Development economics

Table of Contents

1. Topic pack - Development economics - introduction
2. 4.1 Economic development (notes)
3. 4.1 Economic development (questions)
4. 4.2 Measuring Economic Development (notes)
   1. Measuring Economic Development - introduction
   2. Building a development Database (Part 2)
   3. Limitations of using GDP to compare welfare
   4. Comparing welfare
   5. Building a development database (Part 3)
   6. Alternative single indicators
   7. Building a development database (Part 4)
   8. Perspectives on development (videos)
   9. Gapminder data
   10. Composite indicators
   11. Building a development database (Part 5)
   12. Problems of measuring development
   13. Building a development database (Part 6)
5. 4.2 Measuring development (questions)
6. 4.3 The role of domestic factors in economic development (notes)
7. 4.3 The role of domestic factors in economic development (questions)
8. 4.4 The role of international trade (notes)
9. 4.4 The role of international trade (questions)
10. 4.5 The role of Foreign Direct Investment (FDI) (notes)
11. 4.5 The role of foreign direct investment (questions)
12. 4.6 The role of foreign aid and multilaterial development assistance (notes)
13. 4.6 The role of foreign aid and multilateral development assistance (questions)
14. 4.7 The role of international debt (notes)
15. 4.7 The role of international debt (questions)
16. 4.8 The balance between markets and intervention (notes)
17. 4.8 The balance between markets and intervention (questions)
18. Print View

Problems of measuring development

While GDP provides a somewhat limited measure of economic growth and living standards, it does have the advantage of being fairly easily obtained and is based on three variables only - income, expenditure and output.

In contrast to this, as can be seen from the HDI, HPI, MEW and ISEW, development is a multi-dimensional, complex process which can only be judged against a variety of criteria, using composite indices.

This may give rise to various problems involving subjective, value judgments on behalf of the statisticians who construct the indices. For example, how should factors such as life expectancy and literacy be weighted within an index? Which factors should be included and which should be excluded?

So while the HDI, for example, may provide a fairly sophisticated indicator of living standards, it omits some very important components, such as environmental quality; but to construct a development index which is all-embracing would be a statistically awesome task!

You need to be able to:

Explain the measures that make up the Human Development Index (HDI).

You need to be able to:

Compare and contrast the HDIfigures for economically more developed countries and economically less developed
countries.

Explain why a country’s GDP/GNI per capita global ranking may be lower, or higher, than its HDI global ranking.