How do you measure development?
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What does it mean when a country is classed as ‘developed’? It’s certainly not a finite state. For the World Bank a ‘developed’ country is one with a high Gross National Income (GNI) per capita. They then classify countries according to their income level. But this doesn’t tell the whole story – it doesn’t give you the distribution of wealth across a population (like the GINI index or coefficient attempts to do), it just gives a straight average of national income divided by population.

The Human Development Index (HDI) reported on in the United Nations Development Programme’s annual Human Development Report attempts to draw on a wider vision of development, including measures of education, health, and standard of living.

INASP uses a combination of the World Bank classification and the HDI to identify countries eligible for support. These classifications are checked annually to see if any countries have moved into or out of eligibility.

When checking the classifications recently, I came across this interesting tool on the UNDP website – Two different stories: From human development to income. You can select a country and the tool will show you the HDI and GNI values for that country, against another country with a similar HDI value but a very different GNI. It shows the value in using a wider measure of development than just average income levels as higher income levels don’t necessarily equate to high levels of education and health. Let’s take an example. One of INASP’s partner countries is Honduras. The comparison country that comes up when you select Honduras is Botswana – with a much higher GNI per capita but a very similar HDI. Botswana isn’t currently eligible for INASP’s support while Honduras is. As the blurb above the comparison tool says, ‘The HDI can also be used to question national policy choices, asking how two countries with the same level of GNI per capita can end up with such different human development outcomes.’

This raises a number of questions and makes me wonder whether we’re using the right eligibility criteria to identify the countries we could work with. What criteria do others use? Is it worth checking these criteria on an annual basis, given that small fluctuations in GNI and HDI do not reflect significant differences in development on the ground?

About Rebecca Bailey

Rebecca Bailey is the Programme Manager of Country Relations at INASP.
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4 Responses to How do you measure development?

  1. Jonathan Harle says:

    Hi Rebecca – I think it’s really useful to reflect on some of these categories and classifications that have become so entrenched. There’s also the issue of differences within countries – Nigeria always scores quite highly on income indexes because of its oil wealth, but not much of that benefits its citizens (the UNDP tool above compares it to Madagascar), and many of its universities certainly lack investment. If you haven’t seen it already, Andy Sumner’s work at IDS on the ‘new bottom billion’ is worth checking out http://www.ids.ac.uk/go/news/the-new-bottom-billion. Jon

  2. Alex Ademokun says:

    Thanks for this Rebecca. I agree with the post and with Jon’s reference to Nigeria. We need to be aware of what we are measuring and what information our data does (and does not) provide. There is also the question of what sort of country a given programme should be active in. Is it the poorest country (as measured by index X) or the country with the best infrastructure to maximise the intervention? While we are keen to help the poorest people we should also ask ourselves the question: ‘under what conditions are our interventions most likely to succeed?’

  3. I saw this article on scidev.net (http://www.scidev.net/en/science-and-innovation-policy/news/launch-of-inclusive-wealth-index-reveals-gdp-limitations.html) about a new index for measuring growth that takes into account not just economic growth but human capital and natural resources. It is called the inclusive wealth index and the launch page is here along with some country examples: http://www.ihdp.unu.edu/article/iwr

  4. Rebecca Bailey says:

    Thanks for your comments, Jon and Alex (and apologies for the massive delay in responding!). I’ve had a look at the articles you mention and think we definitely need to take all of these things into consideration when making decisions on who we work with and how. Like Alex says, it’s important that work is undertaken where it will have the greatest effect.

    The Inclusive Wealth Report looks like something to keep an eye on, to see if it is picked up and developed for all countries. I’m not sure I agree with what they say on their launch page (http://www.ihdp.unu.edu/article/iwr) about HDI being grouped together with GDP as ‘economic production indicators’. I think HDI does go some of the way to promoting a slightly wider view of development.

    I’ve also come across the following Multidimensional Poverty Index (http://hdr.undp.org/en/statistics/mpi/), developed by the Oxford Poverty and Human Development Initiative (OPHI) of Oxford University and the Human Development Report Office of UNDP.

    So many indices… so little time!