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Measures of Development

Economic development is the sustainable increase in living standards for a country, typically characterised by increases in life span, education levels, and income
There are many measures of economic development
- Single indicators e.g. number of doctors/1000 people; infant mortality rate; % of the population with access to clean drinking water
- Composite indicators such as the Human Development Index (HDI)

Health, as measured by the life expectancy at birth e.g.in (opens in a new tab) 2019 it was 81.2 years in the UK
Education, as measured by a combination of the mean years of schooling that 25 year old’s have received, together with the expected years of schooling for a pre-school child
Income, as measured by the real gross national income per capita at purchasing power parity (ppp)

The Advantages and Disadvantages of Using the HDI for Comparison

Advantages	Disadvantages
It is a composite indicator which provides a more useful comparison metric than single indicators do It incorporates three of the most important metrics for households i.e. health, education and income It is widely used all over the world which provides an opportunity for meaningful comparisons It provides a goal for governments to use when developing their policies e.g. it may help identify that the education levels are holding back improvements to the HDI and government policy can target that It provides citizens with an understanding of how their quality of life compares to other countries	It does not measure the inequality that exists as it uses the mean GNI/capita It does not measure or compare the levels of absolute and relative poverty that exist For many countries it does not provide useful short-term information as gathering the data required for the calculation is difficult. This means the data often lags reality by several years

Advantages

Disadvantages

It is a composite indicator which provides a more useful comparison metric than single indicators do
It incorporates three of the most important metrics for households i.e. health, education and income
It is widely used all over the world which provides an opportunity for meaningful comparisons
It provides a goal for governments to use when developing their policies e.g. it may help identify that the education levels are holding back improvements to the HDI and government policy can target that
It provides citizens with an understanding of how their quality of life compares to other countries

It does not measure the inequality that exists as it uses the mean GNI/capita
It does not measure or compare the levels of absolute and relative poverty that exist
For many countries it does not provide useful short-term information as gathering the data required for the calculation is difficult. This means the data often lags reality by several years

There are many more single indicators of economic development. These can be used to compare the relative standing of countries at any point in time. They also serve to provide targets for improving the lives of citizens. Examples include
- The proportion of the male population engaged in agriculture
- Energy consumption per person
- The proportion of the population with access to clean water
- The proportion of the population with internet access
- Mobile phones per thousand people
- Number of girls completing primary education
Two other useful composite indicators include
- The inequality adjusted HDI (IHDI)
- The Multi-dimensional Poverty Index (MPI)

Characteristics of the IHDI and MPI

IHDI	MPI
Created in 2010 to deal with the lack of information that the HDI provides on inequality The IHDI will be equal to the HDI value when there is no inequality, but falls below the HDI value as inequality rises This means that the IHDI measures the level of human development when inequality is accounted for The difference between the HDI and IHDI can be expressed as a percentage and represents the loss in potential human development due to inequality It provides greater insight into the differences in human development that exist in a country as opposed to the average human development	Launched in 2010 by the Oxford Poverty and Human Development Initiative at the University of Oxford It measures the complexities of poor people’s lives, individually and collectively, each year It tracks deprivation across three dimensions and 10 indicators: health (child mortality, nutrition), education (years of schooling, enrolment), and living standards (water, sanitation, electricity, cooking fuel, housing, assets) It first identifies which of these 10 deprivations each household experiences Then identifies households as poor if they suffer deprivations across 1/3 or more of the weighted indicators It can focus in on regions, ethnicities and also any of the three dimensions making it a useful tool for policymakers and non-government organisation (NGOs) working to reduce poverty

IHDI

MPI

Created in 2010 to deal with the lack of information that the HDI provides on inequality
The IHDI will be equal to the HDI value when there is no inequality, but falls below the HDI value as inequality rises
This means that the IHDI measures the level of human development when inequality is accounted for
The difference between the HDI and IHDI can be expressed as a percentage and represents the loss in potential human development due to inequality
It provides greater insight into the differences in human development that exist in a country as opposed to the average human development

Launched in 2010 by the Oxford Poverty and Human Development Initiative at the University of Oxford
It measures the complexities of poor people’s lives, individually and collectively, each year
It tracks deprivation across three dimensions and 10 indicators: health (child mortality, nutrition), education (years of schooling, enrolment), and living standards (water, sanitation, electricity, cooking fuel, housing, assets)
It first identifies which of these 10 deprivations each household experiences
Then identifies households as poor if they suffer deprivations across 1/3 or more of the weighted indicators
It can focus in on regions, ethnicities and also any of the three dimensions making it a useful tool for policymakers and non-government organisation (NGOs) working to reduce poverty