International Trade and Development, Xiamen, Fujian, China
Received October 08, 2014; Accepted March 03, 2015; Published March 13,2015
Citation: Bartholomew K (2015) Real Development Index. J Glob Econ 3:135. doi: 10.4172/2375-4389.1000135
Copyright: © 2015 Bartholomew K. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
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The Real Development Index (RDI) is a conglomerate index that measures and compares countries’ level of development. The RDI takes into account various economic, social and environmental factors that other economic or human development indexes fail to do. Data for the index is relevant for the year 2014, and compares 110 countries using a variety of hard data and survey data. The index is comprised of three sections to measure a country’s level of development: 1. Law and Stability, 2. Quality of Life, 3. Economic Development.
Human development; Quality of life; Economic development; Development index
In Beyond Economic Growth, published by the World Bank, the author states, “Human beings are at the center of concern for sustainable development. They are entitled to a healthy and productive life in harmony with nature.” The author also states that development must include three aspects: economic, social and environmental. As of yet, there has not been a single index inclusive of all three to measure countries’ level of development; this index hopes to achieve that in order to give an idea of countries’ real level of development . This author would also like to add that the idea of developed and underdeveloped is flawed, rather, all countries are developing because development is not an end goal. Development is the continuous improvement of a country in its standard and quality of living for its citizens. All countries face similar issues to varying degrees, thus a country’s level of development can only be known relative to other countries’ state of being.
The RDI compared 110 countries with data relevant to the year 2014. The index consists of a total score of 100 points; a country can score up to 100 as the highest level of development compared to other countries. The RDI configures a country’s score in three sections, with percentages added for the total score. The score card and factors are as followed:
Section one: Law and stability, 30%
1. Corruption 15%
2. Peace and Security 7.5%
3. Civil Liberties 7.5%
Section two: Quality of life, 33.5%
1. Health 10%
2. Environment 10%
3. Education 7.5%
4. Gender Equality 3%
5. Community 3%
Section three: Economic development, 36.5%
1. Standard of Living 17.5% (unemployment 5.5%, income inequality 5.5%, average income 4%, consumer quality 2.5%)
2. Financial Market Development 5%
3. Infrastructure 5%
4. Business Sophistication 3%
5. Technology 3%
6. Innovation 3%
Is taken from Transparency International’s 2013 Corruptions Perception Index (CPI). The CPI ranks countries “by their perceived levels of corruption, as determined by expert assessments and opinion surveys.” The definition of corruption in this index is “the misuse of public power for private gain ” (Table 1).
|Ranking1 of 110|
|Peace and Stability||7.23|
|Standard of Living||14.8645|
|Financial Market Development||3.6|
Table 1: Comparision of Sections.
Is taken from the Institute for Economics and Peace’s 2014 Global Peace Index. The GPI ranks countries according to their peacefulness. It takes into account 22 factors: 1. Number of external and internal conflicts fought, 2. Number of deaths from organized conflict (external), 3. Number of deaths from organized conflict (internal), 4. Level of organized conflict (internal), 5. Relations with neighboring countries, 6. Level of perceived criminality in society, 7. Number of refugees and displaced persons as percentage of population, 8. Political instability, 9. Terrorist activity, 10. Political terror scale, 11. Number of homicides per 100,000 people, 12. Level of violent crime, 13. Likelihood of violent demonstrations, 14. Number of jailed persons per 100,000 people, 15. Number of internal security officers and police per 100,000 people, 16. Military expenditure as a percentage of GDP, 17. Number of armed-services personal, 18. Volume of transfers of major conventional weapons as recipient (imports) per 100,000 people, 19. Volume of transfers of major conventional weapons as supplier (exports) per 1000,000 people, 20. Financial contributions to UN peace keeping missions, 21. Nuclear and heavy weapons capability, 22. Ease of access to small arms and light weapons .
Is taken from the civil liberties section of the 2014 Freedom of the World survey .
Is life expectancy at time of birth. Data is taken from the World Bank .
Is the 2014 Environmental Performance Index, which “ranks countries on performance indicators tracked across policy categories that cover both environmental public health and ecosystem vitality” .
Is taken from the 2013-14 Global Competitiveness Report and includes six factors: 1. quality of primary education, 2. quality of the educational system, 3. quality of math and science education, 4. quality of management schools, 5. availability of research and training services, 6. extent of staff training .
Is taken from the 2013 Global Gender Gap Index. “It ranks countries according to their gender equality rather than woman’s empowerment.” It measures four categories: Economic participation and opportunity, educational attainment, health and survival, and political empowerment .
Is taken from Charities Aid Foundation’s 2013 World Giving Index. The GPI is based on Gallup Poll questions, which had 500-2000 participants per country. The questions regard donating to charity, volunteering time to an organization and helping a stranger .
Is unemployment total % of the labor force; the share of the labor force that is without work but available for and seeking unemployment. Data is taken from the World Bank .
Is GDP PPP Per Capita. GDP per capita is gross domestic product divided by mid-year population. GDP PPP Per Capita is GDP per capita at purchasing power parity. Data is taken from the World Bank [20,21].
Is taken from the 2013-14 Global Competitiveness Report and includes three factors: 1. degree of customer orientation, 2. buyer sophistication, 3. extent of marketing. This factor was included to show a citizen’s access to, and awareness of products in the market, which enables them to live a healthier material life .
Financial market development
Is taken from the 2013-14 Global Competitiveness Report and includes seven factors: 1. availability of financial services, 2. affordability of financial services, 3. financing through local equity market, 4. ease of access to loans, 5. venture capital availability, 6. soundness of banks, 7. regulation of securities exchange .
Is taken from the 2013-14 Global Competitiveness Report and includes five factors: 1. quality of roads, 2. quality of railroad infrastructure, 3. quality of port infrastructure, 4. quality of transport infrastructure, 5. quality of electricity supply .
Is taken from the 2013-14 Global Competitiveness Report and includes twelve factors: 1. local supplier quality, 2. local supplier quantity, 3. state of cluster development, 4. value chain breadth, 5. production process sophistication, 6. willingness to delegate authority, 7. effectiveness of anti-monopoly policy, 8. ethical behavior of firms, 9. strength of auditing, 10. Efficiency of corporate boards, 11. protection of minority shareholders’ interest, 12. Strength of investor protection .
Is taken from the 2013-14 Global competitiveness report and includes four factors: 1. availability of latest technologies, 2. firm level technology absorption, 3. FDI and technology transfer, 4. availability of scientists and engineers  (Figure 1 and Tables 2-4).
|1.Switzerland, 87.0245||5.Luxembourg, 82.1915||9. Germany, 80.9245|
|2.Norway, 85.684||6.Australia, 81.59||10.Netherlands, 80.873|
|3.Sweden, 82.9955||7.New Zealand, 81.2695||11.Canada, 80.5605|
|4.Finland, 82.814||8.Iceland, 81.172||12.Austria, 80.2955|
|13.Denmark, 80.257||47.Brazil, 53.383||81.Paraguay, 44.4725|
|14.Singapore, 78.9485||48.Thailand, 53.271||82.Senegal, 44.380|
|15. Japan, 78.3835||49.Ecuador, 53.0665||83. Dominican Republic, 44.2405|
|16. Belgium, 76.3395||50.Sri Lanka, 52.784||84.Colombia, 44.020|
|17. United Kingdom, 75.4395||51.Saudi Arabia, 51.7385||85.Georgia, 43.5315|
|18. Ireland, 74.4785||52.Indonesia, 51.367||86.Lebanon, 43.3745|
|19. United States, 70.3735||53.Bulgaria, 51.2995||87.Egypt, 42.5345|
|20. Qatar, 69.3515||54.Argentina, 51.061||88.Nepal, 42.089|
|21. South Korea, 69.350||55.Mexico, 50.985||89.Honduras, 42.0415|
|22. Spain, 69.294||56.Kazakhstan, 50.2165||90.Venezuela, 41.6035|
|23. France, 68.851||57.Ghana, 49.279||91.Malawi, 41.3415|
|24. Slovenia, 68.8395||58.Mongolia, 49.073||92.Russia, 41.2030|
|25. Czech Republic, 68.407||59.Vietnam, 48.993||93.Bangladesh, 41.2105|
|26. Cyprus, 67.8245||60.Peru, 48.988||94.Zambia, 41.005595.Pakistan, 40.790|
|27. Chile, 67.8245||61.Jordan, 48.8885|
|28. Estonia, 66.8395||62.Macedonia, 48.597||96.Cambodia, 40.5805|
|29. Portugal, 66.7175||63.Serbia, 48.5445||97.Iran, 39.822|
|30. Italy, 66.696||64.Turkey, 48.368||98.Algeria, 39.684|
|31. United Arab Emirates, 66.479||65.Philippines, 47.6285||99.Benin, 39.4735|
|32. Uruguay, 65.1405||66.Armenia, 47.4635||100.Kenya, 39.3605|
|33. Israel, 64.394||67.Nicaragua, 47.143||101.Cameroon, 38.352|
|34. Poland, 63.898||68.Guatemala, 47.117||102.Madagascar, 38.337|
|35. Malaysia, 62.7715||69.Laos, 47.107||103.Uganda, 37.9985|
|36. Hungary, 62.346||70.Moldova, 46.9495||104.Tajikistan, 36.396|
|37. Mauritius, 62.021||71.India, 46.782||105.Ethiopia, 36.241|
|38. Costa Rica, 61.722||72.El Salvador, 46.5995||106.Nigeria, 35.595|
|39. Lithuania, 61.317||73.China, 46.390||107.Mali, 32.278|
|40. Panama, 59.5655||74.Morocco, 46.2555||108.Mauritania, 30.298|
|41. Croatia, 58.39||75.Bolivia, 46.0785||109.Yemen, 26.1205|
|42. Latvia, 58.3865||76.South Africa, 45.5605||110.Chad, 24.9755|
|43. Greece, 55.914||77.Albania, 45.526|
|44. Oman, 55.4485||78.Azerbaijan, 45.5025|
|45. Trinidad & Tobago, 55.353||79.Ukraine, 45.4105|
|46. Romania, 54.385||80.Tanzania, 44.8035|
Table 2: Country Score Card Example.
|Americas||Northern andWesternEurope||Southern andEasternEurope||Oceania andEast Asia||Central andSouth Asia||Middle Eastand NorthAfrica||Sub-SaharanAfrica|
|1. Iceland||1. Switzerland||1.Spain||1. Australia||1. Sri Lanka||1. Qatar||1. Mauritius|
|2. Canada||2. Norway||2.Slovenia||2. New Zealand||2. Kazakhstan||2. United Arab Emirates||2. Ghana|
|3. United States||3. Sweden||3.Czech Republic||3. Singapore||3. Armenia||3.Israel||3.South Africa|
|4. Chile||4. Finland||4.Cyprus||4. Japan||4. India||4.Oman||4. Tanzania|
|5. Uruguay||5. Luxembourg||5.Estonia||5. South Korea||5. Azerbaijan||5. Saudi Arabia||5.Senegal|
|6. Costa Rica||6. Germany||6.Portugal||6. Malaysia||6. Georgia||6.Jordan||6.Malawi|
|7. Panama||7. Netherlands||7. Italy||7. Thailand||7. Nepal||7.Morocco||7.Zambia|
|8. Trinidad &Tobago||8. Austria||8.Poland||8. Indonesia||8. Bangladesh||8.Lebanon||8.Benin|
|9. Brazil||9. Denmark||9.Hungary||9. Mongolia||9. Pakistan||9.Egypt||9.Kenya|
|10. Ecuador||10. Belgium||10.Lithuania||10. Vietnam||10. Tajikistan||10. Iran||10. Cameroon|
|11. Argentina||11. United Kingdom||11. Croatia||11.phillippines||11. Algeria||11.Madagascar|
|12. Mexico||12. Ireland||12.Latvia||12. Laos||12. Yemen||12. Uganda|
|13. Peru||13. France||13.Greece||13. China||13. Ethiopia|
|14.Nicaragua||14.Romania||14. Cambodia||14. Nigeria|
|16.Elsalvador||16. Macedonia||16. Mauritania|
|Avg: 54.65959||Avg: 79.8590||Avg: 57.5521||Avg: 59.7306||Avg: 44.6789||Avg: 49.5075||Avg: 40.0776|
Table 3: Ranking and Scores.
It is taken from the 2013-14 Global competitiveness report and includes five factors:
1. Capacity for innovation,
2. Quality of scientific research institutions,
3. Company spending on R&D,
4. University-industry collaboration,
5. Government procurement of advanced tech products .