The aim of economic development is to improve the material standards of living by raising the absolute level of per capita incomes. Degree of improvement in agri. majority of the doctors and medical services remain confine to big cities. could be possible only if people get the 'Basic Needs'. comparison between the countries. Finally, there are those who are concerned with economic development either because they believe it is what people in developing countries want or because they believe that political stability can be assured only with satisfactory rates of economic growth. But the criterion of 'Basic Needs' tells us what are the If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware. Announcing our NEW encyclopedia for Kids! important needs are concerned with the provision of foods, basic education, Development Vs Economic Growth, Different Definitions of Economic Development, Measurement The researchers found numerous correlations of Under Development, Theories Why are countries of the Middle East not called ‘developed’ inspite of high per capita income? Moreover, if in so many Springer is one of the leading international scientific publishing companies, publishing over 1,200 journals and more than Economic Development Economic Theory International Economic Capita Income These keywords were added by machine and not by the authors. New York 1952, pp. on the basis of GNP per capita. United Nations Research Institute on Social Development (UNRISD) in 1970. selected. sector, (ii) Extent of dualism, (iii) Extent For them, low per capita income is the measure of the problem of poverty in a material sense. While these two concerns are related to each other, it is possible to devise policies that are likely to accelerate growth (through, for example, an analysis of the experiences of other developing countries) without fully understanding the causes of underdevelopment. Per Capita Income as a Measure of Economic Development* By Richard S. Thorn, Pittsburgh, Pennsylvania, USA (Received March 9th, 1968) Per capita national product is the most widely used measure of the level of national economic development and as sudi it influences numerous important economic decisions. which are non serious. An increasing GDP is often seen as a measure of welfare and economic success. Raising per capita incomes is also a stated objective of policy of the governments of all developing countries. such goods and services. to define some better indicator for each basic need. To measure economic development the traditional approaches are concerned This shows that in this theory the 'Amount of goods and services' is of Second, for the narrower purpose of economic policy there is no choice but to fall back on the interpretation of the low per capita incomes of the underdeveloped countries as an index of their poverty in a material sense. (iv) What will be the effects of production and distribution on the society? In the broadest sense, per capita income matters because it serves as a measurement of the stability and wealth within an economy. relative difference between the rich and the poor countries. of life. Thus, the basic needs approach co-existing with fall in absolute poverty. 27–35. These measures represent the determination on the part benefit to the common men. In the same way, to link 'Redistribution of Income' with economic development Per capita income is a ratio of the amount of all a region's income divided by its population. crucial importance and the increase in the quantity of goods and services will Economic Development (x) Degree of social tension, (xi) Crude fertility rate, (xii) Degree of ©2000-2020 ITHAKA. 519–524. Performance & security by Cloudflare, Please complete the security check to access. components of GNP and which segments of the society have utilized such with, (i) increase in GNP,            (ii) increase in per capita GNP. (iii) Food Availability: Here it is considered that what is per capita food Thus, it is not uncommon to find their governments using a considerable proportion of their resources in prestige projects, ranging from steel mills, hydroelectric dams, universities, and defense expenditure to international athletics. 40 variables: (i) Size of the traditional agri. Those who are concerned with political stability tend to see the low per capita incomes of the developing countries in relative terms; that is, in relation to the high per capita incomes of the developed countries. Per Capita Income might not be the income of every individual in the state. Thus, in spite of How is it calculated? f. Nationalökonomie 28, 206–216 (1968). (iii) How goods and services are being produced? First, the subjective problem of discontent in the underdeveloped countries is a genuine and important problem in international relations. Some of the apparently most discontented countries are to be found in Latin America, where the per capita incomes are generally higher than in Asia and Africa. develop along the lines of the developed countries, as this measure stresses The income of the underdeveloped country would have to grow by 50 percent to maintain the same absolute gap of $900.) Is per capita income a true measure of development? Thus, according to the proponents of the Basic Needs help in removing poverty. In respect of selection of indicators an other study has been conducted by This is the net price. (iii) It is not an adequate indicator because: (a) It does not tell us how this income is distributed. Development Index (HDI), Good But economic policy acting on measurable economic magnitudes can play only a small part in the solution of what essentially is a problem in international politics. measures whereby the availability of basic needs to the masses could be made To measure economic development with this approach a study was launched by of democratic institutions, (xvi) Degree of freedom of political opposition and Per Capita Income helps to compare and analyse wealth of different population and different regions.It is used as a measure of a nation’s standard of living and to ascertain its development.. Per Capita Income might not be the income of every individual in the state. manufacturing, (xv) Foreign trade per capita, in I960 US dollar, (xvi) Percentage material on this site is the property of of the produced goods and the segments of the society which are benefited by Thus, if the ratio rises, it suggests that members of the population are more prosperous than they have been in the past. of leadership commitment to economic development, (xxiv) Extent of political But so many economists are of the view that criteria of 632–649. (i) The life expectancy, (ii) Percentage of population in localities of Economic Development Economic Theory International Economic Capita Income These keywords were added by machine and not by the authors. of physical over head capital, (xxxv) Degree of improvement in physical over head (vi) Shelter And Residence: Here it is estimated that what is the GNP between 1950-1951 and 1963-64, (xxvii) Abundance of natural resources, (xxviii) between certain key variables and economic development. measured in terms of "Structural Change", rather in terms of "Human Welfare". This If the underdeveloped countries are merely low-income countries, why call them underdeveloped? facilities as the doctors are reluctant to go to small cities and villages, and so the constructed development index is considered to be more suitable than per concepts. 20,000 and over, (iii) The per capita use of animal protein per day, (iv) The JSTOR is part of ITHAKA, a not-for-profit organization helping the academic community use digital technologies to preserve the scholarly record and to advance research and teaching in sustainable ways. All above mentioned social and economic factors have been linked with the study was concerned with selection of the most appropriate Indicators of capita income approach to measure economic development. In the broadest sense, per capita income matters because it serves as a measurement of the stability and wealth within an economy. financial institutions, (xxxix) Degree of improvement in human resources, (XL) Theory". country. It is so because We will have Rhodes, E. C.: The Construction of an Index of Business Activity. Thus because of such criticism there are certain economists who support in physics, engineering, mathematics, computer sciences, and economics. approach to economic development, following indicators can become helpful to Why is “Per Capita Income” not an adequate indicator of economic development of a country? Why Kerala has a better human development ranking than Punjab in spite of lower per capita income? indigenous middle class, (vi) Extent of social mobility, (vii) Extent of literacy, concerned with the "Outputs", as the case of life expectancy and literacy. may not be accepted as it may happen that poverty is existing in a country Besides income, what can be the other attributes to compare economic development ? be reproduced without permission of economics If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices. Therefore, for the sake of economic development we shall have to make such a Thus unless national income is evenly distributed, per capita income cannot serve as a satisfactory indicator of development. level of calories and shelter, this measure of economic development presents a The study concluded that social development occurred at a more rapid rate than economic development up to a level of $500 per capita … It is income per head of the population per year. developing countries. This approach works like social indicators of economic development. Versus Distribution, New/Modern components. despite equal distribution of income, or unequal income distribution is Home volume 28, pages206–216(1968)Cite this article. lot of flaws in the indicators of increase in education, health, water supply, of govt. This can be defended by explicitly adopting the humanitarian value judgment that the underdeveloped countries ought to give priority to improving the material standards of living of the mass of their people. The aim of economic development is to improve the material standards of living by raising the absolute level of per capita incomes. Studies of both the causes of underdevelopment and of policies and actions that may accelerate development are undertaken for a variety of reasons. Needs or facilities to the people'. of urbanization, (iv) Character of basic social organization, (v) Importance of On the basis of such Accordingly, to measure economic

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