Fundamentals of Economics
The Human Development Index (HDI) is a composite statistic of life expectancy, education, and per capita income indicators, which are used to rank countries into four tiers of human development. The HDI was first developed by Pakistani economist Mahbub ul Haq in 1990 and is currently maintained by the United Nations Development Programme (UNDP). The HDI is a more holistic measure of a country's development compared to measures that focus solely on economic indicators like Gross Domestic Product (GDP).
The HDI is calculated as the geometric mean of three components:
The HDI ranges from 0 to 1, with 1 being the highest possible score. Countries are grouped into four tiers of human development based on their HDI score: very high, high, medium, and low. As of 2020, Norway had the highest HDI score of 0.957, while Niger had the lowest score of 0.394.
The HDI has been criticized for not considering other factors that contribute to a country's development, such as inequality, gender disparities, and environmental sustainability. However, it remains a widely used measure of human development and has helped to shift the focus of development policies from economic growth to more comprehensive measures of well-being.
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