Human Development

This review of life in the poorest countries of the world reminds us of the importance of adequate incomes in meeting basic needs as well as the fact that life involves more than market incomes. An interesting new.approach that combines economic indicators with social indicators is the Human Development Index, or HDI, developed by the United Nations Development Program with the assistance of economists Martyr Sen and Gustav Rains. The HDI includes four different indexes: per capital real GDP, life expectancy at birth, school enrollment. and adult literacy. The idea is that economic growth should enrich people’s health and education as well as their purses.

Figure 28-1on page 594 shows a plot of the HDI and per capital output ..The correlation is strong, but there are, exceptions to the general positive relationship. Some countries, such as Algeria, Gabon, and Singapore, score poorly on the HDI scale for their income levels. Others-Costa Rica, Canada and Sri Lanka-emphasize human development and score high relative to other countries with their ‘income levels. This interesting new approach is a reminder that we should not neglect the human dimensions of economic growth

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