Problems with Development Indicators

Question 1

What are the problems with development indicators?

Answer 1

1. Extremes within the country can give a false indication of development. Some oil rich countries are rich but not developed.
2. High GNI figures do not show where the money is being spent. It may not be going to improve health and education.
3. Single indicators are too broad. They are averages which disguise wide internal variations. For example, a few immensely wealthy families but the majority of the population may be living at subsistence level.
4. Some regions/areas of a country may be much better off than others — north-south’ or ‘urban-rural’ contrasts.
5. Subsistence agriculture and ‘barter economies’ are not included in wealth indicators.
6. Certain indicators are perhaps irrelevant to the real quality of life in many poorer developing countries
7. Exchange rates fluctuate making comparison unreliable.

Question 2

What is the HDI

Answer 2

1. HDI is a combination of health, wealth and education indicators.
2. As a combination it is a more balanced view of development.

Question 3

What factors are used to calculate the HDI?

Answer 3

• Life expectancy index
• Education index
• Mean years of schooling index
• Expected years of schooling index
• Income index