gog 102 & ippe 2014 meaning and measures of development · gog 102 & ippe 2014 meaning and...
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PROFESSOR RODDY FOX
GOG 102 & IPPE 2014MEANING AND MEASURES
OF DEVELOPMENT
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• Gapminder’s Ignorance Survey
• Norway, Sweden, UK, USA,
• “simple questions about key aspects of global development .... Environment, Health, Energy, Gender, Economy, Demography and Governance.”
• “When we encounter ignorance, we want to find a cure.”
Introduction
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“[Socrates] was accustomed to say that he did not himself know anything, and that the only way in which he was wiser than other men was that he was conscious of his own ignorance, while they were not.”Guthrie, W.K.C. (1968). The Greek Philosophers from Thales to Aristotle. New York: Harper & Row. p74.
Ignorance Survey: GOG102 & IPPE 2014
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Demonstrate a reasoned understanding of spatial variations at the global scale of selected development characteristics
Describe and show a critical understanding of the spatial and temporal evolution of the world economy
Describe and show a critical understanding of demographic change and the processes driving population increase
Demonstrate an appreciation of the economic and demographic challenges the world currently faces.
Course Outcomes
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What is Development?
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A Perception?
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A Potential?
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• Stanton (2007: 10)”The most common measure of aggregate human well-being is now – as it has been for over 50 years – national income, usually expressed as per capita gross national product (GNP) or per capita gross domestic product (GDP). Criticisms of national income as a metric for social welfare have a long history and are by no means confined to economists ...”
• 1953 UN’s ‘System of Statistical Tables’ shows how to construct national income accounts.
• 1990s GDP supplanted GNP as the most common measure of national income.
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Different Measures
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EXPENDITURE FORMULA FOR GDP
Y = C + I + E + G
• Y - GDP• C - CONSUMER SPENDING• I - INVESTMENT MADE BY INDUSTRY• E - SURPLUS/DEFICIT OF EXPORTS OVER
IMPORTS• G - GOVERNMENT SPENDING • GDP/PER CAPITA divides GDP by total
number of people
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The level of per capita income attained by a group of people is often presented in a static way. It is commonly used to show development in one single index.
Geographically defined (eg nation or region, urban or rural).
The following tables and maps show these levels ....
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GDP at Purchasing Power Parity: GDP (PPP)Top Ranked Countries in 2013
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GDP Per Capita (PPP)Top Ranked Countries in 2013
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Data from: CIA’s World Factbook
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• Development can also be evaluated dynamically.
• Slim (1995: 144-5) quotes Clarke’s (1991) definition of development: “Development is not a commodity to be weighed or measured by GNP statistics. It is a process of change that enables people to take charge of their own destinies and realize their full potential. It requires building up in people the confidence, skills, assets and freedoms necessary to achieve this goal.”
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• Barrow (2001: 4566) ”Attempts to define ‘development’ reflect the current values of those making the definition, it is therefore difficult to agree one definition that is universally accepted and precise. Some see it as a learning process, others argue it is ‘positive social transformation.’ Another definition that is widely accepted in the West is: an ambiguous term for a multidimensional process involving material, social and organizational change, accelerated economic growth, the reduction of absolute poverty and inequality.”
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Animation from: Gapminder World
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Gapminder is Multidimensional and Dynamic: Health, Wealth and Time
Wealth
Hea
lth
1800 2010Time
A
B
C
Three Trajectoriesof ChangeCaused by
Different Processes
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GDP Per Capita (PPP) & Life Expectancy SOUTH AFRICA & SWEDEN 1800-2012
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Multidimensional Indices
The United Nations Development Programme’s (UNDP)
Human Development Index (HDI)Human Sustainable Development Index (HSDI)
HDI combines Education, Health, Wealth, Time.HSDI also adds the Environment
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• Development as a ‘buzzword’• Buzzword .... “An absence of real definition, and a strong
belief in what the notion is supposed to bring about” (Rist 2007).
• Developed and underdeveloped, rich and poor (eg Brandt Commission 1981).
• In the ‘cold war’ period - the First Second and Third Worlds of 1947-1991.
• Development became ....
• economic, endogenous, human, social, sustainable.
• Theories, policies and practice varied widely.
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http://www.nationsonline.org/oneworld/third_world_countries.htm
The Three Worlds of 1947-1991
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The Brandt Commission’s (1981) North: South Divide
Source: http://www.bartlett.ucl.ac.uk/dpu/news/Thinking_across_boundaries_RGS
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‘Western Society’s’ Security Walls after 9/11
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Human Sustainable Development Index 2011
Very High
Very Low
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Theories, policies and practice vary widely ....A key selection from ‘theguardian’ at:
http://www.theguardian.com/global-development/series/theories-of-development
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GOG 102 & IPPE 2014GDP & HDI MEASURES
OF DEVELOPMENTPROFESSOR RODDY FOX
[email protected] [email protected]
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• The Expenditure Calculation for GDP
• Y = C + I + E + G
• Spot test using two fictitious African islands
• Mandibar & Zemba
• GDP; GDP/capita; US$GDP/capita; development?
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INVESTMENT:INDUSTRY PURCHASING NEW PRODUCTIVE FACILITIES
GOVERNMENT SPENDING
CONSUMER SPENDINGEXPORTS - IMPORTS
GDP MONEY FLOWS
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INVESTMENT:INDUSTRY PURCHASING NEW PRODUCTIVE FACILITIES
GOVERNMENT SPENDING
EXPORTS - IMPORTS CONSUMER SAVING
TAXESINCOMESAVINGSSAVIN
GS
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Conceptual Problems of GDP or GNP measures of well being:• Only measure market exchanges;
• Goods and services may, in fact be ‘bads’ eg nuclear weapons and warfare;
• Counts health and ‘illth’ eg addictions, oil spills;
• Natural resources are treated as free and limitless;
• Places no value on leisure time (unless you can be made to pay for it);
• Ignores freedom and human rights;
• Ignores income distribution within society.
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It treats the tip of the economic iceberg as its most important feature.Community Economies Project (2009) Key Ideas. [Online] Available: http://www.communityeconomies.org/Home/Key-Ideas, [13 June 2014]
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“There are many fundamentally different ways of seeing the quality of living, and quite a few of them have some immediate plausibility. You could be well off, without being well. You could be well, without being able to lead the life you wanted. You could have got the life you wanted, without being happy. You could be happy, without having much freedom. You could have a good deal of freedom, without achieving much....” (Sen 1987: 1, quoted in Stanton 2007: 5)
Focuses on what we have in a single measure. But .....
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“Amartya Sen and Martha Nussbaum are together credited with the origination of the ‘capabilities’ approach to human well-being .... Sen and Nussbaum focused attention on what human beings can do, instead of on what they have. Moving the discussion away from utility and towards ‘capabilities’ allowed Sen and Nussbaum to distinguish means (like money) from ends (like well-being or freedom)”(Stanton 2007: 9)
• The Humanistic approach focuses on capabilities with multiple measures.
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“Capabilities are the abilities to do certain things or to achieve desired states of being. They are empowerment, the power to obtain what you desire, utilize what you obtain in the way that you desire, and be who you want to be. Goods, on the other hand, are merely things that you possess. Capabilities allow you to use goods in ways that are meaningful to you”(Stanton 2007: 9)
• The Human Development Index is an example of the capabilities approach.
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During the 1980s Nussbaum collaborated with economist Amartya Sen on issues of development and ethics which culminated in The Quality of Life, published in 1993 by Oxford University Press. Together with Sen and a group of younger scholars, Nussbaum founded the Human Development and Capability Association in 2003. With Sen, she promoted the "capabilities approach" to development, which views capabilities ("substantial freedoms", such as the ability to live to old age, engage in economic transactions, or participate in political activities) as the constitutive parts of development, and poverty as capability-deprivation. This contrasts with traditional utilitarian views that see development purely in terms of economic growth, and poverty purely as income-deprivation. It is also universalist, and therefore contrasts with relativist approaches to development. Much of the work is presented from an Aristotelian perspective.
http://en.wikipedia.org/wiki/Martha_Nussbaum
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“Sen and Nussbaum’s work stands out from that of their predecessors because of inclusion of human beings’ role as agents of their own well-being, and because of the centrality of human agency both as an end in itself, and as a means to other important capabilities or freedoms .... The UNDP’s Human Development Index (HDI) is an attempt to build on the insights of the humanist revolution, in effect developing an applied measure of social welfare ....”(Stanton 2007: 10)
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• Human Development Report of 1990:
• Mahbub ul Haq and Amartya Sen (both from South Asia) instigated the United Nations Development Programme’s annual series of reports;
• A single index (ul Haq’s goal) that is a composite of three measures: life expectancy index, education index (often itself a composite), wealth index.
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• Human Development Report of 1990:
• First use of the Human Development Index (HDI);
• Strongly influenced by the capabilities approach;
• “...income is not the sum total of human life ...”;
• Three components are used which are thought to measure directly, or indirectly, how people’s choices are enlarged:
• a long and healthy life;
• knowledge;
• access to the resources needed for a decent standard of living.
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Life Expectancy EducationIncome
After 2009 uses Mean and Expected Years of Schooling
HDI USES ‘GOALPOSTS’ BETWEEN WHICH INDICES ARE STANDARDISED
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This index uses the
logarithm of income
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Life Expectancy
South Africa: 52 yearsso ....
L = (52 - 20)/(83.2 - 20)
= 0.5063
Lower than China’s 0.847
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Mean Years of Schooling
South Africa: 8.2 yearsso ....
L = (8.2 - 0)/(13.2 - 0)
= 0.6212
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Expected Years of Schooling
South Africa: 13.4 yearsso ....
L = (13.4 - 0)/(20.6 - 0)
= 0.6505
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Education Index
E = √(0.6212*0.6516) - 0 / 0.951 - 0
= 0.669
Higher than China’s 0.589
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Income Index
I = ln(9812) - ln(163) / ln(108,211) - ln(163)
= 0.6306
Higher than China’s 0.584
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Human Development Index
SA’s HDI = √0.5063*0.669*0.6303 = 0.5983
China’s HDI = √0.847*0.589*0.584 = 0.6633
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http://vimeo.com/16470233
UNDP VIDEO: HDR 2010
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HDIs Compared
https://data.undp.org/dataset/Table-2-Human-Development-Index-trends/efc4-gjvq
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