Prior to the 1990s, the predominant approach to economic development was largely growth-centric. The success of a nation's development was primarily measured by macroeconomic indicators such as Gross Domestic Product (GDP) or Gross National Product (GNP) growth rates.
This traditional view often overlooked crucial aspects like income distribution, social well-being, poverty reduction, and environmental sustainability, focusing instead on the aggregate economic output.
In 1990, a significant paradigm shift occurred in development economics, largely spearheaded by the visionary Pakistani economist Mahbub ul Haq. He argued that national income accounting alone did not adequately capture the true progress or well-being of a nation's people.
Mahbub ul Haq championed a shift from purely economic growth models to a people-centered approach, emphasizing human well-being, capabilities, and choices as the ultimate goals of development.
This profound shift led to the conceptualization and launch of the Human Development Report (HDR), published annually by the United Nations Development Programme (UNDP). The first HDR was released in 1990.
Mahbub ul Haq collaborated extensively with the Nobel laureate economist Amartya Sen. Sen's 'capability approach' provided a strong theoretical foundation for the Human Development Index (HDI), advocating that development should be about expanding people's freedoms and opportunities, not just increasing wealth.
Their combined efforts were instrumental in persuading the UNDP to adopt and incorporate Human Development Indicators (HDIs) into its framework for assessing and guiding development policies globally.
The HDI is a composite index that measures a country's average achievements in three basic dimensions of human development:
A long and healthy life (measured by life expectancy at birth).
Knowledge (measured by mean years of schooling and expected years of schooling).
A decent standard of living (measured by Gross National Income (GNI) per capita, adjusted for purchasing power parity (PPP$)).
Therefore, the assertion that Human Development Reports (HDRs) exclusively rely on per capita income as their primary development metric is incorrect. The HDI combines these three distinct dimensions to provide a more holistic view of human development beyond mere economic output.
