MONIQUE C.

PRESBITERO
BSA-1A

1. For all their diversity, many less developed countries are linked by a range of common problems. What are these
problems? Which do you think are the most important? Why?
Common problems that less developed countries usually encounter are;
 Low per capita income
 Poverty
 Unemployment
 Poor governance
 Widening gap between rich and poor
 Increasing corruption
 Population growth
 Poor education

Those are just some of the problems of less developed countries, but I think the most important things here are
low per capita income, poor education and high rate of unemployment because less developed countries are
defined by their low per capita income and that’s is probably due to poor education and unemployment that
lead to poverty.

2. Explain the distinction between low levels of living and low per capita incomes. Can low levels of living exist
simultaneously with high levels of per capita income? Explain and give some examples.
- Low levels of living imply the inability of the population to intake the required calorie count per day. This
kind of situation arises due to poverty or unemployment while low per capita income would be generated if
the income is less as compared to its population
- Higher per capita income does not always mean higher standard of living, for measuring the well- being of
people of various nations we need to consider two things, first is the income of people of the nations or
within various regions of a nation. Second is the price of the commodities in a nation or within various
regions of a nation.

3. Can you think of other common ( not necessarily universal but widespread) characteristics of less developed
countries not mentioned in the text? See if you can list four or five and briefly justifies them?
 High dependence on agricultural sector- since developing countries have low level of human capital, and
one of the job that does not require good sill is on agricultural sector.
 Most citizen of less developed countries are working abroad because minimum wage and salary in their
countries might not be enough for their needs.
 Extreme traffic jam is one characteristic of developing countries, this is because of loe development of
public infrastructure.
 High rate of illiteracy- due to lack of government efforts in terms of educational assistance, less
developed countries face a high percentage of illiteracy.

4. Do you think there is a strong relationship among health, labor productivity and income levels?
- There is a strong relationship among health, labor productivity and income levels. If a person is physically
and mentally healthy, he can work and become even more productive in that case the income level
increase but if a person is ill, he cannot work, the income level decreases.
 5. What is meant by the statement that many developing nations are subject to “dominance, dependence, and
vulnerability” in their relations with rich nations? Can you give some examples?
- Developing countries are dependent on the rich nations has made them very vulnerable.
For example, developing countries demand for their products such as oil, and other natural resources
they’re also dependent on rich nation in terms of jobs because developing countries does not have enough
job opportunities for their people.

6. Explain the many ways in which developing countries may differ in their economic, social, and political
structures.
The developing nations may be identified with some common problems yet differ in their economic, social, and
political structures
Economic, social, and political structures somehow affect the economic development of a developing country
but not in every situations there are some indicators like health status, type of religion, status of women,
financial system and many more.

7. What are some additional strengths and weaknesses of the human development index as a comparative
measure of human welfare? If you were designing the HDI, what might you do differently and why?

Strengths
- it does not rank the countries based on their income alone. It takes into account the measures like education,
health status, poverty, life expectancy, etc. that would combine to reflect true status of the economy. The
ranking comes as low, low-medium, medium and high.
- it enables the government in allocation of funds or asking for international financial aid in underdeveloped
areas.

Weaknesses
- data from some developing countries may not be very reliable and may be difficult to confirm.
- no indication in the education index about access to education for all groups in society.

A universal basis for HDI is not enough to measure a nation’s socio economic position because various internal events
occurring within and limited to the boarders of land. Corruption and slow internet connection are areas that can be
taken account in measuring Philippines HDI.

8. “ Social and institutional innovations are as important for economic growth as technological and scientific
inventions and innovations.” What is meant by this statement?

-The procedure of development of a country needs employment of new technology to challenge at the world level.
The level of technology is also an important determinant of economic growth. The rapid rate of growth can be
achieved through high level of technology. Thus, it is the technological progress which keeps the economy moving.

9. Why do many economists expect income convergence between developed and developing countries and what
factors would you look to for an explanation of why this has occurred for only a limited number of countries and
in such a limited degree so far?
- The term convergence is a hypothesis in economics that believes that there would be a time when
developing nations will grow fastr than the developed ones in terms of per capital income. This happens
because of mainly two reasons:
 The developing nations only need to replicate the development process that was invented by the developed
nations in terms of technology, production methods and other institutions.

There is a lot of scope in developing nations to utilize the resources its disposal. This means that the stage of
diminishing returns is still far for the developing nations.

10. What are good economic institutions, why do so many developing countries lack them, and what can developing
countries do to get them. Justify your answer
Good economic institutions are the well-established arrangements and structures that are part of the
culture or society, e.g., competitive markets, the banking system, kids’ allowances, customary tipping, and a
system of property rights are examples of economic institutions.
Developing countries lack good economic institutions due to:
The developing nations lagged behind in creating dtrong economic institution due to weak geographical
location that did matter for carrying out production activities and processs of urbanization.
The developing nations faced inequality amongst rich and poor in terms to access to education, land, voting
rights as well as labor markets.
- Institutions emerge in two ways: either informally through repeated interactions between individuals or
organisations that establish expected norms of behaviour; or else formally through deliberate design.

11. Which measure shows more equality among countries around the world-GNI calculated at exchange rates or
GNI calculated at purchasing power party?
- The HDI attempts to make an assessment of 189 diverse countries and territories, with very different price
levels. To compare economic statistics across countries, the data must first be converted into a common
currency. Unlike market exchange rates, PPP rates of exchange allow this conversion to take account of price
differences between countries. In that way GNI per capita (PPP $) better reflects people's living standards
uniformly. In theory, 1 PPP dollar (or international dollar) has the same purchasing power in the domestic
economy of a country as $1 (USD) has in the US economy.
The current PPP conversion rates have been introduced in May 2014. They were based on the 2011
International Comparison Programme (ICP) Surveys, which covered 199 economies from all geographical
regions and from the OECD.

12. “South Asia has lower income per capita than Saharan Africa” comment in the validity of the statement
- ”South Asia has a lower income per capita than sub-Saharan Africa.” This statement estimates on the basis
of income per capita at market exchange rates which understate the standard of living of people. Long ago,
South Asia was world’s largest number of poor people and was identify by low per capita incomes, weak
economy. But after 2005, per capita income in nominal dollars nearly tripled. South’s Asia per capita gross
domestic increased by 3.4% annually whereas 0% growth is found in Sub-Saharan Africa. We can notice that
per capita income has increased slowly but in sub-Saharan Africa per capita income has been stagnant. Sub-
Saharan Africa fares well over South Asia on Malnutrition. After research we found that, South Asia may fare
better than Sub-Saharan Africa in terms of levels of poverty, per capita income but it has a higher level of
malnutrition. The income per capita of a country is measured with the help of the country purchasing power
party.

13. What is the meaning of a “colonial legacy”? discuss any disadvantages and possible advantages
 - Colonial legacy has the same purpose as the colonialization, means the strong countries takes over the
control over weak countries. The Disadvantages are as follows:-Health impact. Invasion of other countries
could produce diseases like chicken pox-Enslavement and mass exploitation. Since strong countries have
control, they were forced to work at very low wages or nothing at all-Resource drain. Strong countries use
the weaker countries resources to their own advantage. -Inequality among masses. The education was
accessible only for rich that led to inequality between poor and rich

14. State five characteristics of the developing world. Discuss diversity within the developing world on these
characteristics in relation to the developed world.
1. Low per capita income
2. Illiteracy rate is high
3. High birth rates
4. Lack of good infrastructure
5. Low to Moderate standard of living

Developed Countries have a high per capita income and GDP as compared to Developing Countries.

In Developed Countries the literacy rate is high, but in Developing Countries illiteracy rate is high.

Developed Countries have good infrastructure and a better environment in terms of health and safety, which are absent
in Developing Countries.

In developed countries, the standard of living of people is high, which is moderate in developing countries.

In developed countries, the birth rate and death rate are low, whereas in developing countries both the rates are high.

15. Discuss the differences between the traditional HDI in comparison to the “new”(NHDI) formulation. In what
ways do you think either one is a better measure of human development?
- GNI / capita replaces GDP/capita Since GNI considers the importance of remittances and aids from abroad
- The education index has been completely changed; two new components have been added; the average
actual educational attainment and the expected attainments of today's children.
- Expected educational attainment, the other new component, is not an achievement but a UN forecast
- The two previous components of the education index, literacy and enrollment, have been dropped
- The upper goalposts (maximum values) in each dimension have been increased to the observed maximum.
- The lower goalposts (minimum values) have been reduced
- .The natural log (ln) has been used instead of the common log (log)8.NHDI is computed with a geometric
mean instead of arithmetic mean