Human Development Indices and Indicators A Critical

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HUMAN DEVELOPMENT INDICES AND INDICATORS A CRITICAL EVALUATION. Stephan Klasen is Professor of Development Economics at the University of G ttingen He is also the director. of the Ibero America Institute for Economic Research and the Coordinator of the Courant Research Centre. Poverty Equity and Growth in Developing and Transition Countries He holds a Ph D from Harvard University. and has since held positions at the World Bank King s College Cambridge and the University of Munich His. research focuses mostly on issues of poverty inequality environment and gender He is a member of the UN. Committee on Development Policy President of the European Development Research Network and was a. member of the Intergovernmental Panel on Climate Change for the 5th Assessment Report. This paper critically evaluates UNDP s current suite of human development indicators and composite. indices Despite a drastically changed landscape of development debates and associated indicators. most notably the Sustainable Development Goals SDGs targets and indicators the paper argues for. the continued relevance of comprehensive measures of human development It proposes little. change to the flagship Human Development Index HDI the Inequality adjusted Human Development. Index IHDI and the Multidimensional Poverty Index MPI but encourages more analysis of trends. and determinants in these measures It proposes revisions to gender indicators and two new. measures to track sustainability and commitment to development. HUMAN DEVELOPMENT INDICES AND INDICATORS A CRITICAL EVALUATION. Introduction, In 1990 UNDP presented its first Human Development Report including the first version of the. Human Development Index HDI It was a very different world from the one we live in now At the. time economic policy in general and development policy in particular had taken a turn towards. market fundamentalism and a focus on economic efficiency Stabilization and structural adjustment. programmes were still operating in developing countries affected by the oil shocks of the 1970s a. collapse in terms of trade of their primary products and a resulting debt crisis The emphasis was on. restoring economic growth the primary metric of development at the time The collapse of the Eastern. bloc was just underway with the presumption that market reforms would also lead to quick economic. growth One indicator of the primacy of economic growth and per capita income as the primary. yardstick for development was that in the World Bank s World Development Report countries were. ordered by per capita income using market exchange rates a policy the World Bank maintained until. 1997 since then countries have been listed alphabetically. The world was very different in another way Data on the performance of developing countries. were generally scarce limited to relatively few indicators and public availability was low Academic. and policy researchers spent time typing in data by hand from the statistical annexes of World Bank. and UN reports for their analyses Flagship reports of development agencies were relatively scarce. and limited to few organizations each eagerly awaited by a large audience of academics policy. makers and practitioners, With the publication of the first Human Development Report in 1990 UNDP provided several. key innovations First it offered a new narrative of development based on the human development. paradigm thereby challenging the sole focus on economic efficiency and per capita income In contrast. to earlier ad hoc challenges to the primacy of per capita income such as the basic needs approach of. the 1970s Jolly 1976 Streeten et el 1981 the advantage of the human development paradigm was its. link to Sen s capability approach as an alternative conception of what development is all about Sen. 1998 In that approach economic resources are just means to an end which is better captured by. describing the features of the lives people are actually able to live called functionings or the freedoms. to achieve such functionings called capabilities This gave the human development paradigm a more. durable and convincing underpinning Second and closely related to the first point the new HDI. while itself a rather crude summary measure provided an indicator to track progress in human. development While again there had been earlier related measures such as the Physical Quality of Life. Index Morris 1979 or the Economic Commission for Latin America and the Caribbean s measure of. unsatisfied basic needs ECLAC 2009 the HDI proved more successful and durable for three reasons. First its link to the human development paradigm and the capability approach gave it greater. theoretical grounding and intellectual coherence Second by being housed in a dedicated unit in an. 2018 Human Development Report Office,BACKGROUND PAPER 1. HUMAN DEVELOPMENT INDICES AND INDICATORS A CRITICAL EVALUATION. international organization the measure had appropriate institutional support Third the HDI s global. relevance gave it a broader support base than measures focused only on developing countries. The third innovation was that the Human Development Report became a new series of flagship. reports that continued to develop the human development paradigm linking it to issues of inequality. gender rights climate change human security and human mobility among other topics Alternative. narratives on these topics grounded in the human development paradigm were developed and. inserted into the international development debate. A last innovation has now been called the development dashboard a compilation of a range of. indicators with a bearing on human development Many users of the Human Development Reports. the present author included often made use of the tables in the annex to the report for all sorts of. research on human development, Many of the battles of the 1990s that came to define the Human Development Reports have been. won Today the entire development community accepts that development is more than increasing per. capita gross domestic product GDP Even previously growth and efficiency obsessed organizations. such as the Organisation for Economic Co operation and Development are now at the forefront of. promoting multidimensional better life measures OECD 2017 The World Bank and the. International Monetary Fund IMF have happily signed on to the Millennium Development Goals. MDGs and Sustainable Development Goals SDGs while the structural adjustment era has given. way to a much broader more human development focused agenda of debt relief and associated. poverty reduction strategy papers The HDI has been canonized in all standard textbooks on. development economics or development studies e g Todaro and Smith 2015 Perkins et al 2013 Ray. 1997 etc and is considered the most serious and comprehensive alternative to GDP per capita The. Multidimensional Poverty Index MPI also developed by UNDP is starting to be seen as a serious. competitor to the World Bank s 1 90 a day monetary poverty indicator The MDGs can be seen as a. multidimensional dashboard approach to human development building on the Human Development. Report dashboards And the SDGs with 232 indicators are pushing the development dashboard into. 232 dimensional space, As a source of data the Human Development Reports have become relatively unimportant easily.
dwarfed by the ever increasing free online availability of data most notably the World Bank s online. World Development Indicators and the many non state actors compiling data No one needs the. Human Development Report to learn about new development data although many still turn to. UNDP s compilation for its specific human development focused set of indicators and of course data. on the HDI and other composite indices as well as their component indicators. Related to the point above UNDP s suite of composite indices seems now remarkably. reductionist In the world of big data floods of indicators and SDGs with 17 goals 169 targets and 232. indicators the Human Development Report s tradition of limiting most composite indices to three to. 2018 Human Development Report Office,2 BACKGROUND PAPER. HUMAN DEVELOPMENT INDICES AND INDICATORS A CRITICAL EVALUATION. five indicators seems downright quaint and excessively narrow 1 At the other extreme the SDG Index. of the Bertelsmann Foundation 2016 2017 comprised 63 indicators 77 for OECD countries in 2016. and 83 indicators 99 for OECD countries in 2017 Many other composite measures for example in. the gender field usually have a dozen or more indicators see Klasen and Sch ler 2011. The role of the Human Development Report as a flagship report is also much diminished Now it. competes with dozens of other flagship reports from many other developing agencies and it is hard to. present truly new insights and analysis in this crowded field Its ability to generate outrage about say. global inequality or the inequities of global governance is now drowned out by an increasingly vocal. non governmental sector that specializes in creating sensational facts such as on the state of global. wealth inequality e g Oxfam 2016 The irregular appearance and uneven quality of the reports also. related to funding and staffing issues has not helped either. Given this situation it is right to review the existing approach to the measurement of human. development the various indices produced by the Human Development Report as well as the other. data made available In particular it is critical for the Human Development Report Office to position. itself vis vis the SDG process including indicators and measures proposed there Similarly it needs. to review whether the current suite of composite indicators as well as the larger dashboard of. indicators is sufficient in tracking key aspects of human development This paper will attempt to. provide such a critical review I will argue that UNDP s suite of composite indicators remain relevant. and ought to be retained In particular I recommend little change to the HDI as well as the Inequality. adjusted Human Development Index IHDI I propose to keep the new Gender Development Index. GDI resuscitate the old Gender Empowerment Measure or GEM in slightly revised format retain. the MPI in its current UNDP adjusted format and add a new index of sustainability and one on. commitment to the SDG agenda Finally I suggest presenting a wider human development focused. dashboard of indicators in the report including particularly measures of rights and freedoms from. other sources and also presented in an online database as is already the case. Do we still need the suite of human development indices. Given the changed circumstances discussed above it is a legitimate question to ask whether UNDP s. human development indices are still needed In particular there are three challenges One is the SDGs. and their implied dashboard approach to development In contrast to the HDI a product of the Human. Development Report Office the SDGs were developed as a consensus among the world s governments. about global priorities for the next 15 years They therefore command an unprecedented level of. 1If one looks at the total suite of indicators included in the dashboard of the Human Development Reports they. match the breadth of the SDGs and nearly all SDGs are covered in one way or another But ultimately it is the. composite indices that get most attention and are focused on here. 2018 Human Development Report Office,BACKGROUND PAPER 3. HUMAN DEVELOPMENT INDICES AND INDICATORS A CRITICAL EVALUATION. ownership and will surely play an important role in shaping the development agenda including the. agenda of UN organizations such as UNDP for the foreseeable future While many of the indicators. used in the suite of human development indices are also SDG indicators or closely related to them. and while many indicators monitored in UNDP s dashboard relate to the SDGs UNDP s composite. indices cannot be construed to provide a reliable guide for progress on the SDG front They contain. too few indicators are highly selective and omit entire dimensions of the SDGs such as indicators. related to goals 9 11 12 13 14 15 16 and 17 Their weighting and aggregation rules do not match the. intentions of the SDGs The larger dashboard of indicators reported by UNDP is similar in breadth to. the SDGs but lacks their legitimacy, So one could easily argue either for dropping the suite of human development indices in favour of. focusing exclusively on the SDGs or propose to rework them to become more closely linked to the. SDGs For example one could rework the HDI to include indicators for all 17 goals have gender. measures focused on indicators in goal 5 and inequality measures focused on indicators in goal 10 etc. A second challenge comes from many competing indices that also purport to measure. development and or progress on the SDGs Of particular note are on the one hand competing indices. such as the Better Life Index of the OECD and indicators focused on subjective well being On the. other hand there is the recent SDG Index which purports to measure the state of SDG implementation. Bertelsmann Foundation 2016 2017 using 63 SDG indicators 77 for OECD countries in 2016 and. 83 99 for OECD countries in 2017, A third challenge comes from the ever increasing need to be innovative in order to capture the. attention of a development audience bombarded with indicators data and analyses In that context. the reliance on the same old measures that have been around for 25 years seems to lack innovation. HUMAN DEVELOPMENT INDICES AND INDICATORS A CRITICAL EVALUATION 2018 Human Development Report Office 2 BACKGROUND PAPER international organization the measure had appropriate institutional support Third the HDI s global relevance gave it a broader support base than measures focused only on developing countries

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