What drives quality-adjusted human development achievements?
Since its inception, the main analytical contribution of the Human Development Index (HDI) has been its emphasis on enhancing the quantity of its components. In this paper, a set of qualitative indicators are introduced in order to formulate a quality-adjusted human development index (Q-HDI) which discounts HDI scores by taking into account three dimension-specific quality indicators, namely income distribution, quality of education and healthy life expectancy. This paper also introduces the human development drivers index (HDDI), which has been formulated to capture the strength of three interrelated policy input variables affecting the Q-HDI, namely the health sector capacity index, pupil-teacher ratio index, and economic complexity index.
The results reveal that the Q-HDI brings about a new development narrative, especially for countries with large rank adjustments under the Q-HDI compared with their ranks under the HDI. Also, although the vast majority of countries achieve proportional HDDI and Q-HDI scores, there are a number of clear outliers which may be due to governance factors. Based on these results, this paper suggests that countries invest in health and education sector capacities, promote economic diversity and adopt macroeconomic policies that leverage improvements in health and education quality, including, in particular, policies that generate inclusive broad-based economic growth by supporting the transition to a knowledge-based economy. In tandem with efforts to improve governance systems and enhance participation, accountability and the rule of law, this appears the most appropriate approach for advancing quality-adjusted human development.