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Table of Contents

  1. Topic pack - Development economics - introduction
  2. 4.1 Economic development (notes)
    1. Economic development - introduction
    2. Development - pause for thought
    3. Economic growth and economic development
    4. Sustainability
    5. The sources of economic growth and economic development
    6. Natural factors
    7. Importance of agriculture
    8. Externalities
    9. Case study - farming in Kenya
    10. Human factors
    11. Population
    12. Physical capital and technological factors
    13. Institutional factors
    14. The consequences of growth for Development
    15. Common characteristics of economically less developed countries
    16. Poverty cycle
    17. Diversity among economically less developed nations
    18. International development goals
    19. Millennium Development Goals
    20. Case Study - Millennium Development Goals
  3. 4.1 Economic development (questions)
  4. 4.2 Measuring Economic Development (notes)
  5. 4.2 Measuring development (questions)
  6. 4.3 The role of domestic factors in economic development (notes)
  7. 4.3 The role of domestic factors in economic development (questions)
  8. 4.4 The role of international trade (notes)
  9. 4.4 The role of international trade (questions)
  10. 4.5 The role of Foreign Direct Investment (FDI) (notes)
  11. 4.5 The role of foreign direct investment (questions)
  12. 4.6 The role of foreign aid and multilaterial development assistance (notes)
  13. 4.6 The role of foreign aid and multilateral development assistance (questions)
  14. 4.7 The role of international debt (notes)
  15. 4.7 The role of international debt (questions)
  16. 4.8 The balance between markets and intervention (notes)
  17. 4.8 The balance between markets and intervention (questions)
  18. Print View



Sustainability is when production and consumption methods (Economic Activity) do not cause the environment to deteriorate or resources to diminish.

S:\triplea_resources\DP_topic_packs\economics\student_topic_packs\media_microeconomics\images\environment_globe.jpgFor economic growth to be sustainable, it must have a neutral effect on resources. Any resources used must be renewable and there must be no lasting impact on the environment.

It is important that development is sustainable to ensure that it can endure in the long-term and is not built on the exploitation of natural resources that may run out in the future (at the cost of future generations - Externality graph shows this if the externalities, contained in MSC, are explained to be suffered by future generations)

Some doubt if this is really possible, but to achieve it means investing more in such ventures as:

  • Recycling
  • Using alternative methods and resources to generate power
  • Watching our biodiversity
  • Admitting to both social costs and benefits and accepting that someone has to pay the true cost of resource allocation.

Achieving this may mean developing ways of:

  • Extending property rights - this means extending ownership of resources to allow people to protect the environment and other resources more effectively.
  • Taxing the polluter - if a tax is imposed that is equal to the external cost of an activity, this should ensure that resources are allocated in the interests of society.
  • Issuing permits to pollute (tradable permits) - these allow firms to pollute a certain amount, but if they exceed their limit, they have to buy more permits. Firms which under-use their permits can sell them. This effectively taxes poorly performing organisations and subsidies firms using best practice.
  • Introducing congestion charges and other road pricing policies to combat traffic congestion.
  • Using direct controls and regulations on certain types of economic activity.