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In the
economic An economy (; ) is an area of the production Production may be: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products ( ...

economic
study of the
public sector The public sector (also called the state sector) is the part of the economy composed of both public service A public service is a service Service may refer to: Activities :''(See the Religion section for religious activities)'' * Administr ...
, economic and social development is the process by which the economic
well-being Well-being, also known as ''wellness'', ''prudential value'' or ''quality of life'', refers to what is intrinsically valuable relative ''to'' someone. So the well-being of a person is what is ultimately good ''for'' this person, what is in the s ...
and
quality of life Quality of life (QOL) is defined by the World Health Organization The World Health Organization (WHO) is a specialized agency of the United Nations United Nations Specialized Agencies are autonomous organizations working with the United N ...

quality of life
of a nation, region, local community, or an individual are improved according to targeted goals and objectives. The term has been used frequently in the 20th and 21st centuries, but the concept has existed in the West for far longer. "
Modernization Modernization theory is used to explain the process of modernization within societies. Modernization theory originated from the ideas of German sociologist Max Weber Maximilian Karl Emil Weber (; ; 21 April 186414 June 1920) was a German socio ...
", "
Westernization Westernization ( US) or Westernisation ( UK), also Europeanization/Europeanisation Europeanisation (or Europeanization, see British and American spelling differences, spelling differences) refers to a number of related phenomena and patterns of ch ...
", and especially "
industrialization Factories, refineries, mines, and agribusiness are all elements of industrialisation Industrialisation ( alternatively spelled industrialization) is the period of social and economic change that transforms a human group from an agrarian societ ...
" are other terms often used while discussing economic development. Historically, economic development policies focused on industrialization and
infrastructure Infrastructure is the set of fundamental facilities and systems that support the sustainable functionality of households and firms. Serving a country, city, or other area, including the services and facilities necessary for its economy An eco ...

infrastructure
, but since the 1960s, it has increasingly focused on poverty reduction. Whereas economic development is a
policy Policy is a deliberate system of guideline A guideline is a statement by which to determine a course of action. A guideline aims to streamline particular processes according to a set routine or sound practice. Guidelines may be issued by an ...
intervention aiming to improve the well-being of people,
economic growth Economic growth can be defined as the increase or improvement in the inflation-adjusted market value Market value or OMV (Open Market Valuation) is the price A price is the (usually not negative) quantity Quantity is a property tha ...

economic growth
is a phenomenon of market
productivity Productivity is the efficiency Efficiency is the (often measurable) ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result. In a more general sense, it is the ability to do thin ...
and increases in
GDP Gross domestic product (GDP) is a monetary In a 1786 James Gillray caricature, the plentiful money bags handed to King George III are contrasted with the beggar whose legs and arms were amputated, in the left corner">174x174px Money is any ...
; economist
Amartya Sen Amartya Kumar Sen (; born 3 November 1933) is an Indian economist and philosopher, who since 1972 has taught and worked in the United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom ( ...

Amartya Sen
describes economic growth as but "one aspect of the process of economic development". Economists primarily focus on the growth aspect and the economy at large, whereas researchers of
community economic development Community economic development (CED) is a field of study that actively elicits community involvement A community is a social unit (a group of living things) with commonality such as Norm (social), norms, religion, values, Convention (norm), customs ...
concern themselves with
socioeconomic Socioeconomics (also known as social economics) is the social science that studies how economic activity affects and is shaped by social processes. In general it analyzes how modern society, societies social progress, progress, economic stagnation ...
development as well.


Definition and terminology

The precise definition of economic development has been contested: while economists in the 20th century viewed development primarily in terms of
economic growth Economic growth can be defined as the increase or improvement in the inflation-adjusted market value Market value or OMV (Open Market Valuation) is the price A price is the (usually not negative) quantity Quantity is a property tha ...

economic growth
,
sociologists This is a list of sociologists. It is intended to cover those who have made substantive contributions to social theory and research Research is "creativity, creative and systematic work undertaken to increase the stock of knowledge". It i ...
instead emphasized broader processes of change and
modernization Modernization theory is used to explain the process of modernization within societies. Modernization theory originated from the ideas of German sociologist Max Weber Maximilian Karl Emil Weber (; ; 21 April 186414 June 1920) was a German socio ...
. Development and urban studies scholar Karl Seidman summarizes economic development as "a process of creating and utilizing physical, human, financial, and social assets to generate improved and broadly shared economic well-being and quality of life for a community or region". Daphne Greenwood and Richard Holt distinguish economic development from economic growth on the basis that economic development is a "broadly based and sustainable increase in the overall ''standard of living'' for individuals within a community", and measures of growth such as
per capita income Per capita income (PCI) or total income measures the average income earned per person in a given area (city, region, country, etc.) in a specified year. It is calculated by dividing the area's total income by its total population. Per capita in ...
do not necessarily correlate with improvements in quality of life. Economic development is a wider concept and has qualitative dimensions. Economic development implies economic growth plus progressive changes in certain important variables which determine well-being of the people,e.g: health, education. The
University of Iowa The University of Iowa (UI, U of I, UIowa, or simply Iowa) is a in . Founded in 1847, it is the oldest and the second-largest university in the state. The University of Iowa is organized into 12 colleges offering more than 200 areas of study a ...
's Center for International Finance and Development states that: Though the concept's origin is uncertain, some scholars argue that development is closely bound up with the evolution of
capitalism Capitalism is an economic system An economic system, or economic order, is a system A system is a group of interacting Interaction is a kind of action that occurs as two or more objects have an effect upon one another. The idea o ...

capitalism
and the demise of
feudalism Feudalism, also known as the feudal system, was the combination of the legal, economic, military, and cultural customs that flourished in Medieval Europe In the history of Europe, the Middle Ages or medieval period lasted from the 5t ...
. Others link it to the postcolonial state. Mansell and Wehn also state that economic development has been understood by non-practitioners since the
World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a global war A world war is "a war War is an intense armed conflict between states State may refer to: Arts, entertainment, and media Literatur ...
to involve economic growth, namely the increases in
per capita income Per capita income (PCI) or total income measures the average income earned per person in a given area (city, region, country, etc.) in a specified year. It is calculated by dividing the area's total income by its total population. Per capita in ...
, and (if currently absent) the attainment of a standard of living equivalent to that of
industrialized countries Image:Imf-advanced-un-least-developed-2008.svg, 450px, Classifications by the International Monetary Fund, IMF and the United Nations, UN in 2008.A developed country, industrialized country (or post-industrial country), more developed countr ...
. Economic development can also be considered as a static theory that documents the state of an economy at a certain time. According to Schumpeter and Backhaus (2003), the changes in this equilibrium state to document in economic theory can only be caused by intervening factors coming from the outside.


History

Economic An economy (; ) is an area of the production Production may be: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products ( ...

Economic
development originated in the
post-war In Western Western may refer to: Places *Western, Nebraska, a village in the US *Western, New York, a town in the US *Western Creek, Tasmania, a locality in Australia *Western Junction, Tasmania, a locality in Australia *Western world, co ...
period of reconstruction initiated by the United States. In 1949, during his inaugural speech, President
Harry Truman Harry S. Truman (May 8, 1884December 26, 1972) was the 33rd president of the United States The president of the United States (POTUS) is the head of state and head of government of the United States of America. The president directs the ...
identified the development of undeveloped areas as a priority for the west: :“More than half the people of the world are living in conditions approaching misery. Their food is inadequate, they are victims of disease. Their economic life is primitive and stagnant. Their poverty is a handicap and a threat both to them and to more prosperous areas. For the first time in history humanity possesses the knowledge and the skill to relieve the suffering from these people ... I believe that we should make available to peace-loving peoples the benefits of our store of technical knowledge in order to help them the realize their aspirations for a better life… What we envisage is a program of development based on the concepts of democratic fair dealing ... Greater production is the key to prosperity and peace. And the key to greater production is a wider and more vigorous application of modem scientific and technical knowledge." There have been several major phases of development theory since 1945.
Alexander Gerschenkron Alexander Gerschenkron (russian: Александр Гершенкрон; 1 October 1904 – 26 October 1978) was a Russian Empire, Russian-born United States, American economic historian and professor at Harvard University, trained in the Austrian ...
argued that the less developed the country is at the outset of economic development (relative to others), the more likely certain conditions are to occur. Hence, all countries do not progress similarly. From the 1940s to the 1960s the state played a large role in promoting industrialization in developing countries, following the idea of
modernization theory Modernization theory is used to explain the process of modernization within societies. Modernization theory originated from the ideas of German sociologist Max Weber Maximilian Karl Emil Weber (; ; 21 April 186414 June 1920) was a German Soci ...
. This period was followed by a brief period of basic needs development focusing on human capital development and redistribution in the 1970s.
Neoliberalism Neoliberalism, or neo-liberalism, is a term used to describe the 20th-century resurgence of 19th-century ideas associated with free-market In economics Economics () is the social science that studies how people interact with valu ...

Neoliberalism
emerged in the 1980s pushing an agenda of free trade and removal of
import substitution industrialization Import substitution industrialization (ISI) is a trade Trade involves the transfer of goods from one person or entity to another, often in exchange for money. Economists refer to a system A system is a group of Interaction, interacting ...
policies. In economics, the study of economic development was borne out of an extension to traditional economics that focused entirely on national product, or the aggregate output of goods and services. Economic development was concerned with the expansion of people's
entitlement An entitlement is a provision Provision may refer to: * Provision (accounting), a term for liability in accounting * Provision (contracting), a term for a procurement condition * Provision (album), ''Provision'' (album), an album by Scritti Politt ...

entitlement
s and their corresponding capabilities,
morbidity A disease is a particular abnormal condition that negatively affects the structure or function (biology), function of all or part of an organism, and that is not due to any immediate external injury. Diseases are often known to be medical ...
,
nourishment Nutrition is the biochemical Biochemistry or biological chemistry, is the study of chemical processes within and relating to living organism In biology, an organism (from Ancient Greek, Greek: ὀργανισμός, ''organismos'') is ...
,
literacy Literacy is popularly understood as an ability to read and write Writing is a medium of human communication Communication (from Latin ''communicare'', meaning "to share") is the act of developing Semantics, meaning among Subject (p ...
,
education Education is the process of facilitating learning, or the acquisition of knowledge, skills, value (ethics), values, morals, beliefs, habits, and personal development. Educational methods include teaching, training, storytelling, discussion ...

education
, and other
socio-economic Socioeconomics (also known as social economics) is the social science that studies how economic activity affects and is shaped by social processes. In general it analyzes how modern society, societies social progress, progress, economic stagnation ...
indicators. Borne out of the backdrop of
Keynesian economics Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes John Maynard Keynes, 1st Baron Keynes, ( ; 5 June 1883 – 21 April 1946) was an English economist, whose ideas fundamentally changed the t ...
(advocating government intervention), and
neoclassical economics Neoclassical economics is an approach to economics in which the production, consumption and valuation (pricing) of goods and services are driven by the supply and demand In microeconomics, supply and demand is an economic model In econo ...
(stressing reduced intervention), with the rise of high-growth countries (
Singapore Singapore (), officially the Republic of Singapore, is a sovereign state, sovereign island city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...

Singapore
,
South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korea, Korean Peninsula and sharing a Korean Demilitarized Zone, land border with North Korea. Its western border is for ...

South Korea
,
Hong Kong Hong Kong (; , ), officially the Hong Kong Special Administrative Region of the People's Republic of China (HKSAR), is a List of cities in China, city and Special administrative regions of China, special administrative region of China on the ...

Hong Kong
) and planned governments (
Argentina Argentina (), officially the Argentine Republic ( es, link=no, República Argentina), is a country located mostly in the southern half of South America South America is a continent A continent is any of several large landmasse ...

Argentina
,
Chile Chile, officially the Republic of Chile, is a country in the western part of South America South America is a entirely in the and mostly in the , with a relatively small portion in the . It can also be described as the southern ...

Chile
,
Sudan Sudan ( or ; ar, السودان, as-Sūdān), officially the Republic of the Sudan ( ar, جمهورية السودان, link=no, Jumhūriyyat as-Sūdān), is a country A country is a distinct territorial body or political entity A ...

Sudan
,
Uganda Uganda (Ugandan Languages: Yuganda), officially the Republic of Uganda ( sw, Jamhuri ya Uganda), is a landlocked A landlocked country is a country that does not have territory connected to an ocean or whose coastlines lie on endorheic bas ...

Uganda
), economic development and more generally development economics emerged amidst these mid-20th century theoretical interpretations of how economies prosper. Also, economist Albert O. Hirschman, a major contributor to
development economics Development economics is a branch of economics Economics () is a social science Social science is the Branches of science, branch of science devoted to the study of society, societies and the Social relation, relationships among i ...
, asserted that economic development grew to concentrate on the poor regions of the world, primarily in
Africa Africa is the world's second-largest and second-most populous continent A continent is any of several large landmass A landmass, or land mass, is a large region In geography Geography (from Greek: , ''geographia'', ...

Africa
,
Asia Asia () is Earth's largest and most populous continent, located primarily in the Eastern Hemisphere, Eastern and Northern Hemisphere, Northern Hemisphere of the Earth, Hemispheres. It shares the continental landmass of Eurasia with the cont ...

Asia
and
Latin America * ht, Amerik Latin, link=no * pt, América Latina, link=no , image = Latin America (orthographic projection).svg , area = , population = ( est.) , density = , ethnic_groups = , ethnic_groups_year = 2018 , ethnic ...

Latin America
yet on the outpouring of fundamental ideas and models. It has also been argued, notably by Asian and European proponents of infrastructure-based development, that systematic,
long-term Long-Term Capital Management L.P. (LTCM) was a hedge fund''A financial History of the United States Volume II: 1970–2001'', Jerry W. Markham, Chapter 5: "Bank Consolidation", M. E. Sharpe, Inc., 2002 based in Greenwich, Connecticut, Greenwich, Co ...
government investments in
transportation Transport (in British English British English (BrE) is the standard dialect of the English language English is a West Germanic languages, West Germanic language first spoken in History of Anglo-Saxon England, early medieval Engl ...

transportation
,
housing Housing, or more generally living spaces, refers to the construction Construction is a general term meaning the art and science to form Physical object, objects, systems, or organizations,"Construction" def. 1.a. 1.b. and 1.c. ''Oxford Eng ...

housing
,
education Education is the process of facilitating learning, or the acquisition of knowledge, skills, value (ethics), values, morals, beliefs, habits, and personal development. Educational methods include teaching, training, storytelling, discussion ...

education
, and
healthcare Healthcare is the maintenance or improvement of health Health, according to the , is "a state of complete physical, and social and not merely the absence of and ".. (2006)''Constitution of the World Health Organization''– ''Basic Docume ...

healthcare
are necessary to ensure sustainable economic growth in emerging countries. During Robert McNamara's 13 years at the World Bank, he introduced key changes, most notably, shifting the Bank's economic development policies toward targeted poverty reduction. Prior to his tenure at the World Bank, poverty did not receive substantial attention as part of international and national economic development; the focus of development had been on industrialization and infrastructure. Poverty also came to be redefined as a condition faced by people rather than countries. According to Martha Finnemore, the World Bank under McNamara's tenure "sold" states poverty reduction "through a mixture of persuasion and coercion."


Economic development goals

The development of a country has been associated with different concepts but generally encompasses economic growth through higher productivity, political systems that represent as accurately as possible the preferences of its citizens, the extension of rights to all social groups and the opportunities to get them and the proper functionality of institutions and organizations that are able to attend more technically and logistically complex tasks (i.e. raise taxes and deliver public services). These processes describe the State's capabilities to manage its economy, polity, society and public administration.Lant Pritchett, Michael Woolcock & Matt Andrews (2013). Looking Like a State: Techniques of Persistent Failure in State Capability for Implementation, ''The Journal of Development Studies'', 49:1, 1–18, DOI: 10.1080/00220388.2012.709614 Generally, economic development policies attempt to solve issues in these topics. With this in mind, economic development is typically associated with improvements in a variety of areas or indicators (such as
literacy rate Literacy is popularly understood as an ability to read and write Writing is a medium of human communication Communication (from Latin ''communicare'', meaning "to share") is the act of developing Semantics, meaning among Subject (p ...
s,
life expectancy Life expectancy is a statistical measure of the average time an organism is expected to live, based on the year of its birth, its current age, and other demographic Demography (from prefix ''demo-'' from Ancient Greek Ancien ...

life expectancy
, and poverty rates), that may be causes of economic development rather than consequences of specific economic development programs. For example, health and education improvements have been closely related to economic growth, but the causality with economic development may not be obvious. In any case, it is important to not expect that particular economic development programs be able to fix many problems at once as that would be establishing unsurmountable goals for them that are highly unlikely they can achieve. Any development policy should set limited goals and a gradual approach to avoid falling victim to something Prittchet, Woolcock and Andrews call ‘premature load bearing’. Many times the economic development goals of specific countries cannot be reached because they lack the State's capabilities to do so. For example, if a nation has little capacity to carry out basic functions like security and policing or core service delivery it is unlikely that a program that wants to foster a free-trade zone (special economic zones) or distribute vaccinations to vulnerable populations can accomplish their goals. This has been something overlooked by multiple international organizations, aid programs and even participating governments who attempt to carry out ‘best practices’ from other places in a carbon-copy manner with little success. This isomorphic mimicry –adopting organizational forms that have been successful elsewhere but that only hide institutional dysfunction without solving it on the home country –can contribute to getting countries stuck in ‘capability traps’ where the country does not advance in its development goals. An example of this can be seen through some of the criticisms of foreign aid and its success rate at helping countries develop. Beyond the incentive compatibility problems that can happen to foreign aid donations –that foreign aid granting countries continue to give it to countries with little results of economic growth but with corrupt leaders that are aligned with the granting countries’ geopolitical interests and agenda –there are problems of fiscal fragility associated to receiving an important amount of government revenues through foreign aid. Governments that can raise a significant amount of revenue from this source are less accountable to their citizens (they are more autonomous) as they have less pressure to legitimately use those resources.Todd Moss, Gunilla Pettersson and Nicolas van de Walle (2006), “An Aid Institutions Paradox? A review essay on aid dependency and State building in Sub-Saharan Africa”, Working Paper 74, Center for Global Development. Just as it has been documented for countries with an abundant supply of natural resources such as oil, countries whose government budget consists largely of foreign aid donations and not regular taxes are less likely to have incentives to develop effective public institutions. This in turn can undermine the country's efforts to develop.


Economic development policies

In its broadest sense, policies of economic development encompass three major areas: * Governments undertaking to meet broad economic objectives such as
price A price is the (usually not negative) quantity Quantity is a property that can exist as a multitude or magnitude, which illustrate discontinuity and continuity. Quantities can be compared in terms of "more", "less", or "equal", or by ...

price
stability, high
employment Employment is the relationship between two parties Image:'Hip, Hip, Hurrah! Artist Festival at Skagen', by Peder Severin Krøyer (1888) Demisted with DXO PhotoLab Clearview; cropped away black border edge.jpg, 300px, ''Hip, Hip, Hurrah!'' ...

employment
, and . Such efforts include
monetary Image:National-Debt-Gillray.jpeg, In a 1786 James Gillray caricature, the plentiful money bags handed to King George III are contrasted with the beggar whose legs and arms were amputated, in the left corner, 174x174px Money is any item or verif ...

monetary
and policies, regulation of
financial institution Financial institutions, otherwise known as banking institutions, are corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entit ...
s,
trade Trade involves the transfer of goods from one person or entity to another, often in exchange for money. Economists refer to a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of r ...

trade
, and
tax A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity In law Law is a system A system is a group of Interaction, interacting or interrelated elements that act accord ...
policies. * Programs that provide
infrastructure Infrastructure is the set of fundamental facilities and systems that support the sustainable functionality of households and firms. Serving a country, city, or other area, including the services and facilities necessary for its economy An eco ...

infrastructure
and
services Service may refer to: Activities :''(See the Religion section for religious activities)'' * Administrative service, a required part of the workload of Faculty (academic staff), university faculty * Civil service, the body of employees of a governm ...
such as
highway A highway is any public or private road A road is a wide way leading from one place to another, typically one with a specially prepared surface which vehicles and bikes can use. Roads consist of one or two roadways (British English: ...

highway
s,
park A park is an area of natural, semi-natural or planted space set aside for human enjoyment and recreation Recreation is an activity of leisure Leisure has often been defined as a quality of experience or as free time. Free time is ...

park
s,
affordable housing Affordable housing is housing which is deemed affordable to those with a household income at or below the median household income, median as rated by the Government, national government or a local government by a recognized housing affordability in ...

affordable housing
,
crime prevention Crime prevention is the attempt to reduce and determine crime In ordinary language, a crime is an unlawful act punishable by a state or other authority. The term ''crime'' does not, in modern criminal law, have any simple and universally acc ...
, and
K–12 education K-1 is a martial arts Martial arts are codified systems and traditions of combat practiced for a number of reasons such as self-defense; military A military, also known collectively as armed forces, is a heavily armed, highly organized f ...
. *
Job creation Unemployment, according to the OECD The Organisation for Economic Co-operation and Development (OECD; french: Organisation de Coopération et de Développement Économiques, OCDE) is an intergovernmental organization, intergovernmental eco ...
and retention through specific efforts in business
finance Finance is a term for the management, creation, and study of money In a 1786 James Gillray caricature, the plentiful money bags handed to King George III are contrasted with the beggar whose legs and arms were amputated, in the left corn ...

finance
,
marketing Marketing is the process of intentionally stimulating demand for and purchases of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emphasize in advertising; operation of adv ...

marketing
, neighborhood development,
workforce development Workforce development, an American American(s) may refer to: * American, something of, from, or related to the United States of America, commonly known as the United States The United States of America (USA), commonly known as the United S ...
,
small business Small businesses are privately owned corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and pu ...
development,
business Business is the activity of making one's living or making money by producing or buying and selling products (such as goods and services). Simply put, it is "any activity or enterprise entered into for profit." Having a business name A trad ...

business
retention and expansion,
technology transfer Technology transfer (TT), also called transfer of technology (TOT), is the process of transferring (disseminating) technology Technology ("science of craft", from Ancient Greek, Greek , ''techne'', "art, skill, cunning of hand"; and , ''wikt:- ...

technology transfer
, and
real estate Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more genera ...

real estate
development. This third category is a primary focus of economic development professionals. Contractionary monetary policy is a tool used by central banks to slow down a country’s economic growth. An example would be raising interest rates to decrease lending. In the United States, the use of contractionary monetary policy has increased women’s unemployment. Seguino and Heintz uses a panel dataset for each 50 states with unemployment, labor force participation by race, and annual labor market statistics. In addition, for contractionary monetary policy they utilize the federal funds rate, the short-term interest rates charged to banks. Seguino and Heintz Seguino concludes that the impact of a one percentage point increase in the federal funds rate relative to white and black women’s unemployment is 0.015 and 0.043, respectively One growing understanding in economic development is the promotion of regional clusters and a thriving metropolitan economy. In today's global landscape, location is vitally important and becomes a key in
competitive advantage In business, a competitive advantage is the attribute that allows an organization to outperform its competitors. A competitive advantage may include access to natural resources , Malaysia Malaysia ( ; ) is a country in Southeast Asia. ...
. International trade and exchange rates are a key issue in economic development. Currencies are often either under-valued or , resulting in trade surpluses or deficits. Furthermore, the growth of globalization has linked economic development with trends on international trade and participation in global value chains (GVCs) and international financial markets. The last financial crisis had a huge effect on economies in developing countries. Economist Jayati Ghosh states that it is necessary to make
financial market A financial market is a market (economics), market in which people trade financial Security (finance), securities and derivative (finance), derivatives at low transaction costs. Some of the securities include stocks and Bond (finance), bonds, ra ...
s in developing countries more resilient by providing a variety of
financial institution Financial institutions, otherwise known as banking institutions, are corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entit ...
s. This could also add to financial security for small-scale producers.


Organization

Economic development has evolved into a professional industry of highly specialized practitioners. The practitioners have two key roles: one is to provide leadership in policy-making, and the other is to administer policy, programs, and projects. Economic development practitioners generally work in public offices on the state, regional, or municipal level, or in public–private partnerships organizations that may be partially funded by local, regional, state, or federal tax money. These economic development organizations function as individual entities and in some cases as departments of local governments. Their role is to seek out new economic opportunities and retain their existing business wealth. There are numerous other organizations whose primary function is not economic development that work in partnership with economic developers. They include the news media, foundations, utilities, schools, health care providers, faith-based organizations, and colleges, universities, and other education or research institutions.


Development indicators and indices

There are various types of macroeconomic and sociocultural indicators or "metrics" used by
economist An economist is a professional and practitioner in the social science Social science is the branch The branches and leaves of a tree. A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , pl ...

economist
s and
geographer A geographer is a physical scientist, social scientist or humanist whose area of study is geography Geography (from Greek: , ''geographia'', literally "earth description") is a field of science devoted to the study of the lands, feat ...
s to assess the relative economic advancement of a given region or nation. The
World Bank The World Bank is an international financial institution An international financial institution (IFI) is a financial institution that has been established (or chartered) by more than one country, and hence is subject to international law. Its o ...
's "World Development Indicators" are compiled annually from officially recognized international sources and include national, regional and global estimates.


GDP per capita – growing development population

GDP per capita is gross domestic product divided by mid year population. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidizes not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.


Modern transportation

European
development economist Development economics is a branch of economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption ...
s have argued that the existence of modern transportation networks- such as
high-speed rail High-speed rail (HSR) is a type of rail transport that runs significantly faster than traditional rail traffic, using an integrated system of specialised rolling stock The term rolling stock in the rail transport Rail transport (also k ...
infrastructure constitutes a significant indicator of a country's economic advancement: this perspective is illustrated notably through the Basic Rail Transportation Infrastructure Index (known as BRTI Index) and related models such as the (Modified) Rail Transportation Infrastructure Index (RTI).


Introduction of The GDI and GEM

In an effort to create an indicator that would help measure gender equality, the UN has created two measures: the
Gender-Related Development IndexThe Gender Related Development Index (GDI) is an index Index may refer to: Arts, entertainment, and media Fictional entities * Index (''A Certain Magical Index''), a character in the light novel series ''A Certain Magical Index'' * The Index, an i ...
(GDI) and the Gender Empowerment Measure (GEM). These indicators were first introduced in the 1995 UNDP Human Development Report.


Gender Empowerment Measure

The Gender Empowerment Measure (GEM) focuses on aggregating various indicators that focus on capturing the economic, political, and professional gains made by women. The GEM is composed of just three variables: income earning power, share in professional and managerial jobs, and share of parliamentary seats.


Gender Development Index

The Gender Development (GDI) measures the gender gap in human development achievements. It takes disparity between men and women into account in through three variables, health, knowledge, and living standards.


See also

*
Constitutional economics A constitution is an aggregate of fundamental principles A principle is a proposition or value that is a guide for behavior or evaluation. In law, it is a rule Rule or ruling may refer to: Human activity * The exercise of political ...
* Critical juncture theory * Commerce * Development finance institution * European Free Trade Association * European Union * Education * Economics * Financial deepening * Gender and development * Green Development * Infrastructure * International development * International Monetary Fund * North–South divide in the World, North–South divide * Organisation for Economic Co-operation and Development * Private sector development * Socioeconomics * United Nations Development Program *Universities * World Bank Group


References


Further reading

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External links

{{DEFAULTSORT:Economic Development Economic development, Development economics, * Economic indicators, Development