- Economic development
- Economic development is a broad improvement in people's standard of living, including their health, education, freedom from poverty and the choices open to them.
- Economic growth
- Economic growth is a rise in a country's real output of goods and services over time, measured by the change in real GDP.
Reasons growth can happen without development
Can you name four reasons growth can happen without development?
Each is a way real GDP can rise while most people's lives improve little.
If most of the extra income goes to the richest households, average output rises while most people's lives change little.
Can you think of an example?
Profits from a new copper mine go to its owners and a small group of skilled staff.
Output can rise while air, water or working conditions get worse, cutting well-being that GDP does not count.
Can you think of an example?
A boom in steel output fills a city's air with smoke and sends more people to hospital.
Spending on repairs or security adds to GDP without leaving people better off than before.
Can you think of an example?
Rebuilding after a flood adds to GDP, but people are no better off than before the flood.
If population rises as fast as real GDP, output per person stays the same, so average living standards do not rise.
Can you think of an example?
Real GDP and population each grow by the same percentage a year, so GDP per head is flat.