Measuring Development

Most common measurements:
GDP - Gross Domestic Product US$
GNP - Gross National Product US$

GDP: Total value of all finished goods and services produced by a country in a year, usually expressed in amount per head (per capita)

GNP: The total value of all finished goods and services produced by a country in a year, plus all net income earned by that country and its population from overseas sources


Disadvantages:

•There may be differences in wealth between regions of a country and between various groups (eg. UAE where oil money is collected by the few rich elite)

•It does not take into account the informal employment sector eg. street shoe shiner

•They fail to take into account the local cost of living and thus the purchasing power of peoples money



Quantitate indicators

•Economic indicators other than GNP:
 - Unemployment rates
 - Energy consumption
 - % of people employed in primary industries


•Social indicators include:
 - Access to clean water and sanitation
 - Adult literacy rate
 - Measuring the resources the government has to meet the needs of the people


•Demographic indicators:
 - Birth rate
 - Death rate
 - Total Fertility Rate


•Health indicators:
 - Nutrition (eg. calories per day, % of population with malnutrition)
 - Infant Mortality Rate
 - Population per doctor


•Environmental indicators:
 - How much a country does for the environment


•Composite Indicators:
 - These combine several quantitative indicators into one figure to give a more balanced view

  HDI - Human Development Index

The HDI measures:
 - Life Expectancy
 - Adult Literacy, enrolment in education at primary/secondary/tertiary levels
 - Real GDP per capita


Limitations:

•It has been criticised as some countries traditionally placed in the developing world have he same HDI as some countries in Europe

•This occurs because countries can promote human development even though their income is low

•Problems with all indicators
    •Cumulative Causation
 - Spiral of advantages that occur in a specific geographical location 9core)
 - Core - develops from acquired advantages (multiplier effect, increased tax revenue, increased public spending, education and health care, skilled labour, improvements in infrastructure)
 - Periphery - inaccessible, under populated, resource poor



The Happy Planet Index

•Shows the extent to which 151 countries produce long, happy and sustainable lives for people that live in them

•Overall index scores rank countries based on their efficiency, how many long and happy lives each produces per unit of environmental output

•HPI measures:
 - Life Epectancy
 - Expanded well being
 - Ecological footprint

Other things to think about:

•The development gap
 - The difference in affluence between the richer countries (developed world) and teh poorer countries of the developing world. This gap has increased with time

•Third World Debt

 - Falling commodity prices and rising interest rates have meant that many poorer countries are unable to repay international loans

- The debt has grown until the interest on the debt exceeds the amount the country produces, so the debt can never be repaid

 - There have been initiatives to resolve the situation eg. G8 Summit in 2005 which proposed the cancellation of over $40 billion of debt from the poorest countries