Tuesday, 3 April 2012

Development revision - the basics

Hello everyone - this is the first, of many to come, revision posts over the next few weeks, so enjoy!
Development Mindmap
Development Continuum
The development continuum is the contemporary way of viewing development; percieving it as a contiual process and recognising that it can occur in a number of different ways, not necessarily in the way the UK did, as outlined by the Rostow Model of Development. Ranking countries using HDI, a composite indicator, essentially the development continuum is a sliding scale from most to least developed with lots of intermediates such as RICs and NICs; meaning it illustrates the complexities that the Brandt Line fails to display. Therefore it also indicates the importance of the changing roles of countries such as the Asian Tigers, orginally LDCs who attracted TNCs and consequential cumulative causation accelerated development. Now they are mature NICs and their role in the global economy has changed and will change again as they continue to develop and the global shift moves. This idea has replaced older classification (like first, second, third world and MEDC/LEDC) as the use of LEDC and MEDC as discrete groups implied that all countries within that group are of the same development level, which is not the case, and subsequently the development continuum is more reflective of reality.

Gross National Product (GNP) = total value of goods and services for a country's companies at home and abroad
Gross National Income (GNI) = GDP plus or minus the interest and repayments on debt
Purchasing Power Parity (PPP) = measure of the value of the local currency
Gross Domestic Product (GDP) = total value of goods and services within a country (including foreign companies)
Issues with using GDP as a measure of development:
- Inequalities = in many LDCs wealth remains with a few and does not filter down through population
- Informal employment = in LDCs many work in informal employment, such as street vending, so money is exchaged without record
- Subsistence lifestyles = many farmers lead a subsistence lifestyle, so it is impossible to accurately measure income and population

Composite indicators vs Single Indicators
Development is the process of social and economic advancements that leads to improvements in peoples quality of life and general wellbeing, as such when trying to measure it, it is important to not only consider the economic indicators. This realisation, was one of the main driving forces behind moving away from first, second, third world classification and the Brandt Line, to the development continuum. HDI, for example, takes into account GDP using PPP, life expectancy at birth and educational attainment, thus considers several aspects of development. Therefore just because a country is rich, i.e Qatar which has a really high GDP, does not mean it scores highly on HDI, and vice versa as seen with Kerala which has a low GDP but would rank high on HDI. However, there is clearly often a positive correlation between GDP and HDI as countries with a high HDI can distribute funds to health care and education, subsequently raising life expectancy and educational attainment. Despite this, composite indicators make global comparisions a lot easier but some composites, like HPI, are subjective, meaning that it is a less accurate measure of development than solely using GDP. There are some advantages of using single indicators as they do not shroud individual measures and so, with regards to pinpointing what social and economic improvements are required for a country to develop, should also be taken into consideration when determining level of development.

Rostow Model of Development

Produced in 1960, this model can be used as a rough guide to development and, in conjunction with the Demographic Transition Model can be used to formulate population policies. Transitions between both models are very similar, illustrating the intrinsic link between population and development. Rostow suggeseted that all countries could break the viscious cycle of poverty and develop between this 5 stages. However, it is very eurocentric and underestimates the role of colonialism in early development of the 15 countries it is based on.

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