Chapter 3 — Human Development

Growth is quantitative and value-neutral — it can be positive (an increase) or negative (a decrease). Development is a qualitative change that is always value-positive; it occurs only when there is a positive change in quality, not merely a change in size.

Dr Mahbub-ul-Haq, a Pakistani economist, introduced the concept of human development. He defined it as development that enlarges people's choices and improves their lives, and created the Human Development Index in 1990.

The four pillars are equity (equal access to opportunities irrespective of gender, race, income, or caste), sustainability (continuity of opportunities across generations), productivity (human labour productivity enriched through capability-building), and empowerment (power to make choices through increasing freedom and capability).

Health, education, and access to resources are the three key areas of human development. These are also the three dimensions measured by the Human Development Index.

The HDI gives each of three dimensions a weightage of 1/3: health (life expectancy at birth), education (adult literacy rate and gross enrolment ratio), and access to resources (purchasing power in US dollars). The score ranges from 0 to 1; closer to 1 means greater human development.

The four approaches are: (a) Income approach — links level of income to level of freedom and human development; (b) Welfare approach — treats people as passive recipients and stresses government expenditure on education, health, and social amenities; (c) Basic Needs approach (initially proposed by the ILO) — focuses on six basic needs: health, education, food, water supply, sanitation, and housing; (d) Capabilities approach (associated with Prof Amartya Sen) — focuses on building human capabilities in health, education, and access to resources.

The Human Poverty Index is a non-income measure that captures the shortfall in human development. It considers the probability of not surviving to age 40, the adult illiteracy rate, the number of people without access to clean water, and the proportion of underweight small children.

Very high (above 0.800) — 69 countries; High (0.700–0.799) — 49 countries; Medium (0.550–0.699) — 42 countries; Low (below 0.550) — 33 countries.

Sri Lanka and Trinidad and Tobago both rank higher than India on the HDI despite having smaller economies. Within India, Kerala performs much better than Punjab and Gujarat in human development despite having a lower per capita income.

Bhutan is the only country in the world to officially proclaim Gross National Happiness as the measure of its progress. GNH encourages consideration of spiritual, non-material, and qualitative aspects of development, recognising that material progress cannot come at the cost of happiness.

Nobel Laureate Prof Amartya Sen saw an increase in freedom (or decrease in unfreedom) as the main objective of development. His capabilities approach focuses on building human capabilities in health, education, and access to resources. He worked closely with Dr Mahbub-ul-Haq on the early Human Development Reports.

The United Nations Development Programme (UNDP) has been publishing the Human Development Report every year since 1990. It provides a rank-wise list of all member countries according to their level of human development using the HDI and HPI.

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