r
/ l«fo "~ ■?<
LMTEl") NATIONS
ECONOMIC AND SOCIAL COUNCIL
Distr.
LIMITED
ST/ECA/PSD.2/9
21 December 1981 Original: ENGLISH
ECONOMIC COMMISSION FOR AFRICA
Second session of the Joint Conference of African Planners, Statisticians and Demographers, Agenda item 6(f) Addis Ababa, 8-17 March 19S2
A.
B.
C D.
E.
F.
G.
H.
THE DESIGN WV APPLIGABILITT OF SOCIO-ECCHOMIC INDICATORS
IN THE AFRICAN CONTEXT
CONTENTS
INTRODUCTION
THE NATURE OF SOCIO-ECONOMIC INDICATORS
INTERNATIONAL EXPERIENCE IN INDICATOR DEVELOPMENT
INDICATOR SELECTION IN AFRICAN CONDITIONSTHE USE OF INDICATORS IN DEVELOPMENT PLANNING
MAIN CATEGORIES OF INDICATORSINDICATOR DATA BANK
RECOMMENDATIONS AND CONCLUSIONS
ANNEXES !
I. PROPOSED LIST OF INDICATORS
II- SOME DEDICATOR CROSS-CORRELATIONS FOR DEVELOPING
AFRICAN COUNTRIES
III, INDICATOR CROSS-CORRELATIONS IN DEVELOPING AFRICA (SECOND SAMPLE)
Paragraphs
1
2 12
18 27 36 46 47
- 11 - 17 - 26 - 35 - 45
- 48
2/9
A. INTRODUCTION
1. For the formulation of economic policy in general and for planning in particular, instruments of evaluation are recuired as xrell as tools to verify the attainment of targets0 The instruments must be perfected and refined as socio-economic conditions become more complex and the scope of government policy becomes uider. Among the quantitative instruments at the disposal of planners and economists, indicators have been attracting considerable attention in recent years; a great deal of research has been done on them, and their use has groT>n uith the greater importance of social concerns in development,, In Africa, because information is deficient' in both .amount and quality the use of ■ suitable instruments is even more important than in other regions, and the possi bilities offered by indicators must therefore be explored.. In this paper,
following a discussion of the general nature of indicators and a brief account of the state of research at the international level, ve viill analyse the special problems involved in indicator construction and use in African conditions, examine the main types of indicator of relevance in Africa, propose a tentative list of such indicators and set out recommendations for further research on the question.
B. THE NATURE OF SOCIO-ECQtTOMIC INDICATORS
2O A review of the literature shoxrs that there is a Great deal of confusion about the definition of indicators, Ihereas in current statistical usa^e, the term "indicator' refers to functions of basicil statistical series, like ratios or indexes, it has also acquired the va^ue sense of measures or constructs measuring aspects of socio-economic activity, T;hich does not differentiate them clearly from statistics.- Obviously if there is no basic difference between sta tistics and indicators, there is nothing to :vain in introducing a neu term and a noT- category of data,
3O However, an indicator is by definition something vrhich indicates, that is
■rhich points to something other than itself. Conseo.uently, a socio-economic indicator should be a measure pointing to or indicating a variable T.vhich is different from the one of irhich it ir a direct measure, FolloTrin? McGranahan ve T.ri.ll then consider, for example, that the school enrolment ratio is an indicator
of the educational level of \ country rather than of school enrolment, 1/
l/ Donald I'lcOranohan, "Development indicators and development models", Journal of Development Studies, Vol. 8, No, 3 (April 1972), p. 91*
st/kca/psd.2/9
Pa^e 2
In practice, however, the line between indicators and statistics is not as clear as it should be, and indicators are used both in the proper sense of bein^ indi rect measures of a variable, and in the ordinary statistical sense of direct measurementSo In this second usa^e, ^hat properly differentiates indicators from statistics is that they are considered to be the "best measure11 of :■. given variable among a set of similar statistics. It is clear for example that GDP per head is the best measure of income, despite the biases inherent in GDP calculations.
4« Building on the idea of indicators as :fbest measurements11, it seems possi ble to give a definition of indicators union is operational, that is to consider them as statistics or functions of statistics selected to provide measurements of a complex phenomenon in the frameuork of a unified and systematic conception or theory of the said phenomenon, This definition seems to cover the tvo accep tations of the idea of an indicator, as can be seen uhen considering indicators of health, T.-hich are both indicators (since they are proxy measurements of a.
strictly non-measurable phenomenon) and statistics giving direct measurements of variables like health expectancy, mortality, number of hospital beds per thousand inhabitants, etc. Moreover, Tjhen choosing indicators of he?.lth, --e try to select a short list of statistics which x-n.ll be the best measures of the variables
involved -aid vhich 'ri.ll provide an ima^e of, the interrelations between these
variables,,
5. Je rill then consider socio-economic indicators not in isolation, but as sets of measurements of various socio-economic phenomena. In this precise case '■re i-dll take them as measures of development, a process vrhich from the point of vie** of planning encompasses all socio-economic phenomena, The. definition of cocio-economic indicators i.dll then depend on a conceptual framework for develop ment, allowing us to define the variables to be measured, the mutual relationships between these variables, as -*ell ar, their relationships -rith the statistics from among *4iich the indicators 'dll be selected., The need to have .an inte.^rated set of measurements enabling us to describe development in ill its dimensions is in fact at the origin of -hat can be called the "indicator movement"* There has been increasing recognition of the inadeouacy of purely economic measures of development it a time trhen social concerns and particularly distributional issues are becoming more and more important, Not only does GDP, the main indicator of income, suffer from many intrinsic biases, such as those introduced by the ^,bsence of adequate valuations for non-marketable products, but in addition it entirely ignores the distribution of income as -roll as the many disutilities arising from the develop ment process itself > like pollution of the environment, If T-re rely solely on- GDP T?e are in danger of overlooking the fact that economic &roT-rth is not a uniform process and that, '.jhile come sectors of a country may be progressing fast, Irr^e
ST/ECA/PSD.2/9
P-e ->>
sectors of the population may be still living in saualor. Moreover, economic measurements conceal the fact that non-economic, social, cultural, political or ethical factors may be the most important development factors. Development, then, is a complex phenomenon not reducible to economic factors alone, and thin explains the l^ck of a universally accepted theory of development which would enable us to build up systems of indicators in an unambiguous way.
6. In Africa, development factors are of course different from those in other
regions of the world which are seemingly equally under-developed. Similarly,
among African countries there are variations in the importance of specific factors and in the values held by the different politics as a result of history and of their decisions in favour of a free market or a socialist-oriented economic system.AIL these facts will have to be reflected in the systems of indicators chosen if
they are to be of any utility,
7. Indicators can be classified according to their quantitative nature, the type of variable measured or their final use. Quantitatively indicators axe either basic statistics or functions of statistics, like ratios-, percentages and indexes,
-is to type, a distinction may be drawn between input indicators, based on measure
ment of the resources used to reach a certain objective, like energy consumption per head, or hospital beds per 1,000 population; or output indicators, like life
expectancy or the number of■graduates, based on the measurement of the resultsreached in a -^iven sector.
8. In fact the difference between output and input indicators is not rigid, and many indicators are either one or the other depending on the point of view
of the user.
9. It is also possible to differentiate between descriptive indicators, used to diagnose a certain situation, normative indicators, used to express some deve
lopment or planning objectives, and analytical indicators, used to study the rela
tions between development variables,,
10, .In practice, however, the distinctions are again of less than major importance, as the same indicators con-be used for various purposes, though analytical indicators need to be of much hi.aher quality than the otherso Ue can also differentiate between individual indicators in a system, and composite indi cators. The latter type of indicator has been the subject of considerable research, as a.single measure which could be used to make judgements on the development
status of a country and consequently to make comparisons, between countries would be extremely practical, Moreover, among de.-criptive indicators, a distinction can
be made between those used to describe structures and changes in structures, and
short-term indicators whose main application is in the economic field to measure short-term changes in trends and if possible to ;p.ve warvain of themo One example of a short-term indicator is the Dow Jones index cf the New York Stock Jibcchang-e-
11. !"/hile a concept of development is necessary in order to define indicators, by specifying the variables to be measured, their ultimate choice will depend on how well p -.rticular statistics or functions of a statistics reflect or represent the variablesB For each variable, it is necessrry to select the best measure,
and among the different systems possible, the system containing the greatest amount of information, for a certain size* To be useful; r, system of indicators will necessarily "be limited in s::.ze, both because of the difficulty of interpreting a l?.rge body of data and because the interrelations between development variables are such that after a certain point the addition of new indicators will not signi ficantly increase the amount of information contained in a given system. Moreover, beyond a certain size a system of indicators will not differ significantly from a system of statistics^
C. INTERNATIONAL EXPERIMCE IN INDICATOR DEVELOPMENT
12. The pioneer.in indicators research has been the United Nations Research
Institute for Social Development (tOTISD). which started in the I960? by developing
a level-of-living Index. This was a composite index intended to give a synthetic measure of the "level of satisfaction of the needs of V..e population as measured by the flou of floods and services11. However, al buiiered irun a lack of data on essential components, and from the fact that it was a weighted index of non- commensurable elementsB Although in the economic field :.t is legitimate to value all goods and services at market pricesT this ts no longer permissible when we try to give.a'common evaluation of both economic and non-economic goods. This problem of proper weighting of composite indexes has affected most studies done in this field, and no proper solution h; s been foinid* ' Further research by UMRISD concentrated on the development of an indicator data base, and a method of scaling based on "correspondence points" was developed. Basically the method involves the establishment of relations between development, variables while avoiding the classic least-squares method with its implicit assumptions concerning the probability distri bution of variables, which are rarely confirmed rn developing countries. In place
of this method, median lines minimizing absolute deviations from all variables are defined, and from this correspondence po-nts are determined on a common scale for all the variables, so that a development profile can be drawn for a country and comparisons made between situations at different epochs. However, the work in
UNRISD is still mainly oriented towards intercountry comparison, rather than planning needs at the national level,,
st/eca/psd.2/9
Page 5
13* Other institutions have tried to develop--.composite development indexes.
In 1975 a study of 140 courtries was prepared for the Economic and Social Council, using .7 indicators, to rank the countries according to their level of development.
The British Overseas Development Council developed a Physical Quality of Life . Index (PQLl) in which equal .weight was given to three simple indicators: life expectancy, infant mortality and literacy* This index was used to judge develop ment performance in a "basic needs" .perspective. A similar study was prepared for OECD in 1973, relating the GNPs of 82 developing countries to six indicatorsB
14o UNESCO has been another focal point in indicator research^ with the main emphasis on social indicators and the use of indicators in planning. UNESCO has also researched extensively on the problems associated with criteria for indicator selection and indicators in specific areas, most notably the participation of women in development,
15- As was mentioned earlic-, IETRISD has oriented its research towards the deve lopment of systems of indicators and the creation of r, data bank of indicators»
This orientation dovetails with work in the United Nations secretariat to develop a rationally organized system of demographic and other social statistics, from which a set of indicators can be obtained-
16, One conclusion which can be drawn from international experience is that composite indicators are not a practical proposition, and that efforts should rather be focused on indicator ■systems." As has already been pointed out, the
problem of finding proper weights for a composite indicator combining sub-indicators of both economic and social variables has not been satisfactorily solved. Research to date has also brought ';".c l-'.gV-t interest;! rg ^e"1 °.ti.ons betw^pp development varia bles and made a substantial contribution to the establishment of indicator lists which can be used as a starting point for individual countries' own indicator syst ems„
17» From the methodological' point of view, the research conducted at the inter national level has led to the definition of important selection criteria or pro cedures for indicators. Of course, practical work has to rely on a large extent on intuitive methods of selection based on the social scientist's knowledge of the variables he is measuring and the quality of the statistics at his disposal. In real situations, this knowledge remains .the.decisive factor- However, quantitative methods also exist, and have proved extremely efficient in identifying indicators.
important concepts here are the©© of the validity ph.6 discriminative power of
ST/ECA/PSl),2/9
Page 6
an indicator- in indicator will be valid if it "measures what it is intended to measure", 2/ tiiis being meant in both the statistical and the conceptual senses.
The discriminative power of an indicator relates to whether the indicator "effec tively distinguishes.between... different levels of development ... and is mean ingfully related +.0 (correlated with) other indicators of development". $/ F°r *•
system of indicators, another important criterion is whether a given indicator adds to the information contained in the other indicators already chosen. Quantitatively, the principal tool of indicator selection is correlation analysis. On the basis of a table of cross-correlations between indicators, those having the highest average correlation with the others are generally the best, since good indicators of a spe cific variable or a set of variables should be highly correlated between themselves.
In most cases experience has confirmed this relationship between high average corre lation with other indicators and indicator qualify* At UNESCO, research has gone even
, an mea^uremen so e information content of indicators as well as of systems of indicators, together with criteria for selecting an optimal list of indi cators, have been proposed In addition to correlation analysis, other multivaria^o methods like factor analysis can be used for the selection of indicators.
D. INDICATOR SELECTION IN AFRICAN CONDITIONS
18, We have stated that indicator selection and use depend on a conceptual frame
work enabling us to specify the variable to be measured. For Africa, this win entail establishing which development- variables are specific to African conditions and which should enjoy special emphasis in comparison to the situation in other regions. It is beyond the scope of this paper to embark on a theory of development in Africa, and we will limit ourselves to what appears to be generally agreed amon.- African countries, as GauSGd from the development plans and other policy statements issued by African governments, and the many resolutions adopted by these Governments at meetings organized by OAU and-ECA. It is clear that African Governments are united in regarding development as an increase in the present low levels of income to levels comparable to those enjoyed by industrialized countries, the modernization of xhe production system, an increase in welfare (that is, an improvement of health conditions) and the spread of modern education to the mass of the population. Recently equity m the distribution cf development benefits has come to figure prominently in ' '
i/^g&ga22^g£^^ and Analysis of Sor.jn^^nnn^jw^n^^^.
Indicators^ (Geneva, United Nations Research Institute for Social Development, 1979)
p»6
2/
ST/ECA/PSD.2/9
Page 7
development targets, though there is no clear consensus on what is meant, for example, by a fair distribution of income. In the Lagos Plan of Action, adopted by African countries for their development in the 1980s, the broad objectives
enumerated above have been joined by new elements, among both factors and objectives of development*
19» As Iras pointed out in the introduction, development cannot be reduced to a simple savings-investment process; social, political ejnd cultural factors are involved, It is undeniable, however, that the raising of productivity is the core process, and one which is itself dependent on the acquisition and spread of modern science and technology,, This point of view is clearly expressed in the Lagos Plan of Action, with its strong emphasis on the development of manpower resources and in particular on the building up of indigenous institutions for training, project formulation., research and technology promotion- Science and technology, are, in the Lagos Plan of Action, priority sectors. African Governments are called upon to set up specific institutions and pursue systematic policies in order to organize and expand the mastering of modern technology by Africans as an integral part of development.
20= Another specific development factor which appears in the Lagos Plan is
regional co-operation. The small size of the African economies is a major obstacle to their development, because they cannot exploit the benefits of economies of scale.
This constraint can be overcome by breaking the barriers between African countries, from the physical barriers of geography and poor communications to the monetary and trade regulations and systems which tend to isolate African markets from one another.
The Lagos Plan of Action gives high priority to the elimination of those obstacles, and. introduces a new dimension in the objective of regional co-operation by linking it to the other fundamental objective'of self-reliance: regional co-operation is seen as an instrument for achieving "collective self-reliance",
21- The concept of self-reliance has not as yet received an explicit and clear definition, and may not in fact be amenable to definition, but it seems evident that autarky and the isolation of African countries from the external world in a national or at best a regional context is not what is meant. The central issue here is that development must "be the result of Africans1 own efforts, and not an externally domi nated process. Thus self-relinnce cannot be reduced to the problem of indigenization
of capital and manpower, but gbfes beyond and concerns the mastery "by Africans of the development process in their own countries. The importance of this issue stems from the risk ttiat, with the present gap in technology between Africa and the "ndus- trialiaed world, a type of development will emerge where the role of Africans .'; is reduced to that of suppliers of unskilled labour, • the main initiative .and the main
benefits accruing to overseas agents and enterprises. Indeed, in some cases this type of development.has already be^un to take root.
ST/ECA/PSD.2/9
Page 8
22. The availability of statistics is another key consideration, as this will determine the actual range of possible indicators. In Africa, very serious limi tations are encountered in this respect. As far as population statistics are concerned, understood here as including not only demographic "but also manpower sta
tistics, despite the considerable effqrts of the last 20 years, most African countrie do not have a well-established census system, and civil registration systems do not operate outside the main towns. As a consequence it is not possible to obtain reliable and comparable statistics for long periods on such fundamental data as birth-rates, death-rates or life expectancy* Age distribution statistics are shaky, and though the broad lines are well established it is not possible to reach a high degree of precision and base calculations on single years, for example. In some cases, even the size of the population is lcnorm only with a i-rf.de margin of error, which may be as high as 20 per cent. For manpower, there are difficulties in deli neating the boundaries of the active and non-active population, and the distribution
of the population by economic sectors is known only approximately• Unemployment statistics are very scarce, and knowledge of wage employment is unavailable in suffi cient detail, even though it is subject to government control. Knowledge of occupa tional statistics is almost non-existent,
23. One deficiency of economic statistics is the absence of reliable data on the non-monetised or non-organized sector of the economy. This sector includes not only the bulk of agriculture, but also traditional activities associated with agriculture in the countryside and small-scale crafts, trade and services in the urban areas.
In some countries, non-recorded trade may be equivalent to as much as 50 per cent of recorded trade. The net result is that GUP statistics not only underestimate the real level of economic activity, but also give a distorted picture of its structure and its growth rates, since the valuation of a large part of production is faulty,
24. In the social field, most African countries have detailed information on health and education, in terms of resources allocated and output obtained, but data are extremely poor for income distribution and the ;diettiTDUtionl.ofc:eosnomic assets,,
25. Despite the wide gaps in our statistical knowledge of African society, is one important aspect that should not be neglected: the existence of large insuf ficiently investigated and utilised bodies of information which could supply precious
data for construction of indicators. This is the case for health and educational records, tax data and records of government population counts. In some African countries universal counts of the population have been conducted for tax purposes for decades, but the information collected hias not for the most part been systema tically exploited. In the same vray some countries submit their populations to re gular- complete health checks by mobile preventive medical teams, collecting important data on the prevalence of some endemic diseases as well as basic information on population. Likewise tax records and government records generally, if properly
ST/ECA/PSC2/9
Page 9
e-ploited, could yield fundamental information on manpower and income distriction.
Bat in the full utilization of this kind of data the question of cost is very important in view of the limited human-and material resources available.
26 'In addition to criteria concerning the quality of statistical series and
their acceptability as indicators, the following considerations appear to have an important role in indicator selection in Africa:(a) Availability. The information needed to build indicators may simply be absent, or its quality too poor. In view of the constraints of homogeneity and
auality, it may be that only very simple indicators are possible. However, experienceshows that in many areas recourse can be made to estimation procedures with reasonably
good results.
(b) Qualitative .judgement. Since many statistics are of poor quality, or
simply do not exist at the level of disaggregation required, recourse to the in
formed judgement of social scientists may play a bigger role than purely quantitative
techniques such as multivariate methods.
(c) cost. Because of limited resources, some indicators may be excluded
because of the high cost of identifying them. For example, school health inspection records can reveal interesting data on the evolution through time of some indicators like the average weight of pupils, at least for major towns in some African countries, but resources may be unavailable or the project may be too costly in relation to the
expected benefit.
(d) Development perspectives. Some indicators, though not available
at present may become available in the near future, and systems of indicators should
therefore be designed with a mind to future needs and possibilities. Statistical programmes for example, should be developed bearing in mind data requirements forindicators.
E. THE USE OF'INDICATORS. IN DElTELOPMaTT'PLAtilWG
27. It is not possible to give a complete and detailed account of" the use of indicators in African planning, but it is clear that when indicators have been used,
they have been used in an unsystematic and haphazard manner. ; A: good example isfurnished ty the planning process in Senegal. Since independence in-1960, Senegal
has implemented three-four'year plans, the most recent of which is the p!1 ~1977-1981; a new plan is being prepared for 1981-1985. ^ere were pl£mS
st/eca/fsd.2/9
Page 10
independence, and it. is therefore possible to trace the evolution of planning methods in Senegal over a long period* Study of the plans shows -,hat no attempt has "been made to develop a set of indicators for planning in Senegal, despite the fact that Senegalese planners were remarkable for their very early concern for social issues, in particular the issue of income distribution between rural and urban people, Extensive and sophisticated use has been made of economic and social statisticst
but the only indicator of development as such has been the rate of groirth for over-all GDP and its main sectoral components. The rate of growth has been considered the most important "target of the plans, and at the same time the key indicator of success
or failure. Plan implementation has mostly been measured in financial terms, by comparing actual expenditure to planned expenditure. In the social field no syste matic attempt has been made to define plan targets in terms of such indicators as the school enrolment ratio or the availability of doctors and other medical personnel and facilities. However, in the fourth plan indicators have been used to measure disparities between regions, in connexion with efforts to reduce them. These indi
cators are: , _
(aj Total population;
(h) Population density;
(cj Rate of natural increase of the population;
(d.) Number of inhabitants per hospital bed;
(ej Number of inhabitants per doctor;
(£) School enrolment ratio;
(sy Gross regional product;
(h) Urbanization rate;
(i.) Area*
28O The plan aims at reducing the very wide disparities revealed by the indicators,
which show that GDP per head in some regions is 10 times -the level in.others0 For nutrition, a set of indicators has been used to describe the food situation for the year 1974, -giving data for the whole of Senegal broken down into different rural and urban areas, The indicators are:
(a) Population
(b) Per capita consumption of cereals;
(°-) Per capita daily consumption of principal nutrients;
(&) Per capita consumption of sugar and cooking oil.
29. As in the case of regional disparities, the indicators have been used in the formulation of policies, but it is difficult to relate the actualprogrsinmes to the indicators, sinco.no targets have been established on the basis of the indicators;
all the programmes and projects are expressed in expenditure terms.
st/eca/psd-2/9
Pag-e 11
30, Thus scant use-has been made of indicators in African planning. Although this situation is justified in large measure byrJ;he poor data base and the limited resources at the disposal of the planners, much more can be done with the existing data. Generally speaking, indicator use in Africa will not diverge significantly from the,norm in other regions, and will concern basically:
(a,) The analysis of situations in order to evaluate socio-economic trends;
(b) The expression of planning and policy targets in a form allowing their
use as triggers or warning systems;.
(cj The development of socio-economic models to assist policy-makers and
shed light on the operation of socio-economic variables. In this respect, however, the use of indicators will remain more limited in Africa than in other regions better endowed with planning resources,
31• In the evaluation of socio-economic trends, indicators can be used, for example, as tools for short-term evaluation or prediction, or for the assessment of changes in socio-economic structures. Short-term indicators can be very effective in indicating and even warning of short-term chajiges in economic activity, and can therefore serve as a precious tool for current economic management, and not necessa rily for planning only. Whereas synthetic indicators combining social and economic measurements are plagued by unsolvable weighting problems, there are no such problems for economic synthetic indexes. These indicators are basically proxy measures of GDP, and are used because it is impossible to obtain GDP statistics for sufficiently short periods or because of the delays necessary for GDP statistics to be prepared. In industrialized countries, good examples of such indicators are the Dow Jones index of the New York Stock Exchange and the Index of Leading Indicators of the United States Department of Commerce. In the Ivory Coast, the forecasting section of.the Ministry Of Finance publishes a quarterly synthetic, index of economic activity based on 1974^100. The index combines various sectoral indexes: an index of industrial activity, coffee and cocoa sales, commercial sales, construction activity (as ref lected in short-term bank credits), port activities (based on goods handled), con sumption of electricity and petroleum products, household consumption, etc. This index has performed remarkably well, and its existence proves that other African countries could build similar indicators'with the available statistics.
32. In the evaluation of structural changes, indicators are particularly suited to highlighting and emphasising regional disparities, and in this respect the
breakdown of national indicators into territorial indicators at the lowest feasible administrative level id.ll provide a very valuable tool for planning, especially regional planning, Experiments have already been carried out in this field, and UNRISD and UNESCO are conducting research on the development of indicators at the local level. IDEP is working on regional indicators emphasizing income and
ST/SCA/PSD.2/9
Page 12
development disparities within countries between -'coastal" and "interior" areas*
The set of indicators used for local planning will to a large extent overlap with the national set, "but new specific indicators may be neededn
33- Ifre use of indicators for plan targeting is particularly appropriate since the indicators are chosen as the best measures of development variables which are directly related to plan objectives. Since indicators include not only monetary measures but also physical measures of economic variables, as well as measurements
of social variables, the use of indicators in setting plan targets will make it possible to take into account a greater range of development variables than the
simple use of national accounts statistics,, . . .
34* Monitoring of the indicators used as plan targets will provide a way of warning policy makers or planners of shifts in the path followed by the economy and the need for remedial action. Going further, a special set of indicators could be designed for this purpose with a structure varying according to the variables monitored. In a planning system of the centralized type or where the public sector plays, a major role in the economy, as in many African countries, a system.of indicators at the enterprise level can be used as a tool in plan implementation, progress in
the implementation of the plan being evaluated by means of certain key indicators for which targets are established by the central planning authority.
35« However, the use of indicators in this way can generate serious errors if the indicators are not carefully chosen. Experience in planned economies has shown, for, example, that concentrating.only cw indicators of gross production can lead to the production of unsalable goods and to nigh losses. Moreover, mechanical defini tion of policies on the basis of indicators can deprive production units of the necessary flexibility in making decisions» .More generally, the interpretation of indicators cannot be carried out in isolation from the background of other information and of policies pursued by the planners» There can be situations where the indications given are contradictory, or where some policies are not properly harmonized with
other ones. To take an example,.hasty, measures to decrease the participation of expatriates in the labour force, as part of efforts to.increase self—reliance, may be ill—advised if their participation is made necessary by growth objectives. Again, in tropical Africa, although the rate of growth of GEP has slowed down significantly in the last decade, suggesting a lower rate of increase in the availability of
material goods (a basic component of welfare), social measurements of welfare indicate
a substantial increase in life expectancyt a rise in the proportion of literate adults, increased school enrolment, etc
st/eca/psdo2/9
Page 13
Fs MAIN CATEGORIES OF INDICATORS
36* The process of indicator selection as envisaged here involves first identi fying the development variables, and then try various methods choosing the indicators of the variables among available statistics or functions of statistics,, Among deve
lopment variables, r-:e c.-n distinguish between aspects of development taken (viewed as a specific target situation) and factors of development (viewed as a process).
There is broad agreement that development means a certain level of income, essentially the income no:r reached by industrialized countries or an equivalent income, a certain industrial structure and certain level of education and welfare. The main develop ment factors are human resources, capital and natural resources* From our previous discussion, it can be seen that in the African context special emphasis must be given to the issue of human resources as regards the mastery of modern technology, self—reliance and regional co-operation, which arc considered to be both targets and factors of development in Africa. On this basis, ire may propose for use in planning the folloi-rin-g categories of indicators, which are thought to take account of both
aspects of development and development factors and to include the development variables of greatest significance in Africa:
(lD Population;
(b_) Human resources;
(cj Moderni sation; . (d.) Income and economic growth;
(e) Self-reliance;
(fj African co-operation;
(-) Health;
(h) Welfare.
37* These categories are not definitive, and are presented here only as a guide for discussion. Substantial changes may be dictated by further research. The indicators included have been chosen mainly on the grounds of present availability of data, but a more future—oriented approach would certainly demand more 'complex indicators? For each category, the types of indicator to be included, the source of data ihd the problems involved will be as foil cms,
38« Population.. The indicators will describe the rate of change of population, its pressure on economic resources and its.structure in terms of manpower resources.
The indicators Trill also be used in combination with other indicators to obtain per capita ratios. Data idll "be taken from censuses fond demographic sample surveys, although estimates idll have to be relied upon most .of the time.
st/eca/psd.2/9
e 14
39° Human resources. This category of indicators will not only measure manpower
in the usual terms (percentage of the active population, for example) "but will go
further and- attempt at least rough measurements of the stock of trained manpower in basic science .and technology. This tn.ll of course not be easy to achieve "because of the shortage of dat;if but it ic hoped that more thorough exploitation of existing educational statistics could make a significant contribution,, For example, in most African countries, there are Ion™ series of data on'persons completing the different educational levels uhich could be combined to give estimates of the number of trained personnele An important dimension of human resources, local entrepreneurship, can be approached through the distribution of local entropreneurship "by economic branch.
4°* Income and economic groirth. Indicators mil measure the level of income, and the rate of growth of income* The measurement will be effected first by using GDP statistics, but non-monetary measures trill also be used to avoid the biases of GDP statistics and relate income to basic needs like food- There are no difficult conceptual problems with this category of indicators, but the availability"of basic statistics is crucial*
41• Modernization, Development entails m-ny changes, among them changes in tech niques with xhe spread of modern technology, changes in the structure of production with industrialisation, changes in the distribution of the labour force ets the popu lation shifts away from traditional sectors to industry and related services, and changes in the social structure and even in cultural attitudes. The indicators will measure the changes in production and the labour force and will attempt to measure the increased recourse to modern production techniques,, This latter point is the most difficult to achieve, though indicators of technical change would be the most efficient indicators of development A subcategory of indicators will measure the participation of women and young people in development, since .this is a most
important element of social
42* Self-reliance. !fe have interpreted self-reliance as control by Africans of socio-economic processes in their own countries rather than the building of closed economies. Consequently, the indicators will measure how far capital and key professions and trades are controlled by foreigners. Since in African economies it is above all the modern sector and "modern" professions which are. controlled by
expatriate agents, and since it is from these areas that modernization'is initiated
and controlled, the indicators vrf.ll be limited to depicting the situation there..Information necessary to calculate the indicators is available in tax records giving the distribution of the equity of registered companies; from these records rtvib~*
also generally possible to obtain fairly accurate data on the numbers of expatriate professionals and those occupying managerial positions. There will be other types of indicators measuring self-reliance from the point of view of dependence on foreign resources for financing total expenditure and capital formation. It is
ST /ECA/PSD.2/9
Page 15
quite cltear that a very large deficit on current account is not sustainable without
large amounts of foreign resources, and that self-reliance has not much meaning' m such a case. Likewise, it is preferable for a country to finance its capital formation itself, though even here recourse to foreign resources is not easily inter preted in self-reliance terms. After all, high foreign investment can make a basic contribution to the bailding of a country's infrastructure and productive capital
base, and therefore to its long-term independence.
43. African co-operation. Of the many fo™s of co-operation, those of interest
in this paper relate to trade, financial flows, manpower and other human flows, aswell as joint undertakings and joint funding of projects. At present, because of
the Shortage of data, it will be possible to measure only mutual trade between AfricWi countries and movements of people, and even then very imperfectly becausea larpe proportion of intra-African trade takes place outside official channels.
It would be very useful to construct an indicator of co-operation which could com bine partial indicators on the share of intra-African trade in total flows, the degree of openness of frontiers, the inter-convertiHlity of currencies, etc., but this appears to be quite difficult .and to require further research. Consequently, Tor the time being, intra-African co-operation will be measured using basically
indicators of mutual trade and movements of people,
44. Health. The best indicators are output indicators, namely life expectancy, the over-all mortality rate and the mortality rates for infants and children.
These latter rates are particularly important in Africa;-where a large.proportion
of deaths occur in the first five years of- life. These;, indicators are, moreover,
highly correlated with other development indicators, notably GDP per head,, since mortality depends on a whole range of factors determined by the level of develop ment. The difficulty, however, is to obtain reliable and current measures Of these indicators, inevitably use will have to be made of estimates. At the same time, indicators of the effort made by society to promote health are also useful for planning purposes to check on plan implementation. .-
45. He have not included short-term indicators in the above because of their 'special character. Despite the gaps in statistical knowledge in Africa, short-term
indicators are available in sufficient quantity to give an adequate picture of economic trends, as the example of the Ivory Coast demonstrates. Among the statis tical series available the best appear to be those concerning the marketing of crops, commercial energy consumption, cement consumption, the handling of goods by ports, exports, imports,, bank credits, the money supply, import.taxes and consumer prices. These series can be combined in a fairly straight .forward manner by using known statistical techniques to obtain good synthetic indicators of economic
activity which can give early and reliable estimations of GDP growth and thus be
Page 16
very useful for policy-makers. Each of the individual statistical series is an important indicator of a sector or a variable, as" is the case for import taxes,
tihich in Africa are very sensitive indicators of government revenueoG» INDICATOR DATA BAHK
46. Indicators naturally find their place in r. statistical data bank system, at the»Mgher»; level of the data bank, since in order to be useful indicators will have to satisfy more stringent quality standards than ordinary current statistics, with the current statistics themselves forming the loner level. ...Noteworthy in this respect is the EGA PADIS-STAT project, iMch is desired to create system of regional and national data banks, with a central date bank in Addis Ababa. In its present conception, it is proposed that the central data bank should be divided into three levels, the first covering country profiles, the second current country statistics and the third statistics corrected so as to be homogeneous and comparable; it is
hoped that the indicators will be situated at this third level,Ho RECOMMHWD&TIGCTS AHD CONCLUSICftlS
M A list of possible indicators for the areas defined above is annexed, but oniy as a suggested basis for discussion, Ifct is needed is for national P^TO organizations and other institutions active in development work and, regionally,
IDSP and similar institutions, to embark on research to: _
(a) Identify development variables of interest in.Afrioa," going beyond what is expressed in present development plans and at meetings of government
officials; .
(b) Develop indicator systems appropriate to the needs of African
planning; ,. _ ,,
(c) Develop new uses of the available statistical information for the
construction of indicators;
(d) Design statistical programmes in order to obtain the information
needed for indicators.
48 The systems of indicators adopted in each country should be made comparable to each other to facilitate the comparative analysis of African development. It is of great importance to have a common set of basic indicators.with Which to SauSe the development situation in African countries, and thereby to elucidate common problems and plan further co-operation. ECA-s role in this respect could be to_
draw up a short list of indicators for planning in Attica, which national planning
offices could use as a core around which to build their own systems .2,2/9
Annex I
ANNEX I
Proposed list of Indicators
I. Population
1. Poulation density
2* Natural rate of growth of population
3« Urban population as a percentage of the total population 4. Rate of growth of urban population
5. Active population as a percentage of the total population
II, Human resources
1, Rate of literacy
2O Percentage of literate wage earners
3. Proportion of managers, professionals, scientific and research personnel
in labour force
4. Number of persons completing different levels and types of education in the past 10 years as a proportion of the labour force
5« Newspaper circulation per 1,000 population
6» Enrolment ratios at different levels for all students and pupils and by sex
7. Student/teacher and pupil/teacher ratios
8. Expenditure on education as. a-proportion of GDP„
III* Incomet and economic ffrotfth
1. GDP per head
2. Commercial energy consumption per head 3. Cereal and root crop production per head 4. Manufacturing production per head
5. Exports/imports per head
6. GDP growth rate ( with sectoral rates)
IV. Modernization
1. Share of agriculture in GDP 2. Share of manufacturing in GDP
3- Agricultural labour force as a proportion of the total labour force 4« Proportion of wage earners in labour force
5- Sh^,re of government and public enterprises in GDP 6. Fertilizer use per unit of cultivated area
7. Proportion of commercial and industrial establishments using electricity 8« Non-marketed production as a proportion of GDP
st/eca/psd.2/9
Annex.I Face 2'age
VI. Modernization (continued)
9o Motor vehicles per household 10, Telephones per household
11. Proportion of women in agricultural labour force 12* Proportion of women among wage earners
13» Proportion of women among civil servants 14- Proportion of girls in school enrolment.
V* Self-reliance
1. Proportion of capital of firms idth assets over 10x dollars oxmed by
nationals
20 Percentage of nationals among researches, managers, professionals and
teachers
3» Deficit in goods and services as a proportion of GBP .. ...
4. Foreign capital flows as a proportion of GDP
5* National savings as a proportion of capital formation 6, Cereal imports per heado
VI, African co-operation
1. Intra-African trade as a proportion of total trade
2, Travellers from/to other African countries as a proportion of total
travellers
3» African foreigners as a proportion of total population
4. Value added in joint ventures as a proportion of total value added in the modern sector..
VII. Health
1* Life expectancy 2, Total mortality rate 3<. Infant mortality rate 4« Child mortality rate
5, Hospital "births as a proportion of total "births
6O Number of cases of most important diseases as a proportion of total
illnesses ... .
7. Total calorie intake per head 8. Total protein intake per head
9. Proportion of population with access to safe water 10. Hospital beds per 1,000 persons
11. Medical personnel per 10,000 persons 12* Health expenditure as a proportion of GDP
13. Proportion of population living within 10 Km of a health centre.
st/eca/psd.2/9
Annex I Page 3
VTII. Welfare
1. Total calorie intake'per head 2. Total protein intake per head
3. Proportion of the population with access to safe water 4. Proportion of the population with access to electric light
5. Proportion of population with calorie intake below norm 6. Proportion of population with protein intake below norm
7. Ratio of income of the richest 5 P^r cent to the income of the poorest
20 per cent
8. Minimum wage/average wage as a proportion of GDP per head/GDP per head
in agriculture ..
IX. Short-term indicators
1. Crops marketed
2. Electricity consumed/produced
3. Petroleum products consumed
4. Cement production and/or imports
5* Goods carried (various modes of transport) 6. Exports ("by main products)
7. Imports (by main products)
8. Consumer price index 9. Bank credits
10- Money supply 11. Import taxes 12. Synthetic index
AHHEXII SOMEIHBICATORCROSS-CORRELATICNSFORDEVELOPINGAFRIOAHCOUNTRIES lo 2. 3. 4. 5- 6. 7. 8. 9. 10. 11. 12.
(1)
1.0000 0.3669 0.6334 0.3327 0.6474 -0.0499 0,4884 0.3059 O.8296 0.3349 0.6619 0.5253(2) 1.0000 -0.1775 0.1023 0,2200 -0.3050 -0.1976 0,1938 0.7006 -O.1925 -0.1253 -0.3242
(3) 1.0000 0.3285 0.4075 0.3987 0.9226 0.0606 0.3497 0.4237 0.9307 0.7256
(4) 1.0000 0.7357 0.4393 0.3501 0.2845 0.34-93 O.1276 0.4320 O.1283
(5)
1.0000 0.2490 0.3895 0.5006 0.6382 0.2633 O.554.O 0.3185(6) 1-0000 0.3708 0.0846 O,O?26 0.1617 0.4259 0.1969
(7) 1.0000 0.0061 0.2443 0.5123 0.8426 0.6408
(8) 1.0000 0,3590 0.1994 -0.0242 0.1373
(9)
1.0000 0,0568 0.4770 0.3032(10)(11)(12) 1-0000 0.35191.0000 0.16090.7144-1.0000 Source;WorldDevelopmentReport1981,(Washington,WorldBank,198l)» (1)1979GDPinUSdollars(7)GrowthofGDP(1960-1970)
(2) Population in 1979 (8) Growth of GDP (1970-1979)
(3)GD?perheadin1979inUSdollars ?A)Adul-tliteracy(percentage) v5)Lifeexpectancy(years) (6)Poodproductionindex(l977-1979/l969-197l)m (9)GDPin1970inUSdollars(ECAStatisticsDivision) (10)Growthofpopulation(1970-1979)t (11)Commercialenergyconsumedperhead(kilogramsofcoal^ eouivalent)T1979w (12)Growthofcommercialenergy(1974-1979)
ANNEXIII INDICATORCROSS-CORRT3LATICNSINDEVELOPINGAFRICA (SECCTOSAMPLE) PDEN PGRv-J PURB LITR SCHO GBPH ENCO EXPH IMPH GDPG AGRI MANU LIKE MORT DOCT AGRI MANU LIFE MORT DOCT Source:
PEEN 1.0000 -0.0957 0.0634 O.I85O -O.O358 -0.1626 -0.0115 -0.1507 -O.I683 0.0704 -0.0330 0.3305 0.2201 -0.2106 -0.1662 AGRI 1.0000 -0*2485 -0.4371 0.4429 0.4667
FGRN 1.0000 0.0463 0-3969 0.3034 0.2265 0.2762 0.2170 0.1931 0.2205 -0.1107 -0.0902 0.5572 -0.5614 -0.2915 MANU 1.0000 0.1444 -0.1870 0.292
PURB 1.0000 0.2631 0.5869 0.3989 0.6249 0-3620 0.4732 0.3876 -0.7480 0.1474 0.5631 -0.5755 -0.6138 LIFE 1.0000 -0.9781 -0.6184- ECAsecretariatcalculations.
LITR 1.0000 0.4357 0.2760 0.3940. 0.2557 0.304-8 ■0.4067 -O.2418 0.1O74. 0.5964 -0.6268 -0.3631 MORT 1.0000 0,6582
SCHO 1.0000 0.3979 0.4896 0.3657 0.4334 0.3975 -O.5151 -0.0348 0.5484 -O.586I -O.5642 DOCT 1.0000
■GDFH 1.0000 Q.9196 0.9963 0,9802 0.4505 ..-0.4748 -0-2579 0.3937 -0.3620 -0.2811
ENCO T.0000 :0.9051 ■0.9456
jo.5107 4o.6498
-k).1012 0.5915 -0.5729 -O.4514 -EXPH' 1.0000 0.9690 0.4044 -0.4481: -0.2603 0.3529 -0.3260 -0.2486
IMPH 1-0000 0-5037 -0.5462 0.2607 0.4232 '-0.3843 -0.3497
GDPG 1,0000 -0.4873 0.0559 0.4674 -0.3991 -0.2469 03 hffj 0
fa
roST/ECA/PSD.2/9
Annex III Page 2
PDHNs PGRW:
PURS:
LITR:
SCHOj GDPH:
MCO:
KXPH:
IMFH:
GDFG:
AGRI:
MANU:
LIFE:
MORT:
DOCT:
Population/cultivated land, 1979 (PAO) ! \ Population growth, 1970-1980 (ECA) \ [
Urban population as a percentage of the total population
1980 (Patterns of Urban and Rural Population Growth (United
Nations publication, Sales No. E.79.XIII.9); ;Percentage of adults who are literate, 1975-19761'(iforld Bank)
Primary enrolment rates, 1975 (World Bank) ; ;GDP per head in dollars, 1978 (ECA) : ?
Commercial energy consumed per head (Kilograms of coal equivalent), 1978 (World; Ehergy Supplies 1973-1978. Statistical Papers, series Jt
No, 22 (United Nations publication, Sales No* E.79, XV111.13))
Ebcports per head in dollars, I979 Imports per. head in dollars, 1973
GDP groTith at constant 1970 prices, 1970-1979 Share of agriculture in GBP, 1979 (ECA) ; Share of manufacturing in GDP, 1979 (ECA) \ Life expectancy, 1975-1980 (EGA)
Mortality rate, 1975-1980 (EGA) ■ Population per doctor, 1977 (World Bank)
