Many students wonder, ‘Why you should study development economics?’ This discipline might sound boring at first, but do not be mistaken. Its role in the development of young countries and emerging nations cannot be dismissed. It is necessary to understand the importance of development economics for our region as well.
Let us look closer at the development economics definition and understand its vital purpose of turning an impoverished and problematic nation into a prosperous and successful country. Wouldn’t it be great if Nigeria becomes not just the most populous state in Africa, but also the place with the best living conditions for all the citizens?
What is development economics?
There are many useful branches of knowledge, and development economics is one of them. It is a part of the social science concerned with the production and consumption of products. It is studied as a part of economics.
Looking at the development economics definition from different angles is must-do. Firstly, it is the study of the ways human resources are used. Secondly, it is the understanding of how decisions are made in terms of finances and wealth. Thirdly, it helps the developing countries like Nigeria to understand what to change in the nation’s social, business, financial and fiscal spheres to improve the levels of life within the state.
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What does development economics study?
To understand the definition of development economics better, we should look closer at different things this science studies. It goes beyond money and finances because economists (consultants, professors, advisors) have to deal with:
- The country’s background (the history of its social and political life)
- Education system
- Health care sector
- Working conditions
- Situations in the markets
- Domestic/international policy and industrial growth
- The country’s economic structure
- Macroeconomic and microeconomic aspects
Only the complex study of all these spheres of the country’s life can help to implement the best world’s methods and theories into life and to come up with a unique strategy of transforming the developing market into healthy and robust management of the whole nation.
What is the importance of development economics?
It is necessary also to understand the purpose and significance of this social science branch. Why should you study development economics? How can it help the most miserable states on our planet? These are the questions that come to the minds of students and young people from Nigeria and other places in Africa.
It is fascinating how complex analysis of past and present practices across the globe helps to understand better the origins of poverty in one country and significant success in the economy of a different nation. Development economics mainly analyze all aspects of the life of the people in a state to figure out effective plans that should fix the problems with inequality, poverty, economic failure, and stagnation.
The importance of development economics can be best illustrated with the 5 most significant issues this science can fix in every region with low income and critical fiscal problems:
1. Creation of new jobs
One of the main development economics purposes is to assist small and big firms with information and resources needed for expanding, growing and creating new jobs. Businesses can develop this way, increase the list of their operations and earn more money. Ordinary people can find a job, get a salary and support themselves financially.
2. Diversification of industries
Developing economies understand the importance of industry diversification. One region cannot rely on a single sector. The purpose of this practice is to explain the government how important it is to grow industries outside the ones that are already important within the region and pay attention to creating more jobs in such spheres as healthcare, tourism, business, innovative technologies, etc.
3. Protection of local economies
The growth and expanding of the biggest companies in the region help to protect the local economy from the possible downturns and stagnation periods.
4. Less taxes
There is no need to increase taxes when a country with a developing economy pays more attention to its local businesses and firms and gives them natural conditions for expanding and growing. The bigger the presence of the company in the region, the more significant is the tax revenue. It results in the development of infrastructure and social projects.
5. Better life quality
It is the primary development economics purpose. When a country creates more jobs, improves its infrastructure, health care industry and economy, offers elementary freedoms to people, the nation starts to earn more money, feel optimistic about the future, and their quality of life improves. They spend more money in their region and support the local economy.
In short, the purpose of development economics is to make everything to improve the lives of people within a country. Now you know what is development economics and what its importance is for the countries with low income and reduced level of life.