Development indicators Gianni Vaggi and Clara Capelli University of Pavia November 2013 The Human Development Index 1990 Human Development Report (Mahbub Ul Haq, Amartya Sen et al) Development goes beyond economic growth, encompassing human well-being: Human development is a process of enlarging people’s choices.; The term human development denotes both the process of widening people’s choices and the level of their achieved well-being: Deprivation in income; Deprivation in life expectancy; Deprivation in literacy. Focus on the formation of the capabilities and their use. Economia dello Sviluppo Three dimensions Health and Longevity: Life expectancy Index Knowledge and Education: Education Index Standard of living: Income Index. Economia dello Sviluppo How to calculate it/Before 2010 • Life expectancy at birth; • Adult literacy rate (2/3) and the combination of primary, secondary, and tertiary gross enrollment ratios (1/3); • Natural Logarithm of GDP per capita at PPP. Economia dello Sviluppo How to calculate it/Before 2010 Economia dello Sviluppo Source: HD Report, 2007/8 How to calculate it/After 2010 • Life expectancy at birth; • Mean years of schooling and expected years of schooling; • Natural Logarithm of GNI per capita at PPP. Source: HD Report, 2010 Economia dello Sviluppo How to calculate it/After 2010 Economia dello Sviluppo Source: HD Report, 2011 Economia dello Sviluppo Human Development Index Why these changes? Indicators for education were regarded as not that informative; GNI is more accurate, as it includes international flows and excludes income generated domestically but repatriated abroad; The geometric mean accounts for difference in achievement across dimensions, reducing the level of substitutability between dimensions and ensuring that a x-percent change in one index has the same impact on the HDI, regardless to the index. Aren’t you convinced? LEI = 0.3 ; EI = 0.3 ; II = 0.8 Arithmetic Average = 0.467; Geometric Mean = 0.416; Change of 10% in the income index (it gets 0.88): Arithmetic Average = 0.493 (+5.57%); Geometric Mean = 0.429 (+3.125%). Change of 10% in the life education index (it gets 0.33): Arithmetic Average = 0.477 (+2.14%); Geometric Mean = 0.429 (+3.125%). Economia dello Sviluppo Source: HD Report, 2011 Source: HD Report, 2013 Very high HDI 1 2 3 4 5 6 7 8 9 10 Source: HD Report, 2013 Norway Australia USA Netherlands Germany New Zealand Ireland Sweden Switzerland Japan 0.955 0.938 0.937 0.921 0.92 0.919 0.916 0.916 0.913 0.912 Low HDI 1 2 3 4 5 6 7 8 9 10 Source: HD Report, 2013 Gambia Djibouti Zambia Uganda Haiti Yemen Togo Lesotho Nepal Papua New Guinea 0.439 0.445 0.448 0.456 0.456 0.458 0.459 0.461 0.463 0.466 1980 55 57 59 71 76 85 101 112 114 121 135 136 145 186 Russia Saudi Arabia Cuba Venezuela Iran Brazil China Egypt Philippines Indonesia Ghana India Kenya RDC 0.575 0.626 0.629 0.443 0.522 0.407 0.407 0.561 0.422 0.391 0.345 0.424 0.286 1990 0.730 0.653 0.681 0.635 0.540 0.590 0.495 0.502 0.581 0.479 0.427 0.410 0.463 0.297 2000 0.713 0.717 0.690 0.662 0.654 0.669 0.590 0.593 0.610 0.540 0.461 0.463 0.447 0.234 2005 0.753 0.748 0.735 0.694 0.685 0.699 0.637 0.625 0.630 0.575 0.491 0.507 0.472 0.258 Source: HD Report, 2012 Economia dello Sviluppo 2010 0.782 0.777 0.775 0.744 0.740 0.726 0.689 0.661 0.649 0.620 0.540 0.547 0.511 0.295 2012 0.788 0.782 0.780 0.748 0.742 0.730 0.699 0.662 0.654 0.629 0.558 0.554 0.519 0.304 Source: HD Report, 2013 Source: HD Report, 2013 Source: HD Report, 2013 HDI vs GDP HDI vs GDP HDI and GDP per capita 1.2 1 0.8 0.6 0.4 0.2 0 Human Development Index GDP per capita index (PPP) Source: HD Report, 2013 The Human Development Index Source: HD Report, 2013 Some Criticisms The environmental issue is completed overlooked; National focus which neglects the "global" perspective; Only material aspects of life: what about human rights, freedom, gender equality; Debatable comparability along time. Other Indices from the HDR The Human Poverty Index for developing countries (HPI-1); The Gender-Related Development Index (GDI); The Gender Empowerment Measure (GEM); Inequality-adjusted HDI (IHDI); Gender Inequality Index (GII); Multidimensional Poverty Index (MPI). Other Indices Happy Planet Index (HPI); Gross National Index (GNH); Living Planet Index (LPI); Physical Quality of Life Index (PQLI); Genuine Progress Indicator (GPI). Other reports Stiglitz, J., Sen, A., Fitoussi, JP. (2008), Report by the Commission on the Measurement of Economic Performance and Social Progress. Alkire, S., Roche, J.M. and Seth, S. (2013) Multidimensional Poverty Index 2013, www.ophi.org. Helliwell, J., Layard, R. and Sachs, J. (2013), World Happiness Report 2013, New York, Earth Institute. UNU-IHDP and UNEP, Inclusive Wealth Report 2012. Measuring progress towards sustainability, Cambridge University Press, Cambridge. Source: HD Report, 2013 Economia dello Sviluppo Source: HD Report, 2013 Economia dello Sviluppo