Measuring development

Development is such a big, abstract concept. Approaching it from different angles, there are numerous ways to define and characterize development. In fact, we can even create different typologies of development and enumerate different types of development under the continuum. In addition to these variations, even the scope of development varies. For example, the term may refer to personal and individual development, as well as community-wide development and even nationwide and international development.

Most dictionaries present only loose definitions of development. Dictionary.com, for example, defines development as “a specified state of growth or advancement.” However, if we consult this definition, we would still wonder what the terms “growth” and “advancement” pertain. Both these terms in defining development are still both broad and vague. In fact, even when I looked up the root word of development which is “develop,” the definitions given are still vague. Again, the Dictionary.com states that to develop means to “grow or cause to grow and become more mature and advanced.” But then again, what is growth? What does ‘being more mature’ actually mean? What does ‘being advanced’ entail, more precisely? We can again look up these words in a dictionary and find that there are more definitions linked to these terms. This makes it difficult to characterize development.

Now that we see how impossible it is to give one all-encompassing definition of development, how then do we quantify the term in order to make it measurable and standard across all societies? What are our readily measurable indicators of development (or at least, aspects of it) and how reliable are they?

Perhaps one of the most commonly used indicator or measurment of development is the GDP of a nation. While GDP is widely used and considered a reliable measure, it focuses mainly on a nation’s economic situation and does not take into account the other aspects of development such as sustainability, satisfaction of citizens, and others.

Bill Gates said in an article in the Guardian that the GDP may be an “inaccurate indicator of the poorest countries.”. He said that if the selection for natios that need more development initiatives is based on the GDP, then there may be discrepancies. According to Gates, using statistics as justification to help the world’s poor may therefore not be accurate and reliable. In fact, according to him, GDP also undermines, to an extent, the development in rich countries because the value of goods and services are always in a state of flux.

In developing countries, however, GDP becomes an unreliable measure of development because there are many unrecorded economic activities that are not taxed. For example, those engaged in small and medium enterprises and other subsistence economies are not taken into account in computing for a nation’s GDP. In addition to this, many economic and development reports are not regularly updated. This becomes an additional cause of discrepancy in creating strategic development plans for nations which need them the most.

Therefore, development workers and experts must also start looking at development from a farther distance, in order to see the big picture. In measuring development, we must not only look at it from a single point of view and evaluate it using a single measure but try to gauge the different situations and integrate them in order to form a holistic understanding of development.

Knut Harald Nylænde is the man behind one of Norway’s investments groups, Moxie AS. Knut received his professional training from two of the best business schools in the country, and has worked as a State Authorized Public Accountant in the past.