Development Economics

Development economics is a branch of economics that focuses on how to improve the economies of developing countries. Its major concern is the development of third world economies. Development in such countries is met by improving the basic amenities to promote the welfare of its citizen and to maintain a certain set standard of living for all its citizens. The sectors that should be improved according to the development economists are Health sector, education, employment, and inflation, domestic and international economic policies. This branch of economics is specially tailored to the developing country to help them transform into a prosperous nation through progressive economics.

Development economics concepts might differ from one nation to the other because of the existence of unique features for different countries like political and social background. The concepts of macro and micro economics is greatly borrowed in the development economics on structures of developing economy and efficient domestic and international growth.

The economic development field looks at both the traditional measures of economics like the GDP and more modern measures of the Economy like the standard of living and equal rights opportunities. Development economics can also be seen as the only branch of economics that is concerned more on political processes. It is very keen on the economics agenda that have been passed by the political class in each economy. The most fundamental features of development economics became very clear after the world war two. Although some primitive form of this economy were still practiced by some countries, especially the major empires. The need to expand the concept of development economics came after the war-ravaged nations started the process of economic building. The world war two had left major economies especially in Europe in shambles.

Development economics is surrounded by many theories. The earliest being the linear stages of growth model. The basic ideas in this theory is that economy development and steady growth is to be achieved through the pooling and holding of huge capital from domestic and international savings. The theory failed immediately after being advanced because it did not recognized the necessary preconditions for takeoff. The other development theory that was advanced by developing economy was the international dependency theory. This theory suggests most of the economics problems facing the developing economy were from external forces beyond their control. There was a huge outcry on this theory and this gave birth to the neoclassical theory of development economics.

 The neoclassical theory suggests that economic development can only be achieved if government removed all the controls and regulations to make the market free and allow demand and supply to play the important roles in economics equilibrium and controls. The theory has been adopted by many institutions such as the World Bank with some few differing points on the degree to which the market should be free. A market friendly approach is adopted by the World Bank and allows for some government regulation. The market free schools of thought suggest a free economy that is not influenced by external factors rather than the market forces.