Difference between Economic Growth and Economic Development: Comparison

By Aarna Tiwari|Updated : October 10th, 2022

The Difference between Economic Growth and Economic Development is that increases in the production of economic goods and services from one time period to the next are referred to as economic growth. An increase in the material well-being of society over time is what is referred to as economic development. Though Economic Growth and Economic Development may sound closely related, they are not.

In this article, we have tried to clarify the concept of economic growth and development, along with the major differences between them.

Economic Growth vs Economic Development

Economic growth is the process through which a nation's actual national and per capita income increases over an extended period. The word economic growth is limited. Economic development also includes changes in qualitative terms, such as social attitudes and practices, and quantitative changes, such as growth in output or national revenue.

>> Difference Between Economic Growth and Economic Development [PDF]

Economic development is described as a consistent increase in society's material well-being. A country's net national product will eventually increase due to economic development, which is a long chain of interrelated adjustments to fundamental determinants of supply and demand. It encompasses more than just economic expansion.

Importance of Economic Growth and Economic Development

For economic studies and policymaking, economic growth and economic development are crucial. Without growth, development is impossible. Economic growth will re-accelerate growth and eventually involve a bigger populace in development if it is used effectively. Similarly, rapid growth coupled with poor development causes growth to slow down.

Economic Development, which is defined as an increase in an economy's or nation's economic riches for the benefit of its citizens, is frequently contrasted with economic growth. It should be highlighted that while economic growth is a requirement for economic development, it is not the sole.

Difference between Economic Growth and Economic Development

Many people use Economic Growth and Development interchangeably. Well, there are several differences between Economic Growth and Economic Development. 

Economic Growth

Economic Development

Economic growth alludes to the expansion in the money-related development of a country in a specific period.

Economic development alludes to the general progress of the lifestyle in a country, which also incorporates economic development.

The concept of economic growth is narrower compared to economic development.

The span of the concept of economic development is broad.

Economic growth is a single-dimensional or uni-dimensional approach because its prime focus is on the nation's economic growth.

Economic development is a multi-dimensional approach as it focuses on the income of the country as well as the quality of life of its citizens.

Example: GDP, GNP

Example: HDI, per capita Income, industrial development

Economic growth doesn't require government intervention as it is an automatic process.

Economic development requires government intervention because the government forms all the developmental policies of a nation.

Economic Growth and Development UPSC Questions

Question: Economic development is characterized by

  1. Structural change in the economy
  2. Change in the occupational structure
  3. Both a and b
  4. None of the above

Answer: Option C

Question: Which of the following explains the term economic growth?

  1. Increase in per capita production
  2. Increase in per capita real income
  3. structural change in the economy
  4. all the above are right

Answer: Option D

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Difference between Economic Growth and Economic Development FAQs

  • The Difference Between Economic Growth and Economic Development is that Economic Growth is the process by which a nation's actual national income rises over an extended period. However, Economic Development is concerned not only with an increase in revenue but also with its composition and distribution.

  • Long-term economic growth can be extremely beneficial for a nation. Economic development, which results in higher employment rates and national income, can be brought about by long-term growth. The benefits of economic growth result in an improvement in the nation's citizens' level of living. A country's rate of poverty can be lowered with increased economic development.

  • According to the findings, both long- and short-term economic growth are caused by economic development. To promote inclusive economic growth, it is crucial to concentrate on economic development through higher HDI, more employment, and poverty reduction.

  • Economic Growth refers to quantitative increases, whereas Economic Development is both a quantitative and qualitative concept. To access Growth and Development UPSC Notes, click here.

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