Less is more: The implicit sustainability content of the human development index

Abstract

Sustainability is often defined narrowly using environmental dimensions, and efforts to ‘green’ the HDI usually involve adding such indicators. We take a broader view of sustainability as the relative efficiency of converting commodities into capabilities. This implies that no new indicators need to be added to the HDI, but instead its functional form has to change. We examine another index which uses a relative definition of sustainability - Hickel's SDI - but show how it is not an index of human development as it does not account for absolute achievements in any dimension. Building on Sen's theory of commodities and capabilities, we define a class of development indices which includes the HDI as a special case. Combining the relativity of sustainability with absolute achievements, we derive a new member of this class - the Sustainable Human Development Index (SHDI). Finally, we compare HDI, SDI and SHDI empirically and demonstrate that SHDI offers the best of both worlds. SHDI correlates positively with capabilities but demotes underachievers - countries achieving less than their income would imply - while promoting ‘over-achievers’ and more environmentally-friendly countries. Thus, SHDI provides policy incentives which are more suitable for sustainable human development than either HDI or SDI.