4.3) Emerging And Developing Economies

Question 1

What is economic growth and development?

Answer 1

• growth: an increase in the size of a country’s GDP
• development: more complicated to define and measure how living standards and people’s general welfare change over time

Question 2

Why is GNI per capita alone inadequate to measure economic development?

Answer 2

GNI is the measure of GDP + net income from abroad
- although they are a good measure of people’s standards of living, they do not tell you about the quality of life
- national income data ignores economic welfare brought by hidden economies

Question 3

What is the Human Development Index (HDI)?

Answer 3

A measure of economic development that measures
- health - life expectancy at birth
- education - measures by expected and mean years of schooling
- standard of living - GNI, PPP$

Used to rank countries on a development spectrum

Question 4

Why is HDI more effective than other measures?

Answer 4

• doesn’t capture all the information relevant to people’s welfare but does place a greater emphasis on quality of life of a country’s people of a country’s people rather than just economic growth
• more dimensions, which makes it a more holistic representation and accurate
• can be used to question and frame national policy

Question 5

How is growth measured?

Answer 5

Measured by real GDP which indicated the amount of production in an economy over a period of time
- highest real GDP likely to have the most development e.g. US, UK, Germany - as growth is said to lead to development
- highest growth rate are likely to be growing their companies more rapidly e.g. China, India
Although, economic growth does not a guarantee that governments will make an investment towards development e.g Russia (70s)

Question 6

What are the various indicators of development?

Answer 6

• access to clean water
• communication
• access to the internet
• energy consumed per person => access to electricity and gas
• % of population. In agricultural work

Question 7

What are two alternatives to HDI?

Answer 7

• Inequality adjusted HDI (IHDI)
• Multi-poverty Index (MPI)

Question 8

What are the limitations of HDI?

Answer 8

• it omits other indicators of development e.g. access to internet and inequality, leading it to be an unreliable figure
• ignores the distribution of development - may be unequal in certain regions of a country