8.1A - GDP and Human Development
Human development has traditionally been measured using the growth of GDP as an end in itself, but the relationship between human contentment and levels of wealth and income is complex (Happy Planet Index) and many dominant models are contested. (Sharia Law or Bolivia under Evo Morales.)
The word 'development' implies progress is being made. It has traditionally been measured using economic data, particularly growth in GDP (total or per capita) and a shift from primary industry (e.g. farming), towards manufacturing and the service sector.
Traditionally, GDP growth has been used to measure development, but development is now seen to include more than that.
Human development focuses on progress in terms of quality of life, not just wealth. It includes progress in freedom, equality and how content people are with their lives.
GDP per capita: the value of all a country's goods and services produced in a year, divided by its population.
The word 'development' implies progress is being made. It has traditionally been measured using economic data, particularly growth in GDP (total or per capita) and a shift from primary industry (e.g. farming), towards manufacturing and the service sector.
Traditionally, GDP growth has been used to measure development, but development is now seen to include more than that.
Human development focuses on progress in terms of quality of life, not just wealth. It includes progress in freedom, equality and how content people are with their lives.
GDP per capita: the value of all a country's goods and services produced in a year, divided by its population.
GDP - Benefits and Disadvantages
Why GDP is a good measure of development:
So... there are now other measures of development...
- Economic growth drives other types of development
- Advances in health and life expectancy can only be delivered by economic growth
- The modern concept of development focuses more improving well-being and abilities: health, life expectancy and human rights (and environment?)
- for example, quality of life and contentment, life expectancy, infant and maternal mortality, literacy and healthcare
- GDP increases don't specifically include 'human development', though some argue it leads to it
- The relationship between income and life satisfaction is complex
- Life satisfaction increases rapidly with wealth when incomes are low to begin with
- When a medium level of income is reached, satisfaction increases only very slowly with additional income
- Some people are much more satisfied than their income would suggest whereas others are much less satisfied
- % with high life satisfaction:
- 78% - Mexicans (emerging)
- 66% - El Salvador (developing)
- 43% - Japanese (developed)
- 37% - Greeks (developed)
- % with high life satisfaction:
- Nigerians, Russians and the Japanese have similar levels of life satisfaction despite having vastly different income levels. (around 41-3% of people have high life satisfaction)
- Economic growth exploits natural resources, which negatively impacts environmental quality (which is part of development)
- GDP gives a crude average which skews the income distribution. The majority of incomes could fall well below the mean, and a very wealthy minority raise the average.
- The informal economy is not included in GDP or most economic measures - yet in Uganda this is estimated to produce 60% of GDP.
- Countries which similar GDP may vary in life expectancy. E.g. Tajikistan 72.2 years, Lesotho 61.1
So... there are now other measures of development...
Happy Planet Index
- A measure of human development, introduced by the New Economics Foundation in 2006
- Combines environmental data on sustainability with social data on satisfaction and health - and doesn't income data on income.
- Uses global data
- HPI = EW x LE / EF
- EW = Experienced Well-Being -> people are asked were they place their present well-being on a ladder of ten steps
- Some sources call this life satisfaction
- LE = Life Expectancy
- EF = Ecological Footprint -> devised by WWF, per capita amount of land required to sustain a country's resource consumption
- EW = Experienced Well-Being -> people are asked were they place their present well-being on a ladder of ten steps
- The countries with the highest values are not the most developed, but rather emerging. Do they balance human development with environmental management?
- Six categories, three measures - each rated good/middling/poor
High HPI
- Highest: Costa Rica 64.0, Vietnam 60.4 (best in Central America)
- Also, Mexico, Colombia, Thailand
- Middle-income, emerging countries which balance quality of life and the environment.
Medium HPI
- Upper Middle: UK 47.9, Japan 47.5
- Lower Middle: Singapore 39.8, Ethiopia 39.2, Namibia 38.9 <- low ranking due to the high ecological footprints
- (Also, Spain , India, Indonesia, Brazil)
- Very mixed group, but most lack extensive poverty and have good social conditions.
Low HPI
- Lowest: Botswana 22.6, Chad 25.2
- (Also, USA, Russia, Ivory Coast, South Africa)
- Very wealthy but wasteful societies OR very poor developing countries. Unequal concern for social development and sustainability.
- 2/3 of measures based on highly aggregated and subjective data
- Is it reasonable to assume people perceive their well-being and the steps of the ladder in the same way?
- Only life expectancy is reliable.
Types of Society
Welfare State
There is no universal model for how a society should be run in order to maximise human contentment and levels of wealth.
In most developed countries governments use taxes to fund a welfare state system. This promotes human wellbeing by redistributing resources to people in need such as children, the elderly, disabled, ill or unemployed. It provides:
However, in developed countries there is large variation in terms of which benefits are provided, and how free and generous state welfare systems are.
In most developed countries governments use taxes to fund a welfare state system. This promotes human wellbeing by redistributing resources to people in need such as children, the elderly, disabled, ill or unemployed. It provides:
- Free education, usually from age 4 or 5 to 16 or 18.
- Health services, which are free in some cases.
- Benefits such as a basic income, housing and social services to those in need.
However, in developed countries there is large variation in terms of which benefits are provided, and how free and generous state welfare systems are.
Sharia Law
Creates a code of conduct incompatible with our perceptions of human rights.
List of countries using it includes some of the richest (Brunei, Qatar, Saudi Arabia and the UEA) and some of the poorest nations (Afghanistan, Mauritania, Sudan, Yemen)
What is it?
List of countries using it includes some of the richest (Brunei, Qatar, Saudi Arabia and the UEA) and some of the poorest nations (Afghanistan, Mauritania, Sudan, Yemen)
What is it?
- The legal system in most Muslim countries which dictates many aspects of life.
- It is applied differently across the Muslim world: strictly in some countries and more flexibly in others.
- Covers behaviour and beliefs (public and private)
- It includes zakat, which means the payment of taxes to help less fortunate people. However, if perpetuates gender inequality, by denying fundamental human rights to women.
- theft is punishable by the amputation of the right hand
- converting from Islam is punishable by death
- a man can beat his wife for disobeying him
- a woman cannot speak alone to a man who is not her husband or relative
Bolivia under Evo Morales
- An indigenous Aymara, first elected in 2006, who won an unprecedented third term in office in 2014
- Taxes have been raised on the profits of oil TNCs to over 80% and the extra government income used to reduce poverty through health, education and other programmes including increasing the minimum wage by 50%.
- Has lifted 500,000 Bolivians from poverty - extreme poverty has fallen by 43%
- However Bolivia is still one of the poorest countries in Latin America, dependent on its resources for economic growth, where 1/4 still live on less than $2 a day (World Bank)
Not in Specification - But Still Useful
- GDP = Gross Domestic Product
- the total value of goods produced and services provided in a country during one year
- the total value of goods produced and services provided in a country during one year
- GNI = Gross National Income
- the total domestic and foreign output claimed by residents of a country, consisting of gross domestic product, plus factor incomes earned by foreign residents, minus income earned in the domestic economy by nonresidents
- the total domestic and foreign output claimed by residents of a country, consisting of gross domestic product, plus factor incomes earned by foreign residents, minus income earned in the domestic economy by nonresidents
India
National and regional governments subsidise the cost of housing, food, fuel, fertilisers and water, and make them effectively cheaper and more affordable for those on a low income - at a cost of about $60 billion annually.