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. 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 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 The difference between Net Enrolment Rate and Gross Enrolment Rate is explained succinctly in this blog post on
NER, GER and Universal Primary Education. Other social indicators to be covered in a future post….. (Subjective Indicators) 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:
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.
NB – As with many other posts on this site, this is a work in progress, to be gradually updated as and when I get a chance! Nominal Gross National IncomeNominal Gross National Income is the total economic value of domestic and foreign output by residents of a country. It roughly works out like this: Gross National Income = (gross domestic product) + (factor incomes earned by foreign residents) – (income earned in the domestic economy by nonresidents). Nominal Gross National Income rankings (2015)
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. Gross National Income Per Capita (PPP) rankings (2013)
More up to date data sources for various GNI stats:
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 dayThere 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:
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 countryThe 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:
So how useful is this ‘relative measure of poverty’ as an indicator of a country’s level of development?
The Human Development IndexThe 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.’ Selected Countries by Human Development Index rankings (2015)
For the strengths and limitations of the HID, please see my aptly titled post: ‘the strengths and limitations of the Human Development Index’. Percentage of children enrolled in secondary school The Gender Inequality IndexThe 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:
2015 Gender inequality index rankings Selected countries according to their rankings for the Gender Inequality Index
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’. NotesComposite 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 PostsThis 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:
Please click here to return to the main ReviseSociology home page! 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:
Secondly, Worldometers provides real time world statistics on population, the environment, food, health and media and society. A few stand-out facts are…..
Good resources for researching individual countries
Good Resources for tracking ‘Indicators of Development’
Good Resources for other aspects of global development
More to follow shortly!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. Applying material from the item analyse (ten mark) questions appear with an item as the second question on section B of the AQA A Level Sociology topics paper. Before looking at this question, you might like to review the main post on this topic: economic indicators of development. 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… Item A 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….
Remaining Development Goals (selected)
The map below shows the regions where most and least progress was made over the 15 years of the Millennium Development Goals. Sub-Saharan Africa remains the region where the most progress is to be made.Some strengths of the MDGs as indicators of development
Some limitations of the MDGs as indicators of development
Sources Used The main source used to write this post was the United Nations ‘Millennium Development Goals Progress Page’. http://www.un.org/millenniumgoals/ http://www.un.org/millenniumgoals/multimedia.shtml Further Reading United Nations: The Millennium Development Goals Report 2015 Click to access MDG%202015%20rev%20(July%201).pdf Click to access MDG%202015%20PC%20final.pdf 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 2020Dark Green is high ranging through to dark red which is low…. SourceThe Human Development IndexThe Human Development Index measures Human Development using four indicators
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
(*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 PerformersTop
Towards the Bottom
What do the scores above mean?
Advantages of the Human Development Index
Two Limitations of the Human Development Index
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
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.
‘Per Capita’ and ‘Purchasing Power Parity’
Gross National Income Per CapitaThis 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 CategoriesThe 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.
Comparing countries by GNI per Capita and total GDPTop ten countries – GNI per capita (source)Monaco -full of wealth people but for some reason no longer at the top of the GNI per capita rankings!
Top ten countries Total by Gross Domestic Product (source)The United States – ranked number 1 in the world for total GDP
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 DevelopmentThree Advantages of using GDP/ GNP/ GNI as an indicator of development
Four limitations of using GDP/ GNP/ GNI as an indicators of development
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. Review Questions
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’ Key Statistics
A Global Hierarchy of DevelopmentMany sociologists and geographers today use the following four categories to distinguish between different ‘levels’ of economic and social development.
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:
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
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 DevelopmentWriter 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. Eduardo GaleanoIt 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 AnutaThe 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. Review Questions
Sources
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. The U.S.A. – You don’t need to dig too deep to find squalor beneath the surface, in fact you don’t really need to dig at 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 StatesThe 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 ProductThe 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). Top 10 countries by nominal GDP (Gross Domestic Product) 2015In 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. Wealth IndicatorsAccording 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 IndexIf 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 StatesDespite 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 inequalitiesAccording 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.//www.compareyourcountry.org/inequality?cr=oecd&lg=en&page=0 (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. An approximation of the unequal distribution of wealth in AmericaThe 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. Kim Kardashian – making the rest of us feel even more worthless?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 lineObviously 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). https://www.theatlantic.com/business/archive/2015/09/americas-poverty-problem/405700/ 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 expectancyIn 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 schoolYou 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. America still has the highest military expenditure in the worldThe 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. …
NB – This post is a work in progress, I’ll add to it at various points over the coming year… Things to follow…. The United States are by far the largest nuclear power producer, with 33.2% of the world’s total, followed by France (17.1%) and Russia (7.0%). The United Kingdom’s production accounts for 2.9%. This also means that the United States is the largest producer of nuclear waste, including Plutonium, an essential ingredient in nuclear weapons. Related Posts What is the Global Peace Index
Sources World Development Indicator Maps The difference between GNP, GDP and GNI (Economics Help) What do these countries high GII values indicate when compared to their HDI values?What do these countries' high GII values indicate when compared to their HDI values? These countries have less gender equality despite high levels of education and health care. Q6.
Which statement correctly describes inequality within the countries of Turkey and Brazil?Which statement CORRECTLY describes inequality within the countries of Turkey and Brazil? Brazil's lower IHDI reveals a greater level of inequality than within Turkey.
Which of the following best explains the relationship between GDP per capita and world system theory?Which of the following best explains the relationship between GDP per capita and world system theory? There is an uneven distribution of economic development and geographical division of labor in the world.
Which of the following best explains a trading relationship between two countries based on comparative advantage?Which of the following best explains a trading relationship between two countries based on comparative advantage? Each country specializes in the type of good for which it has the lowest opportunity cost, resulting in a higher global output of both types of goods.
|