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Has the Human Development Index Had Its Day?

When the Human Development Index was introduced in 1990, it was rightly hailed as a major improvement to existing measures which concentrated on using GDP as a measure of progress in global human development.

HDI is basically a simple idea taking universally agreed measures to create an index which can then be used in two ways:

To rank and compare countries in terms of how well they are advancing human well-being.
To chart progress in human development over time for any given country.

As a result, teachers of geography and development studies have cited HDI as the “best” way of defining human development; but is it?

The HDI has come in for increasing amounts of criticism in recent times, and many now believe the HDI has had its day.

What’s wrong with the HDI?

Using the HDI is a good starting point for teachers and students BUT it has its limitations:

It is an aggregate score which hides significant regional variations within countries.
There is a high degree of correlation between GDP and HDI (95% according to Justin Wolfers writing in the Freakonomics blog way back in 2009). However, higher national income doesn’t always equate with higher levels of welfare.
As an aggregate measure it also hides differing levels of inequality within countries.
There are also issues around the selection of variables, and their measurement.

The argument is that countries with higher GDP will always come out at the top of the HDI rankings, because they have the financial resources to provide for higher levels of healthcare and education countries with lower GDP (or GNI as it now is).

So when we compare countries with different GDP/GNI we aren’t comparing like with like.

This has led many scholars, including Sakiko Fukada Parr who was involved in the construction of the original Human Development Index, to suggest a new way forward.

Economic and Social Rights

For Fukada Parr the issue is not how well a state is doing in terms of its HDI ranking but how well it is doing in terms of meeting the development needs of its people given the resource constraints it is working under.

She thinks in terms of populations having a set of economic and social rights which the state is under an obligation to move progressively towards fulfilling, for example the rights to an adequate standard of living, food security, housing employment and so on.

Social and Economic Rights Fulfilment: SERF

SERF is an index measure with scores ranging from 0 to 100. The score is based on achievement. For a range of variables linked to economic and social rights It compares what has been achieved as against what should have been possible to achieve at a given level of GDP.

Put crudely if you take any variable e.g. food intake, and plot it against GDP and do this for a large number of countries you will get a scatter of plots, and with that a line of best fit. Fukada Parr uses this to estimate where a country should be given their level of GDP.

She does this for a range of variables to produce (like HDI) with an aggregate score and ranking for each country. She then produces two tables; one ranks countries with high levels of GDP and the other ranks countries with medium and low GDP.

The results are interesting to say the least. Countries with high rankings on the HDI don’t always score as well on the SERF index. (check it out for yourself; see link below).

Finally, if the scores are revised on an annual basis or whatever, it is possible to see how well a country is progressing towards fulfilling its obligations. And if its GDP is rising then so are its obligations; it is a dynamic situation.

Note: Space doesn’t allow for a detailed review of the SERF index and its construction or the ranking tables, but you can find out more by going to:

Beyond GDP Fukada Parr: