4.3.1 - Measures of development

Question 1

define economic development

Answer 1

economic development is about improvements in living standards and quality of life

improvement in the quality of life and living standards show through measures of literacy, life-expectancy and health care outcomes

Question 2

Define aid

Answer 2

Overseas development assistance from one country to another. Might take the form of humanitarian assistance, technical expertise and project aid etc

Question 3

Define bric

Answer 3

The BRICS grouping – Brazil, Russia, India, China and South Africa – has
become short-hand for the rise of emerging markets in the global economy.

Question 4

Define GDP

Answer 4

The total value of an economy’s domestic output of goods and services
so GDP per capita is just National income per head of population = total GDP / total population

Question 5

define infrastructure

Answer 5

The transport links, communications networks, sewage systems, energy
plants and other facilities essential for the efficient functioning of a country
and its economy.

Question 6

Define informal sector

Answer 6

The sector of the economy, normally comprising of small businesses,
which is unregistered with the tax authorities.

Question 7

Define economic growth

Answer 7

an increase in the size of a countrys GDP

Question 8

Define HDI

Answer 8

an index compiled by the UN that measures a country’s economic development, consisting of equally weighted indices measuring education, health and living standards

Question 9

What does the HDI consist of

Answer 9

(max value at 85, min value at 25)) education: the mean years of schooling of a 25 year old and the expected years of schooling for a 5 year old

2) health: life expectancy at birth

3)income: as measured by real GNI per capita at purchasing power parity

Question 10

How are the different components of HDI combined

Answer 10

Each of the three indicators is given equal weighting and a mean is taken to give a figure between 0 and 1. The higher the number, the greater the level of development.

Question 11

What doesn’t the HDI include?

Answer 11

• income inequalty
• environment
• corruption and freedom
• crime and poverty
• education and health indices do not include quality/success of these outcomes; as well as the length of education, we need to look at literacy and numeracy levels to measure educational outcomes

Question 12

Categories of development based on HDI

Answer 12

LOW: <0.550
MEDIUM: 0.550-0.699
HIGH: 0.700-0.799
VERY HIGH: > 0.800

Question 13

Advantages of HDI:

Answer 13

• It takes into account three key factors which are important for the development of a
  country to give broad measure so better than single indicators
• allows for progress to be measured over time
  -helps focus attention on developing countries - aid

Question 14

disadvanatages of HDI

Answer 14

• should all the components be equally weighted - some argue that GNI per capita per PPP should have greater weighting as there is disagreement on which component is more important to quality of life in a country
  + so allocation of resources may no be as efficient

Question 15

List other measures of development

Answer 15

• The Inequality-adjusted Human Development Index (IHDI):
• The Multidimensional Poverty Index (MPI):
• The Genuine Progress Indicator:

Question 16

define IHDI

Answer 16

• The IHDI is the HDI adjusted for inequalities in the distribution of scores in each of the three dimensions of the HDI (health, education and income).
• The IHDI will be equal to the HDI value when there is no inequality, but falls below the HDI value as inequality rises.

IHDItakes into account inequalities within education etc

Question 17

Define sustainable development

Answer 17

To leave future generations the option or capacity to be as well off as we are.

Question 18

Define trickle down

Answer 18

The process whereby the economic gains from economic growth pass down throughout the entire society eventually giving rise to inclusive
development.

Question 19

What is multidimensional poverty index

Answer 19

This measures the percentage of the population that is multi dimensional poor . It uses data for health, education and standard of living but uses a broader range of indicators within these categories.

Question 20

How is MDPI measured

Answer 20

• Years of schooling and school attendance data is used for education;
• child mortality and nutrition data for health;
• availability of electricity, sanitation and safe drinking water in households, cooking fuel used, assets owned and the type of floor in a
  house for standard of living.

Question 21

evaluate MPI

Answer 21

• highlights the countries where some areas are extremely rich but where most of the
  population is not and focuses on poverty .
• However, it cannot be calculated for all
  countries as the data is not always available . It also doesn’t take into account the
  environment.

Question 22

WHat is the genuine progress indicator

Answer 22

• It is calculated from 26 different indicators grouped into three main categories:
  economic, environmental and social .
• It aims to look at economic sustainability,
  to ensure development does not limit the amount produced and consumed in the
  future

Question 23

what is included in GPI

Answer 23

• The economic category looks at personal consumption, inequality and the cost of
  unemployment.
• Environmental accounts for the cost of pollution, loss of natural areas, CO 2 emissions, ozone depletion and the depletion of non-renewable resources.
• In social, the 10 indicators range from the value of housework and parenting to the cost of crime and commuting to the value of volunteer work.

Question 24

Evaluate Genuine progress indicator

Answer 24

• They tend to show developed countries experiencing negative growth over time, due
  to their impact on the environment.
• Some argue this proves that development is
  unsustainable whilst others argue the index is biased and is constructed to prove
  the anti-growth case.
• figures like changes in electricity production or the numbers with a mobile phone per thousand of the population can show development levels. These are easier to calculate than indexes

Question 25

single indicators of development

Answer 25

GDP per capita (gni),
health measures -life expectancy, infant mortality (shows level of jobs in healthcare, sanitation level, good health education on aids etc, access to hospitals)
- education measures (adult literacy rates, enrollment in primary education)

Question 26

Define GNI

Answer 26

Gross National Income (GNI) is the final value of income flowing to a country’s owned factors of production in a given yea

Question 27

Why use GNI over GDP capita

Answer 27

• if a large amount of national income derives from FDI, then it is likely the profit earnt from this leaves the country so GDP is higher than GNI as GNI only includes income flowing to the country’s FOP
• but use GNI at PPP to account for differences in cost of living between country as the value of currencies will vary greatly

Question 27

Cons of GDP

Answer 27

• Many factors that affect living standards are not accounted for: corruption, environment, crime, education, health
• Increase in GDP can be detrimental, or not beneficial, to living standards e.g. pollution, repairing vandalism
• Unpaid activity e.g. child care not included
  Income distribution not accounted for

Question 27

Pros of GDP as a measure of economic development

Answer 27

• Gives an indication of living standards
• Vast majority of countries collect GDP figures so wide comparisons
• Can be refined into per capita and/or PPP to make it more representative