Essay Topic:

The analysis of the main aspects of the term economic development.

Essay Questions:

What is economic development?

What are the general notions associated with economic development?

What is the main peculiarity of the Todaro’s economic development?

Thesis Statement:

As economic development implies innovations, a country that has a stable and significant economic development after the sphere of basic human needs, will develop its technological sphere which a wider range of the economical development.

Economic Development essay

 

1. Introduction

2. What is Economic Development

3. General notions about the economic development

4. Todaro’s economic development

5. Conclusion

 

Inroduction:The economic development has always been as issue for the contemporary society. This is primary due to the fact that it is economic development that gives any country the potential to prosper and grow. Being the attribute of “strong” countries, mainly belonging to the first world, economic development creates a completely new life-standard for people. In other worlds the actual goal of the economic development is the improvement of the quality of life of ordinary citizens. Economic development in other words is the growth of the country’s wealth that is to improve the well being of the country’s inhabitants. The economical expansion is the guarantee of the growth of the number of investments which are able to convert a developing country into one of those belonging to the "strong" group that are called “developed” countries. The key word of the economic development is innovation. Innovational ideas get investments and therefore companies are able to establish the production of a sufficient amount of products and distribute them to the population, creating an unbreakable economic system of goods and services. As economic development implies innovations, a country that has a stable and significant economic development after the sphere of basic human needs, will develop its technological sphere which a wider range of the economical development. Nowadays, the technological development is the door to the successful economic future of developed countries and further economic development of the developing ones.

2. General notions about the economic development

 

The process of economic development is a multi-sided process for the improvement of life-quality includes numerous aspects such as: the development of the social sphere, the development of culture and national creativity, the creation of favorable social climate, social security, labor supply and many others. Nevertheless, on the priorities of economic development is the creation of a competitive business environment where competition will be the driving force for the development of the companies and therefore the economic development of the country. Another important aspect of the economic development is the development of the consumer’s market, the creation of gold reserves and the development of the infrastructure. All of these are impossible without the technological development of the country. GDP is one of the indicators of the economic development of the country, nevertheless it is not appropriate to use only this indicator in order to make conclusion concerning the economic development and therefore the well being of the inhabitants of the country. This is primarily due to the fact that GDP cannot measure the development of the leisure time, the condition of the environment, the true ability of people to be free in what they do or say, their confidence in the system of social justice and their opportunity to get education and health care. At the present moment tough such countries as Latin America, Africa, and Asia are experiencing a certain economical growth no economic development occurs as the number of “vital” needs such as having a place to live, food to eat and a doctor to take care about the health is not growing. The standard of living remain the same and only get worse as the basic necessities are not distributed properly and the population is in a constant stress that results into the work-productivity and therefore on the competency of the company they are working for.

 

3. Todaro’s economic development

Professor Michael Todaro in his work “Economic development” identifies the meaning of the economic development throught the main objectives that it actually pursues. One of the most important objectives on the opinion of Michael Todaro is the production of the “life necessities” for the people in need and therefore providing them with sufficient amount of food to survive physically, through providing a shelter for people that have no other option than to live on the street and what is even more important the ability and readiness of health institutions to provide such people with health care. Though the production of all the necessary products to satisfy these basic needs is important, the broadening of their implication is vital in terms of a corresponding economic development. Economic development does not just cover the “black spots” but identifies their reason and find a way to prevent their existence. The second objective of the economic development after the satisfaction of the survival needs according to the opinion of Michael Todaro is the general raise of the standards of living. When the conditions of living change the person’s self-esteem growth and he starts settling for more or in other words acquires ambitions. These ambitions are of a special importance as they motivate a person for at least staying on the same level if not for further achievements. The third Todaro’s objective of the economic development is that when a person start getting all the required things for his successful living he starts having more economic and social choices, reduces his fear of the unknown future. Such a person is more likely to succeed and prosper financially. The more people in the country feel save and protected the higher is the productivity and the technological competency of the country. Therefore the economic development improves the well being of the inhabitants and the well being of the inhabitants is in its turn the guarantee of the economic growth and literally the economic development itself, too.

Basically, Michael Todaro proclaims three main functions of the economic development. The first one implies the production of the basic goods, as it has been mentioned before; the second one is saving and developing the conditions established through the sufficient production; and the third one is the reduction of social anxiety through sufficient labor supply. The labor supply factor requires a separate attention, as it is the predictor of the growth of population. The more people feel confident if the financial well-being for tomorrow the more they are open to the perspective of having children and providing them with everything needed.Speaking about the profound definition of the economical development in terms of labor supply it is necessary to mention the work of Harris and Todaro “Migration, unemployment & development: a two-sector analysis”. In this book Todaro & Harris offers a Harris-Todaro model of rural-urban migration that occurs due to the economic development necessity. One of the factors preventing the developing countries from converting into developed countries is the urban unemployment. According to Todaro and Harris the rate of migration flow is influenced by the wages offered by the labor supply. Ordinarily the wages that rural inhabitants expect to get in urban areas are way higher than the rural ones. This difference causes instability and raises unemployment greatly, creates the necessity to industrialize rural areas in order to make the economic situation more stable and stimulates the economic development of the country. In spite of the existence of numerous models of economic development, the main priority is still the reduction of the poverty rate, the improvement of social justice and therefore the elimination of inequality and the employment growth. The Harris-Todaro model does not completely explain the potential economic growth and regression along with other numerous models of economic development.It may appear that there are a lot of indicators of the economic development of a given country; nevertheless after the analysis of the entire conclusion is that these indicators are actually very limited. They include such factors as life expectancy (health care), the average income per person (all the required products), and the level of the development of the education and it accessibility (with a following employment). All the of listed above are the standards of living. And it can be also added that these standard may be viewed as universal standards that define the economic development of any country.

Conclusion: The term economic development gets a unique understanding owing to the books of professor Todaro. The word “development” implies the progress and the positive changes in the growth of the wealth of a given country and therefore the growth of the well-being of its citizens. It is necessary to mention that the economic development may be seen as the synonymy of the well-being of the country. The term economic development also emphasizes the importance of the constant economic growth that is achieved through the competency of the national companies and their work force. The process of the economic development requires certain adjustments that will stimulate the creation of various innovations, raising the economic competency of the countries. And though there is not accepted theory of economic development there still is a variety of factors that can help to identify the important of the economic development and the means of achieving it. Another vital part of making a country economically developed are investments that help to develop the manufacture and production of the sufficient amount of products enough to be distributed in order to cover the vital needs of the population and guarantee its well-being and therefore economical development.

Bibliography:

1. Michael P. Todaro and Stephen C. Smith. Economic Development (9th Edition). Addison-Wesley Series in Economics.

2. Harris J. and M. Todaro (1970). Migration, Unemployment & Development: A Two-Sector Analysis. American Economic Review, 60(1):126-42.