How Do I Set Good Economic Development Goals?

Sustainability is a key element in setting good economic development goals. Economic development does not arise from the pursuit of economic growth without regard for factors such as the environment and quality of living of the population. Economic development occurs within the framework of a stable political system, strong legal protection for individual and property rights, and a strong financial system that enables businesses to obtain capital for expansion. Sustainable development goals aim to achieve the benefits of economic growth without adverse effects on the environment or the health of the population. Specific economic development goals should be set for each nation in the context of that particular country’s situation, including available land, resources, population and infrastructure.

Economic development requires a government that is accountable to the people and must meet public demands to stay in power. Participation from groups within the population in discussion and debate also ensures that problems are aired and solutions discussed. To enable the government to build up the health, education and transport infrastructure, sufficient tax revenues are required. Developing countries generally derive much of their revenue from customs and excise duties and indirect taxes such as sales tax and value-added tax (VAT). Sufficient tax revenue may only be collected if nations also can assess personal and corporate earnings and effectively collect tax, which requires a relatively organized and skilled tax administration.

A well-developed legal system must be implemented to ensure that people and businesses may conclude and enforce contracts, protect their intellectual property and ensure the security of their assets. The laws must be enforced by an effective system of courts that hand down decisions that are carried out by an adequate policing system. Economic development goals also must include an effective banking system that enables businesses to obtain loan financing without having to resort to an informal system of finance charging very high interest rates.

Some economic development goals depend on the historical and geographical background of a country. Some developing countries have, for historical reasons, tended to grow just one or two crops or mine certain metals, and they are entirely dependent on income from those few raw materials. Given the extent to which commodity prices may fluctuate, this leaves them open to the price swings on the world market, which they cannot control. Such countries must implement policies to diversify their agricultural and industrial base to achieve a secure national income and sustainable development.