4.3.1 Measures of development

Question 1

What is development according to Amartya Sen?

Answer 1

Nobel Economist Amartya Sen writing in “Development as Freedom”, sees development as concerned with
improving the freedoms and capabilities of the disadvantaged, thereby enhancing the overall quality of life.

Question 2

What is the avg per capita in a high income country compared to low income country?

Answer 2

The average per capita income in a high-income country is $43,000, versus $795 in a low-income country

Question 3

What were the three objectives of development, according to Michael Todaro?

Answer 3

1. Life sustaining goods and services: To increase the availability and widen the distribution of basic lifesustaining
   goods such as food, shelter, health and protection services.
2. Higher incomes: To raise levels of living, including, in addition to higher incomes, the provision of more jobs,
   better education, and greater attention to cultural and human values, all of which will serve not only to
   enhance material well-being but also to generate greater individual and national self-esteem
3. Freedom to make economic and social choices: To expand the range of economic and social choices available
   to individuals and nations by freeing them from servitude and dependence not only in relation to other people
   and nation-states but also to the forces of ignorance and human misery.

Question 4

What is economic growth?

Answer 4

o A sustained rise in a country’s productive capacity
o An increase in real value of GDP / GNI per capita
o Increases in the productivity of factors of production

Question 5

What is economic development?

Answer 5

o Progress in expanding economic freedoms
o Sustained improvement in economic and social opportunities
o Growth in personal and national capabilities

Question 6

What does the HDI focus on?

Answer 6

The HDI focuses on longevity, basic education and minimal income.

Question 7

What are the values of HDI?

Answer 7

Each of the 3 measures is given a value between 0 and 1 (with 0 being very
low development and 1 very high), and then an average is taken of the 3 composite indicators to give an overall
measure of development. It can be expressed as a number between 0 and 100 (if the measure is multiplier by 100), or 0 and 1.

Question 8

What are three composite measures of the HDI?

Answer 8

1. Knowledge: First an educational component made up of two statistics – mean years of schooling (of those
   already in the workplace) and expected years of schooling (of those still in school)
2. Long and healthy life: Second a life expectancy component is calculated using a minimum value for life
   expectancy of 25 years and maximum value of 85 years
3. A decent standard of living: The final element is gross national income (GNI) per capita adjusted to purchasing
   power parity standard (PPP)

Question 9

What are disadvantages of HDI?

Answer 9

• The standard HDI measure does not take account qualitative factors, such as cultural identity and political
  freedoms (human security, gender opportunities and human rights)
• The GNI per capita figure – and consequently the HDI figure – takes no account of income distribution.
• If income is unevenly distributed, GNI per capita will be an inaccurate measure of people’s well-being
• Purchasing power parity (PPP) values used to adjust GNI data change quickly and can be inaccurate
• Higher GNI may result in more spending on aspects that could reduce living standards e.g. polluting power
  stations rather than green energy production, or armaments

Question 10

What are advantages of HDI?

Answer 10

• Relatively easy data to collect and compare
• As objective as possible – it could be difficult, for example, to come up with an accurate/reliable measure of
  more qualitative factors such as freedom of speech
• Measures such as longevity and education levels are indicative of other development factors
  o People tend to live longer if there is better access to doctors and healthcare, access to good
  sanitation and housing etc

Question 11

What is the Gender Inequality HDI?

Answer 11

The Gender Inequality HDI rankings includes indicators that reflect the extent to which there are deep and
persistent imbalances in economic, social and political freedoms for women and girls in developed and
developing countries.

Question 12

What are other indicators of development?

Answer 12

• Changing structure of national output, trade and employment
• % of adult male and female labour in agriculture
• Access to clean water
• Energy consumption per capita
• Fertility rates,
• Prevalence of HIV

Question 13

Why is GNI and log of income used in HDI?

Answer 13

• GNI (Gross National Income is used because of the growing size of remittances across countries)
• Log of income is used in the HDI calculation because income is instrumental to human development, but higher incomes are assumed to have a declining extra contribution to human development