Ch. 9 Key Issue 1 Why Does Development Vary Among Countries?
Jan 17, 2016
Ch. 9 Key Issue 1
Why Does Development Vary Among Countries?
What do you think development is?
• How should development be defined?• How should it be viewed? Is it an
inherently “Western” idea?
What is Development?• Development implies progress- usually means
improvements in tech., production, and social and economic welfare of people
• Countries cluster at the high (MDC) and low (LDC) ends of the spectrum– MDCs and LDCs tend to cluster together in space
Key Indexes• Gross National Product (GNP)- total dollar value of
the officially recorded goods and services produced in and out of a country
• Gross Domestic Product (GDP)- total value of goods and services produced only within the country per year
• Gross National Income (GNI): – GDP+income - payments to other countries
The 3 Categories of Development• Stems from idea that Indus. Rev and
tech. can improve lives of people• There are three ways we can measure a
country’s development:– Economic indicators– Social indicators–Demographic indicators
Human Development Index• To reveal the level of development, the HDI,
created by the UN, combines 4 indicators:–1 economic–2 social and –1 demographic indicator
• HDI ranges from 0-1• 30 of lowest 32 countries found in sub-
Saharan Africa
Economic Indicators of Development• HDI uses Gross Domestic Product (GDP) per
Capita (per person)–Per capita GDP can help determine average
wages in a country• Dividing GDP by the population (per capita) =
contributions made by each person towards a country’s wealth
• GDP alone can be misleading: Not everyone is starving in LDCs with GDP p/c of $3000. Or wealthy in US with $45,000 GDP p/c
Other Economic Development Indicators
• These indicators are used to distinguish between MDCs and LDCs but not used by the UN to calculate HDI.–Types of Jobs–Worker productivity–Consumer goods
Types of Jobs• Wages are higher in MDCs than LDCs
because people earn living in different ways
• Called the International Division of Labor–Primary sector- extracting materials, hard
manual labor (mostly LDCs)– Secondary sector- manufacturing process (raw
materials into products) (more LDCs than MDCs now)–Tertiary sector- services: exchanging goods
and services for money (mostly MDCs)
Occupational Structure• China GDP $6,200– agriculture 49%, industry 22%, services 29%
• Australia GDP $32,000– agriculture 3.7%, industry 26.4%, services 70%
• Philippines GDP $5,100– agriculture 36%, industry 16%, services 48%
• Luxembourg GDP $59,143– Agriculture 1%, industry 30%, services 69%
• Singapore GDP $21,492– agriculture 0%, industry 30%, services 70%
Occupational Structure• Equatorial Guinea GDP $5,900–agriculture 20%, industry 60%, services 20%
• Haiti GDP $346–Agriculture 32%, industry 20%, services 48%
• Malawi GDP $156–agriculture 37%, industry 29%, services 34%
Worker Productivity• Workers are more productive in MDCs –
they produce more with less effort–MDCs have machines and tools– LDCs rely on human and animal power
• Value added measures productivity– Selling price – inputs (labor, parts, etc.) =
Value Added• High p/c GDP allows countries to invest in
productivity which increases wealth
Consumer Goods• High GDP p/c wealth used to purchase
cars, cell phones, internet, etc.• More necessary in MDCs than in LDCs since
population is more dispersed• Creates a gap of “haves” and have-nots” in
LDCs = conflict? –Owners of consumer goods are concentrated
in the urban areas of LDCs
Social Indicators of Development• MDCs use wealth to provide schools and
healthcare healthier, educated, protected from hardships = economically productive citizens
• 2 social indicators used to measure HDI: Education and Literacy– Education means student/teacher ratio- Less
students, more personalized instruction in MDCs– Literacy rate- More books, magazines, newspapers
printed in MDCs
Social Indicators of Development• Health and welfare– Diet- more calories and protein in MDCs– MDCs have resources to care for sick- more
hospitals/doctors p/c– LDCs have to pay more for health care- gov’t does
not have GDP resources to pay for• MDCs have “safety net” programs”: Struggled to
pay for recently because of slowing economic growth and aging population– Faced with cutting benefits or increasing taxes
Demographic Indicators of Development• Demographics: characteristics of a
population (think demographic transition)• HDI uses life expectancy as main indicator–Better health and welfare permit people to
live longer (60 in LDC, 70 in MDC)– Low life expectancy means more young
people in LDCs (6x more young people = high youth dep. ratio)
• IMR, NIR and CBR can be used to distinguish between MDCs and LDCs
Uneven Development within Countries• Islands of Development–Gov’t prioritizes creation of wealth in one city–Companies usually set up close to their
resources, need cities to house workers and fulfill their needs– Leads to one super developed city in an
“underdeveloped’ country • Informal economy is not counted- what the
government does not keep track of, or is illegal