Comparative Economic Development Quiz

Learning Objectives

• Comparison of economic development reveals disparities in global economic conditions.
• Important indicators for measuring development include GDP, GNI, and HDI.
• Distinguishing characteristics identify developed versus developing nations.

Development Economics

• Focuses on economic growth and development in poorer nations.
• Addresses issues like poverty, inequality, and stagnation.
• Investigates policies for sustainable growth and improved living standards.
• Current poverty threshold in the Philippines: Php 13,875/month for a family of five (NEDA, 2024).

Comparative Development

• Analyzes economic, social, and political variations across countries.
• Aids in understanding developmental differences through comparative analysis.

Classification of Countries by Income Group

• World Bank categorizes economies into four groups:
  • High Income
  • Upper Middle Income
  • Lower Middle Income
  • Low Income
• Southeast Asia examples for 2023-2024:
  • Lower Middle Income: Philippines, Myanmar, Cambodia, Laos, Vietnam
  • Upper Middle Income: Indonesia, Thailand, Malaysia
  • High Income: Singapore, Brunei

Other Classification Methods

• International Indebtedness:
  • Categorizes countries as severely indebted, moderately indebted, or less indebted.
• Economic Situation Classification:
  • Distinguishes between developed, transition, and developing economies.
• International Finance Corporation:
  • Defines emerging and frontier markets.

Basic Indicators of Development

• Real Income: A crucial measure of economic activity.
• Gross National Income (GNI):
  • Total income earned by residents, including abroad earnings, excluding foreign residents’ income.
  • Adjustments necessary for accurate per capita comparisons.
• Purchasing Power Parity (PPP):
  • Measures GNI considering domestic purchasing power to allow accurate living standard comparisons.

Health Indicators

• Life Expectancy: Average expected lifespan based on mortality data.
• Undernourishment: Inadequate food intake affecting activity levels.
• Birth Rate: Number of live births per 1,000 individuals within a specific period.
• Literacy Rate:
  • Basic Literacy: Ability to read/write letters.
  • Functional Literacy: Capability to read/write and comprehend everyday texts.

Holistic Measures of Development

• Human Development Index (HDI):
  • United Nations metric assessing health, knowledge, and living standards.
  • Measures achievement across three dimensions: life expectancy, education, and income.

Top 10 Countries with Lowest HDI (2022)

• Somalia: 0.380
• South Sudan: 0.381
• Central African Republic: 0.387
• Niger: 0.394
• Chad: 0.394
• Mali: 0.410
• Burundi: 0.420
• Yemen: 0.424
• Burkina Faso: 0.438
• Sierra Leone: 0.458

Top 10 Countries with Highest HDI (2022)

• Switzerland: 0.967
• Norway: 0.966
• Iceland: 0.959
• Hong Kong: 0.956
• Denmark: 0.952
• Sweden: 0.952
• Ireland: 0.950
• Germany: 0.950
• Singapore: 0.949
• Australia: 0.946

Characteristics of the Developing World

• Lower living standards, productivity, and human capital (health, education, skills).
• High levels of inequality and absolute poverty.
• Significant rural populations with rapid urban migration.
• Underdeveloped financial and market systems.
• Impact of colonial history and reliance on external support.

Differences Between Low-Income and Developed Countries

• Resource endowments vary widely affecting growth potential.
• Disparities in per capita income and GDP levels.
• Geographic and climatic variations may influence development.
• Historical context of migration impacts present economic conditions.
• Differences in trade benefits and access to technology or research infrastructure.
• Quality and effectiveness of domestic institutions significantly affect development rates.