The Human Development Index (HDI) is a composite statistic of
life expectancy, education, and income per capita indicators, which
are used to rank countries into four tiers of human
development.
Advantages:
- HDI combines 3 most important indicators of development into
score between 0-1.1 indicates a high level of economic development
and 0 a very low level.
- The HDI was introduced to combine three measures – life
expectancy (a social measure), education (average number of years
of schooling and expected years of schooling– a social measure) and
gross national income per capita (an economic measure).
- It takes into account health, knowledge & wealth in the
form of life expectancy, adult literacy & GNP.
- HDI uses 2 types of social data (health and education) and 1
type of economic data which means that the measure uses a broad
range of information and is not tied up with only one measure. This
is a much more accurate measure.
- The information is updated annually and collected by a range of
people who ensure that the data is as accurate as possible.
- Allows direct comparisons to be made between countries and is
an attempt to combine an economic indicator with social indicators,
giving a more rounded view of standards in different
countries.
- Doesn't rely solely on wealth, gives an indicator of quality of
life by including health and education.
- HDI includes a measure of GNI, life expectancy and
education.
Disadvantages
- It usually averages for the whole country's population, meaning
they do not always reveal substantial inequalities between
different segment of society.
- Data used can be out of date data or hard to collect in some
countries.
- The HDI fails to recognize inequality that exists outside the
numbers calculated.
- Higher national wealth does not indicate welfare. GNI may not
necessarily increase economic welfare; it depends on how it is
spent.
- Higher GNI per capita may hide widespread inequality within a
country. Some countries with higher real GNI per capita have high
levels of inequality (e.g. Russia, Saudi Arabia)
Eurocentrism refers to considering Europe is the center. The
idea that Europe and the United States are the main actors in the
political and economic world. The remainder of is simply a
periphery or a respondent to the actions of the main actor, passive
subject in world history. HDI focusses on every country in the
world meeting the standards of the west. So, it is being criticized
for being Eutocentric. In reality every country can't be expected
to meet the standards of the west as it would be unfair.
To conclude HDI has both pros and cons. On the one hand, this
index is a great way for measuring development as it is not solely
based on economic growth but on the other hand it does not
incorporate many dimensions that play an important role in the
development of country.