POLITY
11. Development processes and the development
industry the role of NGOs, SHGs, various groups and
associations, donors, charities, institutional and other
stakeholders,
2. Why is Inequality-adjusted Human Development Index (IHDI) a better measure of
development? Explain with the help of suitable examples.
The IHDI combines a country’s average achievements in health, education and income with how
those achievements are distributed among country’s population by “discounting” each dimension’s
average value according to its level of inequality. Thus, the IHDI is distribution-sensitive average
level of human development. Two countries with different distributions of achievements can have the
same average HDI value. Under perfect equality the IHDI is equal to the HDI, but falls below the
HDI when inequality rises.
The difference between the IHDI and HDI is the human development cost of inequality, also termed –
the overall loss to human development due to inequality. The IHDI allows a direct link to inequalities
in dimensions, it can inform policies towards inequality reduction, and leads to better understanding
of inequalities across population and their contribution to the overall human development cost. A
recent measure of inequality in the HDI, the Coefficient of human inequality, is calculated as an
unweighted average of inequality across three dimensions.
Body
Inequality-adjusted Human Development Index (IHDI) a better measure of development
While the HDI can be viewed as an index of average achievements in human development
dimensions, the IHDI is the level of human development when the distribution of achievements
across people in the society is accounted for. The IHDI will be equal to the HDI when there is
no inequality but falls below the HDI as inequality rises. The difference between the HDI and
IHDI, expressed as a percentage of the HDI, indicates the loss in human development due to
inequality.
IHDI show if inequality is getting better or worse. By analyzing the trend in the IHDI one can
assess the direction of the change.
One of the key properties of the approach is that it is ‘subgroup consistent’. This means that if
, inequality declines in one subgroup and remains unchanged in the rest of population, then the
overall inequality declines. The second important property is that the IHDI can be obtained by
first computing inequality for each dimension and then across dimensions, which further
implies that it can be computed by combining data from different sources, thus it is not
necessary that micro data on all components come from the same survey.
The IHDI allows a direct link to inequalities in dimensions of the HDI and the resulting loss in
human development. Thus, it can help inform policies towards inequality reduction and to
evaluate the impact of various policy options aimed at inequality reduction.
The average global loss in HDI due to inequality is about 22.9 %—ranging from 5.5% (Finland)
to 44.0% (Angola). People in sub-Saharan Africa suffer the largest losses due to inequality in all
three dimensions, followed by South Asia and the Arab States and Latin America and the
Caribbean. Sub-Saharan Africa suffers the highest inequality in health (36.6%), while South
Asia has the highest inequality in education (41.6%). The region of Arab States also has the
highest inequality in education (38%), Latin America and the Caribbean suffers the largest
inequality in income (36.3%).
The IHDI and its components can be useful as a guide to help governments better understand
the inequalities across population and their contribution to the overall loss in the level of human
development due to inequality.
The IHDI can be adapted to compare the inequalities in different subpopulations within a
country, provided that the appropriate data are available. National teams can use proxy
distributions for indicators, which may make more sense in their particular case.
Generally countries with less human development also have more multidimensional inequality and
thus larger losses in human development due to inequality, while people in developed countries
experience the least inequality in human development.
The East Asia and the Pacific Region performs well on the IHDI, particularly in access to healthcare
and education, and former socialist countries in Europe and Central Asia have relatively egalitarian
distributions across all three dimensions.
Conclusion
Though insightful, the index does not reckon several factors, such as the net wealth per capita, the
relative quality of goods, CO2 emissions, crime rate or risk of insolvency in a country. Accounting
for these will lower the rank for some of the most advanced countries, such as the G7 members and
others. However IHDI is still one of the best indicators of Human development.
, 1. Examine the significance of entrepreneurial spirit for the development of a middle income
country like India. What is your assessment of the prevailing policy environment aimed at
promoting entrepreneurship?
Entrepreneurship is the act of creating a business or businesses while building and scaling it to
generate a profit. With a target of $5 trillion economy by 2024, entrepreneurship is a buzzword which
can help India to be in a trajectory to achieve the same and helps developing countries to achieve
sustainable development.
Body
Significance of entrepreneurial spirit:
As our prime minister observed “India need more job creators than job seekers”. This is especially
significant for developing countries like India for the reasons:
Employment: World bank report states that India needs to generate at least 2 million jobs every
year. Unemployment rate has been a 4-decade high at 6.1% as per the NSSO survey.
Entrepreneurship is significant in this context generating new jobs.
Utility of demographic dividend: Mean age of working population in India is around 27 years.
New business and entrepreneurship will help utilize the demography productively in developing
countries which usually have young working population.
Secondary and tertiary sector development: Most developing countries depend on primary
sector for employment (e.g. India – around 50% in agriculture) and entrepreneurship helps them
to move in to manufacturing and services sector which more profit and employment
opportunities.
Development of global level industries: the GAFA (Google, Apple, Amazon, Facebook)
companies were started by small entrepreneurs and have contributed/contributing enormously to
the development of their parent countries. The same applies to developing countries as well
which can be possible only by promoting entrepreneurship.
Research and innovation: Entrepreneurship thrive in innovative ideas and this promote research,
development of new technologies and so on. This in turn will help utilize the natural and human
resources of the developing countries more productively.
Global presence: Entrepreneurship helps in increasing the global presence of Indian entities and
also helps in addressing fiscal deficit, reserves etc., by increasing domestic production and
increasing exports.
Mobilization of resource: especially capital where in small savings can be mobilized and
11. Development processes and the development
industry the role of NGOs, SHGs, various groups and
associations, donors, charities, institutional and other
stakeholders,
2. Why is Inequality-adjusted Human Development Index (IHDI) a better measure of
development? Explain with the help of suitable examples.
The IHDI combines a country’s average achievements in health, education and income with how
those achievements are distributed among country’s population by “discounting” each dimension’s
average value according to its level of inequality. Thus, the IHDI is distribution-sensitive average
level of human development. Two countries with different distributions of achievements can have the
same average HDI value. Under perfect equality the IHDI is equal to the HDI, but falls below the
HDI when inequality rises.
The difference between the IHDI and HDI is the human development cost of inequality, also termed –
the overall loss to human development due to inequality. The IHDI allows a direct link to inequalities
in dimensions, it can inform policies towards inequality reduction, and leads to better understanding
of inequalities across population and their contribution to the overall human development cost. A
recent measure of inequality in the HDI, the Coefficient of human inequality, is calculated as an
unweighted average of inequality across three dimensions.
Body
Inequality-adjusted Human Development Index (IHDI) a better measure of development
While the HDI can be viewed as an index of average achievements in human development
dimensions, the IHDI is the level of human development when the distribution of achievements
across people in the society is accounted for. The IHDI will be equal to the HDI when there is
no inequality but falls below the HDI as inequality rises. The difference between the HDI and
IHDI, expressed as a percentage of the HDI, indicates the loss in human development due to
inequality.
IHDI show if inequality is getting better or worse. By analyzing the trend in the IHDI one can
assess the direction of the change.
One of the key properties of the approach is that it is ‘subgroup consistent’. This means that if
, inequality declines in one subgroup and remains unchanged in the rest of population, then the
overall inequality declines. The second important property is that the IHDI can be obtained by
first computing inequality for each dimension and then across dimensions, which further
implies that it can be computed by combining data from different sources, thus it is not
necessary that micro data on all components come from the same survey.
The IHDI allows a direct link to inequalities in dimensions of the HDI and the resulting loss in
human development. Thus, it can help inform policies towards inequality reduction and to
evaluate the impact of various policy options aimed at inequality reduction.
The average global loss in HDI due to inequality is about 22.9 %—ranging from 5.5% (Finland)
to 44.0% (Angola). People in sub-Saharan Africa suffer the largest losses due to inequality in all
three dimensions, followed by South Asia and the Arab States and Latin America and the
Caribbean. Sub-Saharan Africa suffers the highest inequality in health (36.6%), while South
Asia has the highest inequality in education (41.6%). The region of Arab States also has the
highest inequality in education (38%), Latin America and the Caribbean suffers the largest
inequality in income (36.3%).
The IHDI and its components can be useful as a guide to help governments better understand
the inequalities across population and their contribution to the overall loss in the level of human
development due to inequality.
The IHDI can be adapted to compare the inequalities in different subpopulations within a
country, provided that the appropriate data are available. National teams can use proxy
distributions for indicators, which may make more sense in their particular case.
Generally countries with less human development also have more multidimensional inequality and
thus larger losses in human development due to inequality, while people in developed countries
experience the least inequality in human development.
The East Asia and the Pacific Region performs well on the IHDI, particularly in access to healthcare
and education, and former socialist countries in Europe and Central Asia have relatively egalitarian
distributions across all three dimensions.
Conclusion
Though insightful, the index does not reckon several factors, such as the net wealth per capita, the
relative quality of goods, CO2 emissions, crime rate or risk of insolvency in a country. Accounting
for these will lower the rank for some of the most advanced countries, such as the G7 members and
others. However IHDI is still one of the best indicators of Human development.
, 1. Examine the significance of entrepreneurial spirit for the development of a middle income
country like India. What is your assessment of the prevailing policy environment aimed at
promoting entrepreneurship?
Entrepreneurship is the act of creating a business or businesses while building and scaling it to
generate a profit. With a target of $5 trillion economy by 2024, entrepreneurship is a buzzword which
can help India to be in a trajectory to achieve the same and helps developing countries to achieve
sustainable development.
Body
Significance of entrepreneurial spirit:
As our prime minister observed “India need more job creators than job seekers”. This is especially
significant for developing countries like India for the reasons:
Employment: World bank report states that India needs to generate at least 2 million jobs every
year. Unemployment rate has been a 4-decade high at 6.1% as per the NSSO survey.
Entrepreneurship is significant in this context generating new jobs.
Utility of demographic dividend: Mean age of working population in India is around 27 years.
New business and entrepreneurship will help utilize the demography productively in developing
countries which usually have young working population.
Secondary and tertiary sector development: Most developing countries depend on primary
sector for employment (e.g. India – around 50% in agriculture) and entrepreneurship helps them
to move in to manufacturing and services sector which more profit and employment
opportunities.
Development of global level industries: the GAFA (Google, Apple, Amazon, Facebook)
companies were started by small entrepreneurs and have contributed/contributing enormously to
the development of their parent countries. The same applies to developing countries as well
which can be possible only by promoting entrepreneurship.
Research and innovation: Entrepreneurship thrive in innovative ideas and this promote research,
development of new technologies and so on. This in turn will help utilize the natural and human
resources of the developing countries more productively.
Global presence: Entrepreneurship helps in increasing the global presence of Indian entities and
also helps in addressing fiscal deficit, reserves etc., by increasing domestic production and
increasing exports.
Mobilization of resource: especially capital where in small savings can be mobilized and
