Measuring Development

International development is a process to end global inequality and provide every human being access to basic human rights whilst allowing countries to develop economically and socially. As such, before I delve into the various topics that pique my interest in Development Theory & Practice, it’s important that the way we measure development is considered.

Common ways in which development is often measured are:

  1. Gross Domestic Product (‘GDP’) or Gross National Income (‘GNI’) of a country;
  2. Global Poverty Line;
  3. Inequality measures; and
  4. Human Development Index (‘HDI’).

I will break down GDP briefly, which is the most popular measure of development. GDP is “calculated by valuing outputs of goods and services at market prices for a particular country and when income from abroad (remittances) is added the measure becomes GNI”(Greig, Hulme, & Turner, 2007). The raw GDP figures are incomparable between countries as each currency and inflation rate is different and so purchasing power parity adjusted GDP figures are used for more accurate comparison between nations.

An advantage of utilising GDP as a measure of development is that it accounts for most economic activity in a country and there is ample data available surrounding GDP for every country. The greatest weakness, on the other hand, is that GDP does not take into account unpaid work (value addition through domestic roles) and activities in relation to subsistence production (GDP only accounts for transactions whereby an exchange of money has occurred). As a result, GDP may be underestimated (Greig, Hulme, & Turner, 2007). 

The sole utilisation of one measure to account for development will lead to misleading interpretations. Olson (1982) alluded to the fact that often the way in which data is measured can also lead to different answers. So there is no one perfect measure, but a set of measures must be consulted before coming to a conclusion about an aspect of development for a region or country.

Now that a brief introduction into measurement has been made, I’d like to focus on some of the unconventional and newer metrics for development which piqued my interest in this development class.

  • Democracy index

The Democracy index, simply put, rates countries against a criteria of characteristics of a democratic system. The Economist Intelligence Unit’s democracy index is loosely based on The Freedom House Index but places more emphasis on the public’s involvement in politics and the functionality of the government. It is “based on five categories: electoral process and pluralism; civil liberties; the functioning of government; political participation; and political culture” (The Economist Intelligence Unit’s index of democracy, 2016). 

My only qualm with this index is that it by rating democracies it implies democratic systems are better. As per the table below, a majority of the world’s countries are under a hybrid or authoritarian regime. Although we have not found a truly perfect political system, certain countries and regions may work better with hybrid political system. It seems unfair to penalise them simply because they are not democratic. For instance, in Papua New Guinea, it is within the traditional societal fabric to take care of your family at all costs. This system is the ‘Wontok’ system, whereby jobs may be given to family members over more qualified non-family candidates, if that family member is in need. This system in the democratic world would be labelled nepotism and seen as corrupt however, in PNG, the political system will only truly succeed if this tradition that has been woven into the social fabric of PNG society is adequately considered. Therefore, hybrid regimes may be necessary in certain regions or countries and thus I believe this measure may be biased towards the political concepts of the western world. For example PNG received a 6.03/10 score for democracy in 2015 (“Democracy Index (10 = perfect) by country – 2016”, 2016).

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  • Social Progress Index

The Social Progress Index includes 3 development factors – basic human needs, foundations of wellbeing and opportunity. Specifically this encompasses the following areas:

social-progress

Each factor is calculated through the weighted sum of each of the smaller metrics (“2016 Social Progress Index | Social Progress Imperative”, 2016). 

Given the lack of data in certain areas, some measures are estimated for countries using a regression process. This highlights the importance of sound and complete data and the effect it can have on indices.

E.g. Papua New Guinea did not have complete data and so was unranked in the Social Progress Index. They simply received a score of 54.67 for Foundations of Wellbeing (“2016 Social Progress Index | Social Progress Imperative”, 2016). 

  • Global Peace Index

The Global Peace Index (“GPI”) covers 99.7% of the world’s population (163 nations) and ranks these countries on 23 qualitative and quantitative factors in relation to peace and conflict. The GPI provides data on the level of conflict around the world which is vital to development initiatives.

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  • Happy Planet Index

The Happy Planet Index (HPI) is a wellbeing measure of development which focuses on 4 elements to see if the people in nations are leading enjoyable lives.

The elements are described as follows on the Happy Planet Index website(“About the HPI”, 2016).

  1. Wellbeing: How satisfied the residents of each country say they feel with life overall, on a scale from zero to ten, based on data collected as part of the Gallup World Poll.
  2. Life expectancy: The average number of years a person is expected to live in each country based on data collected by the United Nations.
  3. Inequality of outcomes: The inequalities between people within a country, in terms of how long they live, and how happy they feel, based on the distribution in each country’s life expectancy and wellbeing data. Inequality of outcomes is expressed as a percentage.
  4. Ecological Footprint:The average impact that each resident of a country places on the environment, based on data prepared by the Global Footprint Network. Ecological Footprint is expressed using a standardised unit: global hectares (gha) per person.

HPI.jpeg

It’s quite interesting to note that the most ‘developed’ countries do not rate highly on this index. In fact, the UK is ranked 34 with the US on 108 out of 140 countries. This is an unconventional approach to measuring development but lends to the notion that development is not just about economic or health initiatives but also about increasing the quality of life of people around the world.

References 

Olson, M. (1982). The rise and decline of nations (1st ed., p. 96). New Haven: Yale University Press.

Greig, A., Hulme, D., & Turner, M. (2007). Challenging global inequality (1st ed.). New York: Palgrave Macmillan.

The Economist Intelligence Unit’s index of democracy. (2016) (1st ed.). Retrieved from http://www.avozdocidadao.com.br/images/democracy_index_2007_v3.pdf

Democracy Index (10 = perfect) by country – 2016. (2016). En.actualitix.com. Retrieved 13 December 2016, from http://en.actualitix.com/country/wld/democracy-index.php

OECD Better Life Index. (2016). Oecdbetterlifeindex.org. Retrieved 13 December 2016, from http://www.oecdbetterlifeindex.org/#/11111111111

About the HPI. (2016). Happy Planet Index. Retrieved 13 December 2016, from http://happyplanetindex.org/about/#how

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