This essay seeks to show an understanding of the interface between economic growth and economic development and offer recommendations of what a country like Zambia needs to do in order to achieve them. Firstly this essay will define terms such as development, economic growth as well as economic development. It will then proceed with a brief discussion of the various measures of development, and show why the human development index, has in recent years become a widely accepted measure of development. This essay will then highlight the interface between economic growth and economic development and finally offer resolutions of what a country like Zambia needs to do in order to ...view middle of the document...
It is measured in monetary terms over a period of time. Measures such as gross domestic product and gross national income are used to measure the level of economic growth. Data from these measures of economic growth will help estimate the total income earned in a country in a given year. Growth is a narrower concept than development and therefore should not be equated to development.
Economic development: According to the UNDP (The World Development Report, 1991), economic development means a sustained increase in the standards of living that encompasses material consumption, education, health and environmental protection. The relevance of economic development basically is to measure progress and the quality of life in developing countries. For example we can say that Zambia has developed technologically because now most institutions keep their work computerised than in books as it was done a long time.
HUMAN DEVELOPMENT INDEX AS A BETTER MEASURE OF DEVELOPMENT THAN ECONOMIC GROWTH
According to UNDP (1990), the HDI was introduced in 1990 as part of the United Nations Development Program (UNDP) to provide means of measuring economic development in three broad areas - per capita income, health and education. The HDI tracks changes in the level of development of countries over time. The HDI has two main features: A scale from 0 (no development) to 1 (complete development). An index, which is based on three equally weighted components: Longevity, measured by life expectancy at birth, Knowledge, measured by adult literacy and number of years children are enrolled at school, Standard of living, measured by real GDP per capita at purchasing power (Stephan, 2012).
The HDI is a very useful means of comparing the level of development of countries. GDP per capita alone is clearly too narrow an indicator of economic development and fails to indicate other aspects of development, such as enrolment in school and longevity. Hence, the HDI is a broader and more encompassing indicator of development than GDP, though GDP still provides one third of the index. The HDI indicates level of achievement in living standard of a population in terms of attainment levels of different quality-of-live attributes Ranis et al (2000) It focuses the attention of policy-makers on the ultimate objective of development, which is people’s wellbeing. It is more meaningful as a national average than income as there are much greater extremes in income distribution than in the distribution of life expectancy or literacy. It also shows that human development gaps between nations could be reduced faster than gaps in income.
In particular, it is argued that while the GDP remains as a useful measure of the output production, but has not been able to accommodate the roles of human capital or the environment and natural resources into the production base. In addition, it is pointed out that the original GDP estimation did not include domestic work, and the observation that that growth...