Measures of economic
development
Why? Why bother?
In a simple language:
How far you have gone
Know where you are
Where you want to go
But where you are going / retreating to
--------------------------
Why you have not gone far and what is blocking you?
key functions
Advocacy function
Policy function
Development management function
Planning function
Resource (human, material, financial) mobilization function
Monitoring and performance assessment function including on global
commitments
Measures
PROCESS
TYPE- I TYPE-II TYPE-III
Assessment at
Assessment at local and Selective
national levels community level impact
on basis of on basis of evaluation
detailed study sample study study
OUTCOME
Development Indicators can be qualitative and quantitative:
1. Quantitative Indicators – are based on objective and truthful pieces of information;
and often collected in surveys or in a census.
2. Qualitative Indicators – are based on subjective feelings, impression and opinion.
These provide a good indication of the social health of a country.
Commission on Sustainable Development (CSD)
GDP Birth rate Happiness
Calories consumed Percentage of people
Death rate
per day working in agriculture
Number of cars per Number of people
Adult literacy rate
family per rooms in house.
Amount of debt a Crime rate
Infant mortality rate
country has.
Number of
People per hospital Obesity rate
computers per family
Basic Measures
• Development indicators can be split into 3 different
categories:
• Economic Indicators
• Environmental Indicators
• Social indicators
Some issues………..
Difficulty of measuring social dimension
– Diverse interpretation of the social dimension across countries
– Difficulty of measuring social capital
Capturing trans-boundary effects
– Indicators measured at country-level do not cover, e.g. pollution, natural disasters,
environmental externalities that cross borders
Sets of indicators versus composite indices.
Simple and
Composite Index
GDP
Per Capita Income (PCI)
Human Development Index (HDI)
Gender Development Index (GDI)
Global Hunger Index (GHI)
Multidimensional Poverty Index (MPI)
Capability Approach (CA)
Physical Quality of life Index (PQLI)
Human Development Index (HDI)
The Human Development Index (HDI) is a summary
measure of average achievement in key dimensions of
human development: a long and healthy life, being
knowledgeable and have a decent standard of living.
So, HDI is the geometric mean of three
dimension indices:
Where,
LEI = Life Expectancy index
EI = Education Index
II = Income Index
COUNTRY GROUPINGS USING HDI VALUE
Groups Value Countries
Very high human development 0.800 and above Developed
High human development 0.700–0.799 Economies in transition
Medium human development 0.550–0.699 Developing
Low human development Below 0.550 Undeveloped
. Human Development Report, UNDP, 2016
Dimension indices =
actual value – minimum value
_______________________________
maximum value – minimum value
Example Georgia:
Indicator Value
Life expectancy at birth (years) 75.020
Expected years of schooling (years) 13.905
Mean years of schooling (years) 12.246
Gross national income per capita (2011 purchasing power parity USD) 8,855
Developed, Developing and Undeveloped Countries