Human Development and Economic Uncertainties: Exploring Another Dimension of Development

Jamshed Uppal and Syeda Rabab Mudakkar ()
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Syeda Rabab Mudakkar: Assistant Professor of Statistics, Lahore School of Economics, Pakistan.

Lahore Journal of Economics, 2013, vol. 18, issue Special Edition, 305-334

Abstract: This study makes the case that economic uncertainties—i.e., the extent to which economies face systemic uncertainties—need to be considered another dimension of human development because they render development vulnerable, diminish social welfare, and constrain human capabilities. We propose a methodology for adjusting the human development index (HDI) for economic uncertainties, using the time variability of income changes as a proxy. We construct an adjusted index associated with the income component for the 2011 HDI. Our analysis indicates that such an index contains additional information. The percentage loss in the income component of the HDI seems to reflect the variability in economic indicators arising from the political and economic tribulations experienced by each country. In Pakistan’s case, the results of a time-series analysis of the percentage loss from the uncertainty adjustment appear to closely trace the country’s political and economic upheavals.

Keywords: Human development index; capabilities; human development; economic growth; economic vulnerability; uncertainty; risk. (search for similar items in EconPapers)
JEL-codes: D63 I32 I38 (search for similar items in EconPapers)
Date: 2013
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