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ISSN: 2375-4389
Journal of Global Economics
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Real Development Index

Bartholomew K*

International Trade and Development, Xiamen, Fujian, China

*Corresponding Author:
Bartholomew K
International Trade and
Development,Xiamen, Fujian, China
E-mail: [email protected]

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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Abstract

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.

Keywords

Human development; Quality of life; Economic development; Development index

Introduction

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 [1]. 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.

Index Configuration

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%

Factors

Corruption

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 [2]” (Table 1).

Country:  
Switzerland  Score: 87.0245
Ranking1 of 110   
Section One  27.48%
Corruption  12.75
Peace and Stability  7.23
Civil Liberties  7.5
Section Two 29.69%
Health  9.46
Environment 8.767
Education  6.45
Gender Equality 2.31
Community 2.703
Section Three 29.8545%
Standard of Living  14.8645
Financial Market Development   3.6
Infrastructure  4.4
Business Sophistication 2.25
Technology 2.37
Innovation 2.37

Table 1: Comparision of Sections.

Peace

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 [3].

Civil liberties

Is taken from the civil liberties section of the 2014 Freedom of the World survey [4].

Health

Is life expectancy at time of birth. Data is taken from the World Bank [5].

Environment

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” [6].

Education

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 [7].

Gender equality

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 [8].

Community

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 [9].

Unemployment

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 [10].

Income inequality

Is Distribution of Family Income- GINI Index. Data is taken from various sources. There is a lack of quantifiable data for Chad, Oman, Saudi Arabia, Lebanon and United Arab Emirates [11-19].

Average income

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].

Consumer quality

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 [7].

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 [7].

Infrastructure

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 [7].

Business sophistication

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 [7].

Technology

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 [7] (Figure 1 and Tables 2-4).

global-economics-ranking-and-scores

Figure 1: Ranking and scores(Note: The darker the shade of purple the more developed the country is, the lighter the shade of purple the less developed the country is, excluding those where no data was collected for. Map created in Tableau Public).

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
15.Guatemala   15.Bulgaria       15. Mali
16.Elsalvador   16. Macedonia       16. Mauritania
17.Bolivia   17.Serbia       17. Chad
18.Paraguay   18. Turkey        
19.Dominican Republic            
20.Colombia   20. Albania        
21.Honduras   21.Ukraine        
22. Venezuela   22.Russia        
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.

Innovation

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 [7].

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