SEMESTER – II

MACROECONOMIC 

8. Explain
the criticisms of HDI.

ANS:

The Human Development Index
has been criticized for failing to include any
ecological considerations, focusing exclusively on national performance and
ranking (although many national Human Development Reports,
looking at sub-national performance, have been published by UNDP
and others—so this last claim is untrue), not paying much
attention to development from a global perspective and based on
grounds of measurement error of the underlying statistics and
formula changes by the UNDP which can lead to severe
misclassifications of countries in the categories of being a ‘low’, ‘medium’,
‘high’ or ‘very high’ human development country.

Economists Hendrik Wolff, Howard
Chong and Maximilian Auffhammer discuss the HDI
from the perspective of data error in the underlying health,
education and income statistics used to construct the HDI. They
identify three sources of data error which are due to (i) data updating,
(ii) formula revisions and (iii) thresholds to classify a country’s
development status and find that 11%, 21% and 34% of all countries can
be interpreted as currently misclassified in the
development bins due to the three sources of data error, respectively. The
authors suggest that the United

Nations should discontinue the
practice of classifying countries into development bins because the
cut-off values seem arbitrary, can provide incentives for
strategic behavior in reporting official statistics, and have the
potential to misguide politicians, investors, charity donators and the
public at large which use the HDI.

In 2010 the UNDP reacted to
the criticism and updated the thresholds to classify nations
as low, medium and high human development countries. In a comment
to The Economist in early January 2011, the Human
Development Report Office responded to a January 6, 2011 article in
The Economist which discusses the Wolff et al. paper. The Human
Development Report Office states that they undertook a
systematic revision of the methods used for the calculation of the HDI and
that the new methodology directly addresses the critique by
Wolff et al. in that it generates a system for continuous updating of the
human development categories whenever formula or data revisions
take place. Some common criticisms of the HDI are as
follows:

1. It is a redundant measure
that adds little to the value of the individual measures composing
it.

2. It is a means to provide
legitimacy to arbitrary weightings of a few aspects of social
development.

3. It is a number producing a
relative ranking which is useless for inter-temporal comparisons,
and difficult to compare a country’s progress or regression since
the HDI for a country in each year depends on the levels of, say,
life expectancy or GDP per capita of other countries in that
year. However, each year, UN member states are listed and ranked
according to the computed HDI. If high, the rank in the list can
be easily used as a means of national aggrandizement;
alternatively, if low, it can be used to highlight national
insufficiencies.

Ratan Lal Basu criticizes the
HDI concept from a completely different angle. According to
him the Amartya Sen-Mahbub ulHaq concept of HDI considers that
provision of material amenities alone would bring about Human
Development, but Basu opines that Human Development in the true
sense should embrace both material and moral
development. According to him human development based on HDI
alone, is similar to dairy farm economics to improve dairy
farm output. To quote: ‘so human development effort should not
end up in amelioration of material

deprivations alone: it must
undertake to bring about spiritual and moral development to assist
the biped to become truly human.’ For example, a high suicide rate
would bring the index down. A few authors have proposed
alternative indices to address some of the index’s
shortcomings. However, of those proposed alternatives to the HDI, few
have produced alternatives covering so many countries, and that no development
index (other than, perhaps, Gross Domestic
Product per capita) has been used so extensively—or effectively, in
discussions and developmental planning as the HDI.

 

• Macroeconomics m.com semester 2  important question bank pdf
• m.com semester 2 Macroeconomics important question bank pdf
• macro economics m.com part 1 question papers with answers idol
• mcom sem 2 macro economics question paper with Answers
• mcom sem 2 macro economics question paper
• m.com question papers with answers pdf mumbai university
• mumbai university solved question papers download pdf
• m.com part 1 question papers with answers idol
• mumbai university question papers download pdf
• m.com question paper mumbai university
• mumbai university previous year question papers with solutions
• mumbai university old question papers
• mumbai university solved question papers download pdf macro economics

If you want exam most important question bank pdf then you have to pay per subject 100/- rupees only . 

Contact 8652719712 / 8779537141