Why is the Human Development Index important?

Social development measures should be factored in to calculate a country’s overall level of development. Some believe additional factors such as human rights and happiness are very important. Political corruption and gender inequality are used in some studies. With so much data available to us, we use composite measures instead. Composite measures combine several development measures into one formula, providing a more balanced indication of development and quality of life. The Human Development Index (HDI) consists of three elements. These are:

• income
• life expectancy
• education

GNI per capita is used as an estimated measure of wealth. Life expectancy is the average number of years a person can expect to live. The average number of years of schooling is used in an education index. The three parts are processed to produce a number between 0 and 1.

The map below shows HDI in 2021.

The world’s highest-scoring countries in 2021 are shown below:

1. Switzerland = 0.962
2. Norway = 0.961
3. Iceland = 0.959
4. Hong Kong = 0.952
5. Australia = 0.951

The world’s  lowest-scoring countries in 2021 are shown below:

Burundi = 0.426

Central African Republic = 0.404

Niger = 0.400

Chad = 0.394

South Sudan = 0.385

What are the advantages of using HDI as a development indicator?

1. Comprehensive Measure: HDI considers more than just economic factors, including important aspects of human development like health and education.
2. Comparability: It allows for comparison between countries over time, giving a clear picture of development progress or regression.
3. Focus on Well-being: HDI emphasises individuals’ well-being and quality of life rather than purely economic measures like GDP.
4. Policy Development: It can help governments and organisations to identify areas needing improvement and to formulate policies that foster comprehensive development.
5. Broad Perspective: By integrating multiple dimensions, HDI provides a broader perspective on human development, encouraging a more holistic approach to assessing a country’s status.

What are the disadvantages of using HDI as a development indicator?

1. Data Limitations: HDI relies on the availability and accuracy of data on income, education, and life expectancy, which can be unreliable or outdated, especially in less developed countries.
2. Oversimplification: While it provides a broader measure than GDP, HDI can still oversimplify the complex nature of development by condensing it into a single figure.
3. Neglect of Important Factors: HDI does not account for all factors contributing to human welfare, such as environmental sustainability, political freedom, and income inequality.
4. Cultural Bias: The criteria for measuring education and living standards may not fully capture the values and goals of all cultures, leading to a biased view of development.
5. Lack of Specificity: HDI gives a general overview but does not provide detailed insights into the disparities within countries, such as differences between rural and urban areas or among different social groups.