Role of Economic Development in Reducing the Poverty Rate Essay

Role of Economic Development in Reducing the Poverty Rate - Essay Example This paper presents comprehensive analysis of interrelations between economic development and poverty The essay is aimed at attempting to argue that economic development is a solution towards eradicating poverty. Factors that determine economic development have been examined, factors that cause poverty have been analyzed. Through the GDP, scholars are able to determine the living standard of people occupying specific parts of the world. Thus, any notable increase in economic growth is seen as indicating an increase in standard of living to an average level. It is worth noting that the average living standards are mostly achieved through greater inequality and poverty. Similarly, a section of scholars have argued that economic activities could solely not be attached to bringing to an end poverty across the world. In fact, numerous countries struggling with their economic activities such as oil, tea, precious stones among other natural resources have been continually exploited by foreign countries leaving them with very little benefits for their people However, economic development does not only cause poverty as it has been used by numerous countries to upgrade their economic life. This has been visual through the accessibility of facilities such as water, schools, medical facilities electricity among others. Nevertheless, it is worth noting that economic development does not only cause poverty as it has been used by numerous countries to upgrade their economic life. ... As such, pressing challenges attached to economic development must be dealt with to pave way for curbing poverty. Theoretical framework The Theory of Economic Development The theory of economic development emanates from a scholar known as Schumpeter. According to the theory, it was evident that his view on economic development was based entirely on two types of research that had been carried out by Scholars: Walras and Marx. Although they were both dedicated towards coming up with solution based on the impact of economic development, they had varying reasons. Through Walras who was his great hero, this theory is said to embrace the actual logic on the interdependence between quantities in the economy. On the other hand, Marx argues that there must be vision based on economic evolution that acts as a pathway towards the generation of economic system (Rowe, 2009). In light of this, Schumpeter argues that both contributions have played a huge role in giving the economic development a gr ound as one is rigid and the other is dynamic. As such, he argues that the dynamics in any economic entails data changing by carrying out new combinations of the five cases of economic development. The five cases in economic development consist of new products, new production methods, and opening of new methods, new organization forms and new supply sources. The development of this theory by Schumpeter has greatly contributed towards economic development for over a century. Although the theory focuses more on the limitations of tackling poverty, it could be argued that there are more possibilities towards economic development been a solution to poverty