AQA A-Level Economics (7136) · The National & International Economy
Specification points
- The difference between economic growth and development.
- Measures of development, including the Human Development Index.
- Factors and strategies influencing growth and development.
Growth versus development
Economic growth is a rise in real output; economic development is broader — improvements in living standards, health, education and freedom. A country can grow without developing if the gains are unequal or environmentally damaging.
Measuring development
- GDP/GNI per capita (PPP) — material living standards.
- Human Development Index (HDI) — combines income, health (life expectancy) and education.
- Other indicators: access to clean water, sanitation and technology.
Key definitions
| Term | Definition |
|---|---|
| Economic development | Improvement in living standards and quality of life. |
| HDI | A composite measure of income, health and education. |
| Primary product dependency | Reliance on exports of volatile-priced raw materials. |
Barriers to development
- Primary product dependency and volatile commodity prices.
- The savings gap and shortage of investment.
- Debt, poor infrastructure, weak institutions, corruption and conflict.
- Low human capital and rapid population growth.
Strategies to promote development
- Market-oriented — trade liberalisation, foreign direct investment, microfinance, removing subsidies.
- Interventionist — investment in human capital and infrastructure, protecting infant industries, managed exchange rates.
- Other — aid, debt relief, and the roles of the World Bank and IMF.
Each involves trade-offs (aid dependency, exploitation by MNCs, conditionality).
Worked example
A developing country dependent on one commodity suffers when its world price crashes (primary product dependency). Diversifying into manufacturing and services, funded by FDI and supported by investment in education and infrastructure, reduces this vulnerability — but requires capital the country lacks (the savings gap).
Common exam mistakes
- Equating growth with development.
- Listing barriers without matching them to strategies.
- Ignoring the trade-offs of aid and FDI.
Exam technique
Use the HDI and specific barriers, match strategies to barriers, and evaluate their costs and conditions.
Quick revision
- Growth ≠ development; development measured by HDI.
- Barriers: primary product dependency, savings gap, debt, weak institutions.
- Strategies: market-oriented (FDI, trade) vs interventionist (human capital).