2. Development and the EU
First, a description of “development” is required. Whilst it is possible to distinguish
between richer and poorer countries, states with similar mean incomes can materially
differ in respect of the quality of life, i.e. items such as access to education and
opportunities for employment (Soubbotina and Sheram, 2000). Countries that generate
economic growth but without using this to benet the majority of their citizens, for
instance, in terms of literacy and life expectancy, tend to be unable to sustain this
position (Soubbotina and Sheram, 2000). “Sustainable development” is development
that satises the needs of the present, without compromising the ability of persons in the
future. This includes the concepts of “needs” – especially those of the poor – and of
limitations that the state imposes on the environment’s ability to full needs in the
present and in the future. Thus, a range of component measures is required to describe
“development”. The difculty is, of course, how to select and weight these.
A measure of economic growth is needed: real, annual gross domestic product (GDP)
per person can represent this. The other elements can be selected with reference to the
World Bank’s Millennium Development Goals, which are to eliminate extreme poverty,
achieve primary education for all, further gender equality, lower child mortality,
improve maternal health, combat diseases, ensure the sustainability of the environment
and develop a worldwide partnership for development (World Bank, 2014). The last
three of these are each difcult to represent in a single measure. For the other ve
objectives, the respective indicators might be the share of the poorest quintile in the
national consumption, the literacy rate of 15-24 year olds, the share of women in
non-agricultural wage employment, the infant mortality rate and the maternal
mortality ratio. These data are to be collected for EU Member States, and are to be
benchmarked by the country at the top of the 2013 Human Development Index (HDI),
Norway and, that at the bottom, Niger (United Nations Development Programme, 2015).
As sustainable development includes the requirement to satisfy needs in the future,
the description of “development” should also include a measure of investment and an
indicator of saving. For investment, gross capital formation as a percentage of GDP is
selected. For savings, gross savings as a percentage of GDP is chosen.
Table I shows the development indicators for the 28 Member States of the EU, and for
the countries with the highest (Norway) and lowest (Niger) HDIs for 2013. It also shows
the highest and lowest values for any recorded country for each of the indicators. The
source of these gures is the World Bank’s statistical database.
These components can be weighed and added to form a “sustainable development
index”. As GDP per capita is an indispensable component of development, the annual
GDP per capita measure is to be emphasised more in the construction of the index than
any of the others. Annual GDP per capita is to be weighted at 30 per cent (0.3), and the
other seven indicators at 10 per cent (0.1) each.
As the data may be grouped towards either the weakest or the strongest readings –
for instance, it is grouped towards the latter for the infant mortality rate per thousand
births – I will equilibrate the natural logarithm of the strongest datum reading for each
indicator with the maximum weight for that measure, and the natural logarithm of the
weakest datum reading for each indicator with the minimum weight for that measure –
which is zero. The reading for the relevant country will be scaled between these,
according to the value of its natural logarithm. Such use of natural logarithms evens
out the spread of the data points across the range.