Reasons for Differences in Development (Cambridge (CIE) O Level Economics)
Revision Note
Written by: Steve Vorster
Reviewed by: Jenna Quinn
Causes of Differences in Development
Economic development is the sustainable increase in living standards for a country, typically characterised by increases in life span, education levels, and income
Two indicators used to compare development are the real GDP and the Human Development Index (see: 5.1.1 Indicators of Living Standards)
Countries are all at different points of development and economists distinguish between them using different criteria
E.g. HDI has five categories of development based on the HDI score
Low human development (<0.550)
Medium human development (0.550–0.699)
High human development (0.700–0.799)
Very high human development (>0.800)
There are numerous reasons for these differences including differences in income, productivity, population growth, size of primary, secondary and tertiary sectors, saving and investment, education and healthcare
Causes of Differences in Development
Factor | Explanation |
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Differences in income |
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Differences in productivity |
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Differences in population growth |
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Differences in economic sector sizes |
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Differences in saving and investment |
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Differences in education |
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Differences in healthcare |
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