4.8 Economic development

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Growth is important for development however it is not enough, hence you will see that most countries will have economic growth exceeding economic development.
Growth can also cause negative externalities such as environmental exploitation.
Hence we also see that development can occur even if there is no major growth as development generally refers to the increase in people’s wellbeing.
In an ideal scenario growth must be accompanied by proportionate development.

In Unit 4.7 we went over sustainable development and the 17 SDGs. We can say that sustainable development occurs when Economical; ensuring the economy develops and thrives such that everyone has opportunities, Social; ensuring equality, justice and well being of everyone and Environmental development; ensuring our planet’s natural resources are protected and stored for future generations, occurs. Not any 1 or 2.
This is why there are so many SDG, to develop sustainably all problems must be solved.

In the diagram ‘Viable’ refers to when only economic and environmental development are given attention to however it is not sustainable in the long term as lack of social development will lead to injustices, income inequality and unsustainable practices.
‘Bearable’ refers to when environmental and social development are given attention, this is not sustainable as a lack of economic development will lead to poverty, inequality, political and social unrest and unsustainable practices in the chase of economic development.
Equitable refers to only social and economic development, this is ofcourse unsustainable as this will lead to environmental degradation and lack of resources in the future.

HDI is one of the most common indicators used to measure development of a country and it is a composite indicator.
Human Development Index considers, Income per capita, Life expectancy at birth, expected years of schooling and mean years of schooling. With this it considers economic and social development. Countries are ranked on a 0 to 1 scale. Anything below .55 is considered low development, 0.55-0.699 is medium development, 0.7 to 0.799 is high development and above 0.8 is very high development. Switzerland and Norway have the highest HDI rankings of 0.967 and 0.966 respectively, as of september of 2024.

Obviously HDI is flawed because it doesn’t take into account environmental development.
A index that measures environmental development is EPI or Environmental Performance Index, this includes
It measures Air quality, Water quality, Biodiversity, Climate change, Ecosystem services, Waste management, Environmental health, Environmental governance and Sustainable consumption and production. Scores are given on a scale of 0-100 so it allows for comparison.
Other composite indicators are;
Gender Development Index (GDI); Measures gender disparity with health, education and icnomes
Inequality-adjusted Human Development Index (IHDI); HDI but adjusted for income inequalities
Multidimensional Poverty Index (MPI); measures poverty using incomes, health, education and living standards
Happy Planet Index (HPI); measures sustainability, wellbeing, life expectancies and ecological footprints
Social Progress Index (SPI); Measures social progress based on multiple indicators for basic needs, wellbeing and opportunities
Inclusive Development Index (IDI); Measures a country's progress in achieving inclusive growth such that many people benefit and not a select group.

HDI will be the most common indicator you will use so let’s evaluate it
Strengths
It is easily comparable because it is widely used
Due to it being comprised of multiple dimensions, it can help governments identify issues in the country.
Being composite it is more useful than single indicators
Weaknesses
It doesn’t take into account inequalities
The data is hard to accumulate, and is dependent on the precision of the country
Many important dimensions are left out of HDI
Can be biased and misrepresented