Measuring development: notes and practice questions
- This topic covers the multidimensional nature of economic development and its measurement using various indicators.
- Single indicators include GDP/GNI per capita at purchasing power parity (PPP), health, education, inequality, energy, and environmental measures.
- Composite indicators combine multiple aspects, such as the Human Development Index (HDI).
- Other composite indicators are the Gender Inequality Index (GII), Inequality-adjusted HDI (IHDI), and Happy Planet Index.
- Evaluate the strengths and limitations of different approaches to measuring economic development.
- Analyze the possible relationship between economic growth and economic development.
How it is examined
A common Paper 1 pairing: a 10-mark `explain` of the difference between economic growth and economic development, then a 15-mark `evaluate` of whether single or composite indicators measure development better. In Paper 2 it supplies short definitions and interpretation of a data table.
- The multidimensional nature of economic development. (AO2)
- Single indicators: GDP or GNI per person at purchasing power parity; health and education indicators; economic and social inequality indicators; energy indicators; environmental indicators. (AO2)
- Composite indicators: the Human Development Index; the Gender Inequality Index; the Inequality adjusted Human Development Index; the Happy Planet Index. (AO2)
- The strengths and limitations of approaches to measuring economic development. (AO3)
Guiding questions
- How do you measure something as broad as development?
Linking questions
- GNI per capita at PPP comes from 3.1.
- Inequality indicators overlap with the Lorenz curve and Gini work in 3.4.
- The Happy Planet Index appears in both 3.1 and 4.8.
- Whether growth delivers development is the question 4.10 tries to answer with policy.
Practice questions
4 questions · 4 hardQuestion 1
HardPaper 1 · no calculator25 marks(a) Explain how poor infrastructure may act as a barrier to economic development.
(b) Using real-world examples, evaluate the view that trade liberalization is the most effective strategy for achieving economic development.
Think about the different types of infrastructure (e.g., transport, energy, communication, health, education). For each type, explain how its poor quality or absence could hinder a country's progress in improving living standards, not just increasing output.
Start by explaining the arguments in favour of trade liberalization. Then, for evaluation, consider the potential drawbacks. To address the 'most effective' part of the question, you must compare trade liberalization with other development strategies, such as improving infrastructure or education.
Question 2
HardPaper 1 · no calculator25 marks(a) Explain how inward foreign direct investment (FDI) can contribute to economic growth.
(b) Using real-world examples, discuss the view that a lack of infrastructure is the most significant barrier to economic development.
Start by defining both foreign direct investment (FDI) and economic growth. Then, consider how FDI affects the components of aggregate demand and the determinants of long-run aggregate supply. Think about injections into the circular flow of income and factors that increase a country's productive capacity. A diagram would be helpful here.
To 'discuss' this view, you need to present a balanced argument. First, explain the ways in which poor infrastructure (e.g., transport, energy, sanitation) can hinder economic development. Then, challenge the view by considering other significant barriers (e.g., corruption, low levels of human capital, political instability) and argue why they might be equally or more important in some contexts. Use specific country examples to support both sides of your argument.
Question 3
HardPaper 1 · no calculator25 marks(a) Explain how high levels of economic inequality may act as a barrier to economic growth.
(b) Using real-world examples, evaluate the view that trade liberalization is the most effective strategy for achieving economic development.
Think about the various channels through which the distribution of income can affect a country's overall economic performance. Consider the impact on human capital, social stability, and aggregate demand.
Consider the arguments for and against trade liberalization as a development strategy. To evaluate whether it is the 'most effective', you should compare it with other potential strategies, such as interventionist or other market-based policies.
Question 4
HardPaper 1 · no calculator25 marks(a) Explain how low levels of human capital can act as a barrier to a country's economic growth and economic development.
(b) Using real-world examples, discuss the view that interventionist strategies are more effective than market-based strategies in promoting economic development.
Start by defining human capital, economic growth, and economic development. Then, explain the mechanisms through which poor education and health standards can limit an increase in real GDP (growth) and improvements in overall living standards (development). Consider the impact on productivity and innovation.
Define interventionist and market-based strategies. For each approach, explain the theoretical arguments for how it promotes economic development. Then, evaluate the strengths and weaknesses of each. For example, consider issues like government failure vs. market failure, and equity vs. efficiency. Support your arguments with specific country examples.
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Where marks are lost
- No real-world example, or a stated one. An answer that names a country and stops cannot reach the top two bands.
- One-sided argument. Balance is an explicit axis. A student who argues only that a policy works is capped at 9 out of 15 on that axis alone.
- Diagram present but not explained. The diagram bullet escalates across three bands: included, included and explained, included and fully explained. A diagram dropped into an answer without prose that refers to it sits at 5 to 6 on a 10-mark part.
