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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). 8 Estonian Human Development Report 2012/2013
the HDI’s content has also been hindered by other additional factors. For instance, the HDI does not measure the capabilities related to political freedoms, human rights, environmental sustainability and the pursuit of happiness. Attempts to include politically sensitive measures in the Human Development Reports have caused the countries which feel that they are affected to voice their objections to the UN, and have resulted in discussions at the General Assembly. In 1992, an attempt to construct an index of political freedoms even resulted in the continuity of the Human Development Report’s publication being put at risk. On the other hand, for example, the construction of an environmental friendliness indicator has been obstructed by the great conceptual differences of opinion among the theoreticians (Klugman, Rodriguez, Hyung-Jin 2011). At this point, putting aside the disputes about the reasoning behind the choice of indicators and the calculation methodology employed in computing the HDI, we can, based even on the aforementioned, agree with the assessment by the spiritual father of the HDI, Amartya Sen (Sen 2003), that the HDI is an imperfect measure of capabilities. The concept of capability itself has such a broad meaning, being rich and abstract, that no matter what summarised measure is used to compare a large number of countries, it will be accompanied by much generalising and simplifying approximating (Klugman, Rodriguez, Hyung-Jin 2011). According to the same authors, (Klugman, Rodriguez, Hyung-Jin 2011), who are involved in using the indices in the Human Development Reports, the measurement of capabilities based on the HDI clearly differs from the measurement of well-being. Unlike the function of measuring well-being, the capability index supposedly does not require maximisation, i.e. the need to necessarily aggrandise. Since the HDI, as an index of capabilities, describes an aggregate of freedoms that people are able to use in the execution of their highly-valued life plans, then the expansion of these freedoms is one of the goals of society, but this does not have to be the only goal (Klugman, Rodriguez, Hyung-Jin 2011). Yet, regardless of its creators’ continued attempts to focus on capabilities and the concepts of freedom of choice related thereto, it seems that the HDI has started to live its own life, which is not very firmly linked to the initial theoretical reasoning. The ranking and the grouping of countries based on the level of development in the Human Development Reports, the calculation of the average annual growth rates of the Human Development Index and its sub-indices, and the analyses of the advancements in the country rankings testify to the fact that the maximisation of the Human Development Index is actually considered to be important. In practice, the Human Development Index is treated as a simplified, and therefore significant, indicator that has been freed of any political appendages, and is thereby acceptable to countries with all types of regimes. But, well-being, as a reflection of the satisfying of human needs, in the context of the concept that is widely in use in the social sciences, consisting of health, learnedness, as well as income, traditionally has a value of its own, and the aforementioned are, in regards to well-being, Table 1.1.1 Estonia’s position in the Human Development Index, based on the 2010 calculation method, 1990-2012 1990 2000 2005 2006 2007 2008 2009 2010 2011 24 37 30 28 28 30 30 33 33 33 Source: based on UNDP 2013 Table 1.1.2 Human Development Index and his basic indicators in selected countries, 2012 Very high human development High human development Rank Country Life expectancy at birth (years) Mean years of schooling Expected years of schooling (years) Gross national income (GNI) per capita (2005 PPP US dollars) 2012 Human development index 1 Norway 81.3 12.6 17.5 48,688 0.955 2 Australia 82.0 12.0 19.6 34,340 0.938 3 United States 78.7 13.3 16.8 43,480 0.937 4 Netherlands 80.8 11.6 16.9 37,282 0.921 5 Germany 80.6 12.2 16.4 35,431 0.920 6 New Zealand 80.8 12.5 19.7 24,358 0.919 7 Ireland 80.7 11.6 18.3 28,671 0.916 8 Sweden 81.6 11.7 16.0 36,143 0.916 9 Switzerland 82.5 11.0 15.7 40,527 0.913 10 Japan 83.6 11.6 15.3 32,545 0.912 ... 12 South Korea 80.7 11.6 17.2 28,231 0.909 ... 15 Denmark 79.0 11.4 16.8 33,518 0.901 ... 21 Finland 80.1 10.3 16.9 32,510 0.892 22 Slovenia 79.5 11.7 16.9 23,999 0.892 ... 28 Czech Republic 77.8 12.3 15.3 22,067 0.873 ... 33 Estonia 75.0 12.0 15.8 17,402 0.846 35 Slovakia 75.6 11.6 14.7 19,696 0.840 ... 37 Hungary 74.6 11.7 15.3 16,088 0.831 ... 40 Chile 79.3 9.7 14.7 14,987 0.819 41 Lithuania 72.5 10.9 15.7 16,858 0.818 ... 44 Latvia 73.6 11.5 14.8 14,724 0.814 ... 51 Uruguay 77.2 8.5 15.5 13,333 0.792 ... 55 Russia 69.1 11.7 14.3 14,461 0.788 ... 62 Costa Rica 79.4 8.4 13.7 10,863 0.773 ... Source: UNDP 2013 Estonian Human Development Report 2012/2013 9
Page 1: ESTONIAN HUMAN DEVELOPMENT REPORT 2
Page 4 and 5: Table of Contents 1 Human Capital /
Page 6 and 7: Dear Reader Since the moment when E
Page 9: 1Human Capital Estonian Human Devel
Page 13 and 14: Figure 1.1.1 The human development
Page 15 and 16: Figure 1.1.7 The income sub-index:
Page 17 and 18: The results of the Princeton Projec
Page 19 and 20: the hypothetical generation. The to
Page 21 and 22: Figure 1.2.3 Life expectancy. Eston
Page 23 and 24: Table 1.2.2 also presents the most
Page 25 and 26: The new trends that are appearing i
Page 27 and 28: Figure 1.2.8 Components of populati
Page 29 and 30: New features were introduced into E
Page 31 and 32: Initiation of Voluntary Birth Contr
Page 33 and 34: Table 1.3.1 Best-known educational
Page 35 and 36: (OECD 2012b). Therefore a certain r
Page 37 and 38: The reciprocal dependence of the pr
Page 39 and 40: Figure 1.3.8 Percentage of students
Page 41 and 42: Table 1.3.4 The quality of educatio
Page 43 and 44: 1.4 Health Raul-Allan Kiivet Change
Page 45 and 46: Table 1.4.1 Usage of prescription m
Page 47 and 48: allude to the fact that approximate
Page 49 and 50: promote healthy lifestyles among th
Page 51 and 52: Figure 1.5.1 The World Values Surve
Page 53 and 54: Table 1.5.2 Estonia’s participati
Page 55 and 56: Figure 1.5.3 The percentage of the
Page 57 and 58: Figure 1.5.5 Percentage of the Esto
Page 59 and 60: The fact that Estonia’s position
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Summary Mati Heidmets The global vi
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2People and Society Estonian Human
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Table 2.1.1 Structure of the Bertel
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tioning market economies (15 states
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2.2 Freedom and democracy Martin M
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Table 2.2.1 Democracy indicators Po
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Figure 2.2.2 The distribution of th
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would be something that none of the
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political participation are general
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strongest, while a very small perce
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is concerned, Estonia is one of the
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Figure 2.4.2 Average circulation of
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2.5 Corruption Jüri Saar In accord
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Lithuania, 61%; and in Russia, 69%.
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2.6.2 Intentional homicides in Esto
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crime. And thirdly, there was a wis
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References 1. Ahven, A. & Tabur, L.
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states included in the EU Kids Onli
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2.8 Public assessments of the state
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Figure 2.8.4 Changes releated to tr
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of the state’s development are en
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Table 2.9.1 The positions of Estoni
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3. IEP (2011). Structures of Peace.
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3Welfare and the Quality of Life Es
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choices made, not what people say t
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Figure 3.1.5 Public social spending
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tion agreed upon the social contrac
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References 1. Aidukaite, J. (2006).
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hand, to the “inequality of acces
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and explanations of the extent of i
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5- much more than I deserve. Some d
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people in Estonia consider the inco
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Table 3.3.1 Experienced Well-Being
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at about 70%. In Latvia and Lithuan
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sign. It seems that the usual view
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3.4 Quality of life Anu Toots 3.4.1
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a uniform composite indicator has n
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3.4.6 The components of life qualit
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Figure 3.4.4c Perceived quality of
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Figure 3.4.5 Changes in the depriva
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3.5 Environment dimension of well-b
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Figure 3.5.1.b Estonia’s position
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3.5.4 Energy intensity The energy i
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productivity, which is defined as t
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perceive themselves as worse off th
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4The Economy Estonian Human Develop
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vide a valuable connection for maki
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Figure 4.1.3 Components of economic
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ule of law, the sub-indicators for
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References 1. Acemoglu, D.; Robinso
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Development Report employs generali
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and pasture land, and this was capi
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Basing the total and net savings re
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4.3 Labour market Reelika Leetmaa,
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The problems include the very limit
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• Expenditures for active labour
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who lose their jobs. These ensure i
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4.4 Productivity and the economic s
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labour costs at the company level r
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Table 4.4.4 Comparison of the produ
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Figure 4.4.1 Annual average increas
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4.5 Innovation Erik Terk, Katrin M
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Table 4.5.2 Comparison of innovatio
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Table 4.5.4 Comparison of the indic
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in order to make the R&D potential
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It is characteristic of the South K
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mechanisms for increasing their sta
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Globalisation and Policy Patterns 5
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When Estonia regained its independe
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5.2 The impacts of globalisation an
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Table 5.2.2 Support of the differen
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5.3 Development policies Erik Terk,
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• C -the “Estonia-centred” su
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Figure 5.4.1 Support for the possib
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Summary Erik Terk Estonia is part o
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ehavioural patterns. Therefore, it
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EDR 2012/2013 authors Clemens Buche
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EDR 2012/2013 authors Alari Purju i
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Editor-in-Chief: Mati Heidmets Prod
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