Economics

The Human Development Index is the measure of the well-being of a country through parameters set by the World Bank. Parameters such as the levels of poverty, the efficacy of the education system and the standards of living are used to gauge the HDI of a country. The HDI has some problems in the way it is calculated. For instance, some data that is difficult to measure cannot be represented and used to judge the HDI of a country. An example is the inequality in a country. There is no measure of inequality that can be used to judge how a country is developed. The other is such things as respect for human rights and how free the country is in terms of political freedom. Therefore, a misrepresentation of actual data might occur and defeat the purpose of the final data.

Two countries that violate the common features of developing countries are Brazil and Vietnam. As a country, Brazil has reported record growth in the last one and a half decades after their consistent economic crises in the early nineties. This resulted in one of the highest employment rates in the world with about 97million people employed leaving only around fifteen percent to be unemployed. Vietnam on the other hand ranks above countries that are more developed than it and have higher per capita income. This might be attributed to the methods and parameters used in the calculation of HDI.

The Harrod-Domar model takes on assumptions that have faced a lot of criticisms. For instance, it makes an assumption that investors are only attracted to the output of a region. Another assumption is that the countries that suffer insufficient finances can borrow to cover where they lack. This is not only dangerous but it is also very restricting due to the fact that most developing countries are tie down by foreign debt. Therefore, a good measure to map the growth of a country should include the factors that drag its economy down like corruption levels, the ease at which businesses can be registered and started and finally the unrecorded resources of a country and its value like the labor force of a country.