Measuring Development I – On the impossibility of being developed

There have been some recent changes on the blog and so it seems like a good time to become a bit more active as well. I’m a former KF student who left Graz a while ago and I’m now in the final year of a MSc program that specializes on Economic Development and Growth. This will also be the focus of my blog entries.

On the impossibility of being developed

As a profession we, economists, like clear concepts. When we use a term such as “market”, “capital” or “inflation” we tend to define these terms to get a clear understanding of what we are talking about. Studying a masters in development economics I’ve started to realize that the term “development” has become such a common word in our everyday language that hardly anybody pauses to think about what we actually mean by it.

This blog entry is the first one of a series I am going to write over the next couple of weeks that will deal with the questions of what development is and how we can measure it over time and space. These are obviously important questions, because without a clear idea of what we mean by “development”, “progress” and how we can measure and compare them, most of the things we can say in development economics become quite meaningless.1 In this first part of the series, I focus on discussing “development” and its relation to “progress”.

Let’s start with some basic definitions. The Oxford English Dictionary states:

development

Pronunciation: /dɪˈvɛləpm(ə)nt/

noun

[mass noun]

  • 1the process of developing or being developed:she traces the development of the novel, the paintings provide evidence of his artistic development

  •  a specified state of growth or advancement:the wings attain their full development several hours after birth

  •  [count noun] a new and advanced product or idea:the latest developments in information technology

  • 2 [count noun] an event constituting a new stage in a changing situation:I don’t think there have been any new developments since yesterday

  • […]

progress

noun

Pronunciation: /ˈprəʊgrɛs/

[mass noun]

  • 1forward or onward movement towards a destination:the darkness did not stop my progressthey failed to make any progress up the estuary

  •  [count noun] archaic a state journey or official tour, especially by royalty.

  • 2development towards an improved or more advanced condition:we are making progress towards equal rights

What are we supposed to make of that? – Essentially, what this tells us is that while the term development can be associated with terms such as growth, advancement or changes over time, it is not associated with improvements or goals. Instead, it is “progress” that is defined as a development towards an improved or advanced condition or a goal. Why does this matter? It matters because in our everyday language we are often not careful and clear enough in stating that “development” as such is not a goal. It is a process that takes place over time. This means that we can certainly measure the “development” of something by choosing an appropriate indicator and tracking its performance over time. The resulting series of measurements can then show a rise or a decline of the indicator. Regardless of which, the series will show us the development of a certain measure. To assess whether this development could be called a “progress” though, we need to move onto normative grounds and define a goal or at least define what we consider an “improvement”.

Which leads us to another important point: what does it mean when we say that a country is developing or developed? Unless we can claim that there is some state of development that can’t be reversed, the distinction is complete humbug, because, per definition, all countries are developing. They all undergo a process of constant change.2 What about the term “developed”? I’ve said before that we can choose and indicator, such as GDP per capita, for instance to monitor the economic development of a country, for example. A country could then be considered “developed” if it surpasses a certain threshold of income per capita. However, this choice of a threshold is completely arbitrary and based on our subjective goals, because there is no such thing as an objective level of development. Let me re-emphasize: to define what we consider as “developed” we make a normative judgement and somehow connect it to our idea of “progress”.

While this has all been very philosophical, where have organizations drawn the line between “developed” and “developing” countries in practise? Interestingly enough, the OECD states that:

There is no established convention for the designation of “developed” and “developing” countries or areas in the United Nations system.

While this may seem strange at first, there are two very straightforward reasons. First, there is the before-mentioned problem that it is insanely difficult to justify the choice of a threshold on non-normative grounds. Secondly, development is a multidimensional process. While we often think about GDP per capita in relation with development, this is one of the most narrow definitions we can use. Instead, development has a variety of social aspects that are hard to measure and even if we can come up with a comprehensive list of everything that matters to assess development, we face the problem that somehow we have to aggregate and weight the variety of indicators. This problem of how to measure development has led to an interesting body of research that ranges from 300-page reports on the shortcomings of GDP to a variety of composite indices such as the Human Development Index, Happy Planet Index or OECD Better Life Index and Subjective Well-being research. In the following blog entries I will devote some time to discussing these research efforts.

For those of you who already feel like exploring a little bit, you can start by playing with the OECD Better Life Index.

1 While I will try to put in references (for the interested reader and due to considerations of transparency) this is a blog and not a paper: therefore referencing may be incomplete; but you can always write me a message if you have questions.

2This does clearly not apply to all disciplines: In biology, we could talk about the “full development”, of an embryo, for instance. We can do this, because we have a clear idea of what the final embryo should look like and can assume that the development will not reverse itself. Unlike economics, biology often has “goals” that are non-normative and given by nature.

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8 thoughts on “Measuring Development I – On the impossibility of being developed

  1. The term “development” is indeed something almost everyone uses in a fairly confused way. You mention that what this means for countries is completely arbitrary, which at its core I agree with. However, like with poverty, measures of “relative development” seem to provide a fairly consistent way to think about what it means to be developed and what not. Sure, it’s still mostly arbitrary, but it does provide very useful information. What measure you use to arrive at the level of relative development, as you note, seems like the much harder part.

  2. The call for more accuracy in defining concepts we work with is undoubtedly important and concerns many other realms than development economics as well. If we really think about it, any term we use, in particular in science-to-public communication, is rather vague and mostly underlies some normative judgments. However, language (except mathematics) is imprecise per definition and always leaves a lot of space for individual interpretation. Arguing this way points in a philosophical way and as famously written by Ludwig Wittgenstein: „Die Grenzen meiner Sprache bedeuten die Grenzen meiner Welt“ (The boarders of my language are the boarders of my world). I guess this is one reason for the rise of mathematics (or to be more precise: strict mathematical reasoning) in the social sciences in order to (at least try to) escape the problem of inexactness of languages. I give an example originate from another realm of research than development economics: What is the meaning of sustainability? Beginning with the Brundtland definition, few of them can be operationalised and without a clear commitment which aspects are included (and how they are weighted, measured, etc.), can a statement like “X is sustainable” ever make any sense? However, believing that we are all homines politici that are interested in their world, we sometimes have to use such statements if we think It’s all in good cause. I am convinced we won’t solve the problem of inconsistencies of language and especially more math won’t either. Sorry for getting philosophical, I hope my comment launches some new ideas.

  3. Thanks for the comments =).

    @Florian: The problem remains the same. Whether absolute or relative we first need to move onto normative grounds to define what we mean by development – in other words, the choice of our indicators depends on what WE consider important and can thus never be objective. I will argue in subsequent entries that actually both absolute and relative indicators are quite informative.

    @Wolfgang: Well, it is at it’s core a philosophical topic and I chose it for that reason. I like your comments on language as a boundary (unfortunately I’m not an expert on it) and the fact that language is imprecise. But in this particulary case, I don’t think it has to be imprecise. You can say “The level of development is equal to the level of GDP/per capita and a country is developed if it’s GDP/ capita exceeds x.” That’s not imprecise (admittedly it is not anymore an abstract definition of “development”). You have to do define your variables in mathematics as well, to give them some meaning. The difference is, (and this is off the top of my head) that mathematics is something that we use with more care than language. But in science we should not make that mistake. In science – and to a certain extent in our everyday life – we should pause and think not only about how we formulate complex models with mathematics, but about how we may be able to be very precise and logical just by giving the words we use a clear meaning by using more words and maybe one or the other variable.

    In fact, all I wanted to do with this first entry was:
    1. To get people to think about development
    2. …and argue that by defining it we make a subjective/ normative choice because there is nothing absolute about (economic and social) development

    The next entries will be more applied and less philosophical – I promise.

  4. Interesting topic, looking forward to more.

    But I don’t go along with your view that by defining development you have to make a normative statement. If I say “strawberry yoghurts are yoghurts which contain at least x strawberries” that’s not a normative statement. How is this different from the statement “developed countries are countries whose GDP per capita is at least x”? Of course, if you are allergic to strawberries you can derive from the positive definition of strawberry yoghurts that strawberry yoghurts are bad. Similarly if you think having a GDP per capita larger than x is a good thing, your positive definition of “developed” implies that being a developed country is good. But that does not make your definition of development a normative statement.

    • Well, maybe you and I differ a bit in what we call normative.
      A positive statement would be “This strawberry yoghurt contains three strawberries.”
      That can be true or false.
      However, DEFINING how many strawberries a strawberry yoghurt must contain, for me still is sort of… ideological… you are saying what properties the yoghurt should have, but what do you base that on? The natural law of good strawberry yoghurts? Can it ever be true or false?

      You could say: are therefore all definitions normative?
      And I wouldn’t have an answer (still an economist, not a philosopher), but I would say that the statement that a “strawberry yoghurt must contain strawberries” is LESS normative, but you could probably fight about that…

      In addition, there is one substantial difference between yoghurts and development. One is tangible, the other is abstract. So, it is even harder to claim, that we are NOT invoking ideology when we say that “development” can be measured as “GDP/capita”. Why not subjective well-being? Or the number of roller coasters per capita?

      I agree, though, once we have made our definition of development clear, we can make positive statements: Is a country developed? Well, it has a GDP/capita of xyz, thus invoking our (normative) definition,..

      Sorry, for the long answer. Didn’t know how to make it any shorter.

      • I think you and I don’t disagree about what a normative statement is. Maybe we disagree about what a definition is. As I understand this, a definition is just an explanation of the meaning of words. If you define “development”, you’re just saying how you wanna use that term. There is no wrong or right definition. Different people use different definitions and that’s OK. If you want to define development in terms of subjective happiness, so be it. The only relevant question is how useful a definition is. For instance I think the above definition of development isn’t very useful because it’s hard to measure subjective happiness and it’s even harder to aggregate happiness of different people. But I don’t see how this is a question of ideology?

  5. I’ll promise, you’ll understand why I talk about ideology once I get to write the second (or maybe third) blog entry on the issue of development measures. Bear with me until then. And if you still disagree we can take up the discussion 😉

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