Development Economics — A-Level Economics Revision

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What is Development Economics?

Development economics is a branch of economics that focuses on improving the economic, social, and political well-being of people in developing countries. It goes beyond just economic growth to consider a broader range of indicators such as health, education, and political freedom, as captured by measures like the Human Development Index (HDI). Key issues include poverty, inequality, and the barriers to growth and development.

Board notes: This is a major topic, particularly for AQA and Edexcel. OCR also covers it but in less depth. AQA and Edexcel expect students to be able to analyse a wide range of development indicators, understand the different barriers to development, and evaluate various strategies for promoting development, such as trade, aid, and market-orientated policies.

Worked example

Common mistakes

• 1Equating economic growth with economic development. Economic growth (an increase in real GDP) is a necessary but not sufficient condition for economic development. Development is a broader concept that includes improvements in living standards, freedom, and life expectancy.
• 2Assuming that all developing countries are the same. Developing countries are a diverse group with different resource endowments, political systems, and historical backgrounds. Policies that work in one country may not work in another.
• 3Thinking that foreign aid is a simple solution to a lack of development. While aid can be beneficial, it can also create dependency, be subject to corruption, and may not always be directed to the areas of greatest need. Other factors like trade, investment, and institutional quality are often more important.

Development Economics exam questions

Exam-style questions for Development Economics with mark-scheme style solutions and timing practice. Aligned to AQA, Edexcel and OCR specifications.

Frequently asked questions

• What are the main barriers to economic development?

  Barriers to development are numerous and can include a poverty trap cycle, high levels of debt, a lack of infrastructure, poor governance and corruption, and limited access to education and healthcare. These factors can interact to keep a country in a state of underdevelopment.

• What is the Harrod-Domar model?

  The Harrod-Domar model is an early model of economic growth that suggests the rate of growth depends on the level of savings and the productivity of investment. It implies that to kick-start growth, developing countries need to increase their savings and investment rates.