Indicators of development

What is development?

What is development?

• Development refers to a country's positive progress in improving the standard of living and quality of life for its population

• The quality of life includes subjective factors like happiness

• We measure a country's level of development using the following indicators:

  • Economic indicators (for example, Gross Domestic Product (GDP))

  • Social indicators (for example, life expectancy)

  • Political indicators (for example, the Corruption Perception Index)

• Individual indicators are misleading when used alone, as some features develop before others

  • This may indicate that a country is more developed than it really is

• By using multiple indicators as a measure of development, a clearer picture of that country's development is produced

• The country's GDP (gross domestic product), GNI (gross national income), and GNP (gross national product) are the traditional measures used to measure wealth

Gross Domestic Product (GDP)

Gross Domestic Product (GDP)

• Gross Domestic Product (GDP) per capita is the total value of goods and services produced within a country in a year divided by the population of the country

  • There can be huge differences in GDP depending on the size and population of a country

  • Dividing it by the population means that more meaningful comparisons can be made between countries

• GDP per capita is an average this means that the variation in wealth is hidden

  • It is possible that two countries can have the same average GDP per capita but that one has a few very wealthy people and lots of people living in poverty, whereas the other has a more equal distribution of wealth

• There is no way of knowing what the GDP is spent on

  • GDP increases after an earthquake due to the cost of rebuilding

  • This does not mean that the country is more developed or that everyone's quality of life has improved

Gross National Product (GNP)

Gross National Product (GNP)

• GNP per capita is a measure of a country's economic output per person

• It is calculated by dividing the total value of a country's final output of goods and services by its population

• It reflects the average income of a country's citizens and allows a better comparison since different countries have varying populations

  • For instance, the GNP of the UK is lower than that of India, but the GDP per capita of the UK is higher than that of India (India has a higher population compared to the UK)

  • However, GNP per capita does not take into account the cost-of-living in the country—$1 will go further in Bangladesh than in the USA

• To even this discrepancy, the GNP per capita at Purchasing Power Parity (PPP) is calculated

• Comparison between countries' levels of development is easy to see, but it fails to identify

  • How wealth is distributed around a country—the wealth gap

  • Government investment in the country

    • Despite Cuba's low GNP per capita, the government has historically placed a strong priority on social investment, and the country enjoys higher literacy rates, a lower infant mortality rate, and a comparable life expectancy to America

Gross National Income (GNI)

Gross National Income (GNI)

• Gross national income (GNI) is the total value of goods and services produced within a country, plus income from abroad (like remittances and investment income), minus payments made to foreign organisations

• It is a measure of national wealth that can be used as an alternative to GDP

• To calculate GNI, add income from foreign sources to a country's GDP

• For many countries, there isn't much difference between GNI and GDP

• However, if a country receives significant foreign investment or foreign aid, GNI may be much higher than GDP

• GNI is now more commonly used than GDP by groups like the World Bank

• The European Union also uses it to determine each member country's contribution

GNI per capita

GNI per capita

• GNI per capita, or Gross National Income per capita, is a measure of a country's total income, including income from abroad, divided by its population

• It represents the average income earned by each person in a country and is used to gauge economic development and living standards 

GNI vs GNI per capita

GNI vs GNI per capita

• GNI is the total income earned by a country's population, regardless of where the income was earned

• While GNI per capita is the GNI divided by the country's population, indicating the average income per person

• GNI is a measure of a country's overall economic wealth, and GNI per capita shows an average income (standard of living) within a country

Other development indicators

Other development indicators

Life expectancy

• Life expectancy is the average age a person can be expected to live

  • Various factors impact life expectancy

    • Physical and human environmental factors

    • Personal lifestyle

    • Incidence of disease

    • Access to healthcare

Infant mortality

• Infant mortality rates refer to the number of children per 1000 who die below the age of 1

• Over 18 countries have an infant mortality rate of over 50 per 1000

  • These are all developing countries

  • Most of these countries are in Sub-Saharan Africa

Calorie intake

• Calorie intake, in kilocalories, is the energy obtained from food consumed per person each day

• It can be used as a measure of development because it reflects a country's overall economic and food security status

• Generally, developed countries tend to have higher average daily calorie intake compared to less developed countries

• This difference is often linked to factors like

  • wealth

  • access to resources

  • food production capabilities

Literacy rate

• Literacy rate is a measure of the percentage of people over 15 years old who can read and write

  • In developed countries, literacy rates average 96%

  • Less-developed countries have average literacy rates of 65%

• This can be hard to measure in LICs due to a lack of monitoring

• Conflict zones and squatter settlements are areas where it is difficult to measure literacy rates

People per doctor

• People per doctor is a the number of people each doctor is responsible for treating in a country or region

• A lower number (more doctors per person) usually means that a country is more developed because it means that the healthcare system is stronger

• However, it is a limited measure because

  • People may access healthcare advice through mobile phones or other methods that aren't reflected in the official doctor count

  • Access to healthcare may be limited for certain populations due to insurance or socioeconomic factors

  • The ratio can vary significantly between urban and rural areas within a country