Unit I –DEVELOPMENT CONCEPTS AND PRINCIPLES

MODULE 1 – INTRODUCTION TO ECONOMIC DEVELOPMENT

Learning Outcomes: At the end of this course, students are expected to:

1.​ Define economic development

2.​ Identify the six economic goals
3.​ Determine which economic goals should be prioritized
4.​ Differentiate economic growth and economic development​

Lesson Proper

A better quality of life has been the objective of societies and nations. This has been
pursued since the ancient times to the present.

About a hundred years before the Trojan War, Minos, mythical son of Zeus, organized a
communal society on the island of Crete. For centuries, universal justice and virtue
reigned on the island. Conditions were similar to the fabulous Shangri-La of the lost
horizon. It was like paradise for the people. They contributed their individual ideas,
talents, skills and labor to the community for its development, and for the good of all its
members. The needs of the people were justified, supplied, and they were happy and
content.

Plato, the Greek philosopher, designed an ideal state in his book, The Republic. He
proposed common ownership of properties as a general rule. The concept of equality of
Plato was further improved by Christian doctrines. However, more active and
courageous social reformers emerged into the limelight during the Age of Enlightenment
and Industrial Revolution. Rousseau, Fourier, Bentham, Owen and Marx were the more
prominent among them. They stressed the social aspect of the national order, such as
cooperation, perfectibility of human nature, and other human virtues. The clamor for
equality was not only political but also economic and social. The abuses of the
capitalists and landlords and the great disparities in income and wealth were the
primary targets of reformers.
The challenge now to all societies is how to achieve that level of economic development
where people are happy and secure. Then what is economic development? Why do we
need to work for it?

Economic development is a progressive process of improving human conditions, such

as the reduction or elimination of poverty, unemployment, illiteracy, inequality, disease
and exploitation. It involves the interaction of different factors. For example, in the case
of increasing harvest of palay per hectare, various inputs are combined like fertilizers,
insecticides, irrigation and technology. These are properly applied in order to produce
more output. Such a process is a development.

Another meaning of economic development which practically describes what should be

done to achieve it is: economic development is a process of targeted activities and
programs that work to improve the economic wellbeing and quality of life of a
community by building local wealth, diversifying the economy, creating and retaining
jobs, and building the local tax base.

It pays to notice that both definitions mentioned the word process; it means it does not
happen overnight and that careful planning and strict implementation of projects and
strategies are needed.

Economic development is described by Karl Seidman, a development and urban

studies scholar, as the process of creating and using physical, human, financial, and
social assets to generate improved and widely shared economic well-being and quality
of life for a community or nation.

Your young minds may ask why is economic development important?

By understanding the objectives of economic development presented below you will

realize that economic development is a multi-sector engagement and requires
cooperation and support from each sector.
Objectives of Economic Development

1.​ To reduce unemployment, achieve economic stability, and increase the standard
of living for all citizens.
2.​ To build a highly skilled, flexible workforce
3.​ To concentrate on retaining and expanding existing local businesses
4.​ To increase the number of small firms within the region by fostering local
entrepreneurship;
5.​ To recruit businesses that are suited to the region, require a highly skilled work
force or are willing to train an entry-level work force and are experiencing growth.
6.​ To identify the economic needs of the chronically unemployed and
underemployed in the region, and encourage programming – including education
and retraining -- to meet those needs.
7.​ To maintain and strengthen the region’s position as a tourist destination.
8.​ To promote and encourage preservation of the region’s historic assets.
9.​ To strengthen the local tax base.
10.​To establish and maintain housing and transportation, communication, and utility
systems which support and foster quality development.
11.​To strengthen, maintain, and continually upgrade technology infrastructure and
systems, and provide adequate access and capacity for current and anticipated
needs.
12.​To provide an adequate supply of vacant, development-ready land for
commercial and industrial use.
13.​To encourage development that is environmentally sensitive.
Examples of Objectives of Economic Development

In your previous economics subjects you learned about the economic goals. It pays
to refresh your mind of the different economic goals described below:
GROWTH and DEVELOPMENT

The terms 'economic development' and 'economic growth' have a common ring to them.
The two concepts, however, are not the same. Economic development is a qualitative
concept, while economic growth is a quantitative concept.

Economic growth is described as an increase in the amount of goods and services

produced by a country or economy over a given period of time. The increase in the
country's production of goods and services is steady and consistent, and it can be
attributed to improvements in educational quality, technological advancements, or any
other factor that adds value to goods and services provided by all sectors of the
economy.

Economic development is a process that focuses on the economy's qualitative and

quantitative growth. It assesses all aspects of a country's development, including people
being wealthier, healthier, better educated, and having greater access to high-quality
housing. The significant indicator of economic development is the standard of living. As
a result, for an economy to attain the status of a Developed Nation, it is more important
to increase its growth in the economy.

https://byjus.com/commerce/difference-between-economic-growth-and-economic-development/
Both Economic Growth and Economic Development are measured using different
variables. Increases in GDP, per capita income, and other indicators of economic
growth may be used to assess progress. Economic development, on the other hand,
can be calculated by improvements in life expectancy, child mortality, literacy, and
poverty rates.

Economic Growth without Development

Is it possible to have economic growth without development?

Yes. However, the majority of people do not believe that living conditions have
improved. This could happen as a result of:

1.​ Only a small percentage of the population will benefit from economic growth. A
country's GDP would increase if it generates more oil, for example. However, it is
likely that this oil is purchased by a single company, in which case the average
worker would not profit.
2.​ Corruption is a serious problem. While a country's GDP may increase, the
benefits of growth may be directed to politicians' bank accounts.
3.​ Concerns about the environment. The production of toxic chemicals would
increase real GDP. It can, however, cause environmental and health issues if not
properly regulated. This is an example of how growth will result in a drop in living
standards for many people.
4.​ Congestion can be intensified by economic growth. As a result, people would
spend more time stuck in traffic. They may have a higher GDP, but their living
standards are lower because they spend more time stuck in traffic.
5.​ The production unconsumed. A rise in GDP is expressed when a state-owned
industry increases productivity. However, if the output is not used, it does not
result in a rise in living standards.
6.​ Spending on the military. Spending more on military supplies will boost a
country's GDP. However, if this is done at the cost of healthcare and education,
living standards will suffer.
Now we understand why a nation or society has to achieve economic development.
The video below will highlight

Introduction to Economic Development: https://youtu.be/3lVhDRyNBMQ

Economic Growth vs. Economic Development: https://youtu.be/4D_36i4zVFs

ACTIVITY

A.​ Identification:

1.) ________________________ is "a process of creating and using physical, human,

financial, and social assets to generate. improve, and widely share economic well-being
and quality of life for a community or nation," as described by a development and urban
studies scholar 2.) ______________________.

3.) ______________________ making the most of resources

4.) ______________________ fair distribution of wealth

5.) ___________________________ assurance that payments will be made on time, a

safety net will protect individuals in times of economic disaster, and that goods and
services will be available.

6.) ______________________ free from government intervention in the production and

distribution of goods and services.

7.) __________________________ innovation leading to economic growth, and

economic growth leading to a higher standard of living.

9.) __________________ a qualitative concept

10.) ___________________ a quantitative concept.

B.​ Give at least five (5) objectives of economic development.

1.) _______________________________________________

2.) ________________________________________________

3.) ________________________________________________

4.) _________________________________________________

5.) _________________________________________________

C.​ Answer the following questions:

Why do we need to work for economic development? Explain with a maximum of 3

sentences.

Briefly differentiate economic growth from economic development.

What makes economic development important? (3 sentences only.)

References:

https://pindfoundation.org/economic-development-2010-2019/

https://www.cnbc.com/2019/10/31/what-its-like-to-live-in-helsinki-finland-on-a-48000-doll
ar-salary.html

https://marquette.org/importance-of-economic-development

Seidman, Karl F. (2005). Economic Development Finance. Thousand Oaks: Sage

Publications. p. 5. ISBN 9780765628176.

Madhuri Thakur. Economic Growth vs. Economic Development. Retrieved from

https://www.educba.com/economic-growth-vs-economic-development/
Difference Between Economic Growth And Economic Development. Retrieved from
https://byjus.com/commerce/difference-between-economic-growth-and-economic-devel
opment/

Pettinger, Tejvan. (2018, September 23). Difference between economic growth and
development. Retrieved from
https://www.economicshelp.org/blog/1187/development/economic-growth-and-developm
ent/