Measuring Development

Question 1

Income-based measures (GDP)?

Answer 1

GDP per capita measures the economic output of a nation per person. When GDP per capita is increasing, this means the economy is growing, and it is an indicator of development. If there is no growth, or a downward trend, there is negative development.

While the measure is simple and easy to get for most states, it does not consider how the income is distributed. This can be very misleading in unequal societies (i.e if the rich are getting richer, this may show an increase in GDP per capita, even though the situation of the poor did not change at all)

Question 2

Measuring development?

Answer 2

The complexity of development makes the task of measuring it very convoluted

Question 3

Income-based measures (Gini Coefficient)?

Answer 3

The gini coefficient considers the distribution of income. It measures the difference between the incomes of the richest and of the poorest, and how many people earn how much on this spectrum.

A high gini coefficient indicates that there is a lot of inequality in society and a great difference between the incomes of the wealthiest and poorest. It is used to complement the overall picture provided by GDP per capita.

Question 4

Human Development Index (HDI)?

Answer 4

Human development:
1) Life expectancy at birth; 2) Average years of schooling of people 25 years old and above, expected years of schooling of a child; 3) PPP GNI per capita

The HDI reveals the following:
1. National priorities in terms of which countries are effectively combining economic progress with social development.
2. Potential growth – if a country has built up human capital, and the correct policies are employed, it is very likely that people will have access to market opportunities, resulting in equitable economic growth
3. Disparities between people – the report has breakdowns of data on the basis of gender, income, geographical region and ethnicity

Question 5

Happy Planet Index (HPI)?

Answer 5

Measures the extent to which countries are able to provide a happy, long and suitable life for their citizens and inhabitants.

The HPI uses three indicators
1) Life expectancy; 2) Experienced well-being (where respondents can rank their lived on a scale of 0 to 10); 3) Ecological footprint (a per capita measure of the amount of land needed to sustain the consumption patterns of a country
Countries are ranked on the basis of how many happy and long lives are produced for every unit of environmental output.
Reveals that most of the high-income countries ranked low on the index due to their use of the environment

Question 6

Corruption Perception Index (CPI) ?

Answer 6

The Corruption Perceptions Index (CPI) ranks of countries around the world, based on how corrupt their public sectors are perceived to be.