Do we know economic development when we see it?

Abstract

Considerable ambiguity exists regarding the assessment of regional economic development. Alternative measures often produce conflicting conclusions. Even if economic development progress is defined as improvement in economic welfare, it is not directly measurable. Therefore, this paper develops a theoretical framework that explores the potential linkages between regional utility and commonly used economic measures. State trends in these measures are then examined for the 1990s and related to the theoretical framework. The exercise reveals that no single measure should be preferred in assessing economic development, although it is possible to separate strong performers from weak performers.