ABSTRACT
This chapter discusses the main dimensions and challenges of economic development and the role of development economics in addressing them. Achieving development is about reaching a satisfactory level of human wellbeing, both on average and for everybody in a particular country. While easy to say, this is complex to achieve because wellbeing is multidimensional, with no single agreed-on definition of what the dimensions are and with inevitable trade-offs in achieving the dimensions. Because development—the achievement of individual and collective wellbeing—is so multidimensional, and countries are so heterogeneous and have limited resource endowments, there inevitably exist many trade-offs in outcome. As a consequence, choices need to be made as to which aspects of development matter most for a particular society or social group. Of all development objectives, income growth is likely the most important, as, without it, the other objectives—poverty reduction, reduced disparities, lesser vulnerability to shocks, and achieving satisfactory quality of life—are difficult if not impossible to achieve.
