DEVELOPMENT

1.1.
UN Human Development Index
Aado Keskpaik
To date, the Human Development Index (HDI) has
functioned as a comparative measure of the world’s
countries for over 20 years. It was implemented in the
first Human Development Report commissioned by the
United Nations Development Programme (UNDP) in
1990, and since then has developed into the principal
gauge for regularly monitoring human development. The
global table of HDI values has developed into a traditional
component of the UNDP Human Development
Report, being, perhaps, even the most anticipated component.
It attracts the attention of the public, the media
and politicians, and is used in appropriate research, as
well as a tool in political debates. In connection with the
20 th anniversary of the Human Development Index in
2010, the Human Development Report Office undertook
a thorough methodological analysis of both the Index
and the criticism based thereon, and made significant
changes in the calculation methods (Klugman, Rodriguez,
Hyung-Jin 2011). For the better comprehension of
the following, it should be mentioned that in the new
method, the HDI is calculated as the geometric mean
of three sub-indices – health, education and income.
The health sub-index is calculated on the basis of life
expectancy at birth. The education sub-index is calculated
as the average of two indicators – the mean years
of schooling and the expected years of schooling. The
income sub-index is calculated on the basis of the gross
national income per capita. However, the methodological
questions related to the HDI have yet to be discussed in
Estonia, and it would definitely be useful to turn our
attention to this before starting to interpret, assess and
draw any conclusions about Estonia’s position and the
shifts thereof.
1.1.1.
What is the Human Development Index?
Mahbub ul Haq, a Pakistani economist, is considered
to be the initiator of the development of the Human
Development Index. The Index was created because
of dissatisfaction with income level being used as the
principal measure of human development. The conceptual
content of the index is based, to a great degree,
on the capabilities approach to measuring well-being
implemented by Amartya Sen, the Nobel Prize-winning
economist from India. According to this approach,
well-being and the quality of life is expressed by
people’s capabilities – their ability and freedom to
choose between the various lifestyles (functionings)
that are ensured by the resources at their disposal,
which they can realise according to their values and
wishes 1 . In this approach, the most important thing
about human development is not the abstract freedoms
that have been recorded, but the people’s capability to
utilise these freedoms.
Right from the beginning, the HDI has been a
synthesized compilation comprised of three dimensions
of human development – education, health and
income. It must be remembered that from the viewpoint
of the capabilities-based approach, an attempt is made
to directly calculate, using the HDI, only two of these
extremely important human capabilities – the ability to
acquire an education, as well as to live healthily and
for a long time. The calculation of the third dimension
of the Index – the income – on an equal basis with the
aforementioned is not theoretically correct within the
framework of a capabilities-based approach, because
income should play a strictly instrumental role. But,
including the income as the third dimension of the
Index is justified by the fact that it is used as an approximation
of all other measures of human development 2 . It
seems that including the standard of living measure in
the HDI has been inconvenient, but unavoidable. If the
composite index were limited to only the measures of
education and health, the content would be too meagre.
On the other hand, the addition of the income, as the
indirect representative of the aggregate of unspecified
capabilities, clearly limits the analytical potential of
the Index. The importance of the connection between
income and human development has not been determined
and, therefore, it is difficult to draw any sociopolitical
conclusions from it.
From the start, the structuring and utilisation of the
HDI has been limited by the shortage of reliable statistics
that can be compared on a global basis. Partially, this is
what has determined the small number of dimensions,
and the indicators characterising them that are taken into
consideration by the HDI. However, the enhancement of
1 The approach explored sees individual advantage not merely as opulence or utility, but primarily in terms of the lives people manage to live
and the freedom they have to choose the kind of life they have reason to value. The basic idea here is to pay attention to the actual “capabilities”
that people end up having. The capabilities depend both on our physical and mental characteristics as well as on social opportunities and
influences (and can thus serve as the basis not only of assessment of personal advantage but also of efficiency and equity of social policies).
(Sen, 1998 http://www.nobelprize.org/nobel_prizes/economics/laureates/1998/sen-autobio.html)
2 „Longevity and education are clearly valuable as aspects of the good life, and also valued as constituents of the capability to do other things…
the income component of the HDI has been used as an indirect indicator of some capabilities not well reflected, directly or indirectly, in the
measures of longevity and education.” (Anand, Sen, 2000, p. 86, emphasis in original).
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Estonian Human Development Report 2012/2013