prof. Ragnar Nurkse has rightly observed, “The meaning of capital formation is that society does not apply the whole of its current activity to the needs and desires of immediate consumption, but directs a part of it to the making of capital goods—tools and instruments, machines and transport facilities, plant and equipment.”. 3. The development experience in various countries shows that the share of agricultural sector in GDP of all developing countries has declined excepting Australia. Meaning of Economic Development: Essay # 2. There are three stages in the process of capital formation, i.e.. mi. These resources allow the nation to present itself as a competitor among others. Removal of market imperfections can accelerate the pace of capital formation and can also widen the scope of capital and money market in these countries. Singer has rightly observed, “Investment in education is not only highly productive but also yields increasing returns. Moreover, the task of economic development is influenced by a number of factors such as—economic, political, social, technological, natural, administrative etc. Vicious circle in the underdeveloped countries represented by low productivity is resulted from capital deficiency, market imperfections, economic backwardness and poor development. Underdeveloped countries are facing a peculiar problem of instability arising due to inflationary rise in price level. Reproduction and quotation are authorised provided the source is acknowledged. The increase in the volume of capital formation leads to capital accumulation. The suitable investment criteria should maximise the social marginal productivity and also make a balance between labour intensive and capital intensive techniques. We have presented an enormous amount of information throughout this book that may appear overwhelming. Inappropriate social forces impeding the economic development of underdeveloped countries like India include prevalence of caste system, creating divergence between aptitudes, joint family system, peculiar law of inheritance, outdated religious beliefs, irrational attitudes towards number of children in a family etc. Mandatory cookies enable the main website functions. Economic factors alone are not sufficient for determining the process of economic development in a country. Technological advancement is considered as an important determinant of economic growth. Thus following are some of the important non-economic factors determining the pace of economic development in a country: It is the mental urge for development of the people in general that is playing an important determinant for initiating and accelerating the process of economic development. So, education plays pioneer role for the creation of human capital and social progress which in turn determines the progress of the country.”. After independence, these underdeveloped countries like India had to face serious obstacles to break this deep rooted impasse of low level equilibrium traps. Naturally there is absence of modern enterprise and proper managerial talent, Due to poor socio-cultural climate and weak environment, the managerial talent in these countries fails to reach its desirable level. Favourable investment pattern is an important determinant of economic development in a country. Sustainability of the development, which is always bearing in mind that every action can cause a reaction, and efficient use of resources would be a beneficial for future generations. The development process of an underdeveloped or developing economy is not an easy task rather it is a complicated one as these countries are not having any common characteristics. International trade has forced the underdeveloped countries to become primary producing countries where the terms of trade as well as the gains from trade have always gone against these underdeveloped countries. The economic organisation of the country should be of that type which can respond well to the requirements of planning for economic development. Normally, the rate of capital formation in underdeveloped countries is very poor. Moreover, the rapid change in the size and form of business organisations has also resulted a major structural change in the economy. The people of a country must desire progress and their social, economic, legal and political situations must be favourable to it.”, Emphasising the role of non-economic factors, Prof. Cairncross observed, “Development is not governed in any country by economic forces alone and the more backward the country is, the more this is true. For South African economic growth to increase, the competitiveness of the economy needs to improve. Economic development is thus a process of raising the rate of capital formation, i.e. Moreover, Easterlin argued that population pressure may favourably affect individual motivation and this may again lead to changes in production techniques. In this connection they observed, “During the last 150 years or so, the working of international forces through the media of trade and capital movement.” produced backwash effects on underdeveloped economies. Initially, to step up the rate of investment in the economy, inflow of foreign capital to some extent is important. Economic development, being a dynamic concept refers to the continuous increase in production over the changing time path. 25 SOCIO-ECONOMIC DEVELOP- MENT AND. All these social forces are obstructing the path of development of these underdeveloped countries. Thus whether growing population in a country practically retards economic growth or contributes to it that solely depends on the prevailing situation and balance of various other factors determining the growth in an economy. Regarding the determinants of economic growth, Prof. Ragnar Nurkse observed that “Economic development has much to do with human endowments, social attitude, political conditions and historical accidents.”. Obstacles or Constraints 4. Under such a situation, the rate of investment in these countries is very low leading to low level of capital formation and low level of income. (iii) Amount of capital or other resources for land. Here capital means the stock of physical reproducible factors required for production. It also refers to productivity of capital of different sectors at a definite point of time. After examining the above information, we can say that Economic Growth is a subset of Economic development. Moreover, in order to implement any developmental projects to the fullest extent and also to restrict the leakages involved in it, peoples’ participation and public co-operation are considered very important, especially in these under-developed countries. Another important obstacle or constraint faced by the underdeveloped countries in their path of economic development is its poor rate of savings and investment. r = y/p where r = real income; y = money income and p = price level. Therefore, another requirement of economic development is to maintain stability by avoiding inflationary rise in the price level so as to check mis-allocation of resources along with its other evils. Capital Formation and Capital Accumulation: Capital formation and capital accumulation are playing an important role in the process of economic development of the country. Therefore, in order to catch up with developed nations, developing and emergent countries need to achieve … The external factors which are playing important role in sustaining the economic development include: (a) Growing export earnings for financing increasing import bills required for development, (b) Increasing flow of foreign capital in the form of direct foreign investment and participation in equity capital and. Accordingly, higher rate of population growth can put serious hurdles on the path of economic development Moreover, growth of population at a higher rate usually eat up all the benefits of economic development leading to a slow growth of per capita income. The theory developed here is called the neoclassical theory of distribution. Through a pooled, cross-sectional an alysis of 131 nation-states from 1972 to 1989, Secondly, attainment of economic development indicates increase in real per capita income over time. Category C – Synthesizing Climate Change Mitigation with Development. Thus to bring social and institutional change as per changing environment and to realise the modern values of life are very much important for accelerating the pace of economic development in a country. Jacob Viner stated in this connection, “Population growth in a backward country does not induce capital widening investment or innovation. On the other hand, changes arising on the factor supply are also related to—capital accumulation, discovery of new resources, introduction of new and more efficient production techniques, increase in size of population and organisational changes. Thus C.P. In addition it is pointed out that economic and environmental issues are two important but not absolute conditions for ensuring a sustainable development. Thus with the increase in capital accumulation in such countries, the supply of other co-operant factors should be increased so as to enhance the capital absorption capacity of such countries. Stability, peace, protection from external aggression and legal protection generally raises morality, initiative and entrepreneurship. Too much dependence on agricultural sector is not an encouraging situation for economic development. Thus the underdeveloped or developing countries are facing several constraints or obstacles to its path n economic development. 2. Natural Resources and its Utilization: Availability of natural resources and its proper utilization are considered as an important determinant of economic development. Underdeveloped countries are suffering from backward social factors. With proper human capital formation, increasing mobility and division of labour, manpower resources can provide useful support to economic development. Removal of market imperfections is considered a very important pre-requisities for economic development as such imperfections create a lot of obstacles in the path of economic development of underdeveloped countries. This type of political instability creates uncertainty about its future steps and adversely affects the economic decisions of these underdeveloped countries relating to its investment. Most of the underdeveloped countries are facing the problem of political instability resulting from frequent change of government, threats of external aggression and disturbed internal law and order conditions. Prof. Meier and Baldwin have observed that, “Not only must economic organisation be transformed but social organisation must also be modified so that basic complex of values and motivation may be more favourable for economic change and cultural change.”. Moreover, capital formation requires the suitable skill formation so as to utilise physical apparatus or equipment for raising the productivity level. Japan and England are among those countries which have successfully extended market for its product to different foreign countries. SOCIAL SCIENCE MODULE - 4 Socio-economic Development and Empowerment of Disadvantaged Groups Contemporary India: Issues and Goals 220 Notes 25 SOCIO-ECONOMIC. Conclusions on the economic development scenario. Prof. Krause has observed that, “Education brings revolutions in ideas for economic progress.” Education provides stimulus to economic growth as it teaches honesty, patriotism and adventure. Thus necessary change in the social structure is very important for attaining economic development in a country. (a) An increase in the volume of real savings, (b) Establishment of proper credit and financial institutions for mobilising and channelising these savings into investible fund and. A third dimension, the social dimension, has also to be accounted for because humans are integral parts of ecosystems. Prof. Lewis has rightly observed, “No nation is so poor that it could not save 12 per cent of its national income if it wanted to, poverty has never prevented nations from launching upon wars or from wasting their substance in other ways.”. 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