United Nations' Human Development Index Research Paper Starter

United Nations' Human Development Index

(Research Starters)

One of the more widely espoused vehicles for gauging the development status of a given nation-state is one offered by the United Nations (UN). This paper will take an in-depth look at this model, the UN Human Development Index (HDI). The reader will glean a better understanding of the forces that created this index, as well as the aggregate data employed and the applications of this index to the international community.

Keywords Consumption; Equal Weight; Gross Domestic Product (GDP); Human Development Index (HDI); Life Expectancy

Global Stratification: The United Nations Human Development Index

Global Poverty

Global poverty has long been a thorn in the side of political leaders. The number of poor people around the world is perhaps only surpassed by the harsh conditions in which many of these people live. Policymakers and theorists alike have sought ways to not just stabilize the living conditions of the poor, but to help them take the initiative to reemerge above the poverty line.

The first step to addressing such conditions is to track the living conditions in which people live. Some of the most effective data does not just entail income but the conditions in which people live, including the prevalence of jobs, educational access, life expectancy, and the quality of health care. The combination of these elements paints an accurate depiction of the overall quality of life that populations experience. It also helps policymakers focus on the areas that are underdeveloped and identify those areas of the world that are more developed.

One of the more widely espoused vehicles for gauging the development status of a given nation-state is one offered by the United Nations (UN). This paper will take an in-depth look at this model, the UN Human Development Index (HDI). The reader will glean a better understanding of the forces that created this index, as well as the aggregate data employed and the applications of this index to the international community.

From the GDP to the HDI

In 1987, Amartya Sen commented on the diversity of elements that help paint a picture of an individual's well-being. A great many of these elements, he argued, have considerable plausibility:

You could be well off, without being well. You could be well, without being able to live the life you wanted. You could have … the life you wanted, without being happy," he said, adding, "You could be happy, without having much freedom. You could have a good deal of freedom, without achieving much (cited in Stanton, 2007, p. 5).

Indeed, the complexity of contributors to an individual's quality of life suggests that the human condition is a matter of perspective. There are myriad elements, many of which are economic in origin, that help paint a picture of a nation's overall development status. It is in light of these economic indicators that for many years, the standard for determining this status was per capita gross domestic product (GDP). Under this figure, four primary areas of economic output are identified: consumption, investment, government expenditures (such as welfare and unemployment), and net exports (QuickMBA.com, 2007). By assessing a combination of these factors, an accurate illustration of a nation's economic development and output is drawn.

Although the economic output of a nation-state may show the degree to which that country's economic infrastructure is developed, GDP does not necessarily complete the picture of the economic status of the population. Growth-oriented activity may increase a country's total wealth, but as some observers indicate, the level of growth that enhances human development depends on how that growth is generated and, more importantly, how it is used for the betterment of society as a whole. Per capita GDP does not, for example, gauge income inequalities, unemployment rates, and disparities in access to public programs and services such as health care and education. As one UN official has succinctly stated, "The growth paradigm does not capture adequately the multi-dimensionality of development" (Gaye, 2007, p. 1).

In 1990, the United Nations adopted the Human Development Index (HDI) to account for this diversity of development conditions. Inspired by and credited to Amartya Sen, the HDI takes into account three indicators:

  • An average based on a minimum value of life expectancy of 25 years through the maximum of 85 years;
  • Education, which entails the combination of adult literacy rates and the ratio of students enrolled in primary, secondary, and tertiary school systems; and
  • Individual income or wealth, with income calculated against rising GDP.

By averaging the numerical figures of all three indicators, the HDI creates a singular index of the development status of participating countries (Human Development Reports, 2008).

In addition to creating a broader picture of human development rather than simply focusing on economic output, HDI helps foster a better understanding of long-term growth. Using GDP, a nation's per annum economic growth is readily manifest, but in terms of comparing growth between states, it is far less reliable. The so-called Baltic states, for example, had high levels of economic output in the mid-1990s, even when compared to that of the U.S. and Western European states. However, this spike in output did not take into consideration the size of those countries' respective workforces, education, and other important factors. This point is critical, as it raises the question: is that trend of high economic output sustainable and extensive across the population?

At a 2007 European symposium on economic development, this question was addressed within a broader context of understanding the factors beyond simple output figures. In the Baltic states of Latvia, Lithuania, and Estonia, output did indeed grow markedly in the mid-1990s, primarily due to the fact that, previously, any growth recorded while under Soviet governance was minimal. After the adoption of the free-market capitalist infrastructure, productivity and output understandably increased. However, the workforces of these nations, as well as overall populations, are steadily shrinking. Lacking the domestic infrastructure and fiscal health to foster and sustain a fully trained and educated workforce, such growth could not last for the long term, especially in the face of the global recession of the late 2000s (Chelwing, Kronberg & Schuller, 2007; Grigoryev & Agibalov, 2010). Meanwhile, economic growth in the United States and European Union was also rising, albeit at a much slower rate. Still, the symposium concluded that the U.S. has a strong network of public and private educational and vocational-educational institutions that consistently sends people into the workforce, an infrastructural shortcoming of many new economies. Put simply, education and workforce development, two factors that are not prominently employed in generating GDP-based models of economic development, appear to be extremely relevant in determining overall long-term growth.



The UN Human Development Index is particularly useful in analyzing the specific factors that may affect the overall growth of a given country's development. As shown above, the number of people who are enrolled in school and are, therefore, well trained to participate in the country's economy is a pivotal figure. Similarly, understanding the distribution of wealth is important, once again because the number of poor and disenfranchised within a population speaks to the sustainability of that country's overall economic growth and development.

The United States provides an interesting example of this issue. In 2012, the United States had an overall per capita GDP of about $50,700, placing fourteenth in the international rankings, according to the CIA World Factbook. However, when applied to the HDI, the U.S. rose to third overall. Interestingly, Norway—which, according to the CIA World Factbook, ranked ninth internationally in terms of GDP in 2012, with only $5,200 more per capita than the United States—topped the UN’s HDI rankings that year. In part, this difference is due...

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