The role of supply and use/input output tables in the perspective analysis of economic development of Rwanda with example

Chapter III: METHODOLOGICAL APPROACH TO THE STUDY

It is primary intended to make a description and an analysis study of the role of SUT/I-O Table in the perspective analysis of economic development of Rwanda .For this reason, it bears an exploratory aspect, especially because there has not been a similar study before. The exploratory aspect of this study is understood in the context of a description that was made in order to study the application and applicability of SUT/I-O Table in the process of economic development of Rwanda. This description was adopted because without it, it cannot be possible to make an analysis of the role of SUT in Economic Development. Then, the analysis helps the researcher to couple the results found regarding the use of SUT information with the need to implement an SNA framework that facilitates a sustained economic development process.

3.1. Methodology

The methodology comprises an intellectual process, an orderly system of arrangement that enables one to reach the aspects of knowledge. It is a conceptual process that coordinates a set of investigation operations and techniques. Contemporary English Dictionary (1995; 927) defines methodology as a set of methods and principles that are used when studying subject or doing a particular kind of work.

3.2. Sources of data

To reach the objectives of this research, secondary source of information were used because most required information concerning economic development is mainly of two categories (Quarterly records and/or annually records) and due to the constraint of time, Cost, non availability of GDP by Income Appraoch I was not be able to collect my own data.

In order to collect, organize, and tabulate data a simple form of tables were used. These tables contain Gross Domestic Product by kind of activity from 1999 to 2009 at current, constant 2006 prices and the GDP deflators 2006 base year.

Further more, I gathered also data related to the usefulness of SUT in economic development and the focus was made on the use of SUT/I-O Table in decision making and policies making.

3.3. Conceptual framework of the study

Figure 4.1. Conceptual Framework

SUPPLY

· Domestic Output

· Import

ESTIMATING THE QUALITY OF LIFE

· Linkage Technique

· Specification Technique

· Dummy Technique

INPUT-OUTPUT

· Symmetric Input-Output table

MEASURING ECONOMIC DEVELOPMENT

· Gross Domestic per Capita Growth

· Human Development Index

RICH MEASURE OF WELFARE

· Human Development Index

ESTMATING SOCIAL WELFARE

· Gross Domestic Product

· Gross Domestic Product per Capita

· Literacy

· Life Expectancy

=

Human Development Index is a rich measure of Welfare due to the following reasons:

· The HDI measure a country's average achievement in basic Human Capabilities, indicating whether its citizens lead long and healthy lives, are indicated and knowledgeable and enjoy a decent standard of living.

· Human Development Index is positively correlated with GDP per Capita.

Gross Domestic Product is a poor measure of Welfare due to the following reasons:

· GDP increases when some undesirable events occur, GDP is recorded without netting out the induced environmental impoverishment, and GDP ignores important dimensions of well-being other than monetary income, such as life expectancy and literacy (Nicolas C., Vincent K. & Bruno T. 2005, pp 46-50).

USE

· Intermediate Consumption

· Final Consumption

· Gross Capital formation

· Export

Sources: Brody A. & Carter A.P., 1971, Input-Output Techniques, Geneva. PP 44-60

Nicolas C,Vincent K, Bruno T, 2005, Economic Forecasting, London, United Kingdom PP 46-50

Bulmer-Thomas V., 1982, Input-Output Analysis in Developing Countries, London PP 256-278