If one were to look merely at bank slips, the world's countries and people are far less equal today than they were a mere two decades ago. But dig deeper, and the opposite is true: quality of life worldwide is moving toward a rather impressive average. In terms of health, education, and living conditions, the richest and poorest nations are looking more alike. In other words, it's now possible to be a poor country and boast healthy, educated citizens.
This is perhaps the most important contribution of the United Nations' Human Development Index (HDI) -- a broad measure of global prosperity that has become the gold standard for comparing how countries stack up. On the 20th anniversary of its creation, the new index has been dramatically revamped to provide greater nuance and detail about the state of the world's people. The good news is that the world is undeniably progressing. The bad news is that the index reveals that the poor -- those left furthest behind by that progress -- are more numerous than we thought.
When the HDI was first released in 1990, it transformed the way policymakers, journalists, and the public viewed the development of countries around the world. "Rather than focusing on only a few traditional indicators of economic progress," Nobel Prize-winner Amartya Sen, one of the original creators of the index, writes in the introduction, "'human development' accounting proposed a systematic examination of a wealth of information about how human beings in each society live and what substantive freedoms they enjoy." Relying on economic might alone, for example, one could assume that oil-producing Nigeria is among the wealthiest countries in Africa; its remarkably low human development index, however, puts it well below nominally smaller economies such as Ghana and Cameroon, both of which are dwarfed by Nigeria's gross output.
Two decades later, that once groundbreaking methodology was due for an update. "The HDI was radical at the time in providing an alternative to [such gross economic measures as] GDP, but since then, a lot has happened," said Jeni Klugman, director of the index, in an interview. The initial HDI used country-wide averages for indicators like household income, for example, and thus failed to account for vast differences within countries. This was particularly apparent in natural-resource rich countries such as Angola or Equatorial Guinea for example, where the size of the country's economy -- divided by the number of its people -- seemed to show that things were going fairly well. But the index failed to account for the consolidation of that wealth in the hands of a small group of people -- leaving extensive poverty elsewhere.
Some of the specific indicators had also grown outdated. (The index is based on three primary areas: income, education, and health.) For example, literacy, the primary indicator for education, no longer varies significantly enough between countries to be a useful measure of educational attainment; development experts now consider years spent in school more relevant. Likewise, the index now measures a country's economy using Gross National Income (GNI) rather than Gross Domestic Product (GDP). The change is technically small but conceptually rather large: while GDP measures all wealth and income produced within a country's borders, GNI includes income earned by citizens working or living abroad. The advantage is most visible in measuring of remittances, which are counted in GNI but not GDP, and can have a huge impact on a country's development.
The broad results have not dramatically changed under the new system. The West -- and particularly Scandinavia -- does particularly well; Norway takes this year's top honors, while the United States ranks fourth. Familiar faces are also clustered toward the bottom of the index, with Zimbabwe, the Democratic Republic of the Congo (DRC), and Niger filling out the bottom three spots.
More interesting is the middle of the index, where most of the movement has taken place. Over the last 20 years, the countries that have improved most include such well-known success stories as China (up 8 places since 2005), Indonesia (+2), and South Korea (+8). Yet while these countries have risen in large part due to improvements in income, other top performers can credit advances in education and health for their rise. Nepal, for example, has made large strides in primary education. Back in 1970, Oman would have scored similarly to the DRC on the index; the Gulf state had a mere three primary schools in the entire country. But over the following decades, Oman funneled its oil wealth into education infrastructure -- paying particular attention to the technical training that its economy demanded. Today, the average Omani lives three decades longer than the average Congolese.
The HDI's new inequality sub-index adds further nuance to the story. The utility of building the new sub-ranking was to highlight differences in quality of life within a population. In other words, the greater the proportion of people who do not meet basic benchmarks on income, health, and education, the more a country will suffer on the index. For example, the average Brazilian might attend school for seven years -- but many do not. Brazil falls from 73rd place to 88th once inequality is considered.
Countries in the West perform well on this basic standard -- most citizens complete secondary school, live above a certain age, and have a relatively high base level of income. But in much of the world, this is not yet the case. Eighty percent of all countries lost at least 10 percent of their HDI score when differences across socioeconomic classes were taken into account. Not surprisingly, countries that were lower on the index to begin with suffer an even greater loss: 45 percent in the case of Mozambique, for example. However, high- and middle-income countries also suffer from notable inequality: Argentina, which ranks 46th of 169 countries prior to accounting for inequality, drops to 67th place after taking stratification into account. Brazil, Colombia, Morocco, Peru, and South Africa all lose more than a quarter of their baseline score to inequality as well.