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Development. Development  Definition:  The process of improving the material condition of people through growth and diffusion of technology and knowledge.

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Presentation on theme: "Development. Development  Definition:  The process of improving the material condition of people through growth and diffusion of technology and knowledge."— Presentation transcript:

1 Development

2 Development  Definition:  The process of improving the material condition of people through growth and diffusion of technology and knowledge  Every place, regardless of size, exists at some level of development  MDCs  More developed countries  On wealthier side of development spectrum  LDCs  Less developed countries  On the economically poorer side of the development spectrum

3 Measuring development  There are several ways to measure development  Different factors:  Gross Domestic Product (GDP)  Value of total outputs of goods and services produced in a country, usually over one year  Gross National Product (GNP)  Includes all goods and services owned and produced by a country overseas  Purchasing Power Parity (PPP)  Measurement tool for each currency to buy an equal amount of goods  Allows economists to make “apple to apple” comparisons  Informal Sector  Includes all business transactions that were not reported by the government  Not calculated in GDP  Exists for several reasons

4 Human Development Index  Formula used to measure a country’s development level and compare it to other regions and countries on the rank- ordered list of countries  Country’s level of development can be distinguished by three factors:  Economic  Social  Demographic  HDI examines all three factors  HDI created by United Nations  Created by selecting:  One economic factor (Gross Domestic Product)  Two social factors (literacy rate, education)  One demographic factor (life expectancy)  Highest HDI is a 1.000, or 100%  Lowest score is a 0.000, or 0%

5 Map of HDI HDI

6 Economic Indicator: GDP  Gross Domestic Product per capita  GDP  Definition:  value of the total output of goods and services produced in a country, normally during a year  Divide GDP by total population to get the average contribution from individuals  For example:  The GDP for the U.S. in 2009 was $14 trillion  Divided by pop of 307 million= $46,600  In MDCs GDP per capita exceeds $30,000  In LDCs less than $3,000  The higher the per capita GDP, the greater the potential for ensuring that all citizens enjoy comfortable life  GDP does not perfectly measure country’s development  GDP measures average (or mean) wealth, not its distribution

7 GDP per Capita

8 Three other Economic Indicators  The other economic indicators useful in distinguishing between MDCs and LDCs  Types of jobs  Worker productivity  Availability of consumer goods

9 Types of Jobs  Five categories  Primary  Directly extract resources from earth  Secondary  Manufacturing  Tertiary  Provision of goods and services  Quaternary  Creation and transfer of information  Quinary  Highest level decision making  Distribution of jobs among workers differs greatly between MDCs and LDCs  % of primary jobs in LDCs is 60%, MDCs is less than 5%  High agricultural % means people producing food for mainly survival, not sale

10 Productivity  Definition:  Value of a particular product compared to the amount of labor needed to make it  Workers in MDCs are more productive than LDCs  Productivity can be measured by the value added per capita  Value added: gross value of the product minus the costs of raw materials and energy  $5,000 in U.S., $7,000 in Japan  $500 in China, $100 in India  MDCs  Workers produce more with less effort due to technology (machines, tools, equipment)  LDCs rely solely on human labor and animal power  Larger per capita GDP in MDCs in part pays for the manufacture and purchase of machinery  Which in turn makes workers more productive and generate more wealth

11 Consumer Goods  Part of the wealth generated in MDCs is used to purchase goods and services  Especially important are goods and services related to transportation and communications  Including motor vehicles, telephones, and computers  Products that promote better transportation and communications are accessible to virtually all residents in MDCs  Vital to the economy’s function and growth  In LDCs, these products do not play a major role in daily life  LDCs, most people can not afford them  Most people familiar with goods, see them as symbol of development  Possession of consumer goods is not universal in LDCs  “haves” and “have-nots”  Technological change may help to reduce the gap in access to communications betweens MDCs and LDCs  Cell phone ownership rapidly expanding  Don’t require costly investment of installation of wires

12 Social Indicators of Development  MDCs use part of their wealth to provide schools, hospitals, and welfare services  Result= people are better educated, healthier, and better protected from hardships  Infants more likely to survive, adults live longer  In turn, well-educated, healthy, and secure population can be more economically productive  Social Indicators  Education/ Literacy  Health/ Welfare

13 Education and Literacy  In general:  Higher the level of development = greater quantity and quality of a country’s education  Quality of education is measured in two ways:  Student/teacher ratio  LDCs more students per teacher  = less personalized instruction  Literacy rate  Percentage of a country’s people who can read and write  98% + in MDCs, 60% in LDCs LDCs

14 Health and Welfare  People are healthier in MDCs than LDCs  Health influenced by diet  MDCs:  eat more calories and protein  LDCs:  receive less than the daily minimum allowance of calories and proteins  MDCs health care is a public service  Available at little to no cost  Government programs pay for more than 70% of healthcare costs in European countries  Exception U.S. where private individuals are required to pay an average of 55% health care costs, more similar to LDCs  MDCs use part of their wealth to protect people that cannot work  Public assistance for sick, elderly, poor, disabled, orphaned, veterans of war, widows, unemployed, or single parents  Countries in NW Europe provide highest level of public- assistance  Denmark, Norway, Sweden  Today MDCs are having difficulty maintaining these programs

15 Demographic Indicators of Development  MDCs display demographic differences from LDCs  Demographic Indicators  Used by UN’s HDI:  Life expectancy  Other:  Infant mortality rate  Natural increase rate  Crude birth rates

16 Demographic Indicators  Life expectancy  Better healthcare and welfare in MDCs permit people to live longer  Babies born today can expect to live into their 60s in LDCs, 70s in MDCs  Gap in LE greater for females than males  Females – 13 years longer in MDCs  Males- 10 years longer in MDCs  MDCs have a higher % of older people  = high dependency ratio  Infant Mortality Rate  Better health allows more infants to survive in MDCs  6% die in LDCs, less than 1% in MDCs  Greater in LDCs because:  Babies die from malnutrition, lack of medical attention, dehydration, poor medical practices  Natural Increase Rate  LDCs having more babies!  Averages 1.5% in LDCs  Averages 0.2% in MDCs  Natural increase strains a country’s ability to provide hospitals, schools, jobs, and other services make its people healthier and more productive  LDCs must allocate resources for expanding population rather than improve care for current population  Crude Birth Rate  LDCs have higher NIRs because they have a higher CBR  LDCs= 23 per 1,000  MDCs= 12 per 1,000  CBR does not indicate a society’s level of development  High # of old people in MDCs

17 Distribution of MDCs and LDCs  Countries of the world can be categorized into nine major regions according to their level of development  More Developed Regions  North America  Europe  Russia  Japan  Oceania  Less Developed Regions  Latin America  East Asia  Southwest Asia/ N. Africa  Southeast Asia  Central Asia  South Asia  Sub-Saharan Africa

18 The Development Gap  Definition:  Widening difference between development levels in MDCs and LDCs  MDCs are improving in their development levels faster than are LDCs  In the last decade, the GDP nearly tripled in MDCs but only doubled in LDCs  The rate of population increase fell by nearly 85% in MDCs, but by less than 5% in LDCs  North-South Gap  Refers to the pattern that MDCs are primarily located in the Northern Hemisphere  LDCs are mainly located in the Southern Hemisphere

19 Gender Inequality  A country’s overall level of development masks inequalities in the status of men and women  Gender inequality exists in every country of the world  No country in the world where women are treated as well as men  To measure extent of each country’s gender inequality the UN has created two indexes:  Gender-related development index (GDI)  Compares level of women’s development with that of both sexes  Gender Empowerment Measure (GEM)  Compares the ability of women and men to participate in economic and political decision making

20 Gender-Related Development Index (GDI)  Constructed similar to the HDI  Economic indicators  Per capita female income as a % of per capita male income  Social indicators  # of females enrolled in schools compared to # of males  % of literate females compare to males  Demographic indicators  LE of females compared to males  The GDI penalizes a country for having a large disparity between the well-being men and women  Example: Hungary and Saudi Arabia  A country with complete gender equality would have a GDI of 1.0  A high GDI means that both men and women have achieved a high level of development  A low GDI means that women have a low level of development compared to men

21 Gender Empowerment Measure (GEM)  GEM measures the ability of women to participate in the process o achieving improvements in their status  Political and economic power  GEM is calculated using:  Economic  Per capita female income as a % of per capita male income  % of professional and technical jobs held by women  Political  % of administrative jobs held by women  % of members of the national parliament who are women  Highest score= 1.0  Regions with highest GEMs are:  North America  Northern Europe  Oceania  Regions with lowest GEMS are:  Africa  Asia


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