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Sustainable Human Development for European Countries

2005; Routledge; Volume: 6; Issue: 3 Linguagem: Inglês

10.1080/14649880500287654

1469-9516

Valeria Costantini, Salvatore Monni,

Income, Poverty, and Inequality

Abstract In recent years, sustainable development has represented one of the most important policy goals at the global level. How to design specific policy actions and how to measure performance and results continue to present a challenge. The aim of this paper is to identify a numerical measure of 'sustainable human development' by enlarging human development with more specific environmental aspects. The sustainability condition has been directly analysed on the well‐being side. Building a complex Sustainable Human Development Index may be a hard task because of data availability. European countries represent a useful pilot area for testing the methodology. The key factors of effective sustainable human development are emphasized, comparing a Sustainable Human Development Index with existing traditional indicators such as the Gross Domestic Product and the Human Development Index. Keywords: Sustainable DevelopmentHuman Development Index Acknowledgements The authors are grateful to Mariano D'Antonio, Fabrizio De Filippis, Pasquale De Muro, and Mauro Mellano for helpful discussion and constructive comments. They are grateful to two anonymous reviewers for suggestions. The authors owe special thanks to Alessandra Carleo for her precious help in data calculation. The usual disclaimer applies. Notes 1. This approach corresponds to the widely known 'weak sustainability criterion' where all the capital assets considered, including manufacturing, social, human, and natural assets, can be substituted in the production function, and the sustainability constraint is represented in the optimal control problem as non‐declining general capital stock (Solow, 1986 Solow, R. M. 1986. 'On the intergenerational allocation of natural resources'. Scandinavian Journal of Economics, 88: 141–148. [Crossref], [Web of Science ®] , [Google Scholar]). 2. In this context, the use of a neoclassical utilitarian approach such as the GNNP is strictly functional and is used to assess the effective income available as a means to achieving higher well‐being in the same way, as traditional income has been used in the human development approach. 3. For methodological and empirical explanation of effective components of the GS index, see Hamilton and Clemens (1999 Hamilton, K. and Clemens, M. 1999. 'Genuine savings rates in developing countries'. World Bank Economic Review, 13(2): 333–356. [Crossref], [Web of Science ®] , [Google Scholar]). 4. In this work, we assume that educational attainments are directly reflected by the HDI value, in order to maintain UNDP methodology. For an alternative HDI with diminishing returns for education see Noorbakhsh (1998a Noorbakhsh, F. 1998a. 'A modified Human Development Index'. World Development, 26(3): 517–528. [Crossref], [Web of Science ®] , [Google Scholar]). 5. The employment rate might be a more appropriate indicator than unemployment but, unfortunately, no homogeneous data are available for all countries for the entire analysed time period, reducing the usefulness of the SHDI to make policy considerations for historical trends. 6. All data used for the empirical analysis are from the Human Development Reports of the UNDP (various years United Nations Development Programme. various years. Human Development Report, Oxford: Oxford University Press. [Google Scholar]), the World Development Indicators data‐book of the World Bank (last version 2003), and the environmental dataset provided by the European Environmental Agency together with Eurostat. 7. In particular, y 5 was not considered at all in the calculation of the x 7 index for Luxembourg, whereas herbicides do not affect soil pollution in Bulgaria, Iceland, and Moldova. The Environmental Index for Estonia does not include the water pollution factor (x 6), and the Air Pollution Index (x 5) was not available for Albania, Malta, Moldova, Russian Federation, and Switzerland. An alternative SHDI‐2 has been calculated replacing missing data with the average value of the regional area of each country (i.e. Baltic Republics for Estonia, Eureopan Union 15 for Iceland, Luxembourg, and Switzerland, Accession countries for Bulgaria and Malta, and Transition economies for Albania, Moldova, and Russian Federation). Results have been compared with the original SHDI. 8. The Borda rule provides a ranking order on the basis of the sum of rankings for each component. Countries are ranked according to each single component, and then the resulting ranks are added. Finally, countries are ranked on the basis of their composite scores. 9. For methodological specification of a Meta Index based on the 'benefit of the doubt' approach, see Cherchye and Kuosmanen (2004 Cherchye, L. and Kuosmanen, T. 2004. "'Benchmarking sustainable development: a synthetic meta‐index approach'". In UNU‐WIDER Research Papers RP2004/28, Helsinki: World Institute for Development Economics Research. [Google Scholar]). 10. The Borda rule has been applied to all of the three alternative SHDIs. Table 1 presents results for SHDI‐1B and SHDI‐2B. The results for SHDI‐3B are not reported in Table 1 because they are very similar to the other indices. All details are available from the authors upon request. 11. Evaluation of the SHDI trends has been based on the formulation of SHDI‐1 (as equation (3)). The other indices with a modified ENV factor do not show large differences considering the average values for country groups.