Write an essay on development indicators in which you describe GNP, Child mortality rates and HDI - Economics Essay Example

ASSIGNMENT 03
Write an essay on development indicators in which you:
Describe GNP, Child (under-five) mortality rates and HDI as development indicators that may be used to explain levels of development within countries. Explain the advantages and disadvantages of each of these indicators. Table of Contents

Page 3:Introduction and Development Indicators

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Page 4:GNP: Advantages and Disadvantages

Page 5:Child Mortality: Advantages and Disadvantages

Page 6: HDI: Advantages and Disadvantages
Page 7: Conclusion and Bibliography

Development indicators help us map and measure development and the rate of development in countries. This essay will describe GNP, child mortality and HDI as development indicators, also exploring and explaining the advantages and disadvantages of using each of these development indicators to assess the development of a country. Finally this essay will argue that HDI is the most suitable development indicator as it gives a more balanced and unbiased picture of the state of development of a particular country. There are a wide range of development indicators, ranging from water supply, education, medical advances, and life expectancy to name but a few. Development is measured by focusing on certain areas within a country and comparing the findings to a set development standard.

By doing so one is able to determine, according to the development indicators, how developed a country is in certain areas or as a whole. It should be noted that just because a country may seem developed in a certain area it does not necessarily mean that the whole country is as developed. This is can be seen in the example of Cuba. Cuba has a high literacy rate, yet the country is still in the developing process. All development indicators need to be taken into account when determining how developed a country is.

GNP stands for gross national product. The word ‘gross’ refers to the value before deductions are made. Lipsey and Chrystal define it as measuring “income earned by domestic residents in return for contributions to current production, whether production is located at home or abroad” (Lipsey and Chrystal 2007: 641). The GNP also measures the goods and services that the country’s citizens produce, regardless of their location. The GNP focuses on the economic condition of the country. The measure of GNP is useful as it can give one a sense of the economic activity of a country. If the GNP is high one can assume that there are many jobs which are creating this GNP value. Due to the fact that GNP is measured through income which the government controls and can measure through income tax, the measure for GNP is easy to attain and to some extent easy to measure and form a reliable source. However, there are many flaws with using GNP as a primary measure of development.

There are many factors which GNP does not take into account, including unreported activities such as informal trading (Lipsey and Chrystal 2007: 350-351). Informal trading can be defined as either an underground or black market. These economic interactions are not reported to the tax bodies of the country, and are therefore not included in the measures of GNP. The neglect of these markets highly undermines GNP as a inclusive measure of a nation’s income. Another flaw with using GNP as a measure of development is that it does not take into consideration the environmental damage that has been caused in the production of goods and the procurement of services (Lipsey and Chrystal 2007: 351). This means that GNP is only measuring the positive growth of the economy, but neglecting the negative, which might preclude development. Child mortality or under-five mortality measures the number of children per thousand born that die before their fifth birthday. Measuring the child mortality of a country gives us an indication of the state of the countries’ health services, food provision, water quality and educational programmes.

The reason under five mortality is useful as a measure of development, is that it looks at the social progress of the society (Arnold et al 2006: 24). Healthcare and education are seen as positive steps towards development, and child mortality is an indicator of these failing. Child mortality is found to be an unconvincing measure of development, as it only considers the healthcare and educational programmes affecting a small percentage of a population. Furthermore, using the child mortality rate as a development indicator is a disadvantage, because simply looking at the figures once cannot distinguish the reasons and causes of death. Death may occur for a variety of different reasons during a variety of different times, including famine, war and the introduction of new diseases which do not necessarily indicate underdevelopment. The Human Development Index or HDI is used as an indicator of human progress and quality of life. This index considers three measures in its evaluation of a countries’ progress.

These include life expectancy, education and income (Arnold et al 2006: 24). Is it a composite statistic of life expectancy, education, and income. With the results we are able to rank countries in tiers of human development. Advantage, it considers matters broader than just wealth. Krishana Mazumdar acknowledges that development is not just a numerical increase in GNP or GDP, but it should also take into account the increase in the quality of human life (Mazumdar 2003: 536). It is for this reason that the HDI is found to be a convincing measure of development. It takes into account the people whom development is effecting, and their needs. This is a crucial part of gauging development. This measure of development is superior to the two previously discussed, as it takes more than one factor into account. By looking at a range of measures and factors effecting different parts of the developmental society, one is not getting a biased or unbalanced view of development. By looking simply at the measure of GNP one does not get any sense of the development of education, or health. By looking simply at child mortality, one is getting a small picture of health, and an even smaller picture of the countries’ economy. By creating the hybrid measure of HDI, one can get a more rounded view of the country and the level of development across all sectors of society and the country. HDI focuses on people and their needs, which is a crucial part of gauging development. Recording HDI over a period of time the results will show progress in development or lack thereof.

Thus it can be seen that there are three measures of development that can be applied to a country. These included GNP, child mortality rates and HDI. GNP was found to be a convincing measure of development insofar as it measured economic activity, however there was much information left out of this figure. Child mortality rates suffered the same problem, in that the figure did not provide an in depth analysis of development. HDI was the only measure to take more than one factor into consideration, and was thus found to be the most convincing and suitable indicator for measuring development. This is an important question students of development need to ask themselves, as it forms the basis of many developmental studies. Bibliography:

Arnold, T. et al. 2006. 80:20. Development in an unequal World. 5th Ed. Ireland: 80:20 Educating and Acting for a Better World. Lipsey, RG. and Chrystal, KA. 2007. Economics, 11th Ed. United States: Oxford University Press. Muzumbar, K. 2003. A New Approach to Human Development Index, Review of Social Economy, 61 (4)

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