Human development index: Equality matters if we are to reduce poverty
Twenty years ago the first UN's human development report (UNDPR) put numbers on something we all know anyway – that there are more important things in life than money. Whereas previously countries had been ranked in terms of wealth, the HDR ranked them according to human wellbeing. I have yet to find a better explanation of why GNP is such a limited measure of how a country is doing than the one given by Robert Kennedy, when he was running for president, a few weeks before he was shot:
"Our gross national product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for those who break them. It counts napalm and the cost of a nuclear warhead, and armoured cars for police who fight riots in our streets. It counts Whitman's rifle and Speck's knife, and the television programmes which glorify violence in order to sell toys to our children.
"Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials.
"It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans."
Human development index rankings
The HDR tried to rectify some of that, and it is still an eagerly anticipated publication. But it is also true that in recent years it has been losing a bit of its pulling power. There is little to surprise us any more. Norway is always top, and an unfortunate African country (recently Zimbabwe) is always bottom. Even the movements around the Index are not big enough to be very significant given the limitations in the methodology.
But this year, to mark the 20th anniversary of the first report, tucked away unassumingly in chapter five, is a new feature that could again revolutionise our way of assessing progress, and revitalise the HDR's mission. Alongside the regular Human Development Index, the team of researchers has added what they are calling an "Inequality-adjusted Human Development Index", or IHDI.
The HDI measures average wellbeing in a country, but not the disparities between different regions or groups within a country, which are sometimes vast. The IHDI now takes into account how human development is distributed as well. Countries which are very unequal see their human development scores suffer more than those that are less unequal.
So how does this affect the all-important rankings? In the top 20 countries, movement is limited. Inequality in health, education and income, which are the dimensions of inequality measured in the new Index, is less in countries with "very high human development". But there are some things worth noting. The USA moves down nine places, while South Korea, the incredible economic and human development success story of the past half century, also moves down 18 places (from 12th to 30th) in recognition of its high levels of inequality.
The other big losers are almost all in Latin America, the most unequal region in the world. Panama falls 20 places, Peru 26, Brazil 15, Colombia 18. Venezuela only falls one place, while Nicaragua bucks the trend, rising six places – read into that what you will.
Which are the countries moving up the scale, to take the places of these falling unequal countries? There is no clear pattern but quite a few of them seem to be from the former soviet block (Armenia, Ukraine, Belarus, Moldova, Uzbekistan).
Does any of this matter? I think so. One of the main findings of the first 10 years of the MDGs is that inequality matters. More and more people are realising that rising inequality within and between countries is one of the great challenges facing the modern world. Equality matters as an end in itself, and it matters as one of the quickest means to reduce absolute poverty.
It is very significant that this UN flagship publication is for the first time including inequality in its rankings, tentatively at first, but hopefully it will get bolder in coming years. When the HDI proper fully incorporates an inequality adjustment (ie the IHDI replaces the HDI as the main index), countries will really sit up and listen.
Governments do care about this index and where they are placed on it. Civil society will use these figures in their battles for a more just world. Crucially, when a country manages to reduce inequality, it moves up the rankings. Brazil has seen its "HDI losses" fall between 2000 and 2005 as the country has become a little more equal.
As with the HDI when it was first launched, the methodology may need some tinkering over time, and the weighting (how much importance you attach to inequality, in a number, which affects overall ranking) will no doubt be adjusted according to what is politically feasible. But the first step has been taken.
This is not the only innovation in this year's HDR, which also launches indexes in gender inequality and multidimensional poverty, nor the only interesting talking point – the document is full of fascinating analyses that challenge some widely held beliefs. But in the long term, it could prove the most important.