The main social indicators of development include education, health, employment and unemployment rates and gender equality, and this post introduces students to the specific indicators which institutions such as the World Bank and United Nations use to measure how ‘developed’ a country is, and the main indices which are used to compare the levels of development of different countries.
Indicators Used to Measure Education and Development
The World Bank uses the following eight core indicators to measure how developed a country is in terms of education:
The net enrolment rate for pre-primary
The net enrolment rate for primary*
The net enrolment rate for secondary education
The gross enrolment ratio for tertiary (further) education.
Gender parity for primary education (using the gross enrolment ratio)**
primary completion rate for both sexes
The total number of primary aged children who are out of school.
Government expenditure on education as a percentage of GDP.
*The net enrolment rate for primary is ‘the number of pupils of official primary school age (according to ISCED97) who are enrolled in primary education as a percentage of the total children of the official school age population’.
**The gross enrolment rate for primary school The number of children enrolled in primary school (of any age) as a percentage of the total children of the official school age population
You need to use a range of economic and social indicators to get a full picture of how developed a country is….
There are hundreds of economic, political and social indicators of development, ranging from ‘Hard’ economic indicators such as Gross National Income (and all its variations), to various poverty and economic inequality indicators, to the Sustainable Development Goals, which focus much more on social indicators of development such as education and health, all the way down to much more subjective development indicators such as happiness.
In this blog post I consider what the most useful indicators of development are for students of A level sociology, studying the excellent module in global development.
I’ve thus selected the indicators below to try and represent:
the most commonly used indicators collected by some of the major development institutions, both multilateral agencies such as the World Bank, as well as NGOS.
The indicators you need to know for the ‘indicators of development topic – most obviously GNP, the HDI and the MDGs.
Other indicators which are useful to know for different sub-topics within the global development course (health, education, gender, conflict, the environment etc…)
Taken together these indicators should provide enough breadth of measurements to gain a very good (for A level standards) insight into the level of development of a country, without resulting in information overload and mental meltdown…
Most of the above indicators below have been developed and are monitored by either the World Bank or the United Nations, but I’ve also included others, such as the Global Peace Index, which are collated by other agencies, so as to broaden out the data sou
The indicators I consider in more detail below are as follows.
Total nominal Gross Domestic Product
Gross National Income per capita (PPP)
The percentage of people living on less than $1.25 a day
The percentage of people living below the poverty line within a country.
Nominal GNI is useful for giving you an idea of the ‘economic clout’ of a country compared to other countries. The real global power players (in terms of military expenditure) are all towards the top of this.
These figures, however, tell you very little about the quality of life in a country…. for that you need to divide the figure per head of population and factor in the cost of living in the country….
Gross National Income Per Capita (PPP)
Gross National Income Per Capita – is GNI divided by the population of a country, so it’s GNI per person.
(PPP) stands for Purchasing Power Parity – which alters the raw GNI per capita data to control for the different costs of living in a country, thus modifying the GNI figure in U.S. dollars to reflect what those dollars would actually buy given the different costs of living in different countries.
GNI per capita (PPP) gives you a general idea of what the general economic standard of living is like for the average person in a country, however, there are serious limitations with this indicator – the main one being that it does not tell you how much of that income actually stays in a country, or how income is distributed. Quality of life will thus be a lot better for some people, and a lot worse for others than these gross statistics indicate.
The Percentage of People Living on Less than $1.25 a day
There are still around 800 million people around the world living on less than $1.25 a day (PPP), the figures for some of these countries are below:
The Democratic Republic of Congo (88%)
Looking at absolute poverty statistics like this gives us a much fuller understanding of the lack of development in certain countries – in DRC, you can clearly see that poverty is endemic (absolute poverty is a significant problem in many Sub-Saharan African countries), and we can also see that absolute poverty is still a significant problem in India (mainly rural India) and while the 6% is quite low in China, this 6% represents 10s of millions of people, given the large overall population size.
Proportion of population living below the poverty line within a country
The UN sustainable development goals states that one of its aims (under goal 1) is to ‘reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions’. (Source – The United Nations Sustainable Development Goals)
The United Nations collects this data for countries will lower human development, but not for countries with high human development, and so here we are reliant on data from national governments or other agencies – and the problem here is that different countries measure their ‘poverty line’ in different ways, so this means making cross national comparisons are difficult. Some sources are below:
Selected Stats on the Proportion of People Living Below the Country’s own poverty line:
Most low income countries with high absolute poverty rates register percentages of between 30-60% living below their own poverty lines.
The USA has 15% of its population living below its poverty line (a household income of around $24000 per annum)
The UK also has around 15% of its population living below its poverty line, although its line is higher than the US – around $30000.
So how useful is this ‘relative measure of poverty’ as an indicator of a country’s level of development?
They give us far more insight than the GNI per capita PPP figures, because they tell us about income distribution. Can you really call a rich country developed if 15% of its population aren’t earning enough of an income to fully participate in that society?
We also need them as an addition to the absolute figures of poverty – absolute poverty doesn’t exist in the wealthiest countries, but clearly relative poverty does.
HOWEVER, the differences in how relative poverty figures are calculated does make it difficult to make comparisons.
Also, some figures in the UN’s data just don’t seem believable – some ex-communist countries (such as Kazakhstan) report that only 5% of the population live below the country’s poverty line – either than line is extremely low or there’s maybe a little bit of mis-reporting going on?
The Human Development Index
The Human Development Index is compiled annually by the United Nations and gives countries a score based on GNI per capita, number of years of actual and expected schooling and life expectancy, or in the words of the UN itself – the HDI is ‘A composite index measuring average achievement in three basic dimensions of human development—a long and healthy life, knowledge and a decent standard of living.’
Percentage of children enrolled in secondary school
The Gender Inequality Index
The United Nations defines the Gender Inequality Index as ‘A composite measure reflecting inequality in achievement between women and men in three dimensions: reproductive health, empowerment and the labour market’.
More specifically, it gives countries a score between 0-1 (similar to the HDI) based on:
The Maternal mortality ratio: Number of deaths due to pregnancy-related causes per 100,000 live births.
The Adolescent birth rate: Number of births to women ages 15–19 per 1,000 women ages 15–19.
Proportion of seats held by women in the national parliament expressed as percentage of total seats.
The proportion of the female population compared to the male population with at least some secondary education
The comparative Labour force participation rate for men and women.
Selected countries according to their rankings for the Gender Inequality Index
1st – Slovenia
11th – Finland
39th – The United Kingdom
55th – The United States
56th – Saudi Arabia
97the – Bhutan
127 – Ghana
130th – India
The obvious strength of this is that we get to compare the life chances of women in a country to those of men. What’s (maybe) surprising is that while there does appear to be a general correlation between high GNI per capita (PPP), high human development and low gender inequality, the correlation is not perfect: as is evidenced by the USA being just one place above Saudi Arabia and Ghana being just a few places above India, despite these two pairs of countries having quite divergent levels of ‘human development’.
Composite Versus ‘Single Variable’ Indicators
Some of the indicators above are ‘composite’ indicators – which are formed when individual indicators are combined into a single index, giving countries a simplified score, such as the Human Development Index, the Gender Empowerment Index and the Global Peace Index; others are ‘single variable’ indicators – such as the Child Mortality Rate, which just measure one thing.
My reasons for considering both composite and single indicators of development are that while composite indicators crunch more data into a single figure, and thus allow you to make more ‘in-depth’ snap-shot comparisons, single numbers simply don’t give you a sense of the real difference between countries, so these are necessary to highlight the extent of the difference between countries in terms of economic, social and political development, or lack of it.
(1) of course, studying development comparatively may or may not, in itself be useful!
Signposting and Related Posts
This topic is usually studied early on in the optional module on global development which is usually studied in the second year of A-level sociology.
Two related posts which explore some of the above indicators in more depth are:
Some useful links to good teaching resources for Globalisation and Global Development.
Good resources providing an overview of global trends and global inequalities:
Firstly, this 2016 video imagines the world as 100 people, and so illustrates what percentage of people live on less than $2 a day and so on (once you get through the ‘basic’ stuff on ethnicity/ religion etc…
A few stand-out facts are:
1% of the population own 50% of the world’s wealth
15% don’t have access to clean water
less than 50% have access to the internet
Secondly, Worldometers provides real time world statistics on population, the environment, food, health and media and society.
A few stand-out facts are…..
The total number of malnourished people in the world is decreasing!
The total number of people with no access to clean drinking water is also decreasing!
HOWEVER, we’re losing approximately 20 HA a minute to desertification and 10 HA a minute to deforestation, which could undermine both of the above in the future.
Good resources for researching individual countries
The United Nation’s Country Profiles are probably the most accessible place to start – each country’s page gives you basic development indicators which you can then click on to expand.
The CIA World Fact Book is a useful source for more qualitative information on a country by country by country basis, organised into various categories such as geography, population, economics, politics and so on…
Good Resources for tracking ‘Indicators of Development’
Economic definitions and ways of measuring development are unsatisfactory. A much clearer and more useful picture emerges when wider social factors are included.’ Assess this view of development and underdevelopment. (20)
International organizations such as the World Bank prefer to measure development using economic indicators such as Gross National Product (GNP) and Gross Domestic Product (GDP)
GDP measures the total value of goods and services produced within a country in one year that are available for sale in the market place. GNP is the same but includes the value of all goods and services produced at home and abroad.
The use of GNP as a measurement of development is generally considered most useful by Modernisation theorists who believe that high GNP is an indication of how industrialised a country is, as high levels of production require efficient production in factories, and as far as Modernisation Theory is concerned, industrialisation will eventually lead to the developing countries catching up with the high age of mass consumption found in the west, thus GNP is the single most useful indicator of development.
Overall GNP/ GDP are more useful if we want an indication of how ‘powerful’ a country is, but if we want a better indication of social development; we need to divided GNP by head of population and take the cost of living into account (GNP per capita at PPP).
The usefulness of using GDP/ GNP is that they provide snapshot indicators of development which makes for easy comparisons between countries. However there are problems with both indicators.
However, there are many criticisms of the use of GNP as an indicator of development.
Firstly. It can disguise inequalities within countries. The USA, for example, has one of the highest GNPs in the world but some groups experience extreme poverty, suffering homelessness for example.
Secondly, GNP does not tell us how much wealth actually stays in the country, If production is carried out by Western Corporations, much of the profit may leave the country and not benefit the population. Similarly, some countries have a high GNP but a massive proportion of this goes on debt repayments.
Thirdly, if economic growth is driven by industrialization, this may bring about problems for some people in developing countries. In India for example, some villagers have has their farms destroyed and been reduced to coal scavenging for a living following the construction of open cast coal mines that are necessary to fuel economic growth.
Finally, it is the case that quality of life may be higher than suggested in poorer countries because production is often subsistence based, about survival and consumed locally in the community, and not sold in the market place. Subsistence agriculture is not measured in the GNP. Also, some people may get hold of goods and services illegally. This kind of economic activity is not included in GNP measurements.
Because of the limitations of economic indicators, the UN has developed social indicators such as the Human Development Index and the Millennium Development Goals which provide a picture of social rather than economic progress.
Many of these social indicators show us that high GNP is not necessarily accompanied by social progress, as in the case of Equatorial Guinea, which has a very high GNP but low social development because the corrupt elite keep most of the money to themselves.
The Millennium Development goals also provide a more useful indicator or development than GNP – The MDGs includes such things as female empowerment and sustainability, neither of which are taken into account by cruder economic indicators. Female Empowerment is especially important when considering development in India – it is rapidly developing in terms of GNP, but has very low gender equality, suggesting it has a lot of progress to make in that area.
Post-Development thinkers argue that sustainability indicators are especially important now that we are facing a climate change crisis, and if we take this as a measure of development, many of the richest countries are the biggest polluters, because consumption drives economic growth, which in turn drives pollution, which provides one of the most compelling challenges to the use of GNP as a valid measure of development.
Another seemingly more useful indicator of development is the level of peacefulness in a country – as measured by the Global Peace Index – this is important because where there is conflict, there is no chance of development, moreover, if we use this as an indicator, the USA and China fall down the development league tables because they spend so much money on their militaries, which are frequently used to oppress people and again reduce social development at home and abroad.
Another country which prefers to measure social development rather than economic development is Bhutan, which is poor, yet one of the happiest nations on earth, and the case of Bhutan seems to challenge the notion that economic growth results in greater happiness – many people living in Tokyo in Japan for example, are lonely and miserable.
The very fact that these other indicators exist suggests that many working within development feel that economic indicators are not a satisfactory measurement of ‘development’
In conclusion, it is clear that economic indicators do not provide a full picture of how developed a country is, and that it is clearly possible to have social development without a high GDP.
Moreover, it appears that the pursuit of economic growth can undermine social development, at home, if it leads to greater equality and misery, and abroad, if it leads to environmental decline and war and conflict.
Thus I believe that we really do need to look at a much wider range of indicators to fully understand how developed a country is, because development simply cannot be understood purely in economic terms alone.
Below is a suggested answer to the a possible ten mark question on Global Development which stems directly from the item below,
Read Item A and then answer the question below…
Gross National Product (GNP) has long been one of the main economic indicators used to measure development by international agencies such as the World Bank, and there is a general correlation between increasing GNP and improvements in social development.
However, Post-Development thinkers have criticized GNP as being a very limited measurement of a country’s development because it does not tell us anything about how the wealth generated from production is distributed within a country. Post-Development thinkers argue we need to look at a broader range of indicators to accurately measure development, such as the happiness of a country, the level of peacefulness, equality, and even sustainability.
Applying material from item A, analyse two reasons why Gross National Product may not be sufficient to measure a country’s level of development (10)
The first reason is that Gross National Product does not tell us the income or wealth generated from production is distributed in a country.
Gross National Product may be very high, as it is in the USA for example, but high levels of inequality in that country mean that at least the bottom fifth of the country see little benefit from high overall income and wealth, and so GNP doesn’t necessarily translate into social development.
High social inequality, or relative deprivation, is also correlated with a range of social problems, such as poor health (for the poor) and high levels of crime.
Gender inequality can also mean that high GNPs do not benefit women as much as men, as is the case in especially Saudi Arabia, where women’s freedoms are much more restricted than mens, and many Sub-Saharan African countries too.
In contrast, more economically equal countries seem to have higher social development to unequal countries, irrespective of GNP, and It follows that in addition to GNP, we need to at least look at equality indicators to get a better idea of how socially developed a country might be.
The second reason is that by increasing Gross National Product, a country may actually harm its social development, and that of other countries, so it could actually be something of a ‘perverse indicator’.
For example, in pursuing industrialisation in pursuit of economic growth (and thus high GNP), China has become the sweat shop capital of the world, and has increased the exploitation of its workers who are typically paid low wages. This especially applies to women (given the low levels of gender equality in China).
Another negative consequence of economic growth and industrialisation is the increase in pollution, which leads to sea levels rising, and more climate change refugees.
In contrast, some countries, such as Bhutan, put social development indicators, such as happiness and sustainability first, and arguably countries such as these are less developed when we look at GNP per capita, but more developed when we look at how happy the people are, and they don’t retard the social development of other countries in the process.
The Millennium Development Goals (MDGs) were adopted by 189 nations during the UN Millennium Summit in September 2000. Eight MDGs were developed which responded to the world’s main development challenges.
The goals ranged from halving extreme poverty rates to halting the spread of HIV/AIDS and providing universal primary education, all by the target date of 2015 – form a blueprint agreed to by all the world’s countries and all the world’s leading development institutions.
They have so far galvanized unprecedented efforts to meet the needs of the world’s poorest. The UN is also working with governments, civil society and other partners to build on the momentum generated by the MDGs and carry on with an ambitious post-2015 development agenda.
The MDGs aimed to measure development in eight categories, using 60 separate indicators. The final two goals were aimed more at developed countries, aiming to monitor things such as carbon dioxide emissions, development aid donations and fair trade rules.
Following the success of the eight MDGs, they have since ‘developed’ into seventeen global goals for sustainable development
The Global Goals for Sustainable Development
The Millennium Development Goals – Progress to 2015 (selected)
The infographics below provide the headlines….
And some further MDG achievements….
The proportion of undernourished people in developed regions halved between 1990 and 2015.
In 1990, nearly half of the population in the developing regions lived on less than $1.25 a day. This rate dropped to 14 per cent in 2015.
The average proportion of women in parliament has doubled
The net loss of forests has reduced from an average of 8.3 million hectares annually in the 1990s to an average of 5.2 million hectares annually between 2000 and 2010.
Remaining Development Goals (selected)
At the global level more than 800 million people are still living in extreme poverty
Globally, an estimated 795 people are malnourished
Globally, 300 million workers lived below the $1.25 a day poverty line in 2015.
The proportion of the working-age population that is employed – has fallen from 62 per cent in 1991 to 60 per cent in 2015.
In countries affected by conflict, the proportion of out-of-school children increased from 30 per cent in 1999 to 36 per cent in 2012.
Globally, about three quarters of working-age men participate in the labour force, compared to half of working-age women.
Women continue to experience significant gaps in terms of poverty, labour market and wages, as well as participation in private and public decision-making
Between 1990 and 2012, global emissions of carbon dioxide increased by over 50 per cent.
The map below shows the regions where most and least progress was made over the 15 years of the Millennium Development Goals.
Some strengths of the MDGs as indicators of development
Much broader range of indicators (60) – more validity! – Good for professional development workers!
Includes the developed nations (these also have targets – 7 and 8 especially)
NB – These have now become the ‘sustainable development goals’.
Some limitations of the MDGs as indicators of development
Not very ambitious – halving poverty by 2015, given up on the idea of ‘economic growth’.
Problems with some indicators – e.g. ‘finishing primary school’ doesn’t tell us about quality of education or how many days actually spent in school.
Do the MDGs lack ambition?
The main source used to write this post was the United Nations ‘Millennium Development Goals Progress Page’.
The United Nations uses The Human Development Index (HDI) as a summary measure for assessing long-term progress in three basic dimensions of human development: a long and healthy life, access to knowledge and a decent standard of living. It provides a useful ‘snap-shot’ of a country’s economic and social development.
HDI Scores in 2020
Dark Green is high ranging through to dark red which is low….
To measure education – the average (mean) number years of adult education adults over 25 have received and the number of expected years of education children attending school can expect
To measure standard of living – Gross National Income per capita (PPP)
Each country is then given a rank from between 0 and 1 based on how well it scores in relation to ‘constructed minimum’ and ‘observed maximum scores for each of these criteria. The minimum and maximum scores for each criteria are as below
Life expectancy at birth
Mean years of adult education adults over 25 have received
number of years of education children attending school can expect
Gross National Income per capita (PPP)
(*This is the level below which the UN believes there is no prospect for human development!)
How does the HDI work out a country’s score? – it’s quite easy – if a country has a life expectancy of 83.2, and all the other maximums, it would score one, if it had a life expectancy of 20, and all the other minimums it would score zero. If it was half way between the minimum and maximum – it would score 0.5 – NB by the UK’s standards, this would be a pretty low level of human development!
The Human Development Index – Best and Worst Performers
If a country scores 1-0.788 it is classified as a ‘developed country’ with ‘high human development’ – as are 42 countries – most European countries come into this category. These are typically the countries with GNIs of $40K per capita or more, 13 full years of education and 80+ life expectancies.
If a country scores 0.48 or lower it is classified as having Low human development – e.g. Sierra Leonne – here you will see a GNI per capita of below $1000, 10 years or less of school and life expectancies in the 60s.
Advantages of the Human Development Index
It provides us with a much fuller picture of how well developed a country is, allowing for fuller comparisons to be made.
It shows us that while there is a general correlation between economic and social development, two countries with the same level of economic development may have different levels of social development. See below for examples.
Some argue that this is a more human centred approach, concerned more with actual human welfare than just mere economics. It gets more to ‘the point’ of economic development.
Two Limitations of the Human Development Index
Relying on the HDI score alone may disguise a lack of social development in a country – for example a very high GNI can compensate for poor life-expectancy, as is the case in the United States.
It is still only provides a fairly limited indication of social development – only health and education are covered – there are many other ways of measuring health and education.
International organisations such as the World Bank prefer to measure development using economic indicators. There are three main economic indicators which are used to give an indication of the overall economic health of a country.
This post has primarily been written for students studying the Global Development option for A-level Sociology.
Three Economic Indicators of Development
Gross Domestic Product (GDP) is the total economic value of goods and services (expressed in US dollars) produced within the borders of a country in the course of a year and available for consumption in the market place.
Gross National Product (GNP) is the same but includes the value of all services produced at home and abroad. A country such as Ghana will have a relatively similar GDP to GNP because it doesn’t have many companies which produce things abroad: most production takes place within Ghana. America, on the other hand, which is where many Transnational Corporations are based, has a much higher GNP than GDP – Think about MacDonald’s for example –all of those Big Macs sold outside of the USA won’t appear in the GDP of the USA but will appear in the GNP.
Gross National Income (GNI) a hideous oversimplification of this is that it’s ‘Gross Domestic Product + the additional income that self-employed people pay themselves +income received from abroad’. This matters to a lot of developing countries who don’t produce much but have large diasporas, or populations living permanently abroad. Take Gambia for example (the country Paul Mendy takes your old toys to at Christmas) – 1/6th of its GNI is from money sent by relatives who abroad, this would not be included in either GDP or GNP.
You get slightly different country rankings if you use GNP or GDP rather than GNI. Don’t worry too much about the differences between the above – with a few exceptions* most developing countries tend to have similar GDPs, GNPs and GNI*s.
GDP and GNI per capita in India
*If you look at India’s Gross Domestic Product, it is the 6th richest country in the world, but if you look at its Gross National Income per Capita, it falls to the mid 100s, due to its enormous population, abut also due to the fact that it consumes a lot of the goods it produces itself, so it doesn’t export much, so there’s not a lot of income coming into the country.
‘Per Capita’ and ‘Purchasing Power Parity’
Gross National Product Per Capita – GDP/ GNP are often divided by the total population of a country in order to provide a figure per head of population, known as GDP/ GNP per capita.
The cost of living varies in different countries – so one dollar will buy you a lot more rice in India than it would in America. Purchasing Power Parity figures for GNI per capita factor in the cost of living which is useful as it gives you more of an idea of the actual standard of living in that country for the average person.
Gross National Income Per Capita
This section provides a closer look different levels of ‘development’ according to this particular economic indicator. Remember, global rankings will vary depending on whether you use GNI, GNP, or GDP.
One measurement of development The World Bank uses is Gross National Income (GNI), which can be crudely defined as the total value of goods and services produced in a country in a year plus any income from abroad. If you divide GNI by the number of people in the country, you get the average amount of income per person, or GNI per capita.
GNI per capita is widely regarded as a good indicator of the general standard of living in a country, and it is a good starting point for giving us an idea of the extent of global inequalities between countries. For example, the United Kingdom has a GNI per capita of about $43 000, while India has a GNI per capita of about $1600, which is more than 20 times greater.
The World Bank’s map of countries by Gross National Income per capita map is a useful, interactive resources to easily find out how most countries fair by this indicator of development.
The World Bank’s Four Income Categories
The World Bank categorises countries into one of four categories based Gross National Income per capita (per head): high, upper middle, lower middle and low income countries.
High income = $12, 536 or more – about 60 countries, including most of Europe
Question to consider: Why do you think the top ten countries are so different when judged by total GDP compared to GNI per capita?
Evaluating the Usefulness of Economic Indicators of Development
Three Advantages of using GDP/ GNP/ GNI as an indicator of development
GNI figures provide a snap-shot indication of the huge difference between the more developed and less developed countries. In 2016, the GNP per capita in the UK was $43000 while in India it was only $1600. This means that there is 20 times as much money per person in the UK compared to in India
Gross National Income figures are also closely correlated with social development – generally speaking the higher the GNI per capita, the better the education and health indicators are in a country.
Total GDP figures give us an indication of who the most powerful nations are on earth in terms of military power. It’s not a perfect correlation, but the USA, China, Russia and the UK are all in the top ten for GDP and they are the biggest arms producers and consumers in the world too.
Four limitations of using GDP/ GNP/ GNI as an indicators of development
Quality of life (Social Development) may be higher or lower than suggested by GNP per capita.
They don’t tell us about inequalities within countries. The USA has one of the highest GNPs in the world but some extreme poverty.
A lot of production in developing countries may not be included. For example, subsistence based production is consumed locally in the community, and not sold in the market place. Similarly goods obtained illegally on the black market are not included in GNP measurement
They are very western concepts, equating production and economic growth with development. Some countries may not want economic growth and have different goals (Bhutan)
The United States – economically developed but socially retarded?
The USA is a good example of a country that demonstrates why we can’t rely on economic indicators alone to give us a valid indication of how developed a country is. Despite ranking number 1 for total GDP, the USA does a lot worse on many social indicators of development – See this post – ‘The USA – an undeveloped country?’ for more details.
Define Gross National Income Per Capita and be able to identify some high income and lower income countries.
Explain the difference between GNI, GDP, GNP, and understand the significance of Purchasing Power Parity.
Outline three strengths of using economic indicators of development
Outline at least three reasons why GNP may not be valid measurements of ‘development’
International development professionals categorise countries into ‘more’ or ‘less’ developed. This post explores the meanings and origins of these terms, looking at the concepts of first, second and third world, before looking at the criticism that such systems of classification are ethnocentric, western constructions.
This post has primarily been written for students studying the Global Development option for A-Level Sociology.
What is development?
The term development is used in several ways, but most sociologists agree that development should mean, at the very least, improvement or progress for people who desperately need positive change in their lives.
The main debates about development are underpinned by modernity, meaning that development agencies such as the World Bank and the United Nations aim to replicate within developing societies the material and cultural experience of modern Western societies such as the United Kingdom and the United States.
Consequently, most sociologists believe that development is about achieving economic growth, and the positive consequences which have generally stemmed from that, such as improvements in life expectancy, mass education and social welfare.
This generally means that most countries in Europe are defined as being ‘more developed’ while countries in Sub-Saharan Africa tend to be defined as the ‘least developed’.
Nigeria, in West Africa is an example of a ‘less developed country’
Population: 207 million
GNI per capita – $2030 (2018)
Life Expectancy at Birth – 54 (2017)
Infant Mortality Rate – 74/ 1000 live births
Literacy Rates – Male 71%, Female – 53%
Child Labour Rate – 43%
Urban Population – 51%
Main export – Petroleum
Best World Cup performance – round of 16 (2014).
A Global Hierarchy of Development
Many sociologists and geographers today use the following four categories to distinguish between different ‘levels’ of economic and social development.
Key features of countries
More economically developed countries MEDCs
These are the wealthy industrial-capitalist countries which generally experience economic growth year on year. Their populations enjoy a good standard of living, which means high life expectancy of 80+ years, free primary and secondary education and access to good quality housing and consumer goods are the norm.
Western European countries The USA
Newly industrialized countries NICs
These are the so-called ‘Asian-Tiger’ economies of which have rapidly industrialised in the past 40 years and which today have a large share of the global market in computers, electronics, plastics and textiles.
China South Korea
Less economically developed countries LEDCs
Societies which have experienced extensive urbanization and therefor positive economic growth. However, the economies of these societies are also heavily dependent on agriculture, and extraction of raw materials. Poverty is still a big problem in many of these countries.
Brazil, India, Mexico Ghana
Least economically developed countries LLEDCs
The poorest countries in the world, mostly in sub-Saharan Africa where absolute poverty is the daily norm. These societies experience low life expectancy of around 60 years, and high child mortality rates, linked to preventable diseases such as malaria. They also lack basic infrastructure such as roads, electricity and clean water. Many of these countries also experience high levels of conflict, which is both a cause and consequences of their underdevelopment.
Sierra-Leone Somalia DRCongo Afghanistan Bangladesh Haiti
Some development thinkers from the ‘post-development perspective’ have criticised the above system of categorisation for being an ethnocentric, Western perspective on development, because it implies that industrialised, wealthy nations are superior, and less economically developed countries in other parts of the world as inferior. The implication of this hierarchy is that all countries should aim to become more like those Western countries at the top.
Questions to consider:
In general, do you think that it’s fair to make the generalisation that European countries are more developed than Sub-Saharan African countries?
Should less developed countries strive to become more like Western, Industrialised countries?
The Origins of Western Ideas of ‘International Development’
The concept of rich countries helping poor countries to develop emerged after World War II in the context of the Cold War.
By the end of the Second World War many of the countries in Africa, Asia and Latin America had failed to develop and remained poor, and there was concern amongst the leaders of the western developed countries, especially the United States, that communism might spread into many of these countries, potentially harming American business interests abroad and diminishing U.S. Power.
The conventional way of seeing the world was to split it into first, second and third worlds
Described the industrialised capitalist world – the USA, Western Europe, Japan, Australia and New Zealand.
Described the industrialized communist world – The Soviet Union and Eastern Europe.
Described the rest of the world and covered a vast range of countries in different circumstances and at different stages of development, but what most of them shared in common was the fact that they lacked an industrial base, they had not gone through industrialization.
From the perspective of the developed first world, it was essential to encourage the poorer countries of Asia, Africa and Latin America to adopt a capitalist-industrialist model of development in order to prevent them from forming alliances with the communist second world. In short, development was seen as essential to halt the spread of communism.
The term ‘third world’ also made sense from the perspective of many of those in poorer countries: many countries wanted to pursue their own paths to development, without the ‘assistance’ of either the United States or Communist Russia.
It was immediately after World War Two that the main international institutions of development were established – such as The World Bank, the International Monetary Fund and the United Nations, and for decades, aid money was deliberately channeled to those countries most likely to ‘fall into the hands of the communists’.
Dependency Theorists and Post-Development Theorists (covered in a future lesson) have been critical of Western attempts to help third world countries develop. They argue that aid money and aid programmes have really been about maintaining western political and economic superiority, and less about helping poor countries actually develop,
However, since the collapse of communism in the 1990s, and thanks to significant reforms in the way aid money is distributed through international institutions, ‘development’ today seems to be more about actually helping poor countries develop and less about the west maintaining its political and economic superiority.
But there are those who argue that even today the international development agenda really has a deeper, political purpose, and ‘development’ is not necessarily about helping poor countries. For example a quarter of the UK aid budget goes to the military, and much of this is spent fighting. Islamic extremists in Iraq and Afghanistan, which clearly has a political purpose, although you could just as easily argue that eradicating extremism is a necessary perquisite for any positive change to take place.
Questions to consider
Q1: Why where the countries of the first world concerned to help the countries of the first world develop after World War Two?
Q2: What is the ‘main purpose’ of the three development institutions mentioned above?
Q3: Why were some theorists critical of western attempts to help poor countries develop?
Criticisms of Western Constructs of Development
Writer Eduardo Galeano offers a (self-identified) third world perspective on ‘development’, which serves as a useful criticism of Western concepts of development. You should be able to find three criticisms of western ‘notions’ of development below.
It was the promise of the politicians, the justification of the technocrats, and the illusion of the outcast. The Third World will become like the First World – rich, cultivated and happy if it behaves and does what it is told, without saying anything or complaining. WE CAN BE LIKE THEM, proclaimed a gigantic illuminated board along the highway to development.
However, if the poor countries reached the levels of production and waste of the rich countries, our planet would die. Already it is in a coma, seriously contaminated by the industrial civilisation and emptied of its last drop of substance by the consumer society.
A further disadvantage with the Western notion of development is that it assumes that those countries that are more economically developed are better… i.e. more developed. In contrast, the developing world contains many worlds, the different melodies of life, their pains and strains: the thousand and one ways of living and speaking, thinking and creating, eating, working, dancing, playing, loving, suffering, and celebrating that we have discovered over so many thousands of years.
A further notion is that using terms such as ‘undeveloped’ implies that these countries are inferior and need help, it justifies intervention when this may not be wanted/ be perceived as interference.
Another, but substantially different, Third World approach to development was offered by the theory of self-reliance, put forward by Tanzanian President Julius Nyerere in 1967. The basic idea was self-reliance, or autonomy. It drew on the ideas of Mahatma Gandhi, who proposed a non-exploitative moral economics in which each level of society, from individual through village to state took only what was necessary and accumulation was perceived to be negative.
Case Study: The Island of Anuta
The island of Anuta, part of the Solomon Islands (population 300) seems pretty idyllic, but would these people be better off if they followed an industrial-capitalist model of development?
I first ‘discovered’ the island of Anuta thanks to the excellent BBC series Tribe, broadcast over a decade ago now. If you can track it down, the DVD is well worth a watch to see how things have changed for the islanders over the last decade.
Outline some of the differences between the least and most developed countries on earth.
Explain where the terms ‘first world’, ‘second world’ and ‘third world’ came from, and some of the limitations of these concepts.
Outline three criticisms of ‘Western’ ideas of development
See the ‘about’ page for the main A-level text books I use as references, which are the ones the AQA draws on for the exam.
The United States ranks either at the top, or very near the top on several of the main development indicators used by the World Bank and the United Nations, but if you look more closely you find that the United States might not be so ‘developed’ after all.
This post starts out by exploring the seemingly positive indicators which suggest that the United States is one the most developed nations on earth, before looking at some other statistics and evidence which reveal the darker side of life in the United States, outlining some of the many areas where the U.S.A. looks very underdeveloped, despite its huge wealth and income.
Evidence for the apparent high levels of development in the United States
The U.S. ranks very high up the league tables for many economic indicators of development, such as Gross National Income, Gross National Product, and for total wealth. It also scores very highly in the United Nations Human Development Index which measure income, education and life-expectancy.
Gross National Income and Gross Domestic Product
The United States is the wealthiest country on earth by a long way, at least measured in terms of Nominal Gross National Income, where it’s GNI of $17 trillion is a long way ahead of second place China’s $10 trillion (2014 figures). GNI basically measures the value of goods produced in a country + wages earned abroad (fuller definition here).
The chart below shows rankings by GDP (Gross Domestic Product) which measures economic output in a slightly different way to GNI, but gives very similar rankings to the vast majority of countries when compared to the GNI rankings (see link above for the differences between GDP and GNI).
In terms of GNI per capita (GNI per person), the United States is also very near the top of the league table, coming 6th if we exclude the tax havens at the top, and the only country with a population over 200 million anywhere near the top.
According to Credit Suisse’s ‘World Wealth Report 2015‘, we see the same story in terms of wealth, where the Unites States remains one of the few countries with very high levels of wealth.
The Human Development Index
If we take a slightly more in-depth look at the development levels of the United States, then according to Human Development Index (2015 figures) which gives countries a score based on a combination of GNI per capita, the average levels of education and life expectancy, the USA is in the highest ‘very high human development’ category and it still ranks an impressive 8th (the U.K. is 14th), and as with GNI per capita is the only country with a huge population in the top 10.
Evidence of Underdevelopment in the United States
Despite its coming near the top of the league tables for many economic indicators, the U.S.A. comes much lower down many of the international league tables for social development, which suggests that the U.S.A. is failing to translate its enormous wealth and high levels of income into appropriate levels social development.
The rest of this post explores the relatively poor performance of the United States in terms of social development (and I look at some more economic indicators too.)
The United States has VERY HIGH income and wealth inequalities
According to the OECD, the USA was the third most unequal country in terms of income (2014 data).
The most graphic way of displaying this is through the GINI coefficient. This ranks nations according to equality – A nation where every individual’s income is equal would have a gini index of 0. A nation where one individual gets all income, while everyone else gets nothing would have a gini index of 100.
To put this in terms which might be slightly easier to understand: In the USA, the top 20% of income earners take home almost nine times as much as the bottom 20% of income earners.
(NB – The U.K. isn’t much better – with the income of the top 20% being 6 times greater than the income of the poorest 20%.)
The graph below illustrates the increasing income inequalities in America – the share of national pre-tax income going to the top 1% has increased from around 13% to 21% (for only 1% of the population), whereas the share of income which goes to the bottom 50% has decreased from around 19% to 13%.
In pre-tax income dollars, this means the top 1% earn an average of $1.3 million a year, while the bottom 50% of the American population earned an average of $16,000, which means that the top 1% earn 81 times the bottom 50%, compared to 1980 when it was only 27 times more.
Looking at post tax income, the difference isn’t so stark – the top 1% today earn 40* the bottom 50%, but again, if you look at the 40 year trend, the income of the rich has increased much faster than the income of the bottom 50%, whose income levels have more or less stagnated…
If we look at the distribution of wealth in America, rather than income, there is an even higher degree of inequality.
According to Allianz’s new Global Wealth Report (2015) which includes not just salary, but also property and investments held by a family found that America’s wealth inequality is even more gaping its income inequality.
The U.S. has $63.5 trillion, or 41.6% of the world’s private wealth (next to China with 10.5%, the U.K. is 4th with 5.6%), but the U.S. also has the largest wealth inequality gap of 55 countries studied, according to the report.
Allianz calculated each country’s wealth Gini coefficient — a measure of inequality in which 0 is perfect equality and 100 would mean perfect inequality, or one person owning all the wealth. It found that the U.S. had the most wealth inequality, with a score of 80.56, showing the most concentration of overall wealth in the hands of the proportionately fewest people.
This is a very useful video providing an infographical overview of wealth inequality in the USA (2016)
These statistics on income and wealth inequality are one of the main reasons why I think it’s fair to argue that America is in some ways an underdeveloped country – because such unequal distribution of income and wealth means the people at the bottom are effectively marginalised and don’t benefit from all that wealth and income sloshing about – what we effectively have are pockets of people who don’t benefit from the economic growth (‘development’) which the country as a whole has enjoyed over the past decades.
At least the bottom 20% (about 50 million of people in the U.S.A) face a daily struggle to get by, really only earning just enough for the basics of life – housing, heating, food, utilities, transport, maybe enough to save for birthday presents and a decent Christmas, but that’s pretty much it
Some grim evidence for this lies in the fact that 30 million Americans still can’t afford health insurance (Fiscal Times 2016), with a further 20 million only benefiting from it because of Obamacare (which may be Trashed following Trump’s election), which totals 50 million, or about 20% of the population. If 50 million people lack sufficient money for health care, they sure as hell won’t have enough money to fully participate in the full-blown joys of consumerism which is so much part of American culture.
So that’s 30 million (possibly soon to rise back up to 50 million) people within the United States, unable to access basic health care, just like in many poorer countries, which is pretty compelling evidence for labeling the United States ‘underdeveloped’. (NB if those 50 million people made up a country, it would be 28th most populated country on earth, out of 233).
On top of this, the relatively poor in America also have to contend with everyone else’s wealth and income being conspicuously consumed and displayed around them – on the streets, but especially in the media (if they’re stupid enough to watch T.V, which is most people), which adds an aspect of indignity into just earning enough to get by.
Of course if you were to compare the richest 10% with the bottom 10% the multiplier effect would be even greater, and it’s this section of the population which will be most likely to experience the many problems that come with poverty and extreme relative deprivation – facing the insecurity of flexible working conditions, living on sink housing estates, the threat of homelessness, the worries of debt, and living in the midst of higher crime areas.
15% of the population of America live below the official poverty line
Obviously related the above statistics, The Atlantic notes that the official US census data shows that ‘14.9 per cent of Americans, or almost 47 million people, falling below the poverty threshold of about $24,000 for the year.’ (2014 figures).
HOWEVER, the supplemental data shows that the true figure is slightly higher – standing at 15.3%.
America has relatively low life expectancy and healthy life expectancy
In 2016, the USA ranked a dismal 53rd for Life Expectancy, and the USA is one of only very few countries with ‘very high’ human development where the average life expectancy of the population is below 80 (you can see this in the Human Development Index table above), and in fact, according to the table below, there are several countries which are nestled alongside the USA, such as Puerto Rico and Cuba, which are considerably poorer but do much better on this key indicator of human development.
If you look at World Health Organisation data on healthy life expectancy, then the relative development levels of the United States look even worse. There is a marked contrast between the USA and Europe European countries, which have similar levels of GNI per capita and education to the USA, have healthy life expediencies of 70+, while the United State’s healthy life expectancy languishes in the 65-69 bracket below, alongside the much poorer South American countries and China.America has 1.5 million children of primary-school age out of school
You might have thought that every industrialised, developed nation on earth had figured out how to keep 99% of its kids in school for 13 years or so, well America fails to do so. According to World Bank data, it has a dismal primary enrolment rate of 93%, which slips down to 86% for tertiary education, and there are nearly 1.5 million children out of school (2014 figures)
America is the 114th least peaceful country in the world
According to the Global Peace Index, America has witnessed the fourth largest decrease in peacefulness in last ten years, in terms of how far it’s regressed, it’s right next to Syria in the international league tables for the ten year decline in peacefulness.
The Global Peace Index 2017 notes that: ‘The past year has been a deeply worrying one for the US, with the presidential campaign highlighting the deep divisions within American society. Accordingly, the score for intensity of organised internal conflict has worsened. Data have also shown a declining level of trust in government and other citizens which has generated a deterioration in the score for level of perceived criminality in society. Social problems within the US are also likely to become more entrenched and racial tensions may continue to simmer. Reflecting these tensions, rising homicide rates in several major American cities led to a deterioration in the homicide rate indicator, contributing to the decline in the US’s peace score.’
HOWEVER, the main contributing factor to America’s high violence rating is it’s continued high levels of expenditure on its military and heavy weaponry. Despite military expenditure declining in recent years, relative to other nations, the U.S. still spends a fortune on the machinery of violence.
On the subject of military expenditure…. America’s recent $110 billion arms deal with Saudi Arabia and support for their war against Yemen doesn’t help its peacefulness score. …
Privacy & Cookies Policy
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.