4.3.1 Measures Of Development

Question 1

What is Economic Development and how is it different to Economic Growth?

Answer 1

Economic development = An improvement in the economic wellbeing and quality of life for a society.

Economic Growth = Increase in Real GDP. A high GDP does not equal high economic development.

Question 2

What is the Human Development Index (HDI) (3 Dimensions).

Answer 2

HDI

• High life expectancy
• Education Index (expected years of schooling)
• A decent standard of living (GNI per capita)

Question 3

Explain the Calculations around HDI

Answer 3

• 3 sub-indices - Health, Income and Education (Each scaled 0-1)
• A geometric mean of the three sub - indices is calculated to find the final composite index.
• HDI is ranked on a scale of 0-1
• > 0.8 = Very High
• <0.55 = Low

Question 4

What are the advantages of HDI?

Answer 4

• Measures are reasonably easy to collect and reliable.
• Inclusion of life expectancy and education give a broader measure of the standard of living than GDP / GNI per capita alone.

Question 5

Disadvantages of HDI?

Answer 5

• GNI per capita (One of the 3 dimensions of HDI) does not give any indication of the distribution of income.
• Does not give a full picture (No sign of political unrest / conflict etc.) I.E Syria have a reasonbly high HDI due to good education and healthcare but is incredibly undesirable and dangerous due to the civil war.

Question 6

What are some other measures of development?

Answer 6

• Inequality - adjusted HDI - Country’s HDI score is lowered if there are high levels of inequality in income, education, or health. Could be an EVAL point for HDI.
• GDI Gender equality index - signals political and social freedom (Higher developed countries score higher).
• % of workforce employed in agriculture - shows where a country is on the Kuznets curve.