Improving human development: a long-run view

The pessimistic flavour of the Human Development Reports appears to be in contradiction with their own numbers as developing countries fare comparatively better in human development than in per capita GDP terms. This paper attempts to bridge this gap by providing a new, ‘improved’ human development index (IHDI), informed by welfare economics. The IHDI is presented here alongside the United Nations Development Programme’s (UNDP) HDI for the world and its main regions since the late 19th century. Social dimensions in the IHDI are derived, following Kakwani (Journal of Development Economics 41 (1993), pp. 307–336), with a convex achievement function, whereas a geometric average is employed to combine its dimensions (longevity, knowledge and income). Thus, the IHDI does not conceal the gap between rich and poor countries and casts a much less optimistic view than the conventional UNDP index, while it fits with the UNDP concern for international differences. The paper’s findings highlight main weaknesses in human development dimensions of present-day developing countries.European Community's Seventh Framework ProgramFinancial support from the Spanish Ministry of Science and Innovation (Research Project ‘Consolidating Economics’, Consolider-Ingenio 2010 Programme), the HI-POD Project, Seventh Research Framework Programme Contract no. 225342, and Fundación Rafael del Pino’s Research Project on ‘Economic Freedom in History’ is highly appreciated.Publicad