Chapter 19 | Measuring Human Development

19.1 How is Development Measured?

Economic Indicators

Development, generally, is the process of change in the nature and activities of an economy and subsequent increase in prosperity.
Human development: The processes involved in the improvement of people’s freedoms, rights, capabilities, choices, and material conditions * This refers to the collective population of a country or region, not the individual.
Core countries represent the most diverse economies, highest levels of education, greatest productivity, most advanced technology, and highest standard of living. * Every country can be marked core, peripheral, or semi-peripheral, but within countries there may be distinct regional differences in standard of living.

Income

Economic welfare, as measured by the wealth or income of a country, is not the sole indicator of overall well-being. * It is still a crucial quantitative measure that can indicate level of development and thus standard of living.
Ways to measure a population’s wealth include: * Gross Domestic Product (GDP): The total value of the goods and services produced by a country’s citizens and companies within the country in a year * Gross National Product (GNP): The total value of the goods and services produced by a country’s citizens and companies both domestically and internationally in a year * Gross National Income (GNI): The total value of goods and services globally produced by a country in a year divided by the country’s population
GDP and GNP can also be converted into per capita data, which helps put a country’s overall well-being in perspective.
GNP reflects a country’s real income, as it excludes products made by other countries and the earnings/spending of nonresidents. * It is usually not very accurate as it is affected y international exchange rates.
GNI per capita is calculated with earned income rather than production output. * The difference between GDP and GNI can be very small if a country’s income and global payments are similar.
Income distribution is a better tool for assessing a society’s overall health. * Some high-income economies seem prosperous, but uneven distribution of income can mask severe poverty levels. * Countries with even income distribution have less poverty and great sense of equity, often with political stability and population health.

Economic Structure

The structure of an economy is another measure of development. * Because structure is connected to prosperity, level of development can be predicted by analyzing it. * Recall the trends related to economic sectors and what they indicated about an economy from the last chapter.
As more people work in higher sectors, productivity is increased, which in turn strengthens a country’s economic success.
In addition to classifying economic sectors, the structure of an economy can also be broken into two categories. * Formal sector: Businesses, enterprises, and other economic activities that have government supervision, monitoring, and protection, and are taxed * Informal sector: Any part of a country’s economy that is outside of government monitoring or regulation; sometimes called the informal economy
The taxes from formal activities are usually used by a country to finance a variety of public services.
The informal sector typically deals with cash and is not taxed. * This includes a wide range of activities such as street vending, cleaning and moving services, singular favors, illegal deals and more. * Workers in the informal sector do not have formal employment contracts, regulated work conditions, or fixed hours of work.
It’s difficult to accurately measure the financial or social impact of informal sector activities. * Without government interaction, many of these economic activities aren’t documented and can’t be traced. * The informal sector cannot be included in the GDP or GNI of a country, so many countries likely have higher incomes than official statistics suggest. * In core countries, the informal sector represents anywhere from 10 to 20 percent of a country’s income. * In peripheral countries, the informal sector is much larger, representing as much as 50 percent of a country’s income.
Some say the informal sector is unmanageable and can hinder a growing economy, while others claim it provides financial opportunities.

Fossil Fuels and Renewable Energy

Measuring the use of fossil fuels or of renewable energy can indicate a country’s level of development.
Fossil fuels, like coal, oil, and gas, were introduced during the Industrial Revolution, and are used by all countries for electricity, transportation, heat, and fuel.
When making energy decisions, countries utilize their natural resources or what they can purchase to generate the power they need. * Countries also explore ways to use renewable energy and alternative fuel sources. * This stems from concerns surrounding the finiteness and environmental consequences of fossil fuels.

Social Indicators

Geographers also use noneconomic factors to help complete analysis of a country’s level of development. * Social, cultural, and political factors may not directly affect the level of a national income or output, but they are the cause and effect of a population’s well-being.
Recall that the total fertility rate (TFR) is the average number of children one woman in a given region or country will have during her childbearing years. * Level of healthcare and level of education affect this rate, and so a low rate indicates high development. * Improvements in healthcare, sanitation, diet, and better access to hospitals and medicine generally cause a decline in births.
Cultural factors, such as the status of women and religions or traditions that encourage couples to have large families, affect total fertility rates as well. * Women with higher levels of education and those who pursue careers generally have fewer children.
Infant mortality rate, or the number of deaths of children under the age of 1 per 1,000 live births, is also a good indicator of quality of health care. * High IMRs are connected to higher percentages of people who live in poverty.
Life expectancy, the average number of years a person is expected to live, is a powerful indicator of health from prenatal to elderly care.
Access to comprehensive, quality health care is a dependable measure of a country’s standard of living. * Countries in which people do not have access to immunizations, medications, antibiotics, and sanitary water are often economically underdeveloped.
Literacy rates and education standards are important measures of development as well. * Literacy provides people with skills required to function in modern societies and empowers them intellectually. * It also drives successful economic development, especially in today’s technology-heavy world.

Human Development Index

Human Development Index (HDI): A measure that determines the overall development of a country by incorporating three key dimensions of human development: life expectancy at birth, access to education measured in expected and mean years of schooling, and standard of living measured by GNI per capita * HDI is measured on a scale of 0.0 to 1.0 and, in short, measures basic achievement levels reached through an average of each examined dimension.
When determining HDI, health and education indicators are just as important as economic indicators. * Countries that have higher GNIs may still have lower HDIs than another country.
When looking at these rankings, it’s important to understand the theory of purchasing power parity (PPP). * This concept measures economic variables in different countries so that exchange rates don’t distort across-the-board comparisons. * PPP can be seen as “international dollars.”
Although the HDI score is an important measure of spatial variation in levels of development among states, it has limitations. * The HDI is a simplified calculation and doesn’t capture every aspect of human development. * It doesn’t reflect other quality-of-life factors, such as poverty, gender equality, environmental quality, sustainability, or an overall feeling of security or even of happiness. * It also doesn’t take into account than in many countries, some groups don’t have access to the same opportunities. * HDI also does not consider political dimensions.

19.2 Measuring Gender Inequality

Gender Disparities

Keep in mind the differences between these similar terms: * Parity is a balance between two groups. * Equality refers to the same level of resources and opportunities for everyone, no matter the location or situation. * Equity is about fairness, and it acknowledges how the lack of access to opportunities and certain resources affects underserved people, groups, or communities.
Ensuring equity means providing additional aid to make sure everyone is treated fairly in all circumstances. * According to the United Nations Educational, Scientific and Cultural Organization (UNESCO), gender equity is “fairness of treatment for both women and men, according to their respective needs.”
The level of gender equality can be a measure of a country’s overall level of development.
Gender Development Index (GDI): A measure that calculates gender disparity in the three basic dimensions of human development: health, knowledge, and standard of living * Current GDI calculations show factors in which a difference exists as well as where there is near equity.
Gender Inequality Index (GII): A measure that calculates inequality based on three categories: reproductive health, empowerment, and labor-market participation * The GII ranges from 0.0 to 1.0; 0.0 shows that men and women share equal roles, and 1.0 shows that women have little equality.
The World Bank and other entities have determined that gender equality contributes to development and growth of an economy and is beneficial. * Several countries have introduced policies to promote gender parity. * Countries that dedicate the least amount of attention toward gender parity are usually peripheral.

Reproductive Health

The GII is the first major index to include reproductive health indicators as a measure of gender inequality. * It uses two metrics related to reproductive health: maternal deaths related to childbirth and births among adolescent mothers.
The maternal mortality ratio (MMR) is the number of maternal deaths per 100,000 live births. * The MMR is a good indicator of women’s access to healthcare because these deaths usually result from a lack of adequate care.
The adolescent birth rate (ABR) is the number of births per 1,000 women aged 15 to 19. * Early childbearing is associated with health risks for mothers and infants as well as keeping mothers from accessing higher education.

Empowerment

Women’s empowerment: Women’s options and access to participate fully in the social and economic spheres of a society
The GII uses two indicators to measure women’s empowerment: political representation and educational attainment. * Political representation is measured by the ratio of women with seats in government compared to men.
Women have traditionally been greatly outnumbered by men at every level of government. * This gender inequality has improved over the last 25 years, but women are still underrepresented in decision-making political roles. * Having women in decision-making roles tends to help a country improve its social and economic inequalities.
Educational attainment, the second indicator of women’s empowerment, is measured by the ratio of adult women and men with secondary education. * Studies show that women’s access to education affects their social and economic opportunities as well as their health outcomes. * According to UNESCO, 16 million girls will never set foot in a classroom, an alarming 9 million of them in sub-Saharan Africa.
In addition, women account for two-thirds of all adults who lack basic literacy skills. * UNESCO reports that poverty, geographic obstacles, minority status, disability, early marriage or pregnancy, violence, and traditional attitudes are roadblocks.

Labor-Market Participation

Labor-Market Participation (LMP): A rate that measures an economy’s active labor force, calculated by taking the sum of all employed workers and dividing that number by the working-age population; also known as labor-force participation (LFP) rate
Identifying participation in both formal and informal sectors allows geographers to make generalizations about other important social indicators. * The conclusion that a high labor-force participation rate equals a highly economically developed country is not necessarily true.
The roles that women play in a country’s workforce often reflect that country’s level of economic development. * Core countries usually have more women working full-time jobs outside the home, and they are able to pursue jobs in the tertiary sector that require college education. * Women in semi-/peripheral countries work in the primary and secondary sectors, work to provide for the family, or work unpaid.
Labor-intensive jobs alongside high birth rates inhibit women’s ability to participate in economic and social spaces, holding back a country’s development.
At the same time, female labor-market participation does not solely describe a country’s economic development. * This can be seen in some African countries in the semi-/periphery. * But recall that just because female LMP may be high, it does not inherently mean a successful economy.

19.3 Changing Roles of Women

Evolving Opportunities

Gender roles are generalized “normal” roles that men and women are expected to perform in their everyday lives. * In most societies, these roles delegate the man as the source of income and head of the household, and the woman as primary caretaker. * These roles limit women in society, but with economic development and changing societies, the roles of women, men, and even children change.
Industrialization brought women into the workforce, and postindustrial economies have increased women’s access to education and employment. * As women become more economically developed, the disparity in gender roles diminishes.
Gender inequity has lessened, but is still present. * In the U.S., men still make more money overall: on average, women earn roughly 80 percent of what men do for the same work. * Women in the U.S. are also less likely to hold supervisory and managerial roles, and when they do, tend to carry less authority.

Rural and Urban Opportunities

Gender parity begins with equal opportunities.
Economic changes often result in gender equity changes, and vice versa. * For example, as women in semi-/peripheral countries find work in the secondary and tertiary sector, they increase the household income, creating economic growth.
Generally, urban areas offer greater variety of services and infrastructure, opportunities for education and employment, and fewer social and cultural restrictions. * The access to these opportunities largely depends on location, however. * In some areas, particularly North Africa, Southwest Asia, and South Asia, urban areas actually present more challenges. * The biggest challenge is typically dealing with traditional attitudes about women’s roles in society, among a number of others.

Economic Opportunities

Despite the overall gender gap, attitudes about women in the workforce are changing, and women are playing a larger part in the global economy. * Much of the industrialization in countries in the periphery now relies on women working outside the home. * Additionally, women in all countries are shifting into the service industry, aided by the boom in the tertiary sector.
The cultures of some countries are beginning to realize the value of women in economic roles, which as mentioned, was the biggest roadblock. * Women are not being empowered everywhere, however, especially in certain male-dominated fields.

Educational Opportunities

Until recently, women in many parts of the world have been denied access to education. * This situation can severely limit all connections and opportunities a woman has during her lifetime.
This, subsequently, can cripple the economic advancement of a country.
Generally, as countries make strikes in economic and social development, women gain greater access to education, leading to progress towards gender parity.
Exposure to education increases income possibilities, provides empowerment, and lowers birth rates. * This, in turn, helps to raise households and communities out of poverty and supports national development.

Wages

More educational opportunities for women have emerged over time, which means that women now have a better chance at earning higher wages.
A wage gap still exists, however, even in core countries. * Core countries are also where the greatest strides have been taken against the gap.
Wage disparity is uneven throughout the U.S. due to the nature of state laws and how they can differ. * In 2019, the worst states for equality were Wyoming, West Virginia, Alabama, North Dakota, and Louisiana, where women earned 69 cents to a man’s dollar. * California had the lowest gap, with women earning 88 cents for every dollar earned by a man. * Wage inequality also occurs along racial lines. * White women and Asian American women, on average, make more than Hispanic, African-American, or Native American women.

Empowering Women

In addition to providing more economic and educational opportunities for women, other endeavors seek to empower women. * In places across the globe, women are still subject to violence, social injustice, and a lack of health care.
Many women have been conditioned to believe they are not deserving of food, shelter, education, to work, or to be free. * Some countries have made it impossible for women to accept higher-paying jobs. * Others state that a husband can legally deny his wife the opportunity to work outside of the home.
Several initiatives aim to provide independence and choices for women and continue to make strides toward equality. * The UN has placed a special emphasis on Africa, and good progress has been made there.

Microloans

In recent years, women in semi-/peripheral countries have started applying for loans to start small businesses. * For them, being an entrepreneur is the answer to breaking away from poverty and improving financial security for their family and children.
Microloan: A very small short-term loan with low interest intended to help people in need
Microloans became one option for women wanting to take a risk on their own enterprises. * Most of the women getting microloans would not qualify for loans from a traditional bank.
The microloan industry was started by a Bangladeshi professor who eventually opened the Grameen Bank, a microloan institution. * Others followed in its stead, and the industry has flourished.
Microloans range in size depending on location, ranging from a low $200 in South Asia to nearly $3,000 in Eastern Europe and Central Asia. * The amounts are based on the borrower, the entrepreneurial opportunity, the location, and the income variation.
These loans will cover startup costs for businesses, oftentimes covering education costs as well. * Many microloan institutions offer business training and other resources.
This small amount of financial help greatly contributes to leveling the playing field, and many women have been empowered by microloans.

Investing in Girls and Women

As countries develop, more attention and money can be invested in issues relevant to women.
According to the Organization for Economic Cooperation and Development (OECD), four key strategies need increased investment: * Ensure that financial assets are in the hands of women. * Keep girls in school. * Improve reproductive health and access to family planning. * Support women’s leadership.

19.4 Theories of Development

Rostow’s Stages of Economic Growth

In the 1960s, after much of Africa and Asia gained independence, Walt W. Rostow developed this model.
Stages of economic growth: A model that suggests that all countries can be categorized on a spectrum from traditional to modern and that to become modern, countries need to pass through distinct stages of economic growth in succession
Stage 1: Traditional Society * Political power is local, regional, or based on land ownership. * Family plays a dominant role and social structures limit social mobility. * Primarily rural, centered on subsistence farming by family labor and using primitive technology. * Modern science and technology are nonexistent.
Stage 2: Preconditions for Takeoff * People begin to keep knowledge and break from the traditional mindset. * New types of enterprises emerge with long-term goals, investment increases, and output rises. * As industry accelerates, infrastructure improves as is necessary. * The workforce shifts from agriculture to manufacturing. * Credit institutions are developed to make investments more accessible.
Stage 3: Takeoff * Political, social, and institutional frameworks in society change. * Urbanization increases, infrastructure continues to improve, and productive capacity surges in some manufacturing industries. * There are technological advances.
Stage 4: Drive to Maturity * The economy keeps progressing in a period of self-sustained growth. * The country’s success becomes the norm. * Industries function at maximum effectiveness. * Energy production and consumption are high. * Consumption patterns shift thanks to increased income. * Entrepreneurial leadership changes from individual industrialists to managerial bureaucracy.
Stage 5: High Mass Consumption * Modern societies are urban, centered on wage labor, and organized into states. * Production shifts from industrial manufacturing to consumer goods and services. * Problems of production change to problems of consumption, and trade expands.
Theoretically, all countries can be placed into one of these stages, and can follow these principals to achieve economic growth and success.

Limitations of the Stages of Economic Growth Model

Since Rostow’s model was based on the United States and Europe in the 1960s, critics argue that it can’t be applied to every country.
The model assumes all countries are or will become industrialized, capitalist, and democratic, which may not be true.
A further limitation of the model is that the stages of growth in some countries differ by region. * The model also does not take into consideration geographic influences and challenges.
Additionally, it assumes all countries follow a progression of development in which they become mass consumers. * This doesn’t consider Earth’s carrying capacity and ecological limits; understandable as this information was unavailable to Rostow. * Rostow did not consider that consumers at the final stage would use and demand more than they actually should.
The model does not consider how countries influence one another and how these impacts can affect the progression of development. * Countries in this time of globalization are interconnected and interdependent. * The road to maturity was different for the countries Rostow observed and based the model off of, as they had less competitions or obstacles.

Wallerstein’s World System Theory

In response to Rostow’s stages of economic growth model, Immanuel Wallerstein published his world system theory in 1974, covered in Chapter 1.
The theory describes the spatial and functional relationships between countries and explains the history of uneven economic development.
According to Wallerstein, countries are dependent on one another and don’t develop in isolation: Some countries dominate and some are exploited.
His theory illustrates global inequity through a social structure, diving the world into a three-tiered structure. * This structure consists of the core, semi-peripheral, and peripheral countries that have been referenced throughout.
As you’ve read, core countries dominate and take advantage of peripheral countries for labor and resources. * Semi-peripheral countries have characteristics of both.
The World systems theory includes both political and economic elements and can be viewed as a theory of either, with geographic effects.
Wallerstein examined the world economy and how it developed due to capitalism. * Capitalism became a global system with stronger, interdependent economic ties between countries, now encompassing all countries in the world in some way.
It is possible for countries to move from the periphery to the semi-periphery, and from the semi-periphery to the core as they develop economically. * Since the prosperity of core countries depends on the exploitation of peripheral countries, movement is difficult.
Inequalities exist at different scales: between countries and within countries.

Limitations of World Systems Theory

The biggest criticism of world system theory is that the model is too focused on economics. * Categorizing countries based on a global economy isn’t comprehensive. * Experts claim that there are more determinants for the economic development or connection to the world system than capitalism. * Some also argue that a study of core-periphery relationships must also take into account other measures of integration or dominance, such as cultural influence.
Another limitation is that the theory may work as a historical analysis but may not be the best measure of modern development.
A weakness is that the theory states that countries have mobility, but offers no explanation on how to move up the hierarchy.

Dependency Theory

In the late 1950s, experts at the United Nations tried to explain why economic growth in industrialized countries did not lead to economic growth in nonindustrialized countries.
They identified a financial dependency among countries with widely diverse economies.
This explained the failure of less economically developed countries to experience financial growth despite investments from other countries.
Dependency theory: A theory that describes the development challenges and limitations faced by poorer countries and the political and economic relationships poorer countries have with richer countries * According to dependency theory, peripheral countries offer cheap labor and raw materials to the global market. * Core countries buy the raw materials and hire the cheap labor. * They use these two economic factors to produce goods and sell them at high prices. * Peripheral countries, needing these goods, buy them at the higher price, depleting the funds they might have used to upgrade their own production infrastructure.
This leads to a cycle explaining the huge gap between the rich core and poor periphery. * The needs of the core keep the periphery in a state of underdevelopment.
Both world system theory and dependency theory aim to explain global economic inequality, and include the concept of core, peripheral, and semi-peripheral world structure.
The key difference between the two is based on the focus of the inequality. * In world systems theory, inequality exists because core countries thrive through the exploitation of peripheral ones. * In dependency theory, inequality is proposed to have existed since Europeans began colonizing the world in the 16th century.
As with all models and theories, dependency theory has limitations. * Critics point out that it fails to define critical terms like ‘dependence’ and ‘underdevelopment.’ * There is also no standard to distinguish between dependent and nondependent countries. * It, additionally, fails to take into account other factors that cause underdevelopment, and that the nature of underdevelopment is different region to region. * Lastly, the theory doesn’t consider that underdevelopment can be a product of leaders making bad decisions.

Commodity Dependency

Commodity dependence: An aspect of dependency theory that occurs when more than 60 percent of a country's exports and economic health are tied to one or two resources
This dependency is indicative of the narrow economic base that peripheral and some semi-peripheral countries depend upon. * Because these countries have not been able to add value to their resources through manufacturing, they are often trapped in neocolonial economic relationships.
Unfortunately, export earnings for dependent countries are at the mercy of commodity pricing. * Always at the whim of supply and demand, commodity trade is never stable. * When the commodity price of its major export increases, such a country sees economic growth. * But when supply is high, demand drops and so do prices, meaning commodity dependent countries suffer.
These conditions are why many economists find a connection between commodity dependency, poverty, and financial turmoil.
For countries with a single commodity, there is extreme interest in who controls that commodity. * This situation can cause governments and political factions to clash, creating political instability.
Commodity dependency can have a negative impact on a country’s development, due to the volatile nature of the dependency.