economic development

economic development

Process whereby simple, low-income national economies are transformed into modern industrial economies. Theories of economic development—the evolution of poor countries dependent on agriculture or resource extraction into prosperous countries with diversified economies—are of critical importance to Third World nations. Economic development projects have typically involved large capital investments in infrastructure (roads, irrigation networks, etc.), industry, education, and financial institutions. More recently, the realization that creating capital-intensive industrial sectors provides only limited employment and can disrupt the rest of the economy has led to smaller-scale economic development programs that aim to utilize the specific resources and natural advantages of developing countries and to avoid disruption of their social and economic structures. See also economic growth.