Studying development is essentially about measuring how developed one country is compared to other countries or to the same country in the past. It is common knowledge that each country is aiming to be defined as developed. For us is to determine which measure is a better representative of how country is developed HDI or GNP per capita.

Firstly, we will define what economic development is. Secondly we will compare Gross National Product and Gross Domestic Product. Thirdly, we will outline the problems with these indicators. Finally, we will try to find out whether HDI is a solution to the problems identified in GNP/GDP.

What is economic development?

As the definition states economic development is a “sustainable increase in
World Bank acknowledges that history offers a number of examples where economic growth was not followed by similar progress in human development and growth was achieved at the cost of greater inequity, higher unemployment, weakened democracy, loss of cultural identity, or over-consumption of resources needed by future generations.
Just as there are states that have not benefited from economic growth, there are also states, like Kerala, a state in India, which have raised the standard of living without economic growth. (http://multinationalmonitor.org/hyper/mm0795.08.html) The GDP per capita in Kerala is about $1,000 a year, around $200 less than the Indian average. However, despite low per capita incomes, Kerala’s 31 million people have achieved nearly total literacy, long life expectancy, low infant mortality and birth rates, and high access to medical care. Life expectancy in Kerala is 72 years, which is closer to the American average of 76 than to the Indian average of 61 and the infant-mortality rate in Kerala is among the lowest in the developing world.
Is HDI a solution?
As Human Development Report states each year development is about much more than the rise or fall of national incomes. It is about creating an environment in which people can develop their full potential and lead productive, creative lives in accord with their needs and interests. People are the real wealth of nations.