Development GapFill

Development is the process of improving living standards alongside improving economic performance. It is closely associated with the idea of industrialisation. Countries in the developed world are regarded as being industrialised, or being 'post-industrial', while countries in the developing world are still undergoing the process of industrialisation.

The key development in industrialisation is  factors of productionurbanisationpovertyunemployment: the migration of agricultural workers in rural areas to urban areas to work in industry. An economic model known as the 'Lewis model' contends that surplus labour exists in the agricultural sector, as labour on farms is often shared between many members of a household. As a result of this surplus labour, according to the Lewis model, urbanisation can take place with no corresponding loss in agricultural output. While this line of argument was long championed by proponents of a developmental agenda, it has some key flaws. One flaw is that it does not account for the costs associated with  factors of productionurbanisationpovertyunemployment, such as the retraining and education required before deploying agricultural workers in industry. In addition, it assumes that urban areas are immediately ready to absorb large increases in population, when in reality the public  unemploymentinvestmentinfrastructurepoverty may not be in place to ensure a good quality of living, while the private  investmentunemploymentinfrastructurepoverty may not be present to ensure those migrating can find employment.

The result is often very different from that which the Lewis model assumes: large shanty towns on the outskirts of urban areas, where  investmentunemploymentpovertyfactors of production as its associated negative externalities is rampant. As a result, rather than a reduction in   povertyinfrastructureunemploymenturbanisation we see an increase.

As we can see, often the process of development is not as simple as it first may seem. 

In more recent decades, we have developed ways of more accurately measuring development. The Human Development Index (HDI) ranks countries based on three development criteria. The first is  GDPlife expectancyincomeyears of schooling adjusted per population to give an indication of average incomes. The second, average  years of schoolingincomelife expectancyGDP, provides a snapshot of education standards. The third, average  incomeyears of schoolingGDPlife expectancy, gives an idea of the standards of health among the population. These three criteria are weighted equally and used to produce a number between 0 and 1. The HDI, and other similar measures, is useful in identifying where gaps in the development process exist. International organisations such as the World Bank and the International Monetary Fund, and non-governmental organisations such as Oxfam and WaterAid, will often provide finance and develop strategies for overcoming obstacles in the development process.