4.3.1 Measures of Development Flashcards
What are the three dimensions of the Human Development Index?
- Education - adult literacy, school enrollment
- Health - Life expectancy at birth
- Living standards - GDP per capita PPP
Each factor of the Human Development Indicator is weighted …….
Equally
What numbers does the index range between
0 and 1
1 representing perfect development
What would be considered low development
0-0.49
What would be considered very high development
>0.81
As of 2019, what were the top 3 countries for HDI
Norway
Ireland
Switzerland
As of 2019, what were the bottom 3 countries for HDI
Niger
Central African Republic
Chad
What are the Advantages to HDI as a measure of development between countries and overtime
- Compound measure which still includes GDP
- Focuses on key development outcomes
- Allows for progress to be measured over time and against other countries
- International bodies can identify countries that require the most AID
What are the limitations of using HDI to compared levels of economic development between countries and over-time
- Doesn’t consider the distribution of income
- Some factors maybe more important than others for different countries
- What about other factors like crime, corruption, poverty
What is a single indicator of development
Give examples
Just looks at 1 factor of development
GDP per capita, health measures and educational measures
What are the benefits of looking at GDP when considering development
- Easy to make comparisons over time and between countries
- Correlates with other measures of living
- Having a higher income generally correlates with being able to by more goods/services
Limitations of using GDP as a measure of development
- No allowances of environmental costs
- Human happiness is determined by things other than physical goods/services
- High GDP growth can occur due to exploitation of natural resources - unsustainable growth
- Balance of GDP - due to spending on arms instead of health
What measure is now replacing GDP
Why
GNI per capita
Which looks at income generated in other countries too
It is considered more useful because lots of countries’ factors of production may not be in their own country
An example of this is labour drainage in India, where money is then sent back
When considering FDI, which is GNI per capita a more useful measure of economic development
Developing countries can attract a large amount of investment due to large abundances of natural resources, cheap labour and low regulations
However, a lot of the profits made by foreign countries/MNC is then repatriated back to other economies
Why would it be useful to look at GNI with purchasing power parities
A country could have a high GNI but money doesn’t go very far
Their currency is compared against a globally accepted currency
