Development Economics

A branch of economics that focuses on the economics of country development

Over 1.8 million professionals use CFI to learn accounting, financial analysis, modeling and more. Start with a free account to explore 20+ always-free courses and hundreds of finance templates and cheat sheets.

What is Development Economics?

Development economics is a branch of economics that focuses on the economics of country development. It focuses on how people in a society can escape poverty and enjoy a better standard of living.

Development Economics - Growth Chart


  • Development economics focuses on how people in a society can escape poverty and enjoy a better standard of living.
  • Development economic studies can be divided into economic and social aspects.
  • Development economic research can help policymakers to make better decisions and formulate the right plans.

Aspects of Development Economics

Country development and development economics both involve a wide range of studies. Primarily, development economics can be divided into two categories – economic and social.

1. Economic

Economic growth 

Development economics uses economic growth as an indicator of country development efficiency. Economic growth shows how well a country is running and potentially growing. It is the most obvious and quantitative indicator for the evaluation of country development.

Structural change 

Structural change is the way a country’s economy is organized and how a market functions. It’s usually in between free-market operation and state control. Structural change is the most fundamental aspect of country development. Hence, development economics also study the structural changes in a country.

Technological changes 

Technology can significantly change economic behavior, such as production and consumption. When a new technology appears, development economics will analyze its effect on country development.

2. Social

Social aspects of development economics analyze the economic consequences of social-related development.


Institutions are essential for a country’s economy. Well-established institutions facilitate economic and country development.


Educated human capital leads to better economic production and a higher standard of living. Many countries focus on investing in their human capital through education. Therefore, development economics considers the economic results of such education policies. It is primarily about finding the current human capital level, developing, and providing direction for education policy.

Public health

Better living standards include improvement in public health. Countries see public health as part of their development. Since public health advancement involves a substantial cost, development economics is crucial.

Working conditions 

Working conditions are closely associated with the advanced level of an economy. Working conditions include salaries and employee benefits, which represent the purchasing power in an economy. Development economics can assist in evaluating the impact of working conditions on the future economy.

Development Economics Research

Like other types of economic research, development economics uses the same scale of studies and applies classical economic indicators. Various scales and a few examples of economic indicators are listed below:

Development Economics - Scale and Economic Indicators

Development economic studies can be both domestic or international. International development economics focuses particularly on comparative research between countries.

What Can Development Economics Research Do?

  • Evaluate current development practices
  • Provide direction for country development
  • Define problems in future country development
  • Indicate the economic aspects of country development

Additional Resources

CFI offers the Commercial Banking & Credit Analyst (CBCA)™ certification program for those looking to take their careers to the next level. To keep learning and advancing your career, the following resources will be helpful:

Financial Analyst Certification

Become a certified Financial Modeling and Valuation Analyst (FMVA)® by completing CFI’s online financial modeling classes!

0 search results for ‘