The Real Wealth of Nations: Pathways to Human Development

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For the first time, the Report looks back rigorously at the past several decades and identifies often surprising trends and patterns with important lessons for the future. These varied pathways to human development show that there is no single formula for sustainable progress - and that impressive gains can be achieved even without consistent economic growth.

A key component of every report is the Human Development Index (HDI), which measures people’s well-being by combining measures of health, education and wealth. Since its inception, the HDI has become a prominent global measure of well-being. By offering a comparison of where countries stand in the world, the HDI led the way in moving away from income as the sole measure of development.

“People are the real wealth of a nation.” With these words the 1990 Human Development Report began a forceful case for a new approach to thinking about development. That the objective of development should be to create an enabling environment for people to enjoy long, healthy and creative lives may appear self-evident today. But that has not always been the case. A central objective of the Report for the past 20 years has been to emphasize that development is primarily and fundamentally about people.

This year’s Report celebrates the contributions of the human development approach, which is as relevant as ever to making sense of our changing world and finding ways to improve people’s well-being. Indeed, human development is an evolving idea - not a fixed, static set of precepts - and as the world changes, analytical tools and concepts evolve. So this Report is also about how the human development approach can adjust to meet the challenges of the new millennium.

The past 20 years have seen substantial progress in many aspects of human development. Most people today are healthier, live longer, are more educated and have more access to goods and services. Even in countries facing adverse economic conditions, people’s health and education have greatly improved. And there has been progress not only in improving health and education and raising income, but also in expanding people’s power to select leaders, influence public decisions and share knowledge.

Yet not all sides of the story are positive. These years have also seen increasing inequality - both within and across countries - as well as production and consumption patterns that have increasingly been revealed as unsustainable. Progress has varied, and people in some regions - such as Southern Africa and the former Soviet Union - have experienced periods of regress, especially in health. New vulnerabilities require innovative public policies to confront risk and inequalities while harnessing dynamic market forces for the benefit of all.

Addressing these issues requires new tools. In this Report we introduce three measures to the Report family of indices - the Inequality-adjusted Human Development Index, the Gender Inequality Index and the Multidimensional Poverty Index. These state-of-the-art measures incorporate recent advances in theory and measurement and support the centrality of inequality and poverty in the human development framework. We introduce these experimental series with the intention of stimulating reasoned public debate beyond the traditional focus on aggregates.

Today’s challenges also require a new policy outlook. While there are no silver bullets or magic potions for human development, some policy implications are clear. First, we cannot assume that future development will mimic past advances: opportunities today and in the future are greater in many respects. Second, varied experiences and specific contexts preclude overarching policy prescriptions and point towards more general principles and guidelines. Third, major new challenges must be addressed - most prominently, climate change.

Many challenges lie ahead. Some are related to policy: development policies must be based on the local context and sound overarching principles; numerous problems go beyond the capacity of individual states and require democratically accountable global institutions. There are also implications for research: deeper analysis of the surprisingly weak relationship between economic growth and improvements in health and education and careful consideration of how the multidimensionality of development objectives affects development thinking are just two examples.

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