Summary Economics unit 5

Economics Unit 5: Development Economics

1. Introduction to Development Economics

Development economics is a branch of economics that focuses on improving the fiscal, economic, and social

conditions in developing countries. It differs from economic growth in that development considers

improvements in living standards, education, healthcare, and inequality.



2. Economic Growth vs Economic Development

Economic growth refers to an increase in a country's output (GDP), while economic development is a broader

concept involving qualitative improvements in living standards. Indicators of development include HDI, GNI

per capita, literacy rate, life expectancy, and access to basic services.



3. Characteristics of Developing Economies

- Low income per capita and high income inequality

- High population growth and dependency ratios

- Poor infrastructure and weak institutions

- Heavy reliance on agriculture

- Limited access to education and healthcare



4. Measuring Development

Several indicators are used to assess development:

- Human Development Index (HDI)

- Gender Inequality Index (GII)

- Multidimensional Poverty Index (MPI)

- Gross National Income (GNI) per capita

- Literacy rates and infant mortality rates



5. Barriers to Economic Development

- Corruption and lack of good governance

- External debt burdens and capital flight