An Overview to Economic Development

Geaney Anne B. Luciano

March 29, 2019

Abstract: This paper discusses the brief history, definition, and the process of Economic
Development. Its contribution to the development of certain countries that used
specific models and theories in the success of their growth, the benefits that it gives to
the constant development of the said countries, and how it will help the developing
countries in the future. It also discusses the hidden disadvantages it constitutes to the
society and environment. Finally, this paper will also somewhat provide some insights
that could open the minds of the people and give them just enough ideas about
Economic Development.

Table of Contents:

I. Introduction
II. Body-draft pa lang okie
1. Countries which succeed through Economic Development
2. Benefits- successful economic perf, tech,
3. Disadvantages--- despite the success is the depletion of envi, poverty,
unemployment, social inequality,
III. Conclusion

I. Introduction

Our world has been nothing but a continuous process of progress for a long time.
It has long since it evolved from nothing to something in the past decades. Countries
from around it have had also transformed since then. Together with this is the transition
of the countries’ economic performance with accordance their leaders’ desired
development and prosperity for their economy. Leaders from all over the world had
searched for ways on how to expand their country’s growth and build up success for
their economic performance. Through this, experts have made different concepts,
models, and theories for these countries to achieve what they aspire to have−which is
development. Different people from all over the world have developed mainstreams
just so country leaders could have an idea on how they could actually progress. From
concepts to concepts, theories to theories, they never stopped until they’ve got the
perfect model which is why they’ve come up with Development economics.
Development economics came from the combination of traditional economics and
political economy− which both did not succeed in providing development to countries
because these first two have under looked elements that have affected their
effectiveness in the development of countries. And both of their relevant concepts and
theories made new models and broader multidisciplinary approaches. These have made
a new field of economics where all of the deficiencies of the first two models were fixed.
Development economics is defined as a greater scope since it deals not just with
economic but also social, political, and institutional mechanisms both public and private
needed for the rapid and large-scale improvements in levels of living for the people
from less developed countries.

Economic development aims for the better life of the people in a country. It also
aims for higher development index that could minimize the gap between the rich and
the poor. Because of this, it introduced three objectives which are; to increase the
availability and widen the distribution of basic life, to raise levels of living, and to expand
the range of economic and social choices. The first objective talks about having an
increase in the availability of human needs such as food, shelter, protection, and health.
The next objective simply aims for higher standards of living or higher income for the
people in a country, better education, and greater attention to human values since this
not only improves one’s well-being but also this generates greater individuals which will
lead to national self-esteem. Lastly is the expansion of the range of economic and social
choices. This last objective basically aims for the people’s freedom to choose what they
want in life and being free from servitude and dependence from other people and the
state. The more freedom the people have in a country, the more it proves how
developed the country is.

II. Body

Economic development has different theories and some of these theories have
successfully helped countries to achieve for better economic performance. An excellent
example of this is the success story of South Korea. South Korea before had an absolute
poor economy before. At one time, it was regarded as the poorest country in the world.
From years ago, people from Korea have experienced a dreadful life because of the
absolute poverty that they had to endure right after the Korean War. The country then
had experienced complete destruction that even the experts doubted their ability to
recover from the nightmare that they have gone through. But despite all of these
doubts that they have received from different experts, South Korea didn’t back down.
South Korea was reported to use at least four theories of economic development
namely; Linear-Stage Theory, Structural Change Theory, Dependence Revolution, and
Neoclassical Counter-Revolution. South Korea did admit that it used Walt Rostow’s
Linear-Stage Theory albeit in a limited way. According to this theory, countries must
follow a certain pattern to achieve development, but in South Korea’s case, it only
followed certain steps in this theory which undoubtedly helped a little. Next is the
Structural Change Models. This theory was defined as a transition or transformation
from one industry to another in order to achieve development. In South Korea’s case,
because of its rapidly increasing agricultural productivity, it eventually shifted to labor
industry which resulted to an increase in the country’s per capita income by more than
7% annually for 25 years period. Because of South Korea’s mature economy, it easily
adjusted to the Asian financial crises that have happened in the year 1997-1998.
Through the help of the country’s excellent strategy and unity of the people, they
survived the said crisis that affected a lot of the countries. Next theory was Dependence
Revolution, it was known that South Korea was once under the control of Japanese
colony until 1945 which made them dependent to it and had received a large part of
their national budget from the United States in the form of aid and both exported and
imported a great deal from these developed countries. The success of the country was
thus accustomed in large part by export opportunities which therefore would predict
that slow development but the country have made different ambitious upgrading
policies which limited the multinational corporation to fully penetrate the country and
strengthened their indigenous industries which resulted to break out of dependence.
Lastly is the Neo-Classical Counterrevolution. This theory was defined as permitting the
competitive free markets to flourish, promoting free trade and welcoming different
investors from different countries. South Korea had grabbed this opportunity to
compete with multinational companies. Opening their economy and welcoming
different companies to their country forced them to be more competitive resulting in
more improved and more ambitious innovation to their products which forced them to
venture to technology. And because of the government’s support in upgrading their
development structure and providing incentives to the market they have successfully
become competitive in the world market. South Korea, in the making, sure have faced a
lot of failures but because of the endless support of the people to their government,
seeing the opportunities to every downfall, and taking risks made them successful today
together with intelligently formulating strategies through the use of different economic
development theories.

Economic development sure does a lot of help to the economic performance of a

country which would eventually lead them to a more prosperous life. Most developed
countries receive benefits because they are more advanced than in other countries. The
people experience higher standard and more comfortable living than those who live in
less developed countries. People have access to better education and information.
Could acquire things even beyond their needs and have access to health facilities that
could extend their life compared to people from least developed countries. And they do
also have a higher productivity level. These are just some of the hundreds of benefits
and advantages the developed countries have over the poor countries.

Despite all of these benefits, developed countries still have to face a lot of
problems regarding their environment. It was proved that the more developed the
country is, the bigger the problem they have with regards to their environment. This is
because the resources that they have are at their limit and because of their immense
production and operation, pollution sure is abundant. Trees being cut down without
replacing them, farmlands being transformed into real estate properties also leave the
people from rural areas of the developed countries to suffer because of unemployment.
According to one of the theories of economic development which is structural change,
the surplus labor from agricultural sector would jump to manufacturing industry in
urban areas which are not entirely plausible since it will lead to a mismatch of skills. This
would simply produce unemployment to people who wouldn’t be lucky enough to have
a job which will eventually lead to poverty. Poverty, which will eventually give birth to
social inequality, because of the gap between the poor and the rich people. And
together with poverty is the continuous growth of population, most especially in less
developed countries which just worsens the cycle of destitution. This could just have
been avoided if corruption and hunger for power are out of the picture. Economic
development could have been achieved by every country in the world if only the
government and the people would move forward hand in hand, but reality is reality. The
world’s cruel and until there are people who sit and abuse their power, progress would
never be fully acquired by the people. Economic development will only be just a dream.

Economic development sure is one of the goals of most countries in the world
since this not only makes the economy of a country prosperous but it also improves the
life of the people within an economic developed country.