Measures of Development – AS/A LEVELS/IB/IAL

Measures of Development – AS/A LEVELS/IB/IAL

Courses Info

Level: AS Levels, A Level, GCSE – Exam Boards: Edexcel, AQA, OCR, WJEC, IB, Eduqas – Economics Revision Notes 

The Human Development Index

The HDI consists of three main dimensions and measures the economic & social welfare of countries over time:

  • Health – this is measured in terms of life expentency at birth and takes a range of 25-85 years
  • GDP per person – this is measured at purchasing power parity
  • Education – this is measured in terms of the expected years of schooling at age four and the means years of schooling at age 25

Advantages of the HDI

  • Much broader measure than GDP per capita as it takes into account three different dimensions
  • Allows for more holistic comparisons to be made between countries
  • Factors such as health and education can also provide information regarding a country’s infrastructure and investment opportunities

Disadvantages of HDI

  •  Although three dimensions are considered, it is still quite a narrow measure to use – several other factors are not included
  • Environmental factors not considered
  • HDI also does not consider the amount of freedom people possess, in terms of politically, their human rights, gender equality or culturally
  • The distribution of income and poverty rate are not considered

Examples of other indicators of development

  • The degree of inequality
  • The energy consumption per person
  • Gender-related Development Index – measures the relative inequality between men and women
  • The proportion of people with access to clean water
  • The proportion of people (per thousand) who own a mobile phone
  • The degree of democracy

OCR Spec – Additional Content

The structure of the Economy

Primary Sector

This refers to the extraction of raw materials, where the primary sector may be heavily reliant on the agricultural market

Secondary Sector

This refers to the manufacturing of goods / services, where the raw materials are converted into finished goods. It can be inferred that the economy is reliant on manufacturing if a large proportion of it is Secondary Sector

Tertiary Sector

This refers to the supply of services, such as finance (banking etc) and restaurants

Tertiary Sectors tend to be heavily located in developed countries

CIE Spec – Additional Content

Kuznets Curve

[diagram]

The Kuznets Curve suggests that as employment moves from agriculture to industry, inequality within society also rises as the wages of industrial workers increase faster than the wages of farmers

The wealth is the redistributed through government transfers and education

He argued once countries become economically developed, inequality reduces. In poor countries inequality exists, however it is just a transitional phase

Thomas Piketty

He contradicted Kuznets’s theory and instead argued that continued inequality is a result of capitalist free market system

Inequality increases because the rate of return on capital also rises. This means that as the rich make more  investments, the rate of return on their capital will also rise, causing them to continue to get richer

 

Quick Fire Quiz – Knowledge Check

1. Identify the three dimensions of the HDI (3 marks)

2. Identify how each dimension of the HDI is measured (3 marks)

3. Explain three advantages of using the HDI as a measure of development (6 marks)

4. Explain four disadvantages of using the HDI as a measure of development (8 marks)

5. Identify four other indicators of development (4 marks)

 

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