Measuring Development

Measuring Development

1. The North-South divide

   • Willy Brandt, Brandt Report
   • Recognises general divide between a wealthy 'North' possessing 80% of the world's wealth, and a poorer 'South' with just 20%
   • Ignores different degrees of development within a country
   • Now seems simplistic because of rapid development

2. Single economic measures

   • Gross Domestic Product (GDP)
     • Means the value of goods and services produced in a country over a year
     • It is then usually divided by the total population to give a per capita (per person) value
     • Smooth out fluctuation in currency values by conversion known as the Atlas method
     • Does not show what per capita income is actually worth in terms of spending power;does not take into account the cost of living
   • Gross National Income (GNI)
     • Like GDP
     • Includes overseas investments
     • Better measure of a country's wealth than GDP
     • A better measure for wealthy countries who can gain wealth from shares, earning and profits from TNCs
     • Poorer countries are under-represented in this figure
     • Smooth out fluctuation in currency values by conversion known as the Atlas method
     • Does not show what per capita income is actually worth in terms of spending power;does not take into account the cost of living
   • Purchasing Power Parity (PPP)
     • Shows cost per capita by taking the cost of living into account
   • Commonly and widely used so they are comparable between countries
   • Do not show regional or urban-rural disparities
   • Narrow view of development as solely linked to wealth (western view)
   • Informal economy and subsistence farming cannot be accounted for in the statistics
   • Other factors can 'taint' figures e.g. more energy used for heating in cold country does not necessarily mean that they are wealthy

3. Composite indicators

   • Human Development Index (HDI)
     • Four indicators
       • Life expectancy
       • Education
       • Education (using the two indicators of literacy and length of schooling)
       • GDP per capita (using PPP$)
   • Shows how far people are benefiting from economic growth
   • More accurate
   • More rounded view
   • May not give the full picture of development because of the focus on social indicators
   • Does not include economic, environmental and political issues

4. Development means 'change', and implies that change is for the better. It usually means 'economic' change, which improves people's standards of living

5. The UN's four levels of income

   • High, upper middle, lower middle and low
   • Does not show differences within each division

6. Single social measures

   • Reflect the importance of human development
   • Show that development is a broader concept and is not just linked to money
   • Difficult to access
   • Hard to obtain reliable data for certain parts of the world e.g. North Korea