Where does economic development come from? What are its consequences?

Economic growth does not necessarily breed economic development.  Unless the increase in national income reaches all levels of society, development remains elusive.  It is this, the pursuit of equal income distribution after growth, that is a widely accepted economic goal.

The big four sources of economic development are education, health care, infrastructure and political stability.  Education improves opportunities for all lucky enough to receive it, especially disadvantaged groups like women and minorities.  It allows people to become ever increasingly more productive and engaged as labor/human capital.  In societies where women sit idle, roughly 50% of the potential workforce is simply out of commission.  Educating and employing women can be immensely helpful in achieving growth and development as there are more and better FoPs.  A very interesting argument here involves cultural relativism with respect to whether or not treatment of women is a cultural issue or a human rights / right to work issue.

Moreover, as people learn how to take care of themselves and others, mortality rates fall.  For example, if mothers learn to wash their hands with soap before touching their child's wound or men learn to use condoms to prevent the spread of HIV, rates of infection in both cases will logically fall.

Closely connected to this issue is that of improving health care.  Imagine how difficult it would be to work when suffering from malaria!  As people become healthier, they are better equipped to achieve their maximum productivity.  Therefore, many economists argue governments should spend money to build hospitals, to acquire doctors, nurses and medications and to make health care a vital part of government spending and investment for the future.

The Economist web site defines infrastructure as "the economic arteries and veins...roads, ports, railways, airports, power lines, pipes and wires that enable people, goods, commodities, water, energy and information to move about efficiently".  As infrastructure improves, g/s can be moved around more easily and people can get to work or to school.  Simply stated, development occurs.

Lastly, stories like this can be devastating for economies since people within the country become nervous and foreigners choose to stay away.  With more institutionalized political instability, firms do not invest or conduct business at all.  Therefore, political stability is a clear step to development as economic incentives and ownership become protected and business (via foreign direct investment, FDI) flows into the country.