Chapter 18 - Understanding economic development

Sustainable development

development that meets the needs of the present without compromising the ability of future generations to meet their own needs

what is the objective of the SDGs?

produce a set of universal goals that meet the urgent environment, political and economic challenges facing our world

real life examples of sustainable development

Denmark’s investment in wind energy. Wind now supplies around 50% of Denmark’s electricity, reducing reliance on fossil fuels

economic growth

increases in output (real GDP) and incomes over time, often measured on a per capita basis

economic development

a process that leads to improved standards of living for a population as a whole

human development factors

• life sustenance

  • refers to access to basic services such as education and health care services

• self-esteem

  • involves the feeling of self-respect

• freedom

  • it is freedom to make choices that are not available to people who are subjected to conditions of poverty

human development

process of expanding human freedoms (check factors)

income poverty

when income falls below a nationally or internationally determined poverty line

human poverty

involves deprivations and lack of opportunities that allow individuals to ‘lead a long, healthy, creative life and to enjoy a decent standard of living, freedom, dignity, self-esteem and the respect of others'

indicator

a measurable variable that indicates the state or level of something being measured

GNI vs GDP (per capita)

GNI per capita is a better indicator of standard of living, because it represents income per person received by the residents

GDP per capita is better indicator of the level of output per person produced in a country

purchasing power parity exchange rate

the rate at which once country’s currency needs to be converted to another’s to buy the same amount of good’s and services in both countries

3 common health indicators

life expectancy at birth, infant mortality, and maternal mortality

life expectancy at birth

average number of years of life in a population

infant mortality

number of infant deaths from the time of birth until age of one, per 1000 live births

maternal mortality

number of women who die per year as a result of pregnancy-related causes, per 100,000 live births

adult literacy rate

measures the percentage of people aged 15 or more in the population who can read and write

energy indicators

• renewable energy consumption

• access to electricity

• electric power consumption

social dimension

• share of households (or population) without electricity or commercial energy, or heavily dependent on non-commercial energy

• share of household income spent on fuel and electricity

economic dimension

• energy use per capita

• renewable energy share in energy and electricity

environmental dimension

• air pollutant emissions from energy systems

• rate of deforestation attributed to energy use

environmental indicators

• CO₂ emissions per unit of GDP or per capita

• bird species threatened

• fish species threatened

• measured of ozone layer depletion

• measures of waste generation

composite indicators

summary measures of more than one dimension of development

inequality adjusted HDI

measures human development with same 3 dimensions as HDI, but each dimension is adjusted for inequality

Human Development Index (HDI)

measures achievement in 3 dimensions: a long and healthy life, access to knowledge and a decent standard of living

limitations of measures of economic development

• some countries have a limited capacity for collection of statistical data

• data are not fully available in many countries

• sometimes agencies have to make estimates of missing data, which may not be accurate

• definitions of variables and methods used by statistical services vary form country to country