Levels of Development

 Development is the progress that a country makes to improve the quality of life for its
population and make the country more independent.

 The quality of life includes subjective evaluations of life such as happiness.

 These different components are not independent of each other but linked - for example health
and environment are dependent on income and they in turn may impact happiness:

 Development is not a smooth, continuous process.

 Development can occur for a number of reasons:

o Investment in agriculture (tractors, fertilisers etc.) improves food supplies, which

improves the health of people.

o Improvements in supplies of power to rural areas

o Improvements in access to education for females and overall literacy rates

 It can be slowed, halted, and even reversed by:

o War/conflict

o Disease

o Disasters

o Economic recession

Cycle of wealth

 One of the key indicators of development is the cycle of wealth.

 Economic development creates wealth and if a country has a stable and effective government
this leads to the development.

 As the economy grows, more people work and are earning more money:

o The government can then collect more taxes and people have more disposable income
to spend which increases business profits.

o The taxes collected and profits made by companies can then be invested in future
growth as well as infrastructure, education, healthcare etc...
Measures of national income

 The traditional method of measuring wealth is through the country's GNP (gross national
product), GDP (gross domestic product) and GNI (gross national income)

 Gross Domestic Product (GDP) per capita is the total value of goods and services produced
within a country in a year divided by the population of the country.

o There can be huge differences in GDP depending on the size and population of a
country.

o Dividing it by the population means that more meaningful comparisons can be made
between countries.

 GDP per capita is an average this means that the variation in wealth is hidden.

o It is possible that two countries can have the same average GDP per capita but that
one has a few very wealthy people and lots of people living in poverty whereas the
other has a more equal distribution of the wealth.

 There is no way of knowing what the GDP is spent on - for example, GDP increases after an
earthquake due to the rebuilding which is needed this does not mean that the country is more
developed or that everyone's quality of life has improved.

 As countries have different numbers of people (population), then GNP per capita (per
person) is used.

o This allows comparison between countries where total population figures are
different.

o GNP of the UK is lower than India, but the GNP per capita of the UK is higher than
India (India has a higher population compared to the UK)

o However, GNP per capita does not take into account the cost-of-living in the country
- $1 will go further in Bangladesh than in the USA.

 To even this discrepancy, the GNP per capita at Purchasing Power Parity (PPP) is
calculated.

 Comparison between countries level of development is easy to see, but it fails to identify:
 o How wealth is distributed around a country - the wealth gap

o Government investment in the country - Cuba has higher literacy rates, a lower infant
mortality rate, and similar life expectancy than America, despite Cuba's low GNP per
capita but Cuba's government has long prioritised social investment.

 Levels of development vary on a local, national and international scale.

 There are differences between areas of the same city, the same country and between
countries.

 These include:

o Literacy

o Life expectancy

o Infant mortality

o Doctors per 1000 people

o Energy consumption per capita

o Internet access

o Car ownership

Human development index

 The Human Development Index (HDI) was developed by the UN in 1990 and is a measure
of the disparities between countries.

 The index takes into account four indicators of development:

o Life expectancy at birth

o Mean years of schooling for adults aged 25 years.

o Expected years of schooling for children at school entering the age

o Gross National Income (GNI) per capita (PPP$)

 Countries can be divided into four groups using HDI.

o Very High Human Development (VHHD)

o High Human Development (HHD)

o Medium Human Development (MHD)

o Low Human Development (LHD)

 HDI is scored from 0 to 1

 The higher the HDI the higher the level of development and quality of life

 Norway has the highest HDI at 0.957

  Niger has the lowest HDI at 0.394

Gini coefficient index

 GNP and HDI are unable to identify inequalities between countries.

 The wealth gap in some countries is more significant than in others.

 The Gini coefficient index is used to analyse the distribution of wealth and identify countries
where wealth distribution is the most unequal:

o Measured on a scale of 0 - 1.0 or as a percentage.

o A low value means that the distribution of wealth is more equal - a measurement of 0
would mean that wealth is distributed completely equally.

o A high value means the distribution of wealth is unequal - a measurement of 1 would

indicate maximum inequality.

o The Gini coefficient index is usually between 0.24 and 0.63 or 24%-63%

 The highest inequality is currently in South Africa, Central Africa, Namibia, Zambia and
Suriname.

 The lowest inequality is in the Czech Republic and Croatia.

Inequalities in Development

Stages of development

 All countries move through the different stages of development

 The UN identifies four main stages of development

 Stages of Development

The development gap

 The development gap is the difference in levels of development between the least developed
and most developed countries in the world

 There are many factors which lead to the differences in development

Factors Affecting Development and Human Welfare

  Physical geography

o Landlocked countries find trade more difficult and so often develop more slowly

o Small countries develop more slowly due to have fewer human and natural resources

o Those countries with extreme climates develop more slowly

o The physical geography also impacts on the natural resources available

 The natural resources are those things provided by the physical environment

Natural resource Uses

Water Domestic use, energy

Forests Timber, habitat, rubber, recreation, food, medicines
Fossil Fuels Fuel, energy
Soil Growing crops
Rocks Construction
Minerals Glass, jewellery, money
Animals Food, skins
 Some countries are able to meet all their needs from the natural resources they have:

 Many countries have to import some natural resources that are not available within their
borders.

 When countries have to import natural resources, this means they do not have security of
supply as imports could be affected by war or political issues.

 Water, food and energy security are particularly important to support a country's
development.

 Demography

o The population structure of a country

o The birth and death rates, as well as immigration, affect the available workforce.

o Those countries where birth rates have fallen the most, show the highest rates of
growth.

 Technology

o Can help to increase water, food and energy security.

o Mechanisation of farming increases yields and improved land surveying may reveal
more energy sources.

o Technology can also mean that existing resources are used more efficiently.

 Social
 o Levels of education affect the skills people have. The more educated a population is
the more a country will develop.

o Healthcare affects how well people are which affects their ability to work.

o Lack of equality can mean that the overall productivity of a country is affected.

 Government policies

o The stability and effectiveness of government can have a significant impact on

development and human welfare.

o Development and human welfare are greatest where there is a democratically elected
government.

o Corrupt governments do not invest in the country's development or in improving the

quality of life for the population.

o A government's economic policy affect development and human welfare through:

 Open economy - where foreign investment is encouraged, which generates

faster development.

 Higher rates of saving and lower spending compared to GDP, results in

further development.

Differences within countries

 As well as differences between countries there are also differences in development within
countries:

o This can be seen in all countries whether they are developed, emerging or developing.

o Often development is focused on particular regions.

 Inequalities within countries are due to several factors.

 Cumulative causation theory is one explanation for regional differences:

o Growth in the core region attracts skilled labour and capital.

o Areas in the periphery suffer as skilled labour leaves and investment is focussed on
the core.

o The gap between the core and the periphery grows.

o Eventually the growth of the core region may stimulate growth in the periphery due
to the demand for raw materials.
Economic Sectors

 An economic activity is the production, purchase or selling of goods and services.

 Economic activities can be grouped into four sectors:

o Primary - mining, fishing, farming etc.

o Secondary - factory workers, clothing, steel production etc.

o Tertiary - nurses, lawyers, teachers, shop assistants, chefs

 o Quaternary - hi-tech scientists, research and development
Employment in Economic Sectors

 Economic sectors are an indicator of a country's economic development using either:

o The amount each sector contributes to the Gross Domestic Product (GDP)

o The percentage of the population they employ

 The proportions of each economic sector GDP and employment changes over time:

o In the pre-industrial period, the primary sector dominates with steady increases in
the secondary and tertiary sectors

o As countries develop the reliance on the primary sector for GDP and employment
rapidly decreases

o During the industrial period the amount of GDP and employment in the secondary
sector increases to become dominant and then decreases. The primary sector
continues to decrease and tertiary sector increases

o In the post-industrial phase, the tertiary and quaternary sectors increase whilst the
secondary and primary sectors decrease.

o The tertiary sector dominates employment and GDP in the post-industrial period

Clark-Fisher Sector Model

 As countries develop the numbers of people employed in each economic sector changes

 This can be seen in the Clark Fisher Sector Model above and in the examples below:
 Cumulative Causation

 There are three stages of regional inequality:

o Pre-industrial stage - regional differences are at their lowest.

o Period of rapid economic growth - increasing regional differences

 o Regional economic convergence - where wealth from the core spreads to other parts
of the country

Causes of regional inequalities

 Residence - Urban areas generally attract greater levels of investment leading to increased
business and incomes:

o There may also be inequality within the urban area.

 Ethnicity - Discrimination can result in ethnic groups having income levels significantly
below the dominant groups within a country. This reduces the opportunities open to these
groups.

 Employment - The split between formal and informal employment impacts incomes. Formal
jobs usually have higher incomes and greater benefits, such as holidays and sick pay.

 Education - Those with higher levels of education usually gain higher paying employment.

 Land ownership -Inequalities in land ownership are strongly linked to inequalities in income.

Causes of changes over time

 There are a number of reasons for the change in percentages employed in each sector:

o Increasing mechanisation in agriculture led to a decrease in the jobs available.

o People moved to urban areas to find jobs in secondary and tertiary sectors.

o Increasing mechanisation and global changes led to a decrease in secondary

employment in some countries.

o Technological improvements have led to an increase in tertiary and quaternary

employment.

 There is a clear link between employment structure and indicators of development.