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Measuring Development

Measuring Development. 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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Measuring Development

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  1. Measuring Development

  2. 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.

  3. Does GDP per capita give a reasonable estimate of the welfare of a nation’s population?

  4. 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

  5. Gini Index • Higher Gini Index # = Higher Inequality

  6. Gini Coefficient Gini Coefficient = A/(A + B) • Range 0-1 If A is small because there is little inequality in the country, the coefficient will be close to zero. Real World Approximate Range 0.25 (Denmark) to 0.70 (Namibia)

  7. Gini Index Gini Index =Gini Coefficient [A/(A + B)] x 100 • Range 0-100 Namibia 70.7 South Africa 65 Philippines 45.8 United States 45 Japan 38.1 India 36.8 South Korea 31.3 Sweden 25

  8. 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

  9. 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?

  10. 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

  11. How should we define development given the fact that our definition will guide economic policy?

  12. Economic Growth vs Development Development: Where increases in real GDP per capita are accompanied by increases in standards of living Increases in welfare Increases in human freedom Economic Development Growth

  13. If we don’t know what development is, how do we measure it? 2000 UN Millenium Development Goals

  14. HDIHuman Development Index Composite Index: • Health Life Span • EducationLiteracy + School enrolment • GDP/capita

  15. Anomalies • Saudi Arabia- 44th GDP/capita, 77th HDI

  16. South Africa • 52nd GDP/capita, 120th HDI

  17. Ecuador • 112th GDP/capita, 82nd HDI

  18. Sweden • 20th GDP/capita, 6th HDI

  19. Zimbabwe • 125th GDP/capita, 145th HDI

  20. Gender MeasurementsUN Millenium Goals Goal 3: Promote gender equality and empower women Target 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

  21. 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

  22. 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

  23. GPI Genuine Progress Indicator Website explaining GPI

  24. Review • What is development? • How is development measured?

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