Measuring Human Development Index (HDI): An Introduction
Contents
- Introduction
- History of Evolution of Development: The Concept
- Evolution of the Human Development Index (HDI)
- An Evaluation of the HDI: Achievements, Criticisms and Refinement
- Summary
Introduction
The United Nations Development Program's 1990 publication of the first Human Development Report included the introduction of the Human Development Index (HDI). The HDI's primary objective was to present development as human development, with an emphasis on wellbeing rather than economic advancement. This meant that people were regarded as the true wealth of the country, as Amartya Sen put it. To gauge the level of human well-being, the HDI provided data at the national level for a number of predetermined indicators. The HDI is the result of discussions and deliberations among academics, economists, development experts, policy makers, and NGOs to shift the emphasis away from income as the only measure of development to human well-being, measured by certain economic and socio-cultural indicators. Though the HDI has received a lot of criticism over the years, its creators have worked to improve it in order to assess and gauge the level of development (viewed in terms of the expansion of human capabilities and freedoms, and not just the expansion of income) in various parts of the world.
History of Evolution of Development: The Concept
In the 1950s, economic growth was considered to be the same as development, and the Gross Domestic Product (GDP) and the Gross National Product (GNP) were used as economic indicators to gauge development. While GNP refers to the value of GDP plus the value of income earned by its citizens from abroad less the value of income earned by non-nationals residing in the country during a specific period, GDP refers to the value of all goods and services produced by a society during a specific period of time. Even now, societies are categorized as most highly developed or least highly developed based on their GDP and GNP. The United States had the highest GDP ranking with earnings of US$ 16,244,600 million and Tuvalu produced the lowest GDP ranking with earnings of US$ 40 million, according to a World Bank classification of the world's richest countries in the year 2013 based on GDP. There were 190 countries for which data were available.
A more recent development is the use of a single or composite index to measure development as "human" development. It developed as a result of economists' discontent with the propensity to measure development in terms of a country's economic performance, or more specifically, in terms of the size of its Gross Domestic Product (GDP) and Gross National Product (GNP). Before the first Human Development Report was published in 1990 and the Human Development Index (HDI) was created, the economic performance of a nation was used to classify and divide the world into rich and poor, First and Third, North and South. In order to increase GDP and GNP, these divisions were also used to choose which parts of the world should receive development aid.
It is challenging to define development. Internationally agreed-upon development goals and national policy both have an impact on how a country develops. The historical influence of First World country development patterns on national development policies can be seen in both newly independent nations and poor capitalist nations. Consequently, over the course of the last seven to eight decades, a capitalist, growth-oriented model of development has taken precedence in these nations.
It was initially challenging to define the concept of development because social scientists and development experts couldn't agree on what this term meant. But according to the majority of conventional definitions, development is a process in which a society moves linearly from underdevelopment to development. The degree of development in this country is viewed from a western, capitalist perspective, wherein the presence of industrialization and technological advancements is correlated with a higher level of development. According to this viewpoint, development can be thought of as a continuum, with developed nations at one end and underdeveloped nations at the other.
As controversial as the idea itself has been the quest for development metrics. The disagreement stems from the fact that there is still no agreement on what development is and how exactly it should be measured, whether quantitatively, qualitatively, or as a combination of both. First, the question of which indices are best to use as development measurement variables, and second, the measurement of qualitative development variables, are the two main challenges that measurement of development raises. When it comes to indices, the debate centers on which ones are the most effective for measuring development, as well as whether these should be qualitative indicators of human well-being that are not just quantitative growth indicators but also include social, political, and cultural variables. The problem with using qualitative variables to measure development is that while quantitative variables like life expectancy, income, and level of education are objective and more readily available from census and other statistics, qualitative variables are much harder to identify, assess, and standardize across nations. Economic indicators like GDP and GNP are not always regarded as helpful measures of development because they exclude social indicators of development like income distribution, education, and health. Many social indicators of development have been proposed, which gauge the level of individual control people have over their lives, in an effort to counter the dominance of economic indicators in measuring development. Political and cultural elements have been proposed by Badri (1994) as social indicators of development.
Political factors include political liberties (the right to practice one's own religion, the freedom of speech, etc.). rights (to a fair trial, the right to run for office, etc. ) and obligations of citizens (respect for the national sovereignty of others, respect for national and international rules of law) that they can exercise for a better and more fulfilling life. The levels of adult literacy and educational opportunities attained, as well as people's access to essential services like shelter, clean water, and electricity, are all cultural development indicators according to Badri (1994). According to Badri (1994), the level of development of a nation can be tracked or measured using a continuum of level of development. She points out that, in the case of education, such a continuum would include elements like the eradication of illiteracy and the age of enrollment on one end, moving up to the quality of education using student-teacher ratios, the accessibility of training in a variety of skills and knowledge for potential workers, and the opening up of educational facilities to those who are not in school or on the job market.
However, there are issues with determining the level of development solely by social indicators. For instance, in India, social norms based on gender, class, and caste affect things like accessibility to and availability of high-quality educational and training opportunities, healthcare services, and employment opportunities. For those who do have access to education, healthcare, and employment opportunities, all of this has the potential to skew data on literacy and educational attainment.
The "capabilities approach" to development, put forth by Nussbaum and Sen, sees people's substantive or fundamental freedoms as the primary concern to be examined in any assessment of development. Contrarily, poverty and a lack of fundamental liberties are signs of "capability-deprivation.". A fundamental requirement for a life of dignity for an individual is substantive or basic freedoms, which are the center of the capability approach.
Sen (1999) enumerates a number of freedoms and restrictions, the existence or absence of which is essential to human welfare. According to Sen (1999), "economic opportunities, political liberties, social powers, and enabling conditions of good health, basic education, and the encouragement and cultivation of initiatives" are the freedoms needed to improve human capabilities and well-being. In order to improve human capabilities, it is necessary to eliminate "poverty, tyranny, poor economic opportunities, systematic social deprivation, neglect of public facilities, intolerance, or undue intervention of repressive states" (Ibid.). ). The abolition of these restrictions is not always ensured by material prosperity. Human development is both a process that broadens people's options and a result of those expanded options in terms of the opportunities that result from using those options. Sen expanded this idea to include political, social, moral, and psychological decisions as well, even though the most important decisions people make have to do with living a long and healthy life, getting an education, and having a decent standard of living. People are a country's greatest resource, so rather than using them as a means to an end, human advancement should be the main focus of that nation's development.
On the other hand, Nussbaum's (2006) capabilities approach offers ten principles and their application, both of which are necessary for fundamental human well-being. These ten principles—life, bodily health, bodily integrity, senses, thought, emotions, practical reason, affiliation with other species, play, and environmental control—are opportunities. The necessity of personal, social, and environmental conversion factors is also mentioned by Nussbaum as a means of assisting a person's ability to transform a good into a skill. According to Nussbaum, it is only fair that these ten requirements be satisfied in order for all citizens to live lives of dignity. Both Sen and Nussbaum place a strong emphasis on the human being as the center of the development strategy, both as a way to increase human freedoms and abilities and as a goal in and of itself. This philosophy produced the HDI.
Evolution of the Human Development Index (HDI)
GDP and GNP are no longer the only indicators of a country's development because the human element of development is becoming more and more important. Development started to be viewed from the perspective of not just economic advancement but also from that of the advancement of people's capabilities in 1990, with the publication of the first Human Development Report, whose highlight was the Human Development Index (HDI). This change led to a shift in emphasis from focusing on people as the means of advancing development to focusing on people as the real end or goal of development. Indicators used to measure development in the original HDI included life expectancy at birth, adult literacy rate, combined gross enrolment ratio for primary, secondary, and tertiary education, and living standards as measured by per capita GDP in PPP US dollars.
To overcome the limitations of analyzing each indicator separately, the HDI is one measure of development that combines both economic and social indicators of development. The UNDP uses the Human Development Index (HDI), which was created by Mahbub ul Haq in 1990, in its yearly Human Development Reports. However, it should be noted that the concept of human development is much more expansive than any benchmark or instrument used to gauge it.
The search for a new development metric that could be used to compare the levels of development in various nations focused on figuring out a single number that would sum up the state of human development. The economic and sociocultural facets of people's lives would be taken into account in this figure. In addition to the HDI, its creators sought to create additional indices to track disparities in human development, such as those related to gender and class. The HDI has also been broken down into dimensions like regions, race and ethnicity, the rural-urban divide, and other factors in order to avoid ignoring development gaps in response to criticism that the indicators used to measure development in the HDI were too narrow. Indicators of meaningful and consistent human development are constantly being sought after, and new reliable and valid data are also continuously being collected.
The human development approach, which is the focus of the HDI, attempts to shift the focus away from national income to test a country's level of development by noting that first, national income figures do not disclose the real composition of income or who receives income, and second, people value things that go beyond the national income, as has been seen in the approaches promoted by Nussbaum and Sen. Better law and order, improved working conditions, improved access to high-quality education, improved health and nutrition, and involvement in community economic, cultural, and political activities are a few of these. As a result, national income cannot be used as the only indicator of a country's level of development. The HDI is the result of a response to the demands of intellectuals and policymakers as well as the needs of the general public for a new way to measure development that would put people rather than money at its core. The HDR made it abundantly clear that development is of the people, which refers to the development of human resources and human capital through better healthcare and education systems; it is for the people, which refers to the improvement of the capacities and opportunities for people to lead a better standard of living; and it is by the people, which refers to the development process being participative, i.e. e. Any policy choices would be based on input from the general public. The HDI has the benefit of not classifying nations into North and South, First and Third World categories based on GDP or GNP levels, or other measures of universal development or underdevelopment. Instead, it focuses on contrasting nations and how they relate to one another in terms of the economic and social factors represented by the three development indicators (educational attainment, life expectancy, and national income). As a result, nations with high incomes but low levels of education and life expectancy receive a low HDI ranking and are therefore referred to as less developed. In addition, the HDI views economic growth as a tool for raising living standards rather than the ultimate objective of a nation's development agenda.
In addition, the HDI takes into account factors like obesity and heart disease that contribute to overdevelopment in wealthy societies and lower average life expectancy. However, the HDI has flaws that can jeopardize its dependability (as seen in the section on HDI criticisms). Because gender and class differences exist in the majority of countries and have an impact on how economic and cultural development is experienced, other indices like the Human Poverty Index (HPI), which considers class differences, and the Gender Development Index (GDI), which considers gender differences, must also be taken into account. Socio-cultural indicators were given their due consideration in determining the level of human development or human deprivation in a nation by shifting the focus away from GDP as the primary focus of development.
A high HDI ranking does not necessarily translate into greater happiness, and the HDI is not a comprehensive indicator of human development. The three indices used in the HDI only represent a small portion of human development. It is a helpful tool for determining the level of development, but it should not be mistaken for providing a complete picture of development (information on gender, class, regional, and ethnic disparities, among other things).
The HDI measure was designed to strike a balance between its intellectual and policy orientation (qualitative) and pure statistics (quantitative). Finding the key principles to keep in mind as the measure was being constructed came after this agreement had been reached. The following five such principles were identified: simplicity in terms of conciseness and predictive ability of the index, universal applicability with an emphasis on human capabilities, compositeness and innovative nature of the index to catch the attention of policy makers, activists, academics, the media, etc. creation of a synthesis number that would consolidate attention on the economic function of development and broaden the measure by including socio-cultural factors such as educational attainment, longevity, and standard of living, rather than importance given to any one aspect such as GNP or class, for example.
The HDI calculation has undergone some changes since 2010. Prior to 2010, the combined primary, secondary, and tertiary gross enrollment ratio and adult literacy rate were the two metrics used to calculate the HDI's education component. Since 2010, educational attainment has been calculated using the average number of years spent in school for adults 25 years and older, as well as the anticipated number of years spent in school for children who have reached school-age. Additionally, the HDI is now calculated by the UNDP using the geometric mean (rather than the arithmetic mean) of the normalized index for life expectancy at birth, the synthesized normalized index for mean years of schooling and expected years of schooling, and the normalized index for gross national income, which was previously measured in terms of GDP per capita. The Inequality-adjusted HDI or IHDI has been introduced since the 2010 Human Development Report to take inequality in a country's level of development into account. When there is complete equality, the IHDI is equal to the HDI; however, when there is a rise in inequality, the IHDI is lower than the HDI. The HDI is the level of potential human development a country can achieve if there is no inequality, whereas the IHDI reflects the actual level of human development in a country when inequality has been taken into account.
The IHDI is calculated by discounting each indicator's average value in accordance with the degree of inequality in it, and then comparing the average achievement of a nation for its health, education, and income indicators with how these achievements are distributed among the people. According to official data from the nation, the population of children enrolled in school at all three levels (primary, secondary, and higher) is taken into account when calculating the education indicator. This method estimates the expected years of schooling. Expected years of schooling have a normalized minimum value of 0 and a maximum value of 18 years. The minimum value of 0 is used to normalize the average number of years spent in school, while the maximum value is based on the observed maximum value of the average number of years spent in school across all nations from 1980 to 2012.
This observed maximum value is 13.3 average years of education (United States, 2010). The geometric mean of the normalized values of expected years of schooling and average or mean years of schooling is then used to calculate the education index. The HDI uses a minimum value of 20 years and a maximum value of 83.57 years (the maximum value of life expectancy at birth observed for countries in the period 1980–2012). The minimum value (GNI per capita or PPP$) for wealth or a respectable standard of living is set at US$100, and the maximum value is set at US$87,478—the estimated average wealth of Qatar in 2012. With the aid of geometric mean, the values of these three HDI dimensions, i. e. A composite index is created by combining data on income, education, and health.
First off, the three HDI variables are measured in different units: GNI per capita is expressed in US dollars, educational attainment is expressed in percentages, and life expectancy is measured in years. These multiple units can be removed during normalization, allowing the derivation of pure numbers.
Because each of these is regarded as being equally significant for developing human capabilities, the composite index (HDI) gives equal weight to all three variables. Additionally, it is also not necessary to consider the issue of variable substitution. The income dimension is used as an indicator for all development-related factors that are not covered by health and education, rather than being taken for its own sake. The question then becomes how income is converted into improving human capability in the fields of health and education. Furthermore, according to the idea of human development, increasing one's income is not necessary for developing one's potential. This is achievable even with a limited budget. From this angle, the HDI's worth cannot be determined by income. Because of this, as income rises, its value is reduced before it enters the HDI in terms of its marginal value; if income is high, any additional income is not as significant as an input to human development as it is if income is low. All variables are finally normalized following the necessary corrections.
In order to measure human well-being at the country level, the Human Development Index uses indicators like income, education, and health. The range of development indicators that are measured and compared by governmental and non-governmental organizations, academics, and researchers has been broadened by the UNDP through the publication of the HDI. The HDI has also helped people better understand development as a concept.
An Evaluation of the HDI: Achievements, Criticisms and Refinement
This section evaluates the HDI in terms of its achievements, criticisms and its subsequent (and continuous) refinement.
Achievements of the HDI
The HDI has over the years sparked a great deal of interest in academic and policy circles, and as a result, it has been improved through academic endeavors on the one hand, and used as a tool for advocating for urgent human rights issues on the other. First and foremost, the HDI has been successful in making human agency the primary focus of development rather than GNP and GDP. Particularly for the economically underdeveloped nations, where social, human, and political vulnerabilities are greater, this has had a positive effect. Second, the centrality of human development in a country's development programme, as perceived through the HDI, has led to new approaches in resource allocation. Now, regional disparities within a country are taken into account and the exclusion of any area is questioned, opening up opportunities for greater accountability in decision-making. Thirdly, a persistently low HDI ranking had prompted inquiries and debates in the academic, development, and policymaking spheres of a nation to assess the development agenda and fill any gaps, if any. As a result, patterns of resource allocation have been reviewed while keeping in mind that basic human wellbeing serves as the goal of development. Fourthly, the HDI has been used by numerous national and international NGOs to draw attention to urgent human needs and deficiencies that the HDI has exposed. Reliable and solid data on various aspects of human development that require immediate attention are highlighted because nations produce their National Human Development Reports and many nations, including India, produce their State Human Development Reports. Finally, the HDI has been the subject of significant academic and empirical research that has concentrated on both the theoretical and technical aspects of the HDI. The research has made suggestions to improve the HDI over the years in addition to attempting a thorough review of the HDI in terms of its reliability and predictability. Some research has recommended broadening the scope of the HDI's already-present indicators, while other research has recommended more creative ways to present the HDI to spark interest in it and the inclusion of dimensions that are immediately more pertinent to one region than what is shown in the global HDI.
Criticisms of the HDI
Due to its narrow focus on just three indicators—health, education, and income—the HDI is not regarded as a fully comprehensive indicator of development. The criticism is that other significant aspects of human development, such as political freedom, moral and psychological well-being, and participation in the community, to name a few, are neglected despite the fact that these indicators are extremely important to any development process. Short-term successes or policy changes aimed at a country's long-term human development are not reflected in the HDI because its focus is on long-term outcomes.
Additionally, because HDI is a synthesized, average measure of development, it runs the risk of obscuring disparities and inequalities that exist within nations in terms of gender, class, region, race, and ethnic group. The HDI needs to be supplemented with other helpful indicators, such as poverty and gender, in order to provide a more thorough understanding of a nation's level of development. It also needs to take into account people's opportunities and aspirations for a better standard of living, which may be more of a cultural construct and thus society-specific. These aspirations and opportunities might not be taken into account in a country's ranking on the HDI because the HDI tends to be universally applicable.
Since the HDI relies on census data to compile data for the three indicators, this lack of credibility of the data is a further criticism of the HDI. As a result of its infrequent conduct, which makes it potentially out-of-date and occasionally excluding remote regions of a nation from the data collection process, censuses can be a source of information that is unreliable. Furthermore, there are discrepancies between the three primary indicators used to calculate the HDI that are defined differently in various nations. This is particularly true for literacy, where definitions vary and school enrollment indices don't take into account factors like educational quality and typical length of the school year.
The HDI has also been criticized for using the incorrect set of indicators to gauge human wellbeing. The critics claim that crucial elements that aid in determining the extent of human wellbeing have been missed. The extent of civil and political freedoms, the way in which income is distributed, access to adequate health care and educational opportunities, the effect of the environment on human well-being, and the availability of natural resources are a few of these factors.
There hasn't been any pretense that the HDI encompasses all facets of human development, though. The three indicators are taken into consideration simply because they are thought of as fundamental skills, achieving which can lead to people having access to more opportunities. The HDI also acknowledges socio-cultural dimensions and other facets of human development, such as political rights and freedoms.
The Human Development Index (HDI) is only a summary indicator; it cannot be used in place of the Human Development Reports' comprehensive data. The HDI cannot reflect the distributional or deprivational aspects of development because it is a synthesized average measure of the level of human development of a nation. Since it was realized that the HDI would need to be supplemented with other composite indices for a better understanding of the human development situation of a country, a composite index to account for gender disparities in human development and for women's participation in the political and economic sphere as well as a composite index to measure the multidimensionality of poverty were constructed in 1995 and 1997, respectively. The HDI and these two composite indices were additionally broken down to account for regional, state, provincial, gender, racial and ethnic, and rural-urban disparities.
Gender-related Development Index (GDI) and Gender Empowerment Measure (GEM)
A Gender-related Development Index (GDI) and a Gender Empowerment Measure (GEM) were developed in 1995 to address the gender gaps that persist in the development of fundamental human abilities and the unequal opportunities that women face in the political and economic spheres. The Human Development Index has been lowered to account for gender inequality to create the GDI. The country's GDI in relation to its HDI decreases as gender inequality in achieving basic capabilities increases. The GEM gauges how actively both men and women participate in political and economic decision-making. GEM is measured by three indicators: the proportion of seats held by women in national legislatures, the proportion of women in positions of economic decision-making, and the proportion of women's earned income relative to men's earned income.
A Gender-related Development Index (GDI) and a Gender Empowerment Measure (GEM) were introduced in 1995 to account for the significant gender differences in the acquisition of fundamental human abilities and the unequal opportunities for women in the political and economic spheres, respectively. The Human Development Index has been lowered to account for gender inequality to create the GDI. The country's GDI in relation to its HDI is lower the more gender inequality there is in achieving basic capabilities. The GEM assesses how actively involved both men and women are in making political and economic decisions. GEM is measured using three indicators: the proportion of women in positions of economic decision-making, the proportion of women in seats in national parliaments, and the share of women's earned income relative to men's earned income.
Higher incomes or development do not always translate into equal opportunities for women, as evidenced by the application of GDI and GEM to various nations. The social options that women have in various nations have come to light thanks to the GDI. Both GDI and GEM have been utilized by feminist activists and women's rights advocates as a tool to draw attention to gender disparities in human development and by policy makers for the creation of gendered policies and programs.
Human Poverty Index
In response to the need for a single indicator that would capture the multidimensionality of poverty, the Human Poverty Index (HPI) was created in 1997. The HPI measures how benefits of human development are distributed among a nation's citizens and examines human development from a deprivational perspective. The HDI measures gaps in a country's average performance relative to the three indicators of education, health, and standard of living, as well as the distance each country must travel to reach the maximum value. However, it does not account for inequality in access to benefits of human development. In 1997, an HPI for developing nations (HPI - 1) was created.
The HPI incorporates social inclusion while using the same dimensions as the HDI to measure deprivations in fundamental human development. In the case of HPI-1, a lack of knowledge is measured by the adult literacy rate, a lack of access to basic health services and safe drinking water is measured by the percentage of people without such access, and a lack of economic provisioning is measured by the percentage of children under the age of five who are underweight.
The HPI for developed nations, i. e. The HPI - 2 building was built in 1998. For HPI-2, the percentage of people born today who are not expected to live past 60 years, the percentage of adults who are functionally illiterate, and the incidence of income poverty are used to measure a person's ability to live a long and healthy life. The creation of the HPIs served a variety of purposes, including providing a concise assessment of the multifaceted nature of poverty and demonstrating that neither the presence nor absence of income can be viewed as the only indicators of deprivation or development. The HPI-2 has contributed to the understanding that a high score on the HDI does not necessarily imply low levels of human deprivation.
The Multidimensional Poverty Index (MPI) replaced the HPI in 2010. The MPI employs the exact same set of metrics as the HDI, i. e. education, health, and income (as indicated by standard of living). These three indicators each contain a unique set of dimensions that work to measure poverty holistically and across multiple dimensions. These include availability of cooking fuel, toilet, water, electricity, housing, and basic assets within living standards. They also include child mortality and nutrition within the health sector; years of schooling and enrollment within the education sector. The Oxford Poverty and Human Development Initiative (OPHI) created the MPI for the UNDP's 2010 Human Development Report.
Disaggregation of Composite Indices
In order to accurately reflect reality across regions, states/provinces, racial/ethnic groups, and the rural-urban divide, all composite indices have been de-aggregated. The Human Development Report Office (HDRO) has funded a significant portion of these studies. To highlight differences in human achievement across the aforementioned categories, the National Human Development Reports have led disaggregated indices in the majority of cases. Disaggregation of composite indices has demonstrated that human development disparities are not only present in developing nations but also exist in the world's developed regions. Such a breakdown of composite indices has also had effects on policy choices.
Refining the HDI
The HDI has continuously improved since its launch in 1990 in response to constructive criticism from academics, decision-makers, and development experts regarding its data collection procedure and use of indicators. By concentrating on the topics with which it was concerned, some flaws in the HDI's design were made apparent. By examining the level of deprivation in each indicator, the HDI has a tendency to concentrate on deprivation for all three indicators. As a result, the HDI was calculated as 1 less than the average combined deprivation. Another issue with the HDI at first was the education indicator's one-dimensionality; it only looked at adult literacy rate, which was later found to be insufficient in understanding a country's true achievements in the field of education. Although the HDI's creators generally propagated the idea that income was not the most crucial indicator of development, it was still included, regardless of its importance in each country. Additionally, maximum and minimum values for each indicator were observed, which tended to cause the issue of shifting goalposts and a lack of reliability in HDI rankings for various years with various goalposts. Last but not least, only 130 countries were initially included in the construction of the HDI.
The process for creating the HDI has improved over time. The calculation of HDI, starting in 1991, was changed from being a composite average deprivation of all three variables to being calculated directly. The other major change was the addition of mean years of schooling to account for educational attainment in those who did not fall under the adult literacy umbrella. Mean years of schooling was given one-third weight, while adult literacy, which is more indicative of stock variable6, was given two-thirds. However, since it was not representative of reality, there were some ambiguities in how mean years of schooling was calculated. The average number of years spent in school was then replaced in 1995 by a composite gross enrolment at the primary, secondary, and tertiary levels. Additionally, since the 2010 Human Development Report, educational attainment has been calculated based on the typical number of years spent in school for adults 25 years and older, as well as the anticipated number of years spent in school for children who have reached the age of compulsory attendance. Additionally, starting in 2010, GNI (Gross National Income) per capita is used to measure income. Last but not least, starting in 2010, the UNDP began calculating the HDI using the geometric mean (rather than the arithmetic mean) of the normalized indices of the three indicators of income, health, and education.
Fixed maximum and minimum values were chosen for indicators starting in 1995 as part of the normalization process based on the trends of the three indicators in question and their anticipated values over the following 25 years. Prior to that, observed maximum and minimum values presented difficulties in determining whether a country's higher HDI was a result of its own superior performance or because the observed maximum and minimum values varied from year to year. This led to the maximum and minimum values fluctuating every year, which made country comparisons a dubious phenomenon. A regression formulation was used to adjust income that was above the cut-off point7 until 1998, even though for the year 1990 the average income of every country was logged into the HDI. Any income above the cutoff point was drastically reduced in order to correct inequalities, so the adjustment did not accurately reflect reality. Particularly the middle income countries felt the effects of the drastic adjustment. In 1999, income logging was reinstated in an effort to solve these issues.
National Human Development Reports (NHDR), which provided accurate data at the country level and were published alongside the global Human Development Reports, started to be released at the national level. Through the Human Development Report Office's (HDRO) interventions, which interacted with UN agencies as well as national and international organizations to emphasize the importance of such data and statistics, better and more trustworthy data also started to be produced over time.
Summary
Instead of being viewed as a fixed indicator of human potential and development, the HDI must be viewed as an evolving index. Its creators have made an ongoing effort to improve it in order to make it a useful tool for gauging human wellbeing while also catering to modern needs. Along with the search for more reliable data, the HDI has been improved by broadening the definition of the existing indicators so that they are applicable across nations and time periods. Additionally, other composite indices related to gender and class have been added to the HDI in areas where it is insufficient to determine a country's level of development on its own. State-level HDRs have been created for each nation to better understand the level of human well-being in various regions. These are additional data that shed light on how a nation's capabilities are distributed.
The HDI must remain open to further examination in the academic, policy, and development spheres because the concept of human development is much broader than its composite measure. While the HDI must be open to expanding the scope of measuring other aspects of human well-being, such as governance and sustainability, it must also be receptive to the possibility of qualitative assessments of some aspects of human well-being, such as culture and political and civil rights. But it must do so without allowing too much subjectivity to influence the qualitative evaluation. Its current emphasis on quantitative measurement should not impair its capacity for innovation and prediction.
In order to strengthen and maintain the relevance of the indicators, the Human Development Report Office (HDRO) is constantly working to improve and hone the Human Development Index (HDI). This is done by making improvements to the methodology used to collect and measure the indicators. For this, the HDRO seeks information and ideas exchange from governmental and international organizations, development sector organizations working in various areas of human development, statisticians, and academics.
References
- 1. Jahan, Selim. Measuring Living Standard and Poverty: Human Development Index as an Alternate Measure http://www.peri.umass.edu/fileadmin/pdf/gls_conf/glw_jahan.pdf
- 2. Noorbakhsh, Farhad, “The Human Development Index: Some Technical Issues and Alternative Indices.” Journal of International Development, 10, (1998): 589-605. http://www.ophi.org.uk/wp-content/uploads/Noorbakhsh.pdf
- 3. Sen, Amartya. Development As Freedom. Oxford University Press, 1999.
- 4. Stanton, Elizabeth A. The Human Development Index: A History. http://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1101&context=peri_workingpapers
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