# Measuring Development

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GDP Figures

GDP per capita: the gross domestic product per person. This is the output per person within the borders of a country.

For instance, the GDP per capita in France was \$42560.40, whilst the GDP per capita in Guinea was \$523.10 in 2013 (world bank).

GNI per capita: gross national income per person. This is the output per person produced by nationals of the country concerned, regardless of where they are.

Therefore GDP = GNI + net income from abroad.

For example, the GNI per capita in France was \$43520, but \$460 in Guinea in 2013 (world bank). France’s GNI per capita is greater than its GDP per capita, which means that its net income from abroad is positive because output by nationals exceeds the output of those in France. In contrast, Guniea’s net income from abroad, this would mean that non nationals contribute more to the country’s real GDP than nationals living elsewhere do.

GDP per capita PPP: gross domestic product at purchasing power parity. Purchasing power parity estimates the amount the exchange rate needs to be adjusted between countries in order for identitcal goods and services from different countries to have the same price.

The GDP per capita PPP in France is \$14402.40, whereas Guinea’s is \$1253.10 in 2013 (world bank). This seems to narrow the gap between the two countrys’ GDP because the prices in Guniea are lower than those in France for the same goods and services.

Health Indicators

Although GDP and GNI figures can be very helpful in understanding an economy, they may fail to give the true impression on how developed a country is. This is because a very small percentage of the population may be earning the vast majority of the national income, therefore, the distribution of income may be far from equitable despite high levels of real output. If methods to redistribute income are not used, then the health of the average resident of the country may suffer. This could be due to a lack of government revenue from progressive taxation which may lead to a lack in governement spending on health. Therefore, it is important to look at indicators other than GDP and GNI.

The following are examples of health indicators:

Life expectancy at birth: the number of years that a member of the population can be expected to live.

Maternal morality rate: the annual number of female deaths per 100,000 live births from any cause related to or aggravated by pregnancy or its management (excluding accidental or incidental causes).

Infant mortality rate: compares the number of deaths of infants under one year old in a given year per 1,000 live births in the same year.

The maternal and infant morality rates may be low, while the life expectancy may be high due to…

• Good public healthcare services accessible to all members of the population

• A healthy environment with low pollution levels, adequate sanitation systems and safe drinking water

• Healthy diets and avoidance of malnutrition

• Well educated population

• Low levels of inequality and poverty

United States:

Life expectancy at birth: 78.6 years (2013)

Maternal morality rate: 28

Infant mortality rate: 5.9

Brunei:

Life expectancy at birth: 71 years (2013)

Maternal morality rate: 27

Infant mortality rate: 8.4

All of these statistics can be found on the world bank’s website and are from 2013.

It may seem surprising that such a dominant country like the United States, does not have particularly impressive health statistics compared to a relatively small developing country like Brunei. However, this may be due to inequalities in income and education amoungst the population, leading to concentrate areas of poverty. In addition, this could arguably be due to a lack of good medical coverage accessible for all income groups.

In contrast, Brunei’s life expectancy may seem relatively high due to policies like the government funded AIDs awareness campaign and the fact that individuals requiring medical assistance unavailable in the country are sent overseas for it at the government’s expense.

Education Indicators

Like health, education is very important in considering the standards of living within a country. A more educated population also tends to lead to a more productive workforce in the long run, from which economic growth should follow. However, some countries do not follow this pattern because they have strong economic growth but their governments fail to invest in state provided, or subsidised, education which can lead to greater inequality. However, in some cases, developing countries with low GDP levels have focused on sustaining a good education system as their primary focus.

The following are examples of education indicators…

Adult literacy rate: the percentage of the population age 15 and above who can, with understanding, read and write a short, simple statement on their everyday life.

Primary school enrolement: the total enrollment in primary education, regardless of age, expressed as a percentage of the population of official primary education age. This can exceed 100% due to the inclusion of over-aged and under-aged students because of early or late school entrance and grade repetition.

Secondary school enrolement: the total enrollment in secondary education, regardless of age, expressed as a percentage of the population of official secondary education age. This can exceed 100% due to the inclusion of over-aged and under-aged students because of early or late school entrance and grade repetition.

Norway:

Literacy rate: 100% (2010)

Primary school enrolement: 99.4% (2012)

Secondary school enrolement: 111% (2012)

Russia:

Literacy rate: 100% (2010)

Primary school enrolement: 100.6% (2012)

Secondary school enrolement: 95% (2012)

All of these statistics can be found on the world bank’s website and are from.

Norway is known worldwide for having very high standards of living, however, russia, despite being a developing economy, also has very impressive education statistics. This is believed to be due to the communist history of Russia, whose leaders placed great importance on investing in its education system.

Composite Indicators

Composite indicators include more than one measure and so are considered to be better indicators of economic development. The main one that tends to be used is the Human Development Index.

The HDI measures development by combining indicators of life expectancy, education attainment, and income. The education component contains two indicators: expected years of schooling and mean years of schooling. The income component is measured by GNI per capita (PPP\$).

HDI Value

High Human development: 0.800 and above

Medium human development: 0.500 – 0.799

Low human development: less than 0.500

Some lower income countries may have a high HDI value because of their high life expectancy and education attainment which may be due to their well run and well provided public services.