Meaning and Definition of Economic Development

Generally, the word "development" indicates positive improvement in any sector. The definition of economic development has evolved over time. In the 1950s, an increase in total real national income and an increase in per capita income were commonly referred to as economic development. However, by the 1990s, the scope of the definition of economic development had broadened to be based on the following three areas:

First, significant improvement is required in aspects related to citizens' economic living standards, such as balanced food, safe housing, sufficient clothing, education for the illiterate, accessible healthcare, employment for skilled and qualified youth, ending inequality between the rich and the poor, urbanization, availability of electricity and roads, use of modern technology in production, optimal use of means of production, and an advanced society with modern facilities where every citizen can live a respectable and quality life.

Second, improvement is needed in aspects related to citizens' social lives, such as ending social discrimination based on caste, religion, gender, community, etc., and improving behavior, culture, civilization, and living standards. 

Third, politically, aspects such as increased awareness among citizens, freedom to express one's views, ensuring human rights, and the rule of law have also started to be included within the definition of economic development. A nation that has achieved these three characteristics is considered to have high economic development.

Although it is difficult to give a universally accepted definition of economic development, the definitions given by economists from time to time in the context of economic development are as follows:

According to Professor G.M. Meier, "Economic development is a process whereby the real per capita income of an economy increases over a long period of time."

According to Michael P. Todaro, "Economic development is defined in terms of the reduction of poverty, inequality, and unemployment within the context of a growing economy."

Meaning and Definition of Economic Growth

Generally, the word "growth" implies an improvement in the quantity of something. In economics, economic growth refers to a long-term, significant quantitative improvement seen in any productive sector of the economy. Such improvement indicates an increase in per capita income and the total production of goods and services in the economy that can be measured over a specific period.

High economic growth depends on the quality of production materials, the level of education, the development of the health sector, technological development, the expansion of electricity, transportation, and communication, political stability, etc.

In the context of Nepal, significant improvement in any one sector, for example, hydroelectricity production, can lead to high economic growth by resulting in savings in fuel costs, development of industries, increase in employment and income, and increase in the gross domestic product.

The impact of changes in economic growth can be easily measured in a short period using currency and other units. Economic growth is also considered a prerequisite for the development of a country.

According to Michael P. Todaro and Stephen C. Smith, economic growth is defined as the steady process by which the productive capacity of the economy is increased over time to bring about rising levels of national output and income.

Similarly, according to Jacob Viner, "economic growth is an issue of reducing mass poverty."

Differences Between Economic Growth and Economic Development