Measuring Development
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![Page 1: Measuring Development](https://reader030.fdocuments.net/reader030/viewer/2022032805/56813266550346895d990084/html5/thumbnails/1.jpg)
Measuring Development
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Argument:Over time, capitalist economic systems
inevitably develop increasing inequality within a population because factors of production such as capital, land, and entrepreneurship become concentrated in the hands of the wealthy.
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Does GDP per capita give a reasonable estimate of the welfare of a nation’s population?
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Measuring inequality: The Lorenz Curve
The further the Lorenz Curve is from midpoint line, the more inequality that exists
http://content.answers.com/main/content/img/oxford/Oxford_Geography/0198606737.lorenz-curve.1.jpg
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Gini Index
• Higher Gini Index # = Higher Inequality
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Gini CoefficientGini Coefficient = A/(A + B)
• Range 0-1If A is small because thereis little inequality in the country, the coefficient will be close to zero.
Real World Approximate Range 0.25 (Denmark) to 0.70 (Namibia)
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Gini IndexGini Index =Gini Coefficient [A/(A + B)] x 100
• Range 0-100
Namibia 70.7South Africa 65Philippines 45.8United States 45Japan 38.1India 36.8South Korea 31.3Sweden 25
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Choose two countries below, draw a Lorenz Curve for each on the same graph to compare inequality among their citizens, and use it to explain (in a brief paragraph) whether income inequality tends to be a bigger issue among MEDCs or LEDCs.
• 1Namibia70.7• 2South Africa65.0• 3Lesotho63.2• 4Botswana63.0• 5Sierra Leone62.9• 6Central African Republic61.3• 7Haiti59.2• 8Colombia58.5• 9Bolivia58.2• 10Brazil56.7• 11Guatemala55.1• 12Honduras53.8• 13Hong Kong53.3• 14Paraguay53.2• 15El Salvador52.4• 16Chile52.4• 17Panama51.0• 18Papua New Guinea50.9• 19Zambia50.8• 20Niger50.5
• 21Swaziland50.4
• 22Gambia, The50.2
• 23Zimbabwe50.1
• 24Dominican Republic49.9
• 25Peru49.6
• 26Sri Lanka49.0
• 27Mexico48.2
• 28Costa Rica48.0
• 29Singapore47.8
• 30Madagascar47.5
• 31Mozambique47.3
• 32Nepal47.2
• 33Uruguay47.1
• 34Ecuador46.9
• 35Rwanda46.8
• 36Philippines45.8
• 37Uganda45.7
• 38Jamaica45.5
• 39United States45.0
• 40Cameroon44.6
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Does foreign direct investment by multinational corporations (MNCs) improve the welfare of the citizens of developing countries or does it lead to increased inequality among citizens?
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Does investment by MNCs appears to be benefitting the typical citizen in each country?
Developing Countries• Brazil 56.7• China 41.5• Mexico 48.2• Thailand 43• Malaysia 44.1• India 36.8
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How should we define development given the fact that our definition will guide economic policy?
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Economic Growth vs Development
Growth
Economic DevelopmentDevelopment: Where increases in real GDP per capita are accompanied by increases in standards of living
Increases in welfare
Increases in human freedom
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If we don’t know what development is, how do we measure it?
2000 UN Millenium Development Goals
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HDIHuman Development Index
Composite Index:
• Health Life Span
• EducationLiteracy + School enrolment
• GDP/capita
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Anomalies
• Saudi Arabia- 44th GDP/capita, 77th HDI
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South Africa
• 52nd GDP/capita, 120th HDI
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Ecuador
• 112th GDP/capita, 82nd HDI
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Sweden
• 20th GDP/capita, 6th HDI
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Zimbabwe
• 125th GDP/capita, 145th HDI
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Gender MeasurementsUN Millenium Goals
Goal 3: Promote gender equality and empower womenTarget 4: Eliminate gender disparity in primary and
secondary education, preferably by 2005, and in all levels of education not later than 2015
Ways of Measuring:-Ratio of girls to boys in primary, secondary and tertiary
education-Ratio of literate women to men, 15–24 years old-Share of women in wage employment in the non-
agricultural sector-Proportion of seats held by women in national parliament
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Gender Measurements
Gender-related Development Index (GDI)• GDI = HDI adjusted for inequality between
men and women– If GDI is lower than HDI, more inequality
Gender Empowerment measure (GEM)• % of women in leadership, management,
and parliament positions• Share of national income
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HPIHuman Poverty Index
Proportion of people not meeting a basic level of each of the HDI goals:
% who do not reach age 40% of adults who are illiterate% of pop without access to safe water + %
of kids who are underweight
• Human Poverty Index Map
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GPI Genuine Progress Indicator
Website explaining GPI
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Review
1. What is development?
2. How is development measured?