12) (from yr12) sustainable development Flashcards
what is economic development, how is it measured?
Economic development is a broader measure of economic performance than just growth. It is measured the Human Development Index (HDI) which 3 components: i) GNI per capita il) rates of adult literacy i) life expectancy at birth. In all cases, a higher component and overall index number is better than a lower one.
Countries with high HDI scores are considered to be developed economies; countries with very lw HDI are developing whilst emerging economies are often in between.
how is growth closely linked to development?
Higher real GDP should increase component one, (GNI per Capita) and should also allow the government of the country to provide better public services (e.g clean water, schools, hospitals) enabling improvements in health and education. These improvements should lead to increases in all components of HDI. However, this is not always the case; sometimes growth might not lead to improvements in the standard of living. There are several possible reasons for this…
why may growth not always lead to improvements in the standard of living? (list 4) Any of these factors could lead to unsustainable growth.
- inequality
- government failure
- growth is often driven by FDI
- growth may be driven by the extraction of non-renewable resources eg fossil fuels
why may growth not always lead to improvements in the standard of living? (inequality)
growth may only benefit small sections of the population (e.g. high-income groups). There may be no “trickle down” effect- e.g. if money is siphoned off to tax havens
why may growth not always lead to improvements in the standard of living? (government failure)
a very common factor in developing countries; governments are often either corrupt, highly inefficient or both. Therefore, there are few improvements stemming from the growth
why may growth not always lead to improvements in the standard of living? ( growth is often driven by FDI)
FDI may originate from giant Multinational organisations or countries with their own agenda (China/USA/Russia). When the receiving country stops being useful, capital flight may occur, i.e. the MNCs or bigger country take their resources back out of the economy.
why may growth not always lead to improvements in the standard of living? (environment)
Growth may be driven by the extraction of non- renewable resources (e.g. fossil fuels) or may cause irreparable harm to the environment. Any benefit is only short -term.
what are some issues with unstable economic growth?
a) the growth may not translate into development and/or b the growth/development may only be short-term, not leading to long-run growth/development).
For this reason, global organisations like the UN and the World Bank advise countries to aspire to sustainable growth/development.
What is sustainable growth?
Sustainable growth (development) is growth (development) that meets the needs of the present without compromising the ability of future generations to meet their needs.
What goals have the UN and World Bank set?
The UN and World Bank have set 17 Sustainable development goals (SDs) which every country should aim to achieve. These include goals for equality, clean water and sanitation, the environment etc.
What does the strength of the link between growth and development depend on?
- inequality
- government failure
- growth often driven by FDI
- growth driven by the extraction of non-renewable resources,
can significantly weaken this link
what is one reason that sustainable growth is a good route for economic development?
Sustainable growth creates more businesses, more jobs, increasing the RDI of the population, increasing government tax revenues etc, all leading to potential rightwards shifts in the LRAS/PPF curves, helping to improve standards of living and quality of life.
how can economic growth impact economic growth?
alter work life balance, lead to greater stress, ill health etc, some observers criticise the continued obsession with growth as a driver of development
what other measures are measuring progress in alternative ways?
eg World Happiness Index, the Genuine Progress Indicators (GPIs) focus on alternative ways of measuring progress which is less about finance and output, and more about mental wellbeing, positive outlook on life, quality of he environment etc
These are closely connected to the SDGs mentioned earlier
