CHAPTER 4 - MEASUREMENTS States or using the US Dollar as the basis of

comparison has many weaknesses.

OF ECONOMIC GROWTH
- There are local currencies that are
Economic development is not purely an
overvalued or undervalued in relation to the
economic process. It constitutes several
US Dollar. If the money of a certain country
other elements like social, cultural, political,
is overvalued, then its GNP and PCI in
religion, among other things. It is not easy to
dollar terms becomes higher. On the other
measure economic growth. In fact, no
hand, if it is undervalued, GNP or PCI is
single-measurement can show the actual
lower.
progress of a country. The various
traditional measurements of economic
Top Wage Earners
growths are not really adequate, and they
1. Switzerland
are misleading.
2. Luxembourg
Economic growth of less developed nations
3. Japan
are measured by comparing their gross
4. Sweden
national product (GNP) or per capita income
5. Finland
(PCI).
6. Norway
7. Denmark
Note:
8. West Germany
* Gross National Income (GNI) is the term
9. Iceland
for the GNP.
10. United States
* Gross National Income Growth Rate =
[(GNI Present - GNI Previous)] / GNI
Top Per Capita Savers
Previous
1. Japan - $45,118
* Gross National Income = Price x Quantity
2. Switzerland - $19,971
* Gross Domestic Product = Consumption +
3. Denmark - $19,405
Savings
4. France - $17,650
5. West Germany - $17,042
Some Shortcomings of GNP/PCI 6. Austria - $16,369
‑ National income accounting in less 7. Norway - $15,196
developed countries are understated. For 8. Belgium - $15,111
instance, the value of the services of the 9. Singapore - $14,492
housewives is not computed. 10. Netherlands - $14,282
- There are various trade transactions which
are not placed in the markets. There is no
The Real Indicator of Economic
way of having these reflected in the national
Growth
income accounting.
- GNP or PCI is not an accurate yardstick of
- Another limitation is the inadequacy and
economic growth. It does not reflect the
inaccuracy of statistics. Due to the absence
distribution of income among member of the
of transportation and communication
society.
facilities in some places, researchers are
- Development economists like Todaro and
forced to depend only on secondary data.
Seers have suggested the elimination of
- Also, comparing the GNP or PCI of less
GNP as a yardstick. Instead, they proposed
developed countries with that of the United
to measure economic growth in terms of
poverty, inequality, and underemployment.
Reduction or elimination of poverty
- When most of the people in a country are
poor - although it has achieved a very high
GNP - said country cannot be called a truly
developed economy or society.
- A better approach in determining the
economic growth of a country is to measure
the conditions of poverty.
- "Is there a reduction of poverty?"
- If the great masses have more of these
basic goods (food, clothing, shelter) and
services (health and education) than the
previous years, then it can be said that the
social and economic well-being of the poor
has been improved
- A government program should not only be
stressed on industrialization or balanced
agricultural-industrial development. Rather,
it should direct its main resources in
improving the quality of life of the poorest of
the poor.
Eradication of Inequality
- Inequality does not only mean differences
in income and wealth but also social,
political, and educational disparities among
the members of the society.
- The products of inequality have been
created by religion, culture, political power,
and education.
- Example: The elites of the Roman Empire,
during Feudalism (feudal lords and their
peasants/slaves), the Caste system in India,
Apartheid system in South Africa, and
improper treatments of Whites to Blacks
and other cultural minorities like the
Filipinos in United States.
- There should be institutional reforms in
economic, social, and political areas. Every
member of society should have equal
opportunities in jobs, education, public
health, government service, and other fields
of human endeavours.
- At present, a good program for the poor is
the Comprehensive Agrarian Reform
Program (CARP). If this is properly
implemented, then the poor have the
chance to improve their economic
conditions through their own efforts.
Minimizing Unemployment
- Millions of human resources in less
developed countries who are willing to work
cannot find jobs.
- In the Philippines, many young College
graduates cannot find jobs. Such problems
are further aggravated by the rapid increase
in population.
- Employment is a major source of income
among the poor. Without it, it creates many
serious implications. It does not only mean
hunger, but also a denial of other basic
needs.
The Real Products of Development
- The real products of development are the
people. A country is only as progressive as
its people. Its pervading institutions,
attitudes and values reflect the quality of its
people.
- People are the true key factors in
improving the conditions of their own
nations.
- Development is not only an improvement
in material conditions. There are higher
needs which people naturally crave for as
human beings - freedom and dignity.
The Freedom of Choice
- It is inherent among people to yearn for
freedom of choice.
- Such freedoms are conditioned by cultural
traditions and customs.
- Any society which limits the freedoms of its
members is an ​unjust society.​ It therefore
discourages development - especially
schedule
development of people.
Distribution of
OECD’s Social Indicators: A Measure of Earnings
Well-Being
Fatal occupational
- It is designed to measure individual
injuries
well-being and can be used forthwith by
Member countries interested in building a Work environment
common core of international data to nuisances
serve as a gauge of the quality of life.
Time and Leisure

Social Concerns Indicators The Use of Time Free Time

Health Free Time Activities

Length of Life Life Expectancy Command over Goods and Services

Prenatal Mortality Income Distribution of

Rate Income

Healthfulness of Short-term and Low Income

Life Long-term disability
Material
Education and Learning Deprivation

Use of education Regular education Wealth Wealth Distribution

facilities experience
Physical Environment
Adult education
Housing conditions Indoor Dwelling
Learning Literacy rate Place

Employment and quality of working life Access to Outdoor

Space
Availability of Unemployment rate
employment Basic Amenities
Involuntary
part-time work Accessibility to Proximity of
Services selected Services
Discouraged
workers Environmental Exposure to air
Nuisances pollutants
Quality of working Average working
life hours Exposure to noise

Travel time to work Social Environment

Paid annual leave Social Attachment Suicide rate

A typical work Personal Safety

 Exposure to Risk Fatal injuries

Serious Injuries

Perceived Threat Fear for Personal

Safety

Freedom and Poverty

- Freedom of choice can exist in a
democracy. But in a democratic society
where there is absolute poverty, freedom of
choice is useless.
- The lack of choice applies also to poor
nations. Their political independence is a
farce.
- There are few less developed countries
which have courageously defied the powers
of the rich countries. They nationalized
foreign investments, and drove away all
foreign businessmen and industrialists.

The Existence of Human DIgnity

- Human dignity is inherent in man. It is a
priceless gift of God to man. Without it, a
man is a useless human being.
- A man, whether he is rich or poor, has an
alienable right to human dignity.
- However, people have a distorted concept
of human dignity. They often equate dignity
with material possessions.
- They respect people who are rich and look
down on those who are poor.
- A nation where human dignity has been
reserved for the privilege of the few rich and
powerful has no right to claim economic
growth in its real sense.