4.3.1 Measures of Development Flashcards
Growth vs Development
Economic growth is measured purely with a by real GDP and the productive potential of the country.
Economic development is about improvements in living standards.
Human Development Index (HDI) and its three dimensions
Measure of economic development calculated by the UN. It is a composite index based of three factors:
1) Health - as measured by life expectancy at birth
2) Education - as measured by the mean years of schooling of adults aged 25+ and the expected years of schooling of a current 5 year old over their lives
3) Income/Living standards - as measured by real GNI per capita at purchasing power parity PPP
Each of the three indicators is given equal weighting and a mean is taken to give a figure between 0 and 1. The higher the number, the greater the level of development.
Advantages of HDI
● It takes into account three key factors which are important for the development of a
country.
● It is relatively easy to calculate because governments tend to collect the statistics
used in the data.
Disadvantages of HDI
● There are some issues with the figures: health takes no notice of the
quality of life that people enjoy and education doesn’t take into account the quality
and success of education.
● There is no consideration for the equality of income.
● Also, there are other factors which affect development, for example freedom from
corruption or the environment.
● It is only an indicator and not a precise measure, so should not be expected to be perfect.
Other indicators of development
1) Inequality-adjusted Human Development Index IHDI
2) Multidimensional Poverty Index MPI
3) Genuine Progress Indicator
Inequality-adjusted Human Development Index IHDI
Adjustment of HDI which includes a fourth indicator of development: inequality. The Atkinson Index adjusts measures for education, health and income according to the level of inequality.
- It is broader than HDI but can still be criticised for not taking into account more measures and quality.
Multidimensional Poverty Index MPI
Measured the percentage of the population that is multidimensional poor. It uses data for health, education and standard of living but uses a broader range of indicators within these categories.
● Years of schooling and school attendance data is used for education; child mortality and nutrition data for health; and availability of electricity, sanitation and safe drinking water in households, cooking fuel used, assets owned and the type of floor in a house for standard of living.
● It highlights the countries where some areas are extremely rich but where most of the population is not and focuses on poverty.
- Eval: However, it cannot be calculated for all countries as the data is not always available. It also doesn’t take into account the environment.
Genuine Progress Indicator
Calculated from 26 different indicators grouped into three main categories: economic, environmental and social. It aims to look at economic sustainability, to ensure development does not limit the amount produced and consumed in the future.
● The economic category looks at personal consumption, inequality and the cost of unemployment. Environmental accounts for the cost of pollution, loss of natural areas, CO2 emissions, ozone depletion and the depletion of non-renewable resources. In social, the 10 indicators range from the value of housework and parenting to the cost of crime and commuting to the value of volunteer work.
● They tend to show developed countries experiencing negative growth over time, due to their impact on the environment. Some argue this proves that development is unsustainable whilst others argue the index is biased and is constructed to prove the anti-growth case.
- Moreover, figures like changes in electricity production or the numbers with a mobile phone per thousand of the population can show development levels. These are easier to calculate than indexes.
