Wikipedia
cleanup-date October 2005 Economic development is the development of economic wealth of countrycountries or regions for the well-being of their inhabitants. The study of economic development is known as development economics.Public policy generally aims at continuous and sustained economic growth and expansion of national economics economies so that 'developing countries' become 'developed countries'. The economic development process supposes that legal and institutional adjustments are made to give incentives for innovation and for investments so as to develop an efficient production and distribution system for goods and service.
Overview - Development economics emerged as a branch of economics because conventional economic theories are largely applicable only to developed countries that have gone through development already and are embarking on steady-state growth. The most important objective of development economics is to apply and modify conventional economic theories to deal with the case of developing countries. The differences between developed and developing countries have to do with characteristics of developing countries which have imperfect markets, underemployment, and dualism. The primary characteristic of developing countries is their low per capita income. The purpose of learning a theory in development economics is to draw policy implications for development. It is important to make a distinction between growth and development.
Models of economic development - The three building blocks of most growth models are: (1) the production function, (2) the saving function, and (3) the labor supply function (related to population growth). Together with a saving function, growth rate equals s/ß (s is the saving rate, and β is the capital-output ratio). Assuming that the capital-output ratio is fixed by technology and does not change in the short run, growth rate is solely determined by the saving rate on the basis of whatever is saved will be invested.
Harrod-Domar Model - The Harrod-Domar Model delineates a functional economic relationship in which the growth rate of gross domestic product (g) depends directly on the national saving ratio (s) and inversely on the national capital/output ratio (k) so that it is written a g = s / k. The equation takes its name from a synthesis of analyses of growth process by two economists (Sir Roy Harrod of Britain and E.V. Domar of the USA). The Harrod-Domar model in the early postwar times was commonly used by developing countries in economic planning. With a target growth rate, the required saving rate is known. If the country is not capable of generating that level of saving, a justification or an excuse for borrowing from international agencies can be established. An example in the Asian context is to ascertain the relationship between high growth rates and high saving rates in the cases of Japan and China. It is more difficult to introduce the third building block of a growth model, the labor and population element. In the long run, growth rate is constrained by population growth and also by the rate of technological change.
Exogenous growth model - The exogenous growth model (or neoclassical growth model) of Robert Solow and others places emphasis on the role of technological change. Unlike the Harrod-Domar model, the saving rate will only determine the level of income but not the rate of growth. The sources-of-growth measurement obtained from this model highlights the relative importance of capital accumulation (as in the Harrod-Domar model) and technological change (as in the Neoclassical model) in economic growth. The original Solow (1957) study showed that technological change accounted for almost 90 percent of U.S. economic growth in the late 19th and early 20th centuries. Empirical studies on developing countries have shown different results (see Chen, E.K.Y.1979 Hyper-growth in Asian Economies).Also see, Krugman (1994), who maintained that economic growth in East Asia was based on perspiration (use of more inputs) and not on inspiration (innovations) (Krugman, P., 1994 The Myth of Asia’s Miracle, Foreign Affairs, 73).
Surplus labor - The Lewis-Ranis-Fei (LRF) Model of Surplus Labor (LRF) is an economic development model and not a economic growth model. Economic models such as Big Push, Unbalanced Growth, Take-off, and so forth, are only partial theories of economic growth that address specific issues. It is a model taking the peculiar economic situation in developing countries into account: unemployment and underemployment of resources (especially labor) and the dualistic economic structure (modern vs. traditional sectors). This model is a classical model because it uses the classical assumption of subsistence wage.Here it is understood that the development process is triggered by the transfer of surplus labor in the traditional sector to the modern sector in which some significant economic activities have already begun. The modern sector entrepreneurs can continue to pay the transferred workers a subsistence wage because of the unlimited supply of labor from the traditional sector. The profits and hence investment in the modern sector will continue to rise and fuel further economic growth in the modern sector. This process will continue until the surplus labor in the traditional sector is used up, a situation in which the workers in the traditional sector would also be paid in accordance with their marginal product rather than subsistence wage.The existence of surplus labor gives rise to continuous capital accumulation in the modern sector because (a) investment would not be eroded by rising wages as workers are continued to be paid subsistence wage, and (b) the average agricultural surplus (AAS) in the traditional sector will be channeled to the modern sector for even more supply of capital (e.g., new taxes imposed by the government or savings placed in banks by people in the traditional sector). In the LRF model, saving and investment are driving forces of economic development. This is in line with the Harrod-Domar model but in the context of less-developed countries. The importance of technological change would be reduced to enhancing productivity in the modern sector for even greater profitability and to promote productivity in the traditional sector so that more labor would be available for transfer.
Harris-Todaro Model - The Harris-Todaro ModelHarris-Todaro (H-T) model of rural-urban migration is usually studied in the context of employment and unemployment in developing countries. In the H-T model, the purpose is to explain the serious urban unemployment problem in developing countries. The applicability of this model depends on the development stage and economic success in the developing country. The distinctive concept in the H-T model is that the rate of migration flow is determined by the difference between expected urban wages (not actual) and rural wages. The H-T model is applicable to less successful developing countries or to countries at the earlier stages of development. The policy implications are different from those of the LRF model. One implication in the H-T model is that job creation in the urban sector worsens the situation because more rural migration would thus be induced. In this context, China's policy of rural development and rural industrialization to deal with urban unemployment provides an example.
See also - Development economics Development geography Development aid List of publications in sociology#Economic development Important publications in economic development Growth and Development Theories Dual Sector Model Economic Development Corporation
Institutions - Association of Southeast Asian Nations International Development Association European Bank for Reconstruction and Development United Nations Development Programme
External links - iedconline.org - International Economic Development Council International association of community/economic development professionals econ.worldbank.org - Macroeconomics and Growth bris.ac.uk - Economic Growth Resources gsociology.icaap.org - Social Change Project: page of Research Resources on Economic Growth rru.worldbank.org - World Bank Group Private Sector Development psdblog.worldbank.org - World Bank Group PSD !BlogCategory:DevelopmentCatego ry:EconomicsCategory:Sociology fr:développement? économiquept:Desenvolvimento econômico
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People-Centered Economic Development
P-CED is an originator of profit-for -poverty: the idea of doing business for profit for the purpose of applying profit to help people out of poverty. The idea falls under the general heading of social enterprise, doing business for blended value of traditional profit applied to some form of social benefit. P-CED's specific social focus is on poverty relief.
http://www.p-ced.com/
World Parliament
The World Parliament is a democratic non-military government based on establishing peace and solving environmental problems.
http://www.worldparliamentgov.net/
Seguin Economic Development Corporation
The Seguin Economic Development Corporation (SEDC) is an entity which utilizes a portion of the communities sales tax proceeds to recruit manufacturers into the community as well as to market Seguin on a local, regional, national and global market.
http://www.seguinedc.com
German-Namibian Stipendium Funds
The GNSF supports Namibian students to foster responsibility and development in Namibia.
http://www.stipendienfondsnamibia.de/
Simplefit.net
Offers fitness, exercise, diet, and articles written by personal trainers.
http://www.germantownnews.com/
Thames Valley Professional Institutes Partnership
Our mission is to achieve ever greater recognition of the contribution that Professional Institutes make to the region’s thriving economy. TVPIP is a collective organisation of branches of Professional Institutes, primarily focused upon the Thames Valley but is not limited thereto. TVPIP functions as a group whose members are the professional bodies that are accepted to be part of its organisation and whose events and activities are open to the individual members of those professional bodies.
http://www.ukpip.org/
Town of Florence
Florence is in Pinal County between Phoenix and Tucson. This allows for easy access to the two largest cities in Arizona while maintaining the small town atmosphere. Because of year-round sunshine and ideal climate, Florence is the perfect place for the retired. It is excellent for those seeking a warm, clean air area for health purposes.
http://www.historicflorence.com/
International Voluntary Service and Workcamps
Over 3000 AFFORDABLE International Voluntary Service adventures in more than 100 countries.
http://www.vfp.org/
Destination Rotorua Economic Development
This is the official site of the Destination Rotorua Economic Development Agency and is the resources for doing business,working,investing and living in Rotorua New Zealand
http://www.rotorua-living.com/
Wessex Partnerships Ltd
Consultancy - Funding - Delivery
http://www.wessexpartnerships.com/
Stara Zagora Regional Ecoonomic Development Agency
It is a non-profit organization, dedicated to the assistance and support of small and medium sized enterprises; working to support local governments and mobilize the capacity of various institutions to achieve comprehensive economic development of the region
http://www.szeda.bg/
Northern California Nanotechnology Initiative
Northern California's preeminence in cutting edge technologies, venture capital, hi-tech industries and entrepreneurial spirit, provide the competitive advantage for the region to become a leading nanotechnology cluster. By facilitating a multidisciplinary approach to develop the biotechnology, molecular electronics, advanced materials and manufacturing technologies of Northern California, we are redefining the industries that will dominate science and the economy in the 21st century
http://www.ncnano.org/
Learn Spanish and Make a Difference!
The Institute for Central American Development Studies (ICADS) is a center for study, research and analysis of Central American social and environmental issues. We focus on economic development, wildlife conservation, sustainable development, gender issues, education, public health and the environment.
http://www.icadscr.com/
Rural Community Assistance Partnership
RCAP is a national network that, for more than 30 years, has helped small rural communities develop and operate safe and affordable drinking water and wastewater systems. RCAP provides comprehensive training and technical assistance, as well as some financing, for water infrastructure development and expansion, environmental compliance, pollution prevention, community capacity development, and other activities.
http://www.rcap.org/
Pick 'n Pay Knysna Oyster Festival
A 10 day Festival packed with events: sport, culinary and entertainment! A feast of sports and fun, with oysters on the side!
http://oysterfestival.co.za/
Organisation for Economic Co-operation and Development (OECD)
Brings together countries sharing the principles of the market economy, pluralist democracy and respect for human rights.
http://www.oecd.org/
U.S. Department of Commerce
This portal site in an ezine format gives access and information to the programs, services, and personnel of this cabinet-level, government department.
http://www.doc.gov/
Texas Economic Development
State department devoted to promoting business expansion in Texas.
http://www.tded.state.tx.us/
New Mexico Economic Development Department
Business information from New Mexico. Includes the Divisions of Trade, Space Commercialization, Film, Housing, Border Development, Economic Development, and Science & Technology. Monthly newsletter and latest press releases.
http://www.edd.state.nm.us/
Committee for Economic Development
CED is an independent, non-profit, nonpartisan public policy organization comprised of business and academic leaders dedicated to researching important economic and social issues.
http://www.ced.org
Michigan Economic Development Corporation
Michigan's state agency that provides site location assistance and financing to growing companies.
http://medc.michigan.org
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