Human development

What Is Human Development?

Human development, within the field of Development Economics, is an approach focused on expanding the richness of human life rather than solely concentrating on economic wealth. It emphasizes that people and their capabilities should be the ultimate criteria for assessing a country's progress, going beyond traditional Economic Indicators like Gross Domestic Product (GDP). This framework considers whether individuals have the freedom and opportunities to "be" and "do" desirable things in life, such as being well-nourished, healthy, educated, and participating in community life. Human development encompasses factors like a long and healthy Life Expectancy, access to knowledge through Education, and a decent standard of living, moving beyond a narrow focus on income alone¹⁷, ¹⁸. It inherently involves addressing issues of Poverty and promoting Social Justice.

History and Origin

The concept of human development, as understood today, gained prominence through the work of Nobel laureate economist Amartya Sen and Pakistani economist Mahbub ul Haq. Sen’s "Capability Approach" is a foundational philosophical framework that asserts poverty and well-being should be considered in terms of people's "functionings" and "capabilities," rather than merely their income or economic status. ¹⁵, ¹⁶He argued that the true objective of development should be the expansion of human capabilities and freedoms, not just Economic Growth.
¹⁴
This perspective profoundly influenced the United Nations Development Programme (UNDP), leading to the creation of the annual Human Development Report (HDR) in 1990. ¹³The explicit purpose of these reports was to shift the focus of Welfare Economics from national income accounting to people-centered policies. Amartya Sen was instrumental in the formulation of this report and the development of the Human Development Index (HDI), which integrated his ideas into a measurable framework.
¹¹, ¹²

Key Takeaways

• Human development prioritizes people's well-being, opportunities, and choices over mere economic indicators.
• It is a multi-dimensional concept, encompassing health, education, and living standards.
• The Human Development Index (HDI), published by the UNDP, is a key metric used to measure and compare human development across countries.
• The framework emphasizes the expansion of human capabilities and freedoms as both the means and ends of development.
• It challenges the traditional view that economic growth alone signifies societal progress.

Formula and Calculation

While human development is a broad concept, its most widely recognized quantitative measure is the Human Development Index (HDI), compiled by the United Nations Development Programme (UNDP). The HDI is a composite index that is the geometric mean of normalized indices for three basic dimensions of human development: health, education, and standard of living.
⁹, ¹⁰
The formula for the HDI is:

Where:

• (I_{Health}) is the Health Index, based on Life Expectancy at birth.
• (I_{Education}) is the Education Index, which is the arithmetic mean of the mean years of schooling for adults and expected years of schooling for children of school-entering age.
• (I_{Income}) is the Income Index, based on gross national income (GNI) per capita (PPP$).

Each dimension index is calculated using minimum and maximum values (goalposts) to normalize the indicator between 0 and 1.
⁸

Interpreting the Human Development

Interpreting human development, particularly through the lens of the HDI, involves understanding that a higher index score indicates greater achievements in areas crucial for human well-being. A value closer to 1 signifies higher levels of human development, reflecting longer, healthier lives, better access to knowledge, and a decent standard of living.
⁷
The HDI allows for a more nuanced comparison between countries, revealing that two nations with similar levels of Gross Domestic Product per capita can have vastly different human development outcomes due to variations in their investment in public services, Public Health, and education. ⁶This enables Policy Making to be more targeted towards improving human capabilities directly, rather than solely focusing on economic output. For instance, a country might have robust economic growth, but if this growth does not translate into improved access to healthcare or quality education for its citizens, its overall human development score might remain stagnant.

Hypothetical Example

Consider two hypothetical countries, Industriousland and Prosperville, both with a GDP per capita of $50,000.

Industriousland:

• Life Expectancy: 65 years
• Mean Years of Schooling: 8 years
• Expected Years of Schooling: 12 years

Prosperville:

• Life Expectancy: 78 years
• Mean Years of Schooling: 12 years
• Expected Years of Schooling: 16 years

Even though both have the same economic output, Prosperville's higher life expectancy and educational attainment would result in a significantly higher Human Development Index (HDI) score. This example illustrates that while economic prosperity can contribute to human development, it is not the sole determinant. Prosperville has likely invested more effectively in its Public Health infrastructure and educational systems, directly enhancing the Quality of Life for its citizens. This comparison highlights why human development moves beyond purely financial metrics to evaluate a nation's true progress.

Practical Applications

Human development principles are applied in various real-world scenarios, influencing national and international strategies for progress. The United Nations Development Programme (UNDP) utilizes the Human Development Index (HDI) and its complementary indices—such as the Inequality-adjusted Human Development Index (IHDI), Gender Inequality Index (GII), and Multidimensional Poverty Index (MPI)—to assess and report on global development. Thes⁵e metrics guide governments and international organizations in setting priorities for resource allocation and intervention.

For example, the data collected on human development dimensions helps in identifying areas where Income Inequality or gender disparities are most pronounced, enabling targeted Policy Making. Organizations like the World Bank also utilize similar indicators in their analyses of development and aid programs, aiming to foster holistic societal advancement. Furt⁴hermore, initiatives like the Organisation for Economic Co-operation and Development's (OECD) Better Life Initiative aim to measure well-being beyond traditional economic statistics, incorporating social and environmental factors to provide a comprehensive view of progress. Such², ³ frameworks are crucial for tracking progress toward the Sustainable Development Goals (SDGs) and ensuring that development benefits all segments of society, fostering greater Financial Inclusion and overall societal well-being.

Limitations and Criticisms

While human development provides a comprehensive framework, it faces certain limitations and criticisms. A common critique of the Human Development Index (HDI), its primary measure, is that it simplifies a complex reality into a single number, potentially overlooking crucial nuances of well-being within a country. For instance, a high HDI score might mask significant Income Inequality or regional disparities that affect a substantial portion of the population.

Critics also point out that the HDI, despite its multi-dimensional approach, may not fully capture other vital aspects of human experience, such as human security, environmental sustainability, or subjective well-being. The ¹weighting of the factors within the HDI has also been a subject of discussion, with some scholars arguing that the relative importance assigned to health, education, and income could be debated.

To address some of these concerns, the UNDP has introduced complementary indices like the Inequality-adjusted Human Development Index (IHDI), which discounts the HDI value according to the extent of inequality in each dimension. However, the fundamental challenge remains in capturing the full spectrum of Quality of Life and individual freedoms, as human development is an evolving concept that constantly seeks to encompass new dimensions of societal progress.

Human Development vs. Economic Growth

Human development and Economic Growth are distinct but related concepts. Economic growth refers to the increase in a country's production of goods and services, typically measured by the growth rate of its Gross Domestic Product (GDP). It is primarily a quantitative measure of economic output.

In contrast, human development is a broader, qualitative concept that focuses on expanding people's capabilities, choices, and overall well-being. While economic growth can be a means to achieve human development by providing resources for improved healthcare, education, and infrastructure, it is not an end in itself. A country can experience significant economic growth without a corresponding improvement in the lives of its citizens, especially if the benefits of growth are concentrated among a small segment of the population or if public services are neglected. The emphasis of human development is on whether people are able to live lives they value and have reason to value, moving beyond mere material wealth to encompass broader aspects of Quality of Life and individual freedoms.

FAQs

What are the main components of human development?

The main components of human development, as reflected in the Human Development Index (HDI), are a long and healthy Life Expectancy, access to knowledge (measured by years of schooling), and a decent standard of living (measured by gross national income per capita). These three dimensions aim to provide a holistic view of a country's progress beyond just economic metrics.

Who is considered the father of human development?

While many have contributed to the concept, Nobel laureate Amartya Sen is widely regarded as a key figure in modern human development theory, particularly for his "Capability Approach." His work significantly influenced Mahbub ul Haq, who, along with the United Nations Development Programme (UNDP), developed the Human Development Index (HDI).

How is human development different from economic development?

Human development focuses on expanding people's capabilities, choices, and overall well-being, encompassing health, education, and living standards. Economic Growth, on the other hand, primarily measures the increase in a country's economic output, such as its Gross Domestic Product. While economic growth can facilitate human development, it does not guarantee it, as the benefits of growth must translate into improved lives for the populace.

Why is human development important for policy making?

Human development is crucial for Policy Making because it shifts the focus from purely economic targets to people-centered outcomes. By analyzing indicators like the Human Development Index (HDI) and its related composite indices, policymakers can identify specific areas of deprivation, such as disparities in Education or healthcare access, and design targeted interventions to improve the well-being and opportunities for all citizens.