Economic Growth and Development – SS3 Economics Lesson Note (Second Term)

Economic growth is an increase in the real per capita income of an economy. Economic development is wider. It covers quantitative and qualitative improvements, including the citizens’ standard of living and quality of life. Underdevelopment is the underutilisation of an economy’s human capital or natural resources. This note also covers solutions and strategies.

Behavioural objectives

By the end of the lesson, students should be able to:

1. Define economic growth and development.
2. Differentiate between economic growth and development.
3. Discuss underdevelopment: its characteristics, problems and solutions.
4. Highlight strategies for economic development.

Instructional techniques

• Identification
• Explanation
• Questions and answers
• Demonstration
• Videos from source

Instructional materials

• Videos
• Loudspeaker
• Textbook
• Pictures

What are economic growth and economic development?

Economic growth is an increase in the real per capita income of an economy. An increase in real per capita income means an economic improvement in real terms for each person in the economy.

Economic development, on the other hand, focuses on the improvement of the citizens’ standard of living and quality of life.

What is the difference between economic growth and economic development?

Economic development includes the following:

1. Increase in per capita output (quantitative)
2. High level of literacy (qualitative)
3. High life expectancy (qualitative)
4. High quality of health care (qualitative)

What is underdevelopment and what are its characteristics?

Underdevelopment is the underutilisation of either the human capital or the natural resources of an economy. An underdeveloped economy is often characterised by the following:

1. High rate of poverty
2. Low level of literacy
3. Low quality of health care
4. Low level of per capita income
5. Wide income inequalities
6. Underutilised manpower and natural resources
7. High level of corruption
8. Dependence on primary goods
9. Use of outdated technology

What are the solutions to underdevelopment?

1. Encourage investment: The government must encourage both local and foreign investors to invest in the economy. This will lead to job creation and reduce poverty in the country.
2. Provision of infrastructure: Infrastructure such as good roads and constant electricity must be provided to reduce the cost of doing business in the country.
3. Provision of employment opportunities: The government should absorb some of the unemployed into the civil service.
4. Human capital development: The development of the labour force is very important for a country to move from an underdeveloped economy to a developed one. The government must therefore invest in education and research.
5. Provision of business incentives: Incentives such as tax holidays and low interest rates on loans must be given to infant industries (new industries) so that they can compete with established ones.

What are the strategies for economic development?

1. Import substitution: This is when a country encourages the local production of goods it used to import. Firms spring up, and supporting firms spring up with them. Both employ labour and so reduce poverty. An example is the policy of encouraging local production of rice.
2. Export promotion: This is a situation where the government reduces or removes barriers that could hinder the export of final goods.

Evaluation

1. Define economic growth and development.
2. Differentiate between economic growth and economic development.
3. Explain underdevelopment.
4. State four characteristics of underdevelopment.
5. Give four solutions to underdevelopment.
6. Outline strategies for economic development.

Assignment

Classwork: as in the evaluation questions above.

The teacher praises the students for their effort.