Advancing Human Development: Theory and Practice

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1 Advancing Human Development: Theory and Practice
Frances Stewart

2 Human Development an approach to development which makes the improvement of all people’s lives the central objective

3 Lecture presents an overview of the book

4 Plan of lecture The origins of the idea of HD.
Basic HD; and broader dimensions Its relationship to economic growth Identifying paths of particularly successful countries; and ones with negative experiences. Three examples of success. Progress Some thoughts on implications for approaches to financial inclusion Some neglected aspects and challenges for future.

5 Tracing the origins Many historic origins – e.g. Aristotle. Eudaimonia or the ‘good life’. More recent history, start in 1950s Newly independent countries, very poor, aimed for growth and industrialization to catch-up with developed countries. Following Keynesian philosophy of developed countries adopted interventionist, planned, import-substituting strategy. Broadly successful Growth accelerated; investment rose; industry increased.

6 Broadly successful

7 Yet problems became apparent
Unemployment and underemployment Poverty persisted Inequality was high. Plus high dependence on developed countries Argued high inefficiency of economic strategy (Little,Scott and Scitovsky, Belassa, Kreuger…). Argued for more markets, less state.

8 In reaction: A concerted attack on economic growth as the overriding objective
Dudley Seers, ‘dethroning GNP’: ‘The questions to be asked about a country’s development therefore are: ‘What has been happening to poverty? To unemployment? To inequality’. ‘Fulfillment of human potential requires ..adequate education levels, freedom of speech, citizenship…’ But ‘national income is not totally useless just because it is not an indicator of development’ (Seers,’The Meaning of Development’, 1969).

9 Amartya Sen: defects of GNP
Consequentialist. Neglects agency (1985) Physical condition neglect (1985) Neglects social interactions ‘The rational economic man is close to being a social moron’.(1977) Capabilities as the objective (1980, 1995): Aim of development is to increase peoples capabilities or freedoms, i.e. to advance valued beings and doings. Incomes a means only. Note: Aristotle is there in both Seers and Sen.

10 New development approaches in 1970s
Seers focus on employment Chenery et al. Redistribution with growth. ILO/WB Basic Needs. But from 1980 market critique of Western economists, including IMF and WB, all- powerful as a result of political changes in advanced countries and debt situation in developing countries.

11 Human Development emerges…
1980s, both growth and human-centred approached abandoned by policy-makers for stabilization and marketization. Falling incomes, rising poverty. Led to renewed emphasis on human dimensions. (Adjustment with a Human Face) 1990 UNDP, Mahbub ul Haq, brought together Sen and basic needs theorists, and Human Development approach emerged in Human Development Report.

12 HD defined in first report
Put human life at the centre. Advancing human potential to lead full lives the objective. The economy is a means not the end. Kant: ‘so act as to treat humanity …in every case as an end withal, never as a means only’ ‘The basic objective of development is to create an enabling environment for people to live long, healthy and creative lives’ (HDRO 1990) ‘Human development is a process of enlarging peoples choices. The most critical ones are to lead a long and healthy life, to be educated and to enjoy a decent standard of living. Additional choices include political freedom, guaranteed human rights and self-respect’ (HDRO 1990)

13 Compared with previous approaches
Makes the economy a means not an end. Employment (Seers) a means and end, but only one of many. BN essential, but goes beyond it. Sen’s capabilities, central, but HD adopts the pragmatism and especial focus on the needs of the poor of BN.

14 Basic HD and broader dimensions
HD aims for fulfillment of human potential: to advance valued choices people can make. Hence many dimensions. Yet at country level often measured by HDI: Life expectancy Measure of education Adjusted income per capita This we call ‘basic HD’. Doesn’t begin to incorporate a full measure of HD

15 Many approaches to defining dimensions of human fulfillment : for example
Author Philosophical justification Rawls Deliberative rationality – general facts about human wants and abilities and the necessities of social interdependence. Finnis Practical reasoning – ‘critical reflection about the planning of one’s life’ Doyal and Gough Avoid serious harm Nussbaum Overlapping consensus – what people agree even with different religions and philosophies Voices of the poor (Chambers/Narayan-Parker). Views of the poor Wellbeing in developing countries Group Consult people on characteristics of quality of life

16 Selection of 12 categories of HD from 6 approaches
1. Basic material aspects (directly encompassed by HDI) 2. Mental wellbeing 3. Empowerment 4. Political freedom 5. Social relations 6. Community wellbeing 7. Inequalities 8. Work conditions 9. Leisure conditions 10 Political security 11. Economic security 12. Environmental conditions

17 Cross country correlations of indicators of dimensions show:
HDI is a good indicator of basic aspects : high correlations between HDI and under 5 mortality, infant mortality, maternal mortality adult illiteracy But beyond that, 4/11 categories had NO indicator that correlated with HDI at more than 0.6 correlation coefficient including political freedom and stability; and inequalities. HDI does better than income per capita. But does not measure most of the broader aspects of HD. To assess performance and investigate policies on broader aspects must go beyond HDI.

18 High correlation with HDI Indicators not correlated with HDI
Category High correlation with HDI Indicators not correlated with HDI Mental wellbeing Life satisfaction Male suicide rate; Prisoners Empowerment $1 a day poverty Contraceptive access GEM; Fem/male secondary educ. Union density Political freedom -- Pol/civil liberties; Pol terror Juridical independence Community wellbeing AIDs Rule of law Alcohol cons.; Natural disasters Tolerance of neighbours Inequalities Income Gini; Horiz. Inequl. Rural/urban inequ.; GDI; Health inequ. Work conditions Child labour Unempl; Emp. Conditions; Informal sector ratio Min. wage policy Leisure conditions Phone avail. Cinema attendance Economic Stability Social security avail. GDP cycle; CPI cycle Portfolio inv.; T of T. fluctuations Political stability Pol violence; Refugee flows Environmental conditions Environmental indicator

19 Role of financial inclusion?
1. Basic material aspects Helps, finance food, school fees, medical costs Income earning activities 2. Mental wellbeing Can enhance via security; Can worsen via accumulated debt 3. Empowerment contributes 4. Political freedom na 5. Social relations Depends on form: Chamas, yes; banks, no? 6. Community wellbeing ? 7. Inequalities Can improve F/M equality 8. Work conditions Aids self-employment 9. Leisure conditions Small contribution 10 Political security Na 11. Economic security Contributes. 12. Environmental conditions Too individualistic

20 HD (basic) and economic growth : two way causation
HUMAN DEVELOPMENT Chain B Chain A ECONOMIC GROWTH

21 HEALTH SERVICE COVERAGE
HUMAN DEVELOPMENT HDIF CAPABILITIES MANAGERS;WORKERS; FARMERS C H A I N B EDUCATION ENROLLMENT HEALTH SERVICE COVERAGE WATER AND SANITATION C H A I N HOUSEHOLD EXPEND. ON BN ; ALLOCATION WITHIN HOUSEHOLDS ORGANISATION OF PRODUCTION;R AND D; INNOVATION SOCIAL AND PRIORITY RATIOS MANUFACTURED EXPORTS HOUSEHOLD INCOME AND POVERTY RATES GOVERNMENT REVENUE AND EXPENDITURE RATIOS SAVINGS AND INVESTMENT DISTRIBUTION OF INCOME DISTRIBUTION OF INCOME GNP Red text- where financial inclusion may play a role THE HD-GNP CYCLE

22 Much empirical evidence: 1. Micro studies
Massive accumulation of micro-studies on how: Growth translates into improved HD: e.g. more food exp. with more incomes; better health services, more education… [chain A] Female education improves health and education outcomes.[HDIF in Chain A] Improved HD translates into growth (e.g. literature on returns to education/health; studies of farm and industrial productivity…). [Chain B]

23 Empirical evidence: 2. Macro correlations, 1970-2014, 74 countries
Macro-level, cross-country regressions : Chain A. Level and growth in GDP associated with improved HD. Social expenditure ratio also. Gini insignificant. Improving gender parity in education improves HD outcomes. Chain B. Strong correlation between initial level and changes in HD and subsequent economic growth. Investment significant. Gini not. ‘Catch-up’ element for both chains Africa tends to do less well on both chains than other regions, and LA less well on Chain B. HDIF: Synergies among the variables – improved education improves nutrition and health and conversely.

24 Consequence: Cycles of development
HD Virtuous cycle HD-Lopsided Economic growth Vicious cycle EG-Lopsided

25 Virtuous Change in Human Development (measured by IMR) HD-lopsided Vicious EG-lopsided HD-Economic growth patterns,

26 Patterns of success and failure (basic HD)
Country success and failure in Basic HD – from 1970s to 2000s Sustained improvement- virtuous for 3 or 4 decades Successful transition, from vicious to virtuous Continuous poor performance- vicious for 3 or 4 decades Negative transition from virtuous to vicious Singapore Bangladesh Papua N.Guinea Ecuador Thailand Nepal Pakistan Guatemala Sri Lanka Ethiopia DRC Algeria China Mozambique Senegal Iraq S.Korea Botswana Togo Saudi Arabia Malaysia Rwanda Burundi Indonesia Tanzania Cote d’Ivoire Cuba Uganda Mali Uruguay Bolivia Nigeria Egypt Peru Sierra Leone Tunisia Zimbabwe

27 Alternative paths: Typologies of success and failure
Pattern Growth Social expenditure Equity Gender equity sec.educ. Examples Success on Basic HD Equitable high growth ++ + S.Korea; Sri Lanka Social expend. led Cuba Mozambique Intermediate path Nepal Bangladesh Lack of success on Basic HD All negative - low DRC Burma Inequitable stagnation Cote d’Ivoire Zimbabwe Inequitable growth Ecuador Guatemala

28 Beyond the HDI: NO systematic relationships
Political freedoms: Limited freedoms in many successes (Cuba, China, Bangladesh, Nepal) and failures (Burma and Saudi Arabia); and freedom in some ‘failure’ cases –Ecuador, PNG, Guatemala. Lack of security: Homicides mainly lower in success countries; Political violence affected successes and failures (e.g. Sri Lanka, success) and DRC (failure) Gender empowerment better among successes, but Environment: worse among successes.

29 Three successful countries in basic HD, from 1970s-2000s
HD-Lopsided Virtuous cycle HD 1990s Ethiopia 2000s Thailand, 1970s-2000s 1990s 2000s Economic growth 1970s 1980s Bangladesh 1980s Vicious cycle EG-Lopsided 28

30 Annual % growth in per capita incomes
Economic Performance Annual % growth in per capita incomes

31 Human Development Performance

32 Agents of change: Thailand
progressive bureaucrats, especially in health, supported by progressive govt., elected with support of rural poor. Social sector expenditure increased fast supported by rising government revenue. Introduction of universal health care (free), 2002. ‘A person shall enjoy an equal right to receive standard public health service and and the indigent shall have the right to receive free medical treatment; (2002 National Health Security Act). By 2013: every birth attended by skilled health person.

33 Agents of change: Bangladesh
NGOs very extensive, provided health services, education and microcredit (GRAMEEN and BRAC). Over 90% of Grameen credit to women. BRAC claims reaching 100m people. NGOs basis of rise in secondary enrolment. Over 40% of primary school children in ‘private’ schools’: 95% of secondary. (In Thailand 21%; and 17%). Govt, investment in social sector quite low. Private sector, small scale entrepreneurs in textiles. Women empowered by education, employment and credit. “The garments industry has created the rise of financially independent and successful women in Bangladesh and is responsible for a dramatic shift in paradigm for Bangladeshi society.” “women have a much bigger say now…When she started bringing in money then she was valued by the husband and mother-in-law as well” (interviews in studies of garment industry).

34 Agents of change: Ethiopia
Progressive govt. outcome of armed struggle, ideologically committed, from mid-1990s Supported by aid community Massive droughts in 1980s and 1990s led to millions of deaths. New social protection and relief systems have stopped this. Productive Safety Net Programme largest in Africa.

35 Economic strategies All showed very large rises in investment
Thailand GFC/Y reached 40% of GDP Bangladesh from 9% to 28% Ethiopia: reached 39% by 2015. Mostly market oriented, steered by state in Ethiopia. Growth broadly equitable because: All put resources into agriculture. And supported labour intensive exports (textiles; flowers). Equitable results: Bangladesh Gini 0.32; Ethiopia, 0.3; Thailand,

36 Alternative social allocations, 2012
Total government expenditure , % GDP Public Health and educ, expend. % govt. expenditure Public Health and education expend., % GDP Ethiopia 17.8 49.0 8.9 Thailand 23.3 35.1 7.8 Bangladesh 14.5 22.5 3.2 Ethiopia and Bangladesh: low govt. expenditure. Ethiopia very high social allocation.High S/Y. Bangladesh low social allocation and low S/Y (doesn’t include non-Govt.). Thailand: highest govt. exp. and high social allocation. High S/Y.

37 Differences and similarities
All supported both social and economic aspects Social sectors financed differently; but all improved gender balance. Economic: All put resources into rural sector; and promoted labour intensive diversification. Major emphasis on developing human capabilities. Broadly open-economy, market oriented Different agents led: Thailand, progressive bureaucracy and foreign investment. Ethiopia, progressive state Bangladesh, NGOs and private sector. None especially democratic or uncorrupt.

38 Conclusions from country studies
No unique route to achieving either social or economic success, Social investments can be supported by high government revenue; by aid; or by NGOs; or a combination. Or by lower revenue but higher allocations to social sectors. Political conditions and agents of change differ.

39 Financial inclusion and HD
In theory can make a four-fold contribution: 1. to financing HD-promoting activities (education; health; nutrition;…), directly and by contributing to income-earning activities. 2. Can improve economic security; maintaining essential expenditures in bad times, and avoid catastrophic loss of incomes. 3. Can increase people’s sense of dignity; reduce their sense of vulnerability. 4. Can improve female empowerment. BUT DOES IT? - Do formal lending institutions displace informal and reduce social connections? - Does it lead to heavy indebtedness? -Does it make more than a marginal contribution to these four factors? Some successful experience in Bangladesh; but not so good in India.

40 General findings on global progress on HD from 1980-2015
Advance in Basic HD everywhere but at varying rates. Mixed picture on broader dimensions Progress - empowerment; leisure conditions; political freedoms (now some reversal); economic insecurity. Mixed - work conditions; inequalities; political insecurity; mental health. Mostly worsening – community well-being; political insecurity; environment

41 Major progress in Basic HD for each region
Change in HDI by region, , % p.a

42 Broader dimensions of HD for world as a whole: 1980-2015
Broader dimensions of HD for world as a whole: Progress uneven and some regress Dimension Indicator Change: developing countries Mental health Suicide rate Mixed. Rising LA Empowerment F/M educ.,poverty, TUs Mainly positive Pol freedoms Freedom House,’free’ + to 2000, then stable; post neg. Community well-being Homicides; road accid.; rule of law; trust. Mainly worsening Inequalities Gini country and global, gender Country Gini mainly worse; global G. small improvement; gender +. Work conditions U/e, share of agric, informal sector, child lab., wage share U/e, ag. Share, child labour down; rise in informal sector; fall in wage share Leisure conditions Consumer goods; impt. of leisure C-goods up; impt. of leisure up. Pol. insecurity Violent conflicts; refugees Fell from 1995; rose sharply from 2009 Economic insecurity GDP fluctuations Improvement 1980s to 2000s. Environment Material footprint; CO2 Universal worsening

43 Important issues that have been neglected or down-played in HD analysis and policy
Social institutions Political conditions Economic policies: economic structure and macro. Environment

44 Neglected issues 1. Social institutions and social capabilities.
Capability approach essentially individualistic: -aim to advance individual capabilities. Similarly, mostly, approaches to HD. Tendency to neglect social institutions and social capabilities, i.e. where people together form groups to advance their conditions, to enjoy their choices etc. As people are essentially social and cannot survive or function alone, critically important omission. Etzioni: ‘a basic observation of sociology and psychology is that the individual and the community ‘penetrate’ one another and require one another’

45 Range of relevant social institutions
Here looking at collective activities, outside the state and outside the private sector. Includes formal and non-formal groups: - families, communities, associations (identity or producer/worker), NGOs… Informal financial institutions. - and social norms –includes reciprocity and helping family and neighbours.

46 Why social institutions and social capabilities are important
Conceptually. Choices are formed socially. Individuals are not autonomous. Hence the fundamental building block of HD defined as: ‘a process of enlarging people’s choices’ is questioned. Choices in which context? Influenced by whom? Informal institutions and norms especially relevant. Instrumentally. As producers of HD goods and services - Families; NGOs; social enterprises. 2. As ‘claims’ institutions, demanding rights, improved terms, political change…..Especially important for poor people, powerless alone, but can exert some influence collectively. Scavengers associations; sex workers…

47 Multiple influence of social organisations on dimensions of HD
Dimension of HD Social organisation Social norms Basic HD NGOs, communities, families, producer and worker organisations; financial institutions Norms towards health behaviour, attitudes to violence, employment and discrimination. Norms of reciprocity. Mental wellbeing Family/communities Social expectations and attitudes Work Workers associations Norms towards female and child labour Security Warring groups and gangs; community associations Societal norms towards violence Social relations Family, community, clubs Attiitudes towards diversity Spiritual wellbeing Religious organisations Attitudes. Empowerment and political freedom Political parties, social movements, people’s associations. Norms of hierarchy and discrimination Environment Community associations; NGOs Norms of respect for and behaviour towards environment

48 Far reaching implications
Have to consider why and how social norms and institutions are formed. Impact of other activities and institutions on social institutions and norms – including markets, capitalist firms, states. And interactions among social institutions. Does advance in one direction undermine or support advance in others? Social aspects need to enter into societal evaluations, along with material and political. How can choices be validated since they are not autonomous?

49 Neglected issues 2. ‘Real’ politics (mainly) not addressed
Sen/Nussbaum – democratic consensus. Rational discussion leading to agreement. Is this how political decisions are taken? Similarly HD is UN based- avoids politics. Talks of ‘political will’. Where is power struggle; interest groups; political action? Need to explore how and why political movements develop; and collective action. Draw on Polanyi’s analysis: and on social movt. literature See 19th and 20th C. and emergence of welfare state; see devts. in Brazil, Bolivia, S.Korea, India…. And negative trends

50 Neglected issues 3. Economic strategies – macro economics and structural change
Progress in the global acceptance of HD huge: MDGs; SDGs… But has occurred without any challenge to the dominant economic model either theoretically or in policy terms, i.e. small state; market dominance; budget discipline. Threatens to undermine HD achievements: Because of rising inequality; Dead-end economic model for primary producers. Worsening community well-being Environmental implications.

51 Neglected issues 4. Environment
Future generations should count as much as today’s. Yet HD policy and measurement concerns people alive today. Many negative environmental consequences of present policies. Integrating future generations raises challenges conceptually, for measurement for policy and for nature of decision-making.

52 These represent challenges for HD advance in the 21st century : apply to developed countries as much as developing Social and collective side of HD instrumentally and as an objective. Political conditions Role of state in economy: Economic policy for structural change; how to finance HD expenditures. Environment, most critical because looming threat to HD of future generations.

53 ‘so act as to treat humanity …in every case as an end
‘so act as to treat humanity …in every case as an end ..never as a means only’ (Kant)