Download DETERMINANTS OF ECONOMIC DEVELOPMENT

DETERMINANTS
OF
ECONOMIC
DEVELOPMENT
DEFINITION
 “Economic development is defined as improvement in
material well-being which we may consider to be
reflected in an increasing flow of goods and services”.
 “Determinants of Economic development are based
upon the size of production capacity, organisation and
character of an economy”.
DETERMINANTS
OF
ECONOMIC DEVELOPMENT
Economic Determinants
Non-Economic Determinants
ECONOMIC DETERMINANTS
Labour or human resources: If human
resources are properly used, it will accelerate the process of
development. If not, these may hamper the very process of
development.
 Size of the Market: Large size of the market would
stimulate production, increase employment and raise the
National per capita income.



Capital Formation: “The principle aim of Economic
development is to utilize part of the world
resources on the production of Capital goods, so
that greater production of consumer goods is
possible in the Future”.
Natural resources: Natural resources determine
the limit of Economic development of a Nation.

Structural change: It refers to change in the occupational
structure of the economy. Economy of the country is generally divided
into three basic sectors: Primary (such as agricultural, animal husbandry,
forestry etc.) , Secondary (such as Industrial production, constructions and
the like) and Tertiary (such as trade, banking and commerce.
 Financial stability: It implies the existence of an efficient and
organised banking system in the country. There should be an organised
money market to facilitate easy availability of capital.
NON-ECONOMIC DETERMINANTS
They are non-quantifiable
 In general they are not amenable to
traditional tools of Economic analysis
 They are either not factored in Economic
theories and models or assumed as given
for e.g.: Political, Social, Religious, Cultural
and Institutional aspects.

CONCLUSION
 Economic Development is not determined by any single
factor
 Economics Development depends
Political and Religious factors.
on Economic, Social,
BY PROPER COORDINATION OF BOTH THESE FACTORS
ECONOMIC AND NON-ECONOMIC AND ASPIRATION OF THE
PEOPLE AND THE GOVERNMENT FOR DEVELOPMENT THAT
THE RATE OF ECONOMIC GROWTH CAN BE ACCELERATED.