United Nations Report Doesn't Tell the Whole Story

For years, the UN’s Human Development Index (HDI) rated Canada as the best nation on the planet, a fact many Canadian leaders used to convince Canadians that our government was topnotch too. Canada has slipped to third spot, but the index is still touted by Canadian politicians as proof of their merit.

The index contains only four variables – per capita GDP (gross domestic product), life expectancy, adult literacy, and school enrollment – all important, but hardly the full story of “Human Development.”

The worst aspect of the index is the way it examines the economy. It uses an inappropriate mathematical formula that under weights economic advances once per capita GDP exceeds about $7,000 a year.

Try telling the people of Belarus, one of the most miserable places on the planet, that they should undervalue future GDP growth because their per capita GDP is already a princely $7,544 a year.

It is simply bizarre that the United Nations uses this GDP formula, particularly given the HDI’s focus on democracy in this year’s release. As Freedom House noted in its most recent study of political and civil freedoms, the greatest impetus to increased democracy is economic growth and prosperity. A number of fact-based studies support Freedom House’s contention. As nations become richer, they become more democratic. Very few nations with a per capita GDP under $7,000 are democracies.

It’s not just democracy that’s of concern here. All positive indicators of “human development” increase when prosperity grows. Richer nations have lower levels of child labour, improved environmental quality, superior medical outcomes, and more freedom of all sorts. The list could fill pages.

The UN index also ignores technological progress and the ability of people to obtain information and communicate with each other, surely an essential aspect of being human.

To eliminate these problems, the Fraser Institute prepares its own “Index of Human Progress,” released last week on the same day as the UN index.

The Index of Human Progress fully weights economic activity, more completely captures human health by considering infant, child and adult mortality in addition to life expectancy, and also adds a measure of technological progress. That measure captures the ability of people to communicate with each other by examining the number of radios, televisions and telephones per thousand people.

Canada falls to 17th spot on the Fraser Institute’s Index of Human Progress, largely because of the weakness of Canada’s economy over the last two decades and because of Canada’s relatively low score on the technology index. This presents Canadians a more accurate view of our standing in the world, and we’re nowhere near 3rd best on the list.

However, both indexes contain one clear message – the world has become a better place during the current era of globalization. In the Fraser Institute’s Index, all 84 nations with data back to 1975 have improved their scores. The United Nations’ Index tells a similar story. Of the 100 nations it ranks back to 1975, 99 have seen gains. Only one, Zambia, has slid back over that period.

The news remains positive through the 1990s. In the Fraser Institute’s index, 126 of the 136 nations examined back to 1990 show improvement. Again, the UN index tells much the same story. Of the 135 nations it rates back to 1990, 113 show improvement. Most people across the globe are living better more prosperous lives, with increasing levels of education and health.

Even here, the news for Canada is discouraging. While most of the rest of the world is moving ahead rapidly, Canada has had one of the slowest rates of advance in the world. Of the 84 nations with scores back to 1975, Canada ranks 79th in its rate of improvement. Among rich nations, only New Zealand did worse.

So while politicians across the land preened themselves over Canada’s “human development” last week, the real story should give Canadians pause for concern.