Human Development Index

Human development refers to the process of expanding the freedom and opportunities of human beings while making improvements on their well being. It involves the real freedom of common people in deciding whom their want to be, what they want to do and how to lead their lives. Human development Index was developed with an aim of emphasizing that the eventual criteria for carrying out the evaluation of development of a country should be more than economic growth to include people and their personal capabilities (Deneulin & Shahani, (2009).  This index is used to measure the average accomplishment in major dimensions of human progress that includes a health and long life, having a living standard that is considered standard and being knowledgeable. The human development index is therefore the geometric mean of the three aspects’ mention indices.   The health dimension is normally evaluated by a person’s life expectancy at birth while the education dimension is assessed by a mean of schooling years for the adult with 25 years of age and above and mean of expected schooling years for the children who have reached schooling age. The assessment of living standard is done by use of gross national income per capita (Deneulin & Shahani, 2009).  

The emergence of human development index is traced back to the Human Development Report in 1990, and which was the first one, which incorporated a new approach in the advancement of wellbeing of human beings. This approach of human development was about the expansion of human life richness instead of just the richness of an economy in which people live. The approach was focused on people, their opportunities and choices.  The approach of human development was created by Mahbub Ul Haq who framed it on whether human beings can manage to be and carry out desirable things in their personal lives. Another influencing factor was the ideas on the connection between the growth and development of an economy   in the 20^th century (Deneulin & Shahani, 2009). Growth Domestic Product and the growth in an economy became the major sign of countries’ national progress but were not aimed at measuring the wellbeing of people. The development debate in 1970s and 1980s considered the use of alternative focuses to extend beyond GDP. Such focus involved more weight on employment, distribution and growth and whether people would access basic needs.  The focus on these ideas paved the way for emergency of the approach of human development and its assessment. On that reasoning, United Nations Development Program changed the basis of development hypothesis, policy and measurement while it introduced Human Development Index.  This index emphasized the necessity of ends over means. This HDI has also become the centerpiece of Human Development Reports for more than two decades and has been used to rank countries in the world (Stanton, 2007).

The measurement of Human Development Index’s three dimensions that include the education, health and living standards is normalized through a formula.  Health is connoted as life expectancy (LE) and education in form of literacy (LIT).  The school enrollment (ENR) and literacy indices are normally put together to be weighted average in form of education index (E). Y is used to represent living standard by GDP per capita (Stanton, 2007). Each of these components’s value is changed into an index by use of a normalization formula where a comparison of real value is done with a stylized array of various values over the countries as shown below.

 

1. Calculation of dimension index

Dimension index =   actual value – minimum value

                                   Maximum value – minimum value

1. Calculation of HDI index for income

Dimension Index = In (actual value) – In (minimum value)

                                     In (maximum value) – In (minimum value)

• HDI aggregation formula

 

 HDI   =√ Ihealth Ieducation I income

 

 

 

The Human Development Index and the GDP have various differences which involve the extent to which each delivers results of real measurement of individuals’ wellbeing.  GDP assesses the national progress in economic growth by evaluating how a control has been fairing economically. It is just an indicator of the monetary value of the goods and services that an economy of a country produces including public and private consumption, investments and government outlays. It assesses the health of a country economically and its living standards.  However, the Human Development index measures various aspects that indicate the wellbeing of people in a given country. It extends beyond the economic aspect of a country to include a comprehensive calculation of income component (Deneulin & Shahani, 2009).  However, HDI has been considered by many economists as having various weaknesses. They have considered it as empirically unsound and weak conceptually. That way it has data that is of poor quality due to lack of a thorough collection method and errors arising from the frequency of measurement. Infrequency in the census data collection as well as possible reporting inaccuracies and incomplete countries’ coverage are part of its weakness. Other critiques view the Human Development Index as missing important wellbeing indicators related to political and civil liberties, natural resources access, environmental impacts and further measures of education including stocks and flows (Stanton, 2007).

 

References

 

Deneulin, S., & Shahani, L. (2009). An introduction to the human development and capability approach: Freedom and agency. London: Earthscan.

 

Stanton,E.(2007). The Human Development Index: A History. Retrieved from: http://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1101&context=peri_workingpapers