Which Countries Win (and Lose) When We Add Democracy to the Human Development Index?

The UNDP’s Human Development Index (HDI) is a major achievement. It has focused the world’s attention on the human aspects of development, highlighting and featuring not just economic gains but also schooling and education and life expectancy. In this, it was a hugely important corrective for a development community that tended to have a pure economic growth -focused agenda.

Over the years the UNDP has also refined the index. Creating alternatives that alongside these core human development factors also feature gender equality, inequality, and, most recently, planetary pressure.

But so far the human development index has not included democracy and democratic governance as part of the features they combine when they measure the amount of human development in a country.

This is perhaps not surprising. Democracy remains contested in international governance and for the United Nations talking clearly and unequivocally positively about democracy is still hard, even though the new sustainable development agenda has made that easier. Luckily for us, as researchers, we do not have to take the hurt feelings and animosity of autocrats and dictatorial regimes into consideration. So we went ahead and built a version of the human development index, inspired by the gender, inequality, and planetary pressure (carbon dioxide emissions per person) versions, which includes democratic government as part of the criteria and recalculated each country’s score and position on the HDI.

Obviously, one amusing aspect of this is to showcase how countries such as China and Saudi Arabia then drop precipitously on our ranking compared to the original HDI. More importantly, however, there are good evidence-based reasons for why democracy should indeed be featured in a human development index.

A large, and growing, literature has shown that living under democratic governance and having democratic institutions facilitates long-term sustainable development, including economic growth. Systematic research has shown that democracies are better at reducing infant mortality than autocracies. And a host of studies have established that democracy definitely does not reduce economic growth and most likely leads to higher growth.

As such, democracy appears as a core fundamental component of long term sustainable human development and a human development index should therefore account for it.

Fixing this is actually quite easy. First we need a measure of democracy. We have access to good data on the extent to which a country is a democratic system from several widely used and acclaimed databases. We turn to the Varieties of Democracy, VDEM, project and their polyarchy index. The polyarchy index focuses on the primacy of elections.

‘The electoral principle of democracy seeks to embody the core value of making rulers responsive to citizens, achieved through electoral competition for the electorate’s approval under circumstances when suffrage is extensive; political and civil society organizations can operate freely; elections are clean and not marred by fraud or systematic irregularities; and elections affect the composition of the chief executive of the country. In between elections, there is freedom of expression and an independent media capable of presenting alternative views on matters of political relevance. In the V-Dem conceptual scheme, electoral democracy is understood as an essential element of any other conception of representative democracy — liberal, participatory, deliberative, egalitarian, or some other.’

The polyarchy index ranks all countries from 0 to 1, where 0 is least democratic and 1 is most democratic. This, then, will be our indicator for democracy. Next, we take this indicator and combine it with the other four HDI indicators — life expectancy at birth, expected years of schooling, mean years of schooling, and GNI per capita — and, using the rules set out in the technical appendix for the HDI for combining these indicators, re-calculate the score for each and every country for 2019, the last year for which we have available data.

Before we take a peek at this new index, one caveat is necessary. The HDI, and similar indices, create an unfortunate illusion of precision. The HDI is defined down to the third decimal point and ranks countries exactly in 1st, 22nd, 75th  place and so on and so forth. This approach is perhaps a bit too persuasive and completely neglects the large and inherent uncertainty in the estimation of scores. Instead of focusing on who’s in first and second place it probably makes much more sense, and is much more statistically sober, to focus on which countries cluster towards the top or in other parts of the index.

So what happens? The two maps below show the world according to the original HDI, the first one, and the world according to our democracy-HDI, the second one.

The two maps give a first snapshot at which countries move the most from the original to our new index and if there is any regional clustering. Two tendencies in particular stand out. First, in the set of already highly developed countries, especially in Europe, North America and parts of Asia there are very few changes. These are countries that already scored high on the HDI and who are also democratic. The same also holds for most of South America, although some countries such as Venezuela see deterioration in their scores.

Second, we see the biggest drops in scores across the Middle East and Asia. Fairly rich countries with little or no democratic rule, like many of the Gulf states, fall the most, many of them, like Saudi Arabia, from the top (40th place) towards the bottom (129th place). Similarly, countries such as Russia and China also fall from 40 to 70 places between the two indices. These are countries which do have high, or increasing, levels of material well-being, but where citizens enjoy few or no social and political rights and where human rights abuses, persecution, and repression is widespread. This undermines sustainable development, which is reflected in the countries’ lower score when this is taken into account.

On the other hand, we see the biggest improvements in a set of countries that often score somewhat low on traditional development indicators but where some, with emphasis on some, semblance of democratic governance is respected. These are countries, then, where citizens are very much defying the notion that you have to be a developed country to have democracy. The list includes countries such as Cabo Verde, Ghana, Benin, and Senegal and other countries in Africa, but also Jamaica and Timor-Leste.

No one is saying that democratic institutions in these countries are working perfectly, but they do enjoy some basic democratic values and citizens and incumbents are working hard to improve and defend their democratic institutions. These, then, are countries where the peoples’ rights are, to a much larger extent, respected. And this will serve them well in their efforts toward sustainable development.

The 10 biggest ‘losers’ and the 10 biggest ‘winners’, going from the old to the new index, are also shown in the figures above (losers) and below (winners).

So what is the utility of all of this? As with the original HDI, this index gives you a snapshot of where the world is on the road to human development, where the biggest challenges are, and which countries are performing better than expected.

This new index also provides some much-needed corrective. A lot of talk in development is focused around the ‘miracle growers’ such as China. More and more research is suggesting, however, that these countries are achieving development in spite of the lack of democracy and that their lack of democratic institutions may undermine long term growth.

A core rational behind the human development index was to center development around people. Democratic governance is the only system of government capable of respecting human rights and individual freedoms over the long run. Democracy enables sustainable growth. This index shows that the answer to the question of what countries achieve sustainable development, changes when democracy is taken properly into account.

Table 1: The Democracy and Human Development Index. The Table reports all countries’ rankings on the original and this new index as well as the original and the new scores. The Table is sorted according to the new scores. Note that a negative value in the ‘rank difference’ column means the country climbed from the original to the new index. Note also that some smaller countries that are included in the original index are not included here.

Country Original HDI Corrected HDI Original HDI rank Corrected HDI rank Rank difference
Norway 0.957 0.936 1 1 0
Switzerland 0.955 0.934 2 2 0
Ireland 0.955 0.932 2 3 1
Denmark 0.94 0.93 10 4 -6
Sweden 0.945 0.927 7 5 -2
Iceland 0.949 0.923 4 6 2
Finland 0.938 0.921 11 7 -4
Belgium 0.931 0.919 14 8 -6
Germany 0.947 0.917 6 9 3
Australia 0.944 0.916 8 10 2
New Zealand 0.931 0.916 14 11 -3
Netherlands 0.944 0.914 8 12 4
United Kingdom 0.932 0.913 13 13 0
Canada 0.929 0.913 16 14 -2
Luxembourg 0.916 0.907 23 15 -8
Korea (Republic of) 0.916 0.897 23 16 -7
Spain 0.904 0.897 25 17 -8
France 0.901 0.896 26 18 -8
United States 0.926 0.893 17 19 2
Japan 0.919 0.893 19 20 1
Austria 0.922 0.892 18 21 3
Estonia 0.892 0.892 29 22 -7
Slovenia 0.917 0.885 22 23 1
Italy 0.892 0.884 29 24 -5
Greece 0.888 0.881 32 25 -7
Cyprus 0.887 0.875 33 26 -7
Czechia 0.9 0.873 27 27 0
Portugal 0.864 0.866 38 28 -10
Lithuania 0.882 0.862 34 29 -5
Malta 0.895 0.858 28 30 2
Latvia 0.866 0.852 37 31 -6
Israel 0.919 0.848 19 32 13
Slovakia 0.86 0.848 39 33 -6
Argentina 0.845 0.837 46 34 -12
Chile 0.851 0.831 43 35 -8
Poland 0.88 0.829 35 36 1
Costa Rica 0.81 0.829 62 37 -25
Uruguay 0.817 0.827 55 38 -17
Barbados 0.814 0.816 58 39 -19
Mauritius 0.804 0.808 66 40 -26
Croatia 0.851 0.807 43 41 -2
Panama 0.815 0.807 57 42 -15
Romania 0.828 0.788 49 43 -6
Trinidad and Tobago 0.796 0.783 67 44 -23
Armenia 0.776 0.783 81 45 -36
Peru 0.777 0.779 79 46 -33
Georgia 0.812 0.766 61 47 -14
Mexico 0.779 0.761 74 48 -26
Singapore 0.938 0.757 11 49 38
Bulgaria 0.816 0.752 56 50 -6
Jamaica 0.734 0.752 101 51 -50
Hungary 0.854 0.742 40 52 12
Brazil 0.765 0.741 84 53 -31
Colombia 0.767 0.74 83 54 -29
Suriname 0.738 0.738 97 55 -42
Ecuador 0.759 0.737 86 56 -30
Sri Lanka 0.782 0.736 72 57 -15
North Macedonia 0.774 0.736 82 58 -24
Tunisia 0.74 0.735 95 59 -36
Seychelles 0.796 0.73 67 60 -7
Mongolia 0.737 0.723 99 61 -38
Hong Kong, China (SAR) 0.949 0.722 4 62 58
Botswana 0.735 0.718 100 63 -37
Montenegro 0.829 0.713 48 64 16
Dominican Republic 0.756 0.713 88 65 -23
Bosnia and Herzegovina 0.78 0.709 73 66 -7
Malaysia 0.81 0.706 62 67 5
Moldova (Republic of) 0.75 0.705 90 68 -22
Albania 0.795 0.701 69 69 0
South Africa 0.709 0.701 114 70 -44
Indonesia 0.718 0.697 107 71 -36
Cabo Verde 0.665 0.697 126 72 -54
Paraguay 0.728 0.694 103 73 -30
Ukraine 0.779 0.686 74 74 0
Guyana 0.682 0.68 122 75 -47
Bolivia (Plurinational State of) 0.718 0.668 107 76 -31
Maldives 0.74 0.667 95 77 -18
Lebanon 0.744 0.662 92 78 -14
El Salvador 0.673 0.662 124 79 -45
Fiji 0.743 0.661 93 80 -13
Serbia 0.806 0.659 64 81 17
Namibia 0.646 0.659 130 82 -48
Philippines 0.718 0.649 107 83 -24
Guatemala 0.663 0.645 127 84 -43
Sao Tome and Principe 0.625 0.644 135 85 -50
Timor-Leste 0.606 0.64 141 86 -55
Kuwait 0.806 0.638 64 87 23
Ghana 0.611 0.636 138 88 -50
Vanuatu 0.609 0.634 140 89 -51
Turkey 0.82 0.633 54 90 36
Bhutan 0.654 0.628 129 91 -38
Belarus 0.823 0.615 53 92 39
Russian Federation 0.824 0.609 52 93 41
India 0.645 0.608 131 94 -37
Kyrgyzstan 0.697 0.603 120 95 -25
Nepal 0.602 0.603 142 96 -46
Kazakhstan 0.825 0.6 51 97 46
Gabon 0.703 0.597 119 98 -21
Algeria 0.748 0.595 91 99 8
Iraq 0.674 0.591 123 100 -23
Solomon Islands 0.567 0.591 151 101 -50
Jordan 0.729 0.572 102 102 0
Iran (Islamic Republic of) 0.783 0.568 70 103 33
Palestine, State of 0.708 0.563 115 104 -11
Oman 0.813 0.561 60 105 45
Cuba 0.783 0.559 70 106 36
Benin 0.545 0.559 158 107 -51
Libya 0.724 0.555 105 108 3
Senegal 0.512 0.555 168 109 -59
Morocco 0.686 0.553 121 110 -11
Kenya 0.601 0.552 143 111 -32
Honduras 0.634 0.55 132 112 -20
Côte d’Ivoire 0.538 0.549 162 113 -49
Azerbaijan 0.756 0.546 88 114 26
Lesotho 0.527 0.537 165 115 -50
Venezuela (Bolivarian Republic of) 0.711 0.536 113 116 3
Papua New Guinea 0.555 0.536 155 117 -38
Myanmar 0.583 0.533 147 118 -29
Uzbekistan 0.72 0.529 106 119 13
Thailand 0.777 0.528 79 120 41
Nigeria 0.539 0.528 161 121 -40
Viet Nam 0.704 0.525 117 122 5
Angola 0.581 0.525 148 123 -25
Zambia 0.584 0.522 146 124 -22
Bahrain 0.852 0.52 42 125 83
Madagascar 0.528 0.52 164 126 -38
Comoros 0.554 0.519 156 127 -29
United Arab Emirates 0.89 0.516 31 128 97
Nicaragua 0.66 0.515 128 129 1
Bangladesh 0.632 0.515 133 130 -3
Gambia 0.496 0.513 172 131 -41
Liberia 0.48 0.513 175 132 -43
Egypt 0.707 0.509 116 133 17
Tanzania (United Republic of) 0.529 0.502 163 134 -29
Pakistan 0.557 0.496 154 135 -19
Mauritania 0.546 0.495 157 136 -21
Haiti 0.51 0.494 170 137 -33
Sierra Leone 0.452 0.49 182 138 -44
Turkmenistan 0.715 0.487 111 139 28
Malawi 0.483 0.487 174 140 -34
Guinea-Bissau 0.48 0.486 175 141 -34
Qatar 0.848 0.485 45 142 97
Zimbabwe 0.571 0.481 150 143 -7
Cameroon 0.563 0.479 153 144 -9
Cambodia 0.594 0.473 144 145 1
Uganda 0.544 0.472 159 146 -13
Tajikistan 0.668 0.471 125 147 22
Togo 0.515 0.471 167 148 -19
Guinea 0.477 0.468 178 149 -29
Congo 0.574 0.466 149 150 1
Afghanistan 0.511 0.464 169 151 -18
Rwanda 0.543 0.451 160 152 -8
Mozambique 0.456 0.444 181 153 -28
Mali 0.434 0.442 184 154 -30
Ethiopia 0.485 0.441 173 155 -18
Equatorial Guinea 0.592 0.44 145 156 11
Djibouti 0.524 0.439 166 157 -9
China 0.761 0.437 85 158 73
Congo (Democratic Republic of the) 0.48 0.436 175 159 -16
Eswatini (Kingdom of) 0.611 0.429 138 160 22
Burkina Faso 0.452 0.426 182 161 -21
Lao People’s Democratic Republic 0.613 0.41 137 162 25
Sudan 0.51 0.41 170 163 -7
Niger 0.394 0.409 189 164 -25
Syrian Arab Republic 0.567 0.403 151 165 14
Central African Republic 0.397 0.394 188 166 -22
Chad 0.398 0.361 187 167 -20
South Sudan 0.433 0.347 185 168 -17
Saudi Arabia 0.854 0.346 40 169 129
Burundi 0.433 0.339 185 170 -15
Yemen 0.47 0.336 179 171 -8
Eritrea 0.459 0.288 180 172 -8
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