The Human Development Index

32 ADOPTION The Human Development Index – a better indicator for success? When faced with the complexity of the Sustainable Development Goals, we need a digestible, precise way of measuring progress By Hayley Lashmar, to a country’s wealth, or even GDP per framework swells in complexity – with 17 United Nations Association – UK capita, which tells us something about an goals, 169 targets and even more indicators individual’s means but nothing about their – there is also a need for a simple way to roduced by the UN Development life outcomes. measure progress. Over a 15-year timeframe, Programme in 1990, the firstHuman Of course, the HDI has its limitations. the HDI will do a better job than GDP of PDevelopment Report outlined a new It omits several factors that can have a capturing what progress is being achieved. approach to development, focused on people significant influence on quality of life, such It reflects a more nuanced understanding and their opportunities rather than economic as environmental degradation. Industrial of human development while being simple growth alone. The Human Development pollution and deforestation, for example, enough to remain inclusive: unlike other Index (HDI) was introduced as a way to can lead to complex health problems more complex indices, the HDI is based on quantify this approach. Nearly 30 years (e.g. lymphatic filariasis) or mental health data that is likely to have been collected in later, the Sustainable Development Goals conditions that do not necessarily have an many countries for a number of years. have rekindled discussions on how we impact on mortality rates but which can Despite this, most countries still use measure progress. Does the Index offer a severely impair one’s mobility or quality GDP to assess standard of living and way forward? of living. ‘development’, and it is easy to understand The HDI framework comprises three But all indices will have limitations. why. GDP is a measurement developed in indices: Overall, the HDI has the potential to provide the 1930s to measure the size of a state’s ●● Life Expectancy Index, based on life a simple impression of development that can economy by giving consideration to the expectancy at birth. The index is 1 when be unpacked to indicate progress with respect value of goods and services produced within it is 85 years and 0 when it is 20 years. to the SDGs. It can be used to complement the country. ●● Education Index, based on mean years of alternative measures of development. And The data used in determining GDP is schooling (15 is the projected maximum while factors such as conflict may not be relatively easy to access, and measurements for 2025) and expected years of schooling reflected in the HDI, they may be captured are straightforward. Moreover, this very (18 is the projected maximum – this is the in relation to their impact on wealth, access narrow definition of wealth is easy to apply equivalent of achieving a postgraduate to education and life expectancy. universally, hence its popular use as an degree in most countries). Just as the SDGs built upon the indicator of quality of life. It remains the ●● Income Index, based on Gross National relatively static targets of the Millennium preferred indicator of politicians. Income (GNI) per capita by Purchasing Development Goals to reflect a more However, even as a measurement of Power Parity (PPP), which considers nuanced understanding of development, wealth, GDP leaves a lot to be desired. exchange rates and inflation adjustments the HDI could serve as a reference point It does not consider levels of inequality when determining individual wealth. for new indices as we move towards within a country – whether it be the gap The index is 1 when GNI per capita is understanding human development in between the rich and poor or any instances US$75,000 or above, and 0 when it is a more comprehensive and capabilities- of social or political discrimination. It US$100. focused way. also does not consider the methods of the creation or accumulation of wealth, such as Together, these three indices provide, Why should we encourage HDI over GDP? the detrimental effects of the exploitation in broad-brush terms, an indication of a With their emphasis on leaving no one of natural resources. In this regard, GDP person’s capabilities and wellbeing. They behind, it is clear that the SDGs will require does not measure a standard of living at all provide a richer picture of progress than a deeper understanding of development – it should instead be seen as a measure of gross domestic product (GDP), which relates outcomes on the ground. However, as the economic activity. SUSTAINABLE DEVELOPMENT GOALS 2018 ADOPTION 33 Human development, on the other hand, It is true that at US$67,614, Norway’s concentrates on qualitative outcomes. The GNI per capita is the seventh-highest in the Human Development Index top 40 HDI’s consideration of life expectancy and world: Norwegians have a lot of purchasing education – alongside per capita income COUNTRY HDI GDP PER power, which is likely to translate into a – allow us to flesh out this picture a little. RANK CAPITA RANK high potential for choice. However, this These relatively simple forms of data are Norway 1 7 alone is not sufficient to explain Norway’s very important indicators of social welfare Australia 2 18 performance. Strong institutions and a and freedom. Switzerland 2 8 holistic and capability-based approach to Germany 4 16 development also play a significant role. Unexpected results For instance, Norway ranks first on the Denmark 5 19 When looking for the factors determining Inequality-adjusted Human Development Singapore 5 3 quality of life outside of GDP, some Index (IHDI), first published in UNDP’s specific instances can shed light on just how Netherlands 7 13 2016 Human Development Report, which differently data is perceived when compared Ireland 8 11 compares country’s HDI rankings to their to the HDI. Iceland 9 21 levels of inequality. The IHDI is sensitive Qatar, Kuwait and the UAE – all top Canada 10 20 to the level of human development lost 10 countries by GDP (PPP) per capita, United States 10 10 when inequality is high, allowing for a more standing at first, seventh and eighth place Hong Kong, China 12 9 complex understanding of the relationship respectively – drop quite significantly in (SAR) between development and welfare ranking in the HDI: to 33rd, 51st and 42nd New Zealand 13 28 distribution. place. While Chile was 56th on the 2016 Sweden 14 14 This approach has yielded progress on GDP Index, in the same year it ranked 38th the SDGs too. Norway has made strides Liechtenstein 15 - on the HDI. Similarly, Barbados was 73rd in environmental sustainability – through United Kingdom 16 23 on the GDP Index, while the HDI ranked projects and agreements related to resource it 54th. Japan 17 27 management and climate change mitigation, Clearly, as the Gulf states demonstrate, Korea (Republic of) 18 29 for example. It strives for gender parity, high GDP is no guarantee of high HDI. Israel 19 32 in parliament (where around 40 per cent Equally, Chile and Barbados have shown Luxembourg 20 2 of members are women) and beyond. that it is possible to punch above one’s France 21 25 Norway tops two UNDP gender indices: weight. Taking a capability approach to Belgium 22 22 Gender Development Index (GDI) and the development, as described by Sabina Alkire Gender Empowerment Measure (GEM). Finland 23 24 (p.30), may explain these successes and It also provides financial assistance to Austria 24 17 failures. vulnerable countries in respect to resource Slovenia 25 36 sustainability and eradicating poverty. And Secrets to success – Norway Italy 26 30 each governmental department follows up The HDI criteria are designed to be broad Spain 27 31 on the SDG targets incorporated into their enough to be inclusive of countries’ social, Czech Republic 28 35 agendas as part of their budget proposals. political and economic diversity while being Greece 29 46 By linking the SDGs to budget allocation in indicative of a country’s quality of life. With Brunei Darussalam 30 5 the treasury, the goals are incorporated into the exceptions of 2007 and 2008, Norway a robust institutional process. Estonia 30 40 has topped the HDI chart in every year When we talk about what makes a Andorra 32 - since 2001. The UN also regards Norway country a success or failure with respect to as ranking high in its implementation of the Cyprus 33 34 the SDGs, GDP simply does not reflect the SDGs. So why has it been so successful? Malta 33 37 progress of human development. Though Norwegians have a relatively high life Qatar 33 1 the HDI may not fully capture all the expectancy of 81.7 years – one of the highest Poland 36 45 complexity of the 17 SDGs and 169 targets, in the world. This is in part due to Norway’s Lithuania 37 42 it is not realistic to expect any index that accessible and affordable public healthcare Chile 38 53 accommodates the diversity of all countries’ system. Norwegians spend an average development to do so. Rather, the HDI Saudi Arabia 38 12 of 17.7 years in school – a measurement can be used as an easy and more accurate Slovakia 40 39 reflecting on levels of knowledge as well as indicator of progress as it considers factors freedom of choice, both of which indicate a Source: 2016 Human Development Report that serve as valuable forecasts of quality high level of human development. of life. SUSTAINABLE DEVELOPMENT GOALS 2018.

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