The UN's Human Development Index: A Critique--Posner

When nations are ranked by gross national income per capita, the United States comes in sixth, after Luxembourg, Norway, Switzerland, Denmark, and Iceland, confirming one's general impression that the United States is the wealthiest large country; none of the countries ranked ahead of the U.S. have more than a fortieth of the U.S. population (Switzerland, the most populous of the group, has a population of 7.5 million). But when countries are ranked by the United Nations' Human Development Index, which rates 177 of the world’s 193 countries, the United States falls to 12, Denmark to 14, and Luxembourg to 18; and among the nations promoted above the United States are Australia, Canada, Sweden, Japan, the Netherlands, France, Finland, and Spain (in that order). The composition of the Index reflects dissatisfaction with income as a measure of well-being. And of course it is a limited measure; income is not the only argument in a person's utility function. The Human Development Index is an attempt to develop a better measure of well-being. It is a composite of three indexes: GDP per capita (computed on a purchasing power parity basis, to correct for distortions introduced by using currency exchange rates); life expectancy at birth; and a combination of the adult literacy rate and the combined primary, secondary, and college/university enrollment rate, with the adult literacy rate being weighted twice as heavily as the enrollment rate. For each component index, the value of 0 is assigned to the minimum level of the development indicator (income, life expectancy, and enrollment) and 1 to the maximum, and each country's score is the percentage of the maximum level that it achieves. A country's Human Development score is the simple average of its scores on the three indexes. I cannot myself see the value of the Human Development Index. Not that per capita income, life expectancy at birth, and level of education as proxied by adult literacy and school enrollments are unimportant; a ranking of each of these aspects of human development might be a good first step in identifying areas of weakness that a society might wish to devote additional resources to improving. It is the combining of the indexes and announcing that the combination offers a ranking of nations by the degree of their "human" as distinct from narrowly defined "economic" development that strikes me as dubious, and indeed as senseless. The obvious objection is to the equal weighting of the three indexes, and to the omission of a host of other important dimensions of development, such as housing quality, pollution, tax rates, adult life expectancy, crime rates, unemployment, inflation, quality and variety of goods and services, economic growth, and quality of education--though including them would exacerbate the weighting problem, and some involve serious measurement problems. A less obvious objection, but a general problem with rankings, is that from a sensible evaluative standpoint the distance between ranks is more important than the number of ranks that separate two countries. The wealthiest nation has a per capita income twice as great as that of the 20th wealthiest nation. That is a big difference. But now consider life expectancy at birth. Japan is number 3 with a life expectancy at birth of 82 years; the United States is only number 44, with a life expectancy at birth of 78. A four-year difference in life expectancy is not trivial by any means; but compare it to the difference in per capita income between the third richest country, Switzerland, and the 44th, Palau: the Swiss income per capita is almost eight times as great as the per capita income of Palau. If a country devotes resources to improving life expectancy, it has to give up some other good. It is hard to say that the United States is making a mistake in not spending more resources on extending life expectancy; many Americans think that we spend too much on health care already. One reason (though by no means the only one) that the United States ranks only 44th in life expectancy is that our large black population has an abnormally high death rate; the average life expectancy of black male Americans is only 69. This shockingly high death rate reflects deep-seated problems of American blacks that would probably cost an enormous amount of money to solve. The political will to expend those resources does not exist. This may be a misfortune, a tragedy, or even a sin, but to use it to push the United States down in an index of human development is a political judgment, rather than anything determined by neutral social science. The Human Development Index is an example of ranking mania that has the United States tightly in its grip, so maybe Americans shouldn't complain about the Index. One cannot generalize about the value of rankings. There are pluses and minuses. The major plus is that a ranking is an economical method of presenting information. The related minus is that it often presents it in a misleading way--that is my earlier point that the distance between ranks is more important than the number of ranks that separates the persons (nations, etc.) being ranked. The more compressed a distribution--of ability, health, income, etc.--the less meaningful rank ordering is. But the more serious problem with rank ordering is the arbitrariness of weighting different quality measures to come up with a composite ranking. It is well illustrated by the college, law school, and business school rankings done annually by U.S. News & World Report. Unlike the UN, the editors of that magazine do not rank the different measures they use (such as SAT or LSAT scores and ratio of applicants to admits) equally; but the weightings are just as arbitrary. They are worse in one respect than the Human Development Index: they are manipulable. A school can (and many schools do ) increase its ratio of applicants to admits by blurring its admission criteria or reducing its application fee, thus increasing the number of applicants without increasing the number of admits. It is unlikely that a nation would try to improve its ranking in the Human Development Index by reallocating resources to activities that influence the rankings.

Comments

[J.T. Rothwell]

As usual Prof. Posner raises some excellent points, but the problems he mentions, with respect to African-Americans, that lower the US HDI rank do not solely reflect a political judgment on behalf of the UN; afterall, the HDI is grounded in empircal data that could and hopefully will be changed.

I appreciate Posner's recognition that this an immense stain on the American life, but I am less respectful of his dismissal of the problem as unsovlable (due to a lack of political will, as he puts it). If conservative public intellectuals like he and Becker, not to mention conservative political leaders, were willing to push for better policies towards blacks, they could easily find a coalition in the center and on the left to win legislative changes.

One of the largest problems facing the African-American community is concentrated poverty (see Harvard economist Ed Glaeser work with his colleague David Cutler on ghettos for evidence -or sociologist Doug Massey's book with Nancy Denton). This sounds almost impossible to solve until you realize that it was created, in large part, by ill-advised federal and especially local policies. Blacks have long been denied access to free housing markets through tactics such as racial covenants, Federal Housing Administration discrimination (i.e. red lining), private lending and real estate market discrimination (without federal regulation or adequate civil rights enforcement), and community violence. Now many are kept out of middle-class neighborhoods through exclusionary zoning by municipalities.

Why shouldn't the US ranking be pushed down as a result of these anti-market injustices? This is political oppression that has been narrowly targeted at minorities and now the poor broadly speaking. Sweden doesn't do this, nor do any of the other countries ranked ahead of the US. They don't exactly have a free market on housing, but at least they build high-density and affordbale housing in relatively integrated neighborhoods. The UN HDI ranking on life expectancy and education is a (scientifically observable) consequence of American political economy.

[michael gordon]

Judge Posner must be using per capita income at nominal (existing) exchange rates for his rankings, rather than allowing for purchasing power parity. Here, at the CIA World Factbook, you'll find a more accurate ranking of countries by per capita income, adjusted for PPP. The big surprise --- a real economic miracle the last 20 years --- is Ireland. https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html

[Haris]

JT
I agree with your points, though I must disagree with your characterization of Judge Posner's description of the problems affecting black males in America. I didn't read him to say that the problem is "unsolvable" at all. I think he's just saying that the lack of political will means that the problem is likely to persist, or at least that it won't be fixed by government policy. Specifically, the current political climate seems to be such that those in power have made the political judgment that fixing this problem is simply not worth it, because of what must be given up to fix this particular problem. And Judge Posner appears to concede that this might be a tragedy or even a sin, but it is the current reality. I don't really have an opinion on how many resources should be devoted to this problem, but I just had to offer my reading of the judge's position.

[ChinaCoalWatcher]

As I understand it, alternative measures of "development" (like the UNHDI) are not particularly meaningful for wealthier nations for whom they were not designed.

The indices were created mostly to provide "guidance" (or political preferences disguised as objective guidance) to international development organizations with a view towards implicating an expansion in the valid legal scope of those institutions beyond purely economic matters to include political, social, medical, educational, and environmental considerations.

These additional factors are surely important contributors to welfare in emerging economies that have advanced past the problem of securing the necessities of mere survival for their populations. But just how much more important than the average family's purchasing power they should be considered is purely a matter of opinion.

What an index does is to provide those institutions some other metric to optimize when analyzing the projected effects of their policies. But it doesn't take much to see that he who controls the index controls the policies - while using a seemingly quantitative and objective process to cover the imposition of subjective preferences.

The best use of the data is separate the contribution to welfare over which a person has control (income) over which they have little (prevailing social conditions). One could then make a statement like "Russia and Chile have similar per capita purchasing powers, but Chileans have much stronger democratic institutions, less corruption, live 13 years longer, and breathe cleaner air."

The meaningfulness of the indices break down completely for the wealthiest countries where one factor's improvement can lead to personal choices that diminish another. For example - the increase in wealth in the US has made protein and fat-rich food vastly more affordable while also increasing the productivity of sedentary employment and, through near-universal automobile ownership, eliminating the need of most people to walk.

These lifestyle choices can have greatly detrimental impacts on other measures of public health and longevity through the effects of obesity, heart-disease, and road accidents. But despite widespread knowledge of the risks - people voluntarily choose to engage in these patterns of behavior. If they are actually maximizing their own utility according to their own preferences, while an index of development with "assumed preferences" would indicate a decrease in welfare, then the index is likely not useful for a society such as ours.

[Raul]

Somewhat ironic: "It is unlikely that a nation would try to improve its ranking in the Human Development Index by reallocating resources to activities that influence the rankings."

Isn't positive reinforcement one of the intended objectives of any rating scheme? Incentive for the lower guy to make changes that would improve his rank?

[anon]

Aren't there statistical methods that can auto-compute these weights?

[neilehat]

Just consider the source. There is a movement afoot in the world to tear the U.S. down by any means. What better means than to develop spurious statistical models that show what a "miserable failure" the U.S. "really" is. Kind of sounds like what came out of Bali this last week, in regards to global warming.

[Bertil]

> to use it to push the United States down in an index of human development is a political judgment, rather than anything determined by neutral social science.

How saying that US is a country so blatantly racist that is has impact on its over-all statistics not neutral science? Considering that everyone should have equal opportunity, independently of his skin colour, is a political statement --a dream some would say-- and obviously a minority one in the US; however it is having consequences.

What is the use, what is the utility, of having three times the GDP if you spend two thirds of it on guns and gas guzzlers? What you get is more violent deaths and more asthma. Adding “housing quality, pollution, tax rates, adult life expectancy, crime rates, unemployment, inflation, quality and variety of goods and services, economic growth, and quality of education” would simply force the country of McMansions, SUVs, trillion dollar deficit, 40% uninsured, ghettos, etc. further down.

[GU]

Re: comments about the "origins of HDI"

In Posner's defense, the HDI is very often presented as an objective measure by which to judge and compare all nations. So, even assuming the previous commenters are correct about the HDI's intended purpose, it has (predictably) been used in ways it was not intended.

Posner's points are quite valid though; given the U.S.'s vast population, and the diversity of its population, it is quite amazing to see its immense economic, and in many dimensions, social success. No country in the world has the size and race/ethinc problems that the U.S. has to deal with, yet the U.S. still utterly dominates the world economy. Pretty amazing.

[Diversity]

The UN Human Development Index is surely no more than a polite and reasonable looking way of prodding sovereign governments towards attending to matters that they ought to be attending to. As such, judging by such reactions as Posner's, it seems not completly ineffective. The US situation is that as a government and society the USA does a lot of things right and a few things badly wrong. Prods on the latter are not misplaced.

[Jack]

The topic reminds us that we should use a similar index as our measure of well-being and progress. We hear the "GDP gain" daily though it is pushed up by rebuilding after national disasters, law suits, rising housing, medical or energy costs that add nothing to 'human development' or a rising standard of living.

Next we hear the "jobs created" report with little about the quality, value or productivity of the activity. For example, does anyone think the productivity of a realtor or loan officer is greater because of inflation of housing prices? Like Alice's rabbit many of us seem to be running harder to stay in the same place.

I too thought Posner on thin ice in suggesting we could move up a number of indexes by ignoring the problems from our long history of racial prejudice as every country has some sort of Achilles Heel such as lack of resources, or being geographically sited where wars are more likely. Come to think of it, we are placed in one of the safer regions in terms of border friction and war, but spend more on war prep than all the other nations combined. Curious, eh?

[John Birch]

Judge Posner: The political will to expend those resources does not exist. This may be a misfortune, a tragedy, or even a sin, but to use it to push the United States down in an index of human development is a political judgment, rather than anything determined by neutral social science.

Certainly measuring "respect for human life" is essential to quantifying national health. There are nations whose body politic recognizes that the health of each citizen matters. The UN should not discount the value of any human being in its report. Or, is Judge Posner demanding that the UN report reflect the "actual" value of human beings? To qualify as "neutral social science," must the UN report discount the lives of African-Americans?

Does Judge Posner's definition of "neutral social science" encompass anything more than "importing American racism into the UN Report"?

Perhaps Judge Posner might respond: "Blacks are second-class citizens in the United States and any report grounded in neutral social science should accept that." But it is unclear Judge Posner meant that. Judge Posner, it appears, is criticizing the report for its "bias," thereby championing racism.

[c&d]

Posner -- in a comment where he admits that he cannot see the value of the Human Development Index -- has demonstrated its value: (1) it reminds people that human development, and not GDP, is the goal nations should strive for, (2) it makes thoughtful individuals consider what factors make for a healthy society, (3) it is a starting point for analyzing nations based on a few readily available measurements that are correlated with other important human concerns.

Posner notes that the US "black population has an abnormally high death rate," which brings down that average US life expectancy and "reflects deep-seated problems of American blacks." I would argues it reflect deep-seated problems of America. Life-expectancy is not "use[d] . . . to push the United States down"; rather, discrimination, poverty, and an extremely inefficient health care system have led to low life-expectancy.

Does Posner believe the index was made to make the US look bad?

[Michael]

If you assume black american males make up 6% of the US population (half of the 12% black population), their greatly below average life expectancy accounts for a drop of around 7 months (i.e. the other 94% of the US population necessarily has an average life expectancy of 78.57 years). I don't know if there are other obvious demographic factors that reduce the US life expectancy like this one, but the remaining 3.4 years we fall behind Japan would probably be even more politically difficult and resource intensive to reduce.

[tjr]

Some peripheral comments on the issue

The Human Development Index is a political construct. Unlike a measure such as the Consumer Price Index which at least equates apples and oranges in the same terms of dollars. The weighting in the Human Development Index has no such similar logical construct. It is not determined by any objective measure such as actual dollars spent in a consumption patterns whether historically or currently.

Without going into the advantages and disadvantages of international comparisons, there is probably a greater service to nations in terms of political and social transparency in indicating the divergences within countries. The indicator flagged was the mortality rate for black Americans. In an Australian context the divergence in mortality rates for life expectancies between aboriginal Australians and other Australians should be flagged as the one of huge concern. In international comparisons between Australians and Americans there may be simple factors such as climactic differences that lead to a higher life expectancy within Australia. However the divergence between communities in Australia is probably more important for any understanding of where policy and research responses should be focused.

Partial indicators on specific issues are more likely to give notice to researchers and policymakers on where to put appropriate resources to attempt to fix the problem. Grandiose indicators do not advance the policy debate.

[St. Darwin Assissi's cat]

Thanks to Posner and Becker for another intellectually stunning post .... I feel badly for Posner's reaction to the Human Development Index by the United Nations. Can't you develop the survey? Or challenge the vocabulary and definitions used in the product? For Christmas, 2 guinea pigs have been christened Posner and Penelope Piggy. Smart and adorable.

[Archimedes]

Without getting too lost in metaphysics, I would caution any reader of the Human Development Index to consider its underlying premises carefully. Had this same index been created last century, one of the weighted factors might well have been the religious characteristics of each nations population. Taken seventy years ago, the patriotic characteristics. The point is that ratings can never detach themselves from a degree of arbitrariness.

The relationship between the categories in the Human Development index is arbitrary. Depending on the country, it might be a wise decision to invest limited resources in adding two units of "security" rather than one unit of "liberty" (Forgive me Ben Franklin). But security is not on the index. Even assuming we can all agree that, in each of these categories, a "more developed" country will have a higher number than a "less developed" one--the index suffers substantial entropy, with good decisions not being accounted for and vanishing into statistical limbo.

Then there is the diminishing value of wealth. After a certain point (is this diminishing returns?) a few extra units of wealth really don't mean much. This seems to be Judge Posner's point with life expectancy: how much is it "worth" to add a year to our life expectancy? What matters is not the absolute duration, but the efficiency of it. Therefore a heavy weighting on life expectancy or literacy would not be accurate in all cases. A country with excellent health care may have more blind people, who would be illiterate--thus detracting from its double weighted literacy score.

Obviously this begs the question: what about per capita income? Clearly the argument above cuts both ways. Occam's Razor: The simplest solution is usually the most correct. Per capita income is not a perfect measuring stick for development, but I don't think the Human Development Index is a better one--just more complicated, giving it the illusion of accuracy.

Rankings are valuable as a mental short cut--if you know what you are looking at, and what went into creating it. But inherent in every ranking is the ranker substituting his arbitrary value's for the reader's. I don't see how combining these individual statistics into an index adds to their value.

[Jack]

Perhaps we SHOULD develop the "political will" to challenge Japan and the Scandies on life span and add these priorities to a political platform:

Where are we behind? And what does this cost our society by comparison?

Poor individual health practices, less than "best practice" outcomes in our medical practices, and a high rate of infant mortality, with all being statistically worse in "black" population.

45,000 highway deaths and many times that in cripplings and maimings. When was the last time we had a priority of safer driving and safer highways?

25,000 gun deaths per year that other "advanced" nations do not have along with some far higher number of permanent injuries and cripplings.

Our penchant for warring where we've lost many since the end of WWII that have not been lost in the other "advanced" nations.

And yes, the underlying causes are varied but what else is of higher priority?

[Ken MacIver]

The notion that African American life spans bring down the American average and thus should be disregarded for whatever reason is as curious an idea as would be disregarding Asian American women, whose life span is the highest of any ethnic or racial group in the United States (ranging to over 86 in Hawaii) because they raise the US average unfairly. As Coach Bellicheck says, "It is what it is," and what it is for the complex society that is the US is about 78 years.

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