4.8 Measuring Development

The Concept of Development-an introduction.

The notion of development is complex. Development suggests 'progress' and 'improvement' but compared to what? Eg the move from an agrarian to industrial economy often means the loss of a way of life and movements of population from rural to urban areas. In what sense is this progress or development? Are there only 'winners'? 

Is a worker earning $50,000 pa in an industrialised nation working 18 hour days, commuting long distances on congested roads, with large mortgage and pressure 'to succeed', better or worse off than a worker in developing country earning $5,000 pa - sufficient income to meet the needs of his family - but with fewer 'stresses'?

Dudley Seers' (1969) definition of development is widely accepted. 

Development occurs with: the reduction and elimination of poverty, inequality and unemployment within a growing economy.

"Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs." 1992 UN Rio DeclarationMeasuring Development

Economic development is measured using composite (component) indicators. Therefore development is seen as a broader measure of welfare than simply GDP per capita.

One of the best-known indicators is The UN’s Human Development Index (HDI). 

HDI Basics

This measures a country ’s average achievements in three basic dimensions of human development:

(1) Life expectancy at birth

(2) Educational attainment ( average/mean years of schooling and mean/av. expected years of schooling)

(3) Adjusted real income (GNI PPP$ per person)

Now watch the video below:

Note that in some older books the HDI maybe shown to be calculated slightly differently than described above. This is because the measurement of HDI was modified in 2011. Educational attainment is now measured by calculating the average years of schooling of people aged 25+ and the expected years of schooling for children just starting schooling. These replace literacy rates and and gross enrolment. Equally GNP per capita (PPP) replaces GDP per capita (PPP)

Student Activity:

Pick 2 countries- one a high income and one a low income country. For each find out as much as you can about the component values of the HDI and any other relevant data. Are there any surprises? For example NZ has a much higher HDI index than you would expect by merely looking at GNI per capita figures.

Other measure of Development: Development as a process and the UN MDGs (2015) and their successor the Sustainable development Goals.