HDI surprisingly similar to GDP/capita

Human Development Index HDI is advanced as being a better indicator than “GDP per capita” in measuring the progress of Nations. HDI is calculated by UNDP from indicators for health, education and living standard (income/person). The methodology is quite complicated but it well documented http://hdr.undp.org/en/statistics/hdi/

BUT look at a plot of the correlation between HDI and GDP/capita or all countries in Gapminder World www.bit.ly/XxQw0B You will be surprised! There is today a very strong correlation between rising GDP/capita. If you exclude 6 countries on the right side of the strong correlation that have higher GDP/capita than HDI due to oil or diamonds; and if you exclude 6 former Soviet Republics with collapsed economy but still high literacy rate on the left side of the correlation; you will find that the GDP/capita and the value on Human Development Index follow each other very closely from the worst-off country Congo to the best-off country Norway. The reason seems to be that nations today are surprisingly capable in converting the available national income (measured as GDP/capita) into a longer lifespan for the people (measured as Life expectancy at birth) and into access to education (measured by mean of years of schooling for adults aged 25 years and expected years of schooling for children of school entering age).  But the reason may also be that nations today are very good at converting improved health and education into economic growth. Most probably the causality goes in both directions.

In conclusions:  If you want better health and education fix economic growth. If you want faster economic growth provide better education and health service. GDP/capita appears to be as good a measure of progress of nations as are HDI.

Hans Rosling


Date Posted: 2012-11-20