Measuring Progress: The Human Development Index and Beyond

For most of the 20th century, the world measured a country’s progress by a single number: its Gross Domestic Product (GDP). If the economy grew, the nation was considered to be developing. But this created a troubling blind spot – a country could post impressive GDP growth while millions of its citizens remained illiterate, unhealthy, and powerless. It took the vision of two remarkable economists to change the way the world defines progress, and to put people – not markets – at the center of development measurement.

The problem with GDP as a measure of progress 🔗

GDP and economic growth emerged as leading indicators of national progress in the mid-20th century, yet GDP was never originally designed as a measure of human well-being. It counts the value of goods and services produced, but it does not ask who benefits, who is left behind, or whether citizens can actually live decent, healthy, and educated lives. A country exporting oil or weapons contributes massively to its GDP, yet that money may never reach its schools or hospitals. As economist Mahbub ul Haq pointedly noted, any measure that values a weapon several hundred times more than a bottle of milk raises serious questions about its relevance to human progress. This fundamental dissatisfaction with GDP as the sole benchmark drove the search for something better.

The birth of human development thinking 🔗

The human development concept was developed by Pakistani economist Dr. Mahbub ul Haq, who argued at the World Bank in the 1970s, and later as Pakistan’s Finance Minister, that existing measures of human progress failed to account for the true purpose of development: to improve people’s lives. His intellectual partnership with Indian Nobel laureate Amartya Sen proved decisive. Sen’s capability approach – the idea that development should be evaluated by whether people are able to “be” and “do” desirable things in life – gave Haq the philosophical foundation he needed. Together, they argued that the true purpose of development is to expand human choices, not just national income.

The first Human Development Report (HDR) was launched in 1990 by Mahbub ul Haq and Amartya Sen, published by the United Nations Development Programme (UNDP). Its goal was to place people at the center of the development process in terms of economic debate, policy, and advocacy. The opening declaration of that first report – “People are the real wealth of a nation” – was not merely rhetorical. It was a technical and philosophical repositioning of what development means.

What is the Human Development Index? 🔗

The Human Development Index (HDI) is a statistical composite index of life expectancy, education, and per capita income indicators, used to rank countries into four tiers of human development. Rather than asking “How much does this country produce?”, the HDI asks three distinct questions: How long do people live? How educated are they? And do they have a decent standard of living?

The three dimensions of the HDI 🔗

Each of the three pillars of the HDI captures a fundamental aspect of human capability. Life expectancy at birth measures the health dimension – how long, on average, a person in that country can expect to live. Education is measured through two indicators: mean years of schooling for adults and expected years of schooling for children currently entering school. Gross National Income (GNI) per capita (adjusted for purchasing power parity) represents the standard of living dimension. A country scores higher on the HDI when its citizens live longer, are better educated, and have greater purchasing power. Crucially, these three core capabilities are universally valued around the world, and measurable, intuitively sensible, and reliable indicators exist to represent them.

Why the HDI was a turning point 🔗

The introduction of the HDI revealed something striking: countries with similar income levels ranked very differently when human outcomes were considered. Some nations with high oil revenues found themselves ranked lower on the HDI because they had not invested that wealth in schools or hospitals. Conversely, countries with modest economies ranked surprisingly high because of excellent public health and education systems. The first Human Development Report concluded that “there is no automatic link between economic growth and human progress” – a finding that fundamentally challenged the dominant development paradigm of the time.

Human Development Reports: continuity and evolution 🔗

Since 1990, the Human Development Reports have been released most years, exploring different development themes through the human development approach. Each annual report also presents an updated set of indices, including the HDI, and a compendium of key development statistics. The reports carry editorial independence guaranteed by the United Nations General Assembly, which allows each edition to constructively challenge prevailing policies. Over the decades, the reports have addressed themes ranging from gender inequality and globalization to climate change and democratic governance, cementing their influence on global development discourse. The HDI was formally recognized in the Stiglitz-Sen-Fitoussi Report – a commission established by French President Sarkozy – as an important example of an aggregate composite index that genuinely goes beyond GDP.

The inequality-adjusted HDI 🔗

The HDI’s most persistent criticism was that it relied on national averages, which can mask profound internal disparities. A country might show decent average life expectancy while large portions of its population – often the rural poor or marginalized communities – fare far worse. The 2010 Human Development Report introduced the Inequality-adjusted Human Development Index (IHDI) to address this. The IHDI represents the actual level of human development when accounting for internal inequality, while the standard HDI represents the maximum potential level if inequality did not exist. The gap between the two reveals just how much inequality costs a country in human terms.

The Human Poverty Index: measuring deprivation, not just averages 🔗

While the HDI measured average national achievements, it could not reveal where people were failing to reach even minimum thresholds of well-being. This gap led to the creation of the Human Poverty Index (HPI). The HPI was developed by the United Nations to complement the HDI and was first reported as part of the Human Development Report in 1997. It concentrated on the same three essential dimensions already captured in the HDI – longevity, knowledge, and a decent standard of living – but reframed the question from achievement to deprivation.

The HPI was calculated separately for two groups: HPI-1 for developing countries, and HPI-2 for a select group of high-income OECD countries, recognizing that deprivation looks very different in each context. In a rich country, poverty may include social exclusion and long-term unemployment; in a developing country, it may manifest as lack of safe drinking water or child malnutrition. The HPI used country-level averages to reflect aggregate deprivations in health, education, and standard of living. In 2010, it was replaced by the more sophisticated Multidimensional Poverty Index (MPI), jointly developed by UNDP and Oxford’s Poverty and Human Development Initiative (OPHI), which uses household-level survey data to capture overlapping deprivations more precisely.

Adding a gender lens: the GDI and GEM 🔗

Even as the HDI transformed development measurement, it still presented national averages that obscured a critical dimension: the systematic gap between men’s and women’s opportunities and outcomes. A nation might have a respectable HDI score while women within it faced dramatically worse access to education, income, and political power. Addressing this blind spot became the task of two new indices introduced in 1995.

Gender-related Development Index (GDI) 🔗

The GDI and the Gender Empowerment Measure (GEM) were introduced in 1995 in the Human Development Report written by the UNDP, with the explicit aim of adding a gender-sensitive dimension to human development measurement. The GDI measures gender inequalities in achievement across three basic dimensions of human development: health, measured by female and male life expectancy at birth; education, measured by expected and mean years of schooling for both sexes; and command over economic resources, measured by female and male estimated earned income.

Think of the GDI as the HDI with a gender equity lens applied. It uses an “inequality aversion” penalty – the greater the gap between men’s and women’s outcomes in any dimension, the more it reduces a country’s GDI score relative to its HDI. The GDI suggests, appropriately, that gender inequality is not only a problem for those it disfavors, but that it detracts from overall development in a country. No country in the world, as the data consistently show, achieves full gender parity across all three dimensions, though countries like Norway, Iceland, and Finland historically come the closest.

Gender Empowerment Measure (GEM) 🔗

Where the GDI examines basic well-being outcomes, the Gender Empowerment Measure (GEM) shifts the focus to power and agency. The GEM was designed to measure whether women and men are able to actively participate in economic and political life and take part in decision-making. It targets three key areas of participation. Political participation is measured by the percentage of parliamentary seats held by women. Economic participation and decision-making is measured through women’s shares in senior management, professional, and technical roles. Power over economic resources is captured through estimated earned income, comparing what women actually earn relative to men.

The GEM was intended to measure women’s and men’s abilities to participate actively in economic and political life and their command over economic resources. Its key insight was that women can be present in a workforce and still be excluded from positions of authority – and that a democracy can hold elections without women’s voices meaningfully shaping policy. The GEM forced policymakers to ask not just whether women were participating in society, but how and at what level.

Limitations and the path to the Gender Inequality Index 🔗

Both the GDI and GEM, despite their contributions, faced significant criticism. Given the amount of criticism the GDI and GEM were facing, the UNDP felt that these indices did not fully capture the differences between gender, particularly because the income component tended to dominate results, disadvantaging lower-income countries even when their gender gaps were relatively small. The GEM was also criticized for an elite bias – its focus on parliamentary representation and senior economic roles effectively ignored women working in informal sectors, local governance, or grassroots organizations, where the majority of women in developing countries are actually found. In 2010, the UNDP introduced the Gender Inequality Index (GII) as a more refined replacement, covering reproductive health, empowerment, and labor market participation, and removing the contested income comparison that had skewed earlier results.

What these indices mean for development communication 🔗

The evolution from GDP to HDI to GDI, GEM, and beyond represents more than a statistical debate – it reflects a fundamental shift in how societies define progress itself. Development communication, as a field, relies on these indices to tell stories that GDP never could: stories about maternal mortality rates, girls’ school enrollment, women in parliament, and households without clean water. Each new index has expanded the vocabulary available to journalists, policymakers, and advocates working to hold governments accountable to human outcomes. UNDP’s annual Human Development Reports have successfully shifted the development debate from unidimensional, income-based indices to the inclusion of non-income and multidimensional variables in the measurement of development. That shift – from counting money to counting what money should enable – remains the most important methodological revolution in modern development thinking.

What do you think? If you were designing a new development index today, what dimension would you add that the HDI still fails to capture – mental health, digital access, or something else entirely? And given that no country in the world achieves full gender parity on the GDI, does that suggest something structural about how societies are organized, or is it simply a matter of policy will?

References

1. https://hdr.undp.org/about/human-development
2. https://link.springer.com/article/10.1007/s10888-011-9178-z
3. https://measureofamerica.org/human-development/
4. https://en.wikipedia.org/wiki/Human_Development_Report
5. https://en.wikipedia.org/wiki/Human_Development_Index
6. https://hdr.undp.org/content/revisiting-human-development-measurement-whats-stake
7. https://en.wikipedia.org/wiki/Human_Poverty_Index
8. https://hdr.undp.org/content/multidimensional-poverty-and-its-assessment-found-their-place-2030-agenda
9. https://hdr.undp.org/content/2022-global-multidimensional-poverty-index-mpi
10. https://en.wikipedia.org/wiki/Gender_Development_Index
11. https://hdr.undp.org/gender-development-index
12. https://www.sciencedirect.com/science/article/abs/pii/S0305750X99000352
13. https://en.wikipedia.org/wiki/Gender_Empowerment_Measure
14. https://www.undp.org/india/publications/gendering-human-development-indices-recasting-gender-development-index-and-gender-empowerment-measure-india
15. https://en.wikipedia.org/wiki/Gender_Inequality_Index