The Human Development Index (HDI) has been a politically and rhetorically powerful counter-point to measures of “development” that focus exclusively on economic indicators, such as Gross Domestic Product per capita or household consumption expenditures. However, the relevance of the HDI is increasingly challenged by success.
For instance, by pitching the education component of the HDI at a very low level (literacy and gross enrollment) which has an upper bound, as more and more countries attain near 100 percent literacy and 100 percent gross enrollment of the young the education component ceases to contribute to progress in the HDI.
For countries above the low educational thresholds this implies that more progress in education (e.g. expanding tertiary enrollment, improving quality of learning outcomes in primary school) does not raise the HDI while increases in GDP per capita do raise the HDI.
Presentation to the Joint Chiefs Operations Directorate
November 11, 2022
3 Responses
Is correlation causation (XKCD)? In management, the measurement and publication of results tend to lead to better results,. In development it seems a transparent data set leads the development community and beyond to focus on what needs to be done.
The market analogy applies here too: the market will only be able to assign the scarce resources well, if there is shared information.
PS. is the anti-spam question always the same?
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Bryan Caplan had an interesting critique of the HDI. He notes that a country with a population of wealthy immortals, who *don’t* go to school, will score .66, putting it below Tajikistan.
However, I’m not sure many measures stand up to extreme examples.