“Economic and Social Indicators of Development”

I. INTRODUCTION

Economic and social development can be called as sustainable development. Sustainable development has been defined in many ways, but the most frequently quoted definition is from Our Common Future, also known as the Brundtland Report:

"Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It contains within it two key concepts:

the concept of needs, in particular the essential needs of the world's poor, to which overriding priority should be given; and

the idea of limitations imposed by the state of technology and social organization on the environment's ability to meet present and future needs."

All definitions of sustainable development require that we see the world as a system—a system that connects space; and a system that connects time.

When you think of the world as a system over space, you grow to understand that air pollution from North America affects air quality in Asia, and that pesticides sprayed in Argentina could harm fish stocks off the coast of Australia.

And when you think of the world as a system over time, you start to realize that the decisions our grandparents made about how to farm the land continue to affect agricultural practice today; and the economic policies we endorse today will have an impact on urban poverty when our children are adults.

We also understand that quality of life is a system, too. It's good to be physically healthy, but what if you are poor and don't have access to education? It's good to have a secure income, but what if the air in your part of the world is unclean? And it's good to have freedom of religious expression, but what if you can't feed your family?

The concept of sustainable development is rooted in this sort of systems thinking. It helps us understand ourselves and our world. The problems we face are complex and serious—and we can't address them in the same way we created them. But we can address them.

II. CONTENTS

What is Development?

Though the term development usually refers to economic progress, it can apply to political, social, and technological progress as well. These various sectors of society are so intertwined that it is difficult to neatly separate them. Development in all these sectors is governed by the same principles and laws, and therefore the term applies uniformly.

Economic development and human development need not mean the same thing. Strategies and policies aimed at greater growth may produce greater income in a country without improving the average living standard. This happened in oil-producing Middle Eastern countries—a surge in oil prices boosted their national income without much benefit to poorer citizens. Conversely, people-oriented programs and policies can improve health, education, living standards, and other quality-of-life measures with no special emphasis on monetary growth. This occurred in the 30

years of socialist and communist rule in Kerala in India.

Definition of Economic and Social Development

Development economics considers how to promote economic growth in such countries

by improving factors like health, education, working conditions, domestic and international

policies and market conditions. It examines both macroeconomic and microeconomic factors

relating to the structure of a developing economy and how that economy can create effective

domestic and international growth.

Social development, or social change, is the phrase that refers to the alteration of social order within a society. It may also refer to the notion of sociocultural evolution, or ‘social progress’. This is the philosophical idea that society always moves forward by dialectical means, or evolutionary means.

Social Development Theory

Social development theory attempts to explain qualitative changes in the structure and framework of society that help the society to better realize its aims and objectives. Development can be broadly defined in a manner applicable to all societies’ at all historical periods as an upward ascending movement featuring greater levels of energy, efficiency, quality, productivity, complexity, comprehension, creativity, mastery, enjoyment and accomplishment. Development is a process of social change, not merely a set of policies and programs instituted for some specific results. This process has been going on since the dawn of history. But during the last five centuries it has picked up in speed and intensity, and during the last five decades has witnessed a marked surge in acceleration.

The basic mechanism driving social change is increasing awareness leading to better organization. Life evolves by consciousness and consciousness in turn progresses by organization. When society senses new and better opportunities for progress it accordingly develops new forms of organization to exploit these new openings successfully. The new forms of organization are better able to harness the available social energies and skills and resources to use the opportunities to get the intended results.

Development is governed by many factors that influence the results of developmental efforts. There must be a motive that drives the social change and essential preconditions for that change to occur. The motive must be powerful enough to overcome obstructions that impede that change from occurring. Development also requires resources such as capital, technology, and supporting infrastructure.

Development is the result of society's capacity to organize human energies and productive resources to meet challenges and opportunities. Society passes through well-defined stages in the course of its development. They are nomadic hunting and gathering, rural agrarian, urban, commercial, industrial, and post-industrial societies. Pioneers introduce new ideas, practices, and habits that conservative elements initially resist. At a later stage, innovations are accepted, imitated, organized, and used by other members of the community. Organizational improvements introduced to support the innovations can take place simultaneously at four different levels—physical, social, mental, and psychological. Moreover four different types of resources are involved in promoting development. Of these four, physical resources are most visible, but least capable of expansion. Productivity of resources increases enormously as the quality of organization and level of knowledge inputs rise.

Development pace and scope varies according to the stage society is in. The three main stages are physical, vital (vital refers to the dynamic and nervous social energies of humanity that propel individuals to accomplish), and mental.

Limits to Development

The concept of inherent limits to development arose mainly because past development was determined largely by availability of physical resources. Humanity relied more on muscle-power than thought-power to accomplish work. That is no longer the case. Today, mental resources are the primary determinant of development. Where people drove a simple bullock cart, they now design ships and aircraft that carry huge loads across immense distances. Humanity has tamed rivers, cleared jungles and even turned arid desert lands into cultivable lands through irrigation.

By using intelligence, society has turned sand into powerful silicon chips that carry huge amounts of information and form the basis of computers. Since there is no inherent limit to the expansion of society's mental resources, the notion of limits to growth cannot be ultimately binding.

Three Stages of Development

Society's developmental journey is marked by three stages: physical, vital, and mental. These are not clear-cut stages, but overlap. All three are present in any society at time. One of them is predominant while the other two play subordinate roles. The term 'vital' denotes the emotional and nervous energies that empower society's drive towards accomplishment and express most directly in the interactions between human beings. Before the full development of mind, it is these vital energies that predominate in human personality and gradually yield the ground as the mental element becomes stronger. The speed and circumstances of social transition from one stage to another varies.

Physical stage

The physical stage is characterized by the domination of the physical element of the human personality.During this phase, society is preoccupied with bare survival and subsistence. People follow tradition strictly and there is little innovation and change. Land is the main asset and productive resource during the physical stage and wealth is measured by the size of land holdings. This is the agrarian and feudal phase of society. Inherited wealth and position rule the roost and there is very little upward mobility. Feudal lords and military chiefs function as the

leaders of the society. Commerce and money play a relatively minor role. As innovative thinking and experimental approaches are discouraged, people follow tradition unwaveringly and show little inclination to think outside of established guidelines. Occupational skills are passed down from parent to child by a long process of apprenticeship.

Guilds restrict the dissemination of trade secrets and technical knowledge. The Church controls the spread of new knowledge and tries to smother new ideas that does not agree with established dogmas. The physical stage comes to an end when the reorganization of agriculture gives scope for commerce and industry to expand. This happened in Europe during the 18th century when political revolutions abolished feudalism and the Industrial Revolution gave a boost to factory production. The shift to the vital and mental stages helps to break the bonds of tradition and inject new dynamism in social life.

Vital stage

The vital stage of society is infused with dynamism and change. The vital activities of society expand markedly. Society becomes curious, innovative and adventurous. During the vital stage emphasis shifts from interactions with the physical environment to social interactions between people. Trade supplants agriculture as the principal source of wealth.

The dawning of this phase in Europe led to exploratory voyages across the seas leading to the discovery of new lands and an expansion of sea trade. Equally important, society at this time began to more effectively harness the power of money. Commerce took over from agriculture, and money replaced land as the most productive resource.The center of life shifted from the countryside to the towns where opportunities for trade and business were in greater abundance.

The center of power shifted from the aristocracy to the business class, which employed the growing power of money to gain political influence. During the vital stage, the rule of law becomes more formal and binding, providing a secure and safe environment for business to flourish. Banks, shipping companies and joint-stock companies increase in numbers to make use of the opportunities. Fresh innovative thinking leads to new ways of life that people accept as they prove beneficial. Science and experimental approaches begin to make a headway as the hold of tradition and dogma weaken. Demand for education rises.

As the vital stage matures through the expansion of the commercial and industrial complex, surplus income arises, which prompts people to spend more on items so far considered out of reach. People begin to aspire for luxury and leisure that was not possible when life was at a subsistence level.

Mental stage

This stage has three essential characteristics: practical, social, and political application of mind. The practical application of mind generates many inventions. The social application of mind leads to new and more effective types of social organization. The political application leads to changes in the political systems that empower the populace to exercise political and human rights in a free and democratic manner. These changes began in the Renaissance and Enlightenment, and gained momentum in the Reformation, which proclaimed the right of individuals to relate directly to God without the mediation of priests. The political application of mind led to the American and French Revolutions, which produced writing that first recognized the rights of the common man and gradually led to the actual enjoyment of these rights.

Organization is a mental invention. Therefore it is not surprising that the mental stage of development is responsible for the formulation of a great number of organizational innovations. Huge business corporations have emerged that make more money than even the total earnings of some small countries. Global networks for transportation and communication now connect the

nations of the world within a common unified social fabric for sea and air travel, telecommunications, weather reporting and informationexchange.

In addition to spurring technological and organizational innovation, the mental phase is also marked by the increasing power of ideas to change social life. Ethical ideals have been with humanity since the dawn of civilization. But their practical application in daily social life had to wait for the mental stage of development to emerge.The proclamation of human rights and the recognition of the value of the individual have become effective only after the development of mind and spread of education. The 20th century truly emerged as the century of the common man. Political, social, economic and many other rights were extended to more and more sections of humanity with each succeeding decade.

The relative duration of these three stages and the speed of transition from one to another varies from one society to another. However broadly speaking, the essential features of the physical, vital and mental stages of development are strikingly similar and therefore quite recognizable even in societies separated by great distance and having little direct contact with one another.

Moreover, societies also learn from those who have gone through these transitions before and, therefore, may be able to make the transitions faster and better. When the Netherlands introduced primary education in 1618, it was a pioneering initiative. When Japan did the same thing late in the 19th century, it had the advantage of the experience of the USA and other countries. When many Asian countries initiated primary education in the 1950s after winning independence, they could draw on the vast experience of more developed nations. This is a major reason for the quickening pace of progress.

Economic Development

Economic development ideally refers to the sustained, concerted actions of communities and policymakers that improve the standard of living and economic health of a specific locality. The definition of economic development given by Professor Michael Todaro is an increase in living conditions, improvement of the citizens self-esteem needs and free and a just society. He suggests that the most accurate method of measuring economic development is the Human Development Index which takes into account the literacy rates & life expectancy which in-turn has an outright impact on productivity and could lead to Economic Growth. However, economic development can also be measured by taking into account the GDI (gender related index).

Economic development can also be referred to as the quantitative and qualitative changes in an existing economy. Economic development involves development of human capital, increasing the literacy ratio, improve important infrastructure, improvement of health and safety and others areas that aims at increasing the general welfare of the citizens. The terms economic development and economic growth are used interchangeably but there is a very big difference between the two. Economic growth can be viewed as a sub category of economic development. Economic development is a government policy to increase the economic, social welfare and ensuring a stable political environment. Economic growth on the other hand is the general increase in the country products and services output.

Economic development will only be successful if the whole nation is willing to give their best efforts towards its achievement. A lot of theories have been forwarded by different schools of thought about how economic development should be achieved. Many economists have suggested that each country should try to achieve modernization and industrialization in order to achieve economic development.

There seems to be a lot of correlation between economic growth and human development. This can be explained by a simple example in an economy. We shall consider economic growth as a prerequisite for economic development. Assume we have a household in an economy that ekes their livelihood from a horticultural firm. Economic growth will bring business opportunities to the country and the effects spills over to all sectors of the economy. The firm will increase its profits which will in turn be used to pay for their generation education, improve the access to health care for that family and will increase the general living standard of the family. If this effect is replicated in each household overall economic development will be achieved.

Economic development leads to improvements in many sectors of a nation. There are a variety of indicators that economist use to measure the level of economic development in a country. The indicators are: declining poverty rates, increasing literacy rates, declining infant morbidity and increasing life expectancy. Economic development has to be supported by the whole nation from economists, politicians, and also civilians. Thus it can be concluded that, economic development leads to the creation of more opportunities in the sectors of education, health sector, research, human development and environmental conservation. It equally implies an increase in the per capita income of every citizen.

Economic development is the development of economic wealth of countries, regions or communities for the well-being of their inhabitants. From a policy perspective, economic development can be defined as efforts that seek to improve the economic well-being and quality of life for a community by creating and/or retaining jobs and supporting or growing incomes and the tax base.

Overview

There are significant differences between economic growth and economic development. The term "economic growth" refers to the increase (or growth) of a specific measure such as real national income, gross domestic product, or per capita income. National income or product is commonly expressed in terms of a measure of the aggregate value-added output of the domestic economy called gross domestic product (GDP). When the GDP of a nation rises economists refer to it as economic growth.

The term "economic development," on the other hand, implies much more. It typically refers to improvements in a variety of indicators such as literacy rates, life expectancy, and poverty rates. GDP is a specific measure of economic welfare that does not take into account important aspects such as leisure time, environmental quality, freedom, or social justice. Economic growth of any specific measure is not a sufficient definition of economic development.

Local development

The term "economic development" is often used in a regional sense as well (e.g., a mayor might say that "we need to promote the economic development of our city"). In this sense, economic development focuses on the recruitment of business operations to a region, assisting in the expansion or retention of business operations within a region or assisting in the start-up of new businesses within a region. (See section 'regional policy' below.)

In addition to economic models, the needs of constituency groups guide economic developer's actions. For example, a local economic developer working out of a mayor's office may act towards decreasing unemployment by attracting businesses with large labor needs (call centers). The economic developer working for the chamber of commerce dominated by banks, real estate agents and utilities will recruit manufacturers with large capital investments (steel and chemical plants). The economic developer working for the state manufacturers association will lobby for more workforce training money. The economic developer working for a university will

concentrate on business start-ups, specifically those based on intellectual property developed by the university (biotech).

In its broadest sense, economic development encompasses three major areas:

1) Policies that governments undertake to meet broad economic objectives such as price stability, high employment, expanded tax base, and sustainable growth. Such efforts include monetary and fiscal policies, regulation of financial institutions, trade, and tax policies.

2) Policies and programs to provide infrastructure and services such as highways, parks, affordable housing, crime prevention, and educational programs and projects.

3) Policies and programs explicitly directed at job creation and retention through specific efforts in business finance, marketing, neighborhood development, small business start-up and development, business retention and expansion, technology transfer, workforce training and real estate development. This third category is a primary focus of economic development professionals.

The concept of economic development is often misunderstood. Many times the term is confused with economic growth to define any type of money generating activity in the community. To further cloud the issue, there is no one prescription for economic development that will full-fill the needs of all communities. Successful economic development is a process that fills different needs for different communities at different times. Its success is often case specific, depending on the development goals, implementation and funding resources available. Communities need to thoroughly understand the process before jumping onto the economic development bandwagon. The results of misunderstanding the process can be misunderstanding by the community and political gridlock in the bureaucracy.

It can be defined as "a sustained community effort to improve both the local economy and the quality of life by building the area's capacity to adapt to economic change". This definition suggests a distinction between economic growth and economic development. Economic growth represents an increase in jobs and income in the community. It refers to the expansion of total economic activity in the community. While economic development can involve job and income growth, it also involves sustainable increases in the productivity of individuals, businesses and resources to increase the overall well being of residents and maintaining or even enhancing the quality of life. Economic development refers to the enhancement of economic activity in the community. Economic growth is generally a short run concept while economic development is a long term commitment. To illustrate this point, say there are an increasing number of jobs in a local economy. This may represent economic growth, but if the new jobs do not pay wages that residents can afford to live on, the growth may not represent economic development. However, this short run economic growth could also be a short run objective of a long-term plan of economic development.

Strategies for Community Economic Development

The strategies a community selects for its economic development effort depends on the goals, values and resources available to the community. There are five general categories of strategies for local community economic development.

Improve Efficiency of Existing Firms: As firms become more efficient, they become more competitive in the regional, state and national markets. The greater their efficiency, the more revenue they can bring into the local economy. In addition, the ability to stay competitive is a firm's best guarantee of being able to stay in business and expand. Efficiency is just as important to firms industries with declining employment. The most efficient firm can survive the longest. An example of a community action to assist

businesses in improving their efficiency would be organizing educational programs to strengthen the management capabilities of existing firms.

Improve Ability to Retain and Capture Dollars: In every community, self employed individuals, workers, retirees and businesses of all types control substantial amounts of money with which they make purchases. Every one of these dollars spent in the community adds to the community's employment and income. At least some of these dollars will be re-spent in the community adding additional employment and income. In contrast, dollars spent outside the community do not add to the community's employment and income. From another perspective, thousands of people pass by most communities on highways or to visit nearby tourist attractions each year. The dollars spent locally by nonresidents can be as valuable to the local economy as those generated by the exports of raw materials or manufactured goods. Improving the community's ability to retain local expenditures and capture nonresident dollars will enhance the local economy. Examples of community actions to improve retention and capture dollars include: a) Surveying consumer needs and buying habits to identify market potential, and b) Developing appropriate promotion and advertising programs to generate more purchases by non-local people.

Attract New Basic Employers: In order to initiate economic activity, a community needs to have some businesses that bring in outside revenues through the sale of their products or services outside of the local economy (basic employers). Attracting new basic employers will not only add employment and income directly to the local economy, but also indirectly through re-spending with other local businesses. Basic employers can include manufacturers, tourism attractions, financial firms, computer services, warehouses and state and federal government agencies. An example of a community action to assist in attracting new basic employers would be developing inventories of local industrial, office and commercial sites along with information on public services and available labor.

Encourage Business Formation: There is a continuing need for new businesses to meet the changing demands resulting from population growth or evolving goods and services (video recorder, outpatient care or fast food for example). A new business start-up can mean new income and employment as well as expanded trade with other local businesses. It can also capture sales that might otherwise go to other communities. An example of a community action to assist in business formation is to provide counseling and intensive education for those interested in forming new businesses.

Increase State and Local Funding: A community may want to strive to get back some of the dollars taxed away by the state and federal government and perhaps acquire tax dollars from other areas of the state or nation. State and federal agencies can be major employers providing good paying jobs. In addition, they have a variety of programs that provide funding to local governments and residents. Social security, Medicare and Medicaid payments are major sources of personal income in most communities. Communities may want to at least be aware of the importance of state and federal government funding to their local economy and consider the potential for expanding this funding. An example of a community action to increase state and federal government revenues is developing procedures to actively monitor government programs to obtain assistance whenever it is appropriate.

A Toolbox for Community Economic Development

In community economic development, the regional economist has at his/her disposal a set of tools to analyze the regional economy to determine the economic development needs of the community. These tools include:

Impact models: Can be constructed on the county, regional, state or level national. Models show how dollars flow through the economy and the impact in a change in the level of economic activity.

Budgeting for public services: Changes in the level of economic activity will result in changes in demand for public services. Budgeting can be used to forecast changes in costs.

Business retention and expansion: These programs can target specific businesses to retained or expanded in a region.

Industry targeting: Communities can select what types of businesses that they would like to attract and make the resources available to them.

Social Development Overview

Putting People First

In social development, we adopt an approach that focuses on the need to “put people first” in development processes. Overcoming poverty is not just a matter of getting economic policies right - it is also about promoting social development, which empowers people by creating more inclusive, cohesive, resilient, and accountable institutions and societies. 

Challenge

Sustainable development requires balancing the needs of present and future generations and has become a rapidly growing global concern. Three critical factors - economic, ecological, and social - take a central place in discussions of growth and poverty-reduction. Social sustainability is a critical aspect of achieving long-term development that significantly improves the lives of the world’s poorest people.

Development experiences from client countries of both the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) have shown that overcoming poverty requires more than getting economic policies right. Many of these societies are torn by conflict, fragility and violence, or beset by inequality of opportunity based on gender, race, ethnicity or other factors. Governance problems such as corruption and lack of citizen voice and engagement afflict many societies and nations, undermining public participation in decision making that affects communities’ futures.

There are several challenges affecting the World Bank’s client countries, such as: the issue of social inclusion, enabling the vulnerable and marginalized segments of society to have a say in defining their development paths; the increasing global consciousness of the challenge of climate action and its social dimensions; an increasing focus on the problems of "fragility" - of countries, states and societies - and the implications for poor people; increasing urbanization and its impact on developing societies; and revolutionary changes in information and communication technologies.

History of Economic Development

Economic development originated in the post war period of reconstruction initiated by the US. In 1949, during his inaugural speech, President Harry Truman identified the development of undeveloped areas as a priority for the west:

“More than half the people of the world are living in conditions approaching misery. Their food is inadequate, they are victims of disease. Their economic life is primitive and stagnant. Their poverty is a handicap and a threat both to them and to more prosperous

areas. For the first time in history humanity possesses the knowledge and the skill to relieve the suffering of these people ... I believe that we should make available to peace-loving peoples the benefits of our store of technical knowledge in order to help them realize their aspirations for a better life… What we envisage is a program of development based on the concepts of democratic fair dealing ... Greater production is the key to prosperity and peace. And the key to greater production is a wider and more vigorous application of modem scientific and technical knowledge."

There have been several major phases of development theory since 1945. From the 1940s to the 1960s the state played a large role in promoting industrialization in developing countries, following the idea of modernization theory. This period was followed by a brief period of basic needs development focusing on human capital development and redistribution in the 1970s. Neo-liberalism emerged in the 1980s pushing an agenda of free trade and Import Substitution Industrialization.

In economics, the study of economic development was borne out of an extension to traditional economics that focused entirely on national product, or the aggregate output of goods and services. Economic development was concerned in the expansion of people’s entitlements and their corresponding capabilities, morbidity, nourishment, literacy, education, and other socio-economic indicators.[7] Borne out of the backdrop of Keynesian, advocating government intervention, and neoclassical economics, stressing reduced intervention, with rise of high-growth countries (Singapore, South Korea, Hong Kong) and planned governments (Argentina, Chile, Sudan, Uganda), economic development, more generally development economics, emerged amidst these mid-20th century theoretical interpretations of how economies prosper.[1] Also, economist Albert O. Hirschman, a major contributor to development economics, asserted that economic development grew to concentrate on the poor regions of the world, primarily in Africa, Asia and Latin America yet on the outpouring of fundamental ideas and models.[8]

It has also been argued, notably by Asian and European proponents of Infrastructure-based development, that systematic, long term government investments in transportation, housing, education and healthcare are necessary to ensure sustainable economic growth in emerging countries.

Indicators for Economic Development

Economic development refers to the process by which a community, nation or region of the world raises its living standards. Often, this involves transforming the area's economy from one based on agriculture to a modern industrial system. Economists, demographers, sociologists and public policy makers rely on multiple indicators -- economic and social -- to gauge the pace of economic development.

1. Gross Domestic Producto You obtain per capita gross domestic product, or GDP, by dividing the total value

of goods and services produced within a country or region by its total population. The Development Economics Web Guide observes that per capita GDP figures often illustrate large differences between modern industrial powers and developing nations. The website also cautions that certain issues affect the indicator's reliability. These include issues related to measuring output in countries where some production, such as subsistence farming, may go

unmeasured, which underestimates overall GDP. In addition, governments that collect the data use different collection methods and may have an incentive to overvalue national output.

2. Life Expectancyo People residing in modern developed nations generally have longer lifespans,

measured in years, than those in poor, underdeveloped countries. As an example, the Development Economics Web Guide contrasted life expectancies in the United Kingdom, Ghana and Zambia. U.K. residents had a life expectancy averaging nearly 78 years, far ahead of Ghana's 56.6 and Zambia's 41. Factors affecting life expectancy include poverty, adequate food supplies and disease. An increase in life expectancy points to improved social and economic conditions.

3. Agricultureo The economies of many underdeveloped nations depend heavily on agriculture. In

contrast, developed countries have high levels of industrial employment. The British Broadcasting Corporation reported that low levels of agricultural employment indicate higher economic development. The BBC reported that only 2 percent of the British work force work in agriculture, while agriculture employs 72 percent of Vietnam's work force. A decline in agricultural employment over time may indicate a region or nation undergoing a process of development.

4. Cars and Telephoneso Motor vehicles and telephones are necessary modes of transportation and

communication in developed economies. The BBC reported that the numbers of cars and telephones per 1,000 people provide helpful indicators of a country's level of development. An increase in the number of people who own such goods suggests growing prosperity and a developing economy.

About Leading Economic Indicators

The International Economic Development Council defines economic development as an “activity that seeks to improve the economic well-being and quality of life for a community, by creating and/or retaining jobs…” The World Bank is the primary international organization that measures economic development on a national and global scale. Of the more than 2,000 indicators it uses to assess development, five measure it the most directly.

Economic Policy and Debt

There are three main subcategories in this class: "Balance of Payments," "External Debt" and "National Accounts." Indicators measure capital and financial accounts, as well as the current account and reserves. You'll find measures of foreign direct investment here, statistics for foreign trade and remittances, and development assistance the country receives. This category also includes measures of purchasing power parity.

Financial Sector

There are five subcategories under this heading. "Assets" and "Capital Markets" are the two most general, and they include bank capital and market capitalization. The "Exchange Rates" subcategory includes measures of inflation. "Interest Rates" covers the lending interest rate, the deposit interest rate and the interest rate spread. The fifth subcategory, "Monetary Holdings," includes measures of liability and the money supply.

Poverty

This subcategory covers income distribution and poverty. Poverty is measured nationally and separately as a percentage of rural population and urban populations. Income distribution is measured by quintiles and deciles. A heading called "Conflict and Fragility" measures battle-related deaths and homicides.

Private Sector and Trade

Under the heading "Private Sector and Trade" you’ll find many indicators of the business environment, including imports and exports measured both in dollar value and by time-study indexes. There are statistics for tariffs here, as well as measures of travel and tourism. There are also measures of private infrastructure investment in this section, such as investment in energy, transportation and telecommunications.

Public Sector

Every year the World Bank assigns low income nations a set of ratings called "Country Policy and Institutional Assessment." These ratings are important because they determine the amount of money countries receive from the World Bank. You can find them under the "Public Sector" heading. They measure many variables, including transparency, budgetary management and environmental sustainability. Government finance is measured in this area--revenues, expenditures and deficits. A figure measuring the percentage of seats held by women in the national parliament is included.

Other Categories

The other categories of World Bank indicators include indicators that translate less directly into terms of financial or monetary terms. They include "Education," "Environment," "Health," "Infrastructure" and "Labor."

Industrial production is an example of an economic indicator.

Economic development indicators are crucial for determining the current state of the economy in a country and for predicting future economic developments. Four distinctive indicators are recognized by economists --- leading, lagging, coincident and local indicators are crucial for deriving a conclusion on the current state of economic stability in a state and for establishing short-term economic predictions.

Leading Indicators

o Leading indicators are the elements that change before the economy and have great economic influence. Since they are usually variables, they are quite useful for determining economic and financial stability in short-term economic predictions. Such factors are money income from the stock markets and index of consumer expectations. The Conference Board of the U.S., for example,

emphasizes that the higher consumer confidence is, the higher the standard of living is, which is essential for a stable economy.

Lagging Indicators

o Lagging indicators are the indicators that change after the economy. If the economy has gone weaker, lagging indicators would also weaken with time. Such indicators are the duration of employment in different private and public sectors, the change in labor costs and the average prime rate charged by banks. If the banks request higher interest when lending money, this means that the public needs financing that it could not obtain through employment, which indicates a weakened economy. The National Bureau of Economic Research concludes in its report that such indicators are most efficient in determining the current state of economic activity in a country.

Coincident Indicators

o Coincident indicators are the indicators that change in rhythm with the economy. These indicators are measured in order for a conclusion on current changes of the economy to be established. Such indicators are the gross domestic product (GDP), industrial production and retail prices. For example, data from Bloomberg Magazine shows that retail prices in the UK have risen significantly after the increase in the value added tax (VAT) in the country in the beginning of 2011. This brought negative economic development to the state as a deeper financial recession was inflicted.

Local Indicators

o Local indicators are indicators that are used for making predictions about the economic development of a particular area. Many local indicators can be used for such conclusions --- average pay-rates in the area in question and average rent prices, for instance. For example, data from the National Public Radio shows that among the most commonly used local indicators in the San Francisco area is the rent of a one-bedroom flat on Craigslist.

How do we define Social Indicators?

There are a number of definitions of Social Indicators (SI). Bauer described them as forms of evidence that help assessment of present position and future directions. The Organization for Economic Co-operation and Development (OECD) stated that a SI is a “direct and valid statistical measure which monitors levels and changes over time in a fundamental social concern.”  A social concern is “an identifiable and definable aspiration or concern of fundamental and direct importance to human well-being”. Indicators may be material, such as numbers related to economic growth, and/or immaterial, such as values or goals.Atkinson et al. saw SI as “a parsimonious set of specific indices covering a broad range of social concerns”. This set includes statistics similar to economic statistics of the national accounts which are intended to provide a basis for making concise, comprehensive and balanced judgments about the conditions of major aspects of society as accurate measures of a good society.The concept covers interpretation of cultural signs, simple statistical measures, and complex statistical indexes related to sets of domains.These are used to assess the effectiveness of policy in addressing important social issues.

What is an indicator?

There is no single, universally accepted definition of the term ‘indicator’. This simply reflects the fact that purpose, scope and methodology can vary greatly from one indicator, or set of indicators, to the next. Most indicators are developed in order to describe important features of a larger system. They are “succinct measures that aim to describe as much about a system as possible in as few points as possible” and which “help us understand a system, compare it and improve it”.

The OECD defines an indicator as “a parameter, or a value derived from parameters, which points to, provides information about, and describes the state of a phenomenon/environment/area, with a significance extending beyond that directly associated with a parameter value”. The policy relevance of an indicator is one example of such extended significance; indicators of societal progress are generally developed to inform policy decision-making in some way.

Subjective and Objective Social Indicators

The kind of indicators chosen for empirical measurement depends on the purpose of the measure and the underlying conceptualization. While objective social indicators are statistics which represent social facts independent of personal evaluations, subjective social indicators are measure of individual perceptions and evaluations of social conditions. Historically, two main and polar efforts to operationalize welfare in general and the quality of life in particular can be distinguished: the Scandinavian level of living approach and the American quality of life approach. Today, the overall consensus of opinion is to base welfare measurement on both subjective and objective indicators. This makes sense because similar living conditions can be evaluated differently by people with different backgrounds and experiences. It is however of particular interest how subjective and objective assessments of a person's living condition may differ substantially.

Objective Social Indicators

Objective social indicators represent social facts independently of personal evaluations. Examples include: unemployment rate, poverty rate, working hours per week, perinatal mortality rate. The Scandinavian approach focuses almost exclusively on resources and objective living conditions as capture by objective SIs. The resources are understood as mere means that allow the individual citizen to use them in an autonomous way. Resources are defined in terms of money, property, knowledge, psychic and physical energy, social relations, security and so on. This approach is in some respect similar to the 'capabilities approach' developed by Amartya Sen. His notion of welfare and quality of life has been elaborated within the human development approach.

The use of objective indicators needs to make the assumption that living conditions can be judged to be favourable or unfavourable from the outside which requires comparing real conditions with normative criteria like values, goals or objectives. This requires a societal and, to some extent, political consensus about three issues: first, the welfare relevant dimensions; second, what good and bad conditions are; third, the direction which society should take. For some goals these three things are generally acknowledged, like the reduction of the unemployment or poverty rate, while for example income inequality might or might not be regarded as a social progress.

Subjective Social Indicators

Subjective social indicators are based on individuals ‘perception and evaluation of social conditions. Example include: life satisfaction, job satisfaction, etc.; relevance of different life domains, perception of distributional justice, class identification. The American quality of life research bases welfare measurement primarily on subjective indicators and emphasizes the subjective valuing of individuals as a final outcome of conditions and processes. The common man is considered the best expert to evaluate his quality of life. The most important measures of subjective well-being are happiness and satisfaction. The World Values Survey produces such data for many countries worldwide.

The main criticism levelled at pure subjective SI approaches is that the degree of satisfaction is partly determined by people's aspiration as seen realistic in a given society. Thus, measuring subjective satisfaction would amount to "measuring how well they are adapted to their present conditions".Others have underlined that subjective indicators provide valuable complementary information for policy maker's assessment of policies outcomes and for the selection of policy goals, and prioritization of policy goals.

Functions of Social Indicators

Generally, SI perform one or more of three functions, providing a basis for information for decision-making, monitoring and evaluating policies, and/or searching for a common good and deciding how to reach it. Indicators should be phrased in such a way that they can be interpreted by the general public so that members of the community can provide feedback to promote the development of the organization. Identifying community needs are counted as social indicators.

Indicators should also be designed so that they only show "progress" when social circumstances have really changed. They should not be easily manipulable by political initiatives that do not have a real impact on people's lives.

Framework of Social Indicators

Progress can be considered as a broad notion of a community’s well-being that changes over time. While life satisfaction focuses on the subjective assessment of different elements that affect individual lives, well-being has been used to refer to objective living conditions. Both concepts refer to the condition of the current generation but sustainable development attempts to consider the well-being of future generations, introducing an inter-generational dimension often absent in other frameworks. Societal progress occurs when there is an improvement in the “sustainable and equitable well-being of a society…” to “…encourage communities to consider for themselves what „progress‟ means in the 21st century”.

Salvaris (2000) described a rapid growth in the development of community-based planning projects using benchmarks and indicators to measure progress. For the past 30 years, these projects have occurred in many countries at different levels. Five dominant features are involved in these types of projects:

(1) the integration of the economic-social-environmental domains to respond to the well-beingof people in a well-rounded manner (2) the pronouncement of the benchmarks and indicators to monitor ongoing progress (3) the participation of the community in the production of the benchmarks and indicators

(4) the acquisition of a lengthy period of time to proceed(5) the realization of legitimate policy-making.All of these produce an innovation with a sense of civil society

Social Indicators of Development

Employment

o Employment is an economic element that is closely related to the stage of development in a particular country. The higher the rates of employment are, the stronger the economy of a state is. High employment rates indicate that a country has well-functioning policies for the benefit of the public. If the rates of unemployment are dropping, the country is developing in a positive direction. For example, recent reports from "The Economist" highlight that increasing rates of

employment can be observed in Africa, which indicates that the African states are undertaking a positive course of economic development.

Economic Growth

o Economic growth is the growth in the economy of a state for a particular period of time. It is essential for measuring the rates of development of countries, since it indicates whether there are persistent economic problems or if the state has an opportunity for a steady economic advancement. For instance, data provided by Bloomberg.com indicates that Germany has become the most attractive place for investment in Europe, due to its immense and steady economic growth.

Education

o Education is the most important social factor indicating the state of countries' development. Through education, individuals become specialists within specific areas and can contribute skills and expertise to the economy and some particular branches of national production. Hence the economy grows because there is no lack of skilled labor, and the state develops in a positive direction. For example, higher education in China is becoming more popular among young people, which indicates that the country is developing and producing its own specialists, without the need to import skilled workers from other countries.

Standard of Living

o The standard of living indicates the current stage of development of a state. It is linked with the economy and the social well-being. If the economy is strong, it ensures a high standard of living and potential for further development. For example, Norway is among the countries with highest standard of living. It is among the European states with the highest income per person, and the Norwegian people are considered among the happiest populations in the world.

III. REFERENCES

http://ilo.ch/global/topics/economic-and-social-development/lang--en/index.htm

http://www.ipieca.org/topic/social-responsibility/social-and-economic-development

http://ideas.repec.org/p/wbk/wbrwps/1123.html

http://info.bahai.org/article-1-8-0-1.html

http://corporate.arcelormittal.com/corporate-responsibility/community/social-and-economic-development/approach

http://www.giz.de/en/ourservices/social_development.html

http://partnersworldwide.org/?gclid=COSer8_IjL0CFewl4godJygAgA

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2338107

http://www.businessdictionary.com/definition/economic-development.html#ixzz2vjehpqdN

http://ase.tufts.edu/gdae/?gclid=CPP09OvIjL0CFQ2t4god8wMAe