conclusion on economic development

Check out this awesome Free Essays On Economic Development And The for writing techniques and actionable ideas. Normally, the rate of capital formation in underdeveloped countries is very poor. These resources allow the nation to present itself as a competitor among others. Underdeveloped countries like India are facing serious obstacles due to inadequate infrastructural facilities. Conclusion We have examined a diverse set of mechanisms through which population growth affects economic development. Thus to attain a high rate of economic development, inter-sectoral transfer of work force is very much necessary. After independence, these underdeveloped countries like India had to face serious obstacles to break this deep rooted impasse of low level equilibrium traps. both physical capital and human capital. Prof. Gadgil also observed, “All attitudes, habits of mind, patterns of behaviour, are born out of chiefly historical institutional modes of living. In most of the over-populated countries of Asia and Africa, the rate of growth of population varies between 2 to 3 per cent which adversely affects their rate of economic growth and it is considered as the greatest obstacles to their path of economic development. (c) Utilisation of innovations on a large scale. In recent years, economic planning has been playing an important role in accelerating the pace of economic development in different countries. As A.G.B. 1.1 will clarify the situation. This vicious circle operates not only on demand side but also on supply side. If it is true that economic growth by itself does not ensure development, hardly any development can be sustained without economic growth. Thus C.P. (World Bank) and other regional bodies on economic co-operation like ASEAN, OPEC, E.E.C. All these imperfections have resulted low level of output and low rate of productivity per worker. Inspite of having huge variety of natural resources, countries of Asia and Africa could not attain a higher level of development due to lack of its proper utilization. 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. Thus in order to attain economic development at a suitable rate, the Government of the country should make a choice of suitable investment criteria for the betterment of the economy. put severe obstacle on the path of economic development and also retards its pace. The Conclusion chapter discusses the Sustainable Development Goals (SDGs) in relation to human capability and human security analyses. 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. Underdeveloped countries are also suffering from lack of adequate number of entrepreneurial ability. An economic system is slackly defined as country’s plan for its services, goods produced, and the exact … The present situation in the world economy necessitates active support of external factors for sustaining a satisfactory rate of economic growth in underdeveloped economies. (3) Propensity to initiate technical innovations, All these propensities are showing a clear-cut picture of determinants of economic growth neglecting the non-economic factors totally. The suitable investment criteria should maximise the social marginal productivity and also make a balance between labour intensive and capital intensive techniques. 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.”. Again the investment should be made to attain a balanced growth of different sectors of the economy. Thus the underdeveloped countries are suffering from lack of adequate transportation and communication facilities, shortage of power supply, inadequate banking and financial facilities and other social overheads which are considered very important for attaining economic development. On the other hand, the share of total labour force engaged in the services sector remained almost constant and relatively poor in the countries like Australia, Great Britain, Sweden and Belgium. Some developmental projects may be developed out of foreign aid but it should be maintained, with indigenous motivation. 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. Another pre-requisite for economic development of an under­developed country is the attainment of reasonable equality of income. Another determinant of economic development is the occupational structure of the working population of the country. Finally, social system has much impact on the economic phenomenon of the country. Privacy Policy3. In underdeveloped countries the problems are that of initiating and accelerating development.”, According to Maddison, “the raising of income levels is generally called economic growth in rich countries and in poor ones, it is called economic development.”. Therefore, in order to attain structural change in the economy, there is the necessity of change in the social structure of its society. These Constraints on the path of economic development are of two types: These short-term constraints are related to over concentration and stagnation in agricultural sector, unemployment and under-employment, low productivity of capital, the growing deficit in its balance of payment position etc. In short, resources go to the formation of population not capital.”. Growing concentration of income and wealth in the hands of few and political influence generally protects the richer section from higher rates of taxation and thereby the tax burden ultimately falls much on the middle class and poorer sections of the society. Countries like former U.S.S.R. and even U.S.A. and West Germany have achieved a rapid development through the adoption of economic planning. In addition it is pointed out that economic and environmental issues are two important but not absolute conditions for ensuring a sustainable development. 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. 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. But the same share recorded an absolute and relative increase in the countries like USA, Canada, Italy, Japan, Switzerland and erstwhile USSR. Thus immediate steps be taken to raise the rate of capital formation of the country. Welcome to EconomicsDiscussion.net! Economic development is directed by the use of the resources found in a nation. In this connection, Prof. H.W. 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. Another important obstacle or constraint faced by the underdeveloped countries in their path of economic development is its poor rate of savings and investment. 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.”. Instead it diminishes the rate of accumulation, raises costs in extractive industries, increases the amount of disguised unemployment and in large parts simply diverts capital to maintaining children who die before reaching a productive age. Whatever initiative is to be taken for the economic development, that should come from within the economy of these under­developed countries but not from outside. Thus education is working as an engine for economic development. (c) international economic co-operation in the form of increasing flow of foreign aid from advanced countries like U.S.A., Japan etc. Economic losses are not correlated to health impacts. In order to arouse such peoples’ desire, people of the country must be certain and well assured about the achievement of economic development: If the development strategy of the country is to be efficacious then it should be preceded by a proper economic organisation promoting such development and not hindering it any way. Structural Changes. Foreign capitalists mostly invested their capital on mining, oil drilling and plantation industries where they exploited the domestic workers to the maximum extent and remitted their profit to their parent country. 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. Schultz has aptly observed, “in most poor countries there is not much economic growth to be had by merely taking up whatever slack may exist in the way of the available resources being utilised.” Therefore, in order to provide all outward push to the production frontier, the productive has to be expanded. Ragnar Nurkse has termed it ‘International Demonstration Effect’. Attainment of economic development necessities a suitable environment for initiating, maintaining and accelerating the pace of economic development. 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. Again the Chances of achieving higher rate of development through better allocation of existing resources is very much limited. For 2017, the value of all goods and services produced by Wisconsin workers was $313 billion. Thus the removal of market imperfections leads to an efficient allocation of resources which finally leads to advancement of industrial and agricultural production and also to expansion of foreign trade resulting an successful effort to break the vicious circle of poverty. Cairncross has rightly observed that economic development “ is not just a matter of having plenty of money nor is it purely an economic phenomenon. Obstacles or Constraints on Economic Development: Essay # 4. According to the neoclassical theory, the amount paid to each factor of production depends on the supply and demand , for that factor. Prof. Lewis, in this connection, rightly observed, “The proximate causes of economic growth are: the effort to economise, the increase of knowledge or its application in production and increasing the amount of capital or other resources per head. Essay # 1. Low productivity results in low level of income and low rate of savings leading to low rate of investment, which is again responsible for low rate of productivity. Extent of the market is also considered as an important determinant of economic development. Moreover, market imperfections results factor immobility, under-utilisation of resources and thereby abstract sectoral expansion and the process of development. Therefore, the transfer of population from agricultural sector to non-agricultural sector must be supported by an increase in agricultural production so as to provide necessary food and raw materials to the non-agricultural sector as well as to meet the requirement of increasing population in both of these sectors. Capital-output ratio is also considered as an important determinant of economic development in a country. : The following conditions must be satisfied for attaining technological advancement in a country: (a) making provision for large investments in research. This is a simplified version of Harrod-Domar Model. The processes of economic development should not only generate increased or enhanced means of production but it should also make room for equitable distribution of such resources. Thus this poor performance of agricultural sector is another major obstacle in the path of economic development of these underdeveloped countries. There are,’ however, many things that affect the value of the marginal product. Thus to achieve a higher rate of growth of national income, the country will have to take the following two steps: (b) to generate necessary forces for reducing capital-output ratio. 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