Economic Development and Capital Requirements
IT is difficult to talk briefly about the problems of economic development. Development relates to the economic life of a country, which in turn cannot be separated from its social and political structure, its economic resources, and its history. For the purposes of these discussions the point of central interest is the international flow of capital; this is, of course, related in many ways to economic development. However, each has aspects not directly related to the other. Foreign investment is important not only because it may facilitate economic development per se, but also because it may contribute to the solution of the dollar difficulties of western Europe and Japan and to their economic progress in general. Economic development, at the same time, is a process in which only one of the elements is the supply of foreign capital.
There is no specific agreement as to how one measures economic development, although the words convey a general sense. The most usual statistic used is income per head, but this is only a first approximation. It may be necessary to consider income distribution. (What does one do about per capita income in Kuwait with its $150 millions of oil royalties?) Also there are differences in the non-market sectors which are excluded from national product accounting. (Housewives' services have been estimated to amount to about 25 per cent of United States national income.) In either historical or international comparisons, the difference in the calculations arising