Indicators of Economic Development
When a country goes on developing, changes take place in its economy. These changes are known as indicators of economic development. Thus, the measures or criteria which are used to measure the degree of economic development are called indicators economic development is called indicators of economic development. As development is a dynamic concept, its indicators also changeable. So, there are different opinions of different economists regarding the indicators of economic development which are as follows:
1. Per capita income (PCI):
PCI of a person in a country indicates economic development. If the increase in PCI is higher than the population growth rate, then there is economic development. The economists like Meier, Paul Baron, Buchanan, and Elis have accepted the increase in PCI as the indicator of economic development.
2. Gross national products (GNP):
According to these criteria, if there is a sustained increase in production of a country over a long period of time, then there is economic development. Economic development is considered to be more if GNP is more and vice versa. The economists such as Baldwin, Simon, Kuznets, Meier, etc. have considered GNP as an indicator of Economic development.
3. Physical quality of life index (PQLI):
These criteria were developed by Morris D Morris. PQLI consists of three elements: – Life expectancy, Infant Mortality rate, and Literacy rate. The level of these components determines the level of economic development. If people live longer and are literate, PQLI value will be high and there is economic development. The levels of these three components are ranked from (1 – 100). If its value crosses 50, the country is supposed to be developed and if the value lies below 50, the country is supposed to be developing.
4. Basic human needs:
These criteria were developed by the World Bank. According to these criteria, the development is evaluated on the basis of fulfillment of the basic needs of people in terms of health, education, water, food, cloth, shelter, etc. If these basic needs are available to then people, there is economic development and vice versa.
5. Human development index:
These criteria were developed by UNDP (United Nation Development Programme) in 1990 A.D. This indicator is related to three aspects of human life: – Income for a decent living, Educational attainment, and Life expectancy. HDI is measured in a scale of (0 – 11). Zero indicates the lowest human development and one indicates the highest human development. HDI ranks the countries in three groups by using these three majors of development :
- Lowest human development (0 – 0.49)
- Medium human development (0.50 – 0.79)
- Highest human development (0.80 – 1)
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