Describing and Measuring Differences and Similarities among Countries

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Describing and Measuring Differences and
Similarities among Countries

• Chapter 2

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Quantitative Measures of Development

• World Banks System (what is it?)
• Low, middle, high income per capita
• The OECDs system industrialized vs developing,
  OPEC, NICs
• The UNDPs Human Development Index

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Measuring and comparing income

• GNP (GNI) vs GDP
• Levels, per capita
• Comparing levels across countries
• Official exchange rate conversion to common
  currency (usually USD)
• PPP (common set of prices)
• Growth rates no unit issues
• g(GDP/N) g(GDP) g(N)
• (why?)

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Per Capita Gross National Product in Selected
Countries, 1997 (in U.S. dollars at official
exchange rates)
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Human Development Index

• Weighted average of indexes of income, life
  expectancy, and education
• HDI 0.33 INC 0.33LIFE 0.33ED
• Strength goes beyond income
• Limitations
• Arbitrary structure
• Assumes substitution among components
• Millenium Development Goals
• Hunger, education, gender, health, sustainability
  
• Can these be measured and compared?

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The Structural Diversity of Developing Economies

• Size and income level
• Historical background
• Physical and human resources
• Ethnic and religious composition

• Relative importance of public and private sectors
• Industrial structure
• External dependence
• Political structure, power, and interest groups

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Common Characteristics of Developing Nations

• Low levels of living
• Low levels of productivity
• High rates of population growth and dependency
  burdens
• Substantial dependence on agricultural production
  and primary exports

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Convergence among OECD Countries but Divergence
in the World as a Whole